EXHIBIT 10.14
SYPRIS SOLUTIONS, INC.
INDEPENDENT DIRECTORS' STOCK OPTION PLAN
ADOPTED ON OCTOBER 27, 1994
AS AMENDED AND RESTATED EFFECTIVE MARCH 30, 1998
PREAMBLE
--------
The Sypris Solutions, Inc. Independent Directors' Stock Option Plan is a
restatement of the Group Technologies Corporation Independent Directors' Stock
Option Plan adopted by Group Technologies Corporation effective October 27,
1994. Group Technologies Corporation was merged into Sypris Solutions, Inc.
effective March 30, 1998, with Sypris Solutions, Inc. being the surviving
corporation. Pursuant to the provisions of the plan, Group Technologies
Corporation common stock subject to the plan and outstanding options under the
plan are automatically by virtue of the merger converted into and replaced by
Sypris Solutions, Inc. common stock. The plan is hereby amended and restated,
as set forth herein, to reflect the changes caused by the merger.
1. Purpose. The purpose of the Sypris Solutions, Inc. Independent Directors'
-------
Stock Option Plan is to promote the interests of Company by affording an
incentive to certain persons not affiliated with Company and its Subsidiaries to
serve as a director of Company in order to bring additional expertise and
business judgment to Company through the opportunity for stock ownership offered
under this Plan.
2. Definitions.
-----------
A. "Board" means Company's Board of Directors.
-----
B. "Code" means the Internal Revenue Code of 1986, as amended.
----
C. "Common Stock" means Company's common stock, $.01 par value, or the
------------
common stock or securities of a Successor that have been substituted theretofore
pursuant to Section 9.
D. "Company" means Sypris Solutions, Inc., a Delaware corporation, with its
-------
principal place of business at 455 South Fourth Street, Suite 350, Louisville,
Kentucky 40202.
E. "Compensation Committee" means the Compensation Committee of the Board
----------------------
that administers the Plan pursuant to Section 4.
F. "Independent Director" means an individual serving as a director on
--------------------
Company's Board of Directors and who is not otherwise employed by Company or its
Subsidiaries or an affiliate thereof.
G. "Option Price" means the price to be paid for Common Stock upon the
------------
exercise of an option granted under the Plan, in accordance with Section 7.B.
H. "Optionee" means an Independent Director to whom options have been
--------
granted under the Plan.
I. "Optionee Representative" means the Optionee's estate or the person or
-----------------------
persons entitled thereto by will or by applicable laws of descent and
distribution.
1
J. "Plan" means the Sypris Solutions, Inc. Independent Directors' Stock
----
Option Plan, as set forth herein, and as amended from time to time.
K. "Subsidiary" means any corporation which at the time an option is granted
----------
under the Plan qualifies as a subsidiary of Company under the definition of
"subsidiary corporation" contained in Code Section 424(f), or any similar
provision thereafter enacted.
L. "Successor" means the entity surviving a merger or consolidation with
---------
Company, or the entity that acquires all or a substantial portion of Company's
assets or outstanding capital stock (whether by merger, purchase or otherwise).
3. Shares Subject to Plan.
----------------------
A. Authorized Unissued or Treasury Shares. Subject to the provisions of
--------------------------------------
Section 9, the shares to be delivered upon exercise of options granted under the
Plan shall be made available, at the discretion of the Board, from the
authorized unissued shares or treasury shares of Common Stock.
B. Aggregate Number of Shares. Subject to adjustments and substitutions made
--------------------------
pursuant to the provisions of Section 9, the aggregate number of shares that may
be issued upon exercise of all options that may be granted under the Plan shall
not exceed two hundred fifty thousand (250,000) of Company's authorized shares
of Common Stock.
C. Shares Subject to Expired Options. If any option granted under the Plan
---------------------------------
expires or terminates for any reason without having been exercised in full in
accordance with the terms of the Plan, the shares of Common Stock subject to,
but not delivered under, such option shall become available for any lawful
corporate purpose, including for transfer pursuant to other options granted to
the same employee or other employees without decreasing the aggregate number of
shares of Common Stock that may be granted under the Plan.
4. Administration. The Plan shall be administered by the Compensation
--------------
Committee of the Board. The Compensation Committee shall have full power and
authority to construe, interpret, and administer the Plan and to adopt such
rules and regulations for carrying out the Plan as it may deem proper and in the
best interests of Company.
5. Grant of Options. Subject to the terms, provisions and conditions of the
----------------
Plan, the Board shall have full and final authority in its discretion: (i) to
select the Independent Directors to whom options shall be granted; (ii) to
determine the number of shares of Common Stock subject to each option; (iii) to
determine the time or times when options will be granted, the manner in which
each option shall be exercisable, and the duration of the exercise period; and
(iv) to fix such other provisions of the option agreement as it may deem
necessary or desirable consistent with the terms of the Plan. Subject to the
terms, provisions and conditions of the Plan, either the Board or the
Compensation Committee shall have full and final authority in its discretion to
determine all other questions relating to the administration of the Plan. The
interpretation of any provisions of the Plan by either the Board or the
Compensation Committee shall be final, conclusive, and binding upon all persons
and the officers of Company shall place into effect and shall cause Company to
perform its obligations under the Plan in accordance with the determinations of
the Board or the Compensation Committee in administering the Plan.
