UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
TO
(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:
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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$328,484
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$12.91
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*
Calculated solely for purposes of determining the filing fee. This amount
assumes that options to purchase 679,553 shares of common stock of Sypris
Solutions, Inc., having an aggregate value of
$328,484
as of March 31, 2008 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 $39.30 per million dollars of
the value of the transaction.
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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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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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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: ¨
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 optionees that have exercise prices equal to or greater than
$4.31 per share (the “Eligible Options”). These Eligible Options may be
exchanged for shares of common stock (the “New Shares”) 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
Unexercised
Vested Options for New Vested
Shares of Common Stock or New
Vested Options to Purchase Common Stock, dated March 31, 2008 (the
“Offer to Exchange”). The Offer to Exchange, 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 optionee” refers to
all persons who are employees or current Directors of Sypris or one
of its subsidiaries as of March 31, 2008 and remain employees or
current Directors until the date on which the Eligible Options are
cancelled. To receive a New Share or New Option, eligible optionees must
remain employees or current Directors through the date on which the New Shares
or New Options are granted.
The
information in the Offer to Exchange, including all schedules and annexes
thereto, 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" 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 is 101 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 New Shares 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 optionees and accepted for exchange and cancelled, in
comparison with the value of the New Shares elected by eligible optionees and/or
the Black-Scholes Merton valuations of the New Options elected by eligible
optionees, respectively, as applicable, using the last reported closing price of
Sypris common stock as reported on the Nasdaq Global Market, prior to regular
trading hours on March 31, 2008.
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
Eligible Options in exchange for issuance of New Shares or New Options” and
“Source and amount of consideration; terms of New Shares or New
Options” is incorporated by reference. As of March 31, 2008, there were issued
and outstanding 679,553 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 shares" 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 Officers 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 Eligible
Options in exchange for issuance of New Shares or New Options,” “Conditions of
the offer,” “Price range of shares,” “Source and amount of
consideration; terms of New Shares or 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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(a)
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 is attached hereto as Exhibit 99. (d)(1) and
contains 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 Eligible Options in exchange for issuance of
New Shares 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 Shares or
New Options” is incorporated herein by reference.
(b)
Conditions.
The offer
is not conditioned on any financing contingency.
c)
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.
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, 2007 is incorporated 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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99.(a)(1)(a)
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Offer
to Exchange Certain Unexercised Vested Options for New Vested Shares of
Common Stock or New Vested Options to Purchase Common Stock dated March
31, 2008
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99.(a)(1)(b)
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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 2008 Stock Option Exchange
Program
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99.(a)(1)(e)
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Standard
Terms of Awards Granted Employees Under the 2008 Stock Option Exchange
Program
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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
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99.(a)(1)(k)
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Election
Form
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99.(a)(1)(l)
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Form
of Email Notice to Optionees
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99.(a)(1)(m)
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Additional
Optionee Information Regarding Tax Withholding Obligations and Form of
Stock Ownership
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99.(a)(1)(n)
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Form
of Acceptance of Options for Cancellation
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99.(a)(1)(o)
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Form
of Notice of New Shares Tendered for Tax Withholding
Obligations
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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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Item 13.
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Information
Required by Schedule 13E-3.
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Not
applicable.
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.
Sypris
Solutions, Inc.
/s/
Jeffrey T. Gill
Name: Jeffrey
T. Gill
Title: President
and CEO
Date:
March 31, 2008
Exhibit
Index
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Item
12
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Exhibits.
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99.(a)(1)(a)
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Offer
to Exchange Certain Unexercised Vested Options for New Vested Shares of
Common Stock or New Vested Options to Purchase Common Stock dated March
31, 2008
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99.(a)(1)(b)
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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 2008 Stock Option Exchange
Program
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99.(a)(1)(e)
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Standard
Terms of Awards Granted Employees Under the 2008 Stock Option Exchange
Program
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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
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99.(a)(1)(k)
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Election
Form
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99.(a)(1)(l)
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Form
of Email Notice to Optionees
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99.(a)(1)(m)
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Additional
Optionee Information Regarding Tax Withholding Obligations and Form of
Stock Ownership
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99.(a)(1)(n)
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Form
of Acceptance of Options for Cancellation
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99.(a)(1)(o)
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Form
of Notice of New Shares Tendered for Tax Withholding
Obligations
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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’ 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
NEW VESTED SHARES OF 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.
March
31, 2008
SYPRIS
SOLUTIONS, INC.
Offer
to Exchange Certain
Unexercised,
Vested Options for New Vested Shares of Common Stock or
New
Vested Options to Purchase Common Stock
This
offer will expire at 5:00 p.m., Eastern Time, on May 1, 2008 and your rights to
withdraw will expire at 5:00 p.m., Eastern Time, on May 12, 2008, 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
$4.31 per share (the “Eligible Options”), in exchange for New Shares of common
stock or New Options to acquire common stock with an exercise price of $4.31 per
share (the “Offer Price”). 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) or a current Director and
remain an employee or a Director until 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) new, vested
shares of common stock having a Fair Value equivalent to the Fair Value of each
such Eligible Grant (“New Shares”) or (ii) new options to purchase shares of
Sypris common stock having a Fair Value equivalent to the Fair Value of each
such Eligible Grant (“New Options”). Your election to receive New Shares or New
Options will become effective and final on the expiration date.
New
Shares and New Options issued in exchange for cancelled Eligible Grants are
immediately vested. Each New Option will remain exercisable through March 30,
2012.
The
exercise price of New Options will be equal to the last reported closing price
per share of our common stock on the Nasdaq Global Market prior to regular
trading hours on March 31, 2008.
Our
common stock is traded on the Nasdaq Global Market under the symbol “SYPR.” You
should evaluate current market quotes for our common stock, among other factors,
before deciding to participate in this offer. 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.
IMPORTANT
If you
participate in this offer, you must complete and sign the personalized election
form you receive from us (Exhibit A to the Award Agreement), and fax it to us at
fax number (502) 329-2036, email it to andrea.luescher@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 May 12, 2008. 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
before the deadline are not
permitted if received after
the deadline.
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 OPTIONS.
Offer
to Exchange dated March 31, 2008.
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
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SUMMARY
TERM SHEET AND FREQUENTLY ASKED QUESTIONS
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1
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|||||||||
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THE
OFFER
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7
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|||||||||
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1.
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Eligibility
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7
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|||||||
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2.
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Number
of options; expiration date
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8
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||||||||
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3.
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Purpose
of the offer
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8
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||||||||
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4.
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Procedures
for electing to exchange options
|
9
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||||||||
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5.
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Withdrawal
rights
|
10
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||||||||
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6.
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Acceptance
of Eligible Options in exchange for issuance of New Shares or New
Options
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11
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||||||||
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7.
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Conditions
of the offer
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12
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||||||||
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8.
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Price
range of shares
|
14
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||||||||
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9.
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Source
and amount of consideration; terms of New Shares or New
Options
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14
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||||||||
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10.
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Information
concerning Sypris
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16
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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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18
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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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22
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||||||||
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13.
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Legal
matters; regulatory approvals
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22
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||||||||
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14.
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Material
U.S. federal income tax consequences
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22
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||||||||
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15.
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Extension
of offer; termination; amendment
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23
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16.
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Fees
and expenses
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24
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17.
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Additional
information
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24
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||||||||
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18.
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Miscellaneous
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24
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||||||||
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SCHEDULE
A
|
|
Information
Concerning the Directors and Executive Officers of Sypris Solutions,
Inc.
