☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Connecticut
|
|
06-0854886
|
(State or other jurisdiction of incorporation or organization)
|
|
(IRS Employer Identification No.)
|
15 Secor Road, Brookfield, Connecticut
|
|
06804
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Registrant’s telephone number, including area code
|
|
(203) 775-9000
|
Large Accelerated Filer ☐
|
Accelerated Filer ☒
|
Non-Accelerated Filer ☐
|
Smaller Reporting Company ☐
|
Emerging growth company ☐
|
Class
|
|
Outstanding at May 26, 2017
|
Common Stock, $0.01 par value
|
|
68,872,073 Shares
|
PART I.
|
FINANCIAL INFORMATION
|
Page
|
|
|
|||
Item 1.
|
4
|
||
4
|
|||
5
|
|||
6
|
|||
7
|
|||
8
|
|||
Item 2.
|
20
|
||
Item 3.
|
25
|
||
Item 4.
|
26
|
||
|
|||
PART II.
|
OTHER INFORMATION
|
||
Item 1A.
|
27
|
||
Item 6.
|
27
|
PART I.
|
FINANCIAL INFORMATION
|
April 30,
2017
|
October 30,
2016
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
345,724
|
$
|
314,074
|
||||
Accounts receivable, net of allowance of $3,796 in 2017 and $3,901 in 2016
|
91,150
|
92,636
|
||||||
Inventories
|
24,537
|
22,081
|
||||||
Other current assets
|
11,044
|
12,795
|
||||||
Total current assets
|
472,455
|
441,586
|
||||||
Property, plant and equipment, net
|
503,900
|
506,434
|
||||||
Intangible assets, net
|
19,152
|
19,854
|
||||||
Deferred income taxes
|
16,199
|
16,322
|
||||||
Other assets
|
3,865
|
3,792
|
||||||
Total assets
|
$
|
1,015,571
|
$
|
987,988
|
||||
LIABILITIES AND EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current portion of long-term borrowings
|
$
|
5,503
|
$
|
5,428
|
||||
Accounts payable
|
58,205
|
51,649
|
||||||
Accrued liabilities
|
28,260
|
24,240
|
||||||
Total current liabilities
|
91,968
|
81,317
|
||||||
Long-term borrowings
|
59,147
|
61,860
|
||||||
Other liabilities
|
19,702
|
19,337
|
||||||
Total liabilities
|
170,817
|
162,514
|
||||||
Commitments and contingencies
|
||||||||
Equity:
|
||||||||
Preferred stock, $0.01 par value, 2,000 shares authorized, none issued and outstanding
|
-
|
-
|
||||||
Common stock, $0.01 par value, 150,000 shares authorized, 68,496 shares issued and outstanding at April 30, 2017 and 68,080 shares issued and outstanding at October 30, 2016
|
685
|
681 |
||||||
Additional paid-in capital
|
545,019
|
541,093
|
||||||
Retained earnings
|
180,004
|
176,260
|
||||||
Accumulated other comprehensive income (loss)
|
4,171
|
(7,671
|
)
|
|||||
|
||||||||
Total Photronics, Inc. shareholders’ equity
|
729,879
|
710,363
|
||||||
Noncontrolling interests
|
114,875
|
115,111
|
||||||
Total equity
|
844,754
|
825,474
|
||||||
Total liabilities and equity
|
$
|
1,015,571
|
$
|
987,988
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
April 30,
2017
|
May 1,
2016
|
April 30,
2017
|
May 1,
2016
|
|||||||||||||
Net sales
|
$
|
108,297
|
$
|
122,923
|
$
|
218,128
|
$
|
252,879
|
||||||||
Costs and expenses:
|
||||||||||||||||
Cost of sales
|
(88,140
|
)
|
(91,636
|
)
|
(174,973
|
)
|
(186,156
|
)
|
||||||||
|
||||||||||||||||
Selling, general and administrative
|
(10,894
|
)
|
(11,024
|
)
|
(21,764
|
)
|
(23,222
|
)
|
||||||||
Research and development
|
(3,726
|
)
|
(5,447
|
)
|
(7,212
|
)
|
(11,148
|
)
|
||||||||
Operating income
|
5,537
|
14,816
|
14,179
|
32,353
|
||||||||||||
Other income (expense):
|
||||||||||||||||
Interest and other income (expense), net
|
(3,073
|
)
|
(2,025
|
)
|
(4,596
|
)
|
27
|
|||||||||
Interest expense
|
(549
|
)
|
(964
|
)
|
(1,108
|
)
|
(2,138
|
)
|
||||||||
Gain on sale of investment
|
-
|
-
|
-
|
8,785
|
||||||||||||
Income before income tax benefit (provision)
|
1,915
|
11,827
|
8,475
|
39,027
|
||||||||||||
|
||||||||||||||||
Income tax benefit (provision)
|
(431
|
)
|
2,326
|
(2,481
|
)
|
(1,374
|
)
|
|||||||||
Net income
|
1,484
|
14,153
|
5,994
|
37,653
|
||||||||||||
Net (income) loss attributable to noncontrolling interests
|
313
|
(2,299
|
)
|
(2,250
|
)
|
(4,797
|
)
|
|||||||||
Net income attributable to Photronics, Inc. shareholders
|
$
|
1,797
|
$
|
11,854
|
$
|
3,744
|
$
|
32,856
|
||||||||
Earnings per share:
|
||||||||||||||||
Basic
|
$
|
0.03
|
$
|
0.18
|
$
|
0.05
|
$
|
0.49
|
||||||||
Diluted
|
$
|
0.03
|
$
|
0.16
|
$
|
0.05
|
$
|
0.44
|
||||||||
Weighted-average number of common shares outstanding:
|
||||||||||||||||
Basic
|
68,426
|
67,372
|
68,301
|
67,090
|
||||||||||||
Diluted
|
69,385
|
77,516
|
69,277
|
78,326
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
April 30,
2017
|
May 1,
2016
|
April 30,
2017
|
May 1,
2016
|
|||||||||||||
|
||||||||||||||||
Net income
|
$
|
1,484
|
$
|
14,153
|
$
|
5,994
|
$
|
37,653
|
||||||||
Other comprehensive income, net of tax of $0:
|
||||||||||||||||
Foreign currency translation adjustments
|
18,308
|
23,811
|
17,675
|
2,735
|
||||||||||||
Amortization of cash flow hedge
|
32
|
32
|
64
|
64
|
||||||||||||
Net other comprehensive income
|
18,340
