<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
For the Fiscal Year Ended December 31, 1996
Commission File Number
--------------------------
SPIRE CORPORATION CASH OR DEFERRED
PROFIT SHARING 401(k) PLAN
----------------------------------------------------
(Full title of the plan)
SPIRE CORPORATION
One Patriots Park
Bedford, Massachusetts 01730-2396
----------------------------------------------------
(Name and address of issuer of the securities
held pursuant to the plan)
Financial Statements
December 31, 1996
(With Independent Auditor's Report Thereon)
<PAGE> 2
SPIRE CORPORATION CASH OR DEFERRED
PROFIT SHARING 401(k) PLAN
Index to Financial Statements
Independent Auditor's Report
Statements of Net Assets Available for Plan Benefits
Statements of Changes in Net Assets Available for Plan Benefits
Notes to the Financial Statements
<PAGE> 3
[GPB LOGO] GERALD P. BONDER & COMPANY, P.C.
CERTIFIED PUBLIC ACCOUNTANTS
Six Beacon Street, Boston, Massachusetts 02108-3801 * 617/227-1442
* Fax 617/227-7071
INDEPENDENT AUDITOR'S REPORT
----------------------------
The Participants and Administrator of
The Spire Corporation Cash or Deferred
Profit Sharing 401(k) Plan:
We have audited the accompanying statements of net assets available for plan
benefits of the Spire Corporation Cash or Deferred Profit Sharing 401(k) Plan as
of December 31, 1996 and 1995, and the related statements of changes in net
assets available for plan benefits for each of the three years in the period
ended December 31, 1996. 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 generally accepted auditing
standards. 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 plan benefits at December
31, 1996 and 1995, and the changes in net assets available for plan benefits for
each of the three years in the period ended December 31, 1996, in conformity
with generally accepted accounting principles.
/s/ Gerald P. Bonder & Company, P.C.
March, 1997
Member of the Private Companies Practice Section,
American Institute of Certified Public Accountants
<PAGE> 4
SPIRE CORPORATION CASH OR DEFERRED
PROFIT SHARING 401(k) PLAN
<TABLE>
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
<CAPTION>
DECEMBER 31, 1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
- -------
Investments:
At fair value:
Common stock - Spire Corporation $ 504,776 428,690
At contract value:
Hartford Fixed Income Fund 403,174 474,614
Hartford Group Annuity Contracts 2,831,658 2,177,314
---------- ---------
Total investments 3,739,608 3,080,618
Contribution receivable - employee 33,517 35,688
Contribution receivable - employer 5,016 60,245
Participants' loan receivable 85,992 72,460
Cash 94,734 7,749
---------- ---------
NET ASSETS AVAILABLE FOR BENEFITS $3,958,867 3,256,760
========== =========
</TABLE>
See accompanying notes to the financial statements
<PAGE> 5
<TABLE>
SPIRE CORPORATION CASH OR DEFERRED PROFIT SHARING 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
YEARS ENDED DECEMBER 31,
<CAPTION>
Group Fixed Company 1996 Group
LOANS ANNUITY INCOME STOCK TOTAL LOANS ANNUITY
----- ------- ------ ----- ----- ----- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to Net Assets attributed to:
Investment income:
Interest and dividends 22,230 2,769 24,999
Interest-other 7,055 7,055 7885
Realized gains 4,426 4,426
Net appreciation(depreciation) in
fair value of investments as
determined by quoted market price 396,284 39,875 436,159 64911
------ --------- -------- ------- --------- ------- ---------
7,055 400,710 22,230 42,644 472,639 7,885 64,911
Contributions:
Employer 137,929 137,929
Employees 9,471 353,664 36,633 4,150 403,918 (44,875) 114,708
------ --------- -------- ------- --------- ------- ---------
Total additions 16,526 754,374 58,863 184,723 1,014,486 (36,990) 179,619
------ --------- -------- ------- --------- ------- ---------
Transfers 32,091 (24,344) (7,747) 2,033,383
Deductions from Net Assets attributed to:
Benefits paid to participants (2,994) (137,875) (102,551) (66,689) (310,109)
Insurance premiums paid for
participants (2,270) (2,270)
------ --------- -------- ------- --------- ------- ---------
Total deductions (2,994) (137,875) (102,551) (68,959) (312,379)
------ --------- -------- ------- --------- ------- ---------
Net increase(decrease) 13,532 648,590 (68,032) 108,017 702,107 (36,990) 2,213,002
Net assets available for plan benefits:
Beginning of year 72,460 2,213,002 474,614 496,684 3,256,760 109,450
------ --------- -------- ------- --------- ------- ---------
End of year 85,992 2,861,592 406,582 604,701 3,958,867 72,460 2,213,002
====== ========= ======== ======= ========= ======= =========
</TABLE>
<TABLE>
<CAPTION>
Fixed Mutual Company 1995 Mutual Company 1994
INCOME FUNDS STOCK TOTAL FUNDS STOCK TOTAL
------ ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to Net Assets attributed to:
Investment income:
Interest and dividends 7956 57,241 65,197 120,128 120,128
Interest-other 7,885 6,743 6,743
Realized gains 305,825 305,825
Net appreciation(depreciation) in
fair value of investments as
determined by quoted market price (28,129) 36,782 (141,221) (233,840) (375,061)
------- ---------- ------- --------- --------- -------- ---------
7,956 363,066 (28,129) 415,689 (14,350) (233,840) (248,190)
Contributions:
Employer 150,852 150,852 155,252 155,252
Employees 12,805 294,830 4,426 381,894 390,614 4,327 394,941
------- ---------- ------- --------- --------- -------- ---------
Total additions 20,761 657,896 127,149 948,435 376,264 (74,261) 302,003
------- ---------- ------- --------- --------- -------- ---------
Transfers 529,389 (2,555,022) (7,750)
Deductions from Net Assets attributed to:
Benefits paid to participants (75,536) (154,131) (41,690) (271,357) (252,550) (44,218) (296,768)
Insurance premiums paid for
participants (1,362) (1,362) (2,000) (2,000)
------- ---------- ------- --------- --------- -------- ---------
Total deductions (75,536) (154,131) (43,052) (272,719) 252,550 (46,218) (298,768)
------- ---------- ------- --------- --------- -------- ---------
Net increase(decrease) 474,614 (2,051,257) 76,347 675,716 123,714 (120,479) 3,235
Net assets available for plan benefits:
Beginning of year 2,051,257 420,337 2,581,044 2,036,993 540,816 2,577,809
------- ---------- ------- --------- --------- -------- ---------
End of year 474,614 496,684 3,256,760 2,160,707 420,337 2,581,044
======= ========== ======= ========= ========= ======== =========
</TABLE>
<PAGE> 6
SPIRE CORPORATION CASH OR DEFERRED
PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996 AND 1995
- --------------------------------------------------------------------------------
(1) DESCRIPTION OF PLAN
-------------------
The following description of the Spire Corporation (Company) Cash or
Deferred Profit Sharing 401(k) Plan (Plan) provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
(a) GENERAL
-------
The Plan is a salary reduction (401(k)) plan covering all full-time
employees of the Company who have three months of service and are age
twenty-one or older. It is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
(b) CONTRIBUTIONS
-------------
1. EMPLOYER CONTRIBUTION
---------------------
The Company will contribute to the Plan an amount equal to 40% of
an employee's contributions up to a maximum of 6% of an
employee's cash compensation. The Company's contribution will
always be used to purchase/acquire Company common stock on the
open market.
2. EMPLOYEE CONTRIBUTION
---------------------
Employees electing to participate in the Plan may defer receipt
of up to 17.5% of their compensation subject to the limitation
imposed by the Internal Revenue Code in any one calendar year, by
directing the Company to invest the deferred amount in various
investment vehicles. The investment choices are the Company's
common stock and several investment funds offered by Hartford
Life Insurance Company.
