-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, D5+0B3gLOd4eS4ItFKpJxMCghbJBLQ5U++8lhuVcvk6jy9Q6/5LDNus19uzZ9cMU C34ecPeoVP2EW7DixsaGiQ== 0000892569-99-002780.txt : 19991028 0000892569-99-002780.hdr.sgml : 19991028 ACCESSION NUMBER: 0000892569-99-002780 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19991027 GROUP MEMBERS: JAMES MACDONALD & ROBIN MACDONALD JOINT TENANTS GROUP MEMBERS: MACDONALD JAMES L GROUP MEMBERS: THE MCDONALD FAMILY TRUST SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ALIGN RITE INTERNATIONAL INC CENTRAL INDEX KEY: 0000945122 STANDARD INDUSTRIAL CLASSIFICATION: GLASS, GLASSWARE, PRESSED OR BLOWN [3220] IRS NUMBER: 954528353 STATE OF INCORPORATION: CA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-50019 FILM NUMBER: 99734286 BUSINESS ADDRESS: STREET 1: 2428 ONTARIO ST CITY: BURBANK STATE: CA ZIP: 91504 BUSINESS PHONE: 8188437720 MAIL ADDRESS: STREET 1: 2428 ONTARIO ST CITY: BURBANK STATE: CA ZIP: 91504 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: MACDONALD JAMES L CENTRAL INDEX KEY: 0001031257 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 2428 ONTARIO ST CITY: BURBANK STATE: CA ZIP: 91504 BUSINESS PHONE: 8188437220 MAIL ADDRESS: STREET 1: 2428 ONTARIO ST CITY: BURBANK STATE: CA ZIP: 91504 SC 13D/A 1 AMENDMENT NO.1 TO SCHEDULE 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------------- SCHEDULE 13D (RULE 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934(1) (AMENDMENT NO. 1) ALIGN-RITE INTERNATIONAL, INC. ------------------------------------------- (Name of Issuer) COMMON STOCK, $0.01 PAR VALUE ------------------------------------------------ (Title of Class of Securities) 016251 10 0 ------------------------------------------- (CUSIP Number) JAMES L. Mac DONALD C/O ALIGN-RITE INTERNATIONAL, INC. 2428 ONTARIO STREET BURBANK, CALIFORNIA 91504 (818) 843-7220 with a copy to: J. JAY HERRON, ESQ. O'MELVENY & MYERS LLP 610 NEWPORT CENTER DRIVE, SUITE 1700 NEWPORT BEACH, CALIFORNIA 92660 (949)-760-9600 ------------------------------------------------------- (Name, Address and telephone Number of Person Authorized to Receive Notices and Communication) SEPTEMBER 15, 1999 ------------------------------------------------------- (Date of Event Which Requires filing of This Statement) ----------- If the filing person has previously filed a Statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this Schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box. [X] - ---------- (1) The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter the disclosures provided in a prior cover page. The information required in the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act. 2 - ---------------------- ------------------- CUSIP NO. 016251 10 0 13D PAGE 2 OF 9 PAGES - ---------------------- ------------------- ================================================================================ 1. NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) James L. Mac Donald - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS PF and OO - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION: United States - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF -0- shares SHARES ------------------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER OWNED BY 722,558 shares ------------------------------------------------------- EACH 9. SOLE DISPOSITIVE POWER REPORTING 264,558 shares PERSON ------------------------------------------------------- 10. SHARED DISPOSITIVE POWER WITH 458,000 shares - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 722,558 shares - -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.92% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IN ================================================================================ Page 2 of 9 3 - ---------------------- ------------------- CUSIP NO. 016251 10 0 13D PAGE 3 OF 9 PAGES - ---------------------- ------------------- ================================================================================ 1. NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) The Mac Donald Family Trust - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS OO - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION: United States - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF -0- shares SHARES ------------------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER OWNED BY 440,000 shares ------------------------------------------------------- EACH 9. SOLE DISPOSITIVE POWER REPORTING 440,000 shares PERSON ------------------------------------------------------- WITH 10. SHARED DISPOSITIVE POWER -0- shares - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 440,000 shares - -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 9.1 % - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON OO ================================================================================ Page 3 of 9 4 - ---------------------- ------------------- CUSIP NO. 016251 10 0 13D PAGE 4 OF 9 