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EXHIBIT 10.71
SUPPLEMENTAL RETIREMENT AGREEMENT
THIS AGREEMENT is made and entered into this 8th day of May, 1996 by
and between SpecTran Corporation ("SpecTran"), a Delaware corporation, and
Crawford L. Cutts (hereinafter called "Cutts").
PURPOSE AND INTENT
This agreement (the "Agreement") is designed to recognize Cutts'
contribution to the Corporation(1) and encourage Cutts to remain in the
Corporation's employ by providing supplemental retirement benefits, keyed to a
specified percentage of his compensation, so that Cutts' percentage of spendable
retirement income will approximate the percentage of spendable retirement income
available to less compensated employees who also participate in the
Corporation's retirement plans. Due to restrictions presently imposed by the
Internal Revenue Code on benefits for highly compensated employees, the
percentage of spendable retirement income Cutts would receive under the
Corporation's current benefit plans relative to his current compensation would
be less than that of employees at lower salary levels. The benefits provided in
this Agreement are designed to be entirely supplemental to the Corporation's
other retirement benefits payable to Cutts; if Cutts receives the specified
percentage of compensation through pension plans and other benefits (as
described below) provided by the Corporation, no benefits will be paid out under
this Agreement. While any benefits are paid under this Agreement Cutts will be
available to consult for the Corporation. Further, these benefits are subject to
forfeiture if Cutts is terminated for Cause (as defined herein) or, as described
below, competes with the Corporation.
Cutts has been employed by the Corporation since 1991, and currently
holds the position of President of Applied Photonic Devices, Inc., a wholly
owned subsidiary of
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(1)Initial capitalized words may be defined below under the heading "Certain
Definitions".
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EXHIBIT 10.71
SpecTran. The Board of Directors of SpecTran voted on May 8, 1996 to authorize
the Corporation to enter into this Agreement with Cutts.
CERTAIN DEFINITIONS(a) "Accrued Benefit" shall have the meaning set forth in
Section 2.01 of this Agreement.
(b) "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
Agreement, control shall mean ownership of fifty percent (50%) or more of the
voting stock of any entity.
(c) "Benefit Computation Base" shall mean the average of Cutts' annual
compensation (defined as base salary, eligible bonus(2) and any salary reduction
amounts pursuant to Sections
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(2)To the extent that the average annual bonus paid to Cutts during the 36 month
period in which the Benefit Computation Base is calculated is greater than fifty
percent (50%) of Cutts' average base salary over such period, the excess bonus
payments shall be considered ineligible for the purpose of calculating the
Benefit Computation Base. For example, assume that Cutts' base salary and
bonuses over the 36 month period are as shown in the following two examples:
1.
Base Salary Bonus
----------------------------------------------------
Months 1-12 $200,000 $200,000
Months 13-24 $210,000 $100,000
Months 25-36 $220,000 $ 90,000
Average $210,000 $130,000
In this example, fifty percent (50%) of Cutts' average annual base
salary over the 36 month period is $105,000. Accordingly, of Cutts' average
annual bonus of $130,000 paid over that period, $25,000 will be deemed
ineligible for the purpose of calculating the Benefit Computation Base,
resulting in $105,000 of the average bonus being considered eligible.
2.
Base Salary Bonus
-------------------------------------------
Months 1-12 $200,000 $200,000
Months 13-24 $210,000 $ 10,000
Months 25-36 $220,000 $ 30,000
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EXHIBIT 10.71
401(k) or 125 of the Code) paid during the thirty-six (36) consecutive calendar
months during Cutts' period of employment by the Corporation in which such
compensation is the highest.
(d) "Change in Control" shall have the meaning set forth in Section 10.02 of
this Agreement.
(e) 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 consolidation with SpecTran or which acquires substantially all of the
assets of SpecTran, and any of SpecTran's Affiliates.
(f) "Normal Retirement Date" shall mean Cutts's sixty-fifth birthday.