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|||||||
SUMMARY
TERM SHEET AND FREQUENTLY ASKED QUESTIONS
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 optionees to exchange
Eligible Options for New Shares of 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
Optionees
|
•
|
Employees
and current Directors of Sypris as of March 31, 2008 who remain associated
with Sypris until the date on which we cancel the exchanged options (we
refer to this date as the cancellation date, and we expect it to be May
13, 2008) .
|
Eligible
Options
|
•
|
All
outstanding, vested unexercised options in any Eligible Grant held by
eligible optionees with exercise prices equal to or greater than the Offer
Price 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).
|
Exchange
Ratio
|
•
|
An
eligible optionee may elect to receive New Shares of common stock or New
Options to purchase shares of common stock having an equivalent Fair Value
to each Eligible Grant to be cancelled in each such exchange, as
applicable.
|
Issuance
of New Shares and New Options
|
•
|
Your
New Options and your right to receive New Shares of common stock have been
granted effective as of March 31, 2008, subject to our receipt of your
election form before May 1, 2008.
|
|
•
|
All
New Options will be non-qualified stock options for purposes of federal
tax laws.
|
|
•
|
All
New Shares and New Options will be issued under and will be subject to the
terms of our 2004 Sypris Equity Plan and the 2008 Stock Option Exchange
Program.
|
|
•
|
If
you resign or your employment is terminated before May 13, 2008, your
rights under this offer will be forfeited and your Eligible Options will
be unaffected by this offer (although they may still be forfeited for
other reasons, in accordance with the applicable terms governing such
options).
|
Exercise
Price of the New Options
|
•
|
The
exercise price of the New Options is the Offer
Price.
|
Vesting
and Exercisability of Stock and New Options
|
•
|
Each
New Share and New Option granted with respect to an exchanged Eligible
Option is fully vested commencing on the new grant date. All New Options
will be exercisable through March 30,
2012.
|
|
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 date when exchanged options will be cancelled. We expect
that the cancellation date will be May 13, 2008. If the expiration date is
extended, then the cancellation date will be similarly
extended.
|
|
•
|
“Eligible Grant” refers
to all outstanding grants of Sypris stock options having the same grant
date and exercise price and in which 100% of the granted options are fully
vested, with an exercise price equal to or greater than the Offer
Price.
|
|
•
|
“Eligible Option”
refers to all options in any Eligible
Grant.
|
|
•
|
“eligible optionee”
refers to any employee of Sypris or its subsidiaries who remains employed
until the cancellation date and current
Directors.
|
|
•
|
“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 May 1, 2008 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.
|
|
•
|
“Fair Value” refers to
the value of any grant of equity securities (including any Eligible
Option, Eligible Grant, New Option or New Share) calculated using the
Black-Scholes Merton Valuation Model, pursuant to the requirements of FAS
No. 123(R) in accordance with generally accepted accounting principles,
based on the last reported closing price of Sypris common stock on the
NASDAQ Global Market prior to regular trading hours on March 31,
2008.
|
|
•
|
“Award Agreement” refers
to the standard terms of awards granted under the 2008 Stock Option
Exchange Program and your election form (Exhibit
A).
|
|
•
|
“New Options” refers to
options issued pursuant to this offer that replace your exchanged
options.
|
|
•
|
“New Shares” refers to
common stock of Sypris 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 $4.31 per share, for New
Options or New Shares subject to the terms and conditions described in
this 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 March 31, 2008 and expire
on May 1, 2008.
|
|
•
|
“Offer Price” refers to
the last reported price of Sypris common stock on the Nasdaq Global Market
prior to regular trading hours on March 31,
2008.
|
|
•
|
“Sypris, the Company we, our
or us” refers to Sypris Solutions, Inc. and its
subsidiaries.
|
|
•
|
“SEC” refers to the
U.S. Securities and Exchange
Commission.
|
2
|
•
|
“withdrawal date” refers to the
last date on which you may withdraw any previously submitted election form
and your participation from this offer. We expect that the withdrawal date
will be May 12, 2008 at 5:00 p.m., Eastern Time. We may extend the
withdrawal date at our sole discretion; any extension will be made by
written notice. If we extend the offer, the term “withdrawal date” will
refer to the time and date through which you may withdraw your
participation in the extended offer (including the withdrawal of any
earlier election form).
|
|
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.
|
|
Q4.
|
Who
may participate in this offer?
|
|
A4.
|
You
may participate in this offer if you are an employee or current Director
of Sypris at the time of this offer until the cancellation date. If you
resign or your employment is terminated before May 13, 2008, your rights
under this offer will be forfeited and your Eligible Options will be
unaffected by this offer (although they may still be forfeited for other
reasons, in accordance with the applicable terms governing such
options).
|
|
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 May 1,
2008:
|
|
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 before the deadline
are not permitted
if received after
the deadline.
|
You will
receive a personalized election form by email or U.S. mail at your home address
that lists all of your eligible options. If we do not receive your election form
on or before May 1, 2008 we will assume you have not elected to
participate.
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 optionees 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.
|
Q6.
|
Am
I required to participate in this
offer?
|
3
|
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.
|
|
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 all of the options you previously elected to exchange at any time
before the withdrawal date (which may be extended by us). You may change
your mind as many times as you wish, but you will be bound by the last
properly submitted election form we receive before the expiration date,
and the last withdrawal notice we receive before the withdrawal date. (In
addition, if we have not formally accepted your options for exchange
within 4 business days after the final withdrawal date, you would also
have a right to withdraw your tendered options
thereafter.
|
|
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 withdrawal
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. You may continue to withdraw your previous elections to
exchange any or all of your Eligible Grants through the withdrawal date,
but after the expiration date you may no longer submit any new election
forms or change any election form to choose New Options (instead of
previously selected New Shares) or New Shares (instead of previously
selected New Options).
|
|
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.
|
|
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.
|
4
|
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 stock or options to employees or directors
except in connection with this offer, in connection with newly hired
employees or in connection with the regular payment of certain directors’
fees in the form of stock. Therefore, you should not expect to receive any
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 if you elect to receive New Shares of common
stock. Tax consequences may vary depending on each individual
option holder’s circumstances. If you elect to receive New Shares,
you will need to provide your instructions for how you wish to handle any
tax withholding obligation by May 1, 2008. If we do not receive your
instructions by May 1, 2008, we will automatically withhold enough New
Shares to pay the tax withholding obligation.
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
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.
|
SPECIFIC QUESTIONS ABOUT THE
EXCHANGED OPTIONS
|
Q18.
|
If
I participate in this offer, do I have to exchange all of my
options?
|
|
A18.
|
If
you choose to participate in this offer with respect to any particular
Eligible Grant, you must exchange all Eligible Options within the Eligible
Grant.
|
5
|
Q19.
|
When
will my exchanged options be
cancelled?
|
|
A19.
|
Your
exchanged options will be cancelled on the first business day following
the withdrawal date. We refer to this date as the cancellation date. We
expect that the cancellation date will be May 13, 2008 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 stock
options. You may not exchange restricted stock grants or shares of Sypris
common stock in this offer.
|
|
Q21.
|
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 withdrawal date. We expect that the
cancellation date will be May 13,
2008.
|
|
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 New Shares or New
Options?
|
|
A24.
|
We
will issue certificates or facilitate DWAC deposit (per your choosing) of
the New Shares of common stock to you shortly after the cancellation date.
Your New Options are represented by the 2008 Stock Option Exchange Program
and your Award Agreement which includes your election form (Exhibit
A).
|
|
Q25.
|
How
many New Shares or New Options will I receive for the Eligible Options
that I exchange?
|
|
A25.
|
This
offer is not an even exchange. The ratio of shares subject to Eligible
Options cancelled to New Shares 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 New Shares and New Options that have
a Fair Value approximately equivalent to the Fair Value of the cancelled
options they replace as of March 31,
2008.
|
|
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 closing
price per share of our common stock prior to regular trading hours on
March 31, 2008.
|
|
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
|
6
| 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.
|
|
Q31.
|
Will
the terms and conditions of my New Options be the same as my exchanged
options?
|
|
A31.
|
No.
