EXHIBIT 10(z)
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SPIRE CORPORATION
NON-QUALIFIED DEFERRED COMPENSATION PLAN
FOR ROGER LITTLE
Amended and Restated Effective as of January 1, 2005
This SPIRE CORPORATION NON-QUALIFIED DEFERRED COMPENSATION PLAN FOR
ROGER LITTLE (the "Plan") was entered into and effective as of 1st day of
January, 2002, by Spire Corporation, a corporation duly organized and existing
under the laws of the State of Massachusetts (the "Company"). The Plan has been
amended and restated as of January 1, 2005, to comply with Section 409A of the
Internal Revenue Code and its regulations.
RECITALS:
WHEREAS, the Board of Directors of the Company (the "Board") recognizes
that Roger Little has contributed to the growth and success of the Company, and
desires to assure the Company of his continued employment and to compensate him
therefor; and
WHEREAS, the Board has determined that this Plan will reinforce and
encourage Mr. Little's continued attention and dedication to the Company; and
WHEREAS, the Board has determined that this Plan must be amended and
restated to comply with Section 409A of the Internal Revenue Code.
NOW, THEREFORE, in consideration of the premises and mutual covenants
set forth herein, the Company hereby amends and restates the Plan pursuant to
the following terms and provisions.
1. Definitions.
1.1. Accounting Date means the last day of each calendar month and such
other date or dates as the Committee may designate from time to time as an
Accounting Date.
1.2. Accounting Period means each period beginning on the day following
an Accounting Date and ending on the following Accounting Date.
1.3. Amounts Not Subject to Section 409A means any Tax-Deferred
Contributions or Employer Contributions that were made before January 1, 2005.
1.4. Amounts Subject to Section 409A means any Tax-Deferred
Contributions or Employer Contributions that were made on or after January 1,
2005.
1.5. Beneficiary means the person or persons designated by the
Participant, upon such forms as shall be provided by the Committee, to receive
payments of the vested portion of the Participant's Accounts after the
Participant's death. If the Participant shall fail to designate a Beneficiary,
or if for any reason such designation shall be ineffective, or if such
Beneficiary shall predecease the Participant or die simultaneously with him,
then the Beneficiary shall be, in the following order of preference:
(a) the Participant's surviving spouse, or
(b) the Participant's estate.
1.6. Change of Control
(a) For Amounts Not Subject to Section 409A: shall mean approval
by the shareholders of the Company of (a) a reorganization, merger,
consolidation or other form of corporate transaction or series of transactions,
in each case, with respect to which persons who were the shareholders of the
Company immediately prior to such reorganization, merger or consolidation or
other transaction do not, immediately thereafter, own more than 50% of the
combined voting power entitled to vote generally in the election of directors of
the reorganized, merged or consolidated
company's then outstanding voting securities, (b) a liquidation or dissolution
of the Company or (c) the sale of all or substantially all of the assets of the
Company (unless such reorganization, merger, consolidation or other corporate
transaction, liquidation, dissolution or sale is subsequently abandoned).
(b) For Amounts Subject to Section 409A: means the occurrence of
any of the following:
(i) any one person, or more than one person acting as a group,
acquires ownership of equity securities of the Company that, together with
equity securities held by such person or group, constitutes more than 50% of the
total fair market value or total voting power of the equity securities of the
Company; provided, however, that if any one person, or more than one person
acting as a group, is considered to own more than 50% of the total fair market
value or total voting power of the equity securities of the Company, the
acquisition of additional equity securities by the same person or persons will
not be considered a Change of Control under this Plan. An increase in the
percentage of equity securities of the Company owned by any one person, or
persons acting as a group, as a result of a transaction in which the Company
acquires its equity securities in exchange for property will be treated as an
acquisition of equity securities of the Company for purposes of this clause (i);
or
(ii) any one person, or more than one person acting as a
group, acquires (or has acquired during the 12-month period ending on the date
of the most recent acquisition by the person or persons) all or substantially
all of the assets from the Company. Notwithstanding anything to the contrary in
this Plan, the following shall not be treated as a Change of Control under this
Section 1.6:
(A) a transfer of assets from the Company to a equity
owner of the Company (determined immediately before the asset transfer);
(B) a transfer of assets from the Company to an entity,
50% or more of the total value or voting power of which is owned, directly or
indirectly, by the Company;
(C) a transfer of assets from the Company to a person,
or more than one person acting as a group, that owns, directly or indirectly,
50% or more of the total value or voting power of all the outstanding equity
securities of the Company; or
(D) a transfer of assets from the Company to an entity,
at least 50% of the total value or voting power of which is owned, directly or
indirectly, by a person described in (C) above.
