UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
(Rule
13e-4)
TENDER
OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Sypris
Solutions, Inc.
(Name
of Subject Company (Issuer))
Sypris
Solutions, Inc.
(Names
of Filing Persons (Offeror))
Options
to Purchase Common Stock, par value $0.01 per share
(Title
of Class of Securities)
871655106
(CUSIP
Number of Class of Securities (Underlying Common Stock))
Jeffrey
T. Gill
President
and Chief Executive Officer
Sypris
Solutions, Inc.
101
Bullitt Lane, Suite 450
Louisville,
Kentucky 40222
(502)
329-2000
(Name,
address, and telephone numbers of person authorized to receive notices
and
communications
on behalf of filing persons)
with
a copy to:
Robert
A. Heath, Esq.
Caryn
F. Price, Esq.
Wyatt,
Tarrant & Combs, LLP
500
W. Jefferson Street, Suite 2800
Louisville,
Kentucky 40202
(502)
589-5235
CALCULATION
OF FILING FEE
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Transaction
valuation*
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Amount
of filing fee**
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$2,316,006
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$79.52
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*
Calculated solely for purposes of determining the filing fee. This amount
assumes that options to purchase 1,143,058 shares of common stock of Sypris
Solutions, Inc., having an aggregate value of $2,316,006 as of May 14, 2007
will
be exchanged or cancelled pursuant to this offer. The aggregate value of such
options was calculated based on the Black-Scholes option pricing model.
**
The
amount of the filing fee, calculated in accordance with Rule 0-11(b) of the
Securities Exchange Act of 1934, as amended, equals $30.70 per million dollars
of the value of the transaction.
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¨
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Check
the box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously
paid.
Identify the previous filing by registration statement number, or
the Form
or Schedule and the date of its filing.
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||
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Amount
Previously Paid: N/A
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Form
or Registration No.: N/A
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||
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Filing
Party: N/A
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Date
Filed: N/A
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¨
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Check
the box if the filing relates solely to preliminary communications
made
before the commencement of a tender offer.
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||
Check
the
appropriate boxes below to designate any transactions to which the statement
relates:
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¨
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third-party
tender offer subject to Rule 14d-1.
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x
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issuer
tender offer subject to Rule 13e-4.
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¨
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going-private
transaction subject to Rule 13e-3.
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¨
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amendment
to Schedule 13D under Rule 13d-2.
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Check
the
following box if the filing is a final amendment reporting the results of the
tender offer: ¨
2
This
Tender Offer Statement on Schedule TO relates to an offer by Sypris Solutions,
Inc., a Delaware corporation (“Sypris”), to exchange (the “Exchange Offer”) all
vested, unexercised options to purchase shares of Sypris’s common stock that are
held by eligible participants that have exercise prices equal to or greater
than
$7.90 per share (the “Eligible Options”). These Eligible Options may be
exchanged for shares of common stock or for new options (the “New Options”) that
will be granted under the terms and subject to the conditions set forth in
the
Offer to Exchange Certain Outstanding Options for New Options or Shares of
Common Stock, dated May 14, 2007 (the “Offer to Exchange”). This document, as it
may be amended or supplemented from time to time, constitutes the “Disclosure
Document” and is filed as Exhibit (a)(1)(a) to this Schedule TO. An “eligible
participant” refers to all persons who are participants of Sypris or one of its
subsidiaries as of May 7, 2007 and remain participants through the date on
which
the Eligible Options are cancelled. To receive a New Option, eligible
participants must remain participants through the date on which the New Options
are granted.
The
information in the Disclosure Document, including all schedules and annexes
to
the Disclosure Document, is incorporated by reference in answer to the items
required in this Schedule TO.
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Item 1.
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Summary
Term Sheet.
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The
information set forth under Summary Term Sheet and Frequently Asked Questions
in
the Offer to Exchange is incorporated herein by reference.
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Item 2.
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Subject
Company Information.
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(a)
Name and address.
Sypris
is
the issuer of the securities subject to the Exchange Offer, and the address
and
telephone number of its principal executive office is101 Bullitt Lane, Suite
450, Louisville, Kentucky 40222, (502) 329-2000.
(b)
Securities.
The
subject class of securities consists of the Eligible Options. The actual number
of shares of common stock or New Options to be issued in the Exchange Offer
will
depend on the ratio of the Black-Scholes Merton valuations of the Eligible
Options tendered by eligible participants and accepted for exchange and
cancelled, in comparison with the value of the shares of common stock elected
by
eligible participants and/or the Black-Scholes Merton valuations of the New
Options elected by eligible participants, respectively, as applicable on May
14,
2007.
The
information set forth in the Offer to Exchange under the captions “Summary Term
Sheet and Frequently Asked Questions,” and the sections under the caption
“The Offer” entitled “Number of options; expiration date,” “Acceptance of
options or common stock for exchange and issuance of New Options” and “Source
and amount of consideration; terms of common stock or New Options” is
incorporated by reference. As of May 14, 2007, there were issued and
outstanding 1,063,058 Eligible Options.
(c)
Trading market and price.
The
information set forth in the Offer to Exchange in the section under the caption
“The Offer” entitled “Price range of common stock underlying the options” is
incorporated herein by reference.
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Item 3.
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Identity
and Background of Filing Person.
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The
filing person is the issuer. The information set forth under Item 2(a) above
and
the information set forth in the Offer to Exchange under “Schedule A.
Information Concerning the Directors and Executive Directors of Sypris
Solutions, Inc.” is incorporated herein by reference.
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Item 4.
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Terms
of the Transaction.
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(a)
Material Terms.
The
information set forth in the Offer to Exchange under the captions “Summary Term
Sheet and Frequently Asked Questions” and the sections under the caption “The
Offer” entitled “Eligibility,” “Number of options; expiration date,” “Procedures
for electing to exchange options,” “Withdrawal rights,” “Acceptance of options
for exchange and issuance of common stock or New Options,” “Conditions of the
offer,” “Price range of shares,”
“Source
and amount of consideration; terms of New Options,” “Status of options acquired
by us in the offer; ” “Legal matters; regulatory approvals,” “Material U.S.
federal income tax consequences,” and “Extension of offer; termination;
amendment” is incorporated herein by reference.
(b)
Purchases.
The
information set forth in the Offer to Exchange in the section under the caption
“The Offer” entitled “Interests of directors and executive officers;
transactions and arrangements concerning the options” is incorporated herein by
reference.
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Item 5.
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Past
Contacts, Transactions, Negotiations and Agreements.
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(e)
Agreements Involving the Subject Company’s Securities.
The
information set forth in the Offer to Exchange in the section under the caption
“The Offer” entitled “Interests of directors and executive officers;
transactions and arrangements concerning the options” is incorporated herein by
reference.
The
2004
Sypris Equity Plan and related option agreements are attached hereto as Exhibits
(d)(1) and (d)(2), respectively, and contain information regarding the subject
securities. The
Sypris Solutions, Inc. 1994 Stock Option Plan for Key Employees, as amended,
and
the form of related option agreements
are
attached hereto as Exhibits (d)(3) and (d)(4), respectively, and contain
information regarding the subject securities.
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Item 6.
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Purposes
of the Transaction and Plans or Proposals.
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(a)
Purposes
The
information set forth in the Offer to Exchange under the caption “Summary Term
Sheet and Frequently Asked Questions” and in the section under the caption “The
Offer” entitled “Purpose of the offer” is incorporated herein by reference.
(b)
Use of securities acquired.
The
information set forth in the Offer to Exchange in the sections under the caption
“The Offer” entitled “Acceptance of options for exchange and issuance of common
stock or new options” and “Status of options acquired by us in the offer
is incorporated herein by reference.
(c)
Plans.
The
information set forth in the Offer to Exchange in the sections under the caption
“The Offer” entitled “Purpose of the offer” and “Information concerning Sypris”
is incorporated herein by reference.
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Item 7.
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Source
and Amount of Funds or Other Consideration.
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(a)
Source of funds.
The
information set forth in the Offer to Exchange in the section under the caption
“The Offer” entitled “Source and amount of consideration; terms of new options”
is incorporated herein by reference.
(b)
Conditions.
The
offer
is not conditioned on any financing contingency.
(d)
Borrowed funds.
Not
applicable.
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Item 8.
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Interest
in Securities of the Subject Company.
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(a)
Securities Ownership.
4
The
information set forth in the Offer to Exchange in the section under the caption
“The Offer” entitled “Interests of directors and executive officers;
transactions and arrangements concerning the options” is incorporated herein by
reference.
(b)
Securities Transactions.
The
information set forth in the Offer to Exchange in the section under the caption
“The Offer” entitled “Interests of directors and executive officers;
transactions and arrangements concerning the options” is incorporated herein by
reference.
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Item 9.
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Persons/Assets,
Retained, Employed, Compensated or Used.
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Not
applicable.
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Item 10.
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Financial
Statements.
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(a)
Financial Information
The
information set forth in Item 8 of the Company's Annual Report on Form 10-K
for its fiscal year ended December 31, 2006 and the information set forth in
Item 1 of the Company's Quarterly Report on Form 10-Q for its fiscal quarter
ended March 31, 2007 is incorporate herein by reference. The information
set forth in the Offer to Exchange in sections under the caption “The Offer”
entitled “Information concerning Sypris” and “Additional
information” is incorporated herein by reference. Quarterly and current
reports that Sypris files with the Securities and Exchange Commission can also
be accessed electronically on the Securities and Exchange Commission’s website
at http://www.sec.gov.
(b)
Pro Forma Information
Not
applicable.
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Item 11.
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Additional
Information.
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(a)
Agreements, Regulatory Requirements and Legal Proceedings.
The
information set forth in the Offer to Exchange in the section under the caption
“The Offer” entitled “Legal matters; regulatory approvals” is incorporated
herein by reference.
(b)
Other Material Information.
Not
applicable.
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Item 12.
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Exhibits.
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||
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99.(a)(1)(a)
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Offer
to Exchange Certain Unexercised Options for New Options and Common
Stock
dated May 14, 2007
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| 99.(a)(1)(b) | Exchange Offer Letter | ||
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99.(a)(1)(c)
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Form
of Announcement of Program email
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99.(a)(1)(d)
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Standard
Terms of Awards Granted Executives Under the 2007 Stock Option Exchange
Program
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99.(a)(1)(e)
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Standard
Terms of Awards Granted Employees Under the 2007 Stock Option Exchange
Program
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||
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99.(a)(1)(f)
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Withdrawal
Form
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99.(a)(1)(g)
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Form
of Confirmation of Receipt of Election Form
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99.(a)(1)(h)
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Form
of Confirmation of Receipt of Withdrawal Form
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99.(a)(1)(i)
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Form
of Reminder of Deadline Emails
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99.(a)(1)(j)
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Stock Value Calculator | |
| 99.(a)(1)(k) | Election Form | ||
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99.(b)
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None
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99.(d)(1)*
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2004
Sypris Equity Plan
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99.(g)
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None
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99.(h)
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None
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*
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Incorporated
by reference to Sypris’s Registration Statement on Form S-8 (File No.
333-114982) filed with the Commission on April 29, 2004.
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5
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Item 13.
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Information
Required by Schedule 13E-3.
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Not
applicable.
6
Signature
After
due
inquiry and to the best of my knowledge and belief, I certify that the
information set forth in this statement is true, complete and correct.
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Sypris
Solutions,
Inc.
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/s/
Jeffrey T.
Gill
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Name: Jeffrey
T.
Gill
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Title: President
and
CEO
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Date:
May
14, 2007
7
Exhibit
Index
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Item 12.
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Exhibits.
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||
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99.(a)(1)(a)
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Offer
to Exchange Certain Unexercised Options for New Options and Common
Stock
dated May 14, 2007
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| 99.(a)(1)(b) | Exchange Offer Letter | ||
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99.(a)(1)(c)
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Form
of Announcement of Program email
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||
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99.(a)(1)(d)
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Standard
Terms of Awards Granted Executives Under the 2007 Stock Option Exchange
Program
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99.(a)(1)(e)
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Standard
Terms of Awards Granted Employees Under the 2007 Stock Option Exchange
Program
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||
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99.(a)(1)(f)
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Withdrawal
Form
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99.(a)(1)(g)
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Form
of Confirmation of Receipt of Election Form
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99.(a)(1)(h)
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Form
of Confirmation of Receipt of Withdrawal Form
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99.(a)(1)(i)
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Form
of Reminder of Deadline Emails
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99.(a)(1)(j)
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|
Stock Value Calculator | |
| 99.(a)(1)(k) | Election Form | ||
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99.(b)
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None
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99.(d)(1)*
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2004
Sypris Equity Plan
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99.(g)
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None
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99.(h)
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None
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*
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Incorporated
by reference to Sypris’s Registration Statement on Form S-8 (File
No.333-114982) filed with the Commission on April 29, 2004.
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8
Exhibit
(a)(1)(a)
SYPRIS
SOLUTIONS, INC.
OFFER
TO EXCHANGE
CERTAIN
UNEXERCISED VESTED OPTIONS
FOR
COMMON STOCK OR NEW VESTED OPTIONS
TO
PURCHASE COMMON STOCK
This
document constitutes part of the prospectus relating to the Sypris Solutions,
Inc.
2004
Sypris Equity Plan, covering securities that have been registered under the
Securities
Act of 1933, as amended.
May
14, 2007
SYPRIS
SOLUTIONS, INC.
Offer
to Exchange Certain
Unexercised,
Vested Options for Common Stock or New Vested Options
to
Purchase Common Stock
This
offer and withdrawal rights will expire at 5:00 p.m., Eastern Time, on June
12,
2007 unless we
extend
them by written notice.
By
this
offer, we are giving you the opportunity to surrender your vested outstanding,
unexercised stock options which have exercise prices equal to or greater than
$7.90 per share (the “Eligible Options”), in exchange for shares of common stock
or New Options to acquire common stock with an exercise price of $7.90 per
share. You may participate in this offer if you are an employee of Sypris
Solutions, Inc. or one of our subsidiaries (collectively referred to as Sypris,
the Company, we, our or us) and remain an employee through the date on which
we
cancel Eligible Options under this offer.
At
your
election, you may exchange all of the Eligible Options which you received on
any
single grant date having the same exercise price (each such grant of Eligible
Options which is fully vested, an “Eligible Grant”) for either (i) shares of
common stock having a fair market value equivalent to the fair market value
of
each such Eligible Grant or (ii) a New Option to purchase shares of Sypris
common stock (“New Options”) having a fair market value equivalent to the fair
market value of each such Eligible Grant . Your election to receive shares
of
common stock or New Options will become effective and final on the expiration
date. If you elect to exchange any Eligible Options, you must also surrender
any
target performance options, if any, you have been granted under any Sypris
equity plan.
Shares
of
common stock issued in exchange for cancelled Eligible Grants and each New
Option granted in exchange for other cancelled Eligible Grants are immediately
vested. Each New Option will remain exercisable through May 14, 2011.
The
exercise price of New Options will be equal to $7.90, the last reported sale
price per share of our common stock on the morning of May 14, 2007 as reported
on the Nasdaq Global Market prior to regular trading hours.
Our
common stock is traded on the Nasdaq Global Market under the symbol “SYPR.” On
the morning of May 14, 2007, the last reported sale price of our common stock
was $7.90 per share. You should evaluate current market quotes for our common
stock, among other factors, before deciding to participate in this offer.
IMPORTANT
If
you
participate in this offer, you must complete and sign the personalized election
form you receive from us, and fax it to us at fax number (502) 329-2036, email
it to andrea.leuscher@sypris.com or hand deliver it to Sypris at 101 Bullitt
Lane, Suite 450, Louisville, Kentucky 40222 before 5:00 p.m., Eastern Time,
on
June 12, 2007. Only responses that are complete, signed and actually received
by
us by the deadline will be accepted. Responses submitted by U.S. mail or Federal
Express or other express couriers are not
permitted.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the accuracy or
adequacy of this offer. Any representation to the contrary is a criminal
offense.
You
should direct questions about this offer, or requests for additional copies
of
this offer to exchange and other option exchange program documents, to Andrea
Luescher at (502) 329-2000.
ALTHOUGH
OUR BOARD OF DIRECTORS HAS APPROVED THIS OFFER, NEITHER WE NOR OUR BOARD OF
DIRECTORS MAKES ANY RECOMMENDATIONS AS TO WHETHER OR NOT YOU SHOULD TENDER
YOUR
ELIGIBLE OPTION GRANTS FOR EXCHANGE. YOU MUST MAKE YOUR OWN DECISION WHETHER
TO
TENDER YOUR ELIGIBLE OPTION GRANTS.
Offer
to Exchange dated May 14, 2007.
