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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Connecticut
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06-0854886
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Common Stock, par value $.01
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The Nasdaq Stock Market LLC
(NASDAQ Global Select Market)
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Large accelerated filer
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☐
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Accelerated filer
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Non-accelerated filer
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(Do not check if a smaller reporting company)
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Smaller reporting company
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ITEM 15.
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EXHIBITS, FINANCIAL STATEMENT SCHEDULES
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Joint Venture Framework Agreement dated November 20, 2013 between the Company and Dai Nippon Printing Co., Ltd*#
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Joint Venture Operating Agreement dated November 20, 2013 between the Company and Dai Nippon Printing Co., Ltd.*#
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Outsourcing Agreement dated November 20, 2013 between the Company, Dai Nippon Printing Co., Ltd and Photronics Semiconductor Mask Corporation.*#
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License Agreement dated November 20, 2013 between the Company and Photronics Semiconductor Mask Corporation.*#
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License Agreement dated November 20, 2013 between Dai Nippon Printing Co., Ltd and Photronics Semiconductor Mask Corporation.*#
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Margin Agreement dated November 20, 2013 between the Company, Dai Nippon Printing Co., Ltd and Photronics Semiconductor Mask Corporation.*#
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Merger Agreement dated January 16, 2014 between Photronics Semiconductor Mask Corporation and DNP Photomask Technology Taiwan Co. Ltd.*#
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Exhibit
Number
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Description
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10.19 | Joint Venture Framework Agreement dated November 20, 2013 between the Company and Dai Nippon Printing Co., Ltd*# | |
10.20 |
Joint Venture Operating Agreement dated November 20, 2013 between the Company and Dai Nippon Printing Co., Ltd.*#
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10.21 |
Outsourcing Agreement dated November 20, 2013 between the Company, Dai Nippon Printing Co., Ltd and Photronics Semiconductor Mask Corporation.*#
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10.22 |
License Agreement dated November 20, 2013 between the Company and Photronics Semiconductor Mask Corporation.*#
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10.23 |
License Agreement dated November 20, 2013 between Dai Nippon Printing Co., Ltd and Photronics Semiconductor Mask Corporation.*#
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10.24 |
Margin Agreement dated November 20, 2013 between the Company, Dai Nippon Printing Co., Ltd and Photronics Semiconductor Mask Corporation.*#
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10.25 |
Merger Agreement dated January 16, 2014 between Photronics Semiconductor Mask Corporation and DNP Photomask Technology Taiwan Co. Ltd.*#
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Certification of the Chief Executive Officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002. * | ||
Certification of the Chief Financial Officer as required by Section 302 of the Sarbanes-Oxley Act of 2002.* |
#
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Confidential treatment has been granted with respect to certain provisions of this exhibit.
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*
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Filed herewith.
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Photronics, Inc.
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July 7, 2015
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By:
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/s/ Peter S. Kirlin
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Peter S. Kirlin
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Chief Executive Officer
(Principal Executive Officer)
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/s/ SEAN T. SMITH
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July 7, 2015
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Sean T. Smith
Senior Vice President
Chief Financial Officer
(Principal Accounting Officer/
Principal Financial Officer)
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By
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/s/ CONSTANTINE S. MACRICOSTAS
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July 7, 2015
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Constantine S. Macricostas
Executive Chairman of the Board
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By
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/s/ PETER S. KIRLIN
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July 7, 2015
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Peter S. Kirlin
Chief Executive Officer
Director
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By
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/s/ WALTER M. FIEDEROWICZ
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July 7, 2015
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Walter M. Fiederowicz
Director
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By
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/s/ JOSEPH A. FIORITA, JR.
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July 7, 2015
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Joseph A. Fiorita, Jr.
Director
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By
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/s/ LIANG-CHOO HSIA
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July 7, 2015
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Liang-Choo Hsia
Director
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By
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/s/ GEORGE MACRICOSTAS
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July 7, 2015
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George Macricostas
Director
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By
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/s/ MITCHELL G. TYSON
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July 7, 2015
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Mitchell G. Tyson
Director
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1. | Objective |
1.1 | The objectives of this Agreement are to set forth the agreements between the Parties to effect (a) the acquisition by Photronics Semiconductor Mask Corp., a subsidiary of Photronics organized under the laws of Taiwan, the Republic of China (hereinafter “ROC” or “Taiwan”) with its current principal place of business at 1F, No. 2, Lising Road, Hsinchu City, Hsinchu Science Park, Taiwan (“PSMC”) of DNP Photomask Technology Taiwan Co., Ltd., a subsidiary of DNP organized under the laws of Taiwan with its principal place of business at No.6, Lising 7th Rd., East District, Hsinchu City 30078 Hsinchu Science Park, Taiwan (“DPTT”), by way of a statutory merger under the laws of Taiwan whereby PSMC shall survive (the “Business Combination”); (b) the issue of shares of PSMC to DNP as consideration for the Business Combination; and (c) the execution of the Transaction Agreements (defined below). |
1.2 | For the purposes of this Agreement, the term “Transaction Agreements” shall refer to the following documents (as each is defined herein): |
1.3 | The schedules and exhibits after duly executed shall form part of this Agreement and shall have the same force and effect as if expressly set out in the body of this Agreement, and any reference to this Agreement shall include such schedules and exhibits. |
