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EXHIBIT 10.73
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 John
E. Chapman (hereinafter called "Chapman").
PURPOSE AND INTENT
This agreement (the "Agreement") is designed to recognize Chapman's
contribution to the Corporation(1) and encourage Chapman to remain in the
Corporation's employ by providing supplemental retirement benefits, keyed to a
specified percentage of his compensation, so that Chapman's 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 Chapman 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 Chapman; if Chapman 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 Chapman will be
available to consult for the Corporation. Further, these benefits are subject to
forfeiture if Chapman is terminated for Cause (as defined herein) or, as
described below, competes with the Corporation.
Chapman has been employed by the Corporation since 1983, is now
serving SpecTran as its Senior Vice President-Technology and currently holds the
position of President of
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(1) Initial capitalized words may be defined below under the heading "Certain
Definitions".
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SpecTran Communication Fiber Technologies, Inc., a wholly owned subsidiary of
SpecTran. The Board of Directors of SpecTran voted on May 8, 1996 to authorize
the Corporation to enter into this Agreement with Chapman.
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 Chapman's 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 Chapman during the 36
month period in which the Benefit Computation Base is calculated is greater than
fifty percent (50%) of Chapman's 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 Chapman's
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 Chapman's average annual
base salary over the 36 month period is $105,000. Accordingly, of Chapman's
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
Average $210,000 $ 80,000
In this example, fifty percent (50%) percent of Chapman's average
annual base salary over the 36 month period is $105,000. Chapman's 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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401(k) or 125 of the Code) paid during the thirty-six (36) consecutive calendar
months during Chapman's 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 Chapman'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.
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ARTICLE ONE
1.01 EMPLOYMENT. The Corporation may employ Chapman 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 any particular position and nothing
herein shall restrict the Corporation concerning the terms and conditions of
Chapman'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. Chapman 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 Chapman has
been continuously in the employ of the Corporation, Chapman 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 Chapman's Benefit Computation Base
multiplied by the Annual Percentage Amount (as determined pursuant to Section
2.02, below). Chapman 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 Chapman's actual retirement or the Normal
Retirement Date (unless payment is accelerated in accordance with Sections 10.01
and 10.02 below). No
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payment will be made under this Agreement if the Offsetting Benefits are equal
to or greater than the Accrued Benefit.
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2.02 ANNUAL PERCENTAGE AMOUNT.
(a) The Annual Percentage Amount shall be determined (subject to
subsection (b), below) by the number of years Chapman has been
continuously employed by the Corporation as follows:
================================================================================
YEARS OF CONTINUOUS SERVICE ANNUAL PERCENTAGE AMOUNT
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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) Chapman 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
Chapman 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, Chapman 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
Chapman has been continuously employed by the Corporation as follows:
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================================================================================
YEARS OF SERVICE ANNUAL PERCENTAGE AMOUNT
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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) Chapman 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 Chapman 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
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hereunder is considered a Parachute Payment and when combined with all
other payments considered to be Parachute Payments from the
Corporation to Chapman 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 Chapman 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 Chapman 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 Chapman's (actual or projected)
annual primary social security retirement benefit projected as of
Chapman's social security normal retirement age based on his
Benefit Computation Base in effect on the date of termination of
Chapman's employment with the Corporation;
2. The annual amount of benefits payable to Chapman (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;
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3. The annual amount of benefits payable at the Normal
Retirement Date on a single life annuity basis attributable to
the portion of the account balances of Chapman 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 Chapman 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
Chapman under this Agreement will be made assuming that Chapman
participates in the Offsetting Benefits to the full extent permitted
by law and the terms of those plans.
(d) If Chapman 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 Chapman's social security normal
retirement age assuming continued
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earnings by Chapman at the rate in effect at termination of employment
until Chapman's social security normal retirement age; (ii) the offset
for any qualified defined benefit plan shall be calculated on the
basis of Chapman's accrued benefit in said plan upon termination of
employment projected to be payable at Chapman's Normal Retirement
Date; (iii) the offset for any benefits arising from employer
contributions attributable to the account balances of Chapman arising
from the Corporation's 401(k) plan or any other defined contribution
retirement plan shall also be calculated on the basis of Chapman's
accrued benefit in such plan(s) upon termination of employment
projected to be payable at Chapman's Normal Retirement Date; and (iv)
the offset for any non-qualified supplemental retirement plan shall be
calculated on the basis of Chapman's accrued benefit in said plan upon
termination of employment projected to be payable at Chapman'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, Chapman 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 Chapman under the terms of SpecTran's qualified defined benefit pension plan.
