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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
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(Name of issuer of the securities held pursuant to the plan)
ONE PATRIOTS PARK
BEDFORD, MASSACHUSETTS 01730-2396
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(Address of principal executive offices)
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SPIRE CORPORATION
401(K) PROFIT SHARING PLAN
FOR THE YEAR ENDED DECEMBER 31, 2003
TABLE OF CONTENTS
Page
Number
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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
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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
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5,943,869 4,030,554
Participant contributions receivable........... 18,545 16,954
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Total assets .................................. $ 5,962,414 $ 4,047,508
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Net assets available for benefits ............. $ 5,962,414 $ 4,047,508
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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
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1,621,540
Participant contributions ................................. 364,433
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Total additions .............................................. 1,985,973
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Deductions from net assets attributed to:
Benefits paid to participants ............................. 70,464
Administrative charges .................................... 603
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Total deductions ............................................. 71,067
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Net increase ................................................. 1,914,906
Net assets available for benefits:
Beginning of year ......................................... 4,047,508
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End of year ............................................... $ 5,962,414
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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,
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2003 2002
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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
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$1,580,667
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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,
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2003 2002
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Net assets:
Common stock - Spire Corporation ........... $1,494,579 $ 745,063
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Year ended December 31, 2003
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Changes in net assets:
Benefits paid to participants .............. $ (12,998)
Net appreciation ........................... 762,514
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$ 749,516
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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
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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
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* 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
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$ 5,943,869
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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
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Roger G. Little
Trustee
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