Exhibit 10.30

 

SEPARATION AND CONSULTING AGREEMENT

Photronics, Inc., its subsidiaries and affiliates (the "Company") and I, Michael
J. Luttati, agree as follows:

1.  Resignation of Employment, Directorship. I hereby resign my employment and
all positions as an officer and director with the Company effective as of July
21, 2008 (the "Effective Date").  On the Company's next regular pay day, I will
receive my last pay check.  My resignation of employment will be treated as a
termination "without Cause" for purposes of Section 5(d) of the Employment
Agreement between the Company and me, dated May 12, 2005 (the "Employment
Agreement").

2.  Separation Benefits. In consideration for my execution of this Agreement and
the promises I made herein, and provided that I do not revoke the Agreement
during the Revocation Period (as defined in Section 11 below) or otherwise give
the Company reason to stop such payments and benefits under Section 9 below, the
Company will provide the following (but will not provide any other benefits or
payments to me):

          (a)  Pay me, during the period commencing on the Effective Date and
ending on the six-month anniversary of the Effective Date (the "Initial
Continuation Period"), an amount equal to the lesser of (i) my base salary (at
the current rate of $513,000 per annum) ("Base Salary") that I would have
received had I remained employed through expiration of the Initial Continuation
Period and (ii) $460,000 (the "Initial Severance").  Payment of the Initial
Severance will commence in equal installments immediately following the
expiration of the Revocation Period through the remainder of the Initial
Continuation Period in accordance with the Company's payroll practices in effect
on the Effective Date.  The Initial Severance is intended to constitute a
"separation pay plan" for purposes of Section 409A of the Internal Revenue Code
of 1986, as amended, and applicable regulations and guidance promulgated
thereunder ("Code Section 409A").

          (b)  Pay me, during the period commencing on the first day following
the expiration of the Initial Continuation Period and ending on the 18-month
anniversary of the Effective Date (the "Additional Continuation Period", and
together with the Initial Continuation Period, the "Continuation Period"), an
amount equal to the difference between (i) the Base Salary that I would have
received had I remained employed through expiration of the Additional
Continuation Period and (ii) the Initial Severance (the "Additional Severance");
provided that in the event a "Change of Control" of the Company (as such term is
defined in Section 5(e)(i) of the Employment Agreement) occurs prior to the
expiration of the Consulting Period (as defined in Section 5 below), the
Additional Continuation Period will instead expire on the second anniversary of
the Effective Date.  The Additional Severance will be paid in equal installments
through expiration of the Additional Continuation Period in accordance with the
Company's payroll practices in effect on the Effective Date.

          (c)  Contribute to the cost of my monthly premiums to continue my
health and dental insurance coverage under COBRA during the period commencing on
the expiration of the Revocation Period and ending on the 360th day following
the expiration of the Revocation Period, at the same level it contributes to the
premium of active employees.

          (d)  Permit me, to the extent permitted by applicable law and the
terms of the plan, to retain my Company provided life insurance policy.

          (e)  Permit me to purchase my Company-provided automobile (the
"Company Automobile") at the book value of $24,429.

          (f)  Pay me $40,000 for reasonable outplacement and relocation
benefits (the "Outplacement Payment"); provided that the Company will have the
right to offset the value of the Company Automobile from the Outplacement
Payment.  The Outplacement Payment will be paid to me in a lump sum payment
within ten (10) days following expiration of the Revocation Period.

          (g)  Permit me to exercise any of my outstanding Company stock options
which are vested as of the Effective Date until the expiration of the
Exclusivity Period (as such term is defined in Section 8 of the Employment
Agreement).  Company options that have not vested as of the Effective Date shall
terminate as of the Effective Date.   I acknowledge and agree a complete and
accurate statement of my Company stock options has been provided to me under
separate cover prior to the date hereof.

          (h)  Permit me to continue to vest in my outstanding Company
restricted stock in accordance with the original vesting schedule during the
Consulting Period.  In the event a Change of Control of the Company occurs prior
to the expiration of the Consulting Period, all Company restricted stock granted
to me shall immediately vest as of the date of the Change of Control.  Any
Company restricted stock that remains unvested at the expiration of the
Consulting Period shall be forfeited.  I acknowledge and agree a complete and
accurate statement of my Company restricted stock has been provided to me under
separate cover prior to the date hereof.