You
should only rely on the information contained in this offer to exchange, as
it
may be amended from time to time. You should not assume that the information
provided in this offer to exchange is accurate as of any date other than the
date as of which it is shown or, if no date is otherwise indicated, the date
of
this offer to exchange. This offer to exchange summarizes various documents
and
other information. These summaries are qualified in their entirety by reference
to the documents and information to which they relate. We have not authorized
anyone to provide you with different information. We are not making an offer
of
common stock or the New Options in any jurisdiction where the offer is not
permitted. However, we may, at our sole discretion, take any actions necessary
for us to make the offer to option holders in any of these jurisdictions.
TABLE
OF CONTENTS
|
SUMMARY
TERM SHEET AND FREQUENTLY ASKED QUESTIONS
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2
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|||||
|
THE
OFFER
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10
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1.
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Eligibility
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10
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2.
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Number
of options; expiration date
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10
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|||
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3.
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Purpose
of the offer
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11
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4.
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Procedures
for electing to exchange options
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12
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5.
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Withdrawal
rights
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13
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6.
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Acceptance
of options for exchange and issuance of common stock or New
Options
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14
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|||
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7.
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Conditions
of the offer
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15
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|||
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8.
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Price
range of shares
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17
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9.
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Source
and amount of consideration; terms of New Options
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18
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|||
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10.
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Information
concerning Sypris
|
20
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|||
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11.
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Interests
of directors and executive officers; transactions and arrangements
concerning the options
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22
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|||
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12.
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Status
of options acquired by us in the offer
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24
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13.
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Legal
matters; regulatory approvals
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24
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14.
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Material
U.S. federal income tax consequences
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25
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|||
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15.
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Extension
of offer; termination; amendment
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26
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16.
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Fees
and expenses
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27
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17.
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Additional
information
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27
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| 18. |
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Miscellaneous
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28
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SCHEDULE
A
|
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Directors
and Executive Officers of Sypris Solutions, Inc.
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The
following are answers to some of the questions that you may have about this
offer. You should carefully read this entire offer, and the election and
withdrawal forms together with their associated instructions. This offer is
made
subject to the terms and conditions of these documents as they may be amended.
The information in this summary is not complete. You should also be sure to
read
the remainder of this offer to exchange document, your election form, the
withdrawal form and the other offer documents.
GENERAL
QUESTIONS ABOUT THE OFFER
|
Q1.
|
What
is the offer?
|
|
A1.
|
This
offer is a voluntary opportunity for eligible employees to exchange
Eligible Options for common stock or New Options to purchase common
stock,
subject to certain limitations. The following is a brief summary
of the
terms of this offer:
|
Eligible
Employees
|
|
•
|
Employees
of Sypris as of May 14, 2007 who remain employees of Sypris through
the
date on which we cancel the exchanged options (we refer to this date
as
the cancellation date, and we expect it to be June 13, 2007).
|
Eligible
Options
|
|
•
|
All
outstanding, vested unexercised options held by eligible employees
with
exercise prices equal to or greater than $7.90 per share are Eligible
Options which may participate in this exchange offer.
|
|
|
•
|
If
you participate in this offer, you must exchange all Eligible Options
that
are part of any single, fully vested Eligible Grant (having the same
grant
date and the same exercise price). In addition, if you elect to exchange
any Eligible Options, you must also surrender any target performance
options, if any, which you have been granted under any Sypris equity
plan.
|
Exchange
Ratio
|
|
•
|
An
eligible employee may elect to receive shares of common stock or
New
Options to purchase shares of Sypris common stock having an equivalent
fair market value to each Eligible Grant to be cancelled in each
such
exchange, as applicable. (Section 2)
|
Issuance
of Common Stock and New Options
|
|
•
|
Your
New Options and your right to receive shares of common stock have
been
granted effective as of May 14, 2007, subject to our receipt of your
election form before the cancellation date.
|
|
|
•
|
All
New Options will be non-qualified stock options for purposes of federal
tax laws.
|
|
|
•
|
All
shares of common stock and New Options will be issued under and will
be
subject to the
|
2
|
|
•
|
terms
of our 2004 Sypris Equity Plan and the 2007 Stock Option Exchange
Program.
|
|
|
•
|
If
you resign or your employment is terminated before June 12, 2007,
your
rights under this offer will be
forfeited.
|
Exercise
Price of the New Options
|
|
•
|
The
exercise price of the New Options is $7.90.
|
Vesting
and Exercisability of Stock and New Options
|
|
•
|
Each
share of common stock and New Option granted with respect to an exchanged
option is fully vested commencing on the new grant date. All New
Options
will be exercisable through May 14,
2011.
|
|
Q2.
|
What
are the terms used in this offer?
|
|
A2.
|
The
following is a brief summary of the terms used in this offer:
|
|
•
|
“business
day”
refers to any day other than a Saturday, Sunday or a U.S. federal
holiday
and consists of the time period from 12:01 a.m. through 12:00 midnight,
Eastern Time.
|
|
•
|
“cancellation
date”
refers to the first business day after the expiration date. This
is the
date when exchanged options will be cancelled. We expect that the
cancellation date will be June 13, 2007. If the expiration date is
extended, then the cancellation date will be similarly extended.
|
|
•
|
“exchanged
option”
refers to any fully vested option that you exchange pursuant to this
offer.
|
|
•
|
“expiration
date”
refers to the date that this offer expires. We expect that the expiration
date will be June 12, 2007 at 5:00 p.m., Eastern Time. We may extend
the
expiration date at our sole discretion; any extension will be made
by
written notice. If we extend the offer, the term “expiration date” will
refer to the time and date at which the extended offer expires.
|
|
•
|
“New
Options”
refers to options issued pursuant to this offer that replace your
exchanged options.
|
|
•
|
“offer”
refers to this offer to exchange all of your vested outstanding,
unexercised options that have exercise prices equal to or greater
than
$7.90 per share, for New Options or an award of common stock subject
to
the terms and conditions described in this Offer to Exchange Certain
Unexercised Vested Options for Common Stock or New Vested Options
to
Purchase Common Stock (which is generally referred to as the offer
to
exchange).
|
|
•
|
“offer
period”
refers to the period from the first business day of this offer to
the
expiration date. We expect that this period will begin on May14,
2007 and
expire on June 12, 2007.
|
|
•
|
“common
stock”
refers to common stock of Sypris issued pursuant to this offer that
replace your exchanged options.
|
|
•
|
“Sypris,
we, our or us”
refers to Sypris Solutions, Inc. and its subsidiaries.
|
|
•
|
“SEC”
refers to the U.S. Securities and Exchange Commission.
|
3
|
Q3.
|
Why
is Sypris making this offer?
|
|
A3.
|
We
believe that this offer will foster retention of our employees and
better
align the interests of our employees and stockholders to maximize
stockholder value. We issued the currently outstanding options to
motivate
our employees to perform at high levels and provide an effective
means of
recognizing employee contributions to our success. Many of our
outstanding, unexercised options have exercise prices that are
significantly higher than the current market price for our stock.
These
options are commonly referred to as being “underwater.” By making this
offer, we intend to provide eligible employees with the opportunity
to own
shares of our common stock or options to purchase shares of our common
stock that are structured to help assure that employees receive
appropriate incentives. (Section 3)
|
|
Q4.
|
Who
may participate in this offer?
|
|
A4.
|
You
may participate in this offer if you are an employee of Sypris at
the time
of this offer and you remain an employee of Sypris through the expiration
date. If you resign or your employment is terminated before June
12, 2007,
your rights under this offer will be forfeited.
|
|
Q5.
|
How
do I participate in this offer?
|
|
A5.
|
If
you choose to participate in this offer, you must do the following
before
5:00 p.m., Eastern Time, on June 12, 2007:
|
|
|
1.
|
Properly
complete and sign the personalized election form that you will receive
from us.
|
|
|
2.
|
Deliver
the completed and signed election form to us either via facsimile
at (502)
329-2036, by email to andrea.luescher@sypris.com or by hand at 101
Bullitt
Lane, Suite 450, Louisville, Kentucky 40222. Election forms submitted
by
U.S. mail or Federal Express or other express couriers are not
permitted.
|
You
will
receive a personalized election form by mail at your home address that lists
all
of your eligible options.
This
is a
one-time offer, and we will strictly enforce the election period. We reserve
the
right to reject any options tendered for exchange that we determine are not
in
appropriate form, that we determine are unlawful to accept or otherwise
ineligible for participation. Subject to the terms and conditions of this offer,
we will accept all properly tendered options promptly after the expiration
of
this offer.
We
may
extend this offer. If we extend this offer, we will send an email notice or
other written notice to all eligible employees disclosing the extension no
later
than 5:00 p.m., Eastern Time, on the business day following the previously
scheduled expiration date. We will file a copy of such notice with the SEC.
The
delivery of all documents, including election forms, is at your risk. We intend
to send confirmation of the receipt of your election form and/or any withdrawal
form to you by email within three (3) business days of receipt. If you have
not
received a confirmation, you must confirm that we have received your election
form and/or any withdrawal form.
4
|
Q6.
|
Am
I required to participate in this offer?
|
|
A6.
|
No.
Participation in this offer is completely voluntary. However, if
you
participate in this offer with regard to your Eligible Options, then
you
must exchange all vested options in each Eligible Grant that you
elect to
exchange. In addition, if you elect to exchange any Eligible Options,
you
must also surrender any target performance options, if any, you have
been
granted under any Sypris equity
plan.
|
|
Q7.
|
What
happens to my eligible options if I choose not to participate?
|
|
A7.
|
If
you choose not to participate, your existing options will (i) remain
outstanding until they expire by their terms, and (ii) retain their
current exercise price.
|
|
Q8.
|
Can
I change my mind and withdraw all of my options from this offer?
|
|
A8.
|
Yes.
You may change your mind after you have submitted an election form
and
withdraw from the offer all of the options you previously elected
for
exchange at any time before the expiration date. If we extend the
expiration date, you may withdraw your election to exchange all of
the
options you previously elected to exchange at any time until the
extended
offer expires. You may change your mind as many times as you wish,
but you
will be bound by the last properly submitted election or withdrawal
form
we receive before the expiration date. In addition, if we have not
formally accepted your options for exchange by 5:00 p.m., Eastern
Time, on
June 12, 2007, you may withdraw your tendered options at any time
thereafter. (Section 5)
|
|
Q9.
|
How
do I withdraw my election?
|
|
A9.
|
To
withdraw your election to exchange all of the options you previously
elected to exchange, you must do the following before the expiration
date:
|
|
|
1.
|
Properly
complete and sign the withdrawal form.
|
|
|
2.
|
Deliver
the completed and signed withdrawal form to us either via facsimile
at
(502) 329-2036, by email to andrea.luescher@sypris.com or by hand
at 101
Bullitt Lane, Suite 450, Louisville, Kentucky
40222.
|
|
Q10.
|
What
if I withdraw my election and then decide again that I want to participate
in this offer?
|
|
A10.
|
If
you have withdrawn all of the options you previously elected to exchange
and then decide again that you would like to exchange all of those
options, you may re-elect to participate by submitting a new, properly
completed election form that is signed and dated after the date of
your
withdrawal form but is submitted on or before the expiration date
of the
offer.
|
|
Q11.
|
Why
can’t you just grant me additional shares of common stock or options?
|
|
A11.
|
We have a limited number of shares of common
stock and
options that we may grant without additional stockholder approval.
Granting a sufficient number of shares of stock or stock options
to
employees to allow us to achieve the same benefits for employees
and
stockholders that this offer is intended to achieve could have a
severe
negative impact on the Company in terms of future dilution and reduced
earnings per share. This offer allows us to conserve the current
reserves
under our equity incentive plan and to maintain the flexibility we
need to
provide ongoing grants, award additional options to recognize employee
performance and grant stock or options to newly hired
employees.
|
5
|
We
believe this offer is in the best interests of our employees and
stockholders, providing an appropriate incentive for and commitment
by our
employees through stock options and conserving options and shares
for
future grants. |
|
|
Q12.
|
If
I participate in this offer, may I receive any common stock or option
grants between now and the expiration date?
|
|
A12.
|
Yes.
If you participate in this offer, you may receive new common stock
or
option grants between now and the expiration of this offer. However,
we
have no current plans to grant restricted stock or options to employees
except in connection with this offer and in connection with newly
hired
employees. Therefore, you should not expect to receive any restricted
stock or option grants between now and the expiration
date.
|
|
Q13.
|
If
you extend the offer, how will you notify me?
|
|
A13.
|
If
we extend this offer, we will send an email or other written notice
to all
eligible employees disclosing the extension no later than 5:00 p.m.,
Eastern Time, on the next business day following the previously scheduled
expiration date. We will file a copy of such notice with the
SEC.
|
|
Q14.
|
How
will you notify me if the offer is changed?
|
|
A14.
|
If
we materially change the offer, we will send an email or other written
notice to all eligible employees disclosing the change no later than
5:00
p.m., Eastern Time, on the next business day following the day we
change
the offer. We will file a copy of such notice with the
SEC.
|
|
Q15.
|
Will
I have to pay taxes in connection with the offer if I participate?
|
|
A15.
|
If
you participate in the offer and you are a tax resident of the U.S.,
you
should not be required under current U.S. law to recognize income
for U.S.
federal income tax purposes at the time of the exchange of your Eligible
Options for New Options, however you
will recognize income for U.S. tax purposes for elections to receive
new
common stock.
Tax consequences may vary depending on each individual option holder’s
circumstances.
You
should consult with your own tax advisor to determine the personal
tax
consequences to you of participating in this
offer.
|
|
Q16.
|
Is
there any chance Sypris will not proceed with this offer?
|
|
A16.
|
The
completion of this offer is subject to a number of customary conditions
that are described in Section 7 of this offer. If any of these conditions
are not satisfied, we will not be obligated to exchange properly
tendered
eligible options, though we may do so at our sole discretion.
|
In
addition, prior to the expiration date, we may change the offer for any or
no
reason.
|
Q17.
|
Are
you making any recommendation as to whether I should exchange my
eligible
options?
|
|
A17.
|
No.
We are not making any recommendation as to whether you should accept
this
offer. You must make your own decision as to whether or not to participate
in this offer. For questions regarding personal tax implications
or other
investment-related questions, you should consult with your own legal
counsel, accountant and/or financial
advisor.
|
6
SPECIFIC
QUESTIONS ABOUT THE EXCHANGED OPTIONS
|
Q18.
|
If
I participate in this offer, do I have to exchange all of my options?
|
|
A18.
|
Yes.
If you choose to participate in this offer with respect to any particular
Eligible Grant, you must exchange the entire vested portion of that
grant
that remains outstanding and
unexercised.
|
|
Q19.
|
When
will my exchanged options be cancelled?
|
|
A19.
|
Your
exchanged options will be cancelled on the first business day following
the expiration date. We refer to this date as the cancellation date.
We
expect that the cancellation date will be June 13, 2007 unless the
offer
period is extended.
|
|
Q20.
|
Can
I exchange restricted stock grants, unvested options or in the money
options?
|
|
A20.
|
No.
This offer relates only to unexercised, vested and underwater Sypris
options. You may not exchange restricted stock grants or shares of
Sypris
common stock in this offer.
|
|
21.
|
Will
I be required to give up all of my rights under the cancelled options?
|
|
A21.
|
Yes.
Once we have accepted your tendered options for exchange, your exchanged
options will be cancelled and you will no longer have any rights
under
those options. We intend to cancel all exchanged options on the first
business day following the cancellation date. We expect that the
cancellation date will be June 13,
2007.
|
|
Q22.
|
How
does Sypris determine whether my election form has been properly
completed
and my options have been properly tendered?
|
|
A22.
|
We
decide, in our discretion, whether an election form (or withdrawal
form)
has been properly completed and an option has been properly tendered,
which means that we determine all questions about the validity, form,
eligibility (including time of receipt), and acceptance of any exchanged
options. Any determinations we make on these matters are
final.
|
|
Q23.
|
Will
I receive confirmation that my exchanged options have been cancelled?
|
|
A23.
|
Yes,
Sypris will deliver to you confirmation of the cancellation of the
options
you elect to exchange promptly after the expiration date.
|
SPECIFIC
QUESTIONS ABOUT THE COMMON STOCK AND NEW OPTIONS
|
Q24.
|
When
will I receive my common stock or New Options?
|
|
A24.
|
We
will issue physical shares of the common stock to you shortly after
the
cancellation date. Your New Options are represented by the 2007 Stock
Option Exchange Program and your Grant
Agreement.
|
We
may
choose to suspend this offer if we believe, in our sole discretion, that there
are unusual circumstances surrounding trading in Sypris’s common stock on a
given date or there are other significant factors. Such unusual circumstances
or
significant factors that we might take into account in determining to grant
the
New Options on a date other than the cancellation date include, without
limitation: (i) a halt in the trading of Sypris’s common stock by the Nasdaq
Stock Market; (ii)
8
|
unusually high or low trading volume in Sypris’s common
stock; (iii) the escalation of worldwide or national hostilities
as a
result of an act of war or terrorism; (iv) the recent dissemination
of any
material, non-public information by Sypris; (v) the recent dissemination
of information that causes major stock market averages to fluctuate
significantly; (vi) the occurrence of a catastrophic or other similar
event that has a material impact on Sypris’s business; and (vii) there is
a pending announcement with a third party regarding a significant
corporate transaction involving Sypris.
|
|
|
Q25.
|
How
many shares of common stock or New Options will I receive for the
options
that I exchange?
|
|
A25.
|
This
offer is not an even exchange. The ratio of shares subject to Eligible
Options cancelled to common stock and New Options issued is calculated
using the Black-Scholes Merton Option Valuation Model. These exchange
ratios are intended to result in the issuance of common stock and
New
Options that have a fair value approximately equivalent to the fair
value
of the cancelled options they replace as of May 14, 2007, determined
using
an option valuation model.
|
|
Q26.
|
What
will the exercise price of my New Options be?
|
|
A26.
|
The
exercise price of New Options will be equal to the last reported
sale
price per share of our common stock on the morning of May 14, 2007,
prior
to regular trading hours.
|
|
Q27.
|
After
the grant of my New Options, what happens if my options again end
up
underwater?
|
|
A27.
|
We
cannot protect against your New Options ending up underwater. This
offer
is intended as a one-time offer, and even if your New Options again
end up
underwater we do not expect to implement such an exchange program
in the
future. As your stock options are valid for 4 years from the date
of the
grant, subject to continued employment, the price of our common stock
may
appreciate over the long term even if the exercise price of your
options
is above the trading price of our common stock for some period of
time.