|
23,843
|
17,739
|
2,799
|
||||||||||||
Comprehensive income
|
19,824
|
37,996
|
23,733
|
40,452
|
||||||||||||
Less: comprehensive income attributable to noncontrolling interests
|
4,326
|
6,983
|
8,147
|
5,870
|
||||||||||||
Comprehensive income attributable to Photronics, Inc. shareholders
|
$
|
15,498
|
$
|
31,013
|
$
|
15,586
|
$
|
34,582
|
Six Months Ended
|
||||||||
April 30,
2017
|
May 1,
2016
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
5,994
|
$
|
37,653
|
||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
42,378
|
40,832
|
||||||
Gain on sale of investment
|
-
|
(8,785
|
)
|
|||||
Changes in assets and liabilities:
|
||||||||
Accounts receivable
|
4,204
|
6,499
|
||||||
Inventories
|
(1,506
|
)
|
(256
|
)
|
||||
Other current assets
|
2,103
|
3,095
|
||||||
Accounts payable, accrued liabilities, and other
|
(6,266
|
)
|
(13,899
|
)
|
||||
Net cash provided by operating activities
|
46,907
|
65,139
|
||||||
Cash flows from investing activities:
|
||||||||
Purchases of property, plant and equipment
|
(14,152
|
)
|
(34,928
|
)
|
||||
Acquisition of business
|
(5,400
|
)
|
-
|
|||||
Proceeds from sale of investment
|
167
|
8,785
|
||||||
Other
|
(462
|
)
|
193
|
|||||
Net cash used in investing activities
|
(19,847
|
)
|
(25,950
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Repayments of long-term borrowings
|
(2,695
|
)
|
(54,951
|
)
|
||||
Proceeds from share-based arrangements
|
2,311
|
3,046
|
||||||
Other
|
(23
|
)
|
(19
|
)
|
||||
Net cash used in financing activities
|
(407
|
)
|
(51,924
|
)
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
4,997
|
846
|
||||||
Net increase (decrease) in cash and cash equivalents
|
31,650
|
(11,889
|
)
|
|||||
Cash and cash equivalents at beginning of period
|
314,074
|
205,867
|
||||||
Cash and cash equivalents at end of period
|
$
|
345,724
|
$
|
193,978
|
||||
Supplemental disclosure of non-cash information:
|
||||||||
Accrual for property, plant and equipment purchased during the period
|
$
|
11,409
|
$
|
3,297
|
||||
Subsidiary dividend payable
|
$
|
8,383
|
$
|
11,901
|
Three Months Ended April 30, 2017
|
||||||||||||||||||||||||||||
Photronics, Inc. Shareholders
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-in
|
Retained |
Accumulated
Other
Comprehensive
|
Non-
controlling
|
Total | |||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income (Loss)
|
Interests
|
Equity
|
||||||||||||||||||||||
Balance at January 30, 2017
|
68,333
|
$
|
683
|
$
|
543,116
|
$
|
178,207
|
$
|
(9,530
|
)
|
$
|
118,932
|
$
|
831,408
|
||||||||||||||
Net income (loss)
|
-
|
-
|
-
|
1,797
|
-
|
(313
|
)
|
1,484
|
||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
13,701
|
4,639
|
18,340
|
|||||||||||||||||||||
Sale of common stock through employee stock option and purchase plans
|
148
|
2
|
982
|
-
|
-
|
-
|
984
|
|||||||||||||||||||||
Restricted stock awards vesting and expense
|
15
|
-
|
431
|
-
|
-
|
-
|
431
|
|||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
490
|
-
|
-
|
-
|
490
|
|||||||||||||||||||||
Subsidiary dividend payable
|
-
|
-
|
-
|
-
|
-
|
(8,383
|
)
|
(8,383
|
)
|
|||||||||||||||||||
Balance at April 30, 2017
|
68,496
|
$
|
685
|
$
|
545,019
|
$
|
180,004
|
$
|
4,171
|
$
|
114,875
|
$
|
844,754
|
Three Months Ended May 1, 2016
|
||||||||||||||||||||||||||||
Photronics, Inc. Shareholders
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-in
|
Retained
|
Accumulated
Other
Comprehensive
|
Non-
controlling
|
Total
|
|||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Loss
|
Interests
|
Equity
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance at February 1, 2016
|
67,081
|
$
|
671
|
$
|
529,337
|
$
|
151,062
|
$
|
(28,005
|
)
|
$
|
114,398
|
$
|
767,463
|
||||||||||||||
Net income
|
-
|
-
|
-
|
11,854
|
-
|
2,299
|
14,153
|
|||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
19,159
|
4,684
|
23,843
|
|||||||||||||||||||||
Sale of common stock through employee stock option and purchase plans
|
130
|
1
|
799
|
-
|
-
|
-
|
800
|
|||||||||||||||||||||
Restricted stock awards vesting and expense
|
15
|
-
|
313
|
-
|
-
|
-
|
313
|
|||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
663
|
-
|
-
|
-
|
663
|
|||||||||||||||||||||
Conversion of debt to common stock
|
717
|
7
|
7,431
|
-
|
-
|
-
|
7,438
|
|||||||||||||||||||||
Repurchase of common stock of subsidiary
|
-
|
-
|
(8
|
)
|
-
|
-
|
8
|
-
|
||||||||||||||||||||
Subsidiary dividend payable
|
-
|
-
|
-
|
-
|
-
|
(11,901
|
)
|
(11,901
|
)
|
|||||||||||||||||||
Balance at May 1, 2016
|
67,943
|
$
|
679
|
$
|
538,535
|
$
|
162,916
|
$
|
(8,846
|
)
|
$
|
109,488
|
$
|
802,772
|
Six Months Ended April 30, 2017
|
||||||||||||||||||||||||||||
Photronics, Inc. Shareholders
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-in
|
Retained
|
Accumulated
Other
Comprehensive
|
Non-
controlling
|
Total
|