6. Eligibility. Independent Directors of Company shall be eligible to receive
-----------
options under the Plan. No Company director who is also a Company employee or a
Subsidiary employee shall be entitled to receive an option under the Plan.
Independent Directors to whom options may be granted under the Plan will be
those selected by the Board from time to time who, in the sole discretion of the
Board, have contributed in
2
the past or who may be expected to contribute materially in the future to the
successful performance of Company and its Subsidiaries.
7. Terms and Conditions of Options. Each option granted under the Plan shall
-------------------------------
be evidenced by an option agreement signed by the Optionee and by a member of
the Board. An option agreement shall constitute a binding contract between
Company and the Optionee, and every Optionee, upon acceptance of such option
agreement, shall be bound by the terms and restrictions of the Plan and of the
option agreement. Such agreement shall be subject to the following express
terms and conditions and to such other terms and conditions that are not
inconsistent with the Plan and that the Board may deem appropriate.
A. Option Period. Options granted under the Plan shall be exercisable
-------------
immediately and, if not exercised, shall lapse at the earliest of the following
times:
(i) ten (10) years from the date of grant; or
(ii) the date set by the grant and specified in the applicable option
agreement.
B. Option Price. The Option Price per share of Common Stock shall be the
------------
fair market value of the Common Stock on the date the option is granted and
shall be subject to adjustments in accordance with the provisions of Section 9.
C. Fair Market Value. The fair market value of the Common Stock on any given
-----------------
measurement date shall be determined as follows:
(i) if the Common Stock is traded on the over-the-counter market, the
sale price for the Common Stock in the over-the-counter market on the
measurement date (or if there was no sale of the Common Stock on such
date, on the immediately preceding date on which there was a sale of
the Common Stock), as reported by the National Association of
Securities Dealers Automated Quotation System; or
(ii) if the Common Stock is listed on a national securities exchange,
the closing sale price for the Common Stock on the Composite Tape on
the measurement date; or
(iii) if the Common Stock is neither traded on the over-the-counter
market nor listed on a national securities exchange, such value as the
Board, in good faith, shall determine.
D. Payment of Option Price. Each option shall provide that the purchase
-----------------------
price of the shares as to which an option shall be exercised shall be paid to
Company at the time of exercise either in cash or in such other consideration as
the Board deems acceptable, and which other consideration in the Board's sole
discretion may include: (i) Common Stock of Company already owned by the
Optionee having a total fair market value on the date of exercise, determined in
accordance with Section 7.C, equal to the purchase price, (ii) Common Stock of
Company issuable upon the exercise of a Plan option and withheld by Company
having a total fair market value on the date of exercise, determined in
accordance with Section 7.C, equal to the purchase price, or (iii) a combination
of cash and Common Stock of Company (either shares already owned by the Optionee
or shares being withheld upon the exercise of a Plan option) having a total fair
market value on the date of exercise, determined in accordance with Section 7.C,
equal to the amount of the purchase price not paid in cash.
E. Manner of Exercise. Subject to the terms and conditions of any applicable
------------------
option agreement, any option granted under the Plan may be exercised in whole or
in part. To initiate the process for the
3
exercise of an option: (i) the Optionee shall deliver to Company, or to a
broker-dealer in the Common Stock with the original copy to Company, a written
notice of intent to exercise an option specifying the number of shares as to
which the option is being exercised and, if determined by counsel for Company to
be necessary, representing that such shares are being acquired for investment
purposes only and not for the purpose of resale or distribution; and (ii) the
Optionee, or the broker-dealer, shall pay for the exercise price of such shares
with cash, or if the Board in its discretion agrees to so accept, by delivery to
Company of Common Stock of Company (either shares already owned by the Optionee
or shares being withheld upon the exercise of a Plan option), or in some
combination of cash and such Common Stock acceptable to the Board. If payment of
the Option Price is made with Common Stock, the value of the Common Stock used
for such payment shall be the fair market value of the Common Stock on the date
of exercise as determined in accordance with Section 7.C. The date of exercise
of a stock option shall be determined under procedures established by the Board,
but in no event shall the date of exercise precede the date on which both the
written notice of intent to exercise an option and full payment of the exercise
price for the shares as to which the option is being exercised have been
received by Company. Promptly after receiving full payment for the shares as to
which the option is being exercised and, provided that all conditions precedent
contained in the Plan are satisfied, Company shall, without transfer or issuance
tax or other incidental expenses to Optionee, deliver to Optionee a certificate
for such shares of the Common Stock. If the Optionee fails to accept delivery of
the Common Stock, the Optionee's rights to exercise the applicable portion of
the option shall terminate.
F. Investment Representation. Each option agreement may provide that, upon
-------------------------
demand by the Board for such a representation, the Optionee or Optionee
Representative shall deliver to the Board at the time of any exercise of an
option or portion thereof a written representation that the shares to be
acquired upon such exercise are to be acquired for investment and not for resale
or with a view to the distribution thereof. Upon such demand, delivery of such
representation before delivery of Common Stock issued upon exercise of an option
and before expiration of the option period shall be a condition precedent to the
right of the Optionee or Optionee Representative to purchase Common Stock.
