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 (as permitted by
Rule 14a-6(e)(2))
[X] Definitive proxy statement only
[ ] 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:
___________________________________________________________________
<PAGE>
PHOTRONICS, INC.
1061 East Indiantown Road
Jupiter, Florida 33477
(561) 745-1222
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON APRIL 4, 2000
-------------
TO THE SHAREHOLDERS OF PHOTRONICS, INC.
Notice is hereby given that the Annual Meeting of Shareholders of
Photronics, Inc. will be held at The Inn at Ethan Allen, 21 Lake Avenue
Extension, Danbury, Connecticut, 06811, on April 4, 2000, at 10:00 a.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 approve the Photronics, Inc. 2000 Stock Plan;
3) To ratify the appointment of Deloitte & Touche LLP as the independent
certified public accountants of Photronics, Inc. for the 2000 fiscal
year ; and
4) To transact such other business as may properly come before the
meeting or any adjournments thereof.
The Board of Directors has fixed February 17, 2000 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
March 3, 2000
<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 April 4, 2000
GENERAL INFORMATION
The enclosed proxy is solicited by the Board of Directors (the
"Board" or "Board of Directors") of Photronics, Inc. (the
"Company"), to be voted at the Annual Meeting of Shareholders to be
held on April 4, 2000, at 10:00 a.m. local time at The Inn at Ethan
Allen, 21 Lake Avenue Extension, Danbury, Connecticut, 06811, or
any adjournments or postponements thereof (the "Annual Meeting").
This proxy statement and the enclosed proxy card are first being
sent or given to shareholders on or about March 3, 2000.
VOTING BY PROXY
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 of the Company's common
stock ("Common Stock") represented by such proxies for the election
as directors of the Company of those persons named as management's
nominees; for the approval of the Photronics, Inc. 2000 Stock Plan;
for the ratification of Deloitte & Touche LLP as independent
certified public accountants of the Company for the 2000 fiscal
year; and in accordance with their best judgment on any other
matters which may come before the Annual Meeting. The Board of
Directors does not know of any business to be brought before the
Annual Meeting other than as set forth 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 properly executed proxy bearing
a later date; or (c) appearance by the shareholder at the Annual
Meeting and his or her request to revoke the 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 Annual Meeting without a request to
revoke a proxy will not revoke a previously executed and delivered
proxy.
<PAGE>
QUORUM; REQUIRED VOTES
Only shareholders of record at the close of business on
February 17, 2000 are entitled to notice of and to vote at the
Annual Meeting. As of February 17, 2000, there were 24,118,069
shares of Common Stock issued and outstanding, each of which is
entitled to one vote. 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 Common Stock will be necessary to
constitute a quorum. Unless otherwise noted in this proxy
statement, all matters to come before the Annual Meeting that are
listed in the Notice of Meeting require, to be approved, 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.
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 ("SEC") and the
Company's stock records, the following table sets forth the
beneficial ownership of the Common Stock as of February 1, 2000, by
(i) beneficial owners of more than five percent of the Common
Stock, (ii) each director, (iii) each nominee for election as a
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 58,410 (2) *
1061 East Indiantown Road
Jupiter, FL 33477
Walter M. Fiederowicz 61,580 (2) (3) *
39 Painter Hill Road
Woodbury, CT 06798
Joseph A. Fiorita, Jr. 49,650 (2) (4) *
146 Deer Hill Avenue
Danbury, CT 06810
Constantine S. Macricostas 2,993,742 (2) (5) 12.5
1061 East Indiantown Road
Jupiter, FL 33477
Macricostas Partners, L.P. 2,280,000 9.5
1122 Bel Air
Allen, Texas 75013
<PAGE>
Name and Address Amount and Nature of Percentage
of Beneficial Owner Beneficial Ownership(1) of Class
Willem D. Maris 0 *
De Run 1110
5503 La Veldhoven
The Netherlands
Jeffrey P. Moonan 152,834 (2) *
1061 East Indiantown Road
Jupiter, FL 33477
James R. Northup 91,435 (2) *
1061 East Indiantown Road
Jupiter, FL 33477
Michael J. Yomazzo 454,584 (2) (6) 1.8
1061 East Indiantown Road
Jupiter, FL 33477
Massachusetts Financial 1,551,804 (7) 6.4
Services Company
500 Boylston Street
Boston, MA 02116
Directors and Executive 3,862,235 (8) 15.7
Officers as a group
(seven 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 Common Stock set forth
opposite such person's name.
(2) Includes shares of Common Stock subject to stock options exercisable as
of April 1, 2000 as follows: Mr. Bollo (58,125); Mr. Fiederowicz
(32,750); Mr. Fiorita (32,750); Mr. Macricostas (76,250); Mr. Northup
(90,500); Mr. Yomazzo (236,550); and Mr. Moonan (130,000). Also
includes shares subject to forfeiture under restricted stock award
grants as follows: Mr. Fiederowicz (5,000) and Mr. Fiorita (5,000).
(3) Includes 12,050 shares owned by the wife of Mr. Fiederowicz and 800 shares
owned by his child, as to which shares he disclaims beneficial ownership.
(4) Includes 300 shares owned by the wife of Mr. Fiorita, as to which shares
he disclaims beneficial ownership.
(5) Includes 34,000 shares held by the wife of Mr. Macricostas as to which
shares he disclaims beneficial ownership. Also includes 2,280,000
shares owned by Macricostas Partners, L.P., of which Mr. Macricostas
is a limited partner and 50,618 shares owned by the corporate general
partner of such partnership of which Mr. Macricostas is President, a
director and a significant shareholder. Mr. Macricostas disclaims
beneficial ownership of those shares not represented by his ownership
interests.
(6) Includes 46,000 shares held by the wife of Mr. Yomazzo as to which shares
he disclaims beneficial ownership. Also includes 86,000 shares owned
by Yomazzo Associates Limited Partnership of which Mr. Yomazzo is a
general partner and a limited partner. Mr. Yomazzo disclaims
beneficial ownership of those shares not represented by his ownership
interests.
(7) In a Schedule 13G dated February 11, 2000 filed with the SEC,
Massachusetts Financial Services Company reported that of the 1,551,804
shares of Common Stock that it beneficially owns, it has sole voting
power with respect to 1,233,104 shares and has sole dispositive power
with respect to all shares.
(8) Includes the shares listed in notes (2), (3), (4), (5), and (6) above.
<PAGE>
ITEM 1
ELECTION OF DIRECTORS
A board of five directors is to be elected at the Annual
Meeting to serve until the 2001 annual meeting of shareholders and
until their successors are elected and qualified. The names of,
and certain information with respect to, the nominees for election
as directors are set forth below and were furnished to the Company
by the nominees.
If, for any reason, any of the nominees shall become unable to
stand 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.
The Company, AL Acquisition Corp., a wholly-owned subsidiary
of the Company, and Align-Rite International, Inc. ("Align-Rite")
entered into an Agreement and Plan of Merger dated as of September
15, 1999, as amended, pursuant to which the Company proposes to
acquire Align-Rite in a merger transaction (the "Merger"). In
connection with the Merger, the Company agreed to nominate James L.
MacDonald, the Chairman, Chief Executive Officer and President of
Align-Rite, for election to the Company's Board of Directors.
However, Mr. MacDonald's nomination for election to the Board is
contingent upon the consummation of the Merger, and as of the date
of this proxy statement, the Merger has not been consummated. As
such, Mr. MacDonald is not a nominee for election at the Annual
Meeting, but the Board of Directors intends to elect Mr. MacDonald
to the Board after the Annual Meeting, if the Merger has been
consummated. Mr. MacDonald would serve as a director until the
2001 annual meeting of shareholders and the election and
qualification of his successor.
Nominees to be elected by the shareholders:
Director
Name and (Age) Since Position with the Company
Walter M. Fiederowicz(1)......... 1984 Director
(53 years)
Joseph A. Fiorita, Jr.(1)........ 1987 Director
(55 years)
Constantine S. Macricostas....... 1974 Chairman of the Board
(64 years)
Willem D. Maris .................. (2) Director Nominee
(60 years)
Michael J. Yomazzo................1977 Vice Chairman of the Board
(57 years)
- --------------
(1) Member of the Audit Committee and the Compensation Committee.
(2) Mr. Maris has been nominated for the first time for election as a
director.
- --------------
<PAGE>
In addition to the information set forth in the table above,
the following provides certain information about each director and
nominee for election, including his principal occupation for at
least the past five years.
