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SPECTRAN CORPORATION
EXHIBIT 10.62
SPECTRAN CORPORATION
RETIREMENT PLAN FOR OUTSIDE DIRECTORS
1. Purpose and Intent. The Corporation has determined that it is
important for its future growth and in its best interest to attract and retain
experienced and knowledgeable individuals to serve as outside directors of
SpecTran(1) and its Affiliates. To accomplish this goal, the Board voted on
December 27, 1995 to adopt this Retirement Plan for Outside Directors (the
"Plan") which provides a retirement benefit for Outside Directors. While any
benefits are paid under this Agreement to an Outside Director, such Outside
Director will be available to consult for the Corporation. Further, these
benefits are subject to forfeiture if an Outside Director is removed for Cause
(as defined herein) or, as described below, competes with the Corporation.
This Plan is not intended to be a Qualified Plan under the Internal Revenue
Code of 1986, as amended.
2. Definitions. As used in this Plan, the following words and
phrases wherever capitalized shall have the following meanings unless the
context clearly indicates that a different meaning is intended:
(a) "Affiliate" shall mean any person or entity which
controls, is controlled by or is under common control with the Corporation. For
the purpose of this Plan, control shall mean ownership of fifty percent (50%) or
more of the voting stock of any entity.
(b) "Board" shall mean the Board of Directors of SpecTran.
(c) "Change in Control" shall have the meaning set forth
in Section 16 of this Plan.
(d) The "Corporation" shall mean SpecTran, its successors
and assigns, including but not limited to any corporation, firm or person which
is the survivor of a merger or
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(1) Initial capitalized words may be defined below in Section 2.
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consolidation with SpecTran or which acquires substantially all of the assets
of SpecTran, and any of SpecTran's Affiliates.
(e) "Normal Retirement Date" shall mean an Outside
Director's sixty-fifth birthday.
(f) "Outside Director" shall mean a non-employee director
of the Corporation and/or one or more of its
Affiliates.
(g) "Retirement Benefit" shall have the meaning set forth
in Section 4 of this Plan.
(h) "SpecTran" shall mean SpecTran Corporation, a
Delaware corporation.
3. Eligibility.
(a) All Outside Directors of the Corporation are eligible to
participate in the Plan after the completion of five full calendar years as an
Outside Director, including service prior to the date of the adoption of this
Plan. For the sake of clarity, if an individual during his tenure as a
director has been served both as an Outside Director and a director employed by
the Corporation, his service as a director while being employed by the
Corporation shall not be considered when determining eligibility or the amount
of benefits payable under this Plan. Notwithstanding anything contained
herein, this Plan is not an agreement or guaranty that an Outside Director's
service as a director of the Corporation will be continued after the expiration
of his term.
(b) As a condition of the eligibility of any Outside Director
to participate in this Plan, the Corporation may require Outside Directors to
enter into an Agreement with the Corporation for the purpose of memorializing
each Outside Director's understanding of and agreement with the terms of this
Plan.
4. Retirement Benefits. Each Outside Director will be entitled
to a retirement benefit, determined as of the effective date of the termination
of his service as an Outside Director for whatever reason except Cause,
including whether by (i) death,(ii) disability, (iii) mandatory retirement at
age 70 or (iv) early retirement. The retirement benefit shall be an annual
amount
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equal to the lesser of (i) $1,000 multiplied by each full calendar year of
service as an Outside Director or (ii) $10,000 (the "Retirement Benefit"). The
Retirement Benefit shall be paid for ten (10) years in equal monthly
installments commencing on the first day of the month immediately following the
later of an Outside Director's actual date of termination of service as an
Outside Director or the Normal Retirement Date (unless payment is accelerated
in accordance with Sections 15 and 16 below). Outside Directors are required
to resign as a director of the Corporation on their seventieth birthday, if
they have not previously done so.
5. Vesting. Anything to the contrary in this Plan
notwithstanding, each eligible Outside Director shall be entitled to one
hundred percent (100%) of any benefit payable under this Plan under any one or
more of Sections 4, 6, 15 or 16 at the date on which his entitlement to such
benefit shall be determined commencing with his original date of service as an
Outside Director, provided that such benefits are subject to forfeiture as
described in Sections 8 and 9, below.
6. Death of Outside Director.
(a) If an Outside Director dies while serving as an
Outside Director, SpecTran will pay to the Outside Director's designated
beneficiaries, a total annual amount equal to the Retirement Benefit earned by
the Outside Director as of the date of death, payable over a period of ten (10)
years commencing on the first day of the month next following the delivery to
the Corporation of a death certificate and on a monthly basis thereafter.
