Exhibit 4.1
PHOTRONICS, INC.
2000 STOCK PLAN
(as Amended on March 20, 2002)
(1) PURPOSES OF THE PLAN
The purposes of this 2000 Stock Plan are:
(a) To attract and retain the best available personnel for positions of
substantial responsibility (both as Employees and as Outside
Directors) in respect of the business of PHOTRONICS, INC., and any
current subsidiary or any subsidiary which PHOTRONICS, INC. may
hereafter organize or acquire;
(b) To provide additional incentive to such personnel; and
(c) To promote the success of the business.
(2) DEFINITIONS
As used herein, the following definitions shall apply:
(a) "Award" shall mean an Option or a Restricted Stock Award.
(b) "Board" shall mean the Board of Directors of PHOTRONICS, INC.
(c) "Change of Control" means the occurrence of an event defined in
Section 15 of the Plan.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(e) "Common Stock" shall mean the common stock of the Company.
(f) "Company" shall mean PHOTRONICS, INC.
(g) "Compensation Committee" shall mean a committee of the Board composed
of at least two (2) members of the Board.
(h) "Disability" shall have the meaning set forth in Section 22(e)(3) of
the Code or in any successor provision thereto.
(i) "Employee" shall mean a regular, salaried common law employee of the
Company or any of its subsidiaries or affiliates.
(j) "Option" shall mean a stock option granted pursuant to the Plan.
(k) "Option Agreement" shall mean the stock option agreement entered into
between the Company and an Employee or Outside Director upon the grant
of an Option.
(l) "Option Price" shall mean the exercise price determined pursuant to
Section 4 hereof for the Shares to be issued pursuant to any Option
granted under the Plan.
(m) "Optioned Stock" shall mean the stock subject to an Option or
Restricted Stock Award granted pursuant to the Plan.
(n) "Optionee" shall mean an Employee or Outside Director who receives an
Option or Restricted Stock Award.
(o) "Outside Director" shall mean a member of the Company's Board of
Directors who is not also an Employee.
(p) "Performance Award" means an Option or Restricted Stock Award which is
subject to conditions which render it a performance stock award under
applicable law.
(q) "Plan" shall mean this 2000 Stock Plan.
(r) "Restricted Stock Award" means a restricted stock award granted
pursuant to the Plan.
(s) "Restricted Stock Award Agreement" means the Restricted Stock Award
Agreement entered into between the Company and an Employee or Outside
Director upon the grant of a Restricted Stock Award.
(t) "Share" shall mean a share of the Common Stock of the Company as
adjusted in accordance with Section 14 of the Plan.
(u) "10% Shareholder" shall mean an individual who at the time an Option
is granted hereunder owns, within the meaning of Section 422(b)(6) of
the Code, stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or of its parent or
subsidiary corporations.
(3) STOCK SUBJECT TO THE PLAN
Subject to the provisions of Section 14 of the Plan, the maximum aggregate
number of Shares for which Awards may be granted under the Plan, is Two
Million Five Hundred Thousand (2,500,000) Shares of Common Stock;
provided, that Awards for no more than ten percent (10%) of the Shares
authorized for issuance under this Plan may be granted cumulatively
pursuant to Restricted Stock Awards and Awards for no more than fifteen
percent (15%) of the Shares authorized for issuance under this Plan may be
granted to any one person during any one calendar year. Shares issued
under the Plan may be authorized but unissued, or treasury Shares, or
Shares reacquired by the Company, or any combination of the foregoing.
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If an Option should expire, be cancelled or become unexerciseable for any
reason without having been exercised in full, or any Shares issued
pursuant to a Restricted Stock Award are forfeited or the Restricted Stock
Award is cancelled, the unexercised, cancelled or forfeited Shares which
were subject thereto shall, unless the Plan shall have been terminated,
become available for the grant of other Awards under the Plan.