(g) "Offsetting Benefits" shall have the meaning set forth in Section 2.03 of
this Agreement.
(h) "Supplemental Retirement Benefit" shall have the meaning set forth in
Section 2.01 of this Agreement.
ARTICLE ONE
1.01 EMPLOYMENT. The Corporation may employ Cutts in such capacity as the
Corporation may from time to time determine. Notwithstanding anything contained
herein, this Agreement is not an agreement of employment, a guaranty of
continuing employment or of employment in
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Base Salary Bonus
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Average $210,000 $ 80,000
In this example, fifty percent (50%) percent of Cutts' average annual
base salary over the 36 month period is $105,000. Cutts' average annual bonus
over that period of $80,000 is less than the average annual base salary, and
accordingly the entire average annual bonus will be eligible in determining the
Benefit Computation Base.
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EXHIBIT 10.71
any particular position and nothing herein shall restrict the Corporation
concerning the terms and conditions of Cutts's employment. The benefits provided
by this Agreement are not part of any salary reduction plan or an arrangement
deferring a bonus or a salary increase. Cutts has no option to take any current
payment or bonus in lieu of these salary continuation benefits.
ARTICLE TWO
2.01 SUPPLEMENTAL RETIREMENT BENEFIT. Depending upon how many years Cutts has
been continuously in the employ of the Corporation, Cutts will be entitled to a
retirement benefit determined as of the effective date of his leaving the
Corporation's employment for whatever reason except Cause (as defined below),
including whether by (i) death, (ii) disability, (iii) termination of employment
or (iv) early retirement. The retirement benefit (also known as the "Accrued
Benefit") shall be an annual amount equal to Cutts's Benefit Computation Base
multiplied by the Annual Percentage Amount (as determined pursuant to Section
2.02, below). Cutts will receive a supplemental retirement benefit (the
"Supplemental Retirement Benefit") equal to (i) the amount of the Accrued
Benefit reduced by (ii) the sum of the benefits described in Subsections (1),
(2), (3) and (4) of Section 2.03, below (such benefits are referred to herein as
the "Offsetting Benefits"). The Supplemental Retirement Benefit, if any, to be
paid out under this Agreement, shall continue for fifteen (15) years, and be
paid in equal monthly installments commencing on the first day of the month
immediately following the later of Cutts's actual retirement or the Normal
Retirement Date (unless payment is accelerated in accordance with Sections 10.01
and 10.02 below). No payment will be made under this Agreement if the Offsetting
Benefits are equal to or greater than the Accrued Benefit.
2.02 ANNUAL PERCENTAGE AMOUNT.
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EXHIBIT 10.71
(a) The Annual Percentage Amount shall be determined (subject
to subsection (b), below) by the number of years Cutts has
been continuously employed by the Corporation as follows:
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EXHIBIT 10.71
================================================================================
YEARS OF CONTINUOUS SERVICE ANNUAL PERCENTAGE AMOUNT
25 or more 65%
20 -24 60%
15-19 40%
less than 15 0% (No Supplemental Retirement Benefit)
================================================================================
(b) Notwithstanding the provisions of Subsection (a) of this
Section 2.02, in the event (a) Cutts does not remain employed
by the Corporation for any reason during the twelve (12) month
period following a Change in Control (as defined in Section
10.01, below) or (b) an event described in Section 10.01
occurs and either such other corporation, firm or person (as
described in Section 10.01) does not agree that Cutts shall
continue in the employ of the Corporation for any reason
following such event or the Corporation's successor does not
assume its obligations hereunder, Cutts will be deemed
eligible to receive a Supplemental Retirement Benefit under
this Agreement if at the time of the termination of his
employment he will have completed at least five full years of
service to the Corporation. In this case, the Annual