2.05 VESTING. Anything to the contrary in this Agreement notwithstanding,
Chapman 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
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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 CHAPMAN.
(a) If Chapman 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 Chapman, a total annual amount equal to the
Supplemental Benefit earned by Chapman 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 Chapman 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 Chapman
until all of the Supplemental Retirement Benefit has been paid.
(c) If Chapman 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 Chapman's named beneficiaries an annual benefit
which shall be Chapman'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 Chapman's designated beneficiaries
shall be entitled to accelerated payments of such benefits if and to
the same extent Chapman would have been entitled to an accelerated
payment of the Supplemental Retirement Benefit had he survived.
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3.02 BENEFICIARIES. Chapman shall designate, in writing to the Corporation, on
the form titled "Designation of Beneficiary" attached hereto as Schedule A, one
or more beneficiaries. Chapman 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 Chapman'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
Chapman, or if none, to the beneficiary's estate.
ARTICLE FOUR
4.01 DISABILITY PRIOR TO RETIREMENT. In the event Chapman 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 Chapman through such
insurance programs as may be sponsored by the Corporation. Upon the later of
termination of such other disability benefits (if any), or Chapman's attainment
of the Normal Retirement Date, Chapman 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 Chapman 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, Chapman will receive credit towards
determining the Annual Percentage Amount for service prior to terminating his
employment because of disability and for service after resuming
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employment 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 Chapman's
employment with the Corporation is terminated, voluntarily or involuntarily,
before Chapman attains the Normal Retirement Date, for reasons other than death
or disability, Chapman 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
Chapman's actual retirement, and continuing for fifteen (15) years (except as
set forth in Sections 10.01 and 10.02); provided, however, that Chapman 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. Chapman understands that such election is being
made prospectively and is irrevocable. [add -election only applies to future
services]
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 Chapman's employment for any reason,
Chapman 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 Chapman and his
beneficiaries hereunder shall become void; provided, however, that
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if (a) Chapman 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 Chapman 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.
Chapman 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 Chapman and his beneficiaries
hereunder shall become null and void, if Chapman'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 Chapman for committing any felony, (ii)
stealing from the Corporation, (iii) a willful breach by Chapman of a material
provision of this Agreement and (iv) if Chapman engages in gross misconduct,
such as fraud, dishonesty, gross negligence or insubordination.
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If (a) Chapman 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 Chapman shall 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 Chapman is receiving benefits
pursuant to this Agreement, Chapman 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 Chapman, 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 Chapman or his beneficiary
or any of them, or the transfer of such benefit by operation of law in the event
of
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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.
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 Chapman 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 Chapman 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 Chapman, Chapman 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 Chapman 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.
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 Chapman
and such other corporation, firm or person agree that Chapman 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 Chapman and such corporation, firm or person do not agree
that Chapman 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 Chapman, 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) Chapman is dismissed without Cause
from employment by the Corporation up to and including
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twelve (12) months from such Change in Control or (b) Chapman 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 Chapman, in one
lump sum, his Supplemental Retirement Benefit as of the date of the termination
of Chapman's employment. All calculations of the Supplemental Retirement
Benefit, for purposes of this Section 10.02, 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 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 Chapman 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
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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
Sturbridge, MA 01566
To Chapman:
John E. Chapman
11 Valley Forge Drive
Shrewsbury, MA 01545
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 Chapman (or his beneficiary in the case of Chapman'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
Chapman 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
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aforesaid sixty (60) day period) and a review is desired, Chapman (or
beneficiary in the case of Chapman's death), shall notify the Corporation in
writing within twenty (20) days. In requesting a review, Chapman 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 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 Chapman, his personal
representative, or any beneficiary without consent, nor shall it preclude
further action by Chapman, 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.
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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
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 Chapman
under this Agreement, then the Corporation's obligations to make payments to
Chapman (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.
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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.
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 John E. Chapman
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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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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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