PAGES - ---------------------- ------------------- ================================================================================ 1. NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) James L. Mac Donald and Robin A. Mac Donald, as joint tenants - -------------------------------------------------------------------------------- 2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ] (b) [X] - -------------------------------------------------------------------------------- 3. SEC USE ONLY - -------------------------------------------------------------------------------- 4. SOURCE OF FUNDS PF - -------------------------------------------------------------------------------- 5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) [ ] - -------------------------------------------------------------------------------- 6. CITIZENSHIP OR PLACE OF ORGANIZATION: United States - -------------------------------------------------------------------------------- 7. SOLE VOTING POWER NUMBER OF -0- shares SHARES ------------------------------------------------------- BENEFICIALLY 8. SHARED VOTING POWER OWNED BY 18,000 shares ------------------------------------------------------- EACH 9. SOLE DISPOSITIVE POWER REPORTING -0- shares PERSON ------------------------------------------------------- WITH 10. SHARED DISPOSITIVE POWER 18,000 shares - -------------------------------------------------------------------------------- 11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 18,000 shares - -------------------------------------------------------------------------------- 12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ] - -------------------------------------------------------------------------------- 13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 0.37% - -------------------------------------------------------------------------------- 14. TYPE OF REPORTING PERSON IN ================================================================================ Page 4 of 9 5 This Amendment No. 1 to Schedule 13D amends and restates the Schedule 13D dated September 27, 1999 (as so amended, the "Schedule 13D"). ITEM 1. SECURITY AND ISSUER: This statement on Schedule 13D relates to shares of Common Stock, par value $0.01 per share (the "Common Stock"), of Align-Rite International, Inc., a California corporation (the "Issuer"). The principal executive offices of the Issuer are located at 2428 Ontario Street, Burbank, California 91504. ITEM 2. IDENTITY AND BACKGROUND: (a) This Schedule 13D is filed on behalf of (i) James L. Mac Donald, and amends the Schedule 13G filings made by Mr. Mac Donald; (ii) James L. Mac Donald and Robin A. Mac Donald, as trustees under the Trust Agreement, dated November 17, 1983, for the Mac Donald Family Trust (the "Trust"); and (iii) James L. Mac Donald and Robin A. Mac Donald, as joint tenants (collectively with Mr. Mac Donald and the Trust, the "Reporting Person"). (b) The business address of the Reporting Person is c/o Align-Rite International, Inc., 2428 Ontario Street, Burbank, California 91504. (c) Mr. Mac Donald's present principal occupation is Chairman of the Board, President and Chief Executive Officer of Align-Rite International, Inc. Mrs. Mac Donald is not presently employed. (d) The Reporting Person has not been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) during the last five years. (e) The Reporting Person has not been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which the Reporting Person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws, or finding any violation with respect to such laws during the last five years. (f) Mr. Mac Donald and Mrs. Mac Donald are citizens of the United States of America. ITEM 3. SOURCE OF FUNDS AND AMOUNT OF FUNDS OR OTHER CONSIDERATION: The Trust acquired all of its shares of common stock of the Issuer by transfer from Mr. Mac Donald. Mr. Mac Donald acquired his shares with personal funds and by borrowing approximately $615,000 at the end of July 1999 from Sanwa Bank of California in order to exercise his options to purchase 100,000 shares of Common Stock and to pay taxes that were withheld in connection with such option exercise. Mr. Mac Donald purchased such 100,000 shares of Common Stock at the end of July 1999. Mr. and Mrs. Mac Donald acquired their 18,000 shares of Common Stock, as joint tenants, with personal funds. Page 5 of 9 6 ITEM 4. PURPOSE OF TRANSACTION: On September 15, 1999, the Issuer, Photronics, Inc., a Connecticut corporation ("Parent"), and AL Acquisition Corp., a California corporation and a wholly owned subsidiary of Parent ("Merger Sub"), entered into an Agreement and Plan of Merger (the "Merger Agreement"), attached hereto as Exhibit 2 and incorporated herein by reference, where upon consummation of the transactions contemplated therein, the Issuer will become a wholly owned subsidiary of Parent. Concurrently with the execution of the Merger Agreement, Mr. Mac Donald, the Trust and Parent entered into a