Percentage Amount shall be determined by the number of years
Cutts has been continuously employed by the Corporation as
follows:
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EXHIBIT 10.71
================================================================================
YEARS OF SERVICE ANNUAL PERCENTAGE AMOUNT
25 or more 65%
20 -24 60%
15-19 40%
14 36%
13 32%
12 28%
11 24%
10 20%
9 16%
8 12%
7 8%
6 4%
less than 6 0% (No Supplemental Retirement Benefit)
================================================================================
(c) Anything else to the contrary in this Agreement
notwithstanding, in the event of either (a) Cutts does not
remain employed by the Corporation for any reason during the
twelve month period following a Change in Control or (b) an
event described in Section 10.01 occurs and either such other
corporation, firm or person (as described in Section 10.01)
does not agree that Cutts shall continue in the employ of the
Corporation for any reason following such event or the
Corporation's successor does not assume its obligations
hereunder, and (c) in either case, the payment of the
Supplementary Retirement Benefit hereunder, is considered a
Parachute Payment and when combined with all other payments
considered to be Parachute Payments from the Corporation to
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EXHIBIT 10.71
Cutts due to the events described in (a) and (b) above, result
in an Excess Parachute Payment, as defined by Section 280G of
the Internal Revenue Code of 1986, as amended, then the amount
of the Supplementary Retirement Benefit shall be reduced so
that the total Parachute Payments received by Cutts from the
Corporation do not constitute an Excess Parachute Payment;
provided, however, that this Section 2.02(c) shall not apply
if the total Parachute Payments from the Corporation to Cutts
due to the events described in (a) and (b) above exceed one
hundred twenty percent (120%) of the amount of all Parachute
Payments, not including any amount that would be considered an
Excess Parachute Payment.
2.03 OFFSETTING BENEFITS.
(a) The following are the Offsetting Benefits, which reduce the Accrued
Benefit for the purpose of calculating the Supplemental Retirement
Benefit:
1. Fifty percent (50%) of Cutts's (actual or
projected) annual primary social security retirement
benefit projected as of Cutts's social security
normal retirement age based on his Benefit
Computation Base in effect on the date of termination
of Cutts's employment with the Corporation;
2. The annual amount of benefits payable to
Cutts (or his beneficiaries) at the Normal Retirement
Date calculated on a single life annuity basis from
any qualified defined benefit pension plan maintained
and funded by the Corporation as of the date of this
Agreement, or their successors, as such plan or plans
may be amended or modified from time to time;
3. The annual amount of benefits payable at
the Normal Retirement Date on a single life annuity
basis attributable to the portion
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EXHIBIT 10.71
of the account balances of Cutts arising from
employer contributions (but excluding the portion of
such balances arising from employee salary reduction
and elective contributions) at the date of
determination from the Corporation's 401(k) and other
defined contribution retirement plans maintained by
the Corporation as of the date of this Agreement, or
their successors, as such plan or plans may be
modified from time to time;
4. The annual amount of benefits payable to
Cutts at the Normal Retirement Date calculated on a
single life annuity basis from any other
non-qualified supplemental retirement plan maintained
and funded by the Corporation as of the date of this
Agreement, or their successors, as such plan or plans
may be amended or modified from time to time.
(b) The Corporation's obligation to pay the Offsetting
Benefits shall not be affected by the termination of this
Agreement and the Supplemental Retirement Benefit payable
hereunder for any reason whatsoever.
(c) All calculations of the Supplemental Retirement Agreement
payable to Cutts under this Agreement will be made assuming
that Cutts participates in the Offsetting Benefits to the full
extent permitted by law and the terms of those plans.