|||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income (Loss)
|
Interests
|
Equity
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance at October 31, 2016
|
68,080
|
$
|
681
|
$
|
541,093
|
$
|
176,260
|
$
|
(7,671
|
)
|
$
|
115,111
|
$
|
825,474
|
||||||||||||||
Net income
|
-
|
-
|
-
|
3,744
|
-
|
2,250
|
5,994
|
|||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
11,842
|
5,897
|
17,739
|
|||||||||||||||||||||
Sale of common stock through employee stock option and purchase plans
|
323
|
3
|
2,068
|
-
|
-
|
-
|
2,071
|
|||||||||||||||||||||
Restricted stock awards vesting and expense
|
93
|
1
|
728
|
-
|
-
|
-
|
729
|
|||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
1,130
|
-
|
-
|
-
|
1,130
|
|||||||||||||||||||||
Subsidiary dividend payable
|
-
|
-
|
-
|
-
|
-
|
(8,383
|
)
|
(8,383
|
)
|
|||||||||||||||||||
Balance at April 30, 2017
|
68,496
|
$
|
685
|
$
|
545,019
|
$
|
180,004
|
$
|
4,171
|
$
|
114,875
|
$
|
844,754
|
Six Months Ended May 1, 2016
|
||||||||||||||||||||||||||||
Photronics, Inc. Shareholders
|
||||||||||||||||||||||||||||
Common Stock
|
Additional
Paid-in
|
Retained
|
Accumulated
Other
Comprehensive
|
Non-
controlling
|
Total
|
|||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Loss
|
Interests
|
Equity
|
||||||||||||||||||||||
|
||||||||||||||||||||||||||||
Balance at November 2, 2015
|
66,602
|
$
|
666
|
$
|
526,401
|
$
|
130,060
|
$
|
(10,572
|
)
|
$
|
115,511
|
$
|
762,066
|
||||||||||||||
Net income
|
-
|
-
|
-
|
32,856
|
-
|
4,797
|
37,653
|
|||||||||||||||||||||
Other comprehensive income
|
-
|
-
|
-
|
-
|
1,726
|
1,073
|
2,799
|
|||||||||||||||||||||
Sale of common stock through employee stock option and purchase plans
|
514
|
5
|
2,839
|
-
|
-
|
-
|
2,844
|
|||||||||||||||||||||
Restricted stock awards vesting and expense
|
110
|
1
|
563
|
-
|
-
|
-
|
564
|
|||||||||||||||||||||
Share-based compensation expense
|
-
|
-
|
1,309
|
-
|
-
|
-
|
1,309
|
|||||||||||||||||||||
Conversion of debt to common stock
|
717
|
7
|
7,431
|
-
|
-
|
-
|
7,438
|
|||||||||||||||||||||
Repurchase of common stock of subsidiary
|
-
|
-
|
(8
|
)
|
-
|
-
|
8
|
-
|
||||||||||||||||||||
Subsidiary dividend payable
|
-
|
-
|
-
|
-
|
-
|
(11,901
|
)
|
(11,901
|
)
|
|||||||||||||||||||
Balance at May 1, 2016
|
67,943
|
$
|
679
|
$
|
538,535
|
$
|
162,916
|
$
|
(8,846
|
)
|
$
|
109,488
|
$
|
802,772
|
April 30,
2017
|
October 30,
2016
|
|||||||
Finished goods
|
$
|
74
|
$
|
142
|
||||
Work in process
|
3,692
|
2,987
|
||||||
Raw materials
|
20,771
|
18,952
|
||||||
$
|
24,537
|
$
|
22,081
|
April 30,
2017
|
October 30,
2016
|
|||||||
Land
|
$
|
9,732
|
$
|
8,036
|
||||
Buildings and improvements
|
123,194
|
121,873
|
||||||
Machinery and equipment
|
1,514,409
|
1,475,755
|
||||||
Leasehold improvements
|
20,106
|
19,224
|
||||||
Furniture, fixtures and office equipment
|
13,045
|
12,700
|
||||||
Construction in progress
|
35,443
|
23,961
|
||||||
1,715,929
|
1,661,549
|
|||||||
Less accumulated depreciation and amortization
|
1,212,029
|
1,155,115
|
||||||
$
|
503,900
|
$
|
506,434
|
April 30,
2017
|
October 30,
2016
|
|||||||
Machinery and equipment
|
$
|
34,917
|
$
|
34,917
|
||||
Less accumulated amortization
|
12,098
|
10,352
|
||||||
$
|
22,819
|
$
|
24,565
|
April 30,
2017
|
October 30,
2016
|
|||||||
3.25% convertible senior notes due in April 2019
|
$
|
57,279
|
$
|
57,221
|
||||
2.77% capital lease obligation payable through July 2018
|
7,371
|
10,067
|
||||||
64,650
|
67,288
|
|||||||
Less current portion
|
5,503
|
5,428
|
||||||
$
|
59,147
|
$
|
61,860
|
Line Item
|
Previously
Reported
|
Change Due
to Adoption
|
Retrospectively
Adjusted
|
|||||||||
Other Assets
|
$
|
4,071
|
$
|
(279
|
)
|
$
|
3,792
|
|||||
Long-term Borrowings
|
$
|
62,139
|
$
|
(279
|
)
|
$
|
61,860
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
April 30,
2017
|
May 1,
2016
|
April 30,
2017
|
May 1,
2016
|
|||||||||||||
|
||||||||||||||||
Volatility
|
31.6
|
%
|
39.8
|
%
|
32.2
|
%
|
49.5
|
%
|
||||||||
|
||||||||||||||||
Risk free rate of return
|
2.0
|
%
|
1.4
|
%
|
1.9-2.0
|
%
|
1.4-1.7
|
%
|
||||||||
|
||||||||||||||||
Dividend yield
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
0.0
|
%
|
||||||||
|
||||||||||||||||
Expected term
|
5.0 years
|
5.1 years
|
5.0 years
|
5.1 years
|
Options
|
Shares
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life
|
Aggregate
Intrinsic
Value
|
||||||||||||
|
||||||||||||||||
Outstanding at April 30, 2017
|
3,458,835
|
$
|
7.96
|
6.3 years
|
$
|
12,572
|
||||||||||
|
||||||||||||||||
Exercisable at April 30, 2017
|
2,176,719
|
$
|
6.49
|
5.0 years
|
$
|
10,997
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
April 30,
2017
|
May 1,
2016
|
April 30
2017
|
May 1,
2016
|
|||||||||||||
Net income attributable to Photronics, Inc. shareholders
|
$
|
1,797
|
$
|
11,854
|
$
|
3,744
|
$
|
32,856
|
||||||||