(c) PARTICIPANTS' ACCOUNTS
----------------------
Each participant's account is credited with the participant's
contribution and the Company's match contribution, plus an allocation
of (a) plan earnings, and (b) forfeitures of terminated participants'
nonvested accounts. The benefit to which a participant is entitled is
the benefit that can be provided from the participant's account.
(d) VESTING
-------
Participants are immediately vested in their voluntary contributions
plus actual earnings thereon. Vesting in other amounts is based on
years of continuous service. A participant is 100 percent vested after
six years of credited service.
<PAGE> 7
SPIRE CORPORATION CASH OR DEFERRED 2
PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(e) PAYMENTS OF BENEFITS
--------------------
On termination of service, a participant may elect to receive either a
lump-sum amount equal to the value of his or her account, or annual
installments over a period no longer than ten years.
In addition, a participant is eligible to receive distributions under
financial hardship rules for medical, housing and education needs.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
------------------------------------------
(a) USE OF ESTIMATES
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
(b) CONCENTRATION OF CREDIT RISK
----------------------------
Financial instruments which subject the Plan to concentration of
credit risk principally of guaranteed investment contracts. The Plan
restricts investment of guaranteed investment contracts to financial
institutions with high credit standing.
(3) INVESTMENTS AND ADMINISTRATION OF PLAN ASSETS
---------------------------------------------
Effective for the 1995 plan year, the trustees of the plan have entered
into a contract with Hartford Life Insurance Company (Hartford) to maintain
custody of assets of the plan. Under the terms of the contract, certain
assets of the plan are held in a Deposit Administration Account for the
benefit of the participants. The Deposit Administration Account consists
of:
(a) The Fixed Income Fund, which includes amounts allocated to Hartford's
General Investment Account. These amounts are guaranteed as to
principal and minimum interest earnings. The interest rate guaranteed
for the year ended December 31, 1996 was 5.35%.
(b) The Direct Participation Account, which consists of amounts allocated
to Separate Investment Accounts. The Separate Investment Accounts
offered include a growth stock fund, an international investment fund
and a capital appreciation stock fund. The amounts invested in the
Direct Participation Account are not guaranteed as to principal or
minimum interest earnings.
<PAGE> 8
SPIRE CORPORATION CASH OR DEFERRED 3
PROFIT SHARING 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
(3) INVESTMENTS AND ADMINISTRATION OF PLAN ASSETS (continued)
---------------------------------------------
The common shares of the Company and the mutual fund shares are valued at
fair value on December 31 of each year. Fair value is determined by using
quoted market values. The fixed income fund and group annuity contracts are
stated at contract value, which approximates fair value, as reported to the
plan by Hartford. During the years ended December 31, the Plan's
investments appreciated (depreciated) in value by $436,159 in 1996 and
$36,782 in 1995, and $(375,061) in 1994.
(4) INCOME TAXES
------------
The Plan qualifies for certain tax benefits under Section 401(a) and 401(k)
of the Internal Revenue code. The Federal tax consequences to employees
participating in the Plan, and to the Company, under present tax laws are
as follows:
Salary reductions designated by employees to be contributed to the
Plan from their compensation are not includable in employees' taxable
income and are not subject to Federal tax withholding at the time such
contributions are made.
Additionally, interest, dividends and other earnings on such
contributions are not subject to tax when earned. Employees will be
taxed on such contributions and earnings at the time such amounts are
returned as withdrawals or distributions.
(5) PLAN TERMINATION
----------------
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contribution at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of plan
termination, participants will become 100 percent vested in their accounts.
(6) EXPENSES NOT INCLUDED IN THE FINANCIAL STATEMENTS
-------------------------------------------------
The Company pays all professional fees and other expenses related to the
Profit Sharing 401(k) Plan.