1.7. Code shall mean the Internal Revenue Code of 1986, as amended, and
successor tax laws.
1.8. Committee shall mean the persons designated by the Company as the
Administrative Committee for the Plan, as it may from time to time be
constituted, pursuant to Section 6.1.
1.9. Company shall mean Spire Corporation, a Massachusetts corporation,
its successors and assigns.
1.10. Deferral Agreement shall mean the agreement entered into by the
Participant in accordance with Section 2.1 hereof pursuant to which the
Participant shall elect the amount of his Tax-Deferred Contributions (if any)
for the Plan Year.
1.11. Disability shall mean a disability as that term is defined in the
Long Term Disability Plan of the Company, if any, or if there is no Long Term
Disability Plan, disability shall mean a physical or mental condition that
renders, or is expected to render, the Participant permanently and totally
unable to perform his usual duties or any comparable duties for the Company. The
determination of the existence of a Disability shall be made by the Committee
and shall be final and binding upon the Participant and all other parties. The
Committee may require the submission of such medical evidence, as it may deem
necessary in order to arrive at its determination.
1.12. Effective Date of Plan shall mean January 1, 2002; however, the
Plan is amended and restated effective January 1, 2005.
1.13. Eligible Compensation shall mean the base salary and bonuses paid
by the Company to the Participant for the Plan Year.
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1.14. Employer Contributions shall mean any contributions credited to
the Participant's Account in accordance with Section 2.2 of the Plan.
1.15. Employer Contribution Account means the account maintained under
the Plan for the Participant that is credited with Employer Contributions.
Separate sub-accounts shall be kept for Amounts Subject to Section 409A and
Amounts Not Subject to Section 409A.
1.16. Investment Funds means those investment options that shall from
time to time be made available as investment options under the Plan, as
determined by the Committee.
1.17. Leave of Absence shall mean any absence authorized by the Company
under its standard personnel practices.
1.18. Normal Retirement Age shall mean the date on which the
Participant reaches the age of sixty-five.
1.19. Participant shall mean Roger Little.
1.20. Participant's Account means the total amount credited to the
account maintained in the Plan in accordance with the provisions of the Plan for
the Participant as of any Accounting Date, and which consists of his
Tax-Deferred Contributions Account and his Employer Contributions Account.
1.21. Plan shall mean the Spire Corporation Non-Qualified Deferred
Compensation Plan for Roger Little, as herein set forth and as it may be amended
from time to time.
1.22. Plan Year shall mean each calendar year that begins on or after
January 1, 2002.
1.23. Section 409A means Section 409A of the Code.
1.24. Separation from Service means, as to each Participant's
subaccount, the earliest date on which a Participant has incurred a separation
from service, within the meaning of Section 409A(a)(2) of the Code, with the
Service Recipient.
1.25. Service Recipient means the person for whom the services
resulting in the rights to compensation were performed, and with respect to whom
the legally binding right to compensation arises, and all persons with whom such
person would be considered a single employer under Section 414(b) of the Code
(employees of a controlled group of corporations), and all persons with whom
such person would be considered a single employer under Section 414(c) of the
Code (employees of partnerships, proprietorships, etc. or other entities under
common control).
1.26. Specified Employee shall mean any Participant who, at the time of
his or her Separation from Service, is a "key employee", within the meaning of
Section 416(i) of the Code, of any Service Recipient any of the stock in which
is publicly traded on an established securities market or otherwise. The
determination as to whether a Participant is a Specified Employee shall be
determined in a manner consistent with applicable Treasury Regulations under
Section 409A.
1.27. Tax-Deferred Contributions means the contributions credited to
the Participant's Account under Section 2.1 of the Plan.
