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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
________________
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 17, 2007
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SPIRE CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Massachusetts 0-12742 04-2457335
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
One Patriots Park, Bedford, Massachusetts 01730-2396
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(Address of Principal Executive Offices) (Zip Code)
(781) 275-6000
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(Registrant's telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[_] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[_] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[_] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[_] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
On May 25, 2007, Spire Corporation (the "Company") and its wholly-owned
subsidiary, Bandwidth Semiconductor, LLC ("Bandwidth"), entered into a Loan and
Security Agreement (the "Loan Agreement") with Silicon Valley Bank. Under the
Loan Agreement, for a one-year period, the Company and Bandwidth can borrow up
to $3.5 million in the aggregate to finance certain equipment purchases
(including reimbursement of certain previously-made purchases). Each advance
made under the Loan Agreement will be due thirty-six (36) months from the date
the advance is made. Advances made under the Loan Agreement will bear interest
at one half of one percentage point (0.5%) above Silicon Valley Bank's prime
rate.
Under the terms of the Loan Agreement, as long as any commitment remains
outstanding under the facility, the Company and Bandwidth must comply with an
adjusted quick ratio covenant and a minimum quarterly net income covenant. In
addition, until all amounts under the Loan Agreement are repaid, covenants under
the Loan Agreement impose restrictions on the Company's and Bandwidth's ability
to, among other things, incur additional indebtedness, create or permit liens on
the Company's or Bandwidth's assets, merge, consolidate or dispose of assets
(other than in the ordinary course of business), make dividend and other
restricted payments, make certain debt or equity investments, make certain
acquisitions, engage in certain transactions with affiliates or change the
business conducted by the Company, Bandwidth and their subsidiaries. Any failure
by the Company or Bandwidth to comply with the covenants and obligations under
the Loan Agreement could result in an event of default, in which case Silicon
Valley Bank may be entitled to declare all amounts owed to be due and payable
immediately. The Company's and Bandwidth's obligations under the Loan Agreement
are secured by substantially all of the Company's and Bandwidth's assets, with
the exception of any intellectual property owned or licensed by the Company or
Bandwidth.
ITEM 2.03. CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER
AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT.
Information set forth in Item 1.01 above is incorporated herein by
reference.
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY
ARRANGEMENTS OF CERTAIN OFFICERS.
(b) Departure of Officer
On May 22, 2007, Richard P. Thomley notified the Company that he would be
resigning as Chief Accounting Officer of the Company, effective June 8, 2007, to
pursue an opportunity with another company.
(e) Approval of the Adoption of the 2007 Stock Equity Plan
At the Company's Special Meeting in Lieu of 2007 Annual Meeting of
Stockholders held on May 17, 2007, the Company's stockholders approved the
adoption of the Company's 2007 Stock Equity Plan (the "2007 Plan").
The terms of the 2007 Plan provide for grants of stock options, stock
appreciation rights, or SARs, restricted stock, deferred stock, other
stock-related awards and performance awards that may be settled in cash, stock
or other property.
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The following is a summary of certain principal features of the 2007 Plan.
This summary is qualified in its entirety by reference to the complete text of
the 2007 Plan, which is included as an appendix to the Company's definitive
proxy statement filed with the Securities and Exchange Commission on April 13,
2007.
SHARES AVAILABLE FOR AWARDS; ANNUAL PER-PERSON LIMITATIONS
Under the 2007 Plan, the total number of shares of common stock that may be
subject to the granting of awards under the 2007 Plan shall be equal to
1,000,000 shares, plus the number of shares with respect to which awards
previously granted thereunder that terminate without being exercised; provided,
however, that the maximum number of shares that may be subject to the granting
of awards other than stock options and SARs shall not exceed 500,000.
Awards that are settled or exercised through the payment of shares will be
counted in full against the number of shares available for award under the 2007
Plan, regardless of the number of shares actually issued upon settlement or
exercise of any such award.
Awards with respect to shares that are granted to replace outstanding
awards or other similar rights that are assumed or replaced by awards under the
2007 Plan pursuant to the acquisition of a business are not subject to, and do
not count against, the foregoing limit.