Walter M. Fiederowicz has been a private investor and
consultant since August 1997. From April 1997 until August 1997,
he served as the President and Chief Executive Officer of
WorldCorp., Inc., the holding company of World Airways, Inc., a
provider of long-range passenger and cargo air transportation
services to major airlines, and of InteliData Technologies
Corporation, a provider of caller identification based
telecommunications devices, smart telephones and on-line
electronics information services. Mr. Fiederowicz served as
Chairman of Colonial Data Technologies Corp., a distributor of
telecommunications equipment which subsequently merged into
InteliData Technologies Corporation, 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 a director of Conning and Company (the parent company of
an investment firm). He also serves as Chairman of the Board of
Meacock Capital, PLC, an investment vehicle for the Lloyd's
insurance market. Mr. Fiederowicz serves as a director of First
Albany Companies, Inc., the parent of a broker-dealer, and of
Compensation Value Alliance, Inc., a provider of workers'
compensation-related services.
Joseph A. 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.
Constantine S. Macricostas is Chairman of the Company, and
served as Chief Executive Officer of the Company from 1974 until
August 1997. Mr. Macricostas also serves as a director of Nutmeg
Federal Savings and Loan Association, and the DII Group, Inc., a
provider of integrated electronic manufacturing products and
services.
Willem D. Maris was President and Chief Executive Officer of
ASM Lithography Holding N.V. ("ASML") from June 1990 until his
retirement in January 2000. Headquartered in the Netherlands, ASML
develops, manufactures, markets and services advanced lithography
projection systems for the fabrication of integrated circuits. Mr.
Maris has an extensive background in the semiconductor industry,
having served in management and other positions in the integrated
circuit division of Koninklijke Philips Electronics N.V. from 1964
until joining ASML in 1990. He is a director of MEMC Electronic
Materials, Inc., a company that produces silicon wafers used to
manufacture semiconductors, and he is a member of the supervisory
board of Detron Group N.V., a telecommunications company in the
Netherlands.
<PAGE>
Michael J. Yomazzo has served as Vice Chairman of the Company
since January 1, 1999. He served as Chief Executive Officer of the
Company from August 1997 until December 31, 1998 and as President
from January 1994 until December 31, 1998. From November 1990
until January 1994, he served as Executive Vice President and from
July 1989 until November 1990, he served as Senior Vice President -
Finance and Planning. Mr. Yomazzo is a director of NMBT Corp., the
bank holding company of New Milford Bank and Trust Company.
MEETINGS AND COMMITTEES OF THE BOARD
The Board of Directors met seven (7) times during the 1999
fiscal year. During fiscal 1999, each director 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 four
(4) meetings during the 1999 fiscal year. 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 five (5)
meetings during the 1999 fiscal year. The Company does not have a
nominating committee.
EXECUTIVE COMPENSATION
The following table sets forth certain information regarding
compensation paid by the Company for services rendered for each of
the three fiscal years during the period ended October 31, 1999 to
each of the individuals who served (i) as the Chief Executive
Officer, or in a similar capacity, during the 1999 fiscal year, and
(ii) each executive officer of the Company who served as of October
31, 1999 and whose cash compensation exceeded $100,000 (such
executives are collectively referred to as the "Named Executives").
<PAGE>
SUMMARY COMPENSATION TABLE
:-------------------------------:---------------:------------------:-------:
: : Annual : Long-Term : :
: : Compensation : Compensation : All :
: :-------:-------:------------------: Other :
: : : : Awards : Comp- :
: : : :----------:-------: ensa- :
: : : :Restricted: Stock : tion :
:Name/Principal Position Year:Salary : Bonus : Stock :Options: ($) :
: : ($) : ($) : ($) : (#) : (1) :
:-------------------------------:-------:-------:----------:-------:-------:
:Constantine S. Macricostas 1999:181,836: 0: 0 : 0 : 78,200:
:Chairman (2) 1998:295,000: 5,673: 0 : 5,000: 79,992:
: 1997:329,250:354,250: 0 : 0 : 79,750:
: : : : : : :
:Michael J. Yomazzo 1999:189,529: 0: 0 : 0 : 57,841:
:Vice Chairman (2) 1998:325,000: 31,250: 0 :165,000: 60,042:
: 1997:277,290:302,290: 0 : 0 : 60,196:
: : : : : : :
:James R. Northup 1999:253,470: 0: 0 : 0 : 25,729:
:President (2)(3) : : : : : :
: : : : : : :
:Jeffrey P. Moonan 1999:232,171: 0: 0 : 0 : 25,915:
:Executive Vice President, 1998:176,283: 23,393: 0 : 25,000: 26,035:
:General Counsel and 1997:169,628:189,628: 0 : 0 : 25,890:
:Secretary (2) : : : : : :
: : : : : : :
:Robert J. Bollo 1999:150,939: 0: 0 : 7,500: 3,019:
:Vice President/Finance 1998:150,480: 22,896: 0 : 0 : 3,010:
:and Chief Financial 1997:133,421:126,673: 0 : 0 : 2,663:
:Officer : : : : : :
:-------------------------------:-------:-------:----------:-------:-------:
(1) Represents (i) premiums paid on life insurance policies owned by each of
the Named Executives or his designee, except for Mr. Bollo, as to which
the Company shall be entitled to be repaid unless the respective
individual satisfies certain length of service requirements; and (ii)
matching contributions made by the Company pursuant to the Company's
401(k) Savings and Profit Sharing Plan. The amount of premiums paid in
the 1999 fiscal year were as follows: Mr. Macricostas $75,000; Mr.
Yomazzo $55,000; Mr. Northup $22,500; and Mr. Moonan $22,500. The
matching 401(k) contributions made during fiscal year 1999 were
as follow: Mr. Macricostas, $3,200; Mr. Yomazzo, $2,841; Mr. Northup,
$3,229; Mr. Moonan, $3,415; and Mr. Bollo, $3,019.
(2) Mr. Macricostas served as Chief Executive Officer until August 15, 1997
and Mr. Yomazzo served as Chief Executive Officer from August 15, 1997
until December 31, 1998. Effective January 1, 1999, the Board of
Directors created the Office of the Chief Executive. In connection
with this, Mr. Yomazzo was elected Vice Chairman, and Messrs. Northup
and Moonan were promoted to President and Executive Vice President,
respectively. Prior to this Mr. Northup served as Senior Vice President
of North American Operations, and Mr. Moonan served as Senior Vice
President, General Counsel and Secretary. The Office of the Chief
Executive is comprised of Messrs. Macricostas, Yomazzo, Northup and
Moonan, each of who performs certain executive management functions.
(3) Mr. Northup has served as President since January, 1999 and prior to
that, he was not an executive officer of the Company. Therefore,
amounts paid to Mr. Northup prior to fiscal 1999 are not reported in the
above table.
STOCK OPTIONS
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. The following table sets forth certain information
with respect to (i) options granted to the Named Executives during the
1999 fiscal year, and (ii) the value of such options at assumed annual
rates of stock price appreciation.
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
:-----------------------------------------------:------------------------:
: : Potential Realizable :
: :Value at Assumed Annual :
: Individual Grants : Rates of Stock Price :
: :Appreciation for Option :
: : Term (a) :
:------------------------------------------------------------------------:
:------------:------------:-------------:----------:--------:------------:
: : : : : : :
:Name :Number of :% of Total :Exercise :Expira- : 5% / 10% :
: :Securities :Options :or Base :tion : $ :
: :Underlying :Granted :Price :Date : :
: :Options :to Employees :($/Share) : : :
: :Granted :in Fiscal : : : :
: : :Year : : : :
: : : : : : :
:------------:------------:-------------:----------:--------:------------:
:Constantine : 0 : N/A : N/A : N/A : N/A :
:Macricostas : : : : : :
:------------:------------:-------------:----------:--------:------------:
: : : : : : :
:Michael J. : 0 : N/A : N/A : N/A : N/A :
:Yomazzo : : : : : :
:------------:------------:-------------:----------:--------:------------:
: : : : : : :
:James R. : 0 : N/A : N/A : N/A : N/A :
:Northup : : : : : :
:------------:------------:-------------:----------:--------:------------:
: : : : : : :
:Jeffrey P. : 0 : N/A : N/A : N/A : N/A :
:Moonan : : : : : :
:------------:------------:-------------:----------:--------:------------:
: : : : : : 85,490/ :
:Robert J. : 7,500(b) : 3.3 : 18.125 : 11-4-08: 216,649 :
:Bollo : : : : : :
:------------:------------:-------------:----------:--------:------------:
(a) No gain to the optionees is possible without appreciation in the price
of the Common Stock which will benefit all shareholders. 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 Common Stock
price or to establish any present value of the options.
(b) The option granted to Mr. Bollo was granted at an exercise price equal to
the market price of the Common Stock on the date of grant and vests
over four years in four equal annual installments. The Board of Directors
may accelerate the vesting of the option if the Company merges or
consolidates with another company or sells substantially all of its
assets.