1.4 | References to “Affiliates” in this Agreement shall refer to, with respect to any person, a person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such person, where “control” for the purposes of this definition (including the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and actions of a person, whether through the ownership of voting securities, by contract or credit arrangement, as trustee or executor, or otherwise. |
2. | Business Combination in Taiwan |
3. | Cooperation and Support |
3.1 | The Parties shall use their reasonable best efforts to take or cause to be taken all actions required to consummate the transactions contemplated hereby. In addition, the Parties hereto shall file or supply, or cause to be filed or supplied, all material applications, notifications and information required to be filed or supplied by them pursuant to applicable laws in connection with the transactions contemplated hereby. Each Party hereto shall use its reasonable best efforts to obtain all waivers, consents and approvals from governmental authorities and third parties required to be obtained by such Party for the consummation of the transactions contemplated hereby, other than any waivers, consents and approvals where the failure to obtain such waiver, consent and/or approval, either in any individual case or in the aggregate, would not have a material adverse effect on the transactions contemplated hereby. Each Party hereto shall cooperate in good faith with the other Party hereto in order to achieve the timely consummation of the transactions contemplated hereby. |
3.2 | Notwithstanding the foregoing, the Parties understand that their communications and activities under the Transactions Agreements are subject to various applicable laws and regulations, including anti-trust and related competition laws. Each of the Parties hereby agree to use its reasonable best efforts to take or cause to be taken all actions required and to work with each other to cause the transactions contemplated hereby to be in compliance with such laws and regulations. |
4. | Execution of Transaction Agreements and Regulatory Approval Procedures |
4.1 | Each of the Parties shall execute the Joint Venture Agreements concurrently with their execution of this Agreement. The Joint Venture Agreements (except for this Agreement) will have an effective date as of the closing of the Business Combination. |
4.2 | It is understood that Photronics holds approximately 98.63% of PSMC's total issued and outstanding shares as of the date of this Agreement and Photronics plans to make PSMC become, directly or indirectly, a wholly owned subsidiary of Photronics (“Restructuring Transaction”) in accordance with the Project Timetable subject to the proviso of Section 2 hereof. Photronics and DNP agree that they shall respectively cause PSMC and DPTT to sign the Merger Agreement promptly (but in no event later than ten (10) calendar days) after PSMC has become, directly or indirectly, a wholly owned subsidiary of Photronics. |
4.3 | Subject to the compliance of the Parties in regard to their respective obligations under the Transaction Agreements and except as otherwise agreed by the Parties in writing after the date hereof, the Parties agree that regulatory approvals necessary to consummate the Business Combination are as set forth in the Schedule I of the Merger Agreement. |
5. | Representations and Warranties and Further Covenants |
5.1 | Photronics hereby represents and warrants that each of the representations and warranties set forth in Exhibit 5-1 are true and correct in all material respects as of the date hereof, and as of the closing of the Business Combination. |
5.2 | DNP hereby represents and warrants that each of the representations and warranties set forth in Exhibit 5-2 are true and correct in all material respects as of the date hereof, and as of the closing of the Business Combination. |
5.3 | Photronics and DNP further agree on the relevant net working capital of PSMC and DPTT respectively as set forth in the NWC Proposal attached hereto as Exhibit 5-3 (the “NWC Proposal”). Photronics and DNP hereby covenant to, and shall cause PSMC or DPTT, as applicable, to implement and carry out their respective obligations under the NWC Proposal. In the event that there is a need to extract or inject cash by Photronics and/or DNP from PSMC and/or DPTT as the case may be after the closing of the Business Combination according to the NWC Proposal, Photronics and DNP shall make their best efforts to cooperate with each other in good faith to carry out such cash extraction or injection. |
5.4 | Photronics hereby covenants that it will, and it will also cause PSMC to, and DNP hereby covenants that it will, and it will also cause DPTT to, consummate the terms and the respective obligations set forth in Section 1.9 of the Merger Agreement on the transfer of DPTT employees to the surviving entity resulting from the Business Combination. |
5.5 | During the period of time between signing this Agreement and the closing of the Business Combination, DNP and DPTT will use best efforts to continue to maintain * to the extent reasonably possible under the circumstances. Furthermore, the Parties (DNP, Photronics along with their subsidiaries PSMC and DPTT) agree to collaborate and apply best effort to * by which the Parties can confirm * from the joint venture company formed as a result of the Business Combination referenced hereunder once it is formed or as soon as practical thereafter under similar * as the current *. Either Party will be under no obligation to consummate the Business Combination until the * is secured. In the event that the * is not secured by March 31, 2014, then each Party has a right to * this Agreement and any other Transaction Agreement by delivering a written notice to the other Party, but in no event such notice shall be delivered to the other Party later than April 14, 2014. A failure to deliver such notice by April 14, 2014 shall be regarded as a waiver of the right to * this Agreement or any other Transaction Agreement in accordance with this Section 5.5, and thereafter, notwithstanding anything to the contrary in this Section 5.5, the * shall not affect in any way the Parties’ obligations to consummate the Business Combination under this Agreement and/or any other Transaction Agreement. |
6. | Standstill |
6.1 | Each of the Parties agree, and undertake to cause their Affiliates, not to sell, pledge, hypothecate, assign, encumber, or otherwise directly or indirectly transfer any of their shares in PSMC or DPTT to any person prior to the closing of the Business Combination; for clarification, this standstill restriction does not apply to any actions taken by Photronics and/or any of its Affiliate(s) to carry out the Restructuring Transaction (including but not limited to the release and re-creation of pledge over PSMC shares currently pledged as described in Section 6.4 (i)). |
6.2 | The Parties agree, and undertake to cause their Affiliates, not to sell, pledge, hypothecate, assign, encumber, or otherwise directly or indirectly transfer any of their shares in, or any rights to any interest in the surviving entity resulting from the Business Combination, except as otherwise agreed in the Joint Venture Operating Agreement. |
6.3 | Photronics undertakes to cause PSMC, and DNP undertakes to cause DPTT, commencing with the date first above written and ending as of the date of the closing of the Business Combination: |
(i) | unless otherwise permitted under Article 1.7 of the Merger Agreement, amend its articles of incorporation or make any material change in any policy on corporate governance, internal control, accounting or the like; |
(ii) | issue, sell, transfer, dispose of or create encumbrances over any shares, securities, or options; |
(iii) | make a capital increase/reduction or split or combine any of its capital stock or securities; |
(iv) | redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or securities; |
(v) | enter into any business outside the existing scope of business, change the scope of the existing business or cease carrying on business; |
(vi) | sell or otherwise dispose of all or substantially all of its assets to any third party or contract to do so; |
(vii) | change its auditors; |
(viii) | change its financial year end or tax accounting year end; |
(ix) | except in the ordinary course of its business, and except for the acquisition/lease (an related lease liability) of the * from Photronics or one of Photronics’ Affiliates, acquire assets from third parties in excess of US* in the aggregate; |
(x) | create or establish any subsidiary, acquire any interest in any other person or entity or enter into any joint venture, business alliance or partnership; |