1.28. Tax-Deferred Contributions Account means the account maintained
by the Company under the Plan for the Participant that is credited with the
Participant's Tax-Deferred Contributions. Separate sub-accounts shall be kept
for Amounts Subject to Section 409A and Amounts Not Subject to Section 409A.
1.29. Trust means Spire Corporation Non-Qualified Deferred Compensation
Plan Trust for Roger Little between the Company and the Trustee.
1.30. Trustee shall mean the persons or entity that shall from time to
time be serving as the Trustee of the Trust.
1.31. Unforeseeable Emergency
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(a) For Amounts Not Subject to Section 409A: shall mean an
unanticipated emergency, such as a sudden and unexpected illness or accident of
the Participant or a dependent of the Participant or loss of the Participant's
property due to casualty, that is caused by an event beyond the control of the
Participant and that would result in severe financial hardship if the withdrawal
were not permitted. The need to pay the Participant's child's or grandchild's
tuition to college and the desire to purchase a home shall not be considered
unforeseeable emergencies.
(b) For Amounts Subject to Section 409A: shall mean a severe
financial hardship to the Participant resulting from an illness or accident of
the Participant, the Participant's spouse, the Participant's Beneficiary, or the
Participant's dependent (as defined in Section 152 of the Code, without regard
to Section 152(b)(1), (b)(2) and (d)(1)(B); loss of the Participant's property
due to casualty (including the need to rebuild a home following damage to a home
not otherwise covered by insurance, for example, not as a result of a natural
disaster); or other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the Participant.
Whether an Unforeseeable Emergency has occurred shall be determined by the
Committee based on the relevant facts and circumstances of each case.
2. Contributions.
2.1. Tax-Deferred Contributions. The Participant, so long as he remains
a Participant, may elect (pursuant to a Deferral Agreement furnished by the
Committee prior to the beginning of the Plan Year and in accordance with
Committee rules) to reduce and defer receipt pursuant to this Plan of an amount
not to exceed one hundred percent (100%) (in whole percentages) of his base
salary and any bonuses earned during the Plan Year. Deferral Agreements are
effective on a Plan Year basis, and must be filed before the beginning of the
Plan Year to which they relate. Deferral Agreements may not be amended or
revoked after the beginning of the Plan Year. The Company shall withhold, by
payroll deduction, the Eligible Compensation deferred pursuant to this Section
2.1 (if any) from the current Eligible Compensation payments of the Participant
and credit such withheld amounts to the Participant's Tax-Deferred Contributions
Account under the Plan. The Deferral Agreement may not be amended or revoked
during the Plan Year for which it is made.
2.2. Employer Contributions. For each Plan Year, the Company shall
credit to the Participant's Employer Contribution Account an amount not
exceeding Two Hundred Fifty Thousand Dollars and No Cents ($250,000), which may,
in the Company's discretion, be credited in equal monthly installments
throughout the Plan Year as of the first day of each calendar month. The Company
hereby agrees that the amount to be credited for the Plan Year beginning on
January 1, 2002 shall be $250,000, which shall be credited in equal monthly
installments of $20,833.33 as of the first day of each calendar month. In each
Plan Year commencing on or after January 1, 2003, the Company shall credit the
full $250,000 to the Participant's Employer Contribution Account, unless the
Board determines, reasonably and in good faith, that there is insufficient
Available Cash (as hereinafter defined) to make such contribution in full, in
which case the Company shall contribute to the Participant's Employer
Contribution Account the full amount of Available Cash. If in any Plan Year the
Company fails to make the full contribution due to a lack of Available Cash, the
Company shall make catch-up contributions in each subsequent Plan Year in an
amount equal to all Available Cash remaining after deducting the $250,000
contribution for the then current Plan Year, until such time as the amount
credited by the Company to the Participant's Employer Contribution Account
equals $250,000 times the number of Plan Years that have elapsed. The term
"Available Cash" with respect to any Plan Year shall mean the excess of the
gross receipts of the Company from whatever source for the Plan Year immediately
preceding the current Plan Year over the sum of the following amounts: (a) the
amount of cash disbursed during the Plan Year immediately preceding the current
Plan Year to make payments then due on accrued liabilities and obligations of
the Company and to pay capital expenditures and ordinary and necessary costs and
expenses incident to the operation of the Company's business; and (b) the amount
which the Board allocates to reasonable reserves to pay costs, expenses and
liabilities of the type described in clause (a) for which the Board does not,
reasonably and in good faith, expect the Company to have the necessary cash at
the time such payments are required to be made.