However, we can provide no assurance as to the price of our common
stock
at any time in the future.
|
|
Q28.
|
Are
there any restrictions on when I can exercise any of the New Options
that
are granted to me?
|
|
A28.
|
No.
Your New Options are fully vested.
|
|
Q29.
|
Will
my New Options be incentive stock options or non-qualified stock
options?
|
|
A29.
|
All
New Options will be non-qualified stock options for U.S. federal
income
tax purposes.
|
We
recommend that you read the tax discussion in this offer to exchange and discuss
the personal tax consequences of non-qualified stock options with your
financial, legal and/or tax advisors.
|
Q30.
|
If
I currently have incentive stock options, will my New Options also
be
incentive stock options?
|
|
A30.
|
No.
All New Options will be non-qualified stock options for purposes
of U.S.
federal tax laws.
|
8
|
Q31.
|
Will
the terms and conditions of my New Options be the same as my exchanged
options?
|
|
A31.
|
The
terms and conditions of your New Options may vary from the terms
and
conditions of your exchanged options, but such changes generally
will not
substantially and adversely affect your rights. However, your New
Options
will be non-qualified stock options for purposes of U.S. federal
tax laws
regardless of whether the exchanged options were incentive stock
options
or non-qualified stock options. Your New Options will also have new
exercise price and will vest immediately.
|
|
Q32.
|
Will
I receive a new grant agreement?
|
|
A32.
|
No.
The 2007 Stock Option Exchange Program and your Grant Agreement will
govern the terms of any New
Options.
|
|
Q33.
|
When
will my New Options expire?
|
|
A33.
|
Your
New Options will expire on May 14, 2011, or earlier if your employment
with Sypris terminates.
|
|
Q34.
|
What
if my employment with Sypris ends before cancellation date?
|
|
A34.
|
Your
employment with Sypris is on an at-will basis unless expressly provided
otherwise by the terms of your employment agreement, if any, and
nothing
in this offer modifies or changes the nature of your employment with
Sypris. If your employment with Sypris ends for any reason before
the
cancellation date, you will not have a right to any new shares of
common
stock or New Options. (Section 1)
|
|
35.
|
Who
can I talk to if I have questions about the offer, or if I need additional
copies of the offer documents?
|
|
A35.
|
For
additional information or assistance, you should contact Andrea Luescher
at (502) 329-2000, e-mail:
andrea.luescher@sypris.com.
|
|
How
will the fair value of my New Options be
calculated?
|
|
A36.
|
The
fair value of each New Options ranges from $2.51 to $2.80 based on
the
Black-Scholes Merton Option Valuation Model acceptable under U.S.
generally accepted accounting principles. The Black-Scholes Merton
Option
Valuation Model is a complex Nobel Prize winning valuation model
which
uses assumed stock price, volatility, estimated term, dividend yield
and
U.S. bond yields for the date of the option to complete our estimated
fair
value. Other valuation models exist and may result in different estimates
of fair value, however, Sypris uses the Black-Scholes Merton Option
Valuation Model internally for its accounting
practices.
|
|
Q37.
|
How
will the value of my current options available for exchange be
determined?
|
|
A37.
|
Sypris
has computed the value for each current option grant using the
Black-Scholes Merton Option Valuation
Model.
|
|
Q38.
|
How
will the value of common stock be determined?
|
|
A38.
|
The
fair value of common stock used for exchange is $7.90, the last reported
sale price per share of
|
9
our
common stock on the morning of May 14, 2007, prior to regular trading
hours.
|
Eligibility.
|
You
are
an “eligible employee” if you are an employee of Sypris or its subsidiaries and
you remain employed by Sypris or a successor entity through the date on which
your exchanged options are cancelled.
If
you
resign or your employment is terminated before June 13, 2007, your rights under
this offer will be forfeited. This means that if you quit, with or without
a
good reason, or die or we terminate your employment with or without cause,
before the cancellation date, you forfeit all of your rights under this
offer.
Unless
expressly provided by the terms of your employment agreement, if any, your
employment with Sypris will remain “at-will” and can be terminated by you or us
at any time, with or without cause or notice. Nothing in this offer modifies
or
changes the nature of your employment with Sypris.
|
Number
of options; expiration date.
|
Subject
to the terms and conditions of this offer, we will accept for exchange
outstanding, vested unexercised options with exercise prices equal to or greater
than $7.90 per share that are held by eligible employees and that are properly
elected to be exchanged, and are not validly withdrawn, before the expiration
date.
If
you
choose to participate in this offer with respect to any particular eligible
option, you must exchange the entire portion of each Eligible Grant that remains
outstanding, vested and unexercised. In addition, if you elect to exchange
any
Eligible Options, you must also surrender any target performance options, if
any, you have been granted under any Sypris equity plan.
No
shares
of Sypris common stock, including common stock acquired upon exercise of Sypris
options, may be exchanged in this offer.
Subject
to the terms of this offer and upon our acceptance of your properly tendered
options, your exchanged options will be cancelled. In exchange you will have
the
right, at your election, to receive shares of common stock or to accept the
New
Options at exchange ratios intended to result in the issuance of stock or
options that have a fair value approximately equivalent to the fair value of
the
cancelled options they replaced as of May 14, 2007, determined using the
Black-Scholes Merton Option Valuation Model.
All
New
Options will be subject to the terms of our 2004 Sypris Equity Plan and to
and
the 2007 Stock Option Exchange Program and the new grant agreement between
you
and Sypris dated May 14, 2007 (the “Grant Agreement”). Our 2004 Sypris Equity
Plan, the 2007 Stock Option Exchange Program and the form of your Grant
Agreement are attached as an exhibit or incorporated by reference to the
Schedule TO with which this offer has been filed.
The
expiration date for this offer will be 5:00 p.m., Eastern Time, on June 12,
2007, unless we extend the offer by written notice. We may, in our sole
discretion, extend the offer, in which event the expiration date shall refer
to
the latest time and date at which the extended offer expires. See Section 15
of
this offer for a description of our rights to extend, terminate and amend the
offer.
10
We
believe that this offer will foster retention of our employees and better align
the interests of our employees and stockholders to maximize stockholder value,
despite the current difficulties that exist in our key markets and the financial
restructuring of certain of our major customers. We issued the currently
outstanding options to motivate our employees to perform at high levels and
provide an effective means of recognizing employee contributions to our success.
Many of our outstanding, unexercised options have exercise prices that are
significantly higher than the current market price for our stock. These options
are commonly referred to as being “underwater.” By making this offer, we intend
to provide eligible employees with the opportunity to own shares of common
stock
or options that may more quickly increase in value. However, there can be no
assurance that the shares of common stock or New Options will provide any such
increase in value.
We
chose
to make this offer instead of simply granting more options for a number of
reasons. Because of the large number of outstanding underwater options, granting
additional options covering the same number of shares of common stock as the
outstanding eligible options would have severe negative impact on our dilution,
outstanding shares and earnings per share. Additionally, we have a limited
number of shares and options that we may grant without stockholder approval,
and
therefore our current reserves must be conserved for ongoing grants and new
hires. We believe this program is in the best interests of our employees and
stockholders because it provides our employees with appropriate incentives
and
conserves shares and options for future grants. This offer was also designed
to
include a $7.90 per share exercise price threshold. This was done because we
expect that options with exercise prices below $7.90 per share will continue
to
provide the proper incentives to our employees to continue to perform at high
levels. The Compensation Committee of the board of directors of Sypris
determined that the $7.90 threshold was appropriate after analyzing the exercise
prices of the unexercised options in light of the recent performance of Sypris’s
common stock. In its entirety, this offer allows us to conserve the current
reserves under our equity incentive plan and maintain the flexibility we need
to
provide ongoing grants, award additional options to recognize employee
performance and grant options to newly hired employees.
Except
as
otherwise disclosed in this offer or in our SEC filings, Sypris presently has
no
plans, proposals or negotiations that relate to or would result in:
|
|
•
|
any
extraordinary transaction, such as a merger, reorganization or liquidation
involving Sypris;
|
|
|
•
|
any
purchase, sale or transfer of a material amount of our assets,
|
|
|
•
|
any
material change in our present dividend policy, or our indebtedness
or
capitalization,
|
|
•
|
any
change in our present board of directors, including a change in the
number
or term of directors or to fill any existing board vacancies,
|
|
|
•
|
any
other material change in our corporate structure or business,
|
|
|
•
|
our
common stock being delisted from the Nasdaq Global Market,
|
|
|
•
|
our
common stock becoming eligible for termination of registration pursuant
to
Section 12(g)(4) of the Exchange Act,
|
|
|
•
|
the
suspension of our obligation to file reports under Section 15(d)
of the
Exchange Act,
|
11
|
|
•
|
the
acquisition by any person of additional securities of Sypris or the
disposition of any of our securities, or
|
|
|
•
|
any
change in our certificate of incorporation or bylaws or other actions
that
may impede the acquisition of control of us by any person.
|
Neither
we nor our board of directors makes any recommendation as to whether you should
accept this offer, nor have we authorized any person to make any such
recommendation. You should evaluate carefully all of the information in this
offer and consult your own investment and tax advisors. You must make your
own
decision about whether to participate in this offer.
Proper
Election to Exchange Options.
Participation
in this offer is voluntary. To participate in this offer, you must properly
complete, sign and deliver the election form to us via facsimile at (502)
329-2036, or email to andrea.luescher@sypris.com, or by hand at 101 Bullitt
Lane, Suite 450, Louisville, Kentucky 40222, along with any other required
documents before the expiration date. Election forms submitted by U.S. mail
or
Federal Express or other express couriers are not
permitted. The expiration date will be 5:00 p.m., Eastern Time, on June 12,
2007, unless we extend the offer by written notice. You will receive by email
and mail at your home address an election form that lists all of your eligible
options and all options that you are required to exchange if you elect to
participate in the offer. If you believe that the personalized election form
is
incomplete or inaccurate, please contact us as soon as possible. If any
corrections or additions are made, we will promptly send you a revised election
form. You will be bound by the last properly tendered election form and/or
withdrawal form we receive before the expiration date.
If
you
choose to participate in this offer with respect to any Eligible Grant, you
must
exchange the entire portion of the Eligible Grant that remains outstanding,
vested and unexercised.
If
you
sign your election form, the signature must correspond with your name as written
on the face of the notice of grant to which the exchanged options are subject
without alteration, enlargement or any change whatsoever. If your name has
been
legally changed since you received your notice of grant, please submit proof
of
the legal name change. If your election form is signed by a trustee, executor,
administrator, guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, that person should
so
indicate when signing, and proper evidence satisfactory to Sypris of the
authority of that person to act in that capacity must be submitted with this
election form.
The
delivery of all documents, including election forms, is at your risk. We intend
to confirm the receipt of your election form within three (3) business days.
If
you have not received a confirmation, you must confirm that we have received
your election form and/or any withdrawal form.
Our
receipt of your election form is not by itself an acceptance of your options
for
exchange. For purposes of this offer, we will be deemed to have accepted options
for exchange that are validly elected to be exchanged and are not properly
withdrawn as of the time when we give written notice to the option holders
generally of our acceptance of options for exchange. We may issue this notice
of
acceptance by press release, email or other methods of communication. Options
accepted for exchange will be cancelled on the cancellation date, which we
presently expect will be June 13, 2007.
12
Determination
of validity; rejection of options; waiver of defects; no obligation to give
notice of defects.
We
will
determine, in our sole discretion, whether an election form or withdrawal form
has been properly completed and an option has been properly tendered, including
all questions as to the validity, form, eligibility (including
time of receipt) and acceptance of any options. Our determination of these
matters will be final and binding on all parties. We reserve the right to reject
any election form or withdrawal form or any options elected to be exchanged
or
withdrawn that we determine are not in appropriate form, that we determine
are
unlawful to accept or otherwise ineligible for participation. We will accept
all
options we deem properly tendered that are not validly withdrawn. We also
reserve the right to waive any of the conditions of the offer or any defect
or
irregularity in any tender of any particular options or for any particular
option holder, provided that if we grant any such waiver, it will be granted
with respect to all option holders and tendered options. No tender of options
will be deemed to have been properly made until all defects or irregularities
have been corrected by the tendering option holder or waived by us. Neither
we
nor any other person is obligated to give notice of any defects or
irregularities in tenders, nor will anyone incur any liability for failure
to
give any notice. This is a one-time offer. We will strictly enforce the election
period, subject only to an extension that we may grant in our sole discretion.
Our
acceptance constitutes an agreement.
Your
election to exchange options through the procedures described above constitutes
your acceptance of the terms and conditions of this offer. Our
acceptance of your options for exchange will constitute a binding agreement
between Sypris and you upon the terms and subject to the conditions of this
offer.
You
may
withdraw all of the options that you previously elected to exchange only in
accordance with the provisions of this section.
You
may
withdraw all of the options that you previously elected to exchange at any
time
before the expiration date, which is expected to be 5:00 p.m., Eastern Time,
on
June 12, 2007, unless extended by written notice. If we extend the offer, you
may withdraw your options at any time until the extended expiration
date.
In
addition, although we intend to accept all validly tendered options promptly
after the expiration of this offer, if we have not accepted your options by
9:00
p.m., Eastern Time, on June 13, 2007, you may withdraw your options at any
time
thereafter.
To
validly withdraw all of the options that you previously elected to exchange,
you
must deliver to us via facsimile at (502) 329-2-36, or email to
andrea.luescher@sypris.com or by hand to 101 Bullitt Lane, Suite 450,
Louisville, Kentucky 40222, in accordance with the procedures listed in Section
4 above, a signed and dated withdrawal form with the required information,
while
you still have the right to withdraw the options. Withdrawal forms submitted
by
U.S. mail or Federal Express or other express couriers are not
permitted.
If
you
sign your withdrawal form, the signature must correspond with your name as
written on your notice of grant to which the exchanged options are subject
without alteration, enlargement or any change whatsoever. If your name has
been
legally changed since you received your notice of grant, please submit proof
of
the legal name change. If your withdrawal form is signed by a trustee, executor,
administrator,
13
You
may
not rescind any withdrawal. All options that you withdraw will be deemed not
properly tendered for purposes of the offer, unless you properly re-elect to
exchange all options before the expiration date. To re-elect to exchange all
of
your withdrawn options, you must submit a new election form to Sypris before
the
expiration date by following the procedures described in Section 4 of this
offer. This new election form must be properly completed, signed and dated
after
your original election form and after your withdrawal form. You will be bound
by
the last properly tendered election form or withdrawal form we receive before
the expiration date.
Neither
we nor any other person is obligated to give you notice of any defects or
irregularities in any withdrawal form or any new election form, nor will anyone
incur any liability for failure to give any notice. We will determine, in our
sole discretion, all questions as to the form and validity, including time
of
receipt, of withdrawal forms and new election forms. Our determination of these
matters will be final and binding.
The
delivery of all documents, including any withdrawal forms and any new election
forms, is at your risk. We intend to confirm the receipt of your withdrawal
form
within three (3) business days. If you have not received a confirmation, you
must confirm that we have received your withdrawal form.
|
Acceptance
of options for exchange and issuance of common stock or new options.
|
Upon
the
terms and conditions of this offer and promptly following the expiration date,
we will accept for exchange and cancel all eligible options properly elected
for
exchange and not validly withdrawn before the expiration date. Once the options
are cancelled, you no longer will have any rights with respect to those options.