(xi) | except in the ordinary course of its business, make any borrowings, incur any indebtedness or enter into any financial commitments, guarantees or provision of any kind of security; |
(xii) | enter into any M&A transaction (such as merger, spin-off, business transfer/assumption and share exchange) other than the Business Combination contemplated under the Merger Agreement; or |
(xiii) | make any distribution to its shareholder(s), employees and/or directors/supervisors. |
6.4 | Notwithstanding anything to the contrary set forth herein or in the Section 7.2.1 of the Joint Venture Operating Agreement, the Parties agree that (i) Photronics’ or its Affiliate(s)’ pledge of PSMC shares for Photronics’ or its Affiliate(s)’ loans existing as of the date hereof (including the revolving or renewal of the same or the new loans substitutive therefor) up to * shares of PSMC, in aggregate, is not subject to the restrictions under this Section 6 and Section 7.2.1 of the Joint Venture Operating Agreement, provided that a change in the ownership of any of such pledged shares as a result of the foreclosure by the pledgor shall constitute a material breach of this Agreement and Section 7.2.1 of the Joint Venture Operating Agreement, and (ii) DPTT’s * prior to the closing of the Business Combination as referred to in Article III of the License Agreement between DNP and PSMC is not subject to the restrictions under this Section 6. |
7. | Effectiveness of this Agreement |
7.1 | This Agreement constitutes binding obligations of each of the Parties and shall take effect as of the date hereof until it has been terminated in accordance with this Section 7. |
7.2 | This Agreement shall terminate upon the earliest occurrence of one of the following events: |
8. | Dispute Resolution |
8.1 | The Parties hereby agree that any and all claims, disputes or controversies of whatever nature, arising out of, in connection with, or in relation to the interpretation, performance, enforcement, breach, termination or validity of this Agreement and/or any other Transaction Agreement (except for the License Agreement for the purpose of this Section 8), shall be first raised * of each of the Parties for discussion and attempt at resolution in good faith among *. |
8.2 | If, within thirty (30) days (or such shorter time if emergency or exigent circumstances exist) of first raising the issue to the *, the Parties are unable to reach a mutually agreed resolution, then the Parties hereby agree that such claims, disputes or controversies shall be resolved by a binding arbitration, to be held in Taipei at the ROC Arbitration Association (the “Association”), under the ROC Arbitration Law and the Arbitration Rules of the ROC Arbitration Association. Each Party shall bear its own expenses incurred in connection with arbitration and the fees and expenses of the arbitrator shall be shared equally by the Parties involved in the dispute and advanced by them from time to time as required. The arbitrator shall render its final award within six (6) months, subject to extension by the arbitrator upon substantial justification shown of extraordinary circumstances, following conclusion of the hearing and any required post-hearing briefing or other proceedings ordered by the arbitrator. Any discovery in connection with such arbitration hereunder shall be limited to information directly relevant to the controversy or claim in arbitration. The arbitrator will state the factual and legal basis for the award. To the extent not amended or overturned by appeal to a court of competent jurisdiction pursuant to the Arbitration Law of Taiwan, the decision of the arbitrator in any such proceeding will be final and binding and not subject to judicial review and final judgment may be entered upon such an award in any court of competent jurisdiction, but entry of such judgment will not be required to make such award effective. The Parties agree that the arbitration proceedings and decisions shall be kept confidential and that any information or documents, including any pleadings or submissions exchanged or produced in such arbitration (including, but not limited to briefs, or other documents submitted or exchanged, any testimony or other oral submissions, and any awards) shall not be disclosed beyond the arbitrator, the Association, the Parties, their counsel and any person necessary to conduct the arbitration, except as may be required in recognition and enforcement proceedings or otherwise permitted under Section 9.1. The Parties hereby irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of venue of any action brought for enforcement of such arbitration clause or any award resulting from arbitration pursuant to this Section 8 or any defense of inconvenient forum for the maintenance of any such action. Each of the Parties hereto agrees that an arbitration award in any such action may be enforced in other jurisdictions by suit on the arbitration award or in any other manner provided by applicable law. The Parties agree that the arbitration proceeding described in this Section 8 is the sole and exclusive manner in which the Parties may resolve disputes arising out of or in connection with this Agreement; provided that the Parties expressly agree that nothing in this Agreement shall prevent the Parties from applying to a court having jurisdiction over any of the Parties to this Agreement for the limited purpose of obtaining temporary and provisional or injunctive relief necessary solely to preserve the status quo or otherwise to prevent irreparable harm to a Party pending the outcome of arbitration. The Parties agree that all arbitration proceeding described in this Section 8 shall be conducted in English with English speaking lawyer(s) and arbitrator(s), and that the number of arbitrator(s) required at such proceeding shall be: (a) one (1) arbitrator in the event that the disputed amount is less than*, or (b) three (3) arbitrators in the event that the disputed amount is equal to or greater than *. |
9. | Confidentiality |
9.1 | Each Party shall not disclose, divulge, provide, publish or provide access to third parties, and will use reasonable efforts to cause its respective Affiliates, officers, directors, members, employees, agents, representatives and advisors (collectively, such party’s “Covered Persons”) not to disclose, divulge, provide, publish or provide access to third parties, unless and solely to the extent (i) compelled to disclose by judicial or administrative process or by other requirements of law or the applicable rules of any national securities exchange or (ii) necessary to enforce claims in a judicial or administrative proceeding, (a) the existence and content of the Transaction Agreements and any information arising from or in connection with the Transaction Agreements and/or the transactions contemplated hereby and (b) all documents and information concerning the Transaction Agreements and the transactions contemplated hereby or furnished by one Party and its Covered Persons (the “Disclosing Party”), to any other Party and its Covered Persons (the “Receiving Party”), except to the extent that such information can be shown by written evidence to have been (A) previously known on a non-confidential basis by the Receiving Party, (B) publicly available through no fault of the Receiving Party, (C) rightfully received from a third party without a duty of confidentiality, (D) disclosed by the Disclosing Party of such information to a third party without a duty of confidentiality on such third party, (E) independently developed by the Receiving Party prior to or without reference to any such documents or information, or (F) disclosed with the prior approval of the Disclosing Party of such documents or information. If this Agreement is terminated for any reason, the confidentiality obligations required by this Section 9 shall survive and be maintained as set forth below, and the Receiving Party shall return to the Disclosing Party, all documents and other materials, and all copies thereof, obtained by the Receiving Party from the Disclosing Party in connection herewith that are subject to this Section 9. The Receiving Party shall use any information obtained herewith that are subject to this Section 9 only in relation to the performance of its obligations under the Transaction Agreements and/or the transactions contemplated hereby. The confidentiality obligations required by this Section 9 shall not apply to disclosures permitted pursuant to Section 9.2 hereof, and all confidentiality obligations required by this Section 9 shall be terminated upon the * of the (i) termination of this Agreement, or (ii) termination or expiration of *, whichever is later. |