In addition, for each Plan Year, the Company may credit to the
Participant's Employer Contribution Account such additional contributions, if
any, as the Company shall determine based upon such criteria (including but not
limited to those listed above) as the Company, in its discretion, shall from
time to time determine.
3. Vesting.
3.1. Participant's Account. The Participant's interest in his
Participant's Account shall be fully vested and nonforfeitable at all times.
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4. Investment of Participant's Account and Trust.
4.1. Investment. Amounts credited to a Participant's Account shall be
contributed by the Company to the Trust as soon as practicable after they are so
credited. The value of a Participant's Account shall be measured as if amounts
credited to such Account were actually invested in the Investment Funds selected
by the Participant in accordance with the Plan, and shall be credited with gains
and losses allocable thereto at such times and in such manner as shall be
determined by the Committee reasonably and in good faith. The Participant shall
elect on the Participant Election and Enrollment Form the portion of the
Participant's Account, in whole percentages, that are to be treated as if
invested in each of the Investment Funds. A Participant may, as of the first day
of each calendar quarter and in such manner as shall be permitted by the
Committee, change such election as to the investments upon which the value of
his Participant's Account is to be measured. The Company may direct the Trustees
that the assets of each Trust be invested in any one, or combination, of the
Investment Funds, or in any other investments determined by the Company,
notwithstanding the Participant's election as to the manner in which the value
of his Account is to be measured. In the event that the Investment Funds are
those that are part of a life insurance policy, then the value of the
Participant's Account shall be measured as if it were invested in the Investment
Funds selected by the Participant within a life insurance policy which could be
acquired by the Company or Trust in accordance with the Plan, and shall be
reduced by all cost of insurance and other policy costs, expenses and other
charges (including any potential charges) that are or would be incurred if such
Policy were maintained. In no event, however, shall the Company be required to
purchase or continue to maintain any such life insurance policies, or to invest
any amounts within the life insurance policy in accordance with the
Participant's election with regard to the manner in which the value of his
Account is to be measured.
5. Distributions.
5.1. Timing of Distributions.
(a) Participant's Account. The vested portion of the Participant's
Account, less any applicable tax withholding, shall be distributed to the
Participant commencing upon the Participant's termination of employment with the
Company for any reason, including the Participant's death, Disability or
Separation from Service. However, with respect to Amounts Subject to Section
409A, payments commencing upon the Participant's termination of employment must
also qualify as a Separation from Service. In no event shall any distributions
of Amounts Subject to Section 409A be made under the Plan on account of the
Separation from Service of any Participant that is a Specified Employee before
the date that is 6 months after the date of the Participant's Separation from
Service or, if earlier, the date of the Participant's death, or as otherwise
permitted without violating the requirements of Section 409(A)(a)(2) of the
Code. The distribution shall commence as soon as administratively practicable
after the first day of the calendar month immediately following the date of the
termination of Participant's employment or Separation from Service with the
Company but in no event later than thirty (30) days after such termination.
(b) Acceleration of Distributions. Distribution shall be
accelerated upon the following occurrences:
(i) Hardship Distributions. Upon the written request of the
Participant and in the event the Committee determines that an Unforeseeable
Emergency" has occurred with respect to the Participant, the Participant may
withdraw the lesser of (1) the amount necessary to meet the emergency or (2) the
value of the Participant's Account;
(ii) Change of Control. In the event of a Change of Control,
the full amount of the Participant's Account shall be distributed to the
Participant as soon as administratively practicable following the Change of
Control, unless the Board of Directors of the Company as constituted immediately
prior to the Change of Control shall otherwise provide (and then only to the
extent it will not violate Section 409A for Amounts Subject to Section 409A) but
in no event later than ten (10) days after such Change of Control; or
(iii) Callable Rights. For Amounts Not Subject to Section
409A, the Participant may request all or a portion of his Tax-Deferred
Contributions Account, and his vested Employer Contributions Account, for
reasons other than an Unforeseeable Emergency, subject to the following
restrictions: (1) only eighty percent (80%) of the amount requested by the
Participant, less applicable tax withholding, shall be distributed to the
Participant and the remaining twenty percent (20%) of the amount requested shall
be forfeited, and (2) no further Tax-Deferred Contributions or Employer
Contributions shall be made under the Plan on behalf of the Participant.
