EXHIBIT 10.32
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered into as of
July 17, 2000 by and between Photronics, Inc., a Connecticut corporation (the
"Company") and Xxxxxx Xxxxx ("Executive").
WITNESSETH:
WHEREAS, the Company and Executive desire to enter into this
Agreement to assure the Company of the continuing service of Executive and to
set forth the terms and conditions of Executive's employment with the Company.
NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, the parties agree as follows:
1. TERM. The Company agrees to employ Executive and Executive hereby
accepts such employment, in accordance with the terms of this Agreement,
commencing July 17, 2000 and ending October 31, 2003 unless this Agreement is
earlier terminated as provided herein (the "Term"); provided, however, that
unless the Company or Executive gives written notice to the other party at least
45 days prior to the end of the Term of this Agreement (as may be extended
pursuant to this Section), the Term of this Agreement shall automatically be
extended for an additional two (2) year term from such date.
2. SERVICES AND EXCLUSIVITY OF SERVICES. So long as this Agreement
shall continue in effect, Executive shall devote Executive's full business time,
energy and ability to the business, affairs and interests of the Company and its
affiliates or subsidiaries and matters related thereto. Executive shall use his
best efforts and abilities to promote the Company's interests and shall perform
the services contemplated by this Agreement in accordance with the Company's
policies as established by the Board of Directors of the Company and such
policies as may be established by and under the direction of the Company's Chief
Executive Officer (the "CEO"). Executive agrees to faithfully and diligently
promote the business, affairs and interests of the Company and its affiliates or
subsidiaries.
Without the prior express written authorization of the CEO,
Executive shall not, directly or indirectly, during the Term of this Agreement:
(a) render services to any other person or firm for compensation or (b) engage
in any activity whether alone, as a partner, officer, employee or significant
investor of or in any other entity. An investment of greater than 5% of the
outstanding capital or equity securities of an entity shall be deemed
significant for these purposes.
Executive represents to the Company that Executive has no other
outstanding commitments inconsistent with any of the terms of this Agreement or
the services to be rendered hereunder.
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3. DUTIES AND RESPONSIBILITIES. Executive shall serve as Senior Vice
President of Finance and Chief Financial Officer of the Company. In the
performance of Executive's duties, Executive shall report directly to the CEO
and shall be subject solely to the direction of the CEO and to such reasonable
limits on Executive's authority as the CEO may from time to time impose. During
the Term of this Agreement, the Company shall not reduce materially Executive's
duties, authority or responsibilities; provided, however, that the continuation
of Executive's primary duties, authority, and responsibilities after a "change
of control" of the Company (as such term is defined below) in a larger
organization shall not constitute a reduction of Executive's duties, authority
or responsibilities for purposes hereof.
In addition to following the directives of the CEO, Executive agrees
to observe and comply with the policies, rules and regulations of the Company.
The Company agrees that the duties which may be assigned to Executive shall be
reasonable, usual and customary duties of the office or position to which
Executive will from time to time be appointed or elected and shall not be
inconsistent with the provisions of the charter documents of the Company or
applicable law. Executive shall have such corporate power and authority as shall
reasonably be required to enable Executive to perform the responsibilities and
duties required in any office that may be held.
4. COMPENSATION.
(a) BASE COMPENSATION.
During the Term of this Agreement, the Company agrees to pay
Executive a base salary at the rate of $225,000 per year, payable in accordance
with the Company's practices in effect from time to time (the "Base Salary").
All payments required hereunder, including the payments required by this Section
4(a), may be allocated by the Company to one or more of its subsidiaries to
which Executive renders services but the Company shall remain responsible for
all payments hereunder and Executive shall have no obligation to seek payment
from such subsidiaries.
(b) PERIODIC REVIEW.
The Compensation Committee of the Board of Directors of the Company
shall review Executive's Base Salary and Additional Benefits (as defined below)
then being paid to Executive at each annual meeting of the Board of Directors of
the Company. The annual meeting of the Board of Directors is customarily the
first board meeting held following the end of each fiscal year of the Company.
Following such review, the Company may at its sole discretion increase (but
shall not be required to increase except as set forth below) the Base Salary or
any other benefits, but may not decrease the Base Salary during the time
Executive serves as Senior Vice President of Finance and Chief Financial Officer
and the level of Executive's Additional Benefits shall be commensurate with
those then being provided to the other executive officers of the Company who are
"Named Executives" in the Company's annual proxy statement
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on Schedule 14A that is filed annually with the Securities and Exchange
Commission. At the annual meeting of the Board of Directors following completion
of the Company's fiscal year ended October 31, 2000 and at every annual meeting
of the Board of Directors thereafter during the Term of this Agreement,
Executive's Base Salary shall be increased by an amount no less than the amount
obtained by multiplying such previous Base Salary by the percentage increase of
the Consumer Price Index, as reported by the Bureau of Labor Statistics of the
United States Department of Labor for the State of Connecticut. The amount of
such increase combined with the previous year's Base Salary shall then
constitute Executive's Base Salary for purposes of this Agreement.