Your New Options will have a new exercise price, will vest immediately and
must be exercised in accordance with their terms before March 30,
2012.
|
|
Q32.
|
Will
I receive a new award agreement?
|
|
A32.
|
Yes.
The 2008 Stock Option Exchange Program and your Award Agreement will
govern the terms of any New
Options.
|
|
Q33.
|
When
will my New Options expire?
|
|
A33.
|
Your
New Options will expire on March 30, 2012, or earlier if your employment
with Sypris terminates.
|
|
Q34.
|
What
if my employment with Sypris ends before the 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 or New
Options. However, your Eligible Options will not be cancelled
under those circumstances.
|
|
Q35.
|
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, email:
andrea.luescher@sypris.com.
|
|
How
will the Fair Value of my New Options be
calculated?
|
|
A36.
|
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 an 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.
|
7
|
Q37.
|
How
will the value of my current options available for exchange be
determined?
|
|
A37.
|
Sypris
has computed the Fair 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 each share of common stock used for exchange is the last
reported closing price per share of our common stock prior to regular
trading hours on March 31, 2008.
|
|
Eligibility.
|
You are
an “eligible optionee” if you are a current Director or an employee of Sypris or
its subsidiaries and you remain a current Director or employed by Sypris or a
successor entity until the cancellation date, currently expected to be May 13,
2008.
If you
resign or your employment is terminated before May 13, 2008, 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
and your Eligible Options will be unaffected by this offer (although they may
still be forfeited for other reasons, in accordance with the applicable terms
governing such options).
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 exchange offer, we will accept any Eligible
Options that are held by eligible optionees which you have properly elected to
exchange before the expiration date, and which you have not validly withdrawn
before the withdrawal date.
If you
choose to participate in this offer with respect to any particular Eligible
Option, you must exchange all of the other Eligible Options that were issued in
the same Eligible Grant.
No shares
of Sypris common stock, including common stock previously 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 New 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.
All New
Options will be subject to the terms of our 2004 Sypris Equity Plan and to the
2008 Stock Option Exchange Program and the new award agreement between you and
Sypris dated effective as of March 31, 2008 (the “Award Agreement”). Our 2004
Sypris Equity Plan, the 2008 Stock Option Exchange Program and the form of your
Award 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 May 1, 2008,
unless we extend the offer by written notice (although you may withdraw your
participation in any exchange until 5:00 p.m., Eastern Time, on May 12, 2008,
unless we extend the withdrawal date 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.
8
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 New Shares 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 a 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 an exercise price threshold equal to the Offer Price. This was done
because we expect that options with exercise prices below the Offer Price 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 this threshold was appropriate after
considering the exercise prices of the unexercised options in light of the
recent performance of Sypris’ 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.
Finally, because all exchanges of Eligible Grants will be for an equal Fair
Value of New Options or New Shares, each exchange will be cost neutral to the
Company in accordance with the Black-Scholes Valuation Model.
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,
|
|
•
|
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.
|
9
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 before the
expiration date by U.S. mail or Federal Express or other express couriers are
not
permitted if received after
the expiration date. The expiration date will be 5:00 p.m., Eastern Time, on May
1, 2008, unless we extend the offer by written notice. You will receive by email
or mail at your home address an election form that lists all of your Eligible
Options and all options that you are required to exchange in each Eligible Grant
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 we receive before the expiration date and the last withdrawal form we
receive before May 12, 2008 at 5:00 p.m., Eastern Time.
If you
choose to participate in this offer with respect to any Eligible Grant, you must
exchange all Eligible Options in that Eligible Grant.
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 before the expiration date
and are not properly withdrawn as of the time when we give written notice to the
eligible optionees generally of our acceptance of options for exchange. We may
issue this notice of acceptance by email or other methods of communication.
Options accepted for exchange will be cancelled on the cancellation date, which
we presently expect will be May 13, 2008.
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
10
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 withdrawal date, which is expected to be 5:00 p.m., Eastern Time, on
May 12, 2008, unless extended by written notice. If we extend the offer, you may
withdraw your options at any time until the extended withdrawal
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 5:00
p.m., Eastern Time, on May 16, 2008, 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) 329-2036, 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
before this deadline by U.S. mail or Federal Express or other express couriers
are not
permitted if received after
this deadline.
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, 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
withdrawal form. We will determine, in our sole discretion, whether a withdrawal
form has been properly completed, including all questions as to the validity,
form, eligibility (including time of receipt) and acceptance of any options, in
accordance with Section 4 of this offer to exchange.
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 in any or all of your Eligible Grants before the expiration
date. 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 we receive before the expiration date
and the last properly tendered withdrawal form we receive before the withdrawal
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.
11
|
Acceptance
of Eligible Options in exchange for issuance of New Shares 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 before the expiration date and not validly withdrawn before the
withdrawal 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 May 13, 2008.
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 cancellation date. If you have participated in the
exchange but have not received such a confirmation promptly after the
cancellation date, please contact Andrea Luescher immediately at (502)
329-2000.
We will
issue certificated shares or facilitate DWAC deposit at your request for 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 May 13, 2008. All New
Options will be non-qualified stock options for purposes of U.S. federal tax
laws. All New Shares or New Options have been or will be granted under our 2004
Sypris Equity Plan.
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 and directors other than in
connection with this offer, in connection with newly hired employees or in
connection with the regular payment of certain directors’ fees in the form of
stock. 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
unusual circumstances surrounding trading in Sypris’ common stock,
including any halt or 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 or any
unusually high or low trading volume in Sypris’ common stock or the recent
dissemination of any material, non-public information by
Sypris,
|
12
|
-
|
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,
|
|
-
|
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
escalation of worldwide or national hostilities as a result of an act of
war or terrorism, including the commencement of any 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
|
|
-
|
even
if any of the situations described above existed at the time of
commencement of this offer, that situation, in our reasonable judgment,
has deteriorated materially,
|
|
•
|
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 Global 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:
|
•
|
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,
|
13
|
•
|
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.
|
Fiscal
Year Ending December 31, 2008
|
High
|
Low
|
|
First Quarter as of March 28,
2008
|
$ 6.44
|
$ 4.08
|
|
Fiscal
Year Ending December 31, 2007
|
||
|
First Quarter
|
$ 7.14
|
$ 6.03
|
|
Second Quarter
|
$ 8.87
|
$ 6.46
|
|
Third Quarter
|
$ 9.05
|
$ 7.90
|
|
Fourth Quarter
|
$ 9.91
|
$ 5.53
|
|
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
|
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 prior to regular trading hours on March 31, 2008 as
reported on the Nasdaq Global Market. 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 New Shares and New Options may be less valuable than your tendered
eligible options.
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 Shares or New
Options.
|
Consideration.
At your
election, we will issue either New Shares or New Options in exchange for
eligible unexercised options properly elected to be exchanged by you and
accepted by us for such exchange. Each New Share or New
14
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 the Black-Scholes Merton
Option Valuation Model.
As of
March 28, 2008, there were issued and outstanding options to purchase
approximately 1,255,530 shares of our common stock under all of our option
plans. Of these options, approximately 679,553 (representing 54.1% of all such
options) were held by eligible optionees and are Eligible Options for the
offer.
Subject
to the terms and conditions of this offer, we expect to grant New Options to
purchase a total of approximately 268,887 shares of our common stock, assuming
that all eligible employees tendered their Eligible Options for a grant of New
Options, or approximately 76,169 New Shares of common stock assuming that all
eligible employees tendered their Eligible Options for a grant of New Shares, or
a combination thereof.
General
Terms of New Shares and New Options.
Each New
Share and New Option has been or will be granted under our 2004 Sypris Equity
Plan. All New Shares and New Options will be subject to the terms of the 2004
Sypris Equity Plan, the 2008 Stock Option Exchange Program and your Award
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 equal to the Offer Price.