9.2 | Except as agreed by the Parties, each of the Parties agrees that it shall not, directly or indirectly, make or cause any public announcement in respect of the Transaction Agreements or the transactions contemplated hereby without the prior written consent of the other Party, and the Parties agree that they shall undertake not to, and to cause either PSMC or DPTT, as applicable, not to, directly or indirectly, make or cause to be made any such public announcement without the prior written consent of the applicable other Party. Notwithstanding the foregoing, each Party shall be permitted to issue any public announcements or press releases solely to the extent as required by law or the applicable rules of any national securities exchange, provided that a draft of any such public announcement or press release be first provided by the Party who issues such public disclosure to the other Party no later than five (5) Business Days (defined in the Joint Venture Operating Agreement) prior to such required public disclosure; provided further that, in case that reports on Form 8-K need to be filed according to the Securities Exchange Act of 1934 of the United States, such draft shall be provided to the other Party no later than three (3) Business Days. |
10. | Expenses |
11. | Governing Law |
12. | Indemnification |
12.1 | Each of the Parties hereby agrees to indemnify the other Party that is not in default under this Agreement and/or any other Transaction Agreement and its Affiliates, directors, supervisors, officers, employees, agents, and successors (collectively the “Non-Breaching Party”) against, and agrees to hold the Non-Breaching Party harmless from, any and all claim, cost, damage, loss, liability and expense (including without limitation reasonable attorneys’ fees and expenses in connection with any action, suit or proceeding) of any nature whatsoever suffered or incurred by the Non-Breaching Party resulting from or in connection with a breach of this Agreement and/or any other Transaction Agreement by such Party (each, a “Loss”). |
12.2 | Procedures for Indemnification . |
12.3 | Limitations on Indemnification. |
12.4 | Sole and Exclusive Remedy. |
13. | Notices |
13.1 | All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if (a) delivered personally, (b) mailed, certified or registered mail with postage prepaid, (c) sent by next-day or overnight mail or delivery, or (d) sent by fax with electronic confirmation of delivery, as follows: |
- | if to Photronics, |
- | if to DNP, |
13.2 | All such notices, requests, demands, waivers and other communications shall be deemed to have been received (a) if by personal delivery on the day after such delivery, (b) if by certified or registered mail, on the fifth business day after the mailing thereof, (c) if by next-day or overnight mail or delivery, on the day delivered or (d) if by fax, on the next day following the day on which such transmission was sent, provided that a copy is also sent by personal delivery, overnight courier or certified or registered mail. |
14. | Amendments and Waivers |
15. | Assignment |
16. | Severability |
17. | Survival |
18. | Miscellaneous |
By:
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By:
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(i) | If the Actual PSMC NWC at Closing exceeds or is less than the Estimated * at Closing by an amount greater than NT* then PLAB may extract or must inject *. |
(ii) | If the Actual * at Closing exceeds or is less than the Estimated * at Closing by an amount greater than NT* then DNP may extract or must inject *. |
Page
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Article 1. Organizational Matters
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1
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1.1
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Background
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1
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1.2
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Name
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1
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1.3
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Principal Place of Business
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2
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1.4
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Business Purpose
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2
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1.5
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Term
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2
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1.6
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Accounting Consolidation
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2
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1.7
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Transaction Documents
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4
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1.8
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Ratification of Organizational Actions
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5
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1.9
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Articles of Incorporation
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5
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1.10
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Compliance
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5
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1.11
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Pre-Closing Liabilities
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5
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Article 2. Definitions
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5
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Article 3. Shares and Capital Contributions
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12
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3.1
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Authorized Shares
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12
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3.2
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Initial Capital Contributions and Share Issuance
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12
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3.3
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Return or Redemption of Capital Contribution
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12
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3.4
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Liability of Shareholders
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12
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3.5
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Revenue
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13
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Article 4. Financing of the Company
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13
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4.1
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Types of Financing
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13
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Article 5. Management
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15
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5.1
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Board of Directors
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15
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5.2
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Effect of Reduction in Photronics’ Percentage Interest on Photronics Directors
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16
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5.3
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Effect of Reduction in DNP’s Percentage Interest on DNP Directors
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16
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5.4
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Procedure.