(b) If an Outside Director dies following the
commencement of the payment of the Retirement Benefit under Section 4 hereof,
such payments shall continue to the designated beneficiaries of the Outside
Director until all of the Retirement Benefit has been paid.
(c) If an Outside Director dies following the termination
of his service as an Outside Director of the Corporation and prior to the
commencement of the payment of benefits under Section 4 hereof, SpecTran shall
pay to such Outside Director's designated beneficiaries an annual benefit which
shall be the Outside Director's Retirement Benefit as of the date of the
termination of his service as an Outside Director. Such benefits shall be
payable monthly,
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commencing on the first day of the month following the Normal Retirement Date,
or any date prior to the Normal Retirement Date approved by the Corporation,
and continuing for ten (10) years; provided, however, that such Outside
Director's designated beneficiaries shall be entitled to accelerate payment of
such benefit if and to the same extent the Outside Director would have been
entitled to an accelerated payment of the Retirement Benefit had he survived.
7. Beneficiaries. Each Outside Director shall designate, in
writing to the Corporation, on the form titled "Designation of Beneficiary"
attached hereto as Schedule A, one or more beneficiaries. Outside Directors
may change their designated beneficiaries by delivering to the Corporation a
dated, revised Designation of Beneficiary form, revoking the prior designation.
If no beneficiary is so named by an Outside Director or if no beneficiary named
in the Designation of Beneficiary form is living at the time a payment is due,
benefit payments shall be made, when due, to the Outside Director's estate. If
payment of benefits to a beneficiary commences and such beneficiary dies before
all amounts to which such beneficiary is entitled have been paid, the remaining
benefits shall be paid to the successive beneficiary or beneficiaries, if any,
designated by the Outside Director, or if none, to the beneficiary's estate.
8. Competition with the Corporation.
(a) In the event that during the two year period
immediately following the resignation or removal of an Outside Director from
the Board for any reason, such Outside Director shall compete with the business
of the Corporation, then the Retirement Benefit which might otherwise be due
and payable to him under this Plan shall be immediately forfeited and all
rights of such Outside Director and his beneficiaries hereunder shall become
void; provided, however, that if (a) the Outside Director leaves the Board for
any reason during the twelve (12) month period following a Change in Control or
(b) an event described in Section 15 occurs and the Corporation's successor
does not assume its obligations hereunder, the provisions of Section 8 shall
not apply, but the provisions of Section 15 and 16 shall govern. An Outside
Director will be deemed to have competed with the business of the Corporation
if, during the two year period following his
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resignation or removal from the Board, he either (a) engages, directly or
indirectly, or by stock interest exceeding five percent (5%), or otherwise in
any way, in any business in which the Corporation was engaged during his tenure
on the Board or which the Corporation planned, during his tenure on the Board,
to enter, (b) solicits any past, present or future customers of the Corporation
in any way relating to any business in which the Corporation was engaged during
his tenure on the Board, or which the Corporation planned during his tenure on
the Board, to enter, or (c) induces or actively attempts to influence any
employee or consultant of the Corporation to terminate his employment or
consultancy with the Corporation.
9. Forfeiture. Anything to the contrary in this Plan
notwithstanding (other than Sections 15 and 16), the Retirement Benefits
payable under this Plan to any Outside Director shall be immediately forfeited
and all rights of such Outside Director and his beneficiaries hereunder shall
become null and void, if such Outside Director is removed from the Board for
Cause. For this purpose, a removal shall be a removal for "Cause" only if the
removal is for one or more of the following: (i) the conviction of an Outside
Director for committing any felony, (ii) stealing from the Corporation, (iii) a
willful violation by an Outside Director of a material provision of this Plan
and (iv) if an Outside Director engages in gross misconduct, such as fraud,
dishonesty or gross negligence. If (a) the Outside Director leaves the Board
for any reason during the twelve (12) month period following a Change in
Control or (b) an event described in Section 15 occurs and the Corporation's
successor does not assume its obligations hereunder, the provisions of Section
9 shall not apply, but the provisions of Section 15 and 16 shall govern.
10. Availability To Consult. For so long as an Outside Director
is receiving benefits pursuant to this Plan, he will keep himself available to
consult with, and respond to inquiries from, the Corporation relating to its
business affairs, at reasonable time(s) and to a reasonable extent.