(4) ADMINISTRATION OF THE PLAN
(a) Procedure
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The Plan shall be administered by the Board or the Compensation
Committee. Members of the Board who are either eligible for grants
under this Plan or have been given grants under this Plan may vote
on any matters affecting the administration of the Plan or the
grant of any Options or Restricted Stock Awards pursuant to the
Plan, except that no such member shall act upon the granting of an
Option or Restricted Stock Award to himself, but any such member
may be counted in determining the existence of a quorum at any
meeting of the Board during which action is taken with respect to
the granting of Options or Restricted Stock Awards to him.
(b) Powers of the Board and the Committee
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Subject to the provisions of the Plan, the Board or the
Compensation Committee shall have the authority:
i) to grant to any eligible Employee or Outside Director an
Option or Restricted Stock Award, which shall be conditioned
on the execution by such Employee or Outside Director of an
Option Agreement or Restricted Stock Award Agreement in the
form approved by the Board or the Committee;
ii) to determine the Option Price for any Shares to be issued
pursuant to an Option granted under the Plan, whether an
Option is to be a Performance Award and the conditions
applicable to such Options, the conditions applicable to any
Restricted Stock Award, the Employees or Outside Directors to
whom and the time or times at which Options or Restricted
Stock Awards shall be granted, to determine the exercise or
vesting date of Options and Restricted Stock Awards, whether
the Option shall be a non-qualified or an incentive stock
option (as defined in Section 422 of the Code or any successor
provision thereto) and the number of Shares to be represented
by each Option or Restricted Stock Award, and the term of each
Option which in no event shall be more than ten (10) years
from the date of the grant of the Option (five [5] years in
the case of an incentive stock option granted to a 10% owner);
iii) to interpret the Plan;
iv) to prescribe, amend and rescind rules and regulations relating
to the Plan;
v) to determine the terms and provisions of each Option granted
under the Plan (which need not be identical) and, (with the
consent of the holder thereof) to modify or amend each Option
or Restricted Stock Award; provided, however, that
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in no event may the exercise price of an Option be reduced
(except pursuant to Section 14) after it is issued;
vi) to accelerate any exercise date of any Option or Restricted
Stock Award except that the exercise date of any Option or
Restricted Stock Award granted to any director or executive
officer cannot be accelerated without such holder's consent
if such acceleration would result in liability under Section
16 of the Act, or any successor provision thereto;
vii) to authorize any person to execute on behalf of the Company
any instrument required to effectuate the grant of an Option
or Restricted Stock Award previously granted by the Board or
the Compensation Committee; and
viii) to make all other determinations deemed necessary or
advisable for the administration of the Plan.
(c) Effect of Board's or Compensation Committee's Decision
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All decisions, determinations and interpretations of the Board or
the Compensation Committee shall be final and binding on all the
holders of any Awards granted under the Plan.
(5) ELIGIBILITY
Options and Restricted Stock Awards under the Plan may be granted only to
such Employees or to such Outside Directors as the Board or the
Compensation Committee shall select. An Employee or Outside Director who
has been granted an Award may, if he or she is otherwise eligible, be
granted additional Awards. Incentive stock options may be granted only in
accordance with Section 422 of the Code, as may be amended from time to
time, or any successor provision thereto, and in accordance with any
applicable regulations promulgated thereunder.
(6) TERM OF PLAN
Subject to the provisions of Section 22 hereof, the Plan shall become
effective on January 11, 2000, subject to approval by the shareholders of
the Company. The Plan shall continue in effect for a term of ten (10)
years thereafter, unless sooner terminated under Section 18 hereof.
(7) TERM OF OPTION OR RESTRICTED STOCK AWARD
Except as provided under Code Section 422(c)(5) with respect to a 10%
Shareholder's incentive stock option and unless of shorter duration as
provided in the terms of an Option or Restricted Stock Award Agreement,
the term of each Option or forfeiture period for a Restricted Stock Award
granted under the Plan shall be determined by the Board or the
Compensation Committee but, in no event, shall it be for a period in
excess of ten (10) years from the date of grant thereof.