Subject to the terms and conditions of this offer, if your options are properly
tendered by you for exchange and accepted by us, these options will be cancelled
as of the cancellation date, which we anticipate to be June 13, 2007.
For
purposes of the offer, we will be deemed to have accepted options for exchange
that are validly tendered and are not properly withdrawn as of the time when
we
give written notice to the option holders generally of our acceptance for
exchange of the options. This notice may be made by press release, email or
other method of communication. Subject to our rights to terminate the offer,
discussed in Section 15 of this offer, we currently expect that we will accept
promptly after the expiration date all properly tendered options that are not
validly withdrawn.
We
will
deliver to you confirmation of the cancellation of the options you elect to
exchange promptly after the expiration date. If
you have participated in the exchange but have not received such a confirmation
promptly after the expiration date, please contact Andrea Luescher immediately
at (502) 329-2000.
We
will
physically issue the new shares of common stock shortly after the cancellation
date. If we do not extend the offer, the earliest possible cancellation date
will be June 13, 2007. All New Options will be non-qualified stock options
for
purposes of U.S. federal tax laws. All shares of common stock or New Options
have been or will be granted under our 2004 Sypris Equity Plan.
14
14
We
may
choose to suspend this offer if we believe, in our sole discretion, that there
are unusual circumstances surrounding trading in Sypris’s common stock on a
given date or there are other significant factors. Such unusual circumstances
or
significant factors that we might take into account in determining to suspend
the offer include, without limitation: (i) a halt in the trading of Sypris’s
common stock by the Nasdaq Stock Market; (ii) unusually high or low trading
volume in Sypris’s common stock; (iii) the escalation of worldwide or national
hostilities as a result of an act of war or terrorism; (iv) the recent
dissemination of any material, non-public information by Sypris; (v) the recent
dissemination of information that causes major stock market averages to
fluctuate significantly; (vi) the occurrence of a catastrophic or other similar
event that has a material impact on Sypris’s business; and (vii) there is a
pending announcement with a third party regarding a significant corporate
transaction involving Sypris.
If
you do
not participate in this offer, you may receive new common stock or option grants
between now and the cancellation date. However, we have no current plans to
grant common stock or options to employees other than in connection with this
offer and to newly hired employees. Therefore, you should not expect to receive
any common stock or option grants between now and the cancellation date if
you
decide not to participate in this offer.
Options
that we do not accept for exchange will remain outstanding until they expire
by
their terms and will retain their current exercise price and current vesting
schedule.
|
Conditions
of the offer.
|
Notwithstanding
any other provision of this offer, we will not be required to accept any options
tendered for exchange, and we may terminate the offer, or postpone our
acceptance and cancellation of any options tendered for exchange, in each case,
subject to Rule 13e-4(f)(5) under the Exchange Act, if at any time on or after
the date this offer begins, and before the expiration date, any of the following
events has occurred, or has been determined by us, in our reasonable judgment,
to have occurred:
|
|
•
|
there
shall have been threatened (orally or in writing) or instituted or
be
pending any action, proceeding or litigation seeking to enjoin, make
illegal or delay completion of the offer or otherwise relating in
any
manner to the offer,
|
|
|
•
|
any
order, stay, judgment or decree is issued by any court, government,
governmental authority or other regulatory or administrative authority
and
is in effect, or any statute, rule, regulation, governmental order
or
injunction shall have been proposed, enacted, enforced or deemed
applicable to the offer, any of which might restrain, prohibit or
delay
completion of the offer or impair the contemplated benefits of the
offer
to us,
|
|
|
•
|
there
shall have occurred:
|
|
|
-
|
any
general suspension of trading in, or limitation on prices for, our
securities on any national securities exchange, quotation system
or in the
over-the-counter market in the United States,
|
|
|
-
|
the
declaration of a banking moratorium or any suspension of payments
in
respect of banks in the United States,
|
|
|
-
|
any
limitation, whether or not mandatory, by any governmental, regulatory
or
administrative agency or authority on, or any event that, in our
reasonable judgment, might affect the extension of credit to us by
banks
or other lending institutions in the United States,
|
15
|
|
-
|
in
our reasonable judgment, any extraordinary or material adverse change
in
U.S. financial markets generally, including, a decline of at least
10% in
either the Dow Jones Industrial Average, the Nasdaq Composite Index
or the
Standard & Poor’s 500 Index from the date of commencement of this
offer,
|
|
|
-
|
the
commencement of a war or other national or international calamity
directly
or indirectly involving the United States, which would reasonably
be
expected to affect materially or adversely, or to delay materially,
the
completion of this offer, or
|
|
|
-
|
if
any of the situations described above existed at the time of commencement
of this offer and that situation, in our reasonable judgment, deteriorates
materially after commencement of this offer,
|
|
|
•
|
as
the term “group” is used in Section 13(d)(3) of the Exchange Act:
|
|
|
-
|
any
person, entity or group acquires more than 5% of our outstanding
shares of
common stock, other than a person, entity or group which had publicly
disclosed such ownership with the SEC prior to the date of commencement
of
this offer,
|
|
|
-
|
any
such person, entity or group which had publicly disclosed such ownership
prior to such date shall acquire additional common stock constituting
more
than 1% of our outstanding shares, or
|
|
|
-
|
any
new group shall have been formed that beneficially owns more than
5% of
our outstanding shares of common stock that in our judgment in any
such
case, and regardless of the circumstances, makes it inadvisable to
proceed
with this offer or with such acceptance for exchange of eligible
options,
|
|
|
•
|
there
shall have occurred any change, development, clarification or position
taken in generally accepted accounting principles that would or,
in our
reasonable judgment, could require us to record for financial reporting
purposes compensation expense in connection with the offer,
|
|
|
•
|
a
tender or exchange offer, other than this offer by us, for some or
all of
our shares of outstanding common stock, or a merger, acquisition
or other
business combination proposal involving us, shall have been proposed,
announced or made by another person or entity or shall have been
publicly
disclosed,
|
|
|
•
|
any
event or events occur that have resulted or is likely to result,
in our
reasonable judgment, in a material adverse change in our business
or
financial condition,
|
|
|
•
|
any
event or events occur that have resulted or is likely to result,
in our
reasonable judgment, in a material impairment of the contemplated
benefits
of the offer to us (see Section 3 of this offer to exchange for a
description of the contemplated benefits of the offer to us), or
|
|
|
•
|
any
rules or regulations by any governmental authority, the National
Association of Securities Dealers, the Nasdaq Stock Market, or other
regulatory or administrative authority or any national securities
exchange
have been enacted, enforced or deemed applicable to Sypris.
|
If
any of
the above events occur, we may:
16
|
|
•
|
terminate
this offer and promptly return all tendered eligible options to tendering
holders,
|
|
|
•
|
complete
and/or extend the exchange offer and, subject to your withdrawal
rights,
retain all tendered eligible options until the extended offer expires,
|
|
|
•
|
amend
the terms of this offer, or
|
|
|
•
|
waive
any unsatisfied condition and, subject to any requirement to extend
the
period of time during which this offer is open, complete this offer.
|
The
conditions to this offer are for our benefit. We may assert them in our sole
discretion regardless of the circumstances giving rise to them before the
expiration date. We may waive any condition, in whole or in part, at any time
and from time to time before the expiration date, in our sole discretion,
whether or not we waive any other condition to the offer. Our failure at any
time to exercise any of these rights will not be deemed a waiver of any such
rights. The waiver of any of these rights with respect to particular facts
and
circumstances will not be deemed a waiver with respect to any other facts and
circumstances. Any determination we make concerning the events described in
this
Section 7 will be final and binding upon all persons.
|
Price
range of shares.
|
The
Sypris common stock that underlies your options is traded on the Nasdaq Global
Market under the symbol “SYPR.” The following table shows, for the periods
indicated, the high and low closing prices per share of our common stock as
reported by the Nasdaq Global Market.
|
|
High
|
Low
|
|||||
|
Fiscal
Year Ending December 31, 2007
|
|||||||
|
First
Quarter
|
$
|
7.66
|
$
|
5.95
|
|||
|
Second
Quarter (through May 14, 2007)
|
$
|
8.32
|
$
|
6.31
|
|||
|
Fiscal
Year Ending December 31, 2006
|
|||||||
|
First
Quarter
|
$
|
11.26
|
$
|
9.04
|
|||
|
Second
Quarter
|
$
|
10.10
|
$
|
7.83
|
|||
|
Third
Quarter
|
$
|
9.99
|
$
|
6.94
|
|||
|
Fourth
Quarter
|
$
|
8.35
|
$
|
6.77
|
|||
On
May
11, 2007, the last reported sale price of our common stock on the Nasdaq Global
Market was $7.90 per share.
The
market price of our stock has fluctuated significantly in the past and is likely
to continue to fluctuate in the future. We believe that such fluctuations will
continue as a result of future announcements concerning Sypris, our competitors
or principal customers, new product introductions, governmental regulations,
litigation or changes in earnings by analysts. In addition, historically the
stock market has experienced significant price and volume fluctuations. The
exercise price of the New Options is equal to the last reported sale price
per
share of our common stock on the morning of May 14, 2007 as reported on the
Nasdaq Global Market prior to regular trading hours. In addition, our common
stock may thereafter trade at prices below the exercise price of the New
Options. Depending on the exercise price of your tendered eligible options
and
other factors, your common stock and New Options may be less valuable than
your
tendered eligible options.
17
We
recommend that you obtain current market quotations for Sypris common stock
before deciding whether to tender your Eligible Options for exchange. However,
you should also consider that the current market price of Sypris common stock
may provide little or no basis for predicting what the market price of Sypris
common stock will be at any time in the future.
|
Source
and amount of consideration; terms of New Options.
|
Consideration.
At
your
election, we will issue either shares of common stock or New Options in exchange
for eligible unexercised options properly elected to be exchanged by you and
accepted by us for such exchange. Each share of common stock or New Option
has
been or will be granted under our 2004 Sypris Equity Plan. Subject to the other
terms and conditions of this offer, upon our acceptance of your properly
tendered options, you will be entitled to receive a number of shares or options
intended to result in the issuance of stock or options that have a fair value
approximately equivalent to the fair value of the cancelled options they
replaced as of the new grant date, determined using an option valuation method.
As
of May
14, 2007, there were issued and outstanding options to purchase 2,136,477 shares
of our common stock under all of our option plans. Of these options,
approximately 1,143,058 (representing 53.5% of all such options) were held
by
eligible employees and are options eligible for the offer.
Subject
to the terms and conditions of this offer, we are granting New Options to
purchase a total of approximately 874,234 shares of our common stock, assuming
that all eligible employees who have tendered their eligible options are
entitled to a grant of New Options, or 292,675 shares of common stock, or a
combination thereof.
General
Terms of Common Stock and New Options.
Each
common stock grant and New Option has been or will be granted under our 2004
Sypris Equity Plan. All common stock grants and New Options will be subject
to
the terms of the Equity Plan, the 2007 Stock Option Exchange Program and your
Grant Agreement. Your New Options will be non-qualified stock options for
purposes of U.S. federal tax laws regardless of whether the exchanged options
were incentive stock options or non-qualified stock options. Your New Options
will also have an exercise price of $7.90 per share.
The
following description summarizes the material terms of our 2004 Sypris Equity
Plan and the common stock grants and New Options. We will refer to our 2004
Sypris Equity Plan as the Equity Plan or the plan. Our statements in this offer
to exchange concerning the plan and the common stock grants and New Options
are
merely summaries and do not purport to be complete. The statements are subject
to, and are qualified in their entirety by reference to, the plan, and the
forms
of option agreement under the plan, which have been listed as exhibits to the
Schedule TO of which this offer is a part. Please contact us at Sypris
Solutions, Inc., 101 Bullitt Lane, Suite 450, Louisville, Kentucky 40222,
Attention: Andrea Luescher, or at (502) 329-2000, to receive a copy of the
plan
and the forms of option agreement thereunder. We will promptly furnish you
copies of these documents upon request at our expense.
Equity
Plan.
The
maximum number of shares of common stock covered by options currently
outstanding and unexercised under our Equity Plan is approximately 712,729
shares. The Equity Plan provides for the grant of the following types of
incentive awards: (i) stock options (including incentive stock options and
non-qualified stock options); (ii) stock appreciation rights; (iii) restricted
stock (iv) performance units;
18
General
Terms of the Equity Plan.
The
Equity Plan is administered by our board of directors or a committee appointed
by our board of directors, which we refer to as the administrator. Subject
to
the other provisions of the plan, the administrator generally has the power
to
determine the terms and conditions of the options granted, including the
exercise price, the number of shares covered by the option and the
exercisability of the options.
Term.
All
New
Options granted as a result of this offer will have a term of 4 years from
the
grant date, unless terminated earlier if your employment with Sypris terminates.
Termination
of Employment Before the Cancellation Date.
If,
for
any reason, you are not an employee of Sypris as of the cancellation date,
you
will have forfeited all of your rights under this offer. This means that if
you
quit with or without good reason, or die, or we terminate your employment with
or without cause before the new grant date, you will not be regarded as an
eligible participant.
Termination
of Employment After the Cancellation Date.
The
plan
generally provides that if your employment terminates, other than as a result
of
your total and permanent disability or your death, you may exercise your option
within the time specified in your Agreement. If no time is specified, you may
exercise your option within 3 months after termination, but only to the extent
that you are entitled to exercise it at termination.
The
plan
generally provides that if your employment terminates because of your death,
you
or your designated beneficiaries, or if no beneficiary survives you, the
administrator or executor of your estate, may, within one (1) year after the
date of your death, exercise any vested but unexercised portion of your option.
Exercise
Price.
The
administrator generally determines the exercise price at the time the option
is
granted. The exercise price per share of the New Options is $7.90. Your New
Options may have a higher exercise price than some or all of your current
options.
Vesting
and Exercise.
Each
common stock grant and New Option granted with respect to an exchanged option
will vest immediately and the New Options will remain exercisable for a four
year period commencing on May 14, 2007.
Adjustments
Upon Certain Events.
If
a
change in our capitalization, such as a stock split, reverse stock split,
reclassification, combination, stock dividend or other similar event occurs,
either before or after the cancellation date, an
19
Transferability
of New Options.
New
Options may not be transferred, other than by will or the laws of descent or
distribution, unless the administrator determines otherwise.
Registration
of Shares Underlying Options.
All
of
the new shares of common Sypris common stock and any shares of Sypris common
stock issuable upon exercise of New Options are registered under the Securities
Act of 1933, as amended (the Securities Act), on a registration statement on
Form S-8 filed with the SEC. Unless you are one of our affiliates at the time
of
sale, you will be able to sell the common shares that have vested and the shares
issuable upon exercise of your New Options free of any transfer restrictions
under applicable U.S. securities laws.
U.S.
Federal Income Tax Consequences.
You
should refer to Section 14 of this offer for a discussion of the material U.S.
federal income tax consequences of the New Options and the exchanged options,
as
well as the consequences of accepting or rejecting this offer. If you are a
resident of the United States, but are also subject to the tax laws of another
country, you should be aware that there might be other tax and social insurance
consequences that may apply to you. We strongly recommend that you consult
with
your own advisors to discuss the consequences to you of this transaction.
We
are a
diversified provider of outsourced services and specialty products. We perform
a
wide range of manufacturing, engineering, design, testing and other technical
services, typically under multi-year, sole-source contracts with corporations
and government agencies in the markets for aerospace & defense
electronics, truck components & assemblies, and for users of
test & measurement equipment.
We
focus
on those markets where we have the expertise, qualifications and leadership
position to sustain a competitive advantage. We target our resources to support
the needs of industry leaders that embrace multi-year contractual relationships
as a strategic component of their supply chain management. These contracts,
many
of which are sole-source by part number and are for terms of up to ten years,
enable us to invest in leading-edge technologies to help our customers remain
competitive. The productivity, flexibility and economies of scale that result
become an important means for differentiating ourselves from the competition
when it comes to cost, quality, reliability and customer service.
Our
principal executive offices are located at 101 Bullitt Lane, Suite 450,
Louisville, Kentucky 40202, and our telephone number is (502) 329-2000.
Questions regarding this offer should be directed to Andrea Luescher.