In addition, the 2007 Plan imposes individual limitations on the amount of
certain awards in part to comply with Section 162(m) of the Internal Revenue
Code of 1986, as amended (the "Code"). Under these limitations, during any
fiscal year (i) the number of options or SARs granted to any one participant may
not exceed 300,000 for each type of such award, and (ii) the number of
restricted shares of common stock, deferred shares of common stock, shares as a
bonus or in lieu of other Company obligations, and other stock-based awards
granted to any one participant may not exceed 200,000 for each type of such
award, subject to adjustment in certain circumstances. The maximum amount that
may be earned by any one participant as a performance award in respect to a
performance period of one year is $1,500,000.
A committee of the Company's Board of Directors (the "Committee") is to
administer the 2007 Plan. See "Administration." The Committee is authorized to
adjust the limitations described in the preceding paragraph and is authorized to
adjust outstanding awards (including adjustments to exercise prices of options
and other affected terms of awards) in the event that a dividend or other
distribution (whether in cash, shares of common stock or other property),
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, share exchange or other
similar corporate transaction or event affects the common stock so that an
adjustment is appropriate in order to prevent dilution or enlargement of the
rights of participants. The Committee is also authorized to adjust performance
conditions and other terms of awards in response to these kinds of events or in
response to changes in applicable laws, regulations or accounting principles.
ELIGIBILITY
The persons eligible to receive awards under the 2007 Plan are the
officers, directors, employees and consultants of the Company. An employee on
leave of absence may be considered as still in the employ of the Company for
purposes of eligibility for participation in the 2007 Plan.
ADMINISTRATION
The Company's Board of Directors shall select the Committee that will
administer the 2007 Plan. All Committee members must be "non-employee directors"
as defined by Rule 16b-3 of the Securities
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Exchange Act of 1934, as amended (the "Exchange Act"), "outside directors" for
purposes of Section 162(m) of the Code, and independent as defined by the Nasdaq
Stock Market or any other national securities exchange on which any securities
of the Company may be listed for trading in the future. However, except as
otherwise required to comply with Rule 16b-3 of the Exchange Act or Section
162(m) of the Code, the Board of Directors may exercise any power or authority
granted to the Committee. Subject to the terms of the 2007 Plan, the Committee
is authorized to select eligible persons to receive awards, determine the type
and number of awards to be granted and the number of shares of common stock to
which awards will relate, specify times at which awards will be exercisable or
settled (including performance conditions that may be required as a condition
thereof), set other terms and conditions of awards, prescribe forms of award
agreements, interpret and specify rules and regulations relating to the 2007
Plan and make all other determinations that may be necessary or advisable for
the administration of the 2007 Plan. The Committee may not delegate to officers
or managers of the Company or any related entity, or committees thereof, the
authority to grant awards under the 2007 Plan.
STOCK OPTIONS AND SARS
The Committee is authorized to grant stock options, including both
incentive stock options, or ISOs, which can result in potentially favorable tax
treatment to the participant, and non-qualified stock options and SARs,
entitling the participant to receive the amount by which the fair market value
of a share of common stock on the date of exercise exceeds the grant price of
the SAR. The exercise price per share subject to an option and the grant price
of an SAR are determined by the Committee, but must not be less than the fair
market value of a share of common stock on the date of grant. For purposes of
the 2007 Plan, the term "fair market value" means the fair market value of the
common stock, awards or other property as determined by the Committee or under
procedures established by the Committee. Unless otherwise determined by the
Committee or the Company's Board of Directors, the fair market value of the
common stock as of any given date shall be the closing sales price per share of
common stock as reported on the principal stock exchange or market on which the
common stock is traded on the date as of which such value is being determined
or, if there is no sale on that date, the last previous day on which a sale was
reported. The maximum term of each option or SAR, the times at which each option
or SAR will be exercisable, and provisions requiring forfeiture of unexercised
options or SARs at or following termination of employment or service generally
are fixed by the Committee except that no option or SAR may have a term
exceeding ten years. Options may be exercised by payment of the exercise price
in cash, shares (including the withholding of shares otherwise deliverable
pursuant to the award), outstanding awards or other property (including notes or
other contractual obligations of participants to make deferred payments, so long
as such notes or other contractual obligations are not in violation of
applicable law), as the Committee may determine from time to time. Methods of
exercise and settlement and other terms of the SARs are determined by the
Committee.