(8) MAXIMUM ALLOTMENT OF OPTIONS
The aggregate fair market value (determined as of the date the Option is
granted) of the Common Stock with respect to which incentive stock options
are exercisable for the first time
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by any individual during any calendar year under the Plan and all other
plans of the Company or any parent or subsidiary of the Company shall not
exceed $100,000 or such other amount as is permitted by the Code and
regulations promulgated thereunder with respect to incentive stock
options.
(9) OPTION PRICE
The Option Price for the Shares to be issued pursuant to any Option shall
be as stated in the Option Agreement and shall be not less than the
greater of (a) the fair market value of such Shares on date of grant of
the Option as determined by the Board or the Compensation Committee
(except that with respect to an incentive stock option issued to a 10%
Shareholder, 110% of the fair market value or such other percentage as
may be permitted by the Code and regulations promulgated thereunder), or
(b) the par value of such Shares.
(10) EXERCISE OF OPTIONS
(a) Procedure for Exercise
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Any Option shall be exercisable on such terms and conditions as
are set forth in the Option Agreement. The purchase price of the
Shares as to which an Option shall be exercised shall be paid in
full at the time of exercise at the election of the holder of an
Option:
i) in cash or currency of the United States of America;
ii) by tendering to the Company shares of the Company's Common
Stock, then owned by him, having a fair market value equal
to the cash exercise price applicable to the purchase price
of the Shares as to which an Option is being exercised; or
iii) partly in cash and partly in shares of the Company's Common
Stock valued at fair market value.
Such fair market value shall be the closing price per share of the
Common Stock as reported on the NASD National Market (or on any
successor market or a market or exchange on which the Common Stock
is then traded), as of the close of business on the day
immediately preceding the day on which the Option is exercised. If
the Common Stock is not traded on the NASD National Market or any
other market or exchange, the fair market value shall be
determined by the Board or the Compensation Committee, whose
determination shall be final and conclusive.
An Option shall be deemed to be exercised when:
i) written notice of such exercise has been given to the
Company in accordance with the terms of the Option Agreement
by the person entitled to exercise the Option;
ii) payment as described above for the Shares with respect to
which the Option is exercised has been received by the
Company; and
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iii) such payment is accompanied by any representations or
agreements required by the terms of this Plan or the
Option Agreement.
A holder of an Option shall not have any rights to dividends or
any other rights as a stockholder of the Company with respect
to any shares covered by his Option until such shares shall
have been issued to him as reflected by the books and records
maintained by the Company's transfer agent relating to
stockholders of the Company.
(b) Termination of Employment or Director Relationship/
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Death or Disability of Optionee
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i) If, for any reason, an Optionee shall cease to be an
Employee, or an Outside Director's service on the Board
shall terminate, his or her right to exercise any
non-qualified stock options shall cease thirty (30) days
(except to the extent otherwise provided in [ii] below)
after the date of such termination; provided, however,
that if an Employee's employment is terminated for cause
or an outside Director's service is terminated due to his
or her removal for cause, said Option shall terminate
immediately. The Plan shall not confer upon any Optionee
any right with respect to continuation of employment or
consulting, or continuation of service as an Outside
Director, nor shall it interfere in any way with his right
or the Company's right to terminate such relationship at
any time subject to the provisions of any applicable
contract. An Option may be exercised under this paragraph
only to the extent of the accrued right to exercise at the
time of termination, and only to the extent that the
Option is otherwise exercisable pursuant to the initial
term provided for in the Option Agreement covering such
Option.
ii) In the event of the death or Disability of an Optionee,
any non-qualified stock options which were exercisable by
the Optionee on the date of his death or Disability shall
remain exercisable for a period of six (6) months by the
Optionee, the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or
inheritance. An Option may be exercised under this
paragraph only to the extent of the accrued right to
exercise at the time of death or Disability, as the case
may be, and only to the extent that the Option is
otherwise exercisable pursuant to its initial term.
iii) If an Employee's employment with the Company shall
terminate for any reason, he or she may exercise an
incentive stock option for such period after termination
as provided above for non-qualified stock options, but for
no longer than the maximum period after termination
allowed by Code Section 422 and the regulations
promulgated thereunder; provided, however, that if
employment shall terminate by reason of discharge for
cause, the Option shall terminate immediately upon such
termination.