Set
forth
below is selected financial information about Sypris. This selected financial
data should be read in conjunction with the “Management’s Discussion and
Analysis of Financial Condition and Results of Operations” and our financial
statements and related notes included in Item 8 of our Form 10-K for the
year ended December 31, 2006. The selected financial data set forth below as
of
December 31, 2006 and 2005, and for the three years included in the
period ended December 31, 2006 are
20
derived
from our audited consolidated financial statements included elsewhere in
our
Form 10-K for the year ended December 31, 2006, and the data below are qualified
by reference to those consolidated financial statements and related notes.
|
|
Years
Ended December 31,
|
|||||||||||||||
|
|
2006(1)
|
2005
|
2004(2)(3)
|
2003(3)
|
2002
|
|||||||||||
|
|
(in
thousands, except per share data)
|
|||||||||||||||
|
Consolidated
Statement of Operations Data:
|
||||||||||||||||
|
Net
revenue
|
$
|
497,664
|
$
|
522,766
|
$
|
425,402
|
$
|
276,605
|
$
|
273,477
|
||||||
|
Cost
of sales
|
456,574
|
471,428
|
371,963
|
230,660
|
223,936
|
|||||||||||
|
Gross
profit
|
41,090
|
51,338
|
53,439
|
45,945
|
49,541
|
|||||||||||
|
Selling,
general and administrative
|
38,592
|
35,669
|
35,248
|
26,711
|
27,114
|
|||||||||||
|
Research
and development
|
1,988
|
2,833
|
3,697
|
4,166
|
3,354
|
|||||||||||
|
Amortization
of intangible assets
|
645
|
614
|
596
|
194
|
97
|
|||||||||||
|
Operating
(loss) income
|
(135
|
)
|
12,222
|
13,898
|
14,874
|
18,976
|
||||||||||
|
Interest
expense, net
|
3,708
|
5,979
|
2,100
|
1,693
|
2,742
|
|||||||||||
|
Other
(income) expense, net
|
(387
|
)
|
(1,325
|
)
|
(138
|
)
|
230
|
(159
|
)
|
|||||||
|
(Loss)
income before income taxes
|
(3,456
|
)
|
7,568
|
11,936
|
12,951
|
16,393
|
||||||||||
|
Income
tax (benefit) expense
|
(2,094
|
)
|
2,247
|
3,637
|
4,860
|
4,940
|
||||||||||
|
Net
(loss) income
|
$
|
(1,362
|
)
|
$
|
5,321
|
$
|
8,299
|
$
|
8,091
|
$
|
11,453
|
|||||
|
(Loss)
earnings per common share::
|
||||||||||||||||
|
Basic
|
$
|
(0.08
|
)
|
$
|
0.30
|
$
|
0.48
|
$
|
0.57
|
$
|
0.87
|
|||||
|
Diluted
|
$
|
(0.08
|
)
|
$
|
0.29
|
$
|
0.47
|
$
|
0.56
|
$
|
0.84
|
|||||
|
Cash
dividends per common share
|
$
|
0.12
|
$
|
0.12
|
$
|
0.12
|
$
|
0.12
|
$
|
0.06
|
||||||
|
Shares
used in computing per share amounts:
|
||||||||||||||||
|
Basic
|
18,079
|
18,016
|
17,119
|
14,237
|
13,117
|
|||||||||||
|
Diluted
|
18,079
|
18,323
|
17,745
|
14,653
|
13,664
|
|||||||||||
|
December
31,
|
||||||||||||||||
|
|
2006(1
|
)
|
2005
|
2004(2)(3
|
)
|
2003(3
|
)
|
2002
|
||||||||
|
(in
thousands)
|
||||||||||||||||
|
Consolidated
Balance Sheet Data:
|
||||||||||||||||
|
Cash
and cash equivalents
|
$
|
32,400
|
$
|
12,060
|
$
|
14,060
|
$
|
12,019
|
$
|
12,403
|
||||||
|
Working
capital
|
100,717
|
111,765
|
143,123
|
81,456
|
78,600
|
|||||||||||
|
Total
assets
|
379,033
|
417,624
|
431,178
|
264,435
|
224,612
|
|||||||||||
|
Current
portion of long-term debt
|
5,000
|
—
|
7,000
|
3,200
|
7,000
|
|||||||||||
|
Long-term
debt, net of current portion
|
55,000
|
80,000
|
110,000
|
53,000
|
30,000
|
|||||||||||
|
Total
stockholders’ equity
|
209,886
|
213,734
|
208,939
|
145,392
|
137,690
|
|||||||||||
|
(1)
|
Effective
January 1, 2006, we adopted Statement of Financial Accounting
Standards No. 123(R), “Share-Based Payment” under the modified
prospective method. We also adopted SFAS No. 158, “Employers’
Accounting for Defined Benefit Pension and Other Postretirement Plans,
an
amendment of FASB Statements No. 87, 88, 101 and 132(R).” See Note 1
of our consolidated financial statements.
|
|
(2)
|
On
May 3, 2004 and June 30, 2004, respectively, we completed the
acquisition of the net assets of ArvinMeritor’s Kenton, Ohio facility and
Dana’s Toluca, Mexico facility and their results of operations and related
purchased assets are included from those dates forward.
|
|
3)
|
On
December 31, 2003, we completed the acquisition of the net assets of
Dana’s Morganton, North Carolina facility and its results of operations
and related purchased assets are included from that date forward.
|
21
|
11.
|
A
list of
the members of our board of directors and executive officers is attached to
this
Offer to Exchange as Schedule A.
The
following table sets forth information concerning the beneficial ownership
of
our Common Stock as of May 11, 2007 for the directors and executive officers
of
the Company and their respective affiliates. Except as otherwise noted, the
persons named in the table have sole voting and investment power with respect
to
such securities. The percentages in the table below are based on the total
number of shares of restricted stock and outstanding options to purchase our
common stock under all our plans.
|
|
Shares Beneficially Owned
Common
Stock
|
|||||||||
|
|
Number
|
Percent
|
||||||||
|
Robert
E. Gill (1)
253
Canton Avenue East
Winter
Park, Florida 32789
|
3,275,666
|
17.3%
|
||||||||
|
Virginia
G. Gill (2)
253
Canton Avenue East
Winter
Park, Florida 32789
|
3,275,666
|
17.3%
|
||||||||
|
Jeffrey
T. Gill (3)
101
Bullitt Lane, Suite 450
Louisville,
Kentucky 40222
|
6,174,215
|
32.5%
|
||||||||
|
R.
Scott Gill (4)
161
East Chicago Avenue
Chicago,
Illinois 60611
|
5,695,871
|
30.0%
|
||||||||
|
GFP
I, LP (5)
1220
North Market Street, Suite 606
Wilmington,
Delaware 19801
|
3,274,666
|
17.3%
|
||||||||
|
Gill
Family Capital Management, Inc. (6)
101
Bullitt Lane, Suite 450
Louisville,
Kentucky 40222
|
3,274,666
|
17.3%
|
||||||||
|
John
F. Brinkley (7)
|
39,341
|
*
|
||||||||
|
William
G. Ferko (8)
|
46,740
|
*
|
||||||||
|
William
L. Healey (9)
|
70,708
|
*
|
||||||||
|
Sidney
R. Petersen (10)
|
164,928
|
*
|
||||||||
|
Robert
Sroka (11)
|
151,921
|
*
|
||||||||
|
T.
Scott Hatton (12 )
|
117,986
|
*
|
||||||||
|
John
M. Kramer (13)
|
168,589
|
*
|
||||||||
|
Robert
B. Sanders (14)
|
136,745
|
*
|
||||||||
|
Richard
L. Davis (15)
|
231,511
|
1.2%
|
||||||||
|
Anthony
C. Allen (16)
|
238,996
|
1.3%
|
||||||||
|
John
R. McGeeney(17)
|
132,745
|
*
|
||||||||
|
Kathy
Smith Boyd (18)
|
76,438
|
*
|
||||||||
|
G.
Darrell Robertson (19)
|
150,011
|
*
|
||||||||
|
Current
directors and executive officers as a group (16 persons)
|
10,323,079
|
51.4%
|
||||||||
_________________
* less
than
1%.
22
|
(1)
|
Includes
500 shares beneficially owned by Virginia G. Gill, his spouse.
Robert E.
Gill shares voting and investment power with his spouse with respect
to
these shares. Also includes 3,274,666 shares of the Common Stock
of the
Company owned by GFP I, LP, a Delaware limited partnership, of
which
Robert E. Gill is a limited partner holding a 42.49% ownership
interest
and of which Virginia G. Gill is a limited partner holding a 43.39%
ownership interest. On the basis of certain provisions of the limited
partnership agreement of GFP I, LP (the “Partnership Agreement”), Robert
E. Gill and Virginia G. Gill may be deemed to beneficially own
shares of
Common Stock that are attributable to such limited partnership
interests.
Mr. Gill was also a director and executive officer of the Company
during 2006.
|
|
|
|
|
(2)
|
Includes
500 shares beneficially owned by Robert E. Gill, her spouse. Virginia
G.
Gill shares voting and investment power with her spouse with respect
to
these shares. Also includes 3,274,666 shares held by GFP I, LP.
See
footnote (1) above for certain information concerning GFP I, LP.
|
|
|
|
|
(3)
|
Includes
70,000 shares issuable under currently exercisable stock options
and
23,975 shares owned by Patricia G. Gill, his wife. Jeffrey T. Gill
shares
voting and investment power with his spouse with respect to these
shares.
Also includes 3,274,666 shares held by GFP I, LP, of which Jeffrey
T. Gill
is a limited partner holding a 1.12 % ownership interest, of which
Patricia G. Gill is a limited partner holding a 1.12% ownership
interest,
and of which trusts for the benefit of Jeffrey T. Gill’s children, of
which Jeffrey T. Gill is trustee, are limited partners holding
an
aggregate of 7.05% ownership interest. Gill Family Capital Management,
Inc., a Delaware corporation (the “General Partner”), is the general
partner of GFP I, LP, with a 0.96% ownership interest in GFP I,
LP.
Jeffrey T. Gill is the Co-President and Treasurer of the General
Partner,
is one of two directors of the General Partner, and is a 50% shareholder
of the General Partner. On the basis of Jeffrey T. Gill’s positions with
the General Partner, and pursuant to certain provisions of the
Partnership
Agreement, Jeffrey T. Gill may be deemed to beneficially own shares
of
Common Stock attributable to the General Partner. Mr. Gill is also a
director and executive officer of the Company and was a named executive
officer during 2006.
|
|
|
|
|
(4)
|
Includes
68,500 shares issuable under currently exercisable stock options.
Includes
3,274,666 shares owned by GFP I, LP, of which R. Scott Gill is
a limited
partner holding a 3.87% ownership interest. R. Scott Gill is the
Co-President and Secretary of the General Partner, is one of two
directors
of the General Partner, and is a 50% shareholder of the General
Partner.
On the basis of R. Scott Gill’s positions with the General Partner, and
pursuant to certain provisions of the Partnership Agreement, R.
Scott Gill
may be deemed to beneficially own shares of Common Stock attributable
to
the General Partner. Mr. Gill is also a director of the Company.
|
|
|
|
|
(5)
|
Voting
and investment power is exercised through the General Partner.
See
footnotes (3) and (4).
|
|
|
|
|
(6)
|
In
its capacity as General Partner. See footnotes (3) and (4).
|
|
|
|
|
(7)
|
Includes
37,633 shares issuable under currently exercisable stock options
and 1,708
shares held by a family trust.
|
|
|
|
|
(8)
|
Includes
41,254 shares issuable under currently exercisable stock options.
|
|
|
|
|
(9)
|
Includes
68,500 shares issuable under currently exercisable stock options,
and
2,208 shares held by a family trust.
|
|
|
|
|
(10)
|
Includes
151,424 shares issuable under currently exercisable stock options,
and
13,504 shares held by a family trust.
|
|
|
|
|
(11)
|
Includes
147,071 shares issuable under currently exercisable stock options.
|
|
(12)
|
Includes
20,000 shares issuable under currently exercisable stock
options.
|
|
|
|
|
(13)
|
Includes 109,344 shares issuable under currently exercisable stock options. |
|
|
|
|
|
|
|
|
|
23
(14) Includes
80,000 shares issuable under currently exercisable stock options.
(15) Includes
124,795 shares issuable under currently exercisable stock options.
(16) Includes
103,440 shares issuable under currently exercisable stock options.
(17) Includes
65,000 shares issuable under currently exercisable stock options.
(18) Includes
41,500 shares issuable under currently exercisable stock options.
(19) Includes
106,500 shares issuable under currently exercisable stock options.
*All
options were granted under our 2004 Sypris Equity Plan, 1994 Stock Option Plan
For Key Employees, Independent Directors’ Stock Option Plan.
**
Less
than 1%.
As
of May
11th,
2007,
our executive officers and directors (16 persons) as a group beneficially owned
options outstanding under the 2004 Sypris Equity Plan, Independent Directors’
Stock Option Plan, and the 1994 Stock Option Plan For Key Employees (the
“Plans”) to purchase a total of 1, 679,343 of our shares, which represents
approximately 57.4% of the shares covered by all options outstanding under
the
Plans as of the date.
Neither
we, nor, to the best of our knowledge, any of the members of our board of
directors or executive officers, nor any affiliates of ours, engaged in
transactions involving options to purchase our common stock under the Equity
Plan or in transactions involving our common stock during the past 60 days
before and including May 14, 2007, except for sales by Mr. Kramer of
approximately 39,916 shares and the exercise of 10,000 options in the period
from May 6, 2007 through May 11, 2007.
|
Status
of options acquired by us in the offer.
|
Options
that we acquire through the offer will be cancelled and, to the extent such
exchanged options were granted under the 2004 Sypris Equity Plan, the shares
covered by such exchanged options will be returned to the pool of shares
available for grants of new awards under the 2004 Sypris Equity Plan. To the
extent shares returning to the 2004 Sypris Equity Plan are not fully reserved
for issuance upon exercise of the New Options to be granted in connection with
the offer, the shares will be available for future awards to employees and
other
eligible plan participants, respectively, without further stockholder action,
except as required by applicable law or the rules of the Nasdaq Stock Market
or
any other securities quotation system or any stock exchange on which our shares
are then quoted or listed.
|
Legal
matters; regulatory approvals.
|
We
are
not aware of any license or regulatory permit that appears to be material to
our
business that might be adversely affected by our exchange of options and
issuance of common stock grants and New Options as contemplated by the offer,
or
of any approval or other action by any government or governmental,
administrative or regulatory authority or agency or any Nasdaq listing
requirements that would be required for the acquisition or ownership of our
options as contemplated herein, which we have not already obtained. Should
any
additional approval or other action be required, we presently contemplate that
we will seek such approval or take such other action. We cannot assure you
that
any such approval or other action, if needed, could be obtained or what the
conditions imposed in connection with such approvals would entail or whether
the
failure to obtain any such approval or other action would result in adverse
consequences to our business. Our obligation under the offer to accept tendered
options
24
for
exchange and to issue common stock grants and New Options for tendered options
is subject to the conditions described in Section 7 of this offer to exchange.
|
Material
U.S. federal income tax consequences.
|
CIRCULAR
230 DISCLAIMER.
THE FOLLOWING DISCLAIMER IS PROVIDED IN ACCORDANCE WITH THE INTERNAL REVENUE
SERVICE’S CIRCULAR 230 (21 C.F.R. PART 10). THIS ADVICE IS NOT INTENDED OR
WRITTEN TO BE USED, AND IT CANNOT BE USED BY YOU FOR THE PURPOSE OF AVOIDING
ANY
PENALTIES THAT MAY BE IMPOSED ON YOU. THIS ADVICE WAS WRITTEN TO SUPPORT THE
PROMOTION OR MARKETING OF PARTICIPATION IN THE COMPANY’S EQUITY INCENTIVE PLAN.
YOU SHOULD SEEK ADVICE BASED ON YOUR PARTICULAR CIRCUMSTANCES FROM AN
INDEPENDENT TAX ADVISOR
The
following is a general summary of the material U.S. federal income tax
consequences of the exchange of options pursuant to the offer. This discussion
is based on the U.S. Internal Revenue Code, its legislative history, treasury
regulations thereunder and administrative and judicial interpretations as of
the
date of this offer, all of which are subject to change, possibly on a
retroactive basis. This summary does not discuss all of the tax consequences
that may be relevant to you in light of your particular circumstances, nor
is it
intended to be applicable in all respects to all categories of option holders.
We strongly recommend that you consult with your own advisors to discuss the
consequences to you of this transaction.
We
recommend that you consult your own tax advisor with respect to the federal,
state and local tax consequences of participating in the offer, as the tax
consequences to you are dependent on your individual tax situation.
Option
holders who exchange unexercised options for New Options should not be required
to recognize income for U.S. federal income tax purposes at the time the
exchanged options are surrendered. We believe that the exchange will be treated
as a non-taxable exchange.
Common
Stock.
If
you participate in this offer and elect to receive shares of common stock,
you
generally will recognize ordinary income equal to the fair market value of
the
shares.
When
shares are delivered to you, you must make adequate provision for any sums
required to satisfy applicable federal, state, local and foreign tax withholding
obligations. We may withhold these sums from any amounts otherwise payable
to
you, through payroll withholding, by withholding proceeds received upon sale
of
the underlying common stock through a sell-to-cover arrangement, or otherwise.