voting agreement. Such voting agreement was amended and restated on October 26, 1999 to include the 18,000 shares of Common Stock owned by Mr. and Mrs. Mac Donald as joint tenants (such amended and restated voting agreement shall be referred to herein as the "JM Voting Agreement"). The JM Voting Agreement is attached hereto as Exhibit 3 and incorporated herein by reference. As inducement for, and in consideration of, Parent's participation in the Merger Agreement, the Reporting Person agreed to vote its shares in favor of the Merger Agreement. In addition, the Reporting Person granted an irrevocable proxy to certain officers of Parent and appointed such officers as its attorney-in-fact to vote all the shares beneficially owned by it in accordance with the provisions of the JM Voting Agreement. The Merger Agreement provides, among other things, for (a) the merger of Merger Sub with and into the Issuer; (b) the continued existence of the Issuer after such merger as the surviving corporation (the "Surviving Corporation"); (c) the conversion of each share of common stock, par value $0.01 per share, of Merger Sub into one fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation; (d) the cancellation of shares of common stock of the Issuer owned by Parent, Merger Sub or any other subsidiary of Parent; and (e) the conversion of each share of Common Stock of the Issuer outstanding immediately prior to the effective time of the merger (other than shares to be canceled in accordance with the preceding clause (d) and Dissenting Shares (as defined in the Merger Agreement)) into a number of shares of common stock of Parent determined by dividing $23.09 by the average of the daily average per share high and low sales price of one share of common stock of Parent for a 20-day period set forth in the Merger Agreement, subject to certain limitations. If the Merger Agreement is consummated as planned, the shares of Common Stock of the Issuer will be deregistered under the Securities Exchange Act of 1934, as amended (the "Exchange Act") and will cease to be listed on the NASDAQ National Market System. The Merger Agreement also contains certain arrangements with respect to the charter documents, composition of the Board of Directors and management of the Surviving Corporation. Other than as described above and as contemplated by the Merger Agreement and the JM Voting Agreement, the Reporting Person has no plans or proposals which relate to, or may result in, any of the matters listed in Items 4(a)-(j) of Schedule 13D (although the Reporting Person reserves the right to develop such). Page 6 of 9 7 ITEM 5. INTEREST IN SECURITIES OF ISSUER: (a) The Trust beneficially owns 440,000 shares of the class of securities identified pursuant to Item 1, equal to approximately 9.1% of the outstanding securities of such class. Mr. and Mrs. Mac Donald own, as joint tenants, 18,000 shares of the class of securities identified pursuant to Item 1, equal to approximately 0.37% of the outstanding securities of such class. Mr. Mac Donald beneficially owns 722,558 shares (the "Shares") of the class of securities identified pursuant to Item 1, which amount includes the 440,000 shares owned by the Trust of which Mr. Mac Donald is a trustee and the 18,000 shares held in joint tenancy with Ms. Mac Donald. Mr. Mac Donald's 722,558 shares are equal to approximately 14.92% of the outstanding securities of the class of securities identified pursuant to Item 1. Of Mr. Mac Donald's 722,558 shares, 164,558 shares are in the form of options, all of which are currently exercisable. (b) Under the terms of the JM Voting Agreement, the Reporting Person has agreed to vote or cause to be voted all the Shares in favor of the transactions provided for or contemplated by the Merger Agreement. Additionally, the Reporting Person has granted an irrevocable proxy to certain officers of Parent to vote its Shares in favor of any of the transactions contemplated by the Merger Agreement. Accordingly, the Reporting Person with respect to matters relating to the transactions contemplated by the Merger Agreement may be deemed to have acquired shared voting power with respect to the Shares. (c) The information provided in Item 3 above is herein incorporated by reference. During the last 60 days Mr. Mac Donald exercised options to purchase 100,000 shares of Common Stock of the Issuer, as described in Item 3 above. Mr. Mac Donald currently owns these shares. Other than the transaction described in this paragraph (c) of Item 5 and the transactions described in Item 4 above, the Reporting Person has not effected any transactions for the securities identified in this Item 5. (d) The information provided in Item 4 is herein incorporated by reference. Other than with respect to the agreements and transactions described in Item 4 above, no person is known by the Reporting Person to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Issuer's securities identified in this Item 5. (e) Not applicable. ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER: The information provided in Items 3, 4 and 5 is incorporated herein by reference. The descriptions herein of the Merger Agreement and the JM Voting Agreement are qualified in their entirety by reference to such agreements, copies of which are attached hereto as Exhibits. Page 7 of 9 8 ITEM 7. MATERIALS TO BE FILED AS EXHIBITS: 1. Joint Filing Agreement, dated as of October 10, 1999, by and between James L. Mac Donald; James L. Mac Donald and Robin A. Mac Donald, as joint tenants; and James L. Mac Donald and Robin A. Mac Donald, as trustees under the Trust Agreement, dated November 17, 1983, for the Mac Donald Family Trust. 2. Agreement and Plan of Merger, dated as of September 15, 1999, among Photronics, Inc., a Connecticut corporation, AL Acquisition Corp., a California corporation and Align-Rite International, Inc., a California corporation is incorporated by reference to Exhibit 2 of the Schedule 13D filed by James L. Mac Donald on September 27, 1999. 3. Amended and Restated Voting Agreement, dated October 26, 1999, by and between James L. Mac Donald; James L. Mac Donald and Robin A. Mac Donald, as joint tenants; James L. Mac Donald and Robin A. Mac Donald, as trustees under the Trust Agreement, dated November 17, 1983, for the Mac Donald Family Trust; and Photronics, Inc., a Connecticut corporation. Page 8 of 9 9 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. October 26, 1999 /s/ JAMES L. MAC DONALD ---------------------------------------- James L. Mac Donald /s/ JAMES L. MAC DONALD ---------------------------------------- James L. Mac Donald, as Joint Tenant of 18,000 shares of Common Stock /s/ ROBIN A. MAC DONALD --------------------------------------- Robin A. Mac Donald, as Joint Tenant of 18,000 shares of Common Stock /s/ JAMES L. MAC DONALD ---------------------------------------- James L. Mac Donald, Jr., as trustee under the Trust Agreement, dated November 17, 1983, for The Mac Donald Family Trust /s/ ROBIN A. MAC DONALD ---------------------------------------- Robin A. Mac Donald, as trustee under the Trust Agreement, dated November 17, 1983, for The Mac Donald Family Trust Page 9 of 9 10 EXHIBIT INDEX Exhibit Number Description - ------ ----------- 1. Joint Filing Agreement, dated as of October 10, 1999, by and between James L. Mac Donald; James L. Mac Donald and Robin A. Mac Donald, as joint tenants; and James L. Mac Donald and Robin A. Mac Donald, as trustees under the Trust Agreement, dated November 17, 1983, for the Mac Donald Family Trust. 2. Agreement and Plan of Merger, dated as of September 15, 1999, among Photronics, Inc., a Connecticut corporation, AL Acquisition Corp., a California corporation and Align-Rite International, Inc., a California corporation is incorporated by reference to Exhibit 2 of the Schedule 13D filed by James L. Mac Donald on September 27, 1999. 3. Amended and Restated Voting Agreement, dated October 26, 1999, by and between James L. Mac Donald; James L. Mac Donald and Robin A. Mac Donald, as joint tenants; James L. Mac Donald and Robin A. Mac Donald, as trustees under the Trust Agreement, dated November 17, 1983, for the Mac Donald Family Trust; and Photronics, Inc., a Connecticut corporation. EX-1 2 JOINT FILING AGREEMENT 1 EXHIBIT 1 JOINT FILING AGREEMENT In accordance with Rule 13d-1(k) promulgated under the Securities Exchange Act of 1934, as amended, the persons named below agree to the joint filing on behalf of each of them of a Statement on Schedule 13D (including amendments thereto) with respect to the Common Stock of Align-Rite International, Inc. and further agree that this Joint Filing Agreement be included as an exhibit to such joint filing. In evidence thereof, the undersigned hereby execute this Agreement this October 10, 1999. The Schedule 13D may be executed in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such parts taken together will constitute a part of this Schedule. /s/ JAMES L. MAC DONALD ---------------------------------------- JAMES L. MAC DONALD /s/ JAMES L. MAC DONALD ---------------------------------------- JAMES L. MAC DONALD, as Joint Tenant of 18,000 shares of Common Stock /s/ ROBIN A. MAC DONALD ---------------------------------------- ROBIN A. MAC DONALD, as Joint Tenant of 18,000 shares of Common Stock /s/ JAMES L. MAC DONALD, JR. ---------------------------------------- JAMES L. MAC DONALD, Jr. as Trustee under the Trust Agreement, dated November 17, 1983, for the Mac Donald Family Trust /s/ ROBIN A. MAC DONALD ---------------------------------------- ROBIN A. MAC DONALD, as Trustee under the Trust Agreement, dated November 17, 1983, for the Mac Donald Family Trust EX-3 3 AMENDED AND RESTATED VOTING AGREEMENT 1 EXHIBIT 3 AMENDED AND RESTATED VOTING AGREEMENT This Amended and Restated Voting Agreement (the "Agreement"), dated as of October 26, 1999, by and among Photronics, Inc., a Connecticut corporation ("Parent"), and the other parties