Callable Rights shall not apply for Amounts Subject to Section 409A.
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For Amounts Subject to Section 409A, in no event shall the acceleration of the
time or schedule of any payment under the Plan be permitted, except to the
extent that such acceleration would not violate Section 409A of the Code and the
Treasury Regulations thereunder.
5.2. Form of Distribution. The distribution to the Participant shall be
made in cash either (i) in a lump sum distribution or (ii) in up to twenty (20)
consecutive quarterly installments, as elected by the Participant. Each
quarterly installment shall be equal to the remaining value of the Participant's
Account being distributed multiplied by a fraction, the numerator of which is 1
and the denominator of which is the number of quarterly installments remaining
to be paid. The Participant may elect, on a form provided by the Committee, the
form in which his Participant's Account is to be distributed under this Section
5.2; provided, however, that no such election, or change in any election, shall
be given effect unless it is made at least one year prior to the date on which
distribution of the Participant's Account commences. In the event that the
Participant fails to make an election, then distribution shall be made in the
form of a lump sum. For Amounts Subject to Section 409A, the Participant shall
elect the form of distribution of benefits on a form filed before the beginning
of the Plan Year to which they relate.
5.3. Distribution to Beneficiary. If a Participant dies before
distribution of the entire vested portion of the Participant's Accounts has been
made to him, the remaining vested portion of his Participant's Account, less
applicable withholding taxes, shall be distributed to the Participant's
Beneficiaries in a lump sum distribution in cash.
5.4. Participant Elections. For Amounts Subject to Section 409A, the
following rules shall apply with respect to any of the foregoing elections: (i)
any change in the Participant's election shall not take effect until at least 12
months after the date on which the election is made; (ii) in the case of a
payment other than on account of the Participant's death or Disability or on
account of an Unforeseeable Emergency, the first payment with respect to which
such election is made must be deferred for a period of not less than 5 years
from the date such payment otherwise would have been made; and (iii) any
election must be made not less than 12 months prior to the date that the first
payment is scheduled to be paid. For purposes of the foregoing rules, the term
"payment" refers to each separately identified amount (i.e., an amount that may
be objectively determined) to which a Participant is entitled to payment under
the Plan on a determinable date, and includes amounts applied for the benefit of
the Participant. Payments in the form of installments shall be treated as a
right to series of separate payments.
5.5. Delay in Distributions. For Amounts Subject to Section 409A,
payment of benefits under the Plan may be delayed to the extent permitted
without violating the requirements of Section 409A of the Code, or the Treasury
Regulations thereunder, as follows, provided that the Committee treats all
payments to similarly situated Participants on a reasonably consistent basis:
(i) Payments Subject to Code Section 162(m). A payment may be
delayed if the Service Recipient reasonably anticipates that if the payment was
made as scheduled, the Service Recipient's deduction with respect to such
payment would not be permitted due to the application of Section 162(m) of the
Code. In such an event, the payment shall be made in the first taxable year of
the Service Recipient in which the Service Recipient reasonably anticipates, or
should reasonably anticipate, that if the payment were made in that year, the
deduction of such payment would not be barred by the application of Section
162(m) of the Code. In the event this provision is subsequently removed from the
Plan, the removal must be effective only with respect to amounts deferred after
the Plan is amended to remove the provision.
(ii) Payments That Would Violate Federal Securities Laws or
Other Applicable Law. A payment may be delayed if the Service Recipient
reasonably anticipates that the maker of the payment would violate a Federal
securities law or other applicable law. In such an event, payment shall be made
at the earliest date at which the Service Recipient reasonably anticipates that
the making of the payment would not cause such violation.
(iii) Other Events or Conditions. A payment may be delayed
upon such other events and conditions as the IRS may prescribe in generally
applicable published guidance.