The
following description summarizes the material terms of our 2004 Sypris Equity
Plan, the New Shares and the 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 New Shares 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
number of shares of common stock covered by options currently outstanding and
unexercised under our Equity Plan is approximately 589,103 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; and (v) performance shares. All New Options granted pursuant
to this offer will be non-qualified stock options for purposes of U.S. federal
tax laws.
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 withdrawal 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 cancellation date, you will not be regarded as an
eligible participant and
15
your
Eligible Options will be unaffected by this offer (although they may still be
forfeited for other reasons, in accordance with the applicable terms governing
such options).
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 Award Agreement.
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 the Offer Price.
Your New Options may have a higher exercise price than some of your current
options.
Vesting
and Exercise.
Each New
Share and New Option granted with respect to an exchanged Eligible Option will
vest immediately and the New Options will remain exercisable for a four year
period commencing on March 31, 2008.
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 appropriate adjustment will be
made to the number of shares covered by each option, without any material change
in the aggregate purchase price.
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 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 New Shares 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.
16
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 seven 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, 2007.
|
Years Ended December 31,
|
||||||||||||||||||||
|
2007
|
2006(1)
|
2005
|
2004(2)
|
2003(3)
|
||||||||||||||||
|
(in
thousands, except per share data)
|
||||||||||||||||||||
|
Consolidated
Statement of Operations Data:
|
||||||||||||||||||||
|
Net
revenue
|
$ | 435,915 | $ | 497,664 | $ | 522,766 | $ | 425,402 | $ | 276,605 | ||||||||||
|
Cost
of sales
|
396,119 | 456,574 | 471,428 | 371,963 | 230,660 | |||||||||||||||
|
Gross
profit
|
39,796 | 41,090 | 51,338 | 53,439 | 45,945 | |||||||||||||||
|
Selling,
general and administrative
|
40,517 | 37,107 | 35,669 | 35,248 | 26,711 | |||||||||||||||
|
Research
and development
|
2,821 | 1,988 | 2,833 | 3,697 | 4,166 | |||||||||||||||
|
Amortization
of intangible assets
|
527 | 645 | 614 | 596 | 194 | |||||||||||||||
|
Nonrecurring
(income) expense, net
|
(3,246 | ) | 1,485 | — | — | — | ||||||||||||||
|
Operating
(loss) income
|
(823 | ) | (135 | ) | 12,222 | 13,898 | 14,874 | |||||||||||||
|
Interest
expense, net
|
3,685 | 3,708 | 5,979 | 2,100 | 1,693 | |||||||||||||||
|
Other
expense (income), net
|
31 | (387 | ) | (1,325 | ) | (138 | ) | 230 | ||||||||||||
|
(Loss)
income before income taxes
|
(4,539 | ) | (3,456 | ) | 7,568 | 11,936 | 12,951 | |||||||||||||
|
Income
tax (benefit) expense
|
(2,400 | ) | (2,094 | ) | 2,247 | 3,637 | 4,860 | |||||||||||||
|
Net
(loss) income
|
$ | (2,139 | ) | $ | (1,362 | ) | $ | 5,321 | $ | 8,299 | $ | 8,091 | ||||||||
|
(Loss)
earnings per common share:
|
||||||||||||||||||||
|
Basic
|
$ | (0.12 | ) | $ | (0.08 | ) | $ | 0.30 | $ | 0.48 | $ | 0.57 | ||||||||
|
Diluted
|
$ | (0.12 | ) | $ | (0.08 | ) | $ | 0.29 | $ | 0.47 | $ | 0.56 | ||||||||
|
Cash
dividends per common share
|
$ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.12 | $ | 0.12 | ||||||||||
|
Shares
used in computing per share amounts:
|
||||||||||||||||||||
|
Basic`
|
18,231 | 18,079 | 18,016 | 17,119 | 14,237 | |||||||||||||||
|
Diluted`
|
18,231 | 18,079 | 18,323 | 17,745 | 14,653 | |||||||||||||||
|
December 31,
|
||||||||||||||||||||
|
2007
|
2006(1)
|
2005
|
2004(2)
|
2003(3)
|
||||||||||||||||
|
(in
thousands)
|
||||||||||||||||||||
|
Consolidated
Balance Sheet Data:
|
||||||||||||||||||||
|
Cash
and cash equivalents
|
$ | 14,622 | $ | 32,400 | $ | 12,060 | $ | 14,060 | $ | 12,019 | ||||||||||
|
Working
capital
|
152,441 | 100,717 | 111,765 | 143,123 | 81,456 | |||||||||||||||
|
Total
assets
|
422,060 | 379,033 | 417,624 | 431,178 | 264,435 | |||||||||||||||
|
Current
portion of long-term debt
|
5,000 | 5,000 | — | 7,000 | 3,200 | |||||||||||||||
|
Long-term
debt, net of current portion
|
60,000 | 55,000 | 80,000 | 110,000 | 53,000 | |||||||||||||||
|
Total
stockholders’ equity
|
207,479 | 209,886 | 213,734 | 208,939 | 145,392 | |||||||||||||||
______________________________________
|
(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, 106 and 132(R)” as of December 31,
2006. See Note 1 of our consolidated financial
statements.
|
17
|
(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.
|
|
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 March 28, 2008 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 common stock, 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
|
16.9%
|
|
|
Virginia
G. Gill (2)
253
Canton Avenue East
Winter
Park, Florida 32789
|
3,275,666
|
16.9%
|
|
|
Jeffrey
T. Gill (3)
101
Bullitt Lane, Suite 450
Louisville,
Kentucky 40222
|
6,203,699
|
32.0%
|
|
|
R.
Scott Gill (4)
161
East Chicago Avenue
Chicago,
Illinois 60611
|
5,696,007
|
29.3%
|
|
|
GFP
I, LP (5)
1220
North Market Street, Suite 606
Wilmington,
Delaware 19801
|
3,274,666
|
16.9%
|
|
|
Gill
Family Capital Management, Inc. (6)
101
Bullitt Lane, Suite 450
Louisville,
Kentucky 40222
|
3,274,666
|
16.9%
|
|
|
John
F. Brinkley (7)
|
34,941
|
*
|
|
|
William
G. Ferko (8)
|
31,112
|
*
|
|
|
William
L. Healey (9)
|
55,219
|
*
|
|
|
Sidney
R. Petersen (10)
|
93,671
|
*
|
|
|
Robert
Sroka (11)
|
147,447
|
*
|
|
|
T.
Scott Hatton
|
125,669
|
*
|
|
|
John
R. McGeeney(12)
|
147,932
|
*
|
|
|
Richard
L. Davis (13)
|
247,389
|
1.3%
|
|
|
G.
Darrell Robertson (14)
|
102,797
|
*
|
|
|
Anthony
C. Allen (15)
|
244,051
|
1.3%
|
|
18
|
Kathy
Smith Boyd (16)
|
94,837
|
*
|
|
|
Sergio
L. M. de Carvalho
|
74,373
|
*
|
|
|
Current
directors and executive officers as a group (15 persons)
|
10,025,478
|
50.0%
|
* Less
than 1%.
|
(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 41.88% ownership interest
and of which Virginia G. Gill is a limited partner holding a 42.77%
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 is also a director and executive officer of the
Company.
|
|
(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
41,685 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 1.33% ownership interest, of which Patricia
G. Gill is a limited partner holding a 1.33% 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
7.65% ownership interest. Gill Family Capital Management, Inc., a Kentucky
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 officer during 2007.
|
|
(4)
|
Includes
68,636 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 4.08% 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
17,743 shares issuable under currently exercisable stock options and
17,198 shares held by a family trust of which Mr. Brinkley is a trustee.