listed on the signature page hereof (collectively, the "Shareholder") amends and restates that certain Voting Agreement, dated as of September 15, 1999, by and among Parent and the other parties listed on the signature page thereof. WHEREAS, Parent, AL Acquisition Corp. ("Merger Sub") and Align-Rite International, Inc. (the "Company"), have entered into an Agreement and Plan of Merger of even date herewith (the "Merger Agreement"), pursuant to which the parties thereto have agreed, upon the terms and subject to the conditions set forth therein, to merge Merger Sub with and into the Company (the "Merger"); WHEREAS, as of the date hereof, the Shareholder is the beneficial owner of the number of shares (the "Shares") of common stock, par value $.01 per share, of the Company (the "Company Common Stock") set forth opposite such Shareholder's name on Schedule I attached hereto; and WHEREAS, as a condition to its willingness to enter into the Merger Agreement, Parent has required that the Shareholder agree, and the Shareholder is willing to agree, to the matters set forth herein. Except as specified herein, terms defined in the Merger Agreement are used herein as defined therein. NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, the parties hereto agree as follows: 1. Voting of Shares. 1.1. Voting Agreement. The Shareholder hereby agrees to vote (or cause to be voted) all of the Shares (and any and all securities issued or issuable in respect thereof) which such Shareholder is entitled to vote (or to provide his written consent thereto), at any annual, special or other meeting of the shareholders of the Company, and at any adjournment or adjournments thereof, or pursuant to any consent in lieu of a meeting or otherwise: (i) in favor of the Merger and the approval and adoption of the terms contemplated by the Merger Agreement and any actions required in furtherance thereof; (ii) against any action or agreement that could result in a breach of any covenant, representation or warranty or any other obligation of the Company under this Agreement or the Merger Agreement; and 2 (iii) against (except as specifically requested or agreed to in writing by Parent in advance) (A) any extraordinary corporate transaction, including, without limitation, a merger, consolidation, rights offering, reorganization, recapitalization or liquidation involving the Company or any of its Subsidiaries other than the Merger, (B) a sale or transfer of a material amount of assets of the Company or any of its Subsidiaries or the issuance of any securities of the Company or any Subsidiary, (C) any change in the Board of Directors of the Company; (D) any change in the present capitalization of the Company or any amendment of the Company's articles of incorporation or by laws; (E) any other material change in the Company's corporate structure or business; or (F) any action that could impede, interfere with, delay, postpone or adversely affect in any respect the Merger and the transactions contemplated by the Merger Agreement. 1.2 Grant of Irrevocable Proxy; Appointment of Proxy. (a)The Shareholder hereby irrevocably grants to, and appoints, Michael J. Yomazzo and Jeffrey P. Moonan, in their respective capacities as officers of Parent, any individual who hereafter shall succeed to any such office of Parent, and each of them individually, the Shareholder's proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of the Shareholder, to vote the Shares, or grant a consent or approval in respect of such Shares, in accordance with Shareholder's covenants in Section 1.1 hereof. (b) The Shareholder represents that any proxies heretofore given in respect of the Shares are not irrevocable, and that all such proxies are hereby revoked. (c) The Shareholder hereby affirms that the irrevocable proxy set forth in this Section 1.2 is given in connection with the execution of the Merger Agreement, and that such irrevocable proxy is given to secure the performance of the duties of the Shareholder under this Agreement. The Shareholder hereby further affirms that the irrevocable proxy is coupled with an interest and may under no circumstances be revoked. The Shareholder hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue hereof. 2. Representations and Warranties of Shareholder. The Shareholder represents and warrants to Parent as follows: 2.1. Binding Agreement. The Shareholder has the capacity to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The Shareholder has duly and validly executed and delivered this Agreement and this Agreement constitutes a legal, valid and binding obligation of the Shareholder, enforceable against the Shareholder in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or -2- 3 other similar laws affecting creditors' rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law). 