(c) BONUS.
Executive shall be entitled to receive a minimum annual cash bonus
for the fiscal year ending October 31, 2000 of $35,000 and for the fiscal year
ended October 31, 2001 of $65,000. These bonuses shall not preclude the
Executive from receiving additional bonus awards as may be granted by the
Compensation Committee of the Company from time to time. Each bonus awarded
under the provisions of the clause 4(c) shall be paid to the Executive within 30
days of each such date.
(d) STOCK OPTION AWARDS
Following approval of the Compensation Committee of the Board of Directors
of the Company, Executive shall receive an option to purchase 75,000 shares of
the Company's common stock (NASDAQ: PLAB) to be granted within 15 calendar days
of the signing date of this Agreement and a further stock option award to
purchase an additional 25,000 shares of the Company's common stock to be granted
within 195 calendar days of the signing date of this agreement pursuant to the
provision of the Company's Employee Stock Option Plan effective at the time of
each of these two stock option awards respectively.
These stock option awards shall not preclude the Executive from
receiving additional stock option awards as may be granted by the Compensation
Committee of the Company during the Term of this agreement.
(e) LIFE INSURANCE.
During the Term of this Agreement, the Company shall provide the
Executive with a life insurance benefit consistent with the Company's policies
and provisions applicable to executive officers of the Company who are "Named
Executives" in the Company's annual proxy statement on Schedule 14A that is
filed annually with the Securities and Exchange Commission.
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(f) AUTOMOBILE ALLOWANCE.
During the Term of this Agreement, the Company shall provide the
Executive with a Company business automobile use benefit consistent with the
Company's policies and provisions applicable to executive officers of the
Company who are "Named Executives" in the Company's annual proxy statement on
Schedule 14A that is filed annually with the Securities and Exchange Commission.
(g) PERQUISITES.
During the Term of this Agreement, Executive shall be entitled to
receive a paid vacation benefit in addition to all holidays of the Company in
accordance with the plans, policies, programs and practices as are in effect
generally with respect to executive officers of the Company who are "Named
Executives" in the Company's annual proxy statement on Schedule 14A that is
filed annually with the Securities and Exchange Commission. Executive may not,
however, take vacation time of more than ten (10) consecutive working days at
any one time from the Company for vacation.
(h) ADDITIONAL BENEFITS.
During the Term of this Agreement, the Company shall provide the
Executive with health insurance in addition to all rights and benefits for which
Executive is otherwise eligible under any additional bonus plan, incentive,
participation or extra compensation plan, stock purchase plan, 401K pension
plan, profit-sharing plan, life, medical, dental, disability, or insurance plan
or policy, the Company's medical executive reimbursement plan or other plan or
benefit that the Company may provide for Senior Vice President(s) or (provided
Executive is eligible to participate therein) for executive officers of the
Company who are "Named Executives" in the Company's annual proxy statement on
Schedule 14A that is filed annually with the Securities and Exchange Commission,
as from time to time in effect, during the Term of this Agreement (collectively,
"Additional Benefits").
5. TERMINATION. This Agreement and all obligations hereunder (except
the obligations contained in Sections 7, 8, 9, 10, 11 and 12 (Confidential
Information, Non-Competition, Non-Solicitation of Customers, Non-Interference
with Employees, Intellectual Property, and Remedies) which shall survive any
termination hereunder) shall terminate upon the earliest to occur of any of the
following:
(a) EXPIRATION OF TERM. The expiration of the Term provided for in
Section 1 or the voluntary termination by Executive following 45 day's
written notice to the Company or retirement from the Company in accordance
with the normal retirement policies of the Company.