We may also authorize the withholding of shares in such amounts as we determine
are necessary to satisfy our tax withholding obligations. Unless the foregoing
tax withholding obligations are satisfied, we have no obligation to deliver
any
shares to you.
Non-qualified
Stock Options.
All
New
Options are non-qualified stock options for purposes of the Internal Revenue
Code, regardless of whether the exchanged options are incentive stock options
or
non-qualified stock options.
25
Under
current law, an option holder will not realize taxable income upon the grant
of
a non-qualified stock option. However, when an option holder exercises the
option, the difference between the exercise price of the option and the fair
market value of the shares covered by the option on the date of exercise will
be
compensation income taxable to the option holder.
Sypris
generally will be entitled to a tax deduction equal to the amount of
compensation income taxable to the U.S. option holder if we comply with eligible
reporting requirements.
We
recommend that you consult your own tax advisor with respect to the federal,
state and local tax consequences of participating in the offer.
|
Extension
of offer; termination; amendment.
|
26
We
reserve the right, in our sole discretion, at any time and regardless of whether
or not any event listed in Section 7 of this offer has occurred or is deemed
by
us to have occurred, to extend the period of time during which the offer is
open
and delay the acceptance for exchange of any options. If we elect to extend
the
period of time during which this offer is open, we will give you written notice
of the extension and delay, as described below. If we extend the expiration
date, we will also extend your right to withdraw tenders of eligible options
until such extended expiration date. In the case of an extension, we will send
an email or other written notice to all eligible employees no later than 6:00
a.m., Eastern Time, on the next business day after the previously scheduled
expiration date. We will file a copy of such notice with the SEC.
We
also
reserve the right, in our reasonable judgment, before the expiration date to
terminate or amend the offer and to postpone our acceptance and cancellation
of
any options elected to be exchanged if any of the events listed in Section
7 of
this offer to exchange occurs, by giving written notice of the termination
or
postponement to you or by making a public announcement of the termination.
Our
reservation of the right to delay our acceptance and cancellation of options
elected to be exchanged is limited by Rule 13e-4(f)(5) under the Exchange Act
which requires that we must pay the consideration offered or return the options
promptly after termination or withdrawal of a tender offer.
Subject
to compliance with applicable law, we further reserve the right, before the
expiration date, in our sole discretion, and regardless of whether any event
listed in Section 7 of this offer to exchange has occurred or is deemed by
us to
have occurred, to amend the offer in any respect, including by decreasing or
increasing the consideration offered in this offer to option holders or by
decreasing or increasing the number of options being sought in this offer.
If we
materially change the offer, we will send an email or other written notice
to
all eligible employees disclosing any material change no later than 6:00 a.m.,
Eastern Time, on the next business day following the day we change the offer.
We
will file a copy of such notice with the SEC.
The
minimum period during which the offer will remain open following material
changes in the terms of the offer or in the information concerning the offer,
other than a change in the consideration being offered by us or a change in
amount of existing options sought, will depend on the facts and circumstances
of
such change, including the relative materiality of the terms or information
changes. If we modify the number of eligible options being sought in this offer
or the consideration being offered by us for the eligible options in this offer,
the offer will remain open for at least 10 business days from the date of notice
of such modification. If any term of the offer is amended in a manner that
we
determine constitutes a material change adversely affecting any holder of
eligible options, we will promptly disclose the amendments in a manner
reasonably calculated to inform holders of eligible options of such amendment,
and we will extend the offer’s period so that at least 5 business days, or such
longer period as may be required by the tender offer rules, remain after such
change.
For
purposes of the offer, a “business day” means any day other than a Saturday,
Sunday or a U.S. federal holiday and consists of the time period from 12:01
a.m.
through 12:00 midnight, Eastern Time.
|
Fees
and expenses.
|
We
will
not pay any fees or commissions to any broker, dealer or other person for
soliciting options to be exchanged through this offer.
|
Additional
information.
|
This
offer to exchange is part of a Tender Offer Statement on Schedule TO that we
have filed with the SEC. This offer to exchange does not contain all of the
information contained in the Schedule TO and
27
the
exhibits to the Schedule TO. We recommend that you review the Schedule TO,
including its exhibits, and the materials that we have filed with the SEC before
making a decision on whether to elect to exchange your options. These filings,
our other annual, quarterly and current reports, our proxy statements and our
other SEC filings may be examined, and copies may be obtained, at the SEC’s
public reference rooms at 100 F Street, N.E., Washington, D.C. 20549 and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661. You may obtain
information on the operation of the public reference room by calling the SEC
at
1-800-SEC-0330. Our SEC filings are also available to the public on the SEC’s
Internet site at http://www.sec.gov.
Our
common stock is quoted on the Nasdaq Global Market under the symbol “SYPR” and
our SEC filings can be read at the following Nasdaq address: Nasdaq Operations,
1735 K Street, N.W., Washington, D.C. 20006.
Each
person to whom a copy of this offer to exchange is delivered may obtain a copy
of any or all of the documents to which we have referred you, other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into such documents, at no cost, by writing to us at Sypris
Solutions, Inc., 101 Bullitt Lane, Suite 450, Louisville, Kentucky 40222,
Attention: Andrea Luescher, or by contacting us at (502) 329-2000.
The
information contained in this offer about us should be read together with the
information contained in the documents to which we have referred you in making
your decision as to whether or not to participate in this offer.
|
Miscellaneous.
|
This
Offer and our SEC reports referred to above include forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. However, the safe
harbors of Section 27A of the Securities Act and 21E of the Securities
Exchange Act of 1934 do not apply to statements made in connection with this
Offer. These forward-looking statements involve risks and uncertainties,
including those described in our Annual Report on Form 10-K for the fiscal
year
ended December 31, 2006 and in our Quarterly Report on Form 10-Q for the
fiscal quarter ended March 31, 2007. WE ENCOURAGE YOU TO REVIEW THE RISK
FACTORS CONTAINED IN OUR ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 31, 2006 AND IN OUR QUARTERLY REPORT ON FORM 10-Q FOR THE FISCAL
QUARTER ENDED MARCH 31, 2007 BEFORE YOU DECIDE WHETHER TO PARTICIPATE IN THE
OFFER.
We
are
not aware of any jurisdiction where the making of the offer is not in compliance
with applicable law. If we become aware of any jurisdiction where the making
of
the offer is not in compliance with any valid applicable law, we will make
a
good faith effort to comply with such law. If, after such good faith effort,
we
cannot comply with such law, the offer will not be made to, nor will options
be
accepted from the option holders residing in such jurisdiction.
We
have not authorized any person to make any recommendation on our behalf as
to
whether you should elect to exchange your options through the offer. You should
rely only on the information in this document or documents to which we have
referred you. We have not authorized anyone to give you any information or
to
make any representations in connection with the offer other than the information
and representations contained in this offer to exchange and in the related
offer
documents. If anyone makes any recommendation or representation to you or
gives
28
29
Schedule
A
Information
Concerning the Directors and Executive Officers of Sypris Solutions,
Inc.
Information
concerning the directors of Sypris Solutions, Inc. is set forth in the table
below:
|
R.
Scott Gill
Age
48
|
|
R.
Scott Gill has served as a director of Sypris and its predecessor
since
1983. Mr. Gill has served as Managing Member of Astor & Longwood, LLC,
a real estate development and investment company, since June 2005.
Mr.
Gill served as a Managing Broker with Coldwell Banker Residential
Brokerage from 2003 to 2005. Mr. Gill served as a Managing Broker
and
Associate with Koenig & Strey GMAC Real Estate, a residential real
estate firm from 1999 to 2003. Mr. Gill served as Project Manager
for IA
Chicago, an architectural design firm, from 1998 to 1999, as Senior
Vice
President and Secretary of Sypris from 1997 to 1998, and as Vice
President
and Secretary of its predecessor from 1983 to 1998. Mr. Gill is a
member
of the Executive Committee. R. Scott Gill is the son of Robert E.
Gill and
the brother of Jeffrey T. Gill.
|
|
Robert
Sroka
Age
57
|
|
Robert
Sroka has served as a director of Sypris since 1997. Mr. Sroka has
served
as Managing Director of Corporate Solutions Group, an investment
banking
firm, since December 2003. From 1998 to 2005 he served as Managing
Partner
of Lighthouse Partners, a private investment and business consulting
company. Mr. Sroka served as Managing Director of Investment
Banking-Mergers and Acquisitions for J.P. Morgan from 1994 to 1998.
Prior
to 1994, Mr. Sroka served in a variety of senior executive positions
with
J.P. Morgan, including Vice President-Investment Banking and Vice
President-Corporate Finance. He is Chairman of the Compensation Committee
and a member of the Audit and Finance Committee. Mr. Sroka also serves
as
a director and a member of the audit committee of North American
Insurance
Leaders, Inc.
|
|
William
G. Ferko
Age
52
|
|
William
G. Ferko has served as a director of Sypris since January 2005. Mr.
Ferko
has served as Vice President and Chief Financial Officer of Genlyte
Group
Incorporated, a manufacturer of lighting fixtures and controls, since
1998. Prior to 1998, he served in several finance positions for Tenneco
Inc. and its automotive and packaging divisions and as Chief Financial
Officer for Monroe Auto Equipment Company and Goss Graphic Systems.
Mr.
Ferko is Chairman of the Nominating and Governance Committee and
is a
member of the Audit and Finance Committee.
|
|
Jeffrey
T. Gill
Age
51
|
|
Jeffrey
T. Gill has served as President and Chief Executive Officer of Sypris
and
its predecessor since 1992, and as Executive Vice President of its
predecessor from 1983 to 1992. Mr. Gill holds a BS degree in Business
Administration from the University of Southern California and an
MBA from
Dartmouth College. A director of Sypris and its predecessor since
1983,
Mr. Gill is a member of the Executive Committee. Jeffrey T. Gill
is the
son of Robert E. Gill and the brother of R. Scott Gill.
|
|
Sidney
R. Petersen
Age
76
|
|
Sidney
R. Petersen has served as a director of Sypris since 1997 and of
Sypris
Electronics from 1994 until its merger with Sypris in 1998.
Mr. Petersen retired as Chairman of the Board and Chief Executive
Officer of Getty Oil in 1984, where he served in a variety of increasingly
responsible management positions since 1955. He is Chairman of the
Audit
and Finance Committee and a member of the Executive
Committee.
|
|
John
F. Brinkley
Age
69
|
|
John
F. Brinkley has served as a director of Sypris since April 2005.
Mr.
Brinkley retired as General Manager, North American Automotive Operations
Export Sales for Ford Motor Company in 1995 after a 33 year career
with
Ford. He also served in a variety of responsible management positions
with
Ford in Europe, including Vice President
of Marketing, Director of Southern Europe Sales Operations and Director
of
Truck Operations. Mr. Brinkley is a member of the Compensation Committee
and the Nominating and Governance Committee.
|
|
Robert
E. Gill
Age
81
|
|
Robert
E. Gill has served as Chairman of the Board of Sypris and its predecessor
since 1983, and as President and Chief Executive Officer of its
predecessor from 1983 to 1992. Prior to 1983, Mr. Gill served in
a number
of senior executive positions, including Chairman, President and
Chief
Executive Officer of Armor Elevator Company, Vice President of A.
O. Smith
Corporation and President and Chief Executive Officer of Elevator
Electric
Company. Mr. Gill holds a BS degree in Electrical Engineering from
the
University of Washington and an MBA from the University of California
at
Berkeley. He is Chairman of the Executive Committee. Robert E. Gill
is the
father of Jeffrey T. Gill and R. Scott Gill.
|
|
William
L. Healey
Age
62
|
|
William
L. Healey has served as a director of Sypris since 1997. Mr. Healey
currently serves as a private investor and business consultant. From
2002
to 2005, he served as President and Chief Executive Officer of Cal
Quality
Electronics, an electronics manufacturing company. Mr. Healey served
as a
private investor and consultant from 1999 to 2002. He served as Chairman
of the Board of Smartflex Systems, an electronics manufacturing company,
from 1996 to 1999 and as its President and Chief Executive Officer
from
1989 to 1999. Prior to 1989, Mr. Healey served in a number of senior
executive positions with Silicon Systems, including Senior Vice President
of Operations. Mr. Healey also serves as a director of Microsemi
Corporation.
|
The
executive officers of Sypris Solutions, Inc. are set forth in the following
table:
|
Robert
E. Gill
Age
81
|
|
Robert
E. Gill has served as Chairman of the Board of Sypris and its predecessor
since 1983, and as President and Chief Executive Officer of its
predecessor from 1983 to 1992. Prior to 1983, Mr. Gill served in
a number
of senior executive positions, including Chairman, President and
Chief
Executive Officer of Armor Elevator Company, Vice President of A.
O. Smith
Corporation and President and Chief Executive Officer of Elevator
Electric
Company. Mr. Gill holds a BS degree in Electrical Engineering from
the
University of Washington and an MBA from the University of California
at
Berkeley. He is Chairman of the Executive Committee. Robert E. Gill
is the
father of Jeffrey T. Gill and R. Scott Gill.
|
|
Jeffrey
T. Gill
Age
51
|
|
Jeffrey
T. Gill has served as President and Chief Executive Officer of Sypris
and
its predecessor since 1992, and as Executive Vice President of its
predecessor from 1983 to 1992. Mr. Gill holds a BS degree in Business
Administration from the University of Southern California and an
MBA from
Dartmouth College. A director of Sypris and its predecessor since
1983,
Mr. Gill is a member of the Executive Committee. Jeffrey T. Gill
is the
son of Robert E. Gill and the brother of R. Scott Gill.
|
|
John
M. Kramer
Age
64
|
|
John
M. Kramer has served as Group Vice President of Sypris since December
2004, as Vice President of Sypris from 2000 to December 2004, as
President
and Chief Executive Officer of its subsidiary, Sypris Technologies,
from
1985 to April 2005, and as President of Sypris Technologies from
April
2005 to the present. Prior to 1985, Mr. Kramer served in a number
of
senior management positions with Sypris Technologies, Xerox and Ford
Motor
Company. Mr. Kramer holds a BS degree in Management from the University
of
Louisville.
|
2
|
Robert
B. Sanders
Age
49
|
|
Robert
B. Sanders has served as Group Vice President of Sypris and as President
of its subsidiary, Sypris Electronics, since March 2005. From 2000
to
2005, Mr. Sanders served as General Manager and Site Executive for
the
Defense & Space Electronics Systems division of Honeywell. From 1997
to 2000, he served as Deputy Director Product Development for ITT
Industries, a diversified engineering and manufacturing company with
expertise in defense electronics and services. Mr. Sanders holds
a
Bachelor of Arts Degree in Management/Aeronautics from Dowling College
and
is a former Naval Aviator with the United States Marine
Corps.
|
|
Kathy
Smith Boyd
Age
53
|
|
Kathy
Smith Boyd has served as a Vice President of Sypris, as President
and
Chief Executive Officer of its subsidiary, Sypris Test & Measurement,
from 2003 to April 2005 and as President of Sypris Test & Measurement
from April 2005 to the present. Ms. Boyd served as Corporate Vice
President for Global Services and Solutions for Acterna, a communications
test and measurement company, from 2000 to 2002, as Vice President
and
General Manager of the North American Consulting Business of Hewlett
Packard from 1998 to 2000, and in a variety of management positions
with
Hewlett Packard from 1985 to 1998. Ms. Boyd holds a BA degree in
History
and Psychology from Moravian College.
|
|
G.
Darrell Robertson
Age
64
|
|
G.
Darrell Robertson has served as a Vice President of Sypris, as President
and Chief Executive Officer of its subsidiary, Sypris Data Systems,
from
2000 to April 2005 and as President of Sypris Data Systems from April
2005
to the present. Mr. Robertson served as an Executive Consultant for
Atlantic Management Associates and as Managing Partner for TMT
Acquisition, both small business consulting firms, from 1998 to 2000,
as
President of Aydin Telemetry from 1997 to 1998, and as Vice President
of
Controlotron Corporation from 1994 to 1996. Prior to 1994, Mr. Robertson
served in a number of senior executive positions with Republic Electronics
Corporation and Aeroflex Laboratories. Mr. Robertson holds BS and
MS
degrees in Electrical Engineering from Purdue
University.
|
|
T.
Scott Hatton
Age
40
|
|
T.
Scott Hatton has served as Vice President and Chief Financial Officer
of
Sypris since July 2005. From 2003 to July 2005, Mr. Hatton served
as Vice
President and Chief Financial Officer for Honeywell Automation &
Control Solutions, a strategic business group of Honeywell. From
2002 to
2003, he served as Vice President and Chief Financial Officer for
the
Transportation Systems of Honeywell. From 1988 to 2002, Mr. Hatton
served
in a number of progressively responsible executive positions with
the
General Electric Company, including most recently as Chief Financial
Officer of the Global Noryl business unit of GE Plastics and as Chief
Financial Officer for GE Superabrasives. Mr. Hatton is a graduate
of the
GE Financial Management Program and holds a Bachelor’s Degree in Business
Administration from the University of Kentucky.
|
|
Richard
L. Davis
Age
53
|
|
Richard
L. Davis has served as Senior Vice President of Sypris since 1997,
as
Secretary from 1998 to 2003 and as Vice President and Chief Financial
Officer of its predecessor from 1985 to 1997. Prior to 1985, Mr.