G. Exercise in the Event of Death or Termination of Service. Upon
--------------------------------------------------------
termination of service as an Independent Director, for whatever reason, any and
all stock options held by the Optionee shall remain effective and may be
exercised by the Optionee or the Optionee Representative until the expiration of
the applicable option term.
H. Transferability of Options. An option granted under the Plan may not be
--------------------------
transferable and may be exercised only by the Optionee during Optionee's
lifetime, or by the Optionee Representative in the event of Optionee's death, to
the extent the option was exercisable by Optionee at the date of his death.
I. No Rights as Shareholder. No Optionee or Optionee Representative shall
------------------------
have any rights as a shareholder with respect to Common Stock subject to his
option before the date of transfer to him of a certificate or certificates for
such shares.
J. Tax Withholding. To the extent required by applicable law, the Optionee
---------------
shall, on the date of exercise, make arrangements satisfactory to Company for
the satisfaction of any withholding tax obligations that arise by reason of an
option exercise or any sale of shares. The Board, in its sole discretion, may
permit these obligations to be satisfied in whole or in part with: (i) cash paid
by the Optionee or by a broker-dealer on behalf of the Optionee, (ii) shares of
Common Stock that otherwise would be issued to the Optionee upon exercise of the
option, and/or (iii) shares of Common Stock previously acquired. Company shall
not be required to issue shares for the exercise of an option until such tax
obligations are satisfied and Company may, to the extent permitted by law,
deduct any such tax obligations from any payment of any kind otherwise due to
the Optionee.
4
8. Compliance With Other Laws and Regulations. The Plan, the grant and
------------------------------------------
exercise of options thereunder, and the obligation of Company to sell and
deliver Common Stock under such options, shall be subject to all applicable
federal and state laws, rules and regulations and to such approvals by any
government or regulatory agency as may be required. Company shall not be
required to issue or deliver any certificates for Common Stock before: (i) the
listing of the Common Stock on any stock exchange or over-the-counter market on
which the Common Stock may then be listed and (ii) the completion of any
registration or qualification of any governmental body which Company shall, in
its sole discretion, determine to be necessary or advisable. To the extent
Company meets the then applicable requirements for the use thereof and to the
extent Company may do so without undue cost or expense, and subject to the
determination by the Board of Directors of Company that such action is in the
best interest of Company, Company intends to register the issuance and sale of
such Common Stock by Company under federal and applicable state securities laws
using a Form S-8 registration statement under the Securities Act of 1933, as
amended, or such successor Form as shall then be available.
9. Capital Adjustments Affecting Stock, Mergers and Consolidations.
---------------------------------------------------------------
A. Capital Adjustments. In the event of a capital adjustment in the Common
-------------------
Stock resulting from a stock dividend, stock split, reorganization, merger,
consolidation, or a combination or exchange of shares, the number of shares of
Common Stock subject to the Plan and the number of shares under option shall be
automatically adjusted to take into account such capital adjustment. By virtue
of such a capital adjustment, the price of any share under option shall be
adjusted so that there will be no change in the aggregate purchase price payable
upon exercise of any such option.
B. Mergers and Consolidations. In the event Company merges or consolidates
--------------------------
with another entity, or all or a substantial portion of Company's assets or
outstanding capital stock are acquired (whether by merger, purchase or
otherwise) by a Successor, the kind of shares of Common Stock that shall be
subject to the Plan and to each outstanding option shall, automatically by
virtue of such merger, consolidation or acquisition, be converted into and
replaced by shares of common stock, or such other class of securities having
rights and preferences no less favorable than the Common Stock of the Successor,
and the number of shares subject to the option and the purchase price per share
upon exercise of the option shall be correspondingly adjusted, so that, by
virtue of such merger, consolidation or acquisition, each Optionee shall have
the right to purchase: (i) that number of shares of common stock of the
Successor that have a book value equal, as of the date of such merger,
conversion or acquisition, to the book value, as of the date of such merger,
conversion or acquisition, of the shares of Common Stock of Company theretofore
subject to the Optionee's option, (ii) for a purchase price per share that, when
multiplied by the number of shares of common stock of the Successor subject to
the option, shall equal the aggregate exercise price at which the Optionee could
have acquired all of the shares of Common Stock of Company theretofore optioned
to the Optionee.
C. No Effect on Company's Rights. The granting of an option pursuant to the
-----------------------------
Plan shall not effect in any way the right and power of Company to make
adjustments, reorganizations, reclassifications, or changes of its capital or
business structure or to merge, consolidate, dissolve, liquidate, sell or
transfer all or any part of its business or assets.
10. Amendment, Suspension, or Termination. The Board shall have the right, at
-------------------------------------
any time, to amend, suspend or terminate the Plan. Notwithstanding the
foregoing, without the consent of the Optionee, no amendment shall make any
changes in an outstanding option which would adversely affect the rights of the
Optionee.
11. Effective Date, Term and Approval. The Plan is effective October 27, 1