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(b) DEATH OR DISABILITY OF EXECUTIVE. The death or disability of
Executive. For the purposes of this Agreement, disability shall mean the
absence of Executive performing Executive's duties with the Company on a
full-time basis for a period of sixty business days, or for shorter
periods aggregating sixty or more business days in any twelve (12)-month
period, as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the
Company or its insurers. If Executive shall become disabled, Executive's
employment may be terminated only by written notice from the Company to
Executive. If Executive's employment is terminated by reason of
Executive's death or disability, this Agreement shall terminate without
further obligations to Executive (or Executive's heirs or legal
representatives) under this Agreement, other than for (1) payment of the
sum of (A) Executive's Base Salary through the date of termination to the
extent not theretofore paid, (B) any accrued bonus due to Executive based
on a pro rata allocation of such bonus as of the date of termination, (C)
any compensation previously deferred by Executive (together with any
accrued interest or earnings thereon), and (D) any accrued vacation pay,
in each case to the extent not theretofore paid (the sum of the amounts
described in clauses (A), (B), (C) and (D) shall be hereinafter referred
to as the "Accrued Obligations"), which shall be paid to Executive or
Executive's estate or beneficiary, as applicable, in a lump sum in cash
within 15 business days after the date of termination or any earlier time
required by applicable law; and (2) payment to Executive or Executive's
estate or beneficiary, as applicable, of any amount accrued pursuant to
the terms of any applicable benefit plan.
(c) TERMINATION FOR CAUSE.
The Company may terminate Executive's employment and all of
Executive's rights to receive Salary, bonus and any Additional Benefits
hereunder for cause. For purposes of this Agreement, the term "cause"
shall be defined as any of the following; provided, however, that the
Company must determine the presence of such cause in good faith:
i. Executive's material breach of one or more of the duties
and responsibilities under this Agreement (other than as a result
of incapacity due to Executive's disability);
ii. Executive's conviction by, or entry of a plea of guilty
in, a court of competent and final jurisdiction for any felony;
iii. Executive's commission of an act of fraud upon the
Company; or
iv. Executive's willful failure or refusal to perform
Executive's duties or responsibilities under this Agreement or
Executive's violation of any duty of loyalty (i.e., engaging in
self-interested transactions,
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misappropriation of business opportunities that belong to the
Company, etc.) to the Company or a breach of Executive's
fiduciary duties to the Company.
(d) WITHOUT CAUSE.
Notwithstanding any other provision of this Section 5, the CEO shall
have the right to terminate Executive's employment with the Company
without cause at any time, but any such termination other than as
expressly provided in Section 5(a), (b) or (c) herein shall be without
prejudice to Executive's rights to receive any and all remuneration due
him as provided for under the terms of this agreement through such
termination date. If Executive is so terminated without cause, Executive
shall receive from the Company a payment ("Severance Payment ") equal to
Executive's Base Salary during the then current fiscal year. The Severance
Payment shall be paid by the Company to Executive in twelve equal monthly
installments over the twelve-month period of time immediately following
such termination, the first of such payments to be paid within ten (10)
business days of the date of such termination.
Such payments shall be in lieu of all rights of Executive, including
any rights to any Additional Benefits hereunder, all of which shall
terminate upon the date of termination.
(e) EXCLUSIVE REMEDY. Executive agrees that the Severance Payment
provided and contemplated by this Agreement shall constitute the sole and
exclusive obligation of the Company in respect of Executive's employment
with and relationship to the Company and that the full payment thereof
shall be the sole and exclusive remedy for any termination of Executive's
employment. Executive covenants not to assert or pursue any other
remedies, at law or in equity, with respect to any termination of
employment.
6. BUSINESS EXPENSES. During the Term of this Agreement, to the
extent that such expenditures satisfy the criteria under the Internal Revenue
Code or other applicable laws for deductibility by the Company (whether or not
fully deductible by the Company) for federal income tax purposes as ordinary and
necessary business expenses, the Company shall provide the Executive with
reimbursement of reasonable business expenses incurred by the Executive while
conducting Company business in a manner consistent with the Company's policies
and provisions applicable to the Executives of the Company.
7. CONFIDENTIAL INFORMATION. Executive acknowledges that the nature
of Executive's engagement by the Company is such that Executive shall have
access to information of a confidential and/or trade secret nature which has
great value to the Company and which constitutes a substantial basis and
foundation upon which the business of the Company is based. Such information
includes financial, manufacturing and marketing data, techniques, processes,
formulas, developmental or
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experimental work, work in process, methods, trade secrets (including, without
limitation, customer lists and lists of customer sources), or any other secret
or confidential information relating to the products, services, customers, sales
or business affairs of the Company or its Affiliates (the "Confidential
Information"). Executive shall keep all such Confidential Information in
confidence during the Term of this Agreement and at any time thereafter and
shall not disclose any of such Confidential Information to any other person,
except to the extent such disclosure is (i) necessary to the performance of this
Agreement and in furtherance of the Company's best interests, (ii) required by
applicable law, (iii) lawfully obtainable from other sources, or (iv) authorized
in writing by the Board. Upon termination of Executive's employment with the
Company, Executive shall deliver to the Company all documents, records,
notebooks, work papers, and all similar material containing any of the foregoing
information, whether prepared by Executive, the Company or anyone else.