6. Administration.
6.1. Administrative Committee. The Company shall appoint a Committee
for the administration of the Plan consisting of one or more persons. Any
Committee member may, but need not, be an officer or employee of the Company and
each shall serve until his successor shall be appointed in like manner. Any
member of the Committee may resign by delivering his written resignation to the
Company. The Company may remove any member of the Committee at any time.
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6.2. Powers and Duties. The Committee generally shall be responsible
for the management, operation, interpretation and administration of the Plan.
The Committee shall:
(a) Establish procedures for allocation of responsibilities of the
Plan which are not allocated herein;
(b) Construe all terms, provisions, conditions and limitations of
the Plan and make all factual determinations relating to the Plan;
(c) Correct any defect, supply any omission, or reconcile any
inconsistency that may appear in the Plan and make all factual determinations
relating to the Plan;
(d) Determine the amount, manner, and time of payment of any
benefits hereunder and prescribe procedures to be followed by the Participants
and/or his Beneficiary to obtain benefits; and
(e) Perform such other functions and take such other actions as
may be required by the Plan or as may be necessary or advisable to accomplish
the purposes of the Plan.
The Company shall furnish the Committee with all data and information
available which the Committee may reasonably require in order to perform its
functions hereunder. The Committee may rely without question upon any such data
or information furnished by the Company. Any interpretation or other decision
made by the Committee shall be final, binding and conclusive upon all persons in
the absence of clear and convincing evidence that the Committee acted
arbitrarily and capriciously.
6.3. Agents. The Committee may appoint a Secretary who may, but need
not, be a member of the Committee, and may employ such agents for clerical and
other services, and such counsel, accountants and other professional advisors as
may be required for the purpose of administering the Plan. The Committee may
rely on all tables, valuations, reports, certificates and opinions furnished by
its agents.
6.4. Procedures. A majority of the Committee members shall constitute a
quorum for the transaction of business. No action shall be taken except upon a
majority vote of the Committee. An individual shall not vote or decide upon any
matter relating solely to himself or vote in any case in which his individual
right or claim to any benefit under the Plan is particularly involved. In any
case in which a Committee member is so disqualified to act, and the remaining
members cannot agree on an issue, the Company shall appoint a temporary
substitute member to exercise all of the powers of the disqualified member
concerning the matter in which he is disqualified.
6.5. Claims Procedure. In the event that the Participant or his
Beneficiary claims to be entitled to benefits under the Plan and the Board
determines that such claim should be denied in whole or in part, the Board
shall, in writing, notify such claimant within ninety (90) days of receipt of
such claim that his claim has been denied, setting forth the specific reasons
for such denial. Such notification shall be written in a manner reasonably
expected to be understood by the Participant or Beneficiary and shall set forth
the pertinent sections of the Plan relied on, and where appropriate, an
explanation of how the claimant can obtain review of such denial.
Within sixty (60) days after the mailing or delivery by the Committee
of such notice, such claimant may request, by mailing or delivery of written
notice to the Committee, a review and/or hearing by the Committee of the
decision denying the claim. If the claimant fails to request such a review
and/or hearing within such sixty (60) day period, it shall be conclusively
determined for all purposes of this Plan that the denial of such claim by the
Committee is correct. If such claimant requests a hearing within such sixty (60)
day period, the Committee shall designate a time (which time shall not be less
than seven (7) nor more than sixty (60) days from the date of such claimant's
notice to the Committee) and a place for such hearing, and shall promptly notify
such claimant of such time and place. A claimant or his authorized
representative shall be entitled to inspect all pertinent Plan documents and to
submit issues and comments in writing. If only a review is requested, the
claimant shall have sixty (60) days after filing a request for review to submit
additional written material in support of the claim. After such review and/or
hearing, the Committee shall promptly determine whether such denial of the claim
was correct and shall notify such claimant in writing of its determination with
sixty (60) days after such review and/or hearing or after receipt of any
additional information submitted.
6.6. Indemnification. The Company shall indemnify each Committee member
against any liability or loss sustained by reason of any act or failure to act
made in good faith, including, but not limited to, those in reliance on
certificates, reports, tables, opinions or other communications from any company
or agents chosen by the Committee in
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good faith. Such indemnification shall include attorneys' fees and other costs
and expenses reasonably incurred in defense of any action brought by reason of
any such act or failure to act.