2.2. No Conflict. Neither the execution and delivery of this Agreement nor the compliance with any of the provisions hereof by the Shareholder (a) requires any consent, approval, authorization or permit of registration, declaration or filing (except for filings under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) with, or notification to, any governmental entity, (b) results in a default (or an event which, with notice or lapse of time or both, would become a default) or gives rise to any right of termination by any third party, cancellation, amendment or acceleration under any contract, agreement, instrument, commitment, arrangement or understanding, or results in the creation of a security interest, lien, charge, encumbrance, equity or claim with respect to any of the Shares, (c) requires any consent, authorization or approval of any person other than a governmental entity which has not been obtained, or (d) violates or conflicts with any order, writ, injunction, decree or law applicable to the Shareholder or the Shares. 2.3. Ownership of Shares. The Shareholder is the record and beneficial owner of the Shares free and clear of any security interests, liens, charges, encumbrances, options, proxies, voting trusts or agreements or other understandings, arrangements or other restrictions on the right to vote the Shares. The Shareholder holds exclusive power to vote the Shares. The Shares represent all of the shares of capital stock of the Company beneficially owned by Shareholder entitling Shareholder to vote or give consent with respect to the matters set forth in Section 1 hereof. For purposes of this Agreement, "beneficially own" or "beneficially ownership" with respect to any securities shall mean having "beneficial ownership" of such securities as determined pursuant to Rule 13d-3 under the Exchange Act and shall include securities beneficially owned by all other persons with whom Shareholder would constitute a "group" as discussed in Section 13(d)(3) of the Exchange Act. 3. Representations and Warranties of Parent. Parent represents and warrants to the Shareholder as follows: 3.1. Binding Agreement. Parent is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Connecticut and has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the Merger Agreement by Parent and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by the Board of Directors of Parent, and, no other corporate proceedings on the part of Parent are necessary to authorize the execution, delivery and performance of this Agreement and the Merger Agreement by Parent and the consummation of the transactions contemplated thereby. Parent has duly and validly executed this Agreement -3- 4 and this Agreement constitutes a legal, valid and binding obligation of Parent, enforceable against Parent in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or other similar laws affecting creditors' rights generally and by general equitable principles (regardless of whether enforceability is considered in a proceeding in equity or at law). 3.2. No Conflict. Neither the execution and delivery of this Agreement, the consummation by Parent of the transactions contemplated hereby, nor the compliance by Parent with any of the provisions hereof will (a) conflict with or result in a breach of any provision of its articles of incorporation or by-laws, (b) require any consent, approval, authorization or permit of, registration, declaration or filing (except for filings under the Exchange Act) with, or notification to, any governmental entity, (c) result in a default (or an event which, with notice or lapse of time or both, would become a default) or give rise to any right of termination by any third party, cancellation, amendment or acceleration under any contract, agreement, instrument, commitment, arrangement or understanding, (d) require any consent, authorization or approval of any person other than a governmental entity, or (e) violate or conflict with any order, writ, injunction, decree or law applicable to Parent. 4. Covenants of the Shareholder. 4.1. Certain Prohibited Transfers. The Shareholder agrees not to: (a) sell, transfer, tender, assign, encumber, pledge or otherwise dispose of, or enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, tender, assignment, encumbrance, pledge or other disposition of, the Shares or any interest therein; (b) grant any proxies or power of attorney or enter into a voting agreement or other arrangement with respect to the Shares, other than and pursuant to this Agreement; (c) deposit the Shares into a voting trust; or (d) buy, sell or trade any equity security of Parent including, without limitation, entering into any put, call, option, swap, collar or any other derivative transaction which has a similar economic effect. 