Mr. Brinkley shares voting and investment power with respect to the shares
held by the family trust.
|
|
(8)
|
Includes
4,478 shares issuable under currently exercisable stock
options.
|
|
(9)
|
Includes
40,282 shares issuable under currently exercisable stock options, and
14,937 shares held by a family trust of which Mr. Healey is a co-trustee.
Mr. Healey shares voting and investment power with respect to the shares
held by the family trust.
|
19
|
|
|
|
(10)
|
Includes
38,491 shares issuable under currently exercisable stock options, and
55,180 shares held by a family trust of which Mr. Petersen is a trustee.
Mr. Petersen shares voting and investment power with respect to the shares
held by the family trust.
|
|
(11)
|
Includes
139,994 shares issuable under currently exercisable stock
options.
|
|
(12)
|
Includes
55,814 shares issuable under currently exercisable stock
options.
|
|
(13)
|
Includes
116,300 shares issuable under currently exercisable stock
options.
|
|
(14)
|
Includes
36,400 shares issuable under currently exercisable stock
options.
|
|
(15)
|
Includes
93,175 shares issuable under currently exercisable stock
options.
|
|
(16)
|
Includes
44,579 shares issuable under currently exercisable stock
options.
|
As of
March 28, 2008, our executive officers and directors (15 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 829,722 of our shares, which
represents approximately 66.1% of the shares covered by all options outstanding
under the Plans as of that 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 March 28, 2008, except for grants of common stock awarded
under the Directors Compensation Program for services provided in the first
quarter of 2008.
|
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 Global 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 New Shares 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 for exchange
and to issue New Shares and New Options for tendered options is subject to the
conditions described in Section 7 of this offer to exchange.
20
|
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.
New Shares of Common
Stock.
If you participate in this offer and
elect to receive New Shares, you generally will recognize ordinary income equal
to the fair market value of the shares as of the cancellation date. 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.
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.
It is intended that any options granted under this offer will meet
the safe harbor provisions of the regulations under IRC Section 409A so as to
avoid any adverse tax consequences under such provisions. Eligible
optionees are urged to consult their tax advisors concerning the application of
IRC Section 409A in these circumstances.
We
recommend that you consult your own tax advisor with respect to the federal,
state and local tax consequences of participating in the offer.
21
|
Extension of offer;
termination; amendment.
|
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. In the case of an extension, we
will send an email or other written notice to all eligible employees no later
than 5:00 p.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 optionees disclosing any material 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.
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 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.
22
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, 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, 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 you any information, you must not
rely upon that recommendation, representation or information as having been
authorized by us.
23
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
49
|
|
R.
Scott Gill has served as a director of Sypris and its predecessor since
1983. Mr. Gill has served as Managing Broker for Baird & Warner, a
residential real estate brokerage firm, since June 2007. From June 2005 to
June 2007, he served as a Managing Member of Astor & Longwood, LLC, a
real estate development and investment company. Mr. Gill served as a
Managing Broker with Coldwell Banker Residential Brokerage from 2003 to
2005 and 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 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
58
|
|
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 of North American Insurance Leaders, Inc. and North Shore
Acquisition Corp.
|
|
William
G. Ferko
Age
53
|
|
William
G. Ferko has served as a director of Sypris since January 2005. Mr. Ferko
serves as Chief Financial Officer for Philips BU Professional Luminaires
North America, a manufacturer of lighting fixtures and controls, since
January 2008. From 1998 through January 2008, he served as Vice President
and Chief Financial Officer of Genlyte Group Incorporated, the predecessor
to Philips BU Professional Luminaires North America. 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
52
|
|
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
77
|
|
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.
|
24
|
John
F. Brinkley
Age
70
|
|
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
82
|
|
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
63
|
|
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 and Pro-Dex Inc. Mr. Healey is a member of the Nominating and
Governance Committee and the Compensation
Committee.
|
The
executive officers of Sypris Solutions, Inc. are set forth in the following
table:
|
Robert
E. Gill
Age
82
|
|
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
52
|
|
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.
|
|
Sergio
L. M. de Carvalho
Age
51
|
|
Sergio
L. M. De Carvalho has served as Vice President of Sypris and President of
Sypris Technologies since June 2007. From 1975 to 2007, Mr. Carvalho
served in a variety of senior management positions with ArvinMeritor and
its predecessors, including most recently as Vice President and General
Manager of its Bus and Coach, Government, Specialty, Ride Control,
Suspension, Trailer and Brake
|
25
| businesses. During his long tenure with ArvinMeritor, he held several leadership management positions in both the United States and in Brazil and also served as a board member for numerous ArvinMeritor international businesses. Mr. Carvalho holds a Bachelor’s Degree in Physics from the University de Sao Paulo, Brazil and is fluent in Portuguese, English and Spanish. |
|
Kathy
Smith Boyd
Age
54
|
|
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
65
|
|
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
41
|
|
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
54
|
|
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
51
|
|
John
R. McGeeney has served as General Counsel and Secretary of Sypris since
June 2003. Mr. McGeeney was Of Counsel to Middleton and Reutlinger, a law
firm, in 2003, and served 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.
|
26
|
Anthony
C. Allen
Age
49
|
|
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.
27
Exhibit
99.(a)(1)(b)
Dear
Participant:
Annually
the Compensation Committee reviews our compensation programs, including the
design and effectiveness of our equity compensation plans.
As a
result of this review, the Company has decided to offer you the opportunity to
trade your “underwater”, vested stock options for a smaller number of New Shares
of Sypris stock and/or New Options (with a new exercise price at the current
market price, exercisable for the next four years). The numbers of
New Shares or New Options offered in this exchange have been calculated to be
cost neutral to the Company.
This
is only to be provided in a manner that is cost neutral to the
Company.
Your
choices are:
|
o
|
Maintain
your current stock option position;
|
|
o
|
Trade
eligible grants of fully vested stock options for New Shares of common
stock; or
|
|
o
|
Trade
these eligible grants for New Options exercisable for $4.31 per
share.
|
As a
result of the “cost neutral” requirement, the number of New Shares of common
stock or New Options you are eligible to receive as part of the exchange offer
will be less than the number of shares you are currently
granted. Each vested grant will need to be addressed independently
because the calculated “Fair Value” of each grant is different.
The major
contributors to grant value are:
|
o
|
Number
of shares in the grant
|
|
o
|
Strike
price of the shares
|
|
o
|
Time
remaining till the grant expires
|
Attached
you will find an Offer to Exchange, which provides a detailed explanation of the
2008 Stock Option Exchange Program, a new Award Agreement, an election form
which provides a summary of your equity grants, an interactive spreadsheet which
allows for the calculation of the number of shares of common stock or options
they would convert to should you decide to participate in the Exchange Program
and the value of these grants at various stock prices. You will need to complete
and return the election form to provide notice of your
decision.
As a
general rule electing to tender your options for New Shares of common stock is
the most conservative choice, requiring you to trade a large number of stock
options for a smaller number of shares of common stock, but these shares would
immediately have a value equal to the current trading price of those
shares. Maintaining your current options at their current price is
generally the most aggressive choice - you would reap larger pre-tax gains
should the stock price increase significantly, but if the price does not
increase your gain may be minimal or even zero. Electing to exchange
your current options for new options is generally a choice that has a
risk/reward profile that falls somewhere between the other two
choices.
The
exchange offer is in effect starting March 31, 2008 and ending May 1,
2008. Any selection you make prior to May 1st can be
changed, but after May 1st all
elections become final. If you wish to withdraw your election to
participate you may due so until 5:00 p.m. ET on May 12, 2008.
We have
scheduled a teleconference for April 7, 2008 at 2:00 p.m. ET to review the offer
materials and to answer any questions that have broad
applicability. Questions that pertain to your personal tax
consequences should be directed to your tax
advisor.