(d) If Cutts terminates his employment prior to his Normal
Retirement Date, in calculating his Accrued Benefit, (i) the
offset of primary social security retirement benefit shall be
calculated on the basis of the amount projected to be payable
at Cutts's social security normal retirement age assuming
continued earnings by Cutts at the rate in effect at
termination of employment until Cutts's social security normal
retirement age; (ii) the offset for any qualified defined
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benefit plan shall be calculated on the basis of Cutts's
accrued benefit in said plan upon termination of employment
projected to be payable at Cutts's Normal Retirement Date;
(iii) the offset for any benefits arising from employer
contributions attributable to the account balances of Cutts
arising from the Corporation's 401(k) plan or any other
defined contribution retirement plan shall also be calculated
on the basis of Cutts's accrued benefit in such plan(s) upon
termination of employment projected to be payable at Cutts's
Normal Retirement Date; and (iv) the offset for any
non-qualified supplemental retirement plan shall be calculated
on the basis of Cutts's accrued benefit in said plan upon
termination of employment projected to be payable at Cutts's
Normal Retirement Date.
2.04 OPTIONAL FORMS OF PAYMENT. In lieu of the fifteen (15) year certain
payments provided in Section 2.01 above, or whenever a Supplemental Retirement
Benefit is payable under Section 4.01 or 5.01 of this Agreement, Cutts may elect
by written notice to the Corporation in the calendar year prior to the calendar
year in which payments are to begin, an optional form of payment which shall be
the actual equivalent (factors defined in SpecTran's qualified defined benefit
pension plan) of the said fifteen (15) year certain payments. The optional form
of payment shall be any optional form of payment which is provided to Cutts
under the terms of SpecTran's qualified defined benefit pension plan.
2.05 VESTING. Anything to the contrary in this Agreement notwithstanding, Cutts
shall be entitled to one hundred percent (100%) of any benefit payable under
this Agreement under any one or more of Sections 2.01, 3.01, 4.01, 5.01, 10.01
or 10.02 at the date on which his entitlement to such benefit shall be
determined commencing with his original date of hire by the Corporation,
provided that such benefits are subject to forfeiture as described in Sections
5.03 and 5.04, below.
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ARTICLE THREE
3.01 DEATH OF CUTTS.
(a) If Cutts dies while employed by the Corporation but prior
to the commencement of the payment of the Supplemental
Retirement Benefit under Section 2.01, 4.01 or 5.01, SpecTran
will pay to the designated beneficiaries of Cutts, a total
annual amount equal to the Supplemental Benefit earned by
Cutts as of the date of death, payable over a period of
fifteen (15) years certain 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 Cutts dies following the commencement of the payment of
the Supplemental Retirement Benefit under Section 2.01, 4.01
or 5.01, such payments shall continue to the designated
beneficiaries of Cutts until all of the Supplemental
Retirement Benefit has been paid.
(c) If Cutts dies following the termination of his employment
with the Corporation and prior to the commencement of the
payment of the Supplemental Retirement Benefit under Section
2.01, 4.01 or 5.01, SpecTran shall pay to Cutts's named
beneficiaries an annual benefit which shall be Cutts's
Supplemental Retirement Benefit as of the date of the
termination of his employment. Such benefits shall be payable
monthly, 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 fifteen (15) years; provided, however, that Cutts's
designated beneficiaries shall be entitled to accelerated
payments of such benefits if and to the same extent Cutts
would have been entitled to an accelerated payment of the
Supplemental Retirement Benefit had he survived.
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3.02 BENEFICIARIES. Cutts shall designate, in writing to the Corporation, on the
form titled "Designation of Beneficiary" attached hereto as Schedule A, one or
more beneficiaries. Cutts from time to time may change his designated
beneficiaries by delivering to the Corporation a dated, revised Designation of
Beneficiary form, revoking the prior designation. If no beneficiary is so named
or if no named beneficiary is living at the time a payment is due, benefit
payments shall be made, when due, to Cutts's estate. If payments 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
Cutts, or if none, to the beneficiary's estate.
ARTICLE FOUR
4.01 DISABILITY PRIOR TO RETIREMENT. In the event Cutts shall become disabled,
mentally or physically, which disability prevents him from performing the
material aspects of his duties, the Corporation will pay no disability benefits
hereunder. Disability benefits (if any) will be paid to Cutts through such
insurance programs as may be sponsored by the Corporation. Upon the later of
termination of such other disability benefits (if any), or Cutts's attainment of
the Normal Retirement Date, Cutts shall commence receiving payment of his
Accrued Benefit determined as of the date of the disability. The Supplemental
Retirement Benefit shall be paid in equal monthly installments, for fifteen (15)
years certain commencing on the first day of the month following the later of
the termination of such benefits or the Normal Retirement Date, or in the manner
provided in Section 2.04.
