PHTN » Topics » CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

This excerpt taken from the PHTN DEF 14A filed Jan 28, 2008.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
Photon Dynamics has entered into indemnity agreements with certain officers and directors which provide, among other things, that Photon Dynamics will indemnify such executive officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, executive officer or other agent of Photon Dynamics, and otherwise to the fullest extent permitted under California law and Photon Dynamics’ Bylaws.
 
In July 2007, in connection with the purchase of Salvador Imaging, Salvador’s founder, David W. Gardner, became a holder of more than 5% of our stock and also became an employee of Photon Dynamics’ through its wholly owned subsidiary Salvador Imaging. In addition, as part of the consideration paid in this acquisition, the Company issued a promissory note to a trust of which Mr. Gardner is the trustee. The note bears interest at an annual rate of 5%. At September 30, 2007, approximately $5.3 million was outstanding, which included approximately $47,000 in interest.
 
The Audit Committee has the responsibility under its written charter to review and approve related party transactions, to the extent not previously approved by another independent committee of the Board. The full board reviewed and approved the transaction described above.


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CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
Photon Dynamics has entered into indemnity agreements with certain officers and directors which provide, among other things, that Photon Dynamics will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of Photon Dynamics, and otherwise to the fullest extent permitted under California law and Photon Dynamics’ Bylaws.
 
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
Photon Dynamics has entered into indemnity agreements with certain officers and directors which provide, among other things, that Photon Dynamics will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of Photon Dynamics, and otherwise to the fullest extent permitted under California law and Photon Dynamics’ Bylaws.
 
On November 30, 2005, Mr. Hawthorne exercised an option to purchase 10,000 shares of Photon Dynamics’ Common Stock, with a net value realized (the difference between the exercise price and the fair market value of such shares, based on the closing sales price reported on the Nasdaq National Market for the date of exercise) of $77,750.
 
This excerpt taken from the PHTN DEF 14A filed Jan 28, 2005.
Certain Relationships and Related Transactions

      On March 5, 2001, Photon Dynamics loaned $250,000 to Mr. Delmore, the former Vice President of Marketing, Strategy and Business Development of Photon Dynamics, under a full recourse promissory note, which was secured by shares of Photon Dynamics’ Common Stock owned by Mr. Delmore. This loan bore interest at an annual rate of 7%. From October 1, 2003 to July 29, 2004, the largest aggregate indebtedness of Mr. Delmore under this loan was $308,333, including principal and accrued interest. On July 29, 2004, Mr. Delmore repaid all outstanding principal and accrued interest under the loan.

      Photon Dynamics has entered into indemnity agreements with certain officers and directors which provide, among other things, that Photon Dynamics will indemnify such officer or director, under the circumstances and to the extent provided for therein, for expenses, damages, judgments, fines and settlements he or she may be required to pay in actions or proceedings which he or she is or may be made a party by reason of his or her position as a director, officer or other agent of Photon Dynamics, and otherwise to the fullest extent permitted under California law and Photon Dynamics’ Bylaws.

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