6.7. Participant Bound. Any action with respect to the Plan taken by
the Committee, the Company or the Trustee or any action authorized by or taken
at the direction of the Committee, the Company or the Trustee shall be
conclusive upon the Participant and/or his Beneficiaries entitled to benefits
under the Plan.
6.8. Receipts and Release. Any payment to the Participant and/or his
Beneficiary in accordance with the provisions of the Plan shall, to the extent
thereof, be in full satisfaction of all claims against the Company, the
Committee and the Trustee under the Plan, and the Committee may require such
Participant or Beneficiary, as a condition precedent to such payment, to execute
a receipt and release to such effect. If the Participant and/or his Beneficiary
is determined by the Committee to be incompetent by reason of physical or mental
disability (including minority) to give a valid receipt and release, the
Committee may cause the payment or payments becoming due to such person to be
made to another person for his or her benefit without responsibility on the part
of the Committee, the Company or the Trustee to follow the application of such
funds.
7. Miscellaneous.
7.1. Unfunded Plan. The obligations of the Company under this Plan
shall be paid from the general assets of the Company and not from any particular
fund. It is intended that this Plan shall constitute an "unfunded" plan for a
select group of management or highly compensated employees under the Employee
Retirement Income Security Act of 1974, as amended. If the Company purchases any
life insurance policies, or makes any other investments, either directly or
through the Trust, such policies (and any amounts invested by the Participating
Company therein) and any other investments of the Company or the Trust shall be
subject to the claims of the Company's creditors. Nothing contained in this Plan
shall be interpreted to grant to the Participant or his Beneficiary, any right,
title or interest in any property of the Company or the Trust.
7.2. Successor Plan. In the event that the Participant ceases to
participate in this Plan, but commences participation under any other
non-qualified deferred compensation plan maintained by the Company (the
"Successor Plan"), then the Participant's Account under this Plan shall, in the
discretion of the Company and so long as the Participant consents, cease to be
governed by this Plan and instead shall be governed by the provisions of the
Successor Plan.
7.3. Impact on Other Participant Benefits. This Plan shall not be
construed to impact or cause the denial of any benefits to which the Participant
may be entitled under any other welfare or benefit plan of the Company.
7.4. Other Plans. Payments made to the Participant under this Plan
shall not be includable as salary or compensation for purposes of determining
the amount of employee benefits under any other retirement, pension,
profit-sharing or welfare benefit plans of the Company.
7.5. Tax Withholding. The Committee and/or the Trustee shall withhold
from any contribution to, amounts accumulated under, or distribution from, the
Plan or Trust such amounts as the Committee or the Trustee shall be determined
to be appropriate for Federal, State or local taxes attributable thereto.
7.6. Governing Law. To the extent not preempted by the laws of the
United States, the construction, validity and administration of the Plan shall
be governed by the laws of the Commonwealth of Massachusetts without reference
to the principles of conflicts of law therein.
7.7. No Assignment. The right to receive payment of any benefits under
the Plan shall not be transferred, assigned or pledged other than to the
Participant's Beneficiary following the Participant's death.
7.8. Severability. If any provision of this Plan is found, held or
deemed to be void, unlawful or unenforceable under any applicable statute or
other controlling law, the remainder of the Plan shall continue in full force
and effect.
7.9. Headings and Subheadings. Headings and subheadings in this Plan
are for reference only. In the event of a conflict between a heading or
subheading and the content of an article or paragraph, the content shall
control.
7.10. Gender. The masculine, as used herein, shall be deemed to include
the feminine and the singular to include plural, except where the context
requires a different construction.
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7.11. Amendment and Termination.
(a) General Rule. This Plan may be amended or terminated in any
respect at any time by the Company with the consent of the Participant;
provided, however, that no amendment or termination of the Plan shall be
effective to reduce any benefits that accrue before the adoption of such
amendment or termination. In the event that the Plan is terminated, then, to the
extent permitted without violating the requirements of Section 409A for Amounts
Subject to Section 409A, distributions shall be made to the Participant and/or
his Beneficiary of the vested portion of the Participant's Account in a single
lump sum payment as soon as practicable following such termination,
notwithstanding any elections by the Participant with regard to the timing or
form of in which benefits are to be paid. If and to the extent that the Company
does not accelerate the timing of distributions on account of the termination of
the Plan pursuant to the preceding sentence, payment of any remaining benefits
under the Plan shall be made at the same times and in the same manner as such
distributions would have been made based upon the most recent effective
elections made by Participants and Beneficiaries, and the terms of the Plan, as
in effect at the time the Plan is terminated.