3.  Release of Claims.

          (a)  General Release. In consideration of the payments and benefits
provided to me under this Agreement, I, on behalf of myself, my heirs, agents,
representatives, predecessors, successors and assigns (the "Releasors"), hereby
irrevocably   release, acquit and forever discharge the Company and each of its
respective agents, employees, representatives, parents, subsidiaries, divisions,
affiliates, officers, directors, shareholders, investors, employees, attorneys,
transferors, transferees, predecessors, successors and assigns, jointly and
severally (the "Released Parties") of and from any and all debts, suits, claims,
actions, causes of action, controversies, demands, rights, damages, losses,
expenses, costs, attorneys' fees, compensation, liabilities and obligations
whatsoever, suspected or unsuspected, known or unknown, foreseen or unforeseen,
arising at any time up to and including the date of this Release("Claims"), save
and except for the parties' obligations and rights under this Agreement and the
Surviving Obligations (as defined in Section 4 below).

          (b)  Specific ADEA Release. In recognition of the consideration set
forth in this Agreement, the Releasors hereby release and forever discharge the
Released Parties from any and all Claims, the Releasors have or may have arising
under any state or federal civil rights or human rights law, or under the
Federal Age Discrimination in Employment Act of 1967, as amended, and the
applicable rules and regulations promulgated thereunder ("ADEA"). By signing
this Agreement, I hereby acknowledge and confirm the following: (a) I was
advised in writing by the Company in connection with my termination to consult
with an attorney of my choice prior to signing this Agreement, including without
limitation, the terms relating to my release of claims arising under ADEA and
any other law, rule or regulation referred to above; (b) I was given a period of
not fewer than 21 days to consider the terms of this Agreement and to consult
with an attorney of my choosing with respect hereto; and (c) I am providing the
release and discharge set forth in this Section 3(b) only in exchange for
consideration in addition to anything of value to which I was already entitled.

          (c)  No Assignment or Current Claims. I hereby represent and warrant
that I have neither assigned any of the Claims being released under this Section
3 nor instituted, assisted or otherwise participated in connection with, any
action, complaint, claim, charge, grievance, arbitration, lawsuit, or
administrative agency proceeding, or action at law or otherwise against any the
Company or any of its officers, employees, directors, shareholders or agents.

4.  Prior Agreements. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby
and supersedes and replaces any express or implied, written or oral, prior
agreement, plan or arrangement with respect to the terms of the Executive's
employment and the termination thereof which the Executive may have had with the
Company Group (including, without limitation, the Employment Agreement), but
excluding Sections 5(f) (Tax Consideration), 7 (Confidential Information), 8
(Non-Competition) and 9 (Intellectual Property) of the Employment Agreement
("Surviving Obligations"). For the avoidance of doubt, and in consideration for
the payments and benefits provided to me under this Agreement, I hereby
expressly waive the following under the Employment Agreement: (i) the 30-day
notice period pursuant to Section 5(d)(ii), (ii) the right to a lump sum payment
pursuant to Section 5(e)(iii) and (iii) the application of Section 5(g)(i) to my
Company stock options. I represent that I am not signing this Agreement in
reliance on any representation not expressly set forth herein.

5.  Consulting Relationship. In further consideration for the payments and
benefits provided to me under this Agreement, I agree to provide consulting
services to the Company from the Effective Date until January 31, 2009 (the
"Consulting Period"), in accordance with this Section 5. I agree that the
benefits provided to me under this Agreement are adequate consideration for both
my release of claims under Section 3 above and my promises under this Section
5.  I understand and agree that this Section 5 does not constitute a hiring or
employment agreement and that during the Consulting Period, except as otherwise
provided for in this Agreement, I will not be eligible for, and I hereby waive
any claim to, wages, compensation, or any benefits provided to employees of the
Company.

          (a)  Consulting Services. During the Consulting Period, I shall render
such consulting services, at such time(s) and place(s) as may reasonably be
requested by the Company's Board of Directors or their designee; provided that
in no event may my consulting services pursuant to this Section 5 exceed 20% of
the average level of services provided by me to the Company over 36 months the
immediately preceding the Effective Date.  During the Continuation Period, when
I am not performing consulting services for the Company, I shall be free to
render services to persons or entities outside the Company, provided that such
services do not violate the Surviving Obligations or any other obligation I may
have to the Company.