<PAGE>The following table sets forth certain information with respect to
options exercised during the 1999 fiscal year by the Named Executives and the
value of options held by the Named Executives on October 31, 1999.
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
- -------------------------------------------------------------------------
: : : : Number of : Value of :
: : : : Securities : Unexercised :
: : : : Underlying : In-the-Money :
: : : : Unexercised : Options at :
: : Shares : : Options at : Fiscal Year End :
: : Acquired : : Fiscal Year End : ($) :
: : on : Value :-----------------:-----------------:
: : Exercise : Realized : Exercisable / : Exercisable / :
: Name : (#) : ($) : Unexercisable : Unexercisable :
:------------:----------:-----------:-----------------:----------------:
:Constantine : : : : :
:Macricostas : -0- : -0- : 76,250/28,750 : 645,273/248,218:
: : : : : :
:Michael J. : -0- : -0- : 221,550/126,250 :2,445,373/184,933:
:Yomazzo : : : : :
: : : : : :
:James R. : : : : :
:Northup : -0- : -0- : 88,500/34,500 :1,026,870/325,861:
: : : : : :
:Jeffrey P. : : : : :
:Moonan : -0- : -0- : 130,000/27,500 :2,009,390/260,170:
: : : : : :
:Robert J. : : : : :
:Bollo : -0- : -0- : 56,250/16,250 : 627,128/94,930 :
:------------:----------:-----------:-----------------:-----------------:
CERTAIN AGREEMENTS
The Company has agreed that if the employment of Messrs. Macricostas,
Northup or Moonan is terminated under certain conditions, such officer
will be entitled to continued salary and benefits for one year. In
addition, the Company has entered into agreements providing that each of
Messrs. Macricostas and Yomazzo will serve as a consultant to the Company
upon their respective retirements for a period of up to three (3) years
for a consulting fee of up to $175,000 per year. Messrs. Macricostas and
Yomazzo are also entitled to continued benefits until age 65.
DIRECTORS' COMPENSATION
Directors who are not employees of the Company receive a fee of
$2,500 for each directors' meeting attended and are granted a
restricted stock award of 3,000 shares per year. The restrictions on
these awards lapse quarterly over the year of service period. From
time to time, non-employee directors may also be granted stock options.
If Mr. Maris is elected to the Board at the Annual Meeting, he will
receive an option to purchase 5,000 shares of Common Stock at an
exercise price equal to the market value of the Common Stock on the
date of grant, and a restricted stock award of 3,000 shares of Common Stock.
<PAGE>
During fiscal 1999, the Company retained Joseph A. Fiorita, Jr., a
director of the Company, as a consultant to perform certain accounting
and tax services. Fees paid to Mr. Fiorita in this capacity aggregated
$36,000.
COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY
The Compensation Committee of the Board of Directors (the
"Committee") 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 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 an evaluation of the
Company's performance and achievement of its financial and other goals
during the relevant period, and the achievement of specific goals of each
executive officer. Stock options and restricted stock awards, which the
Committee believes provide a strong link between executive compensation
and shareholder return, are used to provide long-term incentives based on
shareholder return.
In establishing compensation levels for the executive officers
of the Company, including the Named Executives, 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 of
the Company and its executive officers should allow executive
compensation to fall within the median to 75th percentile of compensation
of this comparison group. Since 1992, except as discussed below for the
1999 fiscal year, 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 executives which is aligned with the
Company's needs and results and balances both short and long-term goals.
Section 162(m) of the Internal Revenue Code of 1986, as amended (the
"Code") limits the Company's ability to deduct certain compensation (in
excess of $1,000,000 per year) paid to the Named Executives unless
certain formal requirements are satisfied. The Committee believes,
however, that its ability to subjectively evaluate executive officer
performance is an important part of its function and its ability to
provide incentives. Additionally, compensation paid to the Named
Executives has historically not exceeded deductibility limits under
Section 162(m). Accordingly, the Committee has not required that all
compensation programs comply with Section 162(m), although the Committee
<PAGE>
considers compliance in establishing individual compensation components.
1999 EXECUTIVE COMPENSATION
The Committee considered the factors discussed above in determining
executive compensation for the 1999 fiscal year. However, during the
1999 fiscal year, the Committee revised the compensation paid to the
Named Executives due to (i) the Company's anticipated financial results
for the 1999 fiscal year, and (ii) the Board's creation of the Office of
the Chief Executive (the "Office"), effective January 1, 1999.
Given the Company's expectations for fiscal 1999, and in order to
communicate a message to all employees, the Committee requested, and the
Named Executives agreed to, a reduction in salary. Effective November
23, 1998, each of the Named Executive's salary was reduced by 10%, except
for Mr. Bollo, whose salary was reduced by 5%. The salary reductions were
rescinded effective April 12, 1999, as an upturn in the semiconductor
industry appeared to be underway.
The Office is comprised of Constantine S. Macricostas, Michael J.
Yomazzo, James R. Northup and Jeffrey P. Moonan. The Office was created
to provide, over a period of time, a transition of executive management
duties to Messrs. Northup and Moonan. In connection with creating the
Office, Messrs. Northup and Moonan were promoted to President and
Executive Vice President-Finance and Administration, respectively. Mr.
Yomazzo, who served as the Chief Executive Officer from August 1997 until
December 31, 1998, was elected Vice Chairman, while Mr. Macricostas
continued as Chairman. Consistent with the purpose of the Office,
Messrs. Macricostas and Yomazzo began to focus on broader, strategic
matters and initiatives, while Messrs. Northup and Moonan assumed the
executive management of the day-to-day operations of the Company.
Given the structure of the Office, since January 1, 1999, the
Company has not had a "chief executive officer" by title, as the typical
duties of a chief executive officer are being performed by the members of
the Office during the transition period. In light of the changes in
responsibilities, the Committee increased Mr. Northup's annual salary
from $176,800 to $275,000, and increased Mr. Moonan's annual salary from
$176,413 to $250,000, in each case to reflect the increased management
functions that Messrs. Northup and Moonan assumed. As Messrs.
Macricostas' and Yomazzo's day-to-day executive management
duties had decreased, the Committee reduced Mr. Macricostas' annual
salary to $167,500 from $295,000, and reduced Mr. Yomazzo's annual
salary from $325,000 to $167,500. The increases and decreases in
salaries discussed above are without reference to the November 23, 1998
salary reductions, and such reductions applied to the referenced salary
rates until rescinded on April 12, 1999.
<PAGE>
Robert J. Bollo's base salary in 1999 was increased in accordance
with the salary adjustment budgets for the Company's other employees, but
was also subject to a 5% salary reduction for the period of November 23,
1998 through April 12, 1999. During the 1999 fiscal year, none of the
Named Executives, except for Mr. Bollo, was granted stock options. In
addition, none of the Named Executives received a bonus due to the
Company's financial performance.
Respectfully submitted,
Joseph A. Fiorita, Jr.
Walter M. Fiederowicz
PERFORMANCE GRAPH
The following graph compares the yearly percentage change at October
31(a) of the indicated year in the cumulative total shareholder return on
the Company's Common Stock with the cumulative total 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) (the "Peer Index"). The graph assumes that
$100 was invested on October 31, 1994 in the Company's Common Stock, in
NASDAQ market index and in the Peer Index, and that all dividends were
reinvested. 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
$600:-----------------------------------------------------------------:
: ^ :
: :
: :
$500:-----------------------------------------------------------------:
: :
: :
: :
$400:-----------------------------------------------------------------:
: :
: ~ :
: :
$300:-----------------------------------------------------------------:
: ^ ^ :
: * * * :
: :
$200:------------------------^------------------------~---------------:
: ^ ~ :
: * * :
: ~ ~ :
$100:-----------------------------------------------------------------:
1994 1995 1996 1997 1998 1999
<PAGE>
:-------------------------:------:------:------:------:------:------:
: : 1994 : 1995 : 1996 : 1997 : 1998 : 1999 :
:-------------------------:------:------:------:------:------:------:
:* Photronics, Inc. :100.00:164.05:150.15:238.43:242.60:232.87:
:-------------------------:------:------:------:------:------:------:
:~ NASDAQ Stock Market :100.00:118.62:139.30: 82.56:206.42:340.72:
: (US) Index : : : : : : :
:-------------------------:------:------:------:------:------:------:
:^ Publicly Traded Compan-:100.00:186.55:200.94:283.51:281.34:590.02:
: ies with SIC Code 367 : : : : : : :
:-------------------------:------:------:------:------:------:------:
- -------
(a) Commencing in fiscal 1997, the Company's formal fiscal year end is
determined in accordance with a 52-week fiscal year. However, for
consistency in reporting periods, a nominal year end of October 31st has
been used in the presentation.