11. Interest. Any payment that is required to be made hereunder
that is delayed beyond the date specified in this Plan shall bear interest at a
variable rate which shall be the rate of interest
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on one year U.S. Treasury Bills determined at the first auction of each
calendar year or part thereof during the period of which interest is to be
applied to any obligation hereunder.
12. Alienability. No Outside Director, nor any beneficiary under
this Plan, shall have any power or right to transfer, assign, anticipate,
hypothecate, mortgage, commute, modify, or otherwise encumber in advance any of
the benefits payable under this Plan, and any attempt to do so shall be deemed
null and void. The seizure of the benefits payable hereunder for the payment
of any debts, judgments, alimony or separate maintenance, owed by an Outside
Director, his beneficiary, or any of them, or the transfer of such benefit by
operation of law in the event of bankruptcy, or otherwise, shall be deemed to
be a transfer prohibited by this Plan, and will result in the immediate
termination of all benefits payable under this Plan to such Outside Director,
or his beneficiary, as the case may be.
13. Participation in Other Plans. Nothing contained in this Plan
shall be construed to alter, abridge, or in any manner affect the rights and
privileges of Outside Directors to participate in and be covered by any plan or
plans under which they are eligible to participate which the Corporation may
have or hereafter have.
14. Funding.
(a) The Corporation reserves the right at its sole and
exclusive discretion to insure or otherwise provide for the obligations of the
Corporation undertaken by this Plan or to refrain from same, and to determine
the extent, nature and method thereof, including the establishment of one or
more trusts. Should the Corporation elect to insure this Plan, in whole or in
part, through the medium of insurance or annuities, or both, the Corporation
shall be the owner and beneficiary of the policy or annuity. At no time shall
any Outside Director be deemed to have any right, title or interest in or to
any specified asset or assets of the Corporation, or any trust or escrow
arrangement, including, but not by way of restriction, any insurance or annuity
contracts or the proceeds therefrom.
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(b) Any such policy, contract or asset shall not in any
way be considered to be security for the performance of the Corporation's
obligations under this Plan.
(c) If the Corporation purchases a life insurance or
annuity policy on the life of any Outside Director, the Outside Director, as a
condition of his participation in this Plan, must agree to sign any papers that
may be required for that purpose and to undergo any medical examination or
tests (at the Corporation's expense) which may be necessary, and generally
cooperate with the Corporation in securing such policy.
(d) To the extent an Outside Director acquires a right to
receive benefits under this Plan, such right shall be equivalent to the right
of an unsecured general creditor of the Corporation.
15. Reorganization. SpecTran shall not merge or consolidate into
or with another corporation if such merger or consolidation shall result in the
other corporation being the survivor corporation, nor shall it sell
substantially all of its assets to another corporation, firm or person, unless
and until such other corporation, firm or person agrees in writing without
further qualification to assume and discharge the obligations of SpecTran under
this Plan. If such corporation, firm or person does not so agree to assume and
discharge such obligations, SpecTran shall pay to each Outside Director, in one
lump sum, his Retirement Benefit as of the date of such merger, consolidation
or sale. All calculations of the Retirement Benefit, for purposes of this
Section 15, shall be discounted to present value in accordance with the
actuarial tables used in SpecTran's defined benefit pension plan. For the
purpose of clarification, any transaction between SpecTran and any of its
Affiliates is not intended to be covered by this Section.
16. Change in Control. In the event that a Change in Control
occurs prior to the Normal Retirement Date of an Outside Director and either
(a) such Outside Director is removed from the Board up to and including twelve
(12) months from such Change in Control or (b) such Outside Director
voluntarily resigns from the Board up to and including twelve (12) months from
such Change in Control, then in either case SpecTran shall pay to such Outside
Director, in one
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lump sum, his Retirement Benefit as of the date of his removal or resignation
from the Board. All calculations of the Retirement Benefit, for purposes of
this Section 16, shall be discounted to present value in accordance with the
actuarial tables used in SpecTran's defined benefit pension plan. For the
purposes of this Plan, "Change in Control" shall mean (a) the date of public
announcement that a person has become, without the approval of the Board, the
beneficial owner of 20% or more of the voting power of all securities of
SpecTran then outstanding; (b) the date of the commencement of a tender offer
or tender exchange by any person, without the approval of the Board, if upon
the consummation thereof such person would be the beneficial owner of 20% or
more of the voting power of all securities of SpecTran then outstanding; or (c)
the date on which individuals who constituted the Board on the date this Plan
was adopted cease for any reason to constitute a majority thereof, provided
that any person becoming a director subsequent to such date whose election or
nomination was approved by at least three quarters of such incumbent Board
shall be considered as though such person were an incumbent director.