Davis
served in a number of management positions with Armor Elevator and
Coopers
and Lybrand. Mr. Davis holds a BS degree in Business Administration
from
Indiana University and an MBA from the University of Louisville.
He is a
certified public accountant in the state of Kentucky.
|
|
John
R. McGeeney
Age
50
|
|
John
R. McGeeney has served as General Counsel and Secretary of Sypris
since
June 2003. Mr. McGeeney served Of Counsel to Middleton and Reutlinger,
a
law firm, in 2003, and as General Counsel for Inviva, Inc., an insurance
holding company, from 2000 to 2002. Mr. McGeeney also served in several
senior leadership positions, including General Counsel and Secretary,
with
ARM Financial Group, a financial services company, from 1994 to 1999,
and
as Counsel and Assistant General Counsel for Capital Holding Corporation,
a financial services company, from 1988 to 1994. Mr. McGeeney holds
a BA
degree from Amherst College and a JD degree from the University of
Notre
Dame Law School.
|
3
|
Anthony
C. Allen
Age
48
|
|
Anthony
C. Allen has served as Vice President, Treasurer and Assistant Secretary
of Sypris since December 2004 and as Vice President of Finance and
Information Systems and Assistant Secretary of Sypris from 2003 to
December 2004. Mr. Allen served as Vice President, Controller and
Assistant Secretary of Sypris from 1997 to 2003. He served as Vice
President of Finance of Sypris’ predecessor from 1994 to 1998 and as Vice
President and Controller from 1987 to 1994. Prior to 1987, Mr. Allen
served in a variety of management positions with Armor Elevator.
Mr. Allen
holds a Bachelors degree in Business Administration from Eastern
Kentucky
University and an MBA from Bellarmine University. He is a certified
public
accountant in the state of
Kentucky.
|
The
address of each executive officer and director is: c/o Sypris Solutions, Inc.,
101 Bullitt Lane, Suite 450, Louisville, Kentucky 40222.
4
Exhibit
99.(a)(1)(b)
Congratulations!
Each
year, the Compensation Committee of our Board of Directors reviews the Sypris
compensation program, including all outstanding stock option awards. As a
result, the Committee has granted you the right to exchange all of your vested,
“underwater” stock options for new shares of stock or new stock options with an
exercise price of $7.90.
Please
read the enclosed materials carefully. This exchange offer expires on June
12,
2007. You must complete an election form - even if you wish to keep your
existing stock options.
All
of
your vested stock options which have an exercise price (or “strike” price)
greater than $7.90 per share are “Eligible Options” for this exchange offer. All
of the Eligible Options that you received in any one grant, having the same
strike price, are called an “Eligible Grant.”
Your
choices for each Eligible Grant, as listed on your election form (attached
as
Exhibit A), are:
| 1. |
Keep
all of your Eligible Options in that grant, with no
changes;
|
| 2. |
Trade
all Eligible Options in that grant for a specified number of shares
of
vested stock;
|
| 3. |
Trade
all Eligible Options in that grant for a specified number of new,
vested
stock options with a new strike price of $7.90 per share, exercisable
through May 14, 2011.
|
We
have
calculated the numbers of the new vested shares or new vested options in an
approximately “cost neutral” manner, as described in the attached materials, but
you should carefully evaluate each choice based upon your own analysis. Attached
you will find:
| · |
an
Offer to Exchange, with detailed explanations of the exchange
offer,
|
| · |
the
terms of the 2007 Stock Option Exchange Program,
|
| · |
your
new Exchange Agreement,
|
| · |
the
election form on Exhibit A which provides a summary of your equity
grants,
|
| · |
a
copy of the 2004 Sypris Equity Plan, and
|
| · |
the
forms you can use to change your election before June 12,
2007.
|
We
have
also included a Stock Value Calculator that allows you to assume various stock
prices for Sypris stock and calculates the value of each of your choices at
that
price.
In
the
most “conservative risk” scenarios - where you assume that Sypris stock falls in
price or increases very little - then trading your Eligible Options for shares
of vested stock would be an appropriate choice. In the most “aggressive risk”
scenarios - where you are willing to assume that the price of Sypris stock
will
rise well above the strike price of those Eligible Options - then you might
elect to keep your Eligible Options without any changes. In the “moderate risk”
scenarios - where you believe that Sypris stock will rise in price, but may
not
rise significantly above your current strike prices - then trading Eligible
Options for new options might be your best choice.
We
have
scheduled a teleconference on Friday, May 18, 2007 at 2:00 pm EST, to address
frequently asked questions. You may participate by dialing into 1-XXX-XXX-XXXX
(and then entering: XXXXXX#). Questions that pertain to your personal situation
should be directed to your local Human Resource Representative. Again, you
may
change any election up to June 12th,
but
after June 12th
all
decisions are final.
Congratulations
again on the opportunity to participate in this
program!
Exhibit
99.(a)(1)(c)
Attached
for your review is a voluntary opportunity to exchange fully vested, unexercised
options with exercise prices equal to or greater than $7.90 per share for
either
new
shares of vested stock or new vested options with a four year expiration date.
In order to make your decision please review the attached
documents:
| 1. |
Cover
Letter
|
| 2. |
Offer
to Exchange
|
| 3. |
New
Grant Agreement
|
| 4. |
Your
Election Form
(on Exhibit
A)
|
Additionally
we have provided Stock Values Calculator to allow you to review how different
stock prices might effect your election to keep your current options, elect
to
exchange your options for new options, or elect to exchange your options for
new
shares of common stock.
We
will
conduct a conference call on May
18th to
review
the Exchange Program and address any questions you may have about the materials
provided. The dial in number for this call is 1-XXX-XXX-XXXX, entry code is
XXXXXX#. We urge you to review the material prior to this call.
This
2007
Exchange Offer Program will expire on June 12th
at 5pm
EST and requires you to elect one of the choices provided before that
time.
Exhibit
99.(a)(1)(d)
STANDARD
TERMS OF EXECUTIVE AWARDS GRANTED UNDER
THE
2007 STOCK OPTION EXCHANGE PROGRAM
OF
THE 2004 SYPRIS EQUITY PLAN
1. Purpose
of the Program.
The
Company’s 2007 Stock Option Exchange Program (the “Program”) under the 2004
Sypris Equity Plan (“Plan”) shall be effective for all Awards to executive
officers and directors incorporating these Terms, to advance the Company’s
growth and prosperity by providing meaningful long-term financial incentives
to
its executives and certain other key employees, and to further the Company’s
philosophy of equity ownership and incentives.
2. Eligible
Grant. “Eligible
Grant” means any previous
grant
of
stock options under
any
of the Company’s stock option or equity plans, if: a) 100% of the stock options
awarded in such grant were fully vested
on May
14, 2007, and b) the exercise price of such options is above $7.90 per
share.
3. Eligible
Options.“Eligible
Options” means all stock options
awarded
in any Eligible
Grant.
4. New
Shares.Each
“New
Share” is one fully vested Share of the Common Stock.
5. New
Options.
Each
“New Option” is the right to purchase one Option Share at the Option Price, from
the Grant Date until its Expiration Date or forfeiture (subject to adjustments
per the Plan). Options must be exercised with 48 hours advance written notice,
unless waived by the Company.
| 5.1. |
Option
Price.
“Option Price” means $7.90 per Share (the last closing price per Option
Share prior to the opening of business on May 14, 2007 (“the Grant
Date”)). The Option Price is payable to the Company in cash or any other
method of payment authorized by the Committee in its discretion,
which may
include Stock (valued as the closing price per Share on the exercise
date)
or vested options (valued as the closing price per Share on the exercise
date, less the Option Price), in each case in accordance with applicable
Rules. Similarly, the Participant must arrange for tax withholding
in
accordance with applicable Rules, to the satisfaction of the
Committee.
|
| 5.2. |
Option
Shares.
Initially, each “Option Share” is one Share of the Common Stock (subject
to adjustments per the Plan). Option Shares may be certificated upon
request, with any legends required by applicable
Rules.
|
| 5.3. |
Option
Vesting.
All New Options are 100% vested on the Grant
Date.
|
| 5.4. |
Expiration
Date.
Each New Option's "Expiration Date" will be May 14,
2011.
|
6. Award
of Exchange Rights.
With
respect to each Eligible Grant, in exchange for all Eligible Options in such
grant, the Company hereby awards to the Participant named on Exhibit A, either:
| 6.1. |
New
Options:
the number of New Options specified on Exhibit A in connection with
any
Eligible Grant, for which the Participant has elected Exchange #2
- “New
Options”, on the last duly executed form of Exhibit A received by the
Company on or before June 12, 2007 at 5:00 p.m. EST; or
|
| 6.2. |
New
Shares:
the number of New Shares specified on Exhibit A in connection with
any
Eligible Grant, for which the Participant has elected Exchange #3
- “New
Stock”, on the last duly executed form of Exhibit A received by the
Company on or before June 12, 2007 at 5:00 p.m.
EST.
|
| 6.3. |
No
Change.
In the alternative, the Participant shall retain all Eligible Options
specified on Exhibit A in connection with such Eligible Grant, for
which
the Participant has elected Exchange #1 - “No Change”, on the last duly
executed form of Exhibit A received by the Company on or before June
12,
2007 at 5:00 p.m. EST.
|
7. Retirement,
DEath or Disability.
In the
event of any retirement after age 65 or qualification to receive long-term
disability benefits under the Company’s then current policies, such retirement
or disability period shall be treated as a period of employment for purposes
of
any exercise rights. In the event of death, the Participant’s representative or
estate shall have one (1) year in which to exercise any New Options prior to
their Expiration Date.
8. Leaves
of Absence.
The
Committee may in its discretion treat all or any portion of any period during
which a Participant is on military or other approved leave of absence as a
period of employment for purposes of the accrual of rights
hereunder.
9. Other
Terminations.
If
employment is terminated other than for retirement, death or disability, the
Participant will have up to thirty (30) days in which to exercise any New
Options prior to their Expiration Date.
10. Administration.
The
Committee shall have complete authority to administer or interpret the Program
or any Award, to prescribe, amend and rescind rules and regulations relating
thereto, and to make all other determinations necessary or advisable for the
administration of the Program or any Award Agreements (including to establish
or
amend any rules regarding the Program that are necessary or advisable to comply
with, or qualify under, any applicable law, listing requirement, regulation
or
policy of any entity, agency, organization, governmental entity, or the Company,
in the Committee’s sole discretion (“Rule”)). In addition, with respect to any
future grants or the unvested portion of any Awards, the Committee may amend
or
terminate these Terms or any Awards, in its sole discretion without the consent
of any employee or beneficiary, subject to applicable Rules, at any time and
from time-to-time. With respect to any amendment, action or approval hereunder,
the Committee may require the approval of any other persons or entities,
pursuant to applicable Rules. The decisions of the Committee in interpreting
and
applying the Program will be final.
11. Miscellaneous.
Unless
otherwise specified, all capitalized terms herein shall have the meanings
assigned to them in the Plan or in the Award Agreement.
| 11.1. |
No
Other Rights.
The Awards include no other rights beyond those expressly provided
in the
Plan, the Program or the Award Agreement. Awards are non-assignable
and
non-transferable except by will or the laws of descent and distribution,
unless otherwise approved by the
Committee.
|
| 11.2. |
Taxes.
The Participant must pay in cash, surrender Shares or Options of
then-equivalent value, or otherwise arrange (to the Committee’s
satisfaction) for all tax withholding
obligations.
|
| 11.3. |
Delegation.
The Committee may delegate any portion of their responsibilities
and
powers to one or more persons selected by them, subject to applicable
Rules and revocation at any time.
|
SYPRIS
SOLUTIONS, INC.
By:
Name:
Jeffrey T. Gill__
_
Title:
President & CEO___
Exhibit
99.(a)(1)(e)
STANDARD
TERMS OF EMPLOYEE AWARDS GRANTED UNDER
THE
2007 STOCK OPTION EXCHANGE PROGRAM
OF
THE 2004 SYPRIS EQUITY PLAN
1. Purpose
of the Program.
The
Company’s 2007 Stock Option Exchange Program (the “Program”) under the 2004
Sypris Equity Plan (“Plan”) shall be effective for all Awards to executive
officers and directors incorporating these Terms, to advance the Company’s
growth and prosperity by providing meaningful long-term financial incentives
to
its executives and certain other key employees, and to further the Company’s
philosophy of equity ownership and incentives.
2. Eligible
Grant. “Eligible
Grant” means any previous
grant
of
stock options under
any
of the Company’s stock option or equity plans, if: a) 100% of the stock options
awarded in such grant were fully vested
on May
14, 2007, and b) the exercise price of such options is above $7.90 per
share.
3. Eligible
Options.“Eligible
Options” means all stock options
awarded
in any Eligible
Grant.
4. New
Shares.Each
“New
Share” is one fully vested Share of the Common Stock.
5. New
Options.
Each
“New Option” is the right to purchase one Option Share at the Option Price, from
the Grant Date until its Expiration Date or forfeiture (subject to adjustments
per the Plan). Options must be exercised with 48 hours advance written notice,
unless waived by the Company.
| 5.1. |
Option
Price.
“Option Price” means $7.90 per Share (the last closing price per Option
Share prior to the opening of business on May 14, 2007 (“the Grant
Date”)). The Option Price is payable to the Company in cash or any other
method of payment authorized by the Committee in its discretion,
which may
include Stock (valued as the closing price per Share on the exercise
date)
or vested options (valued as the closing price per Share on the exercise
date, less the Option Price), in each case in accordance with applicable
Rules. Similarly, the Participant must arrange for tax withholding
in
accordance with applicable Rules, to the satisfaction of the
Committee.
|
| 5.2. |
Option
Shares.
Initially, each “Option Share” is one Share of the Common Stock (subject
to adjustments per the Plan). Option Shares may be certificated upon
request, with any legends required by applicable
Rules.
|
| 5.3. |
Option
Vesting.
All New Options are 100% vested on the Grant
Date.
|
| 5.4. |
Expiration
Date.
Each New Option's "Expiration Date" will be May 14,
2011.
|
6. Award
of Exchange Rights.
With
respect to each Eligible Grant, in exchange for all Eligible Options in such
grant, the Company hereby awards to the Participant named on Exhibit A, either:
| 6.1. |
New
Options:
the number of New Options specified on Exhibit A in connection with
any
Eligible Grant, for which the Participant has elected Exchange #2
- “New
Options”, on the last duly executed form of Exhibit A received by the
Company on or before June 12, 2007 at 5:00 p.m. EST; or
|
| 6.2. |
New
Shares:
the number of New Shares specified on Exhibit A in connection with
any
Eligible Grant, for which the Participant has elected Exchange #3
- “New
Stock”, on the last duly executed form of Exhibit A received by the
Company on or before June 12, 2007 at 5:00 p.m.
EST.
|
| 6.3. |
No
Change.
In the alternative, the Participant shall retain all Eligible Options
specified on Exhibit A in connection with such Eligible Grant, for
which
the Participant has elected Exchange #1 - “No Change”, on the last duly
executed form of Exhibit A received by the Company on or before June
12,
2007 at 5:00 p.m. EST.
|
-1-
7. Retirement,
Death or Disability.
In the
event of any retirement after age 65 under the Company’s then current policies,
the first two years of such retirement period shall be treated as a period
of
employment for purposes of any exercise rights. In the event of the
Participant’s death or qualification to receive long-term disability benefits
under the Company’s then current policies, the Participant (or the Participant’s
authorized representative) shall have up to one year in which to exercise any
New Options prior to their Expiration Date.
8. Leaves
of Absence.
The
Committee may in its discretion treat all or any portion of any period during
which a Participant is on military or other approved leave of absence as a
period of employment for purposes of the accrual of rights
hereunder.
9. Other
Terminations.
If
employment is terminated other than for retirement, death or disability, the
Participant will have up to thirty (30) days in which to exercise any New
Options prior to their Expiration Date.