Exhibit
99.(a)(1)(c)
EXCHANGE
OFFER EMAIL
Attached
for your review is a voluntary opportunity to exchange your fully
vested, unexercised stock options with exercise prices equal to or greater than
$4.31 per share (the “Offer Price”) for a smaller number of either fully-vested
New Shares of stock or fully-vested New Options to purchase stock at the Offer
Price for the next four years. In order to make your decision please review the
attached documents:
Document
One:
Cover
Letter; Offer
to Exchange, Award Agreement
Document
Two:
Your
Election Form
(on Exhibit A to
the Award Agreement)
Document
Three:
2004 Sypris Equity Plan
Document
Four:
Amended and Restated Prospectus dated
June 29, 2007
Document
Five
Stock
Value Calculator
We have
provided the Stock Value Calculator to allow you to evaluate how changing stock
prices might effect your election to (i) keep your current options, (ii) elect
to exchange your options for new options, or (iii) elect to exchange your
options for new shares of common stock.
We will
conduct a conference call on April 7th at 2:00 p.m. ET to review the
Exchange Program and address any questions you may have about the materials
provided. The dial in number for this call is 1-888-346-3950, entry code is
579937#. We urge you to review the material prior to this call.
This 2008
Stock Option Exchange Program will expire on May 12th at 5:00
p.m. ET and requires you to elect one of the choices provided on or before May
1, 2008. If you
choose not to elect to tender your eligible stock options you will still need to
complete your election form.
Exhibit 99.(a)(1)(d)
STANDARD
TERMS OF EXECUTIVE AWARDS GRANTED UNDER
THE
2008 STOCK OPTION EXCHANGE PROGRAM
OF
THE 2004 SYPRIS EQUITY PLAN
1. Purpose of
the Program. The Company’s
2008 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. The purpose of the Program is 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 March 31, 2008, and b)
the exercise price of such options is above $4.31 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 $4.31 per Share (the last
closing price per Option Share prior to the opening of business on March
31, 2008 (“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 March
30, 2012.
|
6. Award of
Exchange
Rights. With respect to each Eligible Grant, in exchange for
all Eligible Options in such grant, the Company hereby awards (“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 May 1, 2008 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 May 1, 2008 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 all such
Eligible Grants if Participant has validly withdrawn from the Program, or
all those Eligible Options included in any Eligible Grants 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 May 1,
2008 at 5:00 p.m. EST which has not been
withdrawn.
|
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 this Award Agreement.
|
11.1.
|
No Other
Rights. The Awards include no other rights beyond those
expressly provided in the Plan, the Program or this 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:/s/ Jeffrey T.
Gill
Jeffrey T. Gill
President
& Chief Executive Officer
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 offer expires May 1, 2008.
| Exhibit A- Election Form | Alternative Stock Price Scenarios | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SYPR's closing stock price on 3-28-08: | $ | 4.31 | $ | 4.31 | $ | 4.31 | $ | 4.31 | $ | 4.31 | $ | 4.31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Participant Summary | If SYPR's stock price is: | $ | 7.00 | $ | 7.00 | $ | 7.00 | $ | 12.00 | $ | 12.00 | $ | 12.00 | $ | 18.00 | $ | 18.00 | $ | 18.00 | |||||||||||||||||||||||||||||||||||||||||||||
|
After tax (assumed
tax rate of 40%):
|
60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| 1 | 2 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| * |
Grant
|
Expiration
|
Shares
|
Grant
Price
|
Granted
|
(Vested)
No Change
|
New
Options
|
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
|
|||||||||||||||||||||||||||||||||||||||||||||||
| Example | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/25/03 | 2/24/11 | 2,400 | $ | 8.25 | 2,400 | 1,920 | - | - | $ | - | $ | - | $ | - | $ | 5,400 | $ | - | $ | - | $ | 14,040 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| 2/25/03 | 2/24/11 | 10,000 | $ | 8.25 | 10,000 | 8,000 | - | - | $ | - | $ | - | $ | - | $ | 22,500 | $ | - | $ | - | $ | 58,500 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| 2/26/03 | 2/25/11 | 39,000 | $ | 8.27 | 39,000 | 31,200 | - | - | $ | - | $ | - | $ | - | $ | 87,282 | $ | - | $ | - | $ | 227,682 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| 3/2/06 | 3/1/12 | 12,500 | $ | 10.36 | 12,500 | - | - | - | $ | - | $ | - | $ | - | $ | 12,300 | $ | - | $ | - | $ | 57,300 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| Not eligible: | 63,900 | 41,120 | $ | - | $ | 127,482 | $ | 357,522 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/27/01 | 2/26/09 | 25,000 | $ | 6.25 | 25,000 | 25,000 | 4,994 | 1,415 | $ | 11,250 | $ | 8,060 | $ | 7,466 | $ | 86,250 | $ | 23,042 | $ | 14,541 | $ | 176,250 | $ | 41,021 | $ | 23,031 | ||||||||||||||||||||||||||||||||||||||
| 5/11/07 | 5/14/11 | 27,055 | $ | 7.90 | 27,055 | 27,055 | 12,220 | 3,463 | $ | - | $ | 19,723 | $ | 18,271 | $ | 66,555 | $ | 56,383 | $ | 35,586 | $ | 163,953 | $ | 100,375 | $ | 56,364 | ||||||||||||||||||||||||||||||||||||||
|
Eligible:
|
52,055 | 52,055 | 17,214 | 4,878 | 11,250 | 27,783 | 25,736 | 152,805 | 79,425 | 50,126 | 340,203 | 141,396 | 79,394 | |||||||||||||||||||||||||||||||||||||||||||||||||||
*-In each unshaded box please indicate your election of: (1) no change, (2)
new options, or (3) new stock.
Participant
Signature:_____________________________
Exhibit
99.(a)(1)(e)
STANDARD
TERMS OF EMPLOYEE AWARDS GRANTED UNDER
THE
2008 STOCK OPTION EXCHANGE PROGRAM
OF
THE 2004 SYPRIS EQUITY PLAN
1. Purpose of
the Program. The Company’s
2008 Stock Option Exchange Program (the “Program”) under the 2004 Sypris Equity
Plan (“Plan”) shall be effective for all Awards to employees incorporating these
Terms. The purpose of the Program is to advance the Company’s growth
and prosperity by providing meaningful long-term financial incentives to
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 March 31, 2008, and b)
the exercise price of such options is above $4.31 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 $4.31 per Share (the last
closing price per Option Share prior to the opening of business on March
31, 2008 (“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 March
30, 2012.
|
6. Award of
Exchange
Rights. With respect to each Eligible Grant, in exchange
for all Eligible Options in such grant, the Company hereby awards (“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 May 1, 2008 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 May 1, 2008 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 all such
Eligible Grants if Participant has validly withdrawn from the Program, or
all those Eligible Options included in any Eligible Grants 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 May 1,
2008 at 5:00 p.m. EST which has not been
withdrawn.
|
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 this Award Agreement.
|
11.1.
|
No Other
Rights. The Awards include no other rights beyond those
expressly provided in the Plan, the Program or this 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: /s/ Jeffrey T.