4.02 RE-EMPLOYMENT FOLLOWING DISABILITY. In the event Cutts returns to work with
the Corporation after terminating employment because of disability, this
Agreement shall continue in full force and effect as though such disability had
not occurred. Under such circumstances, Cutts will receive credit towards
determining the Annual Percentage Amount for service prior to terminating his
employment because of disability and for service after resuming employment
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with the Corporation, but will not receive credit for the interim prior during
which he was not employed by the Corporation.
ARTICLE FIVE
5.01 EARLY RETIREMENT, TERMINATION OF SERVICE OR DISCHARGE. Except to the extent
otherwise provided in Sections 5.03 and 5.04, in the event that Cutts's
employment with the Corporation is terminated, voluntarily or involuntarily,
before Cutts attains the Normal Retirement Date, for reasons other than death or
disability, Cutts shall be entitled to a Supplemental Retirement Benefit,
determined as of the date of his termination of employment. Such benefit shall
be payable in equal monthly installments, commencing on the first day of the
month next following the later of the Normal Retirement Date or the date of
Cutts's actual retirement, and continuing for fifteen (15) years (except as set
forth in Sections 10.01 and 10.02); provided, however, that Cutts may elect by
execution and delivery to the Corporation of the form attached hereto as
Schedule B to have the monthly payments of the Supplemental Retirement Benefit
commence prior to the Normal Retirement Date at any date between age 60 and the
Normal Retirement Date. Cutts understands that such election is being made
prospectively and is irrevocable.
5.02 OPTIONAL FORMS OF PAYMENT. In lieu of the fifteen (15) years certain
payments provided in Section 5.01, the Supplemental Retirement Benefit payable
under such Section may be payable in the manner provided in Section 2.04.
5.03 EMPLOYMENT BY COMPETITION. In the event that during the two year period
immediately following the termination of Cutts's employment for any reason,
Cutts shall compete with the business of the Corporation, then the Supplemental
Retirement Benefit which might otherwise be due and payable hereunder shall be
immediately forfeited and all rights of Cutts and his beneficiaries hereunder
shall become void; provided, however, that if (a) Cutts
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does not remain employed by the Corporation for any reason during the twelve
(12) month period following a Change in Control or (b) an event described in
Section 10.01 occurs and either such other corporation, firm or person (as
described in Section 10.01) does not agree that Cutts shall continue in the
employ of the Corporation for any reason following such event or the
Corporation's successor does not assume its obligations hereunder, the
provisions of Section 5.03 shall not apply, but the provisions of Sections 10.01
and 10.02 shall govern. Cutts will be deemed to have competed with the business
of the Corporation if, during the two year period following termination of his
employment with the Corporation, 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 the term of his
employment or which the Corporation planned, during the term of his employment
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
the term of his employment, or which the Corporation planned during the term of
his employment, to enter, or (c) induces or actively attempt to influence any
other employee or consultant of the Corporation to terminate his or her
employment or consultancy with the Corporation.
5.04 FORFEITURE. Anything to the contrary in this Agreement notwithstanding
(other than Sections 10.01 and 10.02), the Supplemental Retirement Benefits
shall be immediately forfeited and all rights of Cutts and his beneficiaries
hereunder shall become null and void, if Cutts's employment with the Corporation
is terminated for Cause. For this purpose, a termination shall be a termination
for "Cause" only if the termination if for one or more of the following: (i) the
conviction of Cutts for committing any felony, (ii) stealing from the
Corporation, (iii) a willful breach by Cutts of a material provision of this
Agreement and (iv) if Cutts engages in gross misconduct, such as fraud,
dishonesty, gross negligence or insubordination.