8. NON-COMPETITION. In order to protect the Confidential
Information, Executive agrees that during the Term of this Agreement, and for a
one-year period following any termination of this Agreement, Executive shall
not, directly or indirectly, whether as an owner, partner, shareholder, agent,
employee, willful creditor or otherwise, promote, participate or engage in any
activity or other business competitive with the Company's business or the
business of any affiliate of the Company in all territories in which the Company
operates.
9. NON-SOLICITATION OF CUSTOMERS. Executive agrees that for a period
of one-year after any termination of this Agreement, Executive will not, on
behalf of Executive or on behalf of any other individual, association or entity,
call on any of the customers of the Company or any affiliate of the Company for
the purpose of soliciting or inducing any of such customers to acquire (or
providing to any of such customers) any product or service provided by the
Company or any affiliate of the Company, nor will Executive in any way, directly
or indirectly, as agent or otherwise, in any other manner solicit, influence or
encourage such customers to take away or to divert their business to Executive
or any other person or entity by or with which Executive is employed,
associated, affiliated or otherwise related.
10. NON-INTERFERENCE WITH EMPLOYEES. In order to protect the
Confidential Information, Executive agrees that during the Term of this
Agreement and for a period of one-year following any termination of this
Agreement, Executive will not, directly or indirectly, induce or entice any
employee of the Company or its affiliates to leave such employment or cause
anyone else to leave such employment.
11. INTELLECTUAL PROPERTY. Executive has no interest (except as
disclosed to the Company) in any inventions, designs, improvements, patents,
copyrights and discoveries which are useful in or directly or indirectly related
to the business of the Company or to any experimental work carried on by the
Company. Except as may be limited by applicable law, all inventions, designs,
improvements, patents, copyrights and discoveries conceived by Executive during
the Term of this
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Agreement which are useful in or directly or indirectly related to the business
of the Company or to any experimental work carried on by the Company, shall be
the property of the Company. Executive will promptly and fully disclose to the
Company all such inventions, designs, improvements, patents, copyrights and
discoveries (whether developed individually or with other persons) and will take
all steps necessary and reasonably required to assure the Company's ownership
thereof and to assist the Company in protecting or defending the Company's
proprietary rights therein.
Executive also agrees to assist the Company in obtaining United
States or foreign letters patent and copyright registrations covering inventions
assigned hereunder to the Company and that Executive's obligation to assist the
Company shall continue beyond the termination of Executive's employment but the
Company shall compensate Executive at a reasonable rate for time actually spent
by Executive at the Company's request with respect to such assistance. If the
Company is unable because of Executive's mental or physical incapacity or for
any other reason to secure Executive's signature to apply for or to pursue any
application for any United States or foreign letters patent or copyright
registrations covering inventions assigned to the Company, then Executive hereby
irrevocably designates and appoints the Company and its duly authorized officers
and agents as Executive's agent and attorney-in-fact to act for and in
Executive's behalf and stead to execute and file any such applications and to do
all other lawfully permitted acts to further the prosecution and issuance of
letters patent or copyright registrations thereon with the same legal force and
effect as if executed by Executive. Executive hereby waives and quitclaims to
the Company any and all claims, of any nature whatsoever, which Executive now or
hereafter may have for infringement of any patent or copyright resulting from
any such application for letters patent or copyright registrations assigned
hereunder to the Company. Executive will further assist the Company in every way
to enforce any copyrights or patents obtained including, without limitation,
testifying in any suit or proceeding involving any of the copyrights or patents
or executing any documents deemed necessary by the Company, all without further
consideration but at the expense of the Company. If Executive is called upon to
render such assistance after the termination of Executive's employment, then
Executive shall be entitled to a fair and reasonable per diem fee in addition to
reimbursement of any expenses incurred at the request of the Company.
12. REMEDIES. The parties hereto agree that the services to be
rendered by Executive pursuant to this Agreement, and the rights and privileges
granted to the Company pursuant to this Agreement, are of a special, unique,
extraordinary and intellectual character, which gives them a peculiar value, the
loss of which cannot be reasonably or adequately compensated in damages in any
action at law, and that a breach by Executive of any of the terms of this
Agreement will cause the Company great and irreparable injury and damage.
Executive hereby expressly agrees that the Company shall be entitled to the
remedies of injunction, specific performance and other equitable relief to
prevent a breach of this Agreement by Executive. This
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Section 12 shall not be construed as a waiver of any other rights or remedies
which the Company may have for damages or otherwise.