Effect of dilutive securities:
|
||||||||||||||||
Interest expense on convertible notes, net of tax
|
-
|
875
|
-
|
1,946
|
||||||||||||
Earnings for diluted earnings per share
|
$
|
1,797
|
$
|
12,729
|
$
|
3,744
|
$
|
34,802
|
||||||||
Weighted-average common shares computations:
|
||||||||||||||||
Weighted-average common shares used for basic earnings per share
|
68,426
|
67,372
|
68,301
|
67,090
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Share-based payment awards
|
959
|
948
|
976
|
1,096
|
||||||||||||
Convertible notes
|
-
|
9,196
|
-
|
10,140
|
||||||||||||
Potentially dilutive common shares
|
959
|
10,144
|
976
|
11,236
|
||||||||||||
Weighted-average common shares used for diluted earnings per share
|
69,385
|
77,516
|
69,277
|
78,326
|
||||||||||||
Basic earnings per share
|
$
|
0.03
|
$
|
0.18
|
$
|
0.05
|
$
|
0.49
|
||||||||
Diluted earnings per share
|
$
|
0.03
|
$
|
0.16
|
$
|
0.05
|
$
|
0.44
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
April 30,
2017
|
May 1,
2016
|
April 30,
2017
|
May 1,
2016
|
|||||||||||||
Convertible notes
|
5,542
|
-
|
5,542
|
-
|
||||||||||||
Share-based payment awards
|
1,082
|
2,160
|
1,038
|
1,414
|
||||||||||||
Total potentially dilutive shares excluded
|
6,624
|
2,160
|
6,580
|
1,414
|
Three Months Ended April 30, 2017
|
||||||||||||||||
Foreign Currency
Translation
Adjustments
|
Amortization
of Cash
Flow Hedge
|
Other
|
Total
|
|||||||||||||
Balance at January 30, 2017
|
$
|
(8,448
|
)
|
$
|
(145
|
)
|
$
|
(937
|
)
|
$
|
(9,530
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
18,382
|
-
|
(74
|
)
|
18,308
|
|||||||||||
Amounts reclassified from accumulated other comprehensive income
|
-
|
32
|
-
|
32
|
||||||||||||
Net current period other comprehensive income (loss)
|
18,382
|
32
|
(74
|
)
|
18,340
|
|||||||||||
Less: other comprehensive (income) loss attributable to noncontrolling interests
|
(4,676
|
)
|
-
|
37
|
(4,639
|
)
|
||||||||||
Balance at April 30, 2017
|
$
|
5,258
|
$
|
(113
|
)
|
$
|
(974
|
)
|
$
|
4,171
|
Three Months Ended May 1, 2016
|
||||||||||||||||
Foreign Currency
Translation
Adjustments
|
Amortization
of Cash
Flow Hedge
|
Other
|
Total
|
|||||||||||||
Balance at February 1, 2016
|
$
|
(27,118
|
)
|
$
|
(274
|
)
|
$
|
(613
|
)
|
$
|
(28,005
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
23,861
|
-
|
(50
|
)
|
23,811
|
|||||||||||
Amounts reclassified from accumulated other comprehensive income
|
-
|
32
|
-
|
32
|
||||||||||||
Net current period other comprehensive income (loss)
|
23,861
|
32
|
(50
|
)
|
23,843
|
|||||||||||
Less: other comprehensive (income) loss attributable to noncontrolling interests
|
(4,709
|
)
|
-
|
25
|
(4,684
|
)
|
||||||||||
Balance at May 1, 2016
|
$
|
(7,966
|
)
|
$
|
(242
|
)
|
$
|
(638
|
)
|
$
|
(8,846
|
)
|
Six Months Ended April 30, 2017
|
||||||||||||||||
Foreign Currency
Translation
Adjustments
|
Amortization
of Cash
Flow Hedge
|
Other
|
Total
|
|||||||||||||
Balance at October 31, 2016
|
$
|
(6,567
|
)
|
$
|
(177
|
)
|
$
|
(927
|
)
|
$
|
(7,671
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
17,768
|
-
|
(93
|
)
|
17,675
|
|||||||||||
Amounts reclassified from accumulated other comprehensive income
|
-
|
64
|
-
|
64
|
||||||||||||
Net current period other comprehensive income (loss)
|
17,768
|
64
|
(93
|
)
|
17,739
|
|||||||||||
Less: other comprehensive (income)loss attributable to noncontrolling interests
|
(5,943
|
)
|
-
|
46
|
(5,897
|
)
|
||||||||||
Balance at April 30, 2017
|
$
|
5,258
|
$
|
(113
|
)
|
$
|
(974
|
)
|
$
|
4,171
|
Six Months Ended May 1, 2016
|
||||||||||||||||
Foreign Currency
Translation
Adjustments
|
Amortization
of Cash
Flow Hedge
|
Other
|
Total
|
|||||||||||||
Balance at November 2, 2015
|
$
|
(9,634
|
)
|
$
|
(306
|
)
|
$
|
(633
|
)
|
$
|
(10,573
|
)
|
||||
Other comprehensive income (loss) before reclassifications
|
2,746
|
-
|
(11
|
)
|
2,735
|
|||||||||||
Amounts reclassified from accumulated other comprehensive income
|
-
|
64
|
-
|
64
|
||||||||||||
Net current period other comprehensive income (loss)
|
2,746
|
64
|
(11
|
)
|
2,799
|
|||||||||||
Less: other comprehensive (income) loss attributable to noncontrolling interests
|
(1,078
|
)
|
-
|
6
|
(1,072
|
)
|
||||||||||
Balance at May 1, 2016
|
$
|
(7,966
|
)
|
$
|
(242
|
)
|
$
|
(638
|
)
|
$
|
(8,846
|
)
|
April 30, 2017
|
October 30, 2016
|
|||||||||||||||
Fair Value
|
Carrying Value
|
Fair Value
|
Carrying Value
|
|||||||||||||
3.25% convertible senior notes due 2019
|
$
|
72,663
|
$
|
57,279
|
$
|
68,230
|
$
|
57,221
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
April 30,
2017
|
May 1,
2016
|
April 30,
2017
|
May 1,
2016
|
|||||||||||||
|
||||||||||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Cost of sales
|
(81.4
|
)
|
(74.5
|
)
|
(80.2
|
)
|
(73.6
|
)
|
||||||||
Gross margin
|
18.6
|
25.5
|
19.8
|
26.4
|
||||||||||||
Selling, general and administrative expenses
