October 10, 1997
Xx. Xxxxxxxxxxx X. Xxxxxxxxxxx
000 Xxxxx Xxxxx Xxx, Xxxx 000
Xxxxxxx, Xxxxxxx 00000
RE: Consulting Agreement
Dear Xxxx:
This letter confirms that Photronics, Inc. (the "Company") has agreed
to retain you as a Consultant in accordance with the terms of this letter.
This agreement is extended to you because of your importance as an Officer of
the Company and our desire to retain your counsel after your retirement.
Accordingly, you shall be retained, and you agree to serve, as a
consultant in the event you retire from the employ of the Company. In order
to retire from the Company, you must be at least 55 years of age and have
been employed by the Company for at least 20 years, which criteria you have
satisfied. The consulting relationship shall commence on your date of
retirement and continue for five (5) years (the "Consulting Period").
1) Consulting Services
You shall provide consulting services to the Company in any area of
your expertise upon request by a duly authorized officer of the Company, and
such services shall be provided at such times, locations (provided that
travel to any location not reasonably proximate to your then current
residence shall be at the expense of the Company) and by such means as
reasonably required by the Company. You shall make yourself available to
provide such services for up to ten (10) hours per month throughout the
Consulting Period.
2) Compensation
As compensation for your services during the Consulting Period, the
Company agrees to provide you with consulting fees and benefits under the
terms specified below:
a) Fees:
In consideration for your consulting services, the Company will pay
you consulting fees in the amount of one hundred seventy-five thousand
dollars ($175,000) per year ("Consulting Fees"). The Company shall pay you
the Consulting Fees in equal monthly payments of fourteen thousand five
hundred eighty-three dollars and thirty-three cents ($14,583.33) throughout
the Consulting Period.
b) Taxes and Withholding:
As a Consultant, you will comply with all applicable State and
Federal laws governing self-employed individuals, including obligations such
as quarterly payment of estimated taxes, social security, disability and
other contributions based on the fees paid to you by the Company under this
Agreement. The Company will not withhold or make payments for State or
Federal income tax or Social Security, make employment insurance or
disability insurance contributions, or obtain workers' compensation insurance
on your behalf. You hereby indemnify and defend the Company against any and
all such taxes or contributions.
c) Health Insurance:
To the extent permitted by law and by the Company's group health
insurance policies, during the Consulting Period you and your spouse will
continue to be covered by the Company's health insurance benefits until age
65. If the Company is unable to provide such coverage directly through its
own benefit program, the Company agrees to reimburse you for the cost of
obtaining any personal replacement insurance coverage.
3) Limitations on Authority
You shall have no responsibilities as a Consultant to the Company other
than as provided for above, and you shall not represent or purport to
represent the Company in any manner whatsoever to any third party unless
authorized by the Company in writing to do so.
4) Non-Competition and Non-Solicitation
You hereby agree that during the Consulting Period, you will not,
without first obtaining the Company's prior written approval, directly or
indirectly engage or prepare to engage in any activities in competition with
the Company or accept employment, provide services to, or establish a
business relationship with a business or individual engaged in or preparing to
engage in competition with the Company. You are free to engage in other work
or business activities during the Consulting Period so long as they are not
competitive with the Company. For purposes of this paragraph, the holding of
less than one percent (1%) of the outstanding voting securities of any firm
or business organization in competition with the Company shall not constitute
activities or services precluded by this paragraph. You also agree that
through the end of the Consulting Period and for one (1) year thereafter, you
will not, either directly or through others, solicit or attempt to solicit
any employee or other personnel of the Company to terminate his or her
relationship with the Company or to become an employee, consultant or
independent contractor to or for any other person or entity. Further, you
agree not to disparage the Company in any manner likely to be harmful to the
Company's business reputation, or the personal or business reputation of the
Company's directors, shareholders or employees. You agree that the
Consulting Fees adequately compensate you for the restrictions in this
paragraph.
5) Expenses
The Company agrees to reimburse you for all reasonable expenses you
incur on behalf of the Company in order to fulfill your obligations
hereunder; provided, however, that you must request prior authorization from
the Company for such expenses.
6) Liquidated Damages / Specific Performance
a) You agree that it would be impracticable or extremely difficult to
ascertain the amount of actual damages caused by breach of paragraph (4),
Non-Competition and Non-Solicitation, of this Agreement. Therefore, you
agree that, in the event of such a breach, the Company will be entitled to
withhold further payments of all Consulting Fees, recover all Consulting Fees
already paid to you, and obtain such injunctive and other relief as
appropriate. You further agree that this liquidated damage provision
represents reasonable compensation for the loss which would be incurred by
the Company because of any such breach.
b) In the event you claim that the Company is in breach of this
Agreement, in addition to any other remedies available to you, you shall be
entitled to obtain specific performance of this Agreement.
c) In the event either party litigates enforcement of this Agreement,
the prevailing party shall be entitled to recover its reasonable attorneys'
fees and pre-judgment interest on amounts due but not paid. Interest shall
be at a rate equal to two percent (2%) above the prime rate announced by the
Company's primary lender.
None of your interests under this letter, or any right to receive any
payments or distribution hereunder, shall be subject in any manner to sale,
transfer, assignment, pledge, attachment, garnishment or other alienation or
encumbrance of any kind, nor may such interest or right to receive a payment
or distribution be taken, voluntarily or involuntarily, for the satisfaction
of the obligations or debts of, or other claims against you, including claims
for alimony, support, separate maintenance and claims in bankruptcy proceedings.
If the foregoing accurately sets forth our Agreement, please so
indicate by signing in the space provided below.
Very truly yours,
PHOTRONICS, INC.
By:____JEFFREY P. MOONAN______
Title: Senior Vice President
Agreed to and accepted by:
XXXXXXXXXXX X. XXXXXXXXXXX
Xxxxxxxxxxx X. Xxxxxxxxxxx