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 Chairman and a director of
the Company. The rent paid to these entities for the fiscal year ended
October 31, 1999 was approximately $135,000.
Financing for construction of such leased building and the
acquisition of 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,
1999 there was outstanding a total of approximately $339,000 in principal
amount of industrial development bonds for which the Company is a
guarantor.
The Company and Toppan Printing Co., Ltd. ("Toppan"), have engaged
in numerous ongoing commercial transactions for the purchase and sale of
raw materials and finished goods based upon competitive terms and
conditions, including market prices. Toppan was a beneficial owner of
more than 5% of the Common Stock during the 1999 fiscal year. The total
amount of sales by the Company to Toppan during fiscal year 1999
aggregated $133,550, and Toppan's sales to the Company aggregated
$9,171,414.
In addition, in September, 1998, the Company agreed to purchase from
Toppan one million shares of Common Stock that the Company had issued to
Toppan in 1993 as partial consideration for the Company's acquisition of
Toppan's photomask operations in Texas. The purchase prices of the
shares ranged from $13.50 to $13.90 per share, which prices were at or
below the then approximate fair market value of the Common Stock. Of
these shares, 750,000 were purchased during September and December 1998
and the balance were purchased during March 1999. The purchases during
fiscal year 1999 aggregated approximately $6,900,000.
The Company believes that the terms of the transactions described
above with affiliated persons were negotiated at arm's-length and were no
less favorable to the Company than the Company could have obtained from
non-affiliated parties.
<PAGE>
ITEM 2
APPROVAL OF THE 2000 STOCK PLAN
The Board of Directors believes that the grant of stock-based awards
under the Company's existing stock plans have been worthwhile in
attracting and retaining qualified personnel. However, as of January 11,
2000, there were only approximately 445,000 shares available for grants
under such plans. The Board of Directors believed that this amount was
inadequate for the period until the 2001 annual shareholders meeting and
believed that additional shares should be authorized at the 2000 Annual
Meeting. Accordingly, on January 11, 2000, the Board of
Directors adopted, subject to shareholder approval, the Photronics, Inc.
2000 Stock Plan (the "Plan"). The Board believes that the grant of stock
options and restricted stock awards under the Plan will permit the
Company to offer incentives to employees in order to attract and retain
qualified employees. Shareholder approval at the Annual Meeting is
required in order for the Plan to become effective.
Under the Plan, grants of stock options and restricted stock awards
(collectively, "Awards") may be made to employees and directors of the
Company. As of the date of this proxy statement, no employee or director
has been granted any Award, nor has any employee or director been
specifically identified to receive an Award in the future.
The following is a summary of the material features of the Plan and
is qualified in its entirety by reference to the text of the Plan, which
is attached to this proxy statement as Annex A.
Administration
The Plan will be administered by the Board of Directors or a
committee of the Board composed of two or more directors (references
below to the Board also refer to such a committee, unless otherwise
stated). The Board has the authority to determine, subject to the
provisions of the Plan, to which employees or directors Awards are
granted, the time at which Awards are granted, the number of shares
subject to Awards granted, the option exercise price per share, the
period over which the Awards vest, whether options are to be ISOs or NQOs
(as defined below), the period during which each option may be exercised,
and the conditions that are applicable to any restricted stock award or
option, including whether any option or restricted stock Award shall be
subject to performance objectives. The Board may make all other
determinations related to Awards under the Plan. The Board may also
accelerate the vesting date of any Awards and, with the consent of the
holder, cancel, modify or amend any Award; provided that the Plan
prohibits a reduction of option exercise prices except in connection with
adjustments related to stock splits and other changes in the
capitalization of the Company.
Stock Options
Options may be granted that are intended to qualify as incentive
stock options ("ISOs") under Section 422 of the Code. Options that are
not intended to qualify as ISOs (referred to as "non-qualified options"
or "NQOs") may also be granted. Currently, in order to qualify as an ISO
under Code Section 422, an option must, among other things (i) be granted
only to an employee, (ii) be granted at an exercise price that is no less
than 100% of the fair market value of the Common Stock on the date of
grant (an exercise price of at least 110% of fair market value is
<PAGE>
currently required for any employee who owns stock or currently
exercisable options exceeding 10% of the voting power of The Company's
capital stock), and (iii) terminate no later than ten (10) years from the
date of grant, or sooner upon termination of employment with the Company.
The exercise price per share of each option may be paid, at the election
of the optionee, in cash and/or by delivery of previously acquired Common
Stock.
Restricted Stock
Upon the grant of a restricted stock award under the Plan, a
certificate representing the shares of Common Stock covered by the award
will be issued in the name of the recipient of the award, after execution
by the recipient of an award agreement and any other documents which the
Board may require, but such certificate will be held in the custody of
the Company. The shares covered by the award will be subject to the
possibility of forfeiture if restrictions and conditions established by
the Board at the time the award is granted are not satisfied, and such
shares shall not be transferable by the
recipient unless and until they are no longer subject to forfeiture.
Such restrictions and conditions may include, among other things,
specified measures of the Company's financial performance or the
individual recipient's performance or continuation of the recipient's
employment, or combinations thereof. Restricted stock awards will not
require the payment of any cash consideration by the recipient to the
Company.
During the period the shares covered by a restricted stock award are
subject to forfeiture, the recipient of the award will have the rights
and privileges of a shareholder as to such shares, including the right to
vote the shares, but not the right to transfer or otherwise dispose of
the shares or to receive dividends or distributions with respect to the
shares. All dividends and distributions with respect to shares subject
to forfeiture shall also be subject to the terms of the restricted stock
award. If and when the restrictions and conditions established by the
Board have been satisfied, the recipient will have unrestricted ownership
of the shares and any dividends and distributions with respect thereto.
Upon the grant of a restricted stock award, the Company will incur
a compensation expense for financial reporting purposes with respect to
the shares covered by the award in an amount equal to the fair market
value of the shares at the date of grant. This expense is reported over
the period during which the shares are subject to forfeiture.
Shares Available
A maximum of one million (1,000,000) shares of Common Stock may be
issued under the Plan; provided, however, that no more than (i) ten
percent (10%) of such shares may be available cumulatively for grants of
restricted stock, and (ii) fifteen percent (15%) of such shares may be
subject to Awards granted to any individual in any calendar year. Such
shares may be authorized but unissued shares, shares previously issued
and reacquired by the Company, or both. Any shares subject to Awards
which, for any reason, expire or are terminated or forfeited, become
available again for the grant of Awards under the Plan. On February 1,
2000, the closing price of the Common Stock on the NASD National Market
was $30.9 per share. In the event of a stock dividend, share
<PAGE>
distribution, recapitalization, merger, consolidation, split-up, spin-
off, combination or exchange of shares or similar action with respect to
the Common Stock, the Board shall make such adjustment
to outstanding Awards and shares available for future grant in order to
reflect any such event.
Termination of Awards
To the extent exercisable on the date of termination of employment
or service as a director, NQOs are exercisable until thirty (30) days
after termination for any reason, except in the case of death,
disability or for cause. If the holder's employment (or a director's
service) is terminated due to death or disability, a NQO may only be
exercised, to the extent exercisable on the date of termination, during
the six (6) months after the date of such termination. All options
expire immediately if termination of employment or service as a director
was for cause. In no event, however, may any option ever be exercised
after its term has expired. ISOs will terminate after termination of
employment to the same extent as NQOs, but no later than the time periods
required under Section 422 of the Code and the regulations promulgated
thereunder.
If the employment or service as a director of a recipient of a
restricted stock award is terminated for any reason, other than due to
death, disability or normal retirement, all of the shares which then
remain subject to forfeiture shall automatically be forfeited and
transferred to the Company at no cost to the Company. The Board may, if
such termination is due to death, disability or normal retirement, deem
that the restrictions or conditions on all or any of the shares subject
to forfeiture have been met, subject to such further terms and
conditions, if any, as the Board may deem appropriate.
The Plan provides that if a recipient of an Award engages in
activities which are in competition with those engaged in by the Company
or other behavior contrary to the interests of the Company within one (1)
year of leaving the employ of the Company, the Company may effect a
forfeiture of any outstanding options and restricted stock and require
such recipient to pay to the Company an amount equal to the difference
between the market value of the shares acquired under Awards exercised or
vested within one (1) year prior to leaving the employ of the Company
after deduction for, in the case of an option, the exercise price of the
options.
Transferability
The Board may permit participants to transfer NQOs to such persons,
and upon such terms and conditions as the Board may determine.
Otherwise, Awards granted under the Plan will not be transferable other
than by will or the laws of descent and distribution.