RESTRICTED AND DEFERRED STOCK
The Committee is authorized to grant restricted stock and deferred stock.
Restricted stock is a grant of shares of common stock which may not be sold or
disposed of, and which may be forfeited in the event of certain terminations of
employment or service, prior to the end of a restricted period specified by the
Committee. A participant granted restricted stock generally has all of the
rights of a stockholder of the Company, unless otherwise determined by the
Committee. Except for certain limited situations set forth in the 2007 Plan,
restricted stock awards subject solely to future service requirements shall have
a restriction period of not less than three years from the date of grant. An
award of deferred stock confers upon a participant the right to receive shares
of common stock at the end of a specified deferral period, and may be subject to
possible forfeiture of the award in the event of certain terminations of
employment prior to the end of a specified restricted period. Prior to
settlement, an award of deferred stock carries no voting or dividend rights or
other rights associated with share ownership, although dividend equivalents may
be granted, as discussed below.
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DIVIDEND EQUIVALENTS
The Committee is authorized to grant dividend equivalents conferring on
participants the right to receive, currently or on a deferred basis, cash,
shares of common stock, other awards or other property equal in value to
dividends paid on a specific number of shares of common stock or other periodic
payments. Dividend equivalents may be granted alone or in connection with
another award, may be paid currently or on a deferred basis and, if deferred,
may be deemed to have been reinvested in additional shares of common stock,
awards or otherwise as specified by the Committee.
BONUS STOCK AND AWARDS IN LIEU OF CASH OBLIGATIONS
The Committee is authorized to grant shares of common stock as a bonus free
of restrictions, or to grant shares of common stock or other awards in lieu of
Company obligations to pay cash under the 2007 Plan or other plans or
compensatory arrangements, subject to such terms as the Committee may specify.
OTHER STOCK-BASED AWARDS
The Committee is authorized to grant awards under the 2007 Plan that are
denominated or payable in, valued by reference to, or otherwise based on or
related to shares of common stock. Such awards might include convertible or
exchangeable debt securities, other rights convertible or exchangeable into
shares of common stock, purchase rights for shares of common stock, awards with
value and payment contingent upon performance of the Company or any other
factors designated by the Committee, and awards valued by reference to the book
value of shares of common stock or the value of securities of or the performance
of specified subsidiaries or business units. The Committee determines the terms
and conditions of such awards. Except for certain limited situations set forth
in the 2007 Plan, other stock-based awards subject solely to future service
requirements shall be subject to restrictions for a period of not less than
three years from the date of grant.
PERFORMANCE AWARDS
The right of a participant to exercise or receive a grant or settlement of
an award, and the timing thereof, may be subject to such performance conditions
(including subjective individual goals) as may be specified by the Committee. In
addition, the 2007 Plan authorizes specific performance awards, which represent
a conditional right to receive cash, shares of common stock or other awards upon
achievement of certain pre-established performance goals and subjective
individual goals during a specified fiscal year. Performance awards granted to
persons whom the Committee expects will, for the year in which a deduction
arises, be "covered employees" (as defined below) will, if and to the extent
intended by the Committee, be subject to provisions that should qualify such
awards as "performance-based compensation" not subject to the limitation on tax
deductibility by the Company under Code Section 162(m). For purposes of Section
162(m), the term "covered employee" means the Company's chief executive officer
and each other person whose compensation is required to be disclosed in the
Company's filings with the SEC by reason of that person being among the four
highest compensated officers of the Company as of the end of a taxable year. If
and to the extent required under Section 162(m) of the Code, any power or
authority relating to a performance award intended to qualify under Section
162(m) of the Code is to be exercised by the Committee, not the Company's Board
of Directors.