Gill
Jeffrey T. Gill
President
& Chief Executive Officer
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 offer expires May 1, 2008.
| Exhibit A- Election Form | Alternative Stock Price Scenarios | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SYPR's closing stock price on 3-28-08: | $ | 4.31 | $ | 4.31 | $ | 4.31 | $ | 4.31 | $ | 4.31 | $ | 4.31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Participant Summary | If SYPR's stock price is: | $ | 7.00 | $ | 7.00 | $ | 7.00 | $ | 12.00 | $ | 12.00 | $ | 12.00 | $ | 18.00 | $ | 18.00 | $ | 18.00 | |||||||||||||||||||||||||||||||||||||||||||||
|
After tax (assumed
tax rate of 40%):
|
60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| 1 | 2 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| * |
Grant
|
Expiration
|
Shares
|
Grant
Price
|
Granted
|
(Vested)
No Change
|
New
Options
|
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
|
|||||||||||||||||||||||||||||||||||||||||||||||
| Example | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/25/03 | 2/24/11 | 2,400 | $ | 8.25 | 2,400 | 1,920 | - | - | $ | - | $ | - | $ | - | $ | 5,400 | $ | - | $ | - | $ | 14,040 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| 2/25/03 | 2/24/11 | 10,000 | $ | 8.25 | 10,000 | 8,000 | - | - | $ | - | $ | - | $ | - | $ | 22,500 | $ | - | $ | - | $ | 58,500 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| 2/26/03 | 2/25/11 | 39,000 | $ | 8.27 | 39,000 | 31,200 | - | - | $ | - | $ | - | $ | - | $ | 87,282 | $ | - | $ | - | $ | 227,682 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| 3/2/06 | 3/1/12 | 12,500 | $ | 10.36 | 12,500 | - | - | - | $ | - | $ | - | $ | - | $ | 12,300 | $ | - | $ | - | $ | 57,300 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| Not eligible: | 63,900 | 41,120 | $ | - | $ | 127,482 | $ | 357,522 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/27/01 | 2/26/09 | 25,000 | $ | 6.25 | 25,000 | 25,000 | 4,994 | 1,415 | $ | 11,250 | $ | 8,060 | $ | 7,466 | $ | 86,250 | $ | 23,042 | $ | 14,541 | $ | 176,250 | $ | 41,021 | $ | 23,031 | ||||||||||||||||||||||||||||||||||||||
| 5/11/07 | 5/14/11 | 27,055 | $ | 7.90 | 27,055 | 27,055 | 12,220 | 3,463 | $ | - | $ | 19,723 | $ | 18,271 | $ | 66,555 | $ | 56,383 | $ | 35,586 | $ | 163,953 | $ | 100,375 | $ | 56,364 | ||||||||||||||||||||||||||||||||||||||
|
Eligible:
|
52,055 | 52,055 | 17,214 | 4,878 | 11,250 | 27,783 | 25,736 | 152,805 | 79,425 | 50,126 | 340,203 | 141,396 | 79,394 | |||||||||||||||||||||||||||||||||||||||||||||||||||
*-In each unshaded box please indicate your election of: (1) no change, (2)
new options, or (3) new stock.
Participant
Signature:_____________________________
Exhibit 99.(a)(1)(f)
SYPRIS
SOLUTIONS, INC.
OFFER
TO EXCHANGE CERTAIN UNEXERCISED VESTED 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 Certain Unexercised Vested Options dated March
31, 2008 (the “Offer”). (Defined terms not explicitly defined herein
shall have the same definitions as in the Offer.)
I now withdraw my previous Election
Forms and reject the Offer, in its
entirety. By
rejecting the Offer I understand that I will not receive any New Shares or New
Options, and that I will keep my Eligible Options instead. 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,
only by delivering a new Election Form prior to the Expiration
Date.
I have
completed and signed the following exactly as my name appears on my original
Election Form.
|
|
||||
|
Optionee
Signature
|
|
Employee
ID or Social Security Number
|
||
|
|
||||
|
Optionee
Name (Please print)
|
|
E-mail
Address Date
and Time
|
||
THIS
NOTICE OF WITHDRAWAL MUST BE RECEIVED BY SYPRIS
BEFORE 5:00 PM EASTERN TIME ON MAY 12, 2008. WE WILL CONFIRM
RECEIPT VIA EMAIL WITHIN 3 BUSINESS DAYS.
INSTRUCTIONS
TO THE NOTICE OF WITHDRAWAL
1. Delivery of Notice of
Withdrawal.
This
Notice of Withdrawal (properly completed and executed) must be RECEIVED by
Sypris at 101 Bullitt Lane, Suite 450, Louisville, Kentucky 40222, via hand
delivery, express courier, interoffice mail or facsimile at (502) 329-2036,
on or before 5:00 p.m. Eastern Time on May 12, 2008.
You should
not fill out this Notice
of Withdrawal unless you wish to cancel all earlier Election Forms. For example,
if you wish to change your election only with respect to one or two, but not
all, of your Eligible Grants, then you should complete and deliver a new
Election Form instead. After you have withdrawn your Election Forms using
this Notice of Withdrawal, you still may change your mind and re-accept the
Offer by delivering a new signed and dated Election Form to the Company at any
time prior to the Expiration Date.
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
40222, telephone number (502) 329-2029.
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 2008 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 May 1, 2008, the Expiration Date of the
Offer to Exchange, or withdrawn by May 12, 2008. 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 Certain Unexercised Vested Options dated March 31, 2008 (the
“Offer”) and nullifying your previously submitted Election Forms. 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 Forms. 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
May 1, 2008.
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 Optionees Eligible to Participate in the Offer to Exchange:
REMINDER
— If you are electing to exchange any of your Eligible
Grants under the Stock Option Exchange Program, the deadline to deliver your
Election Form is May 1, 2008 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 Grants for
exchange, please submit a completed Election Form indicating that you wish to
keep your Eligible Grants.
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)
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 offer expires May 1, 2008.
Stock Value
Calculator
|
Hypothetical
/ "What if?" Scenarios
|
|||||||||||
| SYPR's closing stock price on 3-28-08: |
$ 4.31
|
$ 4.31
|
|||||||||
| Input SYPR hypothtical stock price: |
$7.00
|
$ 7.00
|
$ 7.00
|
$ 7.00
|
|||||||
|
Input
your tax rate:
|
40%
|
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
|
|
|
Example
|
|||||||||||
|
2/25/03
|
2/24/11
|
2,400
|
$ 8.25
|
2,400
|
1,920
|
-
|
-
|
$ -
|
$ -
|
$ -
|
|
|
2/25/03
|
2/24/11
|
10,000
|
$ 8.25
|
10,000
|
8,000
|
-
|
-
|
$ -
|
$ -
|
$ -
|
|
|
2/26/03
|
2/25/11
|
39,000
|
$ 8.27
|
39,000
|
31,200
|
-
|
-
|
$ -
|
$ -
|
$ -
|
|
|
3/2/06
|
3/1/12
|
12,500
|
$ 10.36
|
12,500
|
-
|
-
|
-
|
$ -
|
$ -
|
$ -
|
|
|
Not
eligible:
|
63,900
|
41,120
|
$ -
|
||||||||
|
2/27/01
|
2/26/09
|
25,000
|
$ 6.25
|
25,000
|
25,000
|
4,994
|
1,415
|
$ 11,250
|
$
8,060
|
$ 7,466
|
|
|
5/11/07
|
5/14/11
|
27,055
|
$ 7.90
|
27,055
|
27,055
|
12,220
|
3,463
|
$ -
|
$ 19,723
|
$18,271
|
|
|
Eligible:
|
52,055
|
52,055
|
Value
|
$ 11,250
|
$ 27,783
|
$ 25.736
|
|||||
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 offer expires May 1, 2008.