Change of Control
Upon the occurrence of a change of control of the Company (as
defined in the Plan); (i) all options will automatically become
exercisable, (ii) the restrictions on all shares subject to restricted
stock Awards will lapse, and unrestricted certificates shall be issued to
restricted stock holders; and (iii) the performance objectives set forth
in any performance award shall be deemed fulfilled.
<PAGE>
Amendment and Termination
The Plan may be amended, suspended or terminated by the Board at any
time, without the approval of shareholders or participants, provided that
no such action may, without a participant's written consent, adversely
affect any previously granted Award. In addition no amendment may be
made without shareholder approval to the extent that, under applicable
law and regulations, including Code, such amendment
would disqualify options for treatment as ISOs or would disqualify Awards
for treatment as "qualified performance-based compensation" within the
meaning of Code Section 162(m). No grants may be made under the Plan
after a date which is ten (10) years following the effective date of the
Plan.
Certain Federal Income Tax Consequences
The following is a brief summary of the principal United States
Federal income tax consequences of certain transactions under the Plan,
based on current United States Federal income tax laws. This summary is
not intended to be exhaustive, does not constitute tax advice and, among
other things, does not describe state, local or foreign tax consequences.
Under the Code, no income is recognized by the recipient of a NQO at
the time the option is granted, unless the NQO has a readily
ascertainable fair market value. Upon exercise of a NQO, the optionee
will recognize ordinary compensation income in an amount equal to the
excess, if any, of the fair market value of the shares exercised over
the aggregate option exercise price (the "Spread"). The Company will
generally be entitled to a deduction equal to the Spread, subject to any
limitation on deductibility imposed by Section 162(m) of the Code, as
discussed below.
When an optionee disposes of shares acquired by the exercise of a
NQO, any gain or loss will generally be treated as a long-term or short-
term capital gain, depending upon the holding period of the shares. The
holding period for shares acquired pursuant to the exercise of a NQO
begins on the date of exercise. An optionee's tax basis in shares of
Common Stock acquired by exercise of a NQO will be equal to the exercise
price plus the amount taxable as ordinary income.
If an optionee pays the exercise price of an NQO in full or in part
with shares of previously acquired Common Stock, such exercise will not
affect the tax treatment described above. With respect to such exercise,
no gain or loss generally will be recognized to the optionee upon the
surrender of the previously acquired shares to the Company. The shares
received upon exercise which are equal in number
to the previously acquired shares tendered will have the same tax basis
as the previously acquired shares surrendered to the Company, and will
have a holding period for determining capital gain or loss that includes
the holding period of the shares surrendered. The value of the remaining
shares received by the optionee will be taxable to the optionee as
compensation. The remaining shares will have a tax basis
equal to the fair market value recognized by the optionee as compensation
income and the holding period will commence on the
exercise date. Shares tendered to pay applicable income and payroll
taxes arising from such exercise will generate taxable income or loss
equal to the difference between the tax basis of such shares and the
amount of income and payroll taxes satisfied with such shares. Such
<PAGE>
income or loss will be treated as long-term or short-term capital gain or
loss depending on the holding period of the shares surrendered. Where
the shares tendered to pay applicable income and payroll taxes arising
from such exercise generate a loss equal to the difference between the
tax basis of such shares and the amount on income and payroll taxes
satisfied with such shares, such loss may not be currently recognizable
if, within a period beginning thirty (30) days before the exercise date
and ending thirty (30) days after that date, the optionee acquires or
enters into a contract or option, including a reload option, to acquire
additional Common Stock.
Upon the grant or exercise of an ISO, the optionee will not
recognize income, but will recognize income only when he or she
subsequently disposes of the shares. However, the amount of the income
not recognized is a tax preference item for the purposes of computing the
alternate minimum tax.
If the optionee disposes of the shares acquired no earlier than the
later of one year from the date of exercise or two years from the date of
grant of the ISO, the amount realized from the sale that exceeds the
option exercise price will not be recognized by the optionee as ordinary
income; rather, such amount will be taxed as a long-term capital gain.
Also, the Company will not be entitled to any deduction.
If the disposition occurs prior to the later of one year from the
date of exercise or two years from the date of grant (a "Disqualifying
Disposition"), the optionee will recognize ordinary income equal to the
excess, if any, between (a) the fair market value of the shares on the
date of exercise of the option (or, if less, the amount realized on the
disposition of the shares acquired on exercise); and (b) the option
exercise price. The optionee will also recognize a long-term or short-
term capital gain (depending on the holding period which begins on the
date of exercise) on any further gain measured by the excess, if any,
between the amount received upon disposition of the shares and the fair
market value of the shares on the date of exercise of the option. An
optionee's tax basis in shares of Common Stock acquired by exercise of an
ISO will be equal to the exercise price plus the amount taxable as
ordinary income. If an optionee makes a Disqualifying Disposition, the
Company will be entitled to an income tax deduction equal to the amount
recognized by the employee as ordinary income.
If an optionee pays the exercise price of an ISO in full or in part
with previously acquired shares of Common Stock, the exchange will not
affect the tax treatment of the exercise. Upon such exchange, no gain or
loss generally will be recognized upon the delivery of the
previously acquired shares to the Company, and the shares issued in
replacement of the shares tendered to pay the exercise price will have
the same basis and holding period for capital gain purposes as the
previously acquired shares. An optionee, however, would not be able to
utilize the holding period for the previously acquired shares for
purposes of satisfying the ISO statutory holding period requirements.
Additional shares of Common Stock will have a basis of zero and a
holding period that commences on the date the Common Stock is issued to
the optionee upon exercise of the ISO. If such an exercise is effected
using shares of Common Stock previously acquired through the exercise
of an ISO, the exchange of the previously acquired shares may be a
Disqualifying Disposition of such Common Stock if the holding periods
<PAGE>
discussed above have not been met.
If an ISO is exercised at a time when it no longer qualifies as an
ISO, the option will be treated as a nonqualified option. Subject to
certain exceptions for disability or death, an ISO generally will not be
eligible for the Federal income tax treatment described above if it is
exercised more than three (3) months following a termination of
employment.
Unless a recipient of a restricted stock award elects to be taxed at
the time of grant with respect to the shares subject to the award, the
recipient will not recognize income until the possibility of forfeiture
lapses. When, and as the possibility of forfeiture lapses, the recipient
will recognize ordinary income in an amount equal to the fair market
value of the shares at that time. A recipient of a restricted stock
award may elect, within thirty (30) days following the date of grant, to
recognize ordinary income at the date of the grant with respect to the
shares subject to the award in an amount equal to the fair market value
of the shares at the date of grant, determined without regard to the
possibility of forfeiture. The Company will be entitled to a deduction
at the time ordinary income is recognized by a recipient of a restricted
stock award equal to the amount so recognized. If a recipient of a
restricted stock award elects to be
taxed at the date of grant and the shares are subsequently forfeited,
the recipient is not entitled to a deduction as a consequence of such
forfeiture and the Company must recognize as ordinary income the amount
it previously deducted with respect to such award. Any dividends with
respect to shares subject to forfeiture pursuant to a restricted stock
award granted to a recipient who has not elected to be taxed at the date
of grant of the award are treated as additional compensation, taxable as
ordinary income to the recipient and deductible by the Company when
received by the recipient. If any election has been made to be taxed at
the date of grant, the dividends represent ordinary dividend income to
the recipient and are not deductible by the Company.
To the extent that the vesting period of any options [or restricted
stock awards] are accelerated on account of a proposed dissolution or
liquidation of the Company, or a sale of substantially all of the assets
of the Company, or the merger or consolidation of the Company with or
into another corporation, the value of the options at the time of vesting
could be treated as a "parachute payment" subject
to an excise tax imposed on the holder. Such consequences would only
follow, however, if the total "parachute payments" (including the value
of the option) were of sufficient magnitude to give rise to "excess
parachute payments" as defined in the Code.
With certain exceptions, Section 162(m) of the Code limits the
deduction to the Company for compensation paid to the Covered Executives
in excess of $1 million dollars per executive per taxable
year. However, compensation paid to Covered Executives will not be
subject to such deduction limit if it is considered "qualified
performance-based compensation" (within the meaning of Section 162(m)
of the Code). Awards to the Covered Executives under the Plan are
intended to be qualified performance-based compensation.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS PROPOSAL.
<PAGE>
ITEM 3
RATIFICATION OF APPOINTMENT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors has appointed Deloitte & Touche LLP to serve
as the independent certified public accountants for the Company for its
2000 fiscal year. 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 Board is requesting shareholders to ratify the appointment of
Deloitte & Touche LLP, although such ratification is not required. 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, the persons named in the proxy will act in respect thereof in
accordance with their best judgment.
BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's executive officers and directors and persons who own more
than ten percent of a registered class of the Company's equity securities
to file an initial report of ownership on Form 3 and changes in ownership
on Form 4 or 5 with the Securities and Exchange Commission (the "SEC").
Executive officers, directors and greater than ten percent shareholders
are also required by SEC rules to furnish the
Company with copies of all Section 16(a) forms they file. Based solely
on its review of the copies of such forms received by it, or written
representations from certain reporting persons, the Company believes
that during the last fiscal year, all filing requirements applicable
to its officers, directors and ten percent shareholders were satisfied.
<PAGE>
SHAREHOLDER PROPOSALS
Shareholder proposals intended for inclusion in the Company's proxy
statement for the 2001 annual meeting of shareholders must be received by
the Company no later than November 1, 2000 and must meet certain
requirements of SEC Rule 14a-8. In addition, for shareholder proposals to
be presented at the 2001 annual meeting of shareholders without inclusion
in the Company's proxy statement for that year, notice of such proposal
must be received by the Company no later than January 17, 2001 to
prevent the Company from being able to exercise its discretionary voting
authority with respect to that proposal. Proposals may be mailed to
Photronics, Inc. to the attention of Jeffrey P. Moonan, Secretary, 1061
East Indiantown Road, Jupiter, Florida 33477.
SOLICITATION OF PROXIES AND COSTS 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
March 3, 2000
<PAGE>
Appendix A
PHOTRONICS, INC.
2000 STOCK PLAN
(1) PURPOSES OF THE PLAN
The purposes of this 2000 Stock Plan are:
(a) To attract and retain the best available personnel for
positions of substantial responsibility both as Employees
and as Outside Directors) in respect of the business of
PHOTRONICS, INC., and any current subsidiary or any
subsidiary which PHOTRONICS, INC. may hereafter organize
or acquire;
(b) To provide additional incentive to such personnel; and
(c) To promote the success of the business.
(2) DEFINITIONS
As used herein, the following definitions shall apply:
(a) "Award" shall mean an Option or a Restricted Stock Award.
(b) "Board" shall mean the Board of Directors of PHOTRONICS, INC.
(c) "Change of Control" means the occurrence of an event defined in
Section 15 of the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Common Stock" shall mean the common stock of the Company.
(f) "Company" shall mean PHOTRONICS, INC.
(g) "Compensation Committee" shall mean a committee of the Board
composed of at least two (2) members of the Board.
(h) "Disability" shall have the meaning set forth in Section
22(e)(3) of the Code or in any successor provision thereto.
(i) "Employee" shall mean a regular, salaried common law employee of
the Company or any of its subsidiaries or affiliates.
(j) "Option" shall mean a stock option granted pursuant to the Plan.
(k) "Option Agreement" shall mean the stock option agreement entered
into between the Company and an Employee or Outside Director
upon the grant of an Option.
(l) "Option Price" shall mean the exercise price determined pursuant
to Section 4 hereof for the Shares to be issued pursuant to any
Option granted under the Plan.
(m) "Optioned Stock" shall mean the stock subject to an Option or
Restricted Stock Award granted pursuant to the Plan.
<PAGE>
(n) "Optionee" shall mean an Employee or Outside Director who
receives an Option or Restricted Stock Award.
(o) "Outside Director" shall mean a member of the Company's Board of
Directors who is not also an Employee.
(p) "Performance Award" means an Option or Restricted Stock Award
which is subject to conditions which render it a performance
stock award under applicable law.
(q) "Plan" shall mean this 2000 Stock Plan.
(r) "Restricted Stock Award" means a restricted stock award granted
pursuant to the Plan.
(s) "Restricted Stock Award Agreement" means the Restricted Stock
Award Agreement entered into between the Company and an
Employee or Outside Director upon the grant of a Restricted
Stock Award.
(t) "Share" shall mean a share of the Common Stock of the Company as
adjusted in accordance with Section 14 of the Plan.
(u) "10% Shareholder" shall mean an individual who at the time an
Option is granted hereunder owns, within the meaning of Section
422(b)(6) of the Code, stock possessing more than 10% of the
total combined voting power of all classes of stock of the
Company or of its parent or subsidiary corporations.
(3) STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 14 of the Plan, the maximum
aggregate number of Shares for which Awards may be granted under the
Plan, is One Million (1,000,000) Shares of Common Stock; provided,
that Awards for no more than ten percent (10%) of the Shares
authorized for issuance under this Plan may be granted cumulatively
pursuant to Restricted Stock Awards and Awards for no more than
fifteen percent (15%) of the Shares authorized for issuance under
this Plan may be granted to any one person during any one calendar
year. Shares issued under the Plan may be authorized but unissued,
or treasury Shares, or Shares reacquired by the Company, or any
combination of the foregoing.
If an Option should expire, be cancelled or become unexerciseable
for any reason without having been exercised in full, or any Shares
issued pursuant to a Restricted Stock Award are forfeited or the
Restricted Stock Award is cancelled, the unexercised, cancelled or
forfeited Shares which were subject thereto shall, unless the Plan
shall have been terminated, become available for the grant of other
Awards under the Plan.
(4) ADMINISTRATION OF THE PLAN
(a) Procedure
The Plan shall be administered by the Board or the Compensation
Committee. Members of the Board who are either eligible for
grants under this Plan or have been given grants under this Plan
may vote on any matters affecting the administration of the Plan
<PAGE>
or the grant of any Options or Restricted Stock Awards pursuant
to the Plan, except that no such member shall act upon the
granting of an Option or Restricted Stock Award to himself, but
any such member may be counted in determining the existence of
a quorum at any meeting of the Board during which action is
taken with respect to the granting of Options or Restricted
Stock Awards to him.
(b) Powers of the Board and the Committee
Subject to the provisions of the Plan, the Board or the
Compensation Committee shall have the authority:
i) to grant to any eligible Employee or Outside Director an
Option or Restricted Stock Award, which shall be
conditioned on the execution by such Employee or Outside
Director of an Option Agreement or Restricted Stock Award
Agreement in the form approved by the Board or the
Committee;
ii) to determine the Option Price for any Shares to be issued
pursuant to an Option granted under the plan, whether an
Option is to be a Performance Award and the conditions
applicable to such Options, the conditions applicable to
any Restricted Stock Award, the Employees or Outside
Directors to whom and the time or times at which Options
or Restricted Stock Awards shall be granted, to determine
the exercise or vesting date of Options and Restricted
Stock Awards, whether the Option shall be a non-qualified
or an incentive stock option (as defined in Section 422 of
the Code or any successor provision thereto) and the
number of Shares to be represented by each Option or
Restricted Stock Award, and the term of each Option which
in no event shall be more than ten (10) years from the
date of the grant of the Option (five [5] years in the
case of an incentive stock option granted to a 10% owner);
iii) to interpret the Plan;
iv) to prescribe, amend and rescind rules and regulations
relating to the Plan;
v) to determine the terms and provisions of each Option
granted under the Plan (which need not be identical) and,
(with the consent of the holder thereof) to modify or
amend each Option or Restricted Stock Award; provided,
however, that in no event may the exercise price of an
Option be reduced (except pursuant to Section 14) after it
is issued;
vi) to accelerate any exercise date of any Option or
Restricted Stock Award except that the exercise date of
any Option or Restricted Stock Award granted to any
director or executive officer cannot be accelerated
without such holder's consent if such acceleration would
result in liability under Section 16 of the Act, or any
successor provision thereto;
<PAGE>
vii) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of
an Option or Restricted Stock Award previously granted by
the Board or the Compensation Committee; and
viii) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(c) Effect of Board's or Compensation Committee's Decision
All decisions, determinations and interpretations of the
Board or the Compensation Committee shall be final and
binding on all the holders of any Awards granted under
the Plan.
(5) ELIGIBILITY
Options and Restricted Stock Awards under the Plan may be granted
only to such Employees or to such Outside Directors as the Board or
the Compensation Committee shall select. An Employee or Outside
Director who has been granted an Award may, if he or she is
otherwise eligible, be granted additional Awards. Incentive stock
options may be granted only in accordance with Section 422 of the
Code, as may be amended from time to time, or any successor
provision thereto, and in accordance with any applicable regulations
promulgated thereunder.
(6) TERM OF PLAN
Subject to the provisions of Section 22 hereof, the Plan shall
become effective on January 11, 2000, subject to approval by the
shareholders of the Company. The Plan shall continue in effect for
a term of ten (10) years thereafter, unless sooner terminated under
Section 18 hereof.
(7) TERM OF OPTION OR RESTRICTED STOCK AWARD
Except as provided under Code Section 422(c)(5) with respect to a
10% Shareholder's incentive stock option and unless of shorter
duration as provided in the terms of an Option or Restricted Stock
Award Agreement, the term of each Option or forfeiture period for a
Restricted Stock Award granted under the Plan shall be determined by
the Board or the Compensation Committee but, in no event, shall it
be for a period in excess of ten (10) years from the date of grant
thereof.