(11) NON-TRANSFERABILITY OF OPTIONS AND
RESTRICTED STOCK AWARDS
Except as provided below, an Option and, unless and until the shares
subject to a Restricted Stock Award are no longer subject to
forfeiture, shares subject to a Restricted Stock Award,
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may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by the laws of descent
or distribution and an Option may be exercised during the lifetime of
the Optionee only by the Optionee. Notwithstanding the foregoing, the
Board or the Compensation Committee may permit the transfer of
non-qualified stock options by such optionees to such persons or
entities, and upon such terms or conditions as the Board or
Compensation Committee may determine from time to time.
(12) RESTRICTED STOCK AWARD
The Shares subject to a Restricted Stock Award shall be issued in the
name of the recipient as soon as reasonably practicable after the date
of grant of the Restricted Stock Award (and after the recipient has
executed a Restricted Stock Award Agreement and any other documents
which the Board or the Compensation Committee, in its absolute
discretion, may require) without the requirement for payment of any
cash consideration by such recipient, but shall be held by the Company
until all risk of forfeiture shall have lapsed. Any certificate
representing such Shares may bear such restrictive legend, if any, as
the Board or the Compensation Committee may determine. Shares issued
pursuant to Restricted Stock Awards shall be subject to such
restrictions, terms and conditions as the Board or the Compensation
Committee may establish, which may include, without limitation, the
achievement of specific goals, and shall vest at such time or times as
the Board or the Compensation Committee shall determine. The Board or
the Compensation Committee may, in its sole discretion, make such
adjustments to the goals applicable to a Restricted Stock Award as they
deem necessary or advisable due to changes in criteria used for the
specific goals or other factors which they deem appropriate.
Upon issuance of the Shares subject to a Restricted Stock Award, the
recipient shall, subject to Section ll, have all the rights of a
stockholder with respect to such Shares, including the right to vote
such Shares, but all dividends and other distributions paid or made
with respect to such Shares shall be held by the Company subject to the
restrictions, terms and conditions of the Restricted Stock Award.
As promptly as practicable after the shares of Common Stock subject to
a Restricted Stock Award cease to be subject to forfeiture, the
certificate representing such Shares, or a new certificate without any
inapplicable restrictive legend if the original certificate bore a
restrictive legend, shall be delivered to the recipient or, in the
event of the death of a recipient prior to delivery, to his estate or
other legally appointed personal representative.
In the event of the termination of employment or service as an Outside
Director of a recipient of a Restricted Stock Award due to death,
disability or normal retirement, the Board or the Compensation
Committee may, in its sole discretion, deem that the restrictions,
terms and conditions of the Restricted Stock Award have been met for
all or part of the Shares subject thereto, subject to such further
terms and conditions, if any, as the Board or the Compensation
Committee may determine.
(13) FORFEITURE OF OPTIONS AND REPAYMENT OF MARKET
VALUE OF OPTIONS OR AWARDS
If, at any time within one (1) year after an Optionee ceases to be an
Employee or Outside Director, such Optionee engages in any activity in
competition with any activity of the
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Company, or inimical, contrary or harmful to the interests of the
Company, including, but not limited to:
(a) conduct related to such Optionee's employment for which either
criminal or civil penalties against the Optionee may be sought;
(b) violation of Company policies, including, without limitation, the
Company's insider trading policy;
(c) accepting employment with or serving as a consultant, advisor or in
any other capacity to an employer that is in competition with or
acting against the interests of the Company, including employing or
recruiting any present, former or future employee of the Company;
(d) disclosing or mis-using any confidential information or material
concerning the Company; or,
(e) participating in a hostile takeover attempt, then:
i) Options and Restricted Stock Awards shall terminate
effective the date on which such Optionee enters into
such activity, unless terminated sooner by operation of
another term or condition of this Plan;
ii) the aggregate difference between the exercise price of
Options exercised within one (1) year of the date
Optionee ceased to be an Employee or an Outside Director
(the "Termination Date") and the closing market value of
the Shares covered by such Options; and
iii) the aggregate of the closing market value for all Shares
subject to Restricted Stock Awards as to which forfeiture
provision expired within one (1) year prior to the
Termination Date shall be paid by the Optionee to the
Company.