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16
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5.5
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Chairman and Vice-Chairman
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17
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5.6
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Meetings of Shareholders and of the Board of Directors; Quorum
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17
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5.7
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Supervisors
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19
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5.8
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Actions Requiring a Supermajority Vote of Shareholders
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19
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5.9
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Actions Requiring a Supermajority Vote of Directors
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20
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5.10
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Compensation of Directors and Supervisors
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20
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5.11
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Other Activities
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20
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5.12
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Accounting; Records and Reports
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20
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5.13
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Indemnification and Liability of the Directors
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23
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5.14
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Officer
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25
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5.15
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Management Advisory Committee
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27
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5.16
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Non-Disclosure
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28
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5.17
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Maintenance of Insurance
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28
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5.18
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Related Party Agreements
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28
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Article 6. Operations
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28
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6.1
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Headquarters
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28
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6.2
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Operations Plan; Annual Budget
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28
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6.3
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DPTT Employees
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28
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6.4
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Company Employees; Seconded Employees
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29
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6.5
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Service Provider Documents
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29
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6.6
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Compensation and Benefits
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30
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Article 7. Disposition and Transfers of Interests
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30
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7.1
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Holding of Shares
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30
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7.2
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Transfer Moratorium
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30
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7.3
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Purchase and Sale of Remaining Interest
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32
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7.4
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Change in Control
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34
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7.5
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Purchase and Sale Agreement
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35
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Article 8. [Intentioanlly deleted]
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35
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Article 9.
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35
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9.1
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Term of this Agreement
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35
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9.2
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Termination and Cross-termination
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35
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9.3
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Right of Terminating Party
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36
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Article 10. Dissolution, Liquidation, and Termination of the Company
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37
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10.1
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Limitations
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37
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10.2
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Exclusive Causes
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37
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10.3
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Effect of Dissolution
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38
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10.4
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Loss of the Company
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38
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10.5
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Liquidation
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39
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10.6
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Dissolution
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39
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Article 11. Distributions
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40
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11.1
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Use of Cash
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40
|
11.2
|
Distributions Upon Liquidation
|
40
|
11.3
|
Withholding
|
40
|
11.4
|
Distributions in Kind
|
41
|
11.5
|
Limitations on Distributions
|
41
|
Article 12. Miscellaneous
|
41
|
|
12.1
|
Amendments
|
41
|
12.2
|
No Waiver
|
41
|
12.3
|
Entire Agreement
|
42
|
12.4
|
Further Assurances
|
42
|
12.5
|
Notices
|
42
|
12.6
|
Governing Law
|
42
|
12.7
|
Construction; Interpretation
|
43
|
12.8
|
Rights and Remedies Cumulative
|
43
|
12.9
|
No Assignment; Binding Effect
|
43
|
12.10
|
Severability
|
43
|
12.11
|
Counterparts
|
44
|
12.12
|
Dispute Resolution; Arbitration
|
44
|
12.13
|
Third-Party Beneficiaries
|
45
|
12.14
|
Specific Performance
|
45
|
12.15
|
Consequential Damages
|
46
|
12.16
|
Fees and Expenses
|
46
|
Schedule A | List of Transaction Documents |
Schedule B | * |
Schedule C | Shareholders and Percentage Interest |
Schedule D | * |
Schedule E | Insurance Policies At Closing |
Schedule F | * |
Schedule G | * |
Schedule H | Initial Business Plan |
Schedule I | * |
Schedule J | * |
1.1 | Background |
1.2 | Name |
1.3 | Principal Place of Business |
1.4 | Business Purpose |
1.5 | Term |
1.6 | Accounting Consolidation |
1.7 | Transaction Documents |
1.8 | Ratification of Organizational Actions |
1.9 | Articles of Incorporation |
1.10 | Compliance |
1.11 | Pre-Closing Liabilities |
3.1 | Authorized Shares |
3.2 | Initial Capital Contributions and Share Issuance |
3.3 | Return or Redemption of Capital Contribution |
3.4 | Liability of Shareholders |
3.5 | Revenue |
4.1 | Types of Financing |
5.1 | Board of Directors |
5.2 | Effect of Reduction in Photronics’ Percentage Interest on Photronics Directors |
Photronics’s Percentage Interest
|
Number of Photronics Directors
|
> 80%
|
*
|
> 50% and
≦
80%
|
*
|
≧
20% and
≦
50%
|
*
|
>
0% and < 20%
|
*
|
5.3 | Effect of Reduction in DNP’s Percentage Interest on DNP Directors |
DNP’s Percentage Interest
|
Number of DNP Directors
|
> 80%
|
*
|
> 50% and
≦
80%
|
*
|
≧
20% and
≦
50%
|
*
|
> 0% and < 20%
|
*
|
5.4 | Procedure . |
5.5 | Chairman and Vice-Chairman |
5.6 | Meetings of Shareholders and of the Board of Directors; Quorum |
5.7 | Supervisors |
5.8 | Actions Requiring a Supermajority Vote of Shareholders |
5.9 | Actions Requiring a Supermajority Vote of Directors |
5.10 | Compensation of Directors and Supervisors |
5.11 | Other Activities |
5.12 | Accounting; Records and Reports |
5.13 | Indemnification and Liability of the Directors |
5.14 | Officer |
5.15 | Management Advisory Committee |
5.16 | Non-Disclosure |
5.17 | Maintenance of Insurance |
5.18 | Related Party Agreements |
6.1 | Headquarters |
6.2 | Operations Plan; Annual Budget |
6.3 | DPTT Employees |
6.4 | Company Employees; Seconded Employees |
6.5 | Service Provider Documents |
6.6 | Compensation and Benefits |
7.1 | Holding of Shares |
7.2 | Transfer Moratorium |
7.3 | Purchase and Sale of Remaining Interest |
7.4 | Change in Control |
7.5 | Purchase and Sale Agreement |
9.1 | Term of this Agreement |
9.2 | Termination and Cross-termination |
9.3 | Right of Terminating Party |
10.1 | Limitations |
10.2 | Exclusive Causes |
10.3 | Effect of Dissolution |
10.4 | Loss of the Company |
10.5 | Liquidation |
10.6 | Dissolution |
11.1 | Use of Cash |
11.2 | Distributions Upon Liquidation |
11.3 | Withholding |
11.4 | Distributions in Kind |
11.5 | Limitations on Distributions |
12.1 | Amendments |
12.2 | No Waiver |
12.3 | Entire Agreement |
12.4 | Further Assurances |
12.5 | Notices |
12.6 | Governing Law |
12.7 | Construction; Interpretation |
12.8 | Rights and Remedies Cumulative |
12.9 | No Assignment; Binding Effect |
12.10 | Severability |
12.11 | Counterparts |
12.12 | Dispute Resolution; Arbitration |
12.13 | Third-Party Beneficiaries |
12.14 | Specific Performance |
12.15 | Consequential Damages |
12.16 | Fees and Expenses |
SHAREHOLDERS
|
||
PHOTRONICS, INC.