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If (a) Cutts does not remain employed by the Corporation for any reason within
one year following a Change in Control or (b) an event described in Section
10.01 occurs and either such other corporation, firm or person (as described in
Section 10.01) does not agree that Cutts does not continue in the employ of the
Corporation for any reason following such event or the Corporation's successor
does not agree to assume its obligation hereunder, the provisions of this
Section 5.04 shall not apply, but the provisions of Sections 10.01 and 10.02
shall govern.
5.05 AVAILABILITY TO CONSULT. For so long as Cutts is receiving benefits
pursuant to this Agreement, Cutts 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 reasonable extent.
ARTICLE SIX
6.01 INTEREST. Any payment that is required to be made hereunder that is delayed
beyond the date specified in this Agreement shall bear interest at a variable
rate which shall be the rate of interest 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.
ARTICLE SEVEN
7.01 ALIENABILITY. Neither Cutts, nor any beneficiary under this Agreement shall
have any power or right to transfer, assign, anticipate, hypothecate, mortgage,
commute, modify, or otherwise encumber in advance any of the benefits payable
hereunder, 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 Cutts or 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
Agreement, and will result in the immediate termination of all benefits payable
hereunder.
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ARTICLE EIGHT
8.01 PARTICIPATION IN OTHER PLANS. Nothing contained in this Agreement shall
be construed to alter, abridge, or in any manner affect the rights and
privileges of Cutts to participate in and be covered by any pension, profit
sharing, group insurance, bonus or any other employee plan or plans which the
Corporation may have or hereafter have.
ARTICLE NINE
9.01 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 Agreement 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
Agreement, 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 Cutts 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.
(b) Any such policy, contract or asset shall not in any way be considered
to be security for the performance of the obligations of this
Agreement.
(c) If the Corporation purchases a life insurance or annuity policy on the
life of Cutts, Cutts agrees 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.
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(d) To the extent Cutts acquires a right to receive benefits under this
Agreement, such right shall be equivalent to the right of an unsecured
general creditor of the Corporation.
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ARTICLE TEN
10.01 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 Cutts and
such other corporation, firm or person agree that Cutts shall continue in the
employ of the succeeding, continuing or acquiring corporation, firm or person
and such other corporation, firm or person agrees in writing without further
qualification to assume and discharge the obligations of SpecTran under this
Agreement. If Cutts and such corporation, firm or person do not agree that Cutts
shall continue in the employ of such corporation, firm or person, or such
corporation, firm or person does not so agree to assume and discharge such
obligations, SpecTran shall pay to Cutts, in one lump sum, his Supplemental
Retirement Benefit as of the date of such merger, consolidation or sale. All
calculations of the Supplemental Retirement Benefit, for purposes of this
Section 10.01, 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 10.01.
10.02 CHANGE IN CONTROL. In the event that a Change in Control occurs prior to
the Normal Retirement Date and either (a) Cutts is dismissed without Cause from
employment by the Corporation up to and including twelve (12) months from such
Change in Control or (b) Cutts voluntarily leaves the employ of the Corporation
up to and including twelve (12) months from such Change in Control, then in
either case SpecTran shall pay to Cutts, in one lump sum, his Supplemental
Retirement Benefit as of the date of the termination of Cutts's employment. All
calculations of the Supplemental Retirement Benefit, for purposes of this
Section 10.02, shall be discounted to present value in
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accordance with the actuarial tables used in SpecTran's defined benefit pension
plan. For the purposes of this Agreement, "Change in Control" shall mean (a) the
date of public announcement that a person has become, without the approval of
SpecTran's Board of Directors, 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 SpecTran's Board of Directors, 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 of Directors of SpecTran on the date this Agreement
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 of
Directors shall be considered as though such person were an incumbent director.