(8) MAXIMUM ALLOTMENT OF OPTIONS
The aggregate fair market value (determined as of the date the
Option is granted) of the Common Stock with respect to which
incentive stock options are exercisable for the first time by any
individual during any calendar year under the Plan and all other
plans of the Company or any parent or subsidiary of the Company
shall not exceed $100,000 or such other amount as is permitted by
the Code and regulations promulgated thereunder with respect to
incentive stock options.
(9) OPTION PRICE
The Option Price for the Shares to be issued pursuant to any Option
shall be as stated in the Option Agreement and shall be not less
than the greater of (a) the fair market value of such Shares on date
<PAGE>
of grant of the Option as determined by the Board or the
Compensation Committee (except that with respect to an incentive
stock option issued to a 10% Shareholder, 110% of the fair market
value or such other percentage as may be permitted by the Code and
regulations promulgated thereunder), or (b) the par value of such
Shares.
(10) EXERCISE OF OPTIONS
(a) Procedure for Exercise
Any Option shall be exercisable on such terms and conditions as
are set forth in the Option Agreement. The purchase price of
the Shares as to which an Option shall be exercised shall be
paid in full at the time of exercise at the election of the
holder of an Option:
i) in cash or currency of the United States of America;
ii) by tendering to the Company shares of the Company's Common
Stock, then owned by him, having a fair market value equal
to the cash exercise price applicable to the purchase
price of the Shares as to which an Option is being
exercised; or
iii) partly in cash and partly in shares of the Company's
Common Stock valued at fair market value.
Such fair market value shall be the closing price per share of
the Common Stock as reported on the NASD National Market (or on
any successor market or a market or exchange on which the Common
Stock is then traded), as of the close of business on the day
immediately preceding the day on which the Option is exercised.
If the Common Stock is not traded on the NASD National Market or
any other market or exchange, the fair market value shall be
determined by the Board or the Compensation Committee, whose
determination shall be final and conclusive.
An Option shall be deemed to be exercised when:
i) written notice of such exercise has been given to the
Company in accordance with the terms of the Option
Agreement by the person entitled to exercise the Option;
ii) payment as described above for the Shares with respect to
which the Option is exercised has been received by the
Company; and
iii) such payment is accompanied by any representations or
agreements required by the terms of this Plan or the
Option Agreement.
A holder of an Option shall not have any rights to dividends or
any other rights as a stockholder of the Company with respect to
any shares covered by his Option 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.
<PAGE>
(b) Termination of Employment or Director Relationship/
Death or Disability of Optionee
i) If, for any reason, an Optionee shall cease to be an
Employee, or an Outside Director's service on the Board
shall terminate, his or her right to exercise any non-
qualified stock options shall cease thirty (30) days
(except to the extent otherwise provided in [ii] below)
after the date of such termination; provided, however,
that if an Employee's employment is terminated for cause
or an outside Director's service is terminated due to his
or her removal for cause, said Option shall terminate
immediately. The Plan shall not confer upon any Optionee
any right with respect to continuation of employment or
consulting, or continuation of service as an Outside
Director, nor shall it interfere in any way with his right
or the Company's right to terminate such relationship at
any time subject to the provisions of any applicable
contract. An Option may be exercised under this paragraph
only to the extent of the accrued right to exercise at the
time of termination, and only to the extent that the
Option is otherwise exercisable pursuant to the initial
term provided for in the Option Agreement covering such
Option.
ii) In the event of the death or Disability of an Optionee,
any non-qualified stock options which were exercisable by
the Optionee on the date of his death or Disability shall
remain exercisable for a period of six (6) months by the
Optionee, the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or
inheritance. An Option may be exercised under this
paragraph only to the extent of the accrued right to
exercise at the time of death or Disability, as the case
may be, and only to the extent that the Option is
otherwise exercisable pursuant to its initial term.
iii) If an Employee's employment with the Company shall
terminate for any reason, he or she may exercise an
incentive stock option for such period after termination
as provided above for non-qualified stock options, but for
no longer than the maximum period after termination
allowed by Code Section 422 and the regulations
promulgated thereunder; provided, however, that if
employment shall terminate by reason of discharge for
cause, the Option shall terminate immediately upon such
termination.
(11) NON-TRANSFERABILITY OF OPTIONS AND RESTRICTED STOCK AWARDS
Except as provided below, an Option and, unless and until the
shares subject to a Restricted Stock Award are no longer subject to
forfeiture, shares subject to a Restricted Stock Award, may not be
sold, pledged, assigned, hypothecated, transferred or disposed of in
any manner other than by will or by the laws of descent or
distribution and an Option may be exercised during the lifetime of
the Optionee only by the Optionee. Notwithstanding the foregoing,
the Board or the Compensation Committee may permit the transfer of
non-qualified stock options by such optionees to such persons or
<PAGE>
entities, and upon such terms or conditions as the Board or
Compensation Committee may determine from time to time.
(12) RESTRICTED STOCK AWARD
The Shares subject to a Restricted Stock Award shall be issued in
the name of the recipient as soon as reasonably practicable after
the date of grant of the Restricted Stock Award (and after the
recipient has executed a Restricted Stock Award Agreement and any
other documents which the Board or the Compensation Committee, in
its absolute discretion, may require) without the requirement for
payment of any cash consideration by such recipient, but shall be
held by the Company until all risk of forfeiture shall have lapsed.
Any certificate representing such Shares may bear such restrictive
legend, if any, as the Board or the Compensation Committee may
determine. Shares issued pursuant to Restricted Stock Awards shall
be subject to such restrictions, terms and conditions as the Board
or the Compensation Committee may establish, which may include,
without limitation, the achievement of specific goals, and shall
vest at such time or times as the Board or the Compensation
Committee shall determine. The Board or the Compensation Committee
may, in its sole discretion, make such adjustments to the goals
applicable to a Restricted Stock Award as they deem necessary or
advisable due to changes in criteria used for the specific goals or
other factors which they deem appropriate.
Upon issuance of the Shares subject to a Restricted Stock
Award, the recipient shall, subject to Section II, have all the
rights of a stockholder with respect to such Shares, including the
right to vote such Shares, but all dividends and other distributions
paid or made with respect to such Shares shall be held by the
Company subject to the restrictions, terms and conditions of the
Restricted Stock Award.
As promptly as practicable after the shares of Common Stock
subject to a Restricted Stock Award cease to be subject to
forfeiture, the certificate representing such Shares, or a new
certificate without any inapplicable restrictive legend if the
original certificate bore a restrictive legend, shall be delivered
to the recipient or, in the event of the death of a recipient prior
to delivery, to his estate or other legally appointed personal
representative.
In the event of the termination of employment or service as
an Outside Director of a recipient of a Restricted Stock Award due
to death, disability or normal retirement, the Board or the
Compensation Committee may, in its sole discretion, deem that the
restrictions, terms and conditions of the Restricted Stock Award
have been met for all or part of the Shares subject thereto, subject
to such further terms and conditions, if any, as the Board or the
Compensation Committee may determine.
(13) FORFEITURE OF OPTIONS AND REPAYMENT OF MARKET VALUE
OF OPTIONS OR AWARDS
If, at any time within one (1) year after an Optionee ceases
to be an Employee or Outside Director, such Optionee engages in any
activity in competition with any activity of the Company, or
inimical, contrary or harmful to the interests of the Company,
<PAGE>
including, but not limited to:
(a) conduct related to such Optionee's employment for which
either criminal or civil penalties against the Optionee may be
sought;
(b) violation of Company policies, including, without limitation,
the Company's insider trading policy;
(c) accepting employment with or serving as a consultant, advisor or
in any other capacity to an employer that is in competition with
or acting against the interests of the Company, including
employing or recruiting any present, former or future employee
of the Company;
(d) disclosing or mis-using any confidential information or
material concerning the Company; or,
(e) participating in a hostile takeover attempt, then:
i) Options and Restricted Stock Awards shall terminate
effective the date on which such Optionee enters
into such activity, unless terminated sooner by
operation of another term or condition of this
Plan;
ii) the aggregate difference between the exercise price
of Options exercised within one (1) year of the
date Optionee ceased to be an Employee or an
Outside Director (the "Termination Date") and the
closing market value of the Shares covered by such
Options; and
iii) the aggregate of the closing market value for all
Shares subject to Restricted Stock Awards as to
which forfeiture provision expired within one (1)
year prior to the Termination Date shall be paid by
the Optionee to the Company.
