Exhibit 10.24
SYPRIS SOLUTIONS, INC.
INDEPENDENT DIRECTORS COMPENSATION PROGRAM
ADOPTED ON SEPTEMBER 1, 1995
AMENDED AND RESTATED ON MAY 7, 2002
Description of the Program
Name. The name of this benefit program shall be the "Independent Directors
Compensation Program."
Purpose. The purpose of the Independent Directors Compensation Program is
to enable Sypris Solutions, Inc. (the "Company") to attract, retain and motivate
experienced directors by providing compensation that is competitive with
compensation offered to independent directors of other similarly-situated public
corporations in the United States.
Eligibility and Participation. Only "Independent Directors," defined as
those members of the Board of Directors of the Company (the "Board") who are not
otherwise employed by the Company, its subsidiaries or any affiliate of the
Company in any other capacity, are eligible to participate in the Independent
Directors Compensation Program. Any Independent Director on the Board as of
September 1, 1995 (the "Effective Date") and thereafter shall be eligible for
compensation under the Independent Directors Compensation Program.
Compensation. Independent Directors shall be compensated as set forth
below:
(a) Initial Election Grants and Annual Grants of Stock Options. The
Company shall grant each Independent Director a nonqualified stock option for
the purchase of: (i) up to 10,000 shares of the Company's common stock, $.01 par
value (the "Common Stock") at the time the Independent Director is initially
elected to serve on the Board (the "Initial Election Grant"); and (ii) up to
6,000 shares of the Company's Common Stock at each annual stockholders' meeting
thereafter (the "Annual Grant"), so long as a Director is continuing to serve as
a Director on the date of said annual stockholders' meeting. In the event that
an Independent Director is initially elected to the Board at a time other than
the date of the Company's annual stockholders' meeting, he or she shall receive
an Annual Grant at the subsequent annual stockholders' meeting for a pro rated
number of shares to be determined by multiplying 6,000 by a fraction, the
numerator of which shall be the number of full months which have elapsed since
the date of the Director's initial election and the next annual stockholders'
meeting and the denominator of which shall be 12. All such stock options shall
be granted by the Company to the Independent Directors pursuant to the Company's
Independent Directors' Stock Option Plan (the "Option Plan"). Each of the
options shall be: (i) granted on the dates each of the respective Independent
Directors is initially elected and on the date of each annual stockholders'
meeting; (ii) priced at the fair market value of the Company's common stock, as
determined in accordance with Section 7.C. of the Option Plan, on the respective
date of grant; (iii) immediately exercisable by each of the Independent
Directors on the respective dates of grant; and (iv) subject to the terms and
conditions of the Option Plan and any other terms and conditions which, in
accordance with the Option Plan, are specified in the applicable Stock Option
Agreement entered into by and between the Company and each of the Independent
Directors.
(b) Annual Retainer.
(i) Amount. Each Independent Director shall receive an annual
retainer in the amount of $16,000 (the "Annual Retainer"). In the event that an
Independent Director is initially elected to the Board at a time other than the
date of the Company's annual stockholders' meeting, he or she shall receive a
prorated Annual Retainer (the "Prorated Annual Retainer") the amount of which is
to be determined by multiplying $16,000 by a fraction, the numerator of which
shall be the number of full months which have elapsed since the date of the
Director's initial election to the Board and the next annual stockholders'
meeting and the denominator of which shall be 12.
(ii) Payment. The Annual Retainer or the Prorated Annual
Retainer, as applicable, shall be earned by the Independent Directors and paid
by the Company in equal quarterly installments for each Independent Director.
The quarterly installments of the Annual Retainer or Prorated Annual Retainer
shall be payable, together with any attendance fees (defined below), in arrears
by checks issued to each Independent Director no later than the 15th calendar
day following the end of each of the Company's fiscal quarters during which the
respective Independent Director served on the Board. Alternatively, pursuant to
Paragraph (d) below, each Independent Director may elect to receive his or her
Annual Retainer or Prorated Annual Retainer, together with any attendance fees,
in the form of nonqualified stock options in lieu of cash.
(c) Attendance Fees.
(i) Board Meetings. Each Independent Director shall receive the
sum of $1,200 for each meeting of the Board he or she attends in person or,
alternatively, the sum of $300 for each meeting of the Board in which he or she
participates by telephone (collectively, the "Board Meeting Attendance Fees").
For purposes of the Independent Directors Compensation Program, "attendance"
shall not include execution of an action by written consent of the Board. Board
Meeting Attendance Fees earned by each Independent Director during a fiscal
quarter shall be payable, together with the quarterly installment of the Annual
Retainer or Prorated Annual Retainer, by a check issued no later than the 15th
calendar day following the end of the fiscal quarter. Alternatively, pursuant to
Paragraph (d) below, each Independent Director may elect to receive his or her
Board Meeting Attendance Fees in the form of nonqualified stock options in lieu
of cash.
