11-K 1 form11-k_12588.txt FORM 11-K (DECEMBER 31, 2003) ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(E) OF THE SECURITIES EXCHANGE ACT OF 1934 [X] Annual Report Pursuant to Section 15(d) of the Securities Exchange Act of 1934 For the fiscal year ended December 31, 2003; or [_] Transition Report Pursuant to 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission file number: 0-12742 SPIRE CORPORATION 401(K) PROFIT SHARING PLAN (Full title of the plan) SPIRE CORPORATION ------------------------------------------------------------ (Name of issuer of the securities held pursuant to the plan) ONE PATRIOTS PARK BEDFORD, MASSACHUSETTS 01730-2396 ---------------------------------------- (Address of principal executive offices) ================================================================================ SPIRE CORPORATION 401(K) PROFIT SHARING PLAN FOR THE YEAR ENDED DECEMBER 31, 2003 TABLE OF CONTENTS Page Number ------ Independent Auditors' Report ........................................... 1 Financial Statements: Statements of Net Assets Available for Benefits .................... 2 Statement of Changes in Net Assets Available for Benefits .......... 3 Notes to Financial Statements ..................................... 4 - 6 Supplemental Schedules: Schedule G, Part III - Form 5500, Schedule of Nonexempt Transactions, For the year ended December 31, 2003 .......................... 7 Schedule H, Part IV, Item 4(i) - Form 5500, Schedule of Assets (Held at End of Year), December 31, 2003..... 8 INDEPENDENT AUDITORS' REPORT To the Trustees Spire Corporation 401(k) Profit Sharing Plan Bedford, Massachusetts We have audited the accompanying statements of net assets available for benefits of Spire Corporation 401(k) Profit Sharing Plan (the "Plan") as of December 31, 2003 and 2002 and the related statement of changes in net assets available for benefits for the year ended December 31, 2003. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2003 and 2002, and the changes in net assets available for benefits for the year ended December 31, 2003, in conformity with accounting principles generally accepted in the United States of America. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of nonexempt transactions and assets (held at end of year) are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting under the Employee Retirement Income Security Act of 1974. The supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. CARLIN, CHARRON & ROSEN LLP Worcester, Massachusetts March 3, 2004 1 SPIRE CORPORATION 401(K) PROFIT SHARING PLAN Statements of Net Assets Available for Benefits December 31, 2003 and 2002 2003 2002 ------------ ------------ ASSETS Investments: At fair value: Common stock - Spire Corporation......... $ 1,529,906 $ 760,286 Mutual funds ............................ 4,017,326 2,861,969 Participant loans ....................... 85,944 115,610 At contract value: Hartford Fixed Income Fund .............. 310,693 292,689 ------------ ------------ 5,943,869 4,030,554 Participant contributions receivable........... 18,545 16,954 ------------ ------------ Total assets .................................. $ 5,962,414 $ 4,047,508 ============ ============ Net assets available for benefits ............. $ 5,962,414 $ 4,047,508 ============ ============ See notes to financial statements. 2 SPIRE CORPORATION 401(K) PROFIT SHARING PLAN Statement of Changes in Net Assets Available for Benefits For the Year Ended December 31, 2003 Additions to net assets attributed to: Investment income: Interest and dividends ................................. $ 37,116 Interest on loans ...................................... 3,757 Net appreciation in fair value of investments........... 1,580,667 ------------ 1,621,540 Participant contributions ................................. 364,433 ------------ Total additions .............................................. 1,985,973 ------------ Deductions from net assets attributed to: Benefits paid to participants ............................. 70,464 Administrative charges .................................... 603 ------------ Total deductions ............................................. 71,067 ------------ Net increase ................................................. 1,914,906 Net assets available for benefits: Beginning of year ......................................... 4,047,508 ------------ End of year ............................................... $ 5,962,414 ============ See notes to financial statements. 3 SPIRE CORPORATION 401(K) PROFIT SHARING PLAN Notes to Financial Statements For the Year Ended December 31, 2003 1. PLAN DESCRIPTION The following description of the Spire Corporation 401(k) Profit Sharing Plan (the "Plan") provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan's provisions. GENERAL The Plan is a defined contribution plan covering all employees of Spire Corporation (the "Company") who have completed 90 days of service and are age twenty-one or older. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). CONTRIBUTIONS Each year, participants may contribute up to the maximum amount of pre-tax annual compensation as determined by the Internal Revenue Code. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Participants direct the investment of their contributions into various investment options offered by the Plan. The Plan currently offers the Company's common stock, sixteen mutual funds, and an insurance contract as investment options for participants. The Company may contribute, at the determination of the board of directors, a discretionary matching contribution on the first 15 percent of base compensation that a participant contributes to the Plan. The Company's matching contribution is invested directly in Company common stock. The Company may also make a profit sharing contribution. In 2003, the Company did not make a matching or profit sharing contribution. Contributions are subject to certain limitations. PARTICIPANT ACCOUNTS Each participant's account is credited with the participant's contributions and the Company's matching contribution (if any) and an allocation of (a) the Company's profit sharing contribution (if any), and (b) plan earnings. Allocations are based on participant earnings or account balances, as defined. The benefit to which a participant is entitled is the benefit that can be provided from the participant's vested account. VESTING Participants are immediately vested in voluntary contributions plus actual earnings thereon. Vesting in the Company matching contribution is based on years of continuous service. A participant is 100 percent vested after six years of credited service. PARTICIPANT LOANS Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to $50,000 or 50 percent of their account balance, whichever is less. The loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the plan administrator. Interest rates range from 5.0% to 10.5%. Principal and interest are repaid through payroll deductions. PAYMENTS OF BENEFITS On termination of service for any reason, a participant may elect to receive a lump-sum amount equal to the value of the participant's vested interest in his or her account or annual installments over a period of not more than a participant's and his or her beneficiary's assumed life expectancy determined at the time of distribution. Withdrawals may be made under certain other circumstances in accordance with the Plan document. 