Subject to the requirements of the 2007 Plan, the Committee will determine
performance award terms, including the required levels of performance with
respect to specified business criteria, the corresponding amounts payable upon
achievement of such levels of performance, termination and forfeiture provisions
and the form of settlement; provided, however, that a performance period shall
not be longer than five years. One or more of the following business criteria
for the Company, on a consolidated
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basis, or for business or geographical units of the Company (except with respect
to the total stockholder return and earnings per share criteria), shall be used
by the Committee in establishing performance goals for performance awards to
"covered employees" that are intended to qualify under Section 162(m): (1)
earnings per share; (2) revenues or margins; (3) cash flow; (4) operating
margin; (5) return on net assets, investment, capital, or equity; (6) economic
value added; (7) direct contribution; (8) net income; pretax earnings; earnings
before interest and taxes; earnings before interest, taxes, depreciation and
amortization; earnings after interest expense and before extraordinary or
special items; operating income; income before interest income or expense,
unusual items and income taxes, local, state or federal and excluding budgeted
and actual bonuses which might be paid under any ongoing bonus plans of the
Company; (9) working capital; (10) management of fixed costs or variable costs;
(11) identification or consummation of investment opportunities or completion of
specified projects in accordance with corporate business plans, including
strategic mergers, acquisitions or divestitures; (12) total shareholder return;
(13) debt reduction; (14) market share; (15) entry into new markets, either
geographically or by business unit; (16) customer retention and satisfaction;
(17) strategic plan development and implementation, including turnaround plans;
and (18) and/or the fair market value of a share of common stock. Any of the
above goals may be determined on an absolute or relative basis or as compared to
the performance of a published or special index deemed applicable by the
Committee including, but not limited to, the Standard & Poor's 500 Stock Index
or a group of companies that are comparable to the Company. The Committee shall
exclude the impact of an event or occurrence which the Committee determines
should appropriately be excluded, including without limitation (i)
restructurings, discontinued operations, extraordinary items, and other unusual
or non-recurring charges, (ii) an event either not directly related to the
operations of the Company or not within the reasonable control of the Company's
management, or (iii) a change in accounting standards required by generally
accepted accounting principles.
In granting performance awards, the Committee may establish unfunded award
"pools," the amounts of which will be based upon the achievement of a
performance goal or goals based on one or more of certain business criteria
described in the 2007 Plan (including, I.E., total stockholder return, net
income, pretax earnings, EBITDA, earnings per share, and return on investment).
During the first 90 days of a performance period, the Committee will determine
who will potentially receive performance awards for that performance period,
either out of the pool or otherwise.
After the end of each performance period, the Committee will determine (i)
the amount of any pools and the maximum amount of potential performance awards
payable to each participant in the pools and (ii) the amount of any other
potential performance awards payable to participants in the 2007 Plan. The
Committee may, in its discretion, determine that the amount payable as a
performance award will be reduced from the amount of any potential award.
OTHER TERMS OF AWARDS
Awards may be settled in the form of cash, shares of common stock, other
awards or other property, in the discretion of the Committee. The Committee may
require or permit participants to defer the settlement of all or part of an
award in accordance with such terms and conditions as the Committee may
establish, including payment or crediting of interest or dividend equivalents on
deferred amounts, and the crediting of earnings, gains and losses based on
deemed investment of deferred amounts in specified investment vehicles. The
Committee is authorized to place cash, shares of common stock or other property
in trusts or make other arrangements to provide for payment of the Company's
obligations under the 2007 Plan. The Committee may condition any payment
relating to an award on the withholding of taxes and may provide that a portion
of any shares of common stock or other property to be distributed will be
withheld (or previously acquired shares of common stock or other property be
surrendered by the participant) to satisfy withholding and other tax
obligations. Awards granted under the 2007 Plan generally may not be pledged or
otherwise encumbered and are not transferable except by will or by the
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laws of descent and distribution, or to a designated beneficiary upon the
participant's death, except that the Committee may, in its discretion, permit
transfers for estate planning or other purposes subject to any applicable
restrictions under Rule 16b-3 of the Exchange Act.
Awards under the 2007 Plan are generally granted without a requirement that
the participant pay consideration in the form of cash or property for the grant
(as distinguished from the exercise), except to the extent required by law. The
Committee may, however, grant awards in exchange for other awards under the 2007
Plan or awards under other Company plans, or other rights to payment from the
Company, and may grant awards in addition to and in tandem with such other
awards, rights or other awards.
ACCELERATION OF VESTING; CHANGE IN CONTROL
The Committee may, in its discretion, accelerate the exercisability, the
lapsing of restrictions or the expiration of deferral or vesting periods of any
award, and, if so provided in the award agreement, such accelerated
exercisability, lapse, expiration and vesting shall occur automatically in the
case of a "change in control" of the Company, as defined in the 2007 Plan
(including the cash settlement of SARs and "limited SARs" which may be
exercisable in the event of a change in control). In addition, the Committee may
provide in an award agreement that the performance goals relating to any
performance based award will be deemed to have been met upon the occurrence of
any "change in control."