|
(10.1
|
)
|
(9.0
|
)
|
(10.0
|
)
|
(9.2
|
)
|
||||||||
Research and development expenses
|
(3.4
|
)
|
(4.4
|
)
|
(3.3
|
)
|
(4.4
|
)
|
||||||||
Operating income
|
5.1
|
12.1
|
6.5
|
12.8
|
||||||||||||
Other income (expense), net
|
(3.3
|
)
|
(2.5
|
)
|
(2.6
|
)
|
(0.8
|
)
|
||||||||
Gain on sale of investment
|
-
|
-
|
-
|
3.4
|
||||||||||||
Income before income tax benefit (provision)
|
1.8
|
9.6
|
3.9
|
15.4
|
||||||||||||
Income tax benefit (provision)
|
(0.4
|
)
|
1.9
|
(1.2
|
)
|
(0.5
|
)
|
|||||||||
Net income
|
1.4
|
11.5
|
2.7
|
14.9
|
||||||||||||
Net (income) loss attributable to noncontrolling interests
|
0.3
|
(1.9
|
)
|
(1.0
|
)
|
(1.9
|
)
|
|||||||||
Net income attributable to Photronics, Inc. shareholders
|
1.7
|
%
|
9.6
|
%
|
1.7
|
%
|
13.0
|
%
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
Q2-17
|
Q2-16
|
Percent
Change
|
YTD-17
|
YTD-16
|
Percent
Change
|
|||||||||||||||||||
IC
|
$
|
82.6
|
$
|
90.9
|
(9.1
|
)%
|
$
|
169.0
|
$
|
190.6
|
(11.3
|
)%
|
||||||||||||
FPD
|
25.7
|
32.0
|
(19.9
|
)%
|
49.1
|
62.3
|
(21.1
|
)%
|
||||||||||||||||
Total net sales
|
$
|
108.3
|
$
|
122.9
|
(11.9
|
)%
|
$
|
218.1
|
$
|
252.9
|
(13.7
|
)%
|
Q2-16 to Q2-17
|
YTD-16 to YTD-17
|
|||||||||||||||||||||||
Net Sales in
Q2-17
|
Percent
Change
|
Increase
(Decrease)
|
Net Sales in
YTD-17
|
Percent
Change
|
Increase
(Decrease)
|
|||||||||||||||||||
Taiwan
|
$
|
42.3
|
(9.5
|
)%
|
$
|
(4.4
|
)
|
$
|
88.7
|
(7.1
|
)%
|
$
|
(6.7
|
)
|
||||||||||
Korea
|
30.9
|
(13.1
|
)%
|
(4.6
|
)
|
61.2
|
(14.5
|
)%
|
(10.4
|
)
|
||||||||||||||
United States
|
25.9
|
(17.8
|
)%
|
(5.6
|
)
|
49.6
|
(27.5
|
)%
|
(18.9
|
)
|
||||||||||||||
Europe
|
8.7
|
1.5
|
%
|
0.1
|
17.4
|
5.5
|
%
|
0.9
|
||||||||||||||||
Other
|
0.5
|
(13.2
|
)%
|
(0.1
|
)
|
1.2
|
29.3
|
%
|
0.3
|
|||||||||||||||
$
|
108.3
|
(11.9
|
)%
|
$
|
(14.6
|
)
|
$
|
218.1
|
(13.7
|
)%
|
$
|
(34.8
|
)
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
Q2-17
|
Q2-16
|
Percent
Change
|
YTD-17
|
YTD-16
|
Percent
Change
|
|||||||||||||||||||
Gross margin
|
$
|
20.2
|
$
|
31.3
|
(35.6
|
)%
|
$
|
43.2
|
%
|
$
|
66.7
|
(35.3
|
)%
|
|||||||||||
Percentage of net sales
|
18.6
|
%
|
25.5
|
%
|
19.8
|
%
|
26.4
|
%
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
Q2-17
|
Q2-16
|
Percent
Change
|
YTD-17
|
YTD-16
|
Percent
Change
|
|||||||||||||||||||
Selling, general and administrative expenses
|
$
|
10.9
|
$
|
11.0
|
(1.2
|
)%
|
$
|
21.8
|
$
|
23.2
|
(6.3
|
)%
|
||||||||||||
Percentage of net sales
|
10.1
|
%
|
9.0
|
%
|
10.0
|
%
|
9.2
|
%
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||||||||||
Q2-17
|
Q2-16
|
Percent
Change
|
YTD-17
|
YTD-16
|
Percent
Change
|
|||||||||||||||||||
|
||||||||||||||||||||||||
Research and development
|
$
|
3.7
|
$
|
5.4
|
(31.6
|
)%
|
$
|
7.2
|
$
|
11.1
|
(35.3
|
)%
|
||||||||||||
Percentage of net sales
|
3.4
|
%
|
4.4
|
%
|
3.3
|
%
|
4.4
|
%
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
Q2-17
|
Q2-16
|
YTD-17
|
YTD-16
|
|||||||||||||
Interest and other income (expense), net
|
$
|
(3.1
|
)
|
$
|
(2.0
|
)
|
$
|
(4.6
|
)
|
$
|
-
|
|||||
Interest expense
|
(0.5
|
)
|
(1.0
|
)
|
(1.1
|
)
|
(2.1
|
)
|
||||||||
Gain on sale of investment
|
-
|
-
|
-
|
8.8
|
||||||||||||
Other income (expense), net
|
$
|
(3.6
|
)
|
$
|
(3.0
|
)
|
$
|
(5.7
|
)
|
$
|
6.7
|
Three Months Ended
|
Six Months Ended
|
|||||||||||||||
Q2-17
|
Q2-16
|
YTD-17
|
YTD-16
|
|||||||||||||
Income tax benefit (provision)
|
$
|
(0.4
|
)
|
$
|
2.3
|
$
|
(2.5
|
)
|
$
|
(1.4
|
)
|
|||||
Effective income tax rate
|
22.5
|
%
|
(19.7
|
)%
|
29.3
|
%
|
3.5
|
%
|
Photronics, Inc.
|
||
(Registrant)
|
|
|
|
||
By:
|
/s/ SEAN T. SMITH
|
|
|
Sean T. Smith
|
|
|
Senior Vice President
|
|
|
Chief Financial Officer
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(Duly Authorized Officer and
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Principal Financial Officer)
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Date: June 8, 2017
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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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3
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1.6
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Accounting Consolidation
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3
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1.7
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Transaction Documents
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5
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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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6
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1.12 |
Affiliates
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6
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ARTICLE 2.