|
||
By:
|
||
Name: *
|
||
Title: *
|
||
DAI NIPPON PRINTING CO., LTD.
|
||
By:
|
||
Name: *
|
||
Title: *
|
Photronics, Inc.
|
Dai Nippon Printing Company, Ltd
|
15 Secor Road
|
1-1, Ichigaya Kagacho 1-chome
|
Brookfield, CT 06804
|
Shinjuku-ku, Tokyo, Japan
|
Attn: General Counsel
|
Attn: General Manager of Fine Electronics Operations
|
*
|
|
*
|
*
|
*
|
1. | Property Insurance : Coverage for “all risk” property insurance, insuring against physical damage on a replacement basis for assets, and insuring against resultant business interruption from insured physical damage on an actual-loss sustained basis. The property insurance limit must equal full replacement value of all physical property and one year business interruption insurance. |
2. | Property Insurance for Fixed Assets during installation (unique to Taiwan): Coverage for repair or replacement of capital equipment from the JV dock until installed |
2. | Transit Insurance (Cargo Insurance): Coverage for repair or replacement of capital equipment purchased by the JV during transit up to the invoiced amount for the equipment. |
3. | Liability Insurance: |
· | Commercial general liability insurance, including but not limited to contractual liability, personal injury, completed operations, product liability and host liquor liability, coverage for bodily injury and property damage liability, with a limit of not less than $1 million for each loss occurrence and not less than $2 million in annual aggregate coverage. |
· | Automobile liability coverage for bodily injury and property damage liability with a limit of not less than $1 million for each loss occurrence and not less than $1 million in annual aggregate coverage, for owned, hired, and non-owned automobiles. |
· | Umbrella insurance – Company will be included in Photronics Inc. global policy; current amount of $20 million per occurrence or in the aggregate. |
3. | Workers Compensation & Employers Liability: As required by the Country of Taiwan |
4. | Directors & Officers Liability Coverage: the Company’s Board of Directors will be included in Photronics Inc. global policy. |
5. | Fiduciary Liability Coverage: Company will be included in Photronics Inc. global policy. |
6. | Employers Practices Liability Coverage: Company will be included in Photronics Inc. global policy. |
7. | Crime Coverage: Company will be included in Photronics Inc. global policy. |
· | * will make good faith efforts to accept all Purchase Orders from the Company for * that comply with this Agreement including adhering to all relevant specifications of * as set forth in the Purchase Order entered into between the Company and the * shall notify the Company of acceptance or rejection of a Purchase Order within * of receipt of a Purchase Order (“ Product PO Confirmation ”). Failure of * to accept or reject a Purchase Order within * shall constitute acceptance of such Purchase Order. The * for the * will be as set forth in the applicable Purchase Order (“ Product Lead Time ”). Each Purchase Order shall include the following: (a) the Company’s Purchase Order *; (b) identification of the quantity and type of the Product ordered by *; (c) the * of each Product ordered per Schedule 2 attached hereto; (d) the requested delivery date (subject to the applicable *); (e) any shipping instructions, including preferred carrier and shipping destination; and (f) the specifications for the Product. |
PHOTRONICS, INC.
|
||
By:
|
|
|
Name:
|
Constantine Macricostas
|
|
Title:
|
Chairman and Chief Executive Officer
|
|
DAI NIPPON PRINTING CO., LTD.
|
||
By:
|
|
|
Name:
|
Koichi Takanami
|
|
Title:
|
Executive Vice President
|
|
Photronics Semiconductor Mask Corp.
|
||
By:
|
|
|
Name:
|
|
|
Title:
|
|
Photronics, Inc.
|
Photronics Semiconductor Mask Corporation
|
||||
By:
|
By:
|
||||
Name:
|
Name:
|
||||
Title:
|
Title:
|
By:
|
By:
|
2.1 | Defined Terms |
3.1 | Allocation of Net Sales During the Initial Allocation Period |
3.2
|
Payments
|
3.3
|
Outsourcing Agreement
|
4.1 | EBM 8000 Priority |
4.2 | Transfer of the Products to the Company |
4.3 | Tool Acceptance |
4.4 | Sustained Capacity |
4.5 | Reports |
5.1 | Term |
5.2 | Termination for Cause |
PHOTRONICS, INC.
|
||
By:
|
|
|
Name: Constantine Macricostas
|
||
Title: Chairman and Chief Executive Officer
|
||
DAI NIPPON PRINTING CO., LTD.
|
||
By:
|
|
|
Name: Koichi Takanami
|
||
Title:
Executive Vice President
|
||
PHOTRONICS SEMICONDUCTOR MASK CORP.