4.2. Additional Shares. In the event (i) of any stock dividend, stock split, recapitalization, reclassification, combination or exchange of shares of capital stock of the Company on, of or affecting the Shares or (ii) the Shareholder shall become the beneficial owner of any additional shares of Company Common Stock or other securities entitling the holder thereof to vote or give consent with respect to the matters set forth in -4- 5 Section 1 hereof, then the terms of this Agreement shall apply to, and all references to Shares herein shall include, the shares of capital stock or other securities of the Company held by the Shareholder immediately following the effectiveness of the events described in clause (i) or the Shareholder becoming the beneficial owner thereof, as described in clause (ii), as though they were Shares hereunder. The Shareholder hereby agrees, while this Agreement is in effect, to promptly notify Parent of the number of any new shares of Company Common Stock acquired by the Shareholder, if any, after the date hereof. 4.3. No Solicitation. Prior to the termination of this Agreement pursuant to Section 7 hereof, Shareholder shall not (directly or indirectly through advisors, agents or other intermediaries), solicit or initiate inquiries or encourage the submission of any Acquisition Proposal. If Shareholder receives any such inquiry or proposal, then Shareholder promptly shall inform Parent of the terms and conditions, if any, of such inquiry or proposal and the identity of the person making it. Shareholder immediately will cease and cause his advisors, agents and other intermediaries to cease any and all existing activities, discussions or negotiations with any parties conducted heretofore with respect to any of the foregoing. 4.4. Stop Transfer. Shareholder agrees with, and covenants to Parent that it shall not request that the Company register the transfer of any certificate or uncertificated interest representing any of the Shares. 4.5. Waiver of Appraisal and Dissenter's Rights. Shareholder hereby waives any rights of appraisal or rights to dissent that Shareholder may have. 5. Third Party Business Combination. If (a) the Merger Agreement is terminated in accordance with Section 7.1(h) or Section 7.1(i) of the Merger Agreement, (b) within six months from the termination of the Merger Agreement the Company shall have entered into an agreement for, and within eighteen (18) months from such consummation shall have consummated, a merger, consolidation, liquidation, reorganization, tender offer or other business combination involving the Company or any acquisition, directly or indirectly, of at least 50% of the voting securities of, or all or substantially all of the assets of, the Company ("Third Party Business Combination") and (c) Shareholder receives from any Person (other than Parent, or any of its affiliates) any cash or non-cash consideration in an amount per share greater than $23.09 (the "Third Party Consideration") in respect of any sale or disposition of all or any portion of the Shares in connection with and as part of a Third Party Business Combination, then Shareholder within two (2) Business Days of receipt thereof shall pay to Parent or its designee an aggregate amount equal to (A) the excess of the Third Party Consideration over $23.09 multiplied by (B) the number of Shares with respect to which such Third Party Business Consideration was received, up to $360,000; provided that, (x) if the consideration received by Shareholder shall be securities listed on a national securities exchange or traded on the NASDAQ National Market ("NASDAQ"), the per share value -5- 6 of such consideration shall be equal to the closing price per share listed on such national securities exchange or NASDAQ National Market on the date such transaction is consummated, (y) if the consideration received by Shareholder shall be in a form other than such listed securities, the per share value shall be determined by the agreement of the parties as of the date such transaction is consummated and (z) Shareholder will pay Parent or its designee in kind and on a pro rata basis (i.e., if the Third Party Consideration includes cash, listed securities and/or other consideration, Parent or its designee will receive its pro rata portion of each such item). 6. Specific Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with the terms hereof or were otherwise breached and that each party shall be entitled to seek specific performance of the terms hereof, in addition to any other remedy which may be available at law or in equity. 7. Termination. This Agreement shall terminate on the earlier of (i) the termination of the Merger Agreement, (ii) the agreement of the parties hereto to terminate this Agreement, and (iii) consummation of the Merger. 