By accepting any Option or Restricted Stock Award, each Optionee consents
to a deduction from any amounts the Company owes such Optionee from time
to time (including amounts owed as wages or other compensation, fringe
benefits or vacation pay, as well as any other amounts owed by the
Company), to the extent of the amounts the Optionee owes the Company
under the foregoing paragraph. Whether or not the Company elects to make
any set-off in whole or in part, if the Company does not recover by means
of set-off the full amount the Optionee owes it, calculated as set forth
above, each Optionee agrees to pay immediately the unpaid balance to the
Company. Optionees may be released from their obligations under this
Section above only by the Board of Directors or the Compensation
Committee.
(14) ADJUSTMENTS UPON CHANGES IN CAPITALIZATION
In the event there is any change in the Common Stock through the
declaration of stock dividends, or through a recapitalization resulting
in a stock split, or combination or exchange of Shares, or
reorganization, or otherwise, the Board or the Compensation Committee
shall appropriately adjust the number or class of Shares covered by an
Award, as well as the exercise price of Options; and, in the event of any
such change in the outstanding Common Stock, the aggregate number and
class of Shares available for the grant of Awards under the Plan shall be
appropriately adjusted.
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No fractional Shares of the Common Stock shall be issuable on account
of any action aforesaid, and the aggregate number of Shares then
covered by the Award when changed as a result of such action shall be
reduced to the largest number of whole Shares resulting from such
action unless the Board or the Compensation Committee, in its
discretion, shall determine to issue scrip certificates in respect of
any fractional Shares, which scrip certificates shall be in a form and
have such terms and conditions as the Board or the Compensation
Committee in its discretion shall prescribe.
(15) CHANGE OF CONTROL
(a) For purposes of this Plan, a Change of Control shall occur if
there shall occur:
i) (A) any consolidation or merger in which the Company is not the
continuing or surviving corporation or pursuant to which shares
of stock of the Company entitled to vote in the election of
directors of the Company would be converted into cash, securities
or other property, other than a merger of the Company in which
holders of such stock of the Company immediately prior to the
merger have the same proportionate ownership of common stock
entitled to vote in the election of directors of the surviving
corporation immediately after the merger as immediately before,
or (B) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or
substantially all the assets of the Company.
(b) Notwithstanding any provisions in this Plan to the contrary:
i) Each outstanding Option granted under the Plan shall become immediately
exercisable in full for the aggregate number of shares covered thereby
upon the occurrence of a Change of Control described in this Section 15
and shall continue to be exercisable in full provided, however, that no
Option shall be exercisable beyond the expiration date of its original
term.
ii) The restrictions applicable to shares of a Restricted Stock Award shall
lapse upon the occurrence of a Change of Control, and the holder
thereof shall be entitled to receive, and the Company shall issue,
immediately after the date of the Change of Control, unrestricted
certificates for all of such shares.
iii) If a Change of Control occurs during the course of a performance period
applicable to a Performance Award, the holder of such Performance Award
shall be deemed to have satisfied the performance objectives effective
on the date of such occurrence. Options granted pursuant to Performance
Awards shall immediately vest and be treated as set forth in subsection
(b)(i) above, and the restrictions applicable to any Restricted Stock
Award shall lapse and shall be treated as set forth in subsection
(b)(ii) above immediately following the occurrence of such Change of
Control.