13. SEVERABILITY. If any provision of this Agreement is held to be
unenforceable for any reason, it shall be adjusted rather than voided, if
possible, to achieve the intent of the parties to the extent possible. In any
event, all other provisions of this Agreement shall be deemed valid and
enforceable to the extent possible.
14. SUCCESSION. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns and any such successor
or assignee shall be deemed substituted for the Company under the terms of this
Agreement for all purposes. As used herein, "successor" and "assignee" shall
include any person, firm, corporation or other business entity which at any
time, whether by purchase, merger or otherwise, directly or indirectly acquires
the stock of the Company or to which the Company assigns this Agreement by
operation of law or otherwise. The obligations and duties of Executive hereunder
are personal and otherwise not assignable. Executive's obligations and
representations under this Agreement will survive the termination of Executive's
employment, regardless of the manner of such termination.
15. CHANGE OF CONTROL.
(a) For purposes of the Agreement, a "change of control" means, and
shall be deemed to have taken place, if: (I) any person or entity or group of
affiliated persons or entities, including a group which is deemed a "person" by
Section 3(d)(3) of the Securities Exchange Act of 1934, as amended, acquires in
one or more transactions, ownership of fifty percent (50%) or more of the
outstanding capital stock of the Company.
(b) In the event Executive is terminated by the Company for any
reason (other than for Cause as defined in Section 5.1 thereof), during the
first twelve (12) months following a change in control of the Company (or any
successor), Executive shall be entitled to receive the greater of (i) the total
Severance Payment to which Executive may be entitled under section 5(d) hereof,
or (ii) a lump sum payment of $250,000 (the "Change of Control Payment"). In no
event shall Executive be entitled to receive both the Severance Payment
described in Section 5(d) hereof and the Change of Control payment described in
this Section 15(b).
(c) Any payments to be made to Executive in connection with this
Section 15 shall be made within ten (10) business days after the date of the
Executive's termination under Section 15(b).
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16. NOTICES. Any notice or other communication provided for in
this Agreement shall be in writing and sent if to the Company to its
principal office at:
Photronics, Inc.
00 Xxxxx Xxxx Xxxx
Xxxxxx, XX 00000
Attention: Chief Executive Officer
or at such other address as the Company may from time to time in writing
designate, and if to Executive at the address set forth on the signature page
hereof or at such address as Executive may from time to time in writing
designate. Each such notice or other communication shall be effective (I) if
given by written telecommunication, three (3) days after its transmission to the
applicable number so specified in (or pursuant to) this Section 16 and a
verification of receipt is received, (ii) if given by certified mail, once
verification of receipt is received, or (iii) if given by any other means, when
actually delivered to the addressee at such address and verification of receipt
is received.
17. ENTIRE AGREEMENT. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
any prior agreements, undertakings, commitments and practices relating to
Executive's employment by the Company.
18. AMENDMENTS. No amendment or modification of the terms of
this Agreement shall be valid unless made in writing, duly executed by both
parties.
19. WAIVER. No failure on the part of any party to exercise or
delay in exercising any right hereunder shall be deemed a waiver thereof or of
any other right, nor shall any single or partial exercise preclude any further
or other exercise of such right or any other right.
20. GOVERNING LAW. This Agreement, and the legal relations between
the parties, shall be governed by and construed in accordance with the laws of
the State of Connecticut without regard to conflicts of law doctrines and any
court action arising out of this Agreement shall be brought in any court of
competent jurisdiction within the State of Connecticut.
21. ATTORNEYS' FEES. If any litigation shall occur between
Executive and the Company which litigation arises out of or as a result of this
Agreement or the acts of the parties hereto pursuant to this Agreement, or which
seeks an interpretation of this Agreement, the prevailing party shall be
entitled to recover all costs and expenses of such litigation, including
reasonable attorneys' fees and costs.
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22. WITHHOLDING. All compensation payable hereunder, including
salary and other benefits, shall be subject to applicable taxes, withholding
and other required, normal or elected employee deductions.
23. COUNTERPARTS. This Agreement and any amendment hereto may
be executed in one or more counterparts. All of such counterparts shall
constitute one and the same agreement and shall become effective when a copy
signed by each party has been delivered to the other party.
24. HEADINGS. Section and other headings contained in this
Agreement are for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of July 17, 2000.
THE COMPANY
PHOTRONICS, INC.,
A CONNECTICUT CORPORATION
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By: Xxxxxxxxxxx Xxxxxxxxxxx
Its: Chairman and CEO
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By: Xxxxx X. XxxXxxxxx
Its: President
EXECUTIVE
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Xxxxxx Xxxxx
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