10. Administration.
The
Committee shall have complete authority to administer or interpret the Program
or any Award, to prescribe, amend and rescind rules and regulations relating
thereto, and to make all other determinations necessary or advisable for the
administration of the Program or any Award Agreements (including to establish
or
amend any rules regarding the Program that are necessary or advisable to comply
with, or qualify under, any applicable law, listing requirement, regulation
or
policy of any entity, agency, organization, governmental entity, or the Company,
in the Committee’s sole discretion (“Rule”)). In addition, with respect to any
future grants or the unvested portion of any Awards, the Committee may amend
or
terminate these Terms or any Awards, in its sole discretion without the consent
of any employee or beneficiary, subject to applicable Rules, at any time and
from time-to-time. With respect to any amendment, action or approval hereunder,
the Committee may require the approval of any other persons or entities,
pursuant to applicable Rules. The decisions of the Committee in interpreting
and
applying the Program will be final.
11. Miscellaneous.
Unless
otherwise specified, all capitalized terms herein shall have the meanings
assigned to them in the Plan or in the Award Agreement.
| 11.1. |
No
Other Rights.
The Awards include no other rights beyond those expressly provided
in the
Plan, the Program or the Award Agreement. Awards are non-assignable
and
non-transferable except by will or the laws of descent and distribution,
unless otherwise approved by the
Committee.
|
| 11.2. |
Taxes.
The Participant must pay in cash, surrender Shares or Options of
then-equivalent value, or otherwise arrange (to the Committee’s
satisfaction) for all tax withholding
obligations.
|
| 11.3. |
Delegation.
The Committee may delegate any portion of their responsibilities
and
powers to one or more persons selected by them, subject to applicable
Rules and revocation at any time.
|
SYPRIS
SOLUTIONS, INC.
By:
Name:
Jeffrey T. Gill___
Title:
President & CEO___
Exhibit
99.(a)(1)(f)
SYPRIS
SOLUTIONS, INC.
OFFER
TO EXCHANGE CERTAIN OUTSTANDING OPTIONS
NOTICE
OF WITHDRAWAL
To
Sypris
Solutions, Inc.:
I
previously signed, dated and returned an Election Form in which I elected to
accept Sypris’ Offer to Exchange Outstanding Options to Purchase Common Stock
dated May 14, 2007 (the “Offer”). Defined terms not explicitly defined herein
shall have the same definitions as in the Offer.
I
now
wish to change my previous election and reject Sypris’ Offer. I understand that
by signing this Notice and delivering it to the Company as instructed below,
I
will be withdrawing my acceptance of the Offer, and rejecting the Offer,
in
its entirety.
I
understand that in order to reject the Offer, I must sign, date and deliver
this
Notice before 5:00 p.m. Eastern Time on June 12, 2007, or if Sypris extends
the
Offer, before the extended Expiration Date.
By
rejecting the Offer I understand that I will not receive any shares of common
stock or options to purchase shares of Sypris common stock, and I will keep
my
Eligible Options. These options will continue to be governed by the equity
plans
under which these options were granted and the existing option agreements
between Sypris and me.
I
understand that I may change this election, and once again accept the Offer,
by
delivering a new Election Form prior to 5:00 p.m. Eastern Time on June 12,
2007.
I
have
completed and signed the following exactly as my name appears on my original
Election Form.
I
do
not
accept
the offer to exchange options.
|
|
|
|
|
|
|
Optionee
Signature
|
|
|
Employee
ID or Social Security Number
|
|
|
|
|
|
|
|
|
Optionee
Name (Please print)
|
|
|
E-mail
Address Date
and Time
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RETURN
THIS NOTICE OF WITHDRAWAL TO SYPRIS NO LATER THAN 5:00 PM EASTERN TIME ON JUNE
12, 2007 VIA HAND DELIVERY, INTEROFFICE MAIL OR FACSIMILE TO
(502) 329-2036.
SYPRIS
WILL SEND YOU AN EMAIL CONFIRMATION WITHIN 3 BUSINESS DAYS OF RECEIPT.
[Missing
Graphic Reference]
INSTRUCTIONS
TO THE NOTICE OF WITHDRAWAL
1. Delivery
of Notice of Withdrawal.
A
properly completed and executed original of this Notice of Withdrawal must
be
delivered to Sypris at 101 Bullitt Lane, Suite 450, Louisville, Kentucky 40202,
via hand delivery, interoffice mail or facsimile at (502) 329-2036, on or
before 5:00 p.m. Eastern Time on June 12, 2007(the Expiration Date).
The
method by which you deliver any required documents is at your option and risk,
and the delivery will be deemed made only when actually received by the Company.
You should allow sufficient time to ensure timely
delivery.
Although
by submitting a Notice of Withdrawal of your election, you have withdrawn your
election to exchange your Eligible Option Grants, you may change your mind
and
re-accept the Offer at any time prior to the Expiration Date. If the Company
extends the Expiration Date, you may elect to accept the Offer at any time
until
the new Expiration Date. To change your election, you must deliver a new signed
and dated Election Form to the Company before the Expiration Date. Your options
will not be properly exchanged for purposes of the Offer unless you again elect
to accept the Offer before the Expiration Date by delivery of the new Election
Form.
If
you do not wish to withdraw your election IN
ITS ENTIRETY,
you should
not
fill out this Notice of Withdrawal. If you wish to change your election with
respect only to particular Eligible Option Grants, then you should complete
and
deliver a new Election Form instead.
As noted
in the Offer, you may select Eligible Grants to be exchanged for a reduced
number of shares of Sypris common stock or options to purchase Sypris common
stock. You may change your mind about which Eligible Grants you would like
to
exchange at any time before the Expiration Date. If the Company extends the
Offer beyond that time, you may change your election regarding particular
Eligible Option Grants you elected to exchange at any time until the new
Expiration Date. To change your election regarding any particular Eligible
Grants you previously elected to exchange while continuing to elect to
participate in the Offer, you must deliver a signed and dated new Election
Form.
Upon the receipt of such a new, properly filled out, signed and dated Election
Form, any previously submitted Election Form will be disregarded and will be
considered replaced in full by the new Election Form.
2. Other
Information on This Notice of Withdrawal. In
addition to signing this Notice of Withdrawal, you must print your name and
indicate the date and time at which you signed. You must also include your
email
address and your employee identification number or your social security number,
as appropriate.
3. Requests
for Assistance or Additional Copies. Any
questions or requests for assistance, as well as requests for additional copies
of the Offer to Exchange or this Notice of Withdrawal, should be directed to
Andrea Luescher at Sypris, 101 Bullitt Lane, Suite 450, Louisville, Kentucky
40202, telephone number (502) 329-2029.
15184513.1
Exhibit
99.(a)(1)(g)
CONFIRMATION
OF RECEIPT OF ELECTION FORM
This
email confirms our receipt of your Election Form, which sets forth your election
to exchange one or more of your Eligible Grants in the 2007 Sypris Stock Option
Exchange Program. This email does not serve as a formal acceptance by Sypris
of
the Eligible Grants designated on your Election Form for exchange. The procedure
for acceptance of Eligible Grants for exchange is described in the Offer to
Exchange previously made available to you.
Your
election to exchange your Eligible Grants may be withdrawn or changed at any
time prior to 5:00 p.m. Eastern Time on June 12, 2007, the Expiration Date
of
the Offer to Exchange. Withdrawals must be submitted to the Company according
to
the instructions set forth in the Notice of Withdrawal.
You
may
email questions about the Offer to Exchange to andrea.luescher@sypris.com or
call (502) 329-2029.
Exhibit
99.(a)(1)(h)
CONFIRMATION
OF RECEIPT OF NOTICE OF WITHDRAWAL
This
email confirms our receipt of your Notice of Withdrawal rejecting Sypris’ Offer
to Exchange Outstanding Options to Purchase Common Stock dated May 14, 2007
(the
“Offer”) and nullifying your previously submitted Election Form. Please
note that the Notice of Withdrawal completely withdraws you from the Offer
and
cannot be used to make changes to your previously submitted Election
Form. If
you would like to change your election with respect to particular options
only,
you should submit a new Election Form instead.
In
addition, you may change your mind and re-accept the Offer by completing
and
delivering a new Election Form at any time prior to 5:00 p.m. Eastern Time
on
June 12, 2007.
You
may
email questions about the Offer to andrea.luescher@sypris.com or call
(502) 329-2029.
Exhibit
99.(a)(1)(i)
To
All
Sypris Optionholders Eligible to Participate in the Offer to Exchange:
REMINDER
— If you are electing to exchange any of your Eligible Option Grants under
the
Stock Option Exchange Program, the deadline to deliver your Election Form
is
June 12, 2007 at 5:00 p.m. Eastern Time.
We
cannot
accept late submissions, and therefore we urge you to respond early to avoid
any
last minute problems.
Even
if
you are not electing to tender any of your outstanding Eligible Options for
exchange, a completed Election Form is required on your part.
If
you
have questions regarding the Stock Option Exchange Program, contact
andrea.luescher@sypris.com or call (502) 329-2029.
Exhibit
99.(a)(1)(j)
|
Input
SYPR hypothetical stock price:
|
$
9.00
|
Hypothetical
/ "What if?" Scenarios
|
||||||||||
|
Input
your tax rate:
|
40%
|
SYPR's
closing stock price on 5-11-07:
|
|
$
7.90
|
$
7.90
|
|||||||
|
$
9.00
|
$
9.00
|
$
9.00
|
||||||||||
|
Participant
Summary
|
60%
|
60%
|
60%
|
|||||||||
|
|
1
|
2
|
3
|
|
|
|||||||
|
Grant
|
(Vested)
|
New
|
New
|
1
- No
|
2
- New
|
3
- New
|
||||||
|
Grant
|
Expiration
|
Shares
|
Price
|
Granted
|
No
Change
|
Options
|
Stock
|
Change
|
Options
|
Stock
|
||
|
Participant
|
|
|
||||||||||
|
2/27/01
|
2/26/2009
|
25,000
|
$
6.25
|
25,000
|
25,000
|
-
|
-
|
$
41,250
|
$
-
|
$
-
|
||
|
2/25/03
|
2/24/2011
|
2,400
|
$
8.25
|
2,400
|
1,440
|
-
|
-
|
$
1,080
|
$
-
|
$
-
|
||
|
2/25/03
|
2/24/2011
|
10,000
|
$
8.25
|
10,000
|
6,000
|
-
|
-
|
$
4,500
|
$
-
|
$
-
|
||
|
2/26/03
|
2/25/2011
|
39,000
|
$
8.27
|
39,000
|
23,400
|
-
|
-
|
$
17,082
|
$
-
|
$
-
|
||
|
3/2/06
|
3/1/2012
|
12,500
|
$
10.36
|
12,500
|
-
|
-
|
-
|
$
-
|
$
-
|
$
-
|
||
|
|
|
Not
eligible:
|
88,900
|
55,840
|
$
63,912
|
|
||||||
|
|
|
|
|
|
|
|||||||
|
12/31/05
|
12/30/2011
|
7,500
|
$
9.98
|
7,500
|
7,500
|
7,437
|
2,364
|
$
-
|
$
4,908
|
$
13,806
|
||
|
2/22/00
|
2/21/2008
|
10,000
|
$
10.50
|
10,000
|
10,000
|
2,177
|
692
|
$
-
|
$
1,437
|
$
4,041
|
||
|
7/1/05
|
6/30/2011
|
12,500
|
$
11.92
|
12,500
|
12,500
|
9,648
|
3,067
|
$
-
|
$
6,368
|
$
17,911
|
||
|
2/26/02
|
2/25/2010
|
2,600
|
$
13.50
|
2,600
|
2,600
|
1,201
|
382
|
$
-
|
$
793
|
$
2,231
|
||
|
2/26/02
|
2/25/2010
|
10,000
|
$
13.50
|
10,000
|
10,000
|
4,621
|
1,469
|
$
-
|
$
3,050
|
$
8,579
|
||
|
7/1/02
|
6/30/2010
|
5,000
|
$
16.03
|
5,000
|
5,000
|
1,971
|
626
|
$
-
|
$
1,301
|
$
3,656
|
||
|
|
|
|
Eligible:
|
47,600
|
47,600
|
Value
|
$
-
|
$
17,856
|
$
50,224
|
|||
Exhibit
99.(a)(1)(k)
Note:
The
past performance of the Company's stock is no guarantee of its likely future
performance. Please read the "Offer to Exchange" carefully before making
your election.
This
offier expires June 12, 2007.
Exhibit
A
Participant
Summary
|
Alternative
Stock Price Scenarios
|
|||||||||
|
SYPR’s
closing price on 5-11-07:
|
$7.90
|
$7.90
|
$7.90
|
$7.90
|
$7.90
|
$7.90
|
|||
|
If
SYPR’s stock price is:
|
$9.00
|
$9.00
|
$9.00
|
$15.00
|
$15.00
|
$15.00
|
$21.00
|
$21.00
|
$21.00
|
|
After
tax (assumed tax rate of 40%):
|
60%
|
60%
|
60%
|
60%
|
60%
|
60%
|
60%
|
60%
|
60%
|
|
*
Grant Expiration
Participant
.
|
Shares
|
Grant
Price
|
Granted
|
1
(Vested)
No
Change
|
2
New
Options
|
3
New
Stock
|
1
-
No Change
|
2
-
New
Options
|
3
-
New
Stock
|
1
-
No Change
|
2
-
New
Options
|
3
-
New
Stock
|
1
-
No Change
|
2
-
New
Options
|
3
-
New
Stock
|
||
|
|
2/27/01
|
2/26/2009
|
25,000
|
$
6.25
|
25,000
|
25,000
|
-
|
-
|
$
41,250
|
$
-
|
$
-
|
$131,250
|
$
-
|
$
-
|
$
221,250
|
$
-
|
$
-
|
|
|
2/25/03
|
2/24/2011
|
2,400
|
$
8.25
|
2,400
|
1,440
|
-
|
-
|
$
1,080
|
$
-
|
$
-
|
$
9,720
|
$
-
|
$
-
|
$
18,360
|
$
-
|
$
-
|
|
|
2/25/03
|
2/24/2011
|
10,000
|
$
8.25
|
10,000
|
6,000
|
-
|
-
|
$
4,500
|
$
-
|
$
-
|
$
40,500
|
$
-
|
$
-
|
$
76,500
|
$
-
|
$
-
|
|
|
2/26/03
|
2/25/2011
|
39,000
|
$
8.27
|
39,000
|
23,400
|
-
|
-
|
$
17,082
|
$
-
|
$
-
|
$157,482
|
$
-
|
$
-
|
$
297,882
|
$
-
|
$
-
|
|
|
3/2/06
|
3/1/2012
|
12,500
|
$
10.36
|
12,500
|
-
|
-
|
-
|
$
-
|
$
-
|
$
-
|
$
34,800
|
$
-
|
$
-
|
$
79,800
|
$
-
|
$
-
|
|
|
|
Not
Eligible:
|
88,900
|
55,840
|
$
63,912
|
|
$373,752
|
|
$
693,792
|
|
|||||||
|
|
12/31/05
|
12/30/2011
|
7,500
|
$
9.98
|
7,500
|
7,500
|
6,378
|
2,021
|
$
-
|
$
8,993
|
$
12,813
|
$
22,590
|
$
31,954
|
$
24,939
|
$
49,590
|
$
54,915
|
$
37,065
|
|
|
2/22/00
|
2/21/2008
|
10,000
|
$
10.50
|
10,000
|
10,000
|
1,255
|
397
|
$
-
|
$
1,770
|
$
2,517
|
$
27,000
|
$
6,288
|
$
4,899
|
$
63,000
|
$
10,806
|
$
7,281
|
|
|
7/1/05
|
6/30/2011
|
12,500
|
$
11.92
|
12,500
|
12,500
|
8,002
|
2,535
|
$
-
|
$
11,283
|
$
16,072
|
$
23,100
|
$
40,090
|
$
31,282
|
$
68,100
|
$
68,897
|
$
46,492
|
|
|
2/26/02
|
2/25/2010
|
2,600
|
$
13.50
|
2,600
|
2,600
|
910
|
288
|
$
-
|
$
1,283
|
$
1,826
|
$
2,340
|
$
4,559
|
$
3,554
|
$
11,700
|
$
7,835
|
$
5,282
|
|
|
2/26/02
|
2/25/2010
|
10,000
|
$
13.50
|
10,000
|
10,000
|
3,502
|
1,109
|
$
-
|
$
4,938
|
$
7,031
|
$
9,000
|
$
17,545
|
$
13,685
|
$
45,000
|
$
30,152
|
$
20,339
|
|
|
7/1/02
|
6/30/2010
|
5,000
|
$
16.03
|
5,000
|
5,000
|
1,490
|
472
|
$
-
|
$
2,101
|
$
2,992
|
$
-
|
$
7,465
|
$
5,824
|
$
14,910
|
$
12,829
|
$
8,656
|
|
|
|
|
Eligible:
|
47,600
|
47,600
|
$
-
|
$
30,367
|
$
43,251
|
$
84,030
|
$107,900
|
$
84,183
|
$
252,300
|
$185,434
|
$125,115
|
|||
*In each unshaded box please indicate your election of: (1) no change, (2) new options, (3) new stock.
Participant
Signature___________________________