For purposes of the 2007 Plan, a "change in control" will be deemed to
occur upon the earliest of the follow:
(a) The acquisition by any person of Beneficial Ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of fifty percent (50%)
or more of either (1) the then outstanding shares of common stock of the Company
(the "Outstanding Common Stock") or (2) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities") (such
Beneficial Ownership, a "Controlling Interest"); provided, however, that for
this purpose, the following acquisitions shall not constitute a Change of
Control: (v) any acquisition directly from the Company; (w) any acquisition by
the Company; (x) any acquisition by any person that as of the effective date of
the 2007 Plan owns Beneficial Ownership of a Controlling Interest; (y) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any related entities; or (z) any acquisition by any
company pursuant to a transaction which complies with clauses (1), (2) and (3)
of (c) below; or
(b) During any period of two (2) consecutive years (not including any
period prior to the effective date of the 2007 Plan) individuals who constitute
the Board on the effective date of the 2007 Plan (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the effective
date of the 2007 Plan whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a person other than the Board; or
(c) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Company or any of
its subsidiaries, a sale or other disposition of all or substantially all of the
assets of the Company, or the acquisition of assets or stock of another entity
by the Company or any of its subsidiaries (each a "Business Combination"), in
each case, unless, following such Business Combination, (1) all or substantially
all of the individuals and entities who were the Beneficial Owners,
respectively, of the Outstanding Common Stock and Outstanding Company Voting
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Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the company resulting from such Business
Combination (including, without limitation, a company which as a result of such
transaction owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination
of the Outstanding Common Stock and Outstanding Company Voting Securities, as
the case may be, (2) no person (excluding any employee benefit plan (or related
trust) of the Company or such company resulting from such Business Combination
or any person that owns a Controlling Interest as of the effective date of the
2007 Plan) beneficially owns, directly or indirectly, fifty percent (50%) or
more of the then outstanding shares of common stock of the company resulting
from such Business Combination or the combined voting power of the then
outstanding voting securities of such company except to the extent that such
ownership existed prior to the Business Combination and (3) at least a majority
of the members of the Board of Directors of the company resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or
(d) Approval by the stockholders of the Company of a complete liquidation
or dissolution of the Company.
AMENDMENT AND TERMINATION
The Company's Board of Directors may amend, alter, suspend, discontinue or
terminate the 2007 Plan or the Committee's authority to grant awards without
further stockholder approval, except stockholder approval must be obtained for
any amendment or alteration if such approval is required by law or regulation or
under the rules of any stock exchange or quotation system on which shares of the
Company's common stock are then listed or quoted. Accordingly, stockholder
approval may not necessarily be required for every amendment to the 2007 Plan
which might increase the cost of the 2007 Plan or alter the eligibility of
persons to receive awards. Stockholder approval will not be deemed to be
required under laws or regulations, such as those relating to ISOs, that
condition favorable treatment of participants on such approval, although the
Company's Board of Directors may, in its discretion, seek stockholder approval
in any circumstance in which it deems such approval advisable. Unless earlier
terminated by the Company's Board of Directors, the 2007 Plan will terminate at
such time as no shares of common stock remain available for issuance under the
2007 Plan and the Company has no further rights or obligations with respect to
outstanding awards under the 2007 Plan. In any event, unless terminated earlier
in accordance with the preceding sentence, the 2007 Plan will expire on the
tenth anniversary of its effective date.
Other than in connection with standard adjustments (as set forth in Section
10(c) of the 2007 Plan), the Committee is not permitted to (i) lower the
exercise price per share of an option or SAR after it is granted, (ii) cancel an
option or SAR when the exercise price per share exceeds the fair market value of
the underlying shares in exchange for another award (other than in connection
with substitute awards granted in connection with business combinations) or
(iii) take any other action with respect to an option or SAR that may be treated
as a repricing, without approval of the Company's stockholders.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SPIRE CORPORATION
Date: May 25, 2007 By: /s/ Christian Dufresne
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Christian Dufresne
Chief Financial Officer
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