|
||
By:
|
|
|
Name:
|
|
|
Title:
|
(1) | Photronics Semiconductor Mask Corp., a company organized and existing under the laws of the Republic of China (" R.O.C. "), with its registered office at1F, No. 2, Lising Road, Hsinchu City, Hsinchu Science Park, Taiwan, R.O.C. (" Party A "); and |
(2) | DNP Photomask Technology Taiwan Co. Ltd., a company organized and existing under the laws of the R.O.C., with its registered office at No. 6, Lising 7 th Rd., East District, Hsinchu City, Hsinchu Science Park, Taiwan, R.O.C. (" Party B "). |
1.1 | Method of Merger |
1.2 | Capital Stock |
(a) | Capital Stock of Party A . S ubject to change resulted from PSMC’s Permitted Capital Reduction (as defined below), as of the date of execution hereof, Party A has an authorized capital of NT$ 3,500,000,000 and a paid-in capital of NT$2,183,070,000 divided into 218,307,000 shares of common stock with a par value of NT$10 per share which are 100% owned directly or indirectly by Photronics. |
(b) | Capital Stock of Party B . Subject to change resulted from DPTT’s Permitted Capital Increase (as defined below), as of the date of execution hereof, Party B has an authorized capital of NT$5,210,117,000 and a paid-in capital of NT$5,170,618,000 divided into 5,170,618 shares of common stock with a par value of NT$1,000 per share, which are 100% owned by DNP. |
(c) | Capital Stock of Surviving Company . Immediately after the Closing (as defined in Article 1.5 below) of the Merger, the amount of authorized capital and that of paid-in capital of the Surviving Company shall be as set forth in Schedule II hereof. |
1.3 | Merger Consideration |
1.4 | Adjustment of Merger Consideration |
(a) | The occurrence of any event which will have a material impact on the financial circumstances of Party A or Party B, including but not limited to, the disposal by Party A or Party B of any of its material assets; |
(b) | The occurrence of any event which will have a material impact on the rights of shareholders or price of shares of Party A or Party B, such as a major disaster (natural or otherwise), major revolution in technologies, or any act of war or terrorist activity; |
(c) | Party A’s or Party B’s repurchase of treasury shares; |
(d) | Adjustment of the Merger Consideration is necessary due to change of regulation, order by relevant authorities or administrative guideline; |
(e) | The occurrence of any other major events affecting the business or operation of Party A or Party B; or |
1.5 | Merger Effective Date |
1.6 | Delivery of Share Certificates and Payment of Merger Consideration |
1.7 | Articles of Incorporation, Directors and Supervisors of Surviving Company |
1.8 | Assumption of Rights and Obligations |
1.9 | Transfer of Employees |
2.1 | Mutual Conditions to Closing . |
(a) | The board of directors and shareholders meeting approvals (if required by applicable laws) for the Merger by each Party shall have been obtained, not revoked and shall remain in full force and effect; |
(b) | All prior approvals and consents required for the consummation of the Merger or in connection with the authorization, execution and performance of this Agreement from the relevant authorities (the " Regulatory Approvals ") and/or any other third party approvals (other than any approvals and consents where the failure to obtain such approvals and consents, either in any individual case or in the aggregate, would not have a material adverse effect on the Merger contemplated hereby) as listed in Schedule I shall have been duly obtained, made or given and shall be in full force and effect and shall not impose material restrictions or other material burdens on the Parties or the Surviving Company with respect to the Merger or the matters contemplated in the Transaction Agreements (as defined in the Framework Agreement); |
(c) | There shall not (i) be in effect any law, regulation, ruling or governmental order of any governmental authority which makes illegal, prevents or restricts the consummation of the Merger or other transactions contemplated by any other Transaction Agreement, the performance by the applicable Parties of their respective obligations under this Agreement or any other Transaction Agreement, or impairs the ability of the Surviving Company to own or conduct the business of Party A and Party B as previously conducted, whether directly or indirectly, (ii) have been commenced or threatened any action or proceeding by any governmental authority which seeks to prevent the Merger or the performance by the applicable Parties of their respective obligations under this Agreement or any other Transaction Agreement; and |
(d) | The Framework Agreement, the Operating Agreement and all other Transaction Agreements shall have been executed and delivered. |
2.2
|
Additional Conditions to the Obligations of Party A
|
(a) | Party B shall have performed and complied with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing , including Article 3.4 provided that a failure to obtain any third party consent that is not listed in Schedule I (Approvals) prior to the Closing should not be deemed a breach or non-performance of Article 3.5 for the purpose of this Article 2.2(a) ; |
(b) | No events or circumstances which result in an event that is materially adverse to the business, properties or assets, including contracts, customer and supplier relationships (" Material Adverse Change ") of Party B shall have occurred since the date hereof; |
(c) | All of the representations and warranties in Article IV given by Party B shall be true, accurate and not misleading in all material respects as of the date of Closing; |
(d) | Party A shall have received at the Closing a certificate issued by an executive officer of Party B, dated as of the date of Closing, in form and substance substantially as set forth in Exhibit B attached hereto; |
(e) | DNP is not in any material breach, noncompliance or other default of any provision of the Framework Agreement; |
(f) | No government order has been issued, or other government action has been taken, to prohibit Party A from completing the capital reduction in the amount set forth in Schedule II prior to the Closing for the purpose of adjustment of Party A’s evaluation for the Merger, after which capital reduction its paid-in capital should become the amount as set forth in Schedule II with a par value of NT$10 per share, which are 100% owned directly or indirectly by Photronics as of the date of Closing (“ PSMC’s Permitted Capital Reductio n ”), and Party B has not taken any action to prohibit the completion of PSMC’s Permitted Capital Reduction prior to the Closing; and |
(g) | Party B has, after obtaining all required corporate or governmental approvals, duly and legally completed capital increase in the amount set forth in Schedule II for the purpose of repaying its existing loans as of the Signing Date (the “ Existing Loans ”), after which capital increase its paid-in capital should become the amount as set forth in Schedule II with a par value of NT* per share, which are 100% owned by DNP, as of the date of Closing (“ DPTT’s Permitted Capital Increase ”), and Party B has * in full and provided Party A copies of * evidencing the * thereof. |
2.3
|
Additional Conditions to the Obligations of Party B
|
(a) | Party A shall have performed and complied with all agreements and covenants required by this Agreement to be performed or complied with by it on or prior to the Closing , including Article 3.4 provided that a failure to obtain any third party consent that is not listed in Schedule I (Approvals) prior to the Closing should not be deemed a breach or non-performance of Article 3.5 for the purpose of this Article 2.3(a); |