By accepting any Option or Restricted Stock Award, each
Optionee consents to a deduction from any amounts the Company owes
such Optionee from time to time (including amounts owed as wages or
other compensation, fringe benefits or vacation pay, as well as any
other amounts owed by the Company), to the extent of the amounts
the Optionee owes the Company under the foregoing paragraph.
Whether or not the Company elects to make any set-off in whole or
in part, if the Company does not recover by means of set-off the
full amount the Optionee owes it, calculated as set forth above,
each Optionee agrees to pay immediately the unpaid balance to the
Company. Optionees may be released from their obligations under
this Section above only by the Board of Directors or the
Compensation Committee.
(14) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event there is any change in the Common Stock through
the declaration of stock dividends, or through a recapitalization
resulting in a stock split, or combination or exchange of Shares, or
<PAGE>
reorganization, or otherwise, the Board or the Compensation
committee shall appropriately adjust the number or class of Shares
covered by an Award, as well as the exercise price of Options; and,
in the event of any such change in the outstanding Common Stock, the
aggregate number and class of Shares available for the grant of
Awards under the Plan shall be appropriately adjusted.
No fractional Shares of the Common Stock shall be issuable on
account of any action aforesaid, and the aggregate number of shares
then covered by the Award when changed as a result of such action
shall be reduced to the largest number of whole shares resulting
from such action unless the Board or the Compensation Committee, in
its discretion, shall determine to issue scrip certificates in
respect of any fractional Shares, which scrip certificates shall be
in a form and have such terms and conditions as the Board or the
Compensation Committee in its discretion shall prescribe.
(15) CHANGE OF CONTROL
(a) For purposes of this Plan, a Change of Control shall
occur if there shall occur:
i) (A) any consolidation or merger in which the Company is
not the continuing or surviving corporation or
pursuant to which shares of stock of the Company
entitled to vote in the election of directors of the
Company would be converted into cash, securities or
other property, other than a merger of the Company in
which holders of such stock of the Company immediately
prior to the merger have the same proportionate
ownership of common stock entitled to vote in the
election of directors of the surviving corporation
immediately after the merger as immediately before, or
(B) any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions)
of all or substantially all the assets of the Company.
(b) Notwithstanding any provisions in this Plan to the
contrary:
i) Each outstanding Option granted under the Plan
shall become immediately exercisable in full for
the aggregate number of shares covered thereby upon
the occurrence of a Change of Control described in
this Section 15 and shall continue to be exercisable in
full provided, however, that no Option shall be
exercisable beyond the expiration date of its original
term.
ii) The restrictions applicable to shares of a Restricted
Stock Award shall lapse upon the occurrence of a Change of
Control, and the holder thereof shall be entitled to
receive, and the Company shall issue, immediately after
the date of the Change of Control, unrestricted
certificates for all of such shares.
iii) If a Change of Control occurs during the course of a
performance period applicable to a Performance Award, the
<PAGE>
holder of such Performance Award shall be deemed to have
satisfied the performance objectives effective on the date
of such occurrence. Options granted pursuant to
performance Awards shall immediately vest and be treated
as set forth in subsection (b)(i) above, and the
restrictions applicable to any Restricted Stock Award
shall lapse and shall be treated as set forth in
subsection (b)(ii) above immediately following the
occurrence of such Change of Control.
iv) In the event of a Change of Control, no amendment,
suspension or termination of the Plan thereafter shall
impair or reduce the rights of any person with respect to
any award made under the Plan
(16) WITHHOLDING TAX
The Company may make such provisions (including accepting shares as
payment or reducing the number of Shares to be issued) as it may
deem appropriate for the withholding of any taxes which the Company
determines it is required to withhold in connection with the grant
or exercise of any Award or the disposition of any Common Stock
acquired pursuant to the exercise of an Option or Restricted Stock
Award. If an Optionee who exercises all or part of an Option
subsequently disposes of Common Stock in a "disqualifying
disposition" described under Code Section 422(c)(2), such
Optionee shall so notify the Company, forward such information as is
thereby requested by the Company and, if so requested by the
Company, pay to the Company such dollar amounts as are necessary to
satisfy the Company's tax withholding obligations resulting from
such disposition.
(17) TIME OF GRANTING OPTIONS
The date of grant of an Award under the Plan shall for all
purposes be the date on which the Board or Compensation Committee
makes the determination granting such Award. Notice of the
determination shall be given to the Optionee within a reasonable
time after the date of such grant.
(18) AMENDMENT AND TERMINATION OF THE PLAN
(a) Amendment
The Board, without approval of the shareholders, may amend the
Plan from time to time in such respects as the Board may deem
advisable except that the Board may not, without the approval of
the shareholders, amend the Plan to the extent that such
amendment would require shareholder approval under the Code in
order for Options to be granted as incentive stock options or in
order for Awards to be considered "qualified performance-based
compensation" within the meaning of Section 162(m) of the Code.
(b) Termination
The Board, without approval of the shareholders, may at any time
suspend or terminate the Plan.
(c) Effect of Amendment or Termination
Any such amendment or termination of the Plan shall not
adversely affect Awards previously granted.
<PAGE>
(19) CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued with respect to an Award granted under
the Plan unless the exercise of such Option or termination of the
forfeiture period for such Restricted Stock Award and the issuance
and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the
Securities Act of 1933, as amended, the Act, the rules and
regulations promulgated thereunder, the requirements of any stock
exchange upon which the Shares may then be listed, and applicable
state securities laws, and shall be further subject to the approval
of counsel for the Company with respect to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the
time of any such exercise that the Shares are being purchased only
for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the
Company, such a representation is necessary or desirable under any
of the aforementioned relevant provisions of law.
(20) RESERVATION OF SHARES
During the terms of this Plan, the Company will at all times reserve
and keep available a number of Shares sufficient to satisfy the
requirements of the Plan.
Inability of the Company to obtain from any regulatory body having
jurisdiction such authority as is deemed by the Company's counsel to
be necessary to the lawful issuance and sale of any Shares hereunder
shall relieve the Company of any liability in respect of the non-
issuance or sale of such shares as to which such requisite authority
shall not have been obtained.
(21) GOVERNING LAW
The Plan and the rights of all persons hereunder shall be governed
by the laws of the State of Connecticut, without regard to
principles of conflict of laws.
(22) MISCELLANEOUS
Participation under the Plan shall not affect eligibility for any
profit-sharing, bonus, insurance, pension, or other extra
compensation plan which the Company or any subsidiary may at any
time adopt for employees, except to the extent that any law or
regulation governing any such plan so provides. By acceptance of an
Award under the Plan, each employee shall be deemed to agree that
any income realized upon the receipt or exercise thereof or upon the
disposition of the shares received pursuant thereto is special
incentive compensation and will not be taken into account as
"wages", "salary" or "compensation" in determining the amount of any
payment under any pension, retirement, incentive, profit-sharing,
employee stock purchase or deferred compensation plan of the Company
or any subsidiary.
(23) SHAREHOLDERS' APPROVAL
The Plan shall be subject to approval by the affirmative vote of the
holders of a majority of the shares of Common Stock present and
voting at a duly held shareholders' meeting within twelve (12)
months before or after adoption of the Plan by the Board and any
Award, granted hereunder prior to such approval shall be conditioned
<PAGE>
thereon.
<PAGE>
P R O X Y
___________
Photronics, Inc.
2000 Annual Meeting of Shareholders
April 4, 2000
___________________________________________________
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, as proxies of the
undersigned, and hereby authorizes each or any of them to vote, as
designated below, all shares of common stock of Photronics, Inc., which the
undersigned would be entitled to vote if personally present at the 2000
Annual Meeting of Shareholders of Photronics, Inc. to be held at 10:00 a.m.
on April 4, 2000 at The Inn at Ethan Allen, 21 Lake Avenue Extension,
Danbury, Connecticut, and at any adjournments or postponements thereof.
1) To elect the following five (5) persons as directors:
Walter M. Fiederowicz Constantine S. Macricostas
Joseph A. Fiorita, Jr. Willem D. Maris
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 approve the Photronics,Inc. 2000 Stock Plan.
___ FOR ___ AGAINST ___ ABSTAIN
3) To ratify the appointment of Deloitte & Touche LLP as the independent
certified public accountants of the Company for the 2000 fiscal year.
___ FOR ___ AGAINST ___ ABSTAIN
4) In their discretion, such other business as may properly come before the
meeting or any adjournments or postponements thereof.
(Please date and sign proxy card on other side)
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The shares represented by this proxy will be voted (or not voted) on Items 1, 2,
and 3 as directed by the shareholder, but if no direction is indicated, will
be voted FOR each Item. The Board of Directors recommends a vote FOR each of
the Items.
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:____________________ , 2000
Please mark, sign, date and return this proxy card using the enclosed
envelope.