iv) In the event of a Change of Control, no amendment, suspension or
termination of the Plan thereafter shall impair or reduce the rights of
any person with respect to any award made under the Plan
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(16) WITHHOLDING TAX
The Company may make such provisions (including accepting Shares as
payment or reducing the number of Shares to be issued) as it may deem
appropriate for the withholding of any taxes which the Company determines
it is required to withhold in connection with the grant or exercise of
any Award or the disposition of any Common Stock acquired pursuant to the
exercise of an Option or Restricted Stock Award. If an Optionee who
exercises all or part of an Option subsequently disposes of Common Stock
in a "disqualifying disposition" described under Code Section 422(c)(2),
such Optionee shall so notify the Company, forward such information as is
thereby requested by the Company and, if so requested by the Company, pay
to the Company such dollar amounts as are necessary to satisfy the
Company's tax withholding obligations resulting from such disposition.
(17) TIME OF GRANTING OPTIONS
The date of grant of an Award under the Plan shall for all purposes be
the date on which the Board or Compensation Committee makes the
determination granting such Award. Notice of the determination shall be
given to the Optionee within a reasonable time after the date of such
grant.
(18) AMENDMENT AND TERMINATION OF THE PLAN
(a) Amendment
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The Board, without approval of the shareholders, may amend the
Plan from time to time in such respects as the Board may deem
advisable except that the Board may not, without the approval of
the shareholders, amend the Plan to the extent that such amendment
would require shareholder approval under the Code in order for
Options to be granted as incentive stock options or in order for
Awards to be considered "qualified performance-based compensation"
within the meaning of Section 162(m) of the Code.
(b) Termination
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The Board, without approval of the shareholders, may at any time
suspend or terminate the Plan.
(c) Effect of Amendment or Termination
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Any such amendment or termination of the Plan shall not adversely
affect Awards previously granted.
(19) CONDITIONS UPON ISSUANCE OF SHARES
Shares shall not be issued with respect to an Award granted under the
Plan unless the exercise of such Option or termination of the forfeiture
period for such Restricted Stock Award and the issuance and delivery of
such Shares pursuant thereto shall comply with all relevant provisions of
law, including, without limitation, the Securities Act of 1933, as
amended, the Act, the rules and regulations promulgated thereunder, the
requirements of any stock exchange upon which the Shares may then be
listed, and applicable state securities laws, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance. As a condition to the exercise of an Option, the Company may
require the person exercising such Option to represent and warrant at the
time of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute such
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Shares if, in the opinion of counsel for the Company, such a
representation is necessary or desirable under any of the aforementioned
relevant provisions of law.
(20) RESERVATION OF SHARES
During the terms of this Plan, the Company will at all times reserve and
keep available a number of Shares sufficient to satisfy the requirements
of the Plan.
Inability of the Company to obtain from any regulatory body having
jurisdiction such authority as is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder shall
relieve the Company of any liability in respect of the non-issuance or
sale of such Shares as to which such requisite authority shall not have
been obtained.
(21) GOVERNING LAW
The Plan and the rights of all persons hereunder shall be governed by the
laws of the State of Connecticut, without regard to principles of
conflict of laws.
(22) MISCELLANEOUS
Participation under the Plan shall not affect eligibility for any
profit-sharing, bonus, insurance, pension, or other extra compensation
plan which the Company or any subsidiary may at any time adopt for
employees, except to the extent that any law or regulation governing any
such plan so provides. By acceptance of an Award under the Plan, each
employee shall be deemed to agree that any income realized upon the
receipt or exercise thereof or upon the disposition of the shares
received pursuant thereto is special incentive compensation and will not
be taken into account as "wages", "salary" or "compensation" in
determining the amount of any payment under any pension, retirement,
incentive, profit-sharing, employee stock purchase or deferred
compensation plan of the Company or any subsidiary.
(23) SHAREHOLDERS' APPROVAL
The Plan shall be subject to approval by the affirmative vote of the
holders of a majority of the shares of Common Stock present and voting at
a duly held shareholders' meeting within twelve (12) months before or
after adoption of the Plan by the Board and any Award, granted hereunder
prior to such approval shall be conditioned thereon.
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