DEFINITIONS
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6
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ARTICLE 3.
SHARES AND CAPITAL CONTRIBUTIONS
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13
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3.1
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Authorized Shares
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13
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3.2
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Initial Capital Contributions and Share Issuance
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13
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3.3
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Return or Redemption of Capital Contribution
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13
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3.4
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Liability of Shareholders
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14
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3.5
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Revenue
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14
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ARTICLE 4.
FINANCING OF THE COMPANY
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14
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4.1
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Types of Financing
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14
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ARTICLE 5.
MANAGEMENT
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16
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5.1
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Board of Directors
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16
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5.2
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Effect of Reduction in Photronics’ Percentage Interest on Photronics Directors
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18
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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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18
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5.4
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Procedure.
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19
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5.5
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Chairman and Vice-Chairman
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19
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5.6
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Meetings of Shareholders and of the Board of Directors; Quorum
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20
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5.7
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Supervisors
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22
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5.8
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Actions Requiring a Supermajority Vote of Shareholders
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22
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5.9
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Actions Requiring a Supermajority Vote of Directors
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22
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5.10
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Compensation of Directors and Supervisors
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22
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5.11
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Other Activities
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22
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5.12
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Accounting; Records and Reports
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23
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5.13
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Indemnification and Liability of the Directors
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25
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5.14
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Officer
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27
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5.15
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Steering Committee
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29
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5.16
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Non-Disclosure
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31
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5.17
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Maintenance of Insurance
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31
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5.18
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Related Party Agreements
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31
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ARTICLE 6.
OPERATIONS
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32
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6.1
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Headquarters
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32
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6.2
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Operations Plan; Annual Budget
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32
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6.3
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DPTT Employees
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32
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6.4
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Company Employees; Seconded Employees
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32
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6.5
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Service Provider Documents
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32
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6.6
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Compensation and Benefits
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33
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ARTICLE 7.
DISPOSITION AND TRANSFERS OF INTERESTS
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33
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7.1
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Holding of Shares
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33
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7.2
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Transfer Moratorium
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34
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7.3
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Purchase and Sale of Remaining Interest
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35
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7.4
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Change in Control
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35
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7.5
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Purchase and Sale Agreement
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36
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ARTICLE 8.
[INTENTIOANLLY DELETED]
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36
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ARTICLE 9.
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37
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9.1
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Term of this Agreement
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37
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9.2
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Termination and Cross-termination
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37
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9.3
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Right of Terminating Party
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38
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ARTICLE 10.
DISSOLUTION, LIQUIDATION, AND TERMINATION OF THE COMPANY
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39
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10.1
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Limitations
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39
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10.2
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Exclusive Causes
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39
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10.3
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Effect of Dissolution
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40
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10.4
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Loss of the Company
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40
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10.5
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Liquidation
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41
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10.6
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Dissolution |
41
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ARTICLE 11.
DISTRIBUTIONS
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41
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11.1
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Use of Cash
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41
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11.2
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Distributions Upon Liquidation
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42
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11.3
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Withholding
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42
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11.4
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Distributions in Kind
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42
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11.5
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Limitations on Distributions
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43
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ARTICLE 12.
MISCELLANEOUS
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43
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12.1
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Amendments
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43
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12.2
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No Waiver
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43
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12.3
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Entire Agreement
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43
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12.4
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Further Assurances
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44
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12.5
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Notices
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44
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12.6
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Governing Law
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44
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12.7
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Construction; Interpretation
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44
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12.8
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Rights and Remedies Cumulative
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45
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12.9
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No Assignment; Binding Effect
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45
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12.10
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Severability
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45
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12.11
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Counterparts
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46
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12.12
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Dispute Resolution; Arbitration
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46
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12.13
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Third-Party Beneficiaries
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47
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12.14
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Specific Performance
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47
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12.15
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Consequential Damages
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47
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12.16
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Fees and Expenses
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47
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Schedule A |
List of Transaction Documents
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Schedule B |
[intentionally left blank]
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Schedule C |
Shareholders and Percentage Interest
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Schedule D |
Majority Board Control Items
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Schedule E |
Insurance Policies At Closing
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Schedule F |
List of Actions Requiring A Supermajority Vote of Shareholders
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Schedule G |
List of Actions Requiring A Supermajority Vote of Directors
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Schedule H |
Initial Business Plan
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Schedule I |
Form of Articles of Incorporation
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Schedule J |
Representative Funding Plan
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Schedule K |
Scoring Items for PDMCX Technology Partnership Proposals
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Schedule L |
Competitors
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1.1 |
Background
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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1
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1.2 |
Name
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1.3 |
Principal Place of Business
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1.4 |
Business Purpose
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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2
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1.5 |
Term
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1.6 |
Accounting Consolidation
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(a) |
Photronics shall promptly notify DNP of the reasons for, and content of, any proposed Accounting Amendment in writing;
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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3
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(b) |
after Photronics’ above notification, Photronics and DNP shall use all reasonable efforts to negotiate with each other with a view to reaching a written agreement for the Accounting Amendment or other mutually acceptable solution, provided however, that, if no such agreement or solution is reached by Photronics and DNP within thirty (30) calendar days after Photronics’ above notification,
(i)
Photronics may, in its discretion, retroactively and/or prospectively, make the Accounting Amendment to the minimum extent reasonably deemed necessary by Photronics, and shall promptly notify the Company and DNP of the content of such Accounting Amendment in writing
; and (ii) after Photronics exercises its discretionary power set forth in (i) above, if the Accounting Amendment concerned involves any change in the definition of and/or any of the actions requiring a Supermajority Vote of Directors as set forth in
Schedule G
hereof, the definition of and/or any of the actions requiring a Supermajority Vote of Shareholders as set forth in
Schedule F
hereof, and/or the number of board seats of DNP in the Company hereunder, DNP shall have [***]. DNP may, at any time after the Accounting Amendment takes effect but only after the expiration of the Initial Two-Year Term, exercise [***] by giving a written notice to Photronics
(the “
Accounting Amendment Option Notice
”). Photronics agrees to use all reasonable efforts to apply for all applicable regulatory approvals or clearance within thirty (30) days after receipt of the Accounting Amendment Option Notice. The closing of the [***] (the "
Accounting Amendment Closing
") shall take place as soon as commercially practicable (taking into account the necessary funds raising arrangement by Photronics) without any undue delay and shall be within three (3) Business Days after all prior regulatory approvals or clearance have been obtained. The Accounting Amendment Closing Price shall be equal to [***] as of the last day of the Fiscal Month immediately prior to the date of the Accounting Amendment Option Notice, divided by the number of Issued and outstanding Shares of the Company as of the date of the last day of the Fiscal Month immediately prior to the date of the Accounting Amendment Option Notice, multiplied by the number of the Shares held by [***] as of the date of the Accounting Amendment Closing. The Accounting Amendment Closing Price shall be paid by [***] pursuant to the terms and conditions agreed to upon the exercise of the Accounting Amendment Option, but the Accounting Amendment Closing Price shall be fully paid within seven (7) years from the exercise of the Accounting Amendment Option. At the Accounting Amendment Closing, [***] shall transfer all of its Interests in the Company to Photronics, free and clear of any liens or encumbrances, and [***] shall pay the amount of all or part of the Accounting Amendment Closing Price that [***] will be required to pay upon the Accounting Amendment Closing to [***] by wire transfer of cash. At the Accounting Amendment Closing, DNP shall deliver to Photronics such instrument or instruments of conveyance as Photronics reasonably requests.