4 SPIRE CORPORATION 401(K) PROFIT SHARING PLAN Notes to Financial Statements For the Year Ended December 31, 2003 1. PLAN DESCRIPTION (CONTINUED) ADMINISTRATIVE COSTS Except for loan fees, which are charged against the borrowers' accounts, administrative costs of the Plan are paid by the Company. FORFEITED ACCOUNTS At December 31, 2003, forfeited nonvested accounts totaled $17,713. These amounts will be used to reduce future employer contributions. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value except for its insurance contract which is stated at contract value, which approximates fair value, as reported to the plan administrator by Hartford Life Insurance Company. Quoted market prices are used to value investments. Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. PAYMENT OF BENEFITS Benefits are recorded when paid. 3. INVESTMENTS Investments that represent five percent or more of the Plan's net assets are as follows: December 31, ------------------------- 2003 2002 ---------- ---------- Mutual funds Franklin Flexible Capital Growth Fund ..... $1,162,364 $ 833,760 Oppenheimer Quest Opportunity Value Fund... 1,161,689 925,599 American Washington Mutual Investors Fund.. 376,332 279,048 Hartford Fixed Income Fund ................ 310,693 292,689 Common stock Spire Corporation ......................... 1,529,906 760,286 The Plan's investments (including investments bought, sold, and held during the year) appreciated in value as follows: Mutual funds ................................. $ 799,767 Common stock ................................. 780,900 ---------- $1,580,667 ========== 5 SPIRE CORPORATION 401(K) PROFIT SHARING PLAN Notes to Financial Statements For the Year Ended December 31, 2003 4. NONPARTICIPANT-DIRECTED INVESTMENTS Information about the net assets and the significant components of the changes in net assets relating to the nonparticipant-directed investments is as follows: December 31, ------------------------- 2003 2002 ---------- ---------- Net assets: Common stock - Spire Corporation ........... $1,494,579 $ 745,063 ========== ========== Year ended December 31, 2003 ---------------------------- Changes in net assets: Benefits paid to participants .............. $ (12,998) Net appreciation ........................... 762,514 ---------- $ 749,516 ========== 5. PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants would become 100 percent vested in their employer contributions. 6. INCOME TAX STATUS The Internal Revenue Service has determined and informed the Company by a letter dated May 23, 1995, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code ("IRC"). Although the Plan has been amended since receiving the determination letter, the plan administrator believes that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 7. NON-EXEMPT TRANSACTIONS The Company is obligated to transmit payroll withholdings of employee contributions to the investment manager within fifteen business days after the month end in which the amounts are withheld. For two months in 2003, withholdings amounting to $52,951 were three days late in being transmitted. 6 SPIRE CORPORATION 401(K) PROFIT SHARING PLAN Schedule G, Part III - Form 5500 Schedule of Nonexempt Transactions For the Year Ended December 31, 2003 E.I.N. 04-2457335 Plan number 002 (a) (b) (c) (h) (i) Identity Relationship Description Cost of Current of Party to Plan of Transaction Asset Value -------------------------------------------------------------------------------- Spire Corporation Plan Sponsor Payroll withholdings $ 52,951 $ 52,951 not invested within 15 business days 7 SPIRE CORPORATION 401(K) PROFIT SHARING PLAN Schedule H, Part IV, Item 4(i) - Form 5500 Schedule of Assets (Held at End of Year) December 31, 2003 E.I.N. 04-2457335 Plan Number 002
(a) (b) (c) (d) (e) Description of Investment Identity of Issue, Including Maturity Date, Borrower, Lessor Rate of Interest, Collateral, Current or Similar Party Par or Maturity Value Cost Value ------------------------------------------------------------------------------------------------------------ * Hilliard Lyons, Inc. Spire Corporation common stock $ 646,537 $ 1,529,906 OppenheimerFunds Oppenheimer Quest Opportunity Value n/a 1,161,689 Franklin Templeton Investments Franklin Flexible Capital Growth n/a 1,162,364 American Funds Washington Mutual Investors n/a 376,332 American Funds Europacific Growth n/a 272,557 Hartford Life Insurance Co. Fixed Income Fund n/a 310,693 AIM Funds AIM Cash Reserve Shares n/a 208,863 American Funds American Balanced n/a 150,191 PIMCO Funds Pimco Innovation n/a 128,530 AIM Funds AIM Balanced n/a 49,148 Franklin Templeton Investments Franklin Small Mid-Cap Growth Fund n/a 70,418 MFS Investment Management MFS Capital Opportunities n/a 49,230 MFS Investment Management Mass Investors Growth Stock n/a 49,164 Eaton Vance Income Fund of Boston n/a 70,357 American Funds New Perspective n/a 55,320 OppenheimerFunds Oppenheimer Strategic Income n/a 33,541 Fidelity Investments Fidelity Advisor Value Strategies n/a 107,154 PIMCO Funds Pimco Total Return n/a 53,857 Hilliard Lyons, Inc. Black Rock Money Market n/a 898 Pioneer Investments Pioneer Cash Reserves n/a 17,713 Participant Loans Interest rates 5.0% to 10.5% n/a 85,944 ----------- $ 5,943,869 ===========
8 SIGNATURE The Plan. Pursuant to the requirements of the Securities Exchange Act of 1034, the trustees have duly caused this annual report to be signed on their behalf by the undersigned hereunto duly authorized. SPIRE CORPORATION 401(k) PROFIT SHARING PLAN Date: March 29, 2004 By: /s/ Roger G. Little ---------------------------------------- Roger G. Little Trustee 9