17. Amendment or Termination. The Board reserves the right to
amend this Plan from time to time or terminate this Plan; provided, however,
that no such amendment or termination shall adversely affect the rights of any
Outside Director or beneficiary without such person's prior written consent
with respect to the benefits accrued prior to such termination or amendment.
18. Operation of Law on Corporation's Obligations. In the event
that any governmental entity promulgates any statute, rule, regulation, policy
or order which restricts or prohibits the Corporation from making payments to
an Outside Director under this Plan, then the Corporation's obligations to make
payments hereunder shall terminate or be restricted or suspended (consistent
with such law or binding regulation, policy or order) for so long as such
restriction or prohibition applies to the Corporation. Nothing in this Plan is
intended to require or shall be construed as requiring the Corporation to do or
fail to do any act in violation of any applicable law or binding regulation,
policy or order.
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19. Claims Procedure. In the event that benefits under this Plan
are not paid to an Outside Director (or his beneficiary in the case of an
Outside Director's death), and such person feels entitled to receive them, a
claim shall be made in writing to the Corporation within sixty (60) days after
written notice from the Corporation to the Outside Director or his beneficiary
or personal representative that payments are not being made or are not to be
made under this Plan. Such claim shall be reviewed by the Corporation. If the
claim is approved or denied, in full or in part, the Corporation shall provide
a written notice of approval or denial within sixty (60) days from the date of
receipt of the claim setting forth the specific reason for denial, specific
reference to the provision of this Plan upon which the denial is based, and any
additional material or information necessary to perfect the claim, if any.
Also, such written notice shall indicate the steps to be taken if a review of
the denial is desired. If a claim is denied (a claim shall be deemed denied if
the Corporation does not take action within the aforesaid sixty (60) day
period) and a review is desired, the Outside Director (or his beneficiary in
the case of the Outside Director's death), shall notify the Corporation in
writing within twenty (20) days. In requesting a review, the Outside Director
or his beneficiary may review this Plan or any document relating to it and
submit any written issues and comments he or she may feel appropriate. In its
sole discretion the Corporation shall then review the claim and provide a
written decision within sixty (60) days. This decision likewise shall state
the specific reasons for the decision and shall include reference to specific
provisions of this Plan on which the decision is based. Any decision of the
Corporation shall not be binding on the Outside Director, his personal
representative, or any beneficiary without consent, nor shall it preclude
further action by the Outside Director, his personal representatives or
beneficiary.
20. Arbitration. All claims, disputes and other matters in
question between the Corporation and any eligible Outside Director hereto
arising out of or relating to this Plan or the breach thereof shall be decided
by arbitration in accordance with the Rules of the American Arbitration
Association then obtaining, subject to the limitations and restrictions stated
below. Neither party will be permitted to submit a dispute to arbitration
without first following the procedures set forth in Section 19. Notice of
demand for arbitration must be filed in writing with
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the other party and with the American Arbitration Association. The demand must
be made within a reasonable time after the claim, dispute or other matter in
question has arisen. In no event may the demand for arbitration be made if the
institution of legal or equitable proceedings based on such claim, dispute or
other matter in question would be barred by the applicable statute of
limitations. Arbitrations hereunder will be held in the English language in
Boston, Massachusetts or such other place as the parties may agree. The award
rendered by the arbitrators will be final, not subject to appeal and judgment
may be entered upon it in any court having jurisdiction thereof. Each party
will bear all of his or its own costs and expenses associated with the
arbitration, and the parties shall equally share the administrative costs of
the arbitration.
21. Governing Law. The parties, terms and conditions of this Plan
are subject to and shall be governed by the laws of the Commonwealth of
Massachusetts without giving effect to the principles of conflicts of law.
22. Gender. Any reference in this Plan to the masculine shall be
deemed to include the feminine where the context so requires.
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SPECTRAN CORPORATION
SCHEDULE A
DESIGNATION OF BENEFICIARY
Date:______________
Gentlemen:
In accordance with the provisions of the SpecTran Corporation Retirement Plan
for Outside Directors, I hereby designate ________________________ residing at
____________________________* as my beneficiary to receive payment thereunder
in the event of my death before payments in full thereunder have been made. In
the event said beneficiary predeceases me, I hereby designate
________________________ residing at ____________________________* as
beneficiary in his or her stead.
Very truly yours,
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* If more than one beneficiary is to be designated, add a page listing the
beneficiaries and specify the percentage of each payment to be received by each
beneficiary.
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