(b) Termination and Liquidation Subject to Certain Conditions. If
and to the extent otherwise permitted by Section 409A and the Treasury
Regulations thereunder, the Company may terminate and liquidate the Plan if the
following requirements are met:
(i) the termination and liquidation does not occur proximate
to a downturn in the financial health of any Service Recipient;
(ii) the Company and the other Service Recipients terminate
and liquidate all agreements, methods, programs and other arrangements sponsored
by the Service Recipients that would be aggregated with any terminated and
liquidated agreements, methods, programs, and other arrangements under Section
1.409A-1(c) of the Treasury Regulations if the Participant had deferrals of
compensation under all of the agreements, methods, programs, and other
arrangements that are terminated and liquidated;
(iii) no payments in liquidation of the Plan are made within
12 months of the date the Company takes all necessary action to irrevocably
terminate and liquidate the Plan, other than payments that would be payable
under the terms of the Plan if the action to terminate and liquidate the Plan
had not been taken;
(iv) all payments are made within 24 months of the date the
Company takes all necessary action to irrevocably terminate and liquidate the
Plan; and
(v) neither the Company nor any other Service Recipient adopts
a new plan that would be aggregated with any terminated and liquidated plan
under applicable Treasury Regulations if the same Participant participated in
both plans, at any time within three years following the date that the Company
takes all necessary action to irrevocably terminate and liquidate the Plan.
7.12. No Employment Contract. This Plan does not constitute a contract
of employment or impose on the Participant or the Company any obligations to
retain the Participant as an employee, to change the status of the Participant's
employment, or to change the Company's policies regarding termination of
employment.
7.13. Limited Restriction on Setting Aside or Reserving Assets.
Notwithstanding the foregoing, for Amounts Subject to Section 409A, if the
Participant is an "applicable covered employee", then no amounts credited to
that Participant's Account shall be transferred to a trust or otherwise set
aside or reserved pursuant to any other arrangement during any "restricted
period" with respect to a single-employer defined benefit plan (a "DB Plan").
For these purposes:
(a) "restricted period" means (A) any period during which the DB
Plan is in at-risk status, as defined in Section 430(i) of the Code; (B) any
period in which the plan sponsor of the DB Plan is a debtor in a case under
Title 11, United States Code, or similar Federal or State law, and (C) the 12
month period beginning on the date which is six months before the termination
date of the DB Plan if, as of the termination date, the assets of the DB Plan
are not sufficient for pay all benefit liabilities (within the meaning of
Section 4041 of ERISA) under the DB Plan;
(b) "applicable covered employee" means any (A) covered employee
of the plan sponsor of the DB Plan; (B) covered employee of any member of a
controlled group that includes the plan sponsor, and (C) former employee who was
a covered employee at the time of termination of employment with the plan
sponsor of the DB Plan or any member of a controlled group that includes the
plan sponsor; and
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(c) "covered employee" means an individual described in Section
162(m)(3) of the Code or an individual subject to the requirements of Section
16(a) of the Securities Exchange Act of 1934.
7.14. Compliance with Section 409A. With respect to Amounts Subject to
Section 409A, and to the extent the Committee otherwise deems necessary, this
Plan shall be construed in an manner consistent with the applicable requirements
of Section 409A, and the Committee, in its sole discretion and without the
consent of any Participant or Beneficiary, may amend the provisions of this Plan
if and to the extent that the Committee determines that such amendment is
necessary or appropriate to comply with the applicable requirements of Section
409A of the Code.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed the
day and year first above written.
AGREED:
By: /s/ Roger G. Little
-----------------------------
Name: Roger G. Little
SPIRE CORPORATION
By: /s/ Christian Dufresne
-----------------------------
Name: Christian Dufresne
Title: CFO & Treasurer
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