(ii) Committee Meetings. Independent Directors are entitled to
compensation for attending or participating in meetings of committees of the
Board only if such meetings are held on dates other than the dates of meetings
of the full Board. In the event that committee meetings are held on dates other
than the dates of meetings of the full Board, each Independent Director who
attends a committee meeting in person and serves as the chairperson of the
meeting shall receive the sum of $1,200 per meeting, and each of the other
Independent Directors who attend such a committee meeting in person shall
receive the sum of $900 per meeting. Alternatively, each Independent Director
who, as the chairperson or as a committee member, participates by telephone in
committee meetings of the Board which are held on dates other than the dates of
meetings of the full Board, shall receive the sum of $300 per meeting. (All of
the aforementioned fees in this subparagraph shall hereafter be collectively
referred to as the "Committee Meeting Attendance Fees"). For purposes of the
Independent Directors Compensation Program, "attendance" shall not include
execution of an action by written consent for any committee. Committee Meeting
Attendance Fees earned by each Independent Director during a fiscal quarter
shall be payable, together with the Annual Retainer or Prorated Annual Retainer
and the Board Meeting Attendance Fees, by a check issued to the Independent
Director no later than the 15th calendar day following the end of the fiscal
quarter. Alternatively, pursuant to Paragraph (d) below, each Independent
Director may elect to receive his or her Committee Meeting Attendance Fees in
the form of nonqualified stock options in lieu of cash.
(d) Form of Payment. Each Independent Director may elect to receive
his or her Annual Retainer or Prorated Annual Retainer, Board Meeting Attendance
Fees and Committee Meeting Attendance Fees in the form of nonqualified stock
options in lieu of cash. The election to receive stock options in lieu of cash
must be made by the Independent Director before each January 1 and shall apply
to the sum of the Annual Retainer, Prorated Annual Retainer, Board Meeting
Attendance Fees and Committee Meeting Attendance Fees (collectively, the "Fees")
earned during the following calendar year. Independent Directors initially
elected to the Board other than at an annual stockholders' meeting shall make
the election no later than 10 calendar days after being elected to the Board and
such election shall apply to Fees earned during the remainder of such calendar
year. An Independent Director who fails to make a timely election for the first
calendar year such director is eligible to make an election shall be deemed to
have elected to receive Fees in cash. An Independent Director who fails to make
an election for any subsequent calendar year shall be deemed to have made the
same election such director made for the immediately preceding calendar year.
Such elections, including deemed elections, shall be irrevocable for the
calendar year for which made.
Any stock options issued to an Independent Director in lieu of cash
compensation shall be granted to the respective Independent Director pursuant to
the Option Plan on a quarterly basis, with each grant to be made on the first
day following the end of each of the Company's fiscal quarters (the "Date of
Grant"). The number of shares to be granted under such options shall be
determined by dividing the total of the quarterly installment of the Annual
Retainer or Prorated Annual Retainer, as applicable, plus any Board Meeting
Attendance Fees and any Committee Meeting Attendance Fees earned by the
respective Independent Director during the previous fiscal quarter by 33% of the
fair market value of the Company's Common Stock, as determined in accordance
with Section 7.C. of the Option Plan, on the Date of Grant. The options shall
be: (i) priced at the fair market value of the Company's Common Stock, as
determined in accordance with Section 7.C. of the Option Plan, on the Date of
Grant; (ii) immediately exercisable by each of the Independent Directors on the
respective date of grant; and (iii) subject to the terms and conditions of the
Option Plan and any other terms and conditions which, in accordance with the
Option Plan, are specified in the applicable Stock Option Agreement entered into
by and between the Company and each of the Independent Directors.
Expense Reimbursement. Each Independent Director shall be reimbursed for
travel and other expenses incurred in the performance of his or her duties.
Administration. The Independent Directors Compensation Program is
administered by the Compensation Committee of the Board. The Committee members
are selected by the Board and have no specific term of office.
Resignation from the Board of Directors. The resignation of any Independent
Director shall cause such director to be ineligible to receive any amount of the
Annual Retainer or Prorated Annual Retainer installments not yet paid to him or
her as of the date of resignation. Any attendance fees which have been earned by
the Independent Director in accordance with Paragraph (c) above prior to the
date of resignation shall be paid in the same form and according to the same
timetables described in Paragraph (c) above.
Program Termination or Modification. The Compensation Committee shall
review the Independent Directors Compensation Program on at least an annual
basis and may make changes, alterations or modifications to the program which
are deemed to be in the Company's best interest. Any change, alteration or
modification shall be made by a written instrument consented to by the Board.
The Board may similarly terminate the Independent Directors Compensation Program
at any time if, in the judgment of the Board, such termination is in the
Company's best interest.
IN WITNESS WHEREOF, the Company has caused this Independent Directors
Compensation Program to be executed in its name and on its behalf on May 7,
2002.
SYPRIS SOLUTIONS, INC.
By: /s/ Jeffrey T. Gill
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Jeffrey T. Gill
President and CEO