8. Notices. All notices and other communications hereunder shall be in writing and shall be deemed given upon (a) transmitter's confirmation of a receipt of a facsimile transmission, (b) confirmed delivery by a standard overnight carrier or when delivered by hand or (c) the expiration of five business days after the day when mailed by certified or registered mail, postage prepaid, addressed at the following addresses (or at such other address for a party as shall be specified by like notice): -6- 7 If to Parent, to: Photronics, Inc. 1061 East Indiantown Road Jupiter, Florida 33477 Attention: Jeffrey P. Moonan Telephone No: 561-745-1222 Facsimile No: 561-747-1432 with a copy to: Paul, Hastings, Janofsky & Walker LLP 399 Park Avenue New York, New York 10022 Attention: Steven L. Wasserman, Esq. Telephone No: (212) 318-6462 Facsimile No.: (212) 319-4090 If to Shareholder, to the Shareholder at: 10234 Candleberry Land Northridge, California 91324 with a copy to: O'Melveny & Myers LLP 400 South Hope Street Los Angeles, California 90071 Attention: Richard A. Boehmer, Esq. 9. Entire Agreement. This Agreement (including the documents and instruments referred to herein) constitutes the entire agreement and supersedes all other prior agreements and understandings, both written and oral, between the parties, with respect to the subject matter hereof. 10. Consideration. This Agreement is granted in consideration of the execution and delivery of the Merger Agreement by Parent. 11. Amendment. This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement by the parties hereto. -7- 8 12. Successors and Assigns. This Agreement shall not be assigned by operation of law or otherwise without the prior written consent of the other parties hereto. This Agreement will be binding upon, inure to the benefit of and be enforceable by each party and such party's respective heirs, beneficiaries, executors, representatives and permitted assigns; provided, that Parent may assign, in its sole discretion, its rights and obligations hereunder to any affiliate of Parent, but no such assignment shall relieve Parent of its obligations hereunder if such assignee does not perform such obligations. 13. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 14. Governing Law. This Agreement shall be governed in all respects, including validity, interpretation and effect, by the laws of the State of California (without giving effect to the provisions thereof relating to conflicts of law). 15. Public Announcements. Shareholder shall not issue any press release or other statement with respect to the transactions contemplated by this Agreement and the Merger Agreement without the prior written consent of Parent. 16. Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms of provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable. 17. Headings. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 18. Shareholder Capacity. Shareholder makes no agreement or understanding herein in his capacity as a director or officer of the Company. The Shareholder signs solely in his capacity as the record holder and beneficial owner of the Shares and nothing herein shall restrict Shareholder in the exercise of his fiduciary duties as a director or officer of the Company. -8- 9 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the Shareholder and a duly authorized officer of Parent on the day and year first written above. Photronics, Inc. By: /s/ MICHAEL J. YOMAZZO ------------------------------------ Michael J. Yomazzo, Vice Chairman /s/ JAMES L. MAC DONALD ---------------------------------------- James L. Mac Donald /s/ JAMES L. MAC DONALD, JR. ---------------------------------------- James L. Mac Donald, Jr. as Trustee under the Trust Agreement, dated November 17, 1983, for the Mac Donald Family Trust /s/ ROBIN A. MAC DONALD ---------------------------------------- Robin A. Mac Donald as Trustee under the Trust Agreement, dated November 17, 1983, for the Mac Donald Family Trust /s/ JAMES L. MAC DONALD ---------------------------------------- James L. Mac Donald, as Joint Tenant of 18,000 shares of Common Stock /s/ ROBIN A. MAC DONALD ---------------------------------------- Robin A. Mac Donald as Joint Tenant of 18,000 shares of Common Stock -9- 10 Acknowledgment and Agreement of Spouse The undersigned, being the spouse of Shareholder, acknowledges that she has read and understands the terms of this Agreement and hereby agrees to be bound by the terms hereof to the extent she has a community property or other interest in the Shares. /s/ ROBIN A. MAC DONALD ---------------------------------------- Robin A. Mac Donald -10- 11 Acknowledgment and Agreement of Spouse The undersigned, being the spouse of Shareholder, acknowledges that he has read and understands the terms of this Agreement and hereby agrees to be bound by the terms hereof to the extent he has a community property or other interest in the Shares. /s/ JAMES L. MAC DONALD ----------------------------------- James L. Mac Donald -11- 12 SCHEDULE I
Shares of Common Options to Acquire Shares Name Stock Owned of Common Stock - ---- ---------------- ------------------------- James L. Mac Donald 100,000 241,396, of which 164,558 are vested James L. Mac Donald 440,000 and Robin A. Mac Donald as Trustees under the Trust Agreement, dated November 17, 1983, of the Mac Donald Family Trust James L. Mac Donald 18,000 and Robin A. Mac Donald, as Joint Tenants
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