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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4
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1.7 |
Transaction Documents
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1.8 |
Ratification of Organizational Actions
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1.9 |
Articles of Incorporation
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1.10 |
Compliance
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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5
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1.11 |
Pre-Closing Liabilities
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1.12 |
Affiliates
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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6
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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7
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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8
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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9
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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10
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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11
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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12
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3.1 |
Authorized Shares
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3.2 |
Initial Capital Contributions and Share Issuance
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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13
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3.3 |
Return or Redemption of Capital Contribution
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3.4 |
Liability of Shareholders
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3.5 |
Revenue
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4.1 |
Types of Financing
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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14
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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15
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5.1 |
Board of Directors
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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16
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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17
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5.2 |
Effect of Reduction in Photronics
Singapore’s Percentage Interest on Photronics Directors
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Photronics
Singapore’s Percentage Interest
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Number of Photronics
Directors
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> 80%
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[***]
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> 50% and
≦
80%
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[***]
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≧
20% and
≦
50%
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[***]
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>
0% and < 20%
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[***]
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5.3 |
Effect of Reduction in DNP Asia Pacific’s Percentage Interest on DNP Directors
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DNP Asia Pacific’s Percentage Interest
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Number of DNP Directors
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> 80%
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[***]
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> 50% and
≦
80%
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[***]
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≧
20% and
≦
50%
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[***]
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> 0% and < 20%
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[***]
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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18
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5.4 |
Procedure
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5.5 |
Chairman and Vice-Chairman
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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19
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5.6 |
Meetings of Shareholders and of the Board of Directors; Quorum
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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20
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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21
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5.7 |
Supervisors
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5.8 |
Actions Requiring a Supermajority Vote of Shareholders
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5.9 |
Actions Requiring a Supermajority Vote of Directors
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5.10 |
Compensation of Directors and Supervisors
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5.11 |
Other Activities
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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22
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5.12 |
Accounting; Records and Reports
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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23
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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24
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5.13 |
Indemnification and Liability of the Directors
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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25
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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26
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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27
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5.14 |
Officer
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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28
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5.15 |
Steering Committee
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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29
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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30
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5.16
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Business Development Team [***]
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5.17 |
Maintenance of Insurance
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5.18 |
Related Party Agreements
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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31
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6.1 |
Headquarters
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6.2 |
Operations Plan; Annual Budget
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6.3
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Reserved
[RESERVED]
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6.4 |
Company Employees; Seconded Employees
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6.5 |
Service Provider Documents
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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32
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6.6 |
Compensation and Benefits
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7.1 |
Holding of Shares
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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33
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7.2 |
Transfer Moratorium
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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34
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7.3 |
Purchase and Sale of Remaining Interest
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7.4 |
Change in Control
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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35
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7.5 |
Purchase and Sale Agreement
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8.1
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Non-Competition
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8.2
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Business Scope of the Company
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8.3
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Contact with Customers
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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36
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9.1 |
Term of this Agreement
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9.2 |
Termination and Cross-termination
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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37
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9.3 |
Right of Terminating Party
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9.4
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Exceptional Exit
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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38
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10.1 |
Limitations
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10.2 |
Exclusive Causes
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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39
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10.3 |
Effect of Dissolution
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10.4 |
Loss of the Company
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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40
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10.5 |
Liquidation
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10.6
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Dissolution
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11.1 |
Use of Cash
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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41
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11.2 |
Distributions Upon Liquidation
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11.3 |
Withholding
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11.4 |
Distributions in Kind
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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42
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11.5 |
Limitations on Distributions
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12.1 |
Amendments
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12.2 |
No Waiver
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12.3 |
Entire Agreement
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
43
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12.4 |
Further Assurances
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12.5 |
Notices
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12.6 |
Governing Law
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12.7 |
Construction; Interpretation
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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44
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12.8 |
Rights and Remedies Cumulative
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12.9 |
No Assignment; Binding Effect
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12.10 |
Severability
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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45
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12.11 |
Counterparts
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12.12 |
Dispute Resolution; Arbitration
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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46
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12.13 |
Third-Party Beneficiaries
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12.14 |
Specific Performance
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12.15 |
Consequential Damages
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12.16 |
Fees and Expenses
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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47
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12.17 |
Confidentiality
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*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
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48
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PHOTRONICS INC.
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By:
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Name: [***]
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Title: [***]
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PHOTRONICS SINGAPORE PTE, LTD.
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By:
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Name: [***]
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Title: [***]
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||
DAI NIPPON PRINTING CO., LTD.
|
||
By:
|
||
Name: [***]
|
||
Title: [***]
|
||
DNP ASIA PACIFIC PTE. LTD.
|
||
By:
|
||
Name: [***]
|
||
Title: [***]
|
Shareholder
|
Percentage Interest
|
Photronics Singapore
|
50.01%
|
DNP Asia Pacific
|
49.99%
|
Addresses for Notices Purposes
|
|
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
|
Tel: [***]
|
Fine Electronics Operations
|
Fax: [***]
|
Tel: [***]
|
Fax: [***]
|
|
Photronics Singapore Pte. Ltd.
|
DNP Asia Pacific Pte. Ltd.
|
No. 33, Ubi Avenue 3 #03-09,
|
4 Pandan Crescent, Singapore 128475
|
Vertex Building Singapore 408868
|
|
Attn: Representative Director
|
Attn: President
|
Tel: [***]
|
Tel: [***]
|
Fax: [***]
|
Fax: [***]
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
1
|
(a) |
Contribution Closing
.
|
(b) |
Capitalization of PDMCX
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
2
|
(c) |
Use of Capital of PDMCX
|
(d) |
Obligations at the Closing
|
(e) |
Assumption of Liabilities
.