          (b)  Expenses. The Company agrees to reimburse me for reasonable out
of pocket expenses incurred by me in connection with the performance of my
consulting duties hereunder, provided that my (i) entertainment and meal
expenses and (ii) all other expenses which in the aggregate are in excess of
$1,000 shall require prior approval by the Company.

6.  Confidentiality of Agreement, Separation. I agree to keep every term of this
Agreement confidential and will not hereafter disclose the existence of this
Agreement, the fact that this Agreement was being discussed or considered, or
the substance or contents of this Agreement to any person or entity other than
my attorneys, tax advisors and immediate family, or otherwise as required by
subpoena, court order or other legal process.  Upon service to me, or anyone
acting on my behalf, of any subpoena, court order or other legal process
requiring me to disclose information described in this Section 6, I shall
immediately notify the Company and shall cooperate fully with the Company to
lawfully resist disclosure of the information prior to actual compliance with
the request.   I further agree that I will not make any statement concerning my
separation from the Company (or the circumstances surrounding or leading up to
my separation) to any reporter, research analyst, or other member of the
financial press or investment financial services communities without the prior
written approval of the Company as to both the fact and the content of such
statement, nor will I disparage the Company to anyone in any way.  The Company
agrees that it will not disparage Mr. Luttati to anyone in any way.

7.  Return of Company Property. On or before the Effective Date, I will return
to the Company all files, documents, records and copies of the foregoing
(whether in hard or electronic form), Company-provided computer and telephone
equipment, credit cards, keys, building passes, security passes, access or
identification cards, and any other property of the Cmpany in my possession or
control, with the exception of the Company Automobile.   The Company will
arrange for the prompt return of my personal items from the office.

8.  Cooperation. I agree that I will assist and cooperate with the Company in
connection with the defense of prosecution of any claim that may be made against
or by the Company, or in connection with any ongoing future investigation or
dispute or claim of any kind involving the Company, including any proceeding
before any arbitral, administrative, judicial, legislative, or other body or
agency, including testifying in any proceeding to the extent such claims,
investigations or proceedings are related to services performed or required to
be performed by me, knowledge possesses by me or any act or omission by me.  I
further agree to perform all acts and execute and deliver any documents that may
be reasonably necessary to carry out the provisions of this Section 8.  The
Company agrees to pay me at the rate of $2,000 per day in the event I am
requested to cooperate with the Company pursuant to this Section 8; provided
that such payment will only be made by the Company to the extent that such
request exceeds my consulting obligation during the Consulting Period or occurs
after the Consulting Period.  The Company also agrees to reimburse me for any
reasonable out of pocket expenses I may incur in complying with this Section 8
at the request of the Company.

9.  Violations. I agree that (a) if I violate any provision of Sections 3, 5, 6,
7, or 8 of this Agreement or any of the Surviving Obligations or (b) if I engage
in any conduct during the Continuation Period that would have constituted
"Cause" to terminate my employment under Section 5(c) of the Employment
Agreement, in addition to any other rights and remedies the Company might have,
(i) the Consulting Period and the consulting relationship with the Company under
Section 5 of this Agreement will terminate immediately, (ii) all payments and
benefits under Section 2 of this Agreement will cease immediately and I will not
be entitled to any further payments or benefits of any kind from the Company,
and (iii) the Company shall be entitled to obtain an injunction to be issued by
any court of competent jurisdiction restraining me form committing or continuing
any such violation(s), without the need to post any bond or for any other
undertaking or prove the inadequacy of money damages.

10.  Certain Tax Considerations.

          (a)  Code Section 409A.

                (i)  If any provision of this Agreement contravenes Code Section
409A, or could cause any amounts or benefits hereunder to be subject to taxes,
interest or penalties under Code Section 409A, I agree that the Company may, in
its sole discretion and without my consent, modify the Agreement to:  (i) comply
with, or avoid being subject to, Code Section 409A and avoid the imposition of
taxes, interest and penalties under Code Section 409A, and (ii) maintain, to the
maximum extent practicable, the original intent of the applicable provision
without contravening the provisions of Code Section 409A.  I understand that
this Section 10 (a)(i) is not intended to create an obligation on the part of
the Company to modify this Agreement and does not guarantee that the amounts or
benefits owed under the Agreement will not be subject to interest and penalties
under Code Section 409A.