ARTICLE ELEVEN
11.01 BENEFITS AND BURDENS. This Agreement shall be binding upon and inure to
the benefit of Cutts and his personal representatives, the Corporation, and any
successor organization which shall succeed to substantially all of the
Corporation's assets and business without regard to the form of such succession.
ARTICLE TWELVE
12.01 COMMUNICATIONS. Any notice or communication required of either party with
respect to this Agreement shall be made in writing and may either be delivered
personally or sent by certified mail, return receipt requested, as the case may
be:
To the Corporation:
c/o President of the Corporation
SpecTran Corporation
50 Hall Road
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Sturbridge, MA 01566
To Cutts:
Crawford L. Cutts
1 High Street
Southborough, MA 01772-1423
Each party shall have the right by written notice to change the place to which
any notice may be addressed.
ARTICLE THIRTEEN
13.01 CLAIMS PROCEDURE. In the event that benefits under this Agreement are not
paid to Cutts (or his beneficiary in the case of Cutts'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
Cutts or his beneficiary or personal representative that payments are not being
made or are not to be made under this Agreement. 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 Agreement 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, Cutts (or beneficiary
in the case of Cutts's death), shall notify the Corporation in writing within
twenty (20) days. In requesting a review, Cutts or his beneficiary may review
this Agreement 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
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EXHIBIT 10.71
decision likewise shall state the specific reasons for the decision and shall
include reference to specific provisions of this Agreement on which the decision
is based.
Any decision of the Corporation shall not be binding on Cutts, his personal
representative, or any beneficiary without consent, nor shall it preclude
further action by Cutts, his personal representatives or beneficiary.
13.02 ARBITRATION. All claims, disputes and other matters in question between
the parties hereto arising out of or relating to this Agreement 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 13.01. Notice of demand for
arbitration must be filed in writing with the other party to this Agreement 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.
ARTICLE FOURTEEN
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14.01 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of the
parties with respect to the subject matter hereof, and supersedes all prior
agreements, written or verbal, with respect to such subject matter. This
instrument may be altered or amended only by written agreement signed by the
parties hereto.
14.02 GENDER. Any reference in this Agreement to the masculine shall be deemed
to include the feminine where the context so requires.
14.03 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 Cutts under
this Agreement, then the Corporation's obligations to make payments to Cutts (or
his beneficiary) 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
Agreement 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.
14.04 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be considered an original, but together shall constitute one
and the same document.
14.05 SEVERANCE. In the event any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid or unenforceable, the remainder of
this Agreement shall remain in full force and effect and will not be affected by
such invalid or unenforceable provisions.
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EXHIBIT 10.71
14.06 JURISDICTION, GOVERNING LAW. The parties, terms and conditions of this
Agreement 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.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
duly executed by its duly authorized officer and its Corporate Seal affixed at
Sturbridge, Massachusetts the day and year first above written.
SPECTRAN CORPORATION
By
- -------------------------- -----------------------------------
Witness Name:
Title:
- -------------------------- -------------------------------------
Witness Crawford L. Cutts
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SCHEDULE A
DESIGNATION OF BENEFICIARY
Gentlemen:
In accordance with the provisions of the Supplemental Retirement Agreement dated
May 8, 1996, between SpecTran Corporation and the undersigned, I hereby
designate ____________________, residing at ________________________,* as my
beneficiary to receive payments 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/her stead.
Very truly yours,
_________________________
*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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EXHIBIT 10.71
SCHEDULE B
Gentlemen:
In accordance with Section 5.01 of the Supplemental Retirement Agreement dated
May 8, 1996, between SpecTran Corporation and the undersigned, I hereby
prospectively and irrevocably make the election indicated below with respect to
the payment of benefits:
[CHECK ONE]
______ I elect to commence receiving benefits prior to age 65
if I retire before the Normal Retirement Age, with the benefits to commence at
age ____ [Specify age between 60 and 65].
OR
______ I elect to commence receiving benefits after the Normal
Retirement Date and forego my right to receive benefits prior to the Normal
Retirement Age.
Very truly yours,
_______________________
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