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
3
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
4
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
5
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
6
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
7
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
8
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
9
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
10
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
11
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
12
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
13
|
PHOTRONICS, INC.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
PHOTRONICS SINGAPORE PTE LTD.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
DAI NIPPON PRINTING CO., LTD.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
DNP ASIA PACIFIC PTE. LTD.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
|||
XIAMEN AMERICAN JAPAN PHOTRONICS MASK CO., LTD.
|
|||
By:
|
|||
Name:
|
|||
Title:
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
1
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
1
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
2
|
1.1 |
Defined Terms
|
1.2 |
Incorporation
by Reference
|
2.1 |
Outsource and Issuance of Purchase Orders
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
2
|
2.2 |
Purchase Orders
|
2.3 |
Purchase Order Terms
|
2.4 |
Rescheduling and Cancellation
|
2.5 |
End of Life
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
3
|
2.6 |
Certain Claims
|
2.7 |
Priority for New Products
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
4
|
4.1 |
Prices
|
4.2 |
Invoices; Payments
|
4.3 |
Taxes
|
5.1 |
Risk of Loss and Title
|
5.2 |
Delivery
|
6.1 |
Suppliers Limited Warranty
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
5
|
6.2 |
Disclaimer
|
7.1 |
Term
|
7.2 |
Termination for Cause
|
7.3 |
Survival
|
8.1 |
Indemnification by the Suppliers
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
6
|
8.2 |
Indemnification by the Company
|
8.3 |
Procedure
|
9.1 |
Limited Liability
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
7
|
9.2 |
Remedies
|
10.1 |
[***]
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
8
|
1. |
“
Affiliate
” of a Person means any other Person which, directly or indirectly, controls, is controlled by, or is under common control with, such Person. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract or otherwise. A Person shall be deemed an Affiliate of another Person only so long as such control relationship exists.
|
2. |
“
Applicable Currency
” means (i) for payments in relation to Photronics, U.S. Dollars, (ii) for payments in relation to DNP, U.S. Dollars, and (iii) for payments in relation to PDMC, US Dollars.
|
3. |
“
Delivery Term
” means DDP (Incoterms 2010) at delivery point in China. The Delivery Term may be otherwise determined by the Company and the Supplier in the Purchase Order where delivery point is other place than China.
|
4. |
***.
|
5. |
“
Intellectual Property Rights
” means all rights in and to (a) U.S. and foreign patents and patent applications, including all divisions, substitutions, continuations, continuations-in-part, and any reissues, re-examinations and extensions thereof, (b) copyrights and other rights in works of authorship, (c) unpatented inventions, trade secrets, data, processes, or materials, (d) mask work rights, and (e) other intellectual property or proprietary rights of any kind now known or hereafter recognized in any jurisdiction, but excluding trademarks, service marks, trade names, trade dress, domain names, logos and similar rights, and the goodwill associated therewith.
|
6. |
***.
|
7. |
***.
|
8. |
***.
|
9. |
***.
|
10. |
***.
|
11. |
“
Product
” means photolithographic integrated circuit photomasks for
[***]
and related services.
|
12. |
“
Purchase Order
” means any of the following (a) a written purchase order issued to the Company by third party buyers for the purchase of certain Products; (b) a written purchase order issued by the Company to a Supplier for a quantity of the Product.
|
13. |
“
Warranty Period
” means a period of
[***]
from the relevant Supplier’s shipment of the Product.
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
2 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
3 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
4 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
5 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
6 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
7 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
8 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
9 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
10 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
11 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
12 |
Dai Nippon Printing Co., Ltd.
|
||
By:
|
||
Name: [***]
|
||
Title: [***]
|
||
Photronics DNP Mask Corporation
|
||
By:
|
||
Name: [***]
|
||
Title: [***]
|
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
13 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
14 |
*** Confidential treatment has been requested by Photronics, Inc. for redacted portions of this exhibit. This copy omits the information subject to the confidentiality request. Omissions are designated as [***]. A complete version of this exhibit has been provided separately to the Securities and Exchange Commission.
|
15 |
PHOTRONICS, INC.,
|
|||
as the Company
|
|||
By:
|
|||
Name:
|
|||
Title:
|
JPMORGAN CHASE BANK, N.A., individually as a Lender and as Administrative Agent
|
|||
By:
|
|||
Name:
|
|||
Title:
|
CITIZENS BANK, N.A.,
|
|||
as a Lender
|
|||
By:
|
|||
Name:
|
|||
Title:
|
TD BANK, N.A.,
|
|||
as a Lender
|
|||
By:
|
|||
Name:
|
|||
Title:
|
PHOTRONICS IDAHO, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
||
TRIANJA TECHNOLOGIES, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
||
PHOTRONICS TEXAS ALLEN, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
||
PHOTRONICS CALIFORNIA, INC.
|
||
By:
|
||
Name:
|
||
Title:
|
1. |
I have reviewed this quarterly report on Form 10-Q 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.
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a) |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a) |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ PETER S. KIRLIN
|
|
Peter S. Kirlin
|
|
Chief Executive Officer
|
|
June 8, 2017
|
1.
|
I have reviewed this quarterly report on Form 10-Q 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.
|
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
|
4. |
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b) |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c) |
evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d) |
disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5. |
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b) |
any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ SEAN T. SMITH
|
|
Sean T. Smith
|
|
Chief Financial Officer
|
|
June 8, 2017
|
(1)
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended April 30, 2017, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ PETER S. KIRLIN
|
|
Peter S. Kirlin
|
|
Chief Executive Officer
|
|
June 8, 2017
|
(1)
|
The Quarterly Report on Form 10-Q of the Company for the quarter ended April 30, 2017, (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ SEAN T. SMITH
|
|
Sean T. Smith
|
|
Chief Financial Officer
|
|
June 8, 2017
|