                (ii)  I hereby agree and understand that I am a "specified
employee" for purposes of Code Section 409A as of the Effective Date and, as a
result, any payment or benefit under this Agreement (including any provision of
continued benefits) that provides for the deferral of compensation within the
meaning of Code Section 409A will not be paid or commence to be paid on any date
prior to the commencement of the Additional Continuation Period.  I further
agree and understand that in order to comply with the Code Section 409A deferral
and timing of payment rules, this Agreement will terminate and be of no further
force or effect if I do not sign this Agreement prior to November 1, 2008.

                (iii)  Except as expressly provided otherwise in this Agreement,
no reimbursement payable pursuant to any provisions of this Agreement or
pursuant to any plan or arrangement of the Company covered by this Agreement may
be paid later than the last day of the calendar year following the calendar year
in which the related expense was incurred, and no such reimbursement during any
calendar year may affect the amounts eligible for reimbursement in any other
calendar year, except, in each case, to the extent that the right to
reimbursement does not provide for a "deferral of compensation" within the
meaning of Code Section 409A.

          (b)  Withholding.  The Company may withhold from any amounts payable
under this Agreement such federal, state, local or foreign taxes are be required
to be withheld pursuant to any applicable law or regulation and all other
authorized deductions.

11.  Revocation. The Agreement may be revoked by me within the 7-day period
commencing on the date I sign this Release (the "Revocation Period"). In the
event of any such revocation, all obligations of the Company under this
Agreement will terminate and be of no further force and effect as of the date of
such revocation.   No such revocation will be effective unless it is in writing
and signed by me and received by the Company prior to the expiration of the
Revocation Period.

12.  Effective Date of Agreement. This Agreement shall not become effective
until the day following the last day of the Revocation Period.

13.  Notices. Any notices required or made pursuant to this Agreement shall be
in writing and shall be deemed to have been given when delivered or mailed by
United States certified mail, return receipt requested, postage prepaid, as
follows:

          if to Executive, to the most recent home address in the records of the
Company

          with a copy to:

          Robert L. Birnbaum
          Foley Hoag LLP
          155 Seaport Boulevard, Boston, MA  02210-2600

          if to the Company:

          Photronics, Inc.
          15 Secor Road, P.O. Box 5226, Brookfield, Connecticut 06804

          Attention:  Corporate Secretary

or to such other address as either party may furnish to the other in writing in
accordance with this Section 13.  Notices of change of address shall be
effective only upon receipt.

14.  Miscellaneous. This Agreement is not an admission of guilt or wrongdoing by
either me or the Company.  Subject to Section 10(a)(i), no provision in this
Agreement may be modified, waived, amended or discharged except by a written
document signed by me and a duly authorized Company representative.  This
Agreement may be executed in one or more counterparts, which, together, shall
constitute one and the same agreement.  This Agreement binds my Releasors,
successors and assigns, and will inure to the benefit of all Released Parties
and respective heirs, administrators, representatives, executors, successors and
assigns.  The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.  A waiver of any
conditions or any provisions of this Agreement in a given instance shall not be
deemed a waiver of such conditions or provisions at any other time.  If any of
the provisions, terms, and clauses of this Agreement are declared illegal,
unenforceable or ineffective in a legal forum, these provisions, terms and
clauses shall not be deemed binding upon both parties.    Section headings are
intended solely for the convenience of reference only and shall not be a part of
this Agreement for any other purpose.  The validity, interpretation,
construction and performance of this Agreement shall be governed by the internal
laws of the State of Connecticut.

I HEREBY ACKNOWLEDGE THAT I HAVE READ THIS AGREEMENT, THAT I FULLY KNOW,
UNDERSTAND AND APPRECIATE ITS CONTENTS, AND THAT I HEREBY ENTER INTO THIS
AGREEMENT VOLUNTARILY AND OF MY OWN FREE WILL.

Dated:

   

7/21/2008

 

 

 

 

 

/s/ MICHAEL J. LUTTATI

 

 

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Photronics, Inc.

  

 

 

Dated:

 

7/21/2008

 

 

 

By:

 

/s/ RICHELLE E. BURR

 

 

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Title:

 

Vice President

 

 

Associate General Counsel

 

 

and Assistant Secretary