| Exhibit A- Election Form | Alternative Stock Price Scenarios | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| SYPR's closing stock price on 3-28-08: | $ | 4.31 | $ | 4.31 | $ | 4.31 | $ | 4.31 | $ | 4.31 | $ | 4.31 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Participant Summary | If SYPR's stock price is: | $ | 7.00 | $ | 7.00 | $ | 7.00 | $ | 12.00 | $ | 12.00 | $ | 12.00 | $ | 18.00 | $ | 18.00 | $ | 18.00 | |||||||||||||||||||||||||||||||||||||||||||||
|
After tax (assumed
tax rate of 40%):
|
60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | 60 | % | ||||||||||||||||||||||||||||||||||||||||||||||
| 1 | 2 | 3 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| * |
Grant
|
Expiration
|
Shares
|
Grant
Price
|
Granted
|
(Vested)
No Change
|
New
Options
|
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
|
|||||||||||||||||||||||||||||||||||||||||||||||
| Example | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/25/03 | 2/24/11 | 2,400 | $ | 8.25 | 2,400 | 1,920 | - | - | $ | - | $ | - | $ | - | $ | 5,400 | $ | - | $ | - | $ | 14,040 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| 2/25/03 | 2/24/11 | 10,000 | $ | 8.25 | 10,000 | 8,000 | - | - | $ | - | $ | - | $ | - | $ | 22,500 | $ | - | $ | - | $ | 58,500 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| 2/26/03 | 2/25/11 | 39,000 | $ | 8.27 | 39,000 | 31,200 | - | - | $ | - | $ | - | $ | - | $ | 87,282 | $ | - | $ | - | $ | 227,682 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| 3/2/06 | 3/1/12 | 12,500 | $ | 10.36 | 12,500 | - | - | - | $ | - | $ | - | $ | - | $ | 12,300 | $ | - | $ | - | $ | 57,300 | $ | - | $ | - | ||||||||||||||||||||||||||||||||||||||
| Not eligible: | 63,900 | 41,120 | $ | - | $ | 127,482 | $ | 357,522 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2/27/01 | 2/26/09 | 25,000 | $ | 6.25 | 25,000 | 25,000 | 4,994 | 1,415 | $ | 11,250 | $ | 8,060 | $ | 7,466 | $ | 86,250 | $ | 23,042 | $ | 14,541 | $ | 176,250 | $ | 41,021 | $ | 23,031 | ||||||||||||||||||||||||||||||||||||||
| 5/11/07 | 5/14/11 | 27,055 | $ | 7.90 | 27,055 | 27,055 | 12,220 | 3,463 | $ | - | $ | 19,723 | $ | 18,271 | $ | 66,555 | $ | 56,383 | $ | 35,586 | $ | 163,953 | $ | 100,375 | $ | 56,364 | ||||||||||||||||||||||||||||||||||||||
|
Eligible:
|
52,055 | 52,055 | 17,214 | 4,878 | 11,250 | 27,783 | 25,736 | 152,805 | 79,425 | 50,126 | 340,203 | 141,396 | 79,394 | |||||||||||||||||||||||||||||||||||||||||||||||||||
*-In each unshaded box please indicate your election of: (1) no change, (2)
new options, or (3) new stock.
Participant
Signature:_____________________________
Exhibit
99.(a)(1)(l)
Email
Notice- Conference Call Reminder
We will
conduct a conference call on April 7th at 2:00 p.m. EST to
review any additional questions you may have as you prepare your election form
for the Exchange Program.
The dial
in number for this call is 1-888-XXX-XXXX, entry
code is XXXXXX#. We urge you to work through your election form prior to this
call to help determine whether you have any further questions.
We
have also attached your personalized information regarding your tax withholding
obligations should you elect to exchange your eligible options for shares of
common stock. Please review the attached information and if you
intend to elect stock, please complete part II of the Form (telling us how you
wish to receive your shares) and send via email to andrea.luescher@sypris.com
or fax to 502-329-2036.
This
2008 Stock Option Exchange Program will expire on May 1st at 5:00 pm EST
and requires you to elect one of the choices provided before that
time. If you wish to withdraw your prior election to participate in
the Offer you may do so until 5:00 p.m. EST on May 12, 2008.
Exhibit
99.(a)(1)(m)
SYPRIS
SOLUTIONS, INC.
OFFER
TO EXCHANGE CERTAIN OUTSTANDING OPTIONS
__________________________________
ISSUES
RELATING TO RECEIPT OF NEW SHARES OF STOCK
Part I. Tax
Withholding Percentage
Your tax
withholding percentage for any New Shares of common stock that you have elected
to receive is:
[Insert Applicable
Rate]%
For any
grant of New Shares of stock, you can estimate the tax you would owe as
follows:
|
(a)
|
the
number of New Shares that you elect to receive for any Eligible
Grant,
|
multiplied
by
|
(b)
|
your
estimate of the closing price per share of Sypris stock on May 12, 2008
(“Estimated Value”), multiplied
by
|
|
(c)
|
[Insert Applicable
Rate].
|
For
example, if you were to receive 100 New Shares (in exchange for one of your
Eligible Grants), your tax withholding obligation for that grant would be [Insert calculated
result] if the Estimated Value of Sypris stock were $5.00 per share,
because 100 x $5.00 x [Insert Applicable
Rate] = [Insert
calculated result]. To estimate your total tax withholding
obligation, you should perform this calculation by including each Eligible Grant
that you choose to exchange for New Shares.
Please
use this form to elect which method you will use to meet your required tax
withholding obligation. We will
automatically withhold sufficient New Shares to pay the withholding obligation
if you do not provide your preference by May 1, 2008.
[
] I will pay with a
check [
] Please withhold sufficient shares to pay for the withholding
obligation
Note: We
must receive your check for the required tax withholding amount by 5:00pm ET on
May 16, 2008, if not we will automatically withhold wages from your next pay
check to meet the tax obligation.
Part II. Preferred Form of
Stock Ownership
Please
use this form to designate the manner in which you wish to receive any New
Shares of stock. If you do not designate any preference by May 1, 2008, you will
automatically receive an original share certificate.
[
] Please send an original share certificate to my home address
below:
_________________________________________________
_________________________________________
_________________________________________
Original
certificates are valuable items which you should keep in a safety deposit box or
other safe place.
OR
Please
transfer shares electronically (by way of DTC) to my brokerage account
below:
Brokerage
Firm Name:___________________________
Broker's
Name:________________________________
Broker
Phone Number:__________________________
DTC
Participant #:_____________________________
Please
provide your broker with a copy of this election.
Note
to Brokers: You must initiate the DWAC Deposit on May 14, 2008, in order to
receive the shares.
Signature
:__________________________
Name:______________________________
Date:_______________________________
Exhibit
99.(a)(1)(n)
CONFIRMATION
OF ACCEPTANCE, AND CANCELLATION, OF ELIGIBLE GRANTS
This
email serves as our formal acceptance of your election to tender one or more of
your Eligible Grants as set forth on your last properly completed Election Form.
The final Withdrawal Date under the Offer to Exchange was May 12,
2008.
If you
have questions about the Offer to Exchange or this acceptance form, you may send
an email to andrea.luescher@sypris.com or call (502) 329-2029.
Exhibit
99.(a)(1)(o)
|
2008
Exhange Offer Calculations
|
|||
|
Name
of Optionee:
|
XXXXXXXXXX
|
||
|
Date
of Option Exchange Offer:
|
March
31, 2008
|
||
|
Number
of New Stock Shares:
|
XXX
|
||
|
|
|||
|
5/12/2008
SYPR Closing Price:
|
XXX
|
||
|
Taxable
Income
|
-
|
||
|
Federal
|
-
|
25.00%
|
|
|
State
(KY)
|
-
|
6.00%
|
|
|
Medicare
|
-
|
1.45%
|
|
|
Local
(KY)
|
-
|
1.16%
|
|
|
County
(KY)
|
-
|
0.60%
|
|
|
Total
|
-
|
34.21%
|
|
|
Tax
withholding
|
-
|
||
|
Full
shares required
|
-
|
||
|
Exact
shares needed to pay tax withholding
|
-
|
||
|
Tax
withholding overpayment
|
-
|
shares
|
|
|
Amount
due to shareholder for
|
|||
|
tax
withholding overpayment
|
$ -
|
||
|
Balance
of shares due to shareholder
|
-
|
||