(b) | No Material Adverse Change of Party A shall have occurred since the date hereof; |
(c) | All of the representations and warranties in Article IV given by Party A shall be true, accurate and not misleading in all material respects as of the date of the Closing; |
(d) | Party B shall have received at the Closing a certificate issued by an executive officer of Party A, on behalf of Party A and dated as of the date of the Closing, in form and substance substantially as set forth in Exhibit C attached hereto; |
(e) | Photronics is not in any material breach, noncompliance or other default of any provision of the Framework Agreement; |
(f) | No government order has been issued, or other government action has been taken, to prohibit Party B from completing the DPTT’s Permitted Capital Increase prior to the Closing, and Party A has not taken any action to prohibit the completion of DPTT’s Permitted Capital Increase prior to the Closing; and |
(g) | Party A has, after obtaining all required corporate or governmental approvals, duly and legally completed PSMC’s Permitted Capital Reduction |
3.1 | Covenants with Respect to this Agreement |
3.2 | Issuance of shares |
3.3 | Conduct of Business of Party A or Party B with Respect to this Agreement |
(a) | the business of Party A and Party B shall be conducted in substantially the same manner as heretofore conducted and only in the ordinary course of business, and each of Party A and Party B shall use their reasonable best efforts to preserve the business organization of Party A or Party B, and to maintain the existing relations with customers, creditors, business partners and others having business dealings with Party A or Party B. |
(b) | neither Party A nor Party B shall pass any resolution for its winding up, bankruptcy, re-organization or dissolution or liquidation or apply for the appointment of a receiver, manager or judicial manager or like officer; |
(c) | neither Party A nor Party B shall take any of the following actions without the prior written consent of the other Party except for the DPTT’s Permitted Capital Increase and PSMC’s Permitted Capital Reduction: |
(i) | unless otherwise permitted under Article 1.7 hereof, amend its articles of incorporation or make any material change in any policy on corporate governance, internal control, accounting or the like; |
(ii) | issue, sell, transfer, dispose of or create encumbrances over any shares, securities, or options kind; |
(iii) | make a capital reduction or split or combine any of its capital stock or securities; |
(iv) | redeem, purchase or otherwise acquire directly or indirectly any of its capital stock or securities; |
(v) | enter into any business outside the existing scope of business, change the scope of the existing business or cease carrying on business; |
(vi) | sell or otherwise dispose of all or substantially all of its assets to any third party or contract to do so; |
(vii) | change its auditors; |
(viii) | change its financial year-end or tax accounting year-end; |
(ix) | except in the ordinary course of its business, acquire assets in excess * in the aggregate; |
(x) | create or establish any subsidiary, acquire any interest in any other person or entity or enter into any joint venture, business alliance or partnership; |
(xi) | except in the ordinary course of its business, make any borrowings, incur any indebtedness or enter into any financial commitments, guarantees or provision of any kind of security; |
(xii) | enter into any M&A transaction (such as merger, spin-off, business transfer/assumption and share exchange) other than the Merger contemplated hereunder; or |
(xiii) | make any distribution to its shareholder(s), employees and/or directors/supervisors. |
3.4 | Access to Information |
3.5 | Regulatory and Other Authorizations; Notices and Consents |
3.6 | Notification to Creditors . |
(a) | Legal Establishment and Existence . It is a corporation duly organized and validly existing under the laws of the R.O.C., and has obtained all necessary licenses, approvals, permits and other certification required for operating its existing business activities; |
(b) | Full Power and Valid Authorization . I t has full legal capacity and power and is duly and validly authorized to execute and perform this Agreement; |
(c) | Validity of the Agreement . Its execution and performance of this Agreement is not in violation of the following: (i) any provisions of applicable laws and regulations; (ii) its articles of incorporation and other applicable internal rules; (iii) any rulings, orders or dispositions of the court or relevant authorities; and (iv) any contracts, agreements, representations, undertakings, warranties, binding arrangements or any other legal or contractual obligations, except with respect to clause (i) and (iv) where the failure of such violation would not, individually or in the aggregate, have a Material Adverse Change; and |
(d) | Enforceability . T his Agreement constitutes the legally valid and binding obligations of it, enforceable against it in accordance with the terms and conditions of this Agreement, except to the extent that enforceability may be limited by applicable bankruptcy, reorganization, insolvency, moratorium or other laws affecting the enforcement of creditors’ rights generally and by general principles of equity. |
5.1 | Expenses |
5.2 | Tax |
6.1 | Amendments and Modification |
6.2 | Assignment |
6.3 | Severability |
6.4 | Notices |
To Party A: | Photronics, Inc. |
Attention: | General Counsel |
Address: | 15 Secor Road |
Fax No. | * |
To Party B: | DNP Photomask Technology Taiwan Co. Ltd. |
Attention: | * |
Address: | No. 6, Lising 7th Rd., East District, Hsinchu City, Hsinchu Science Park, Taiwan, R.O.C. |
Fax No. | * |
6.5 | Governing Law |
6.6 | Governing Language |
6.7 | Arbitration |
6.8 | Counterparts |
6.9 | Termination |
(a) | This Agreement constitutes binding obligations of each of the Parties and shall take effect as of the Signing Date until it has been terminated in accordance with this Article 6.9. |
(b) | Prior to the Closing, this Agreement shall terminate upon the earliest occurrence of one of the following events: |
(c) | After this Agreement has been terminated, both Parties shall adopt necessary actions to cease to proceed the Merger and either Party may request the other Party to return any and all documents, information, files, articles, plans, trade secrets, and other tangible data obtained in connection with the Merger within seven (7) business days after such termination. |
6.10 | Indemnification |
6.11 | Confidentiality |
Photronics Semiconductor Mask Corp.
|
||
|
||
By:
|
||
Title:
|
||
Address:
|
||
DNP Photomask Technology Taiwan Co. Ltd.
|
||
|
||
By:
|
||
Title:
|
||
Address:
|
EXHIBIT 31.1
|
||||
|
|
|||
I, Peter Kirlin, certify that:
|
||||
|
||||
1.
|
|
I have reviewed this Annual Report on Form 10-K/A of Photronics, Inc.
|
||
|
||||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
|||
/s/ PETER KIRLIN
|
Peter Kirlin
Chief Executive Officer July 7, 2015 |
EXHIBIT 31.2
|
||
|
||
I, Sean T. Smith, certify that:
|
||
|
I have reviewed this Annual Report on Form 10-K/A of Photronics, Inc.
|
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.
|
/s/ SEAN T. SMITH
|
|
Sean T. Smith
|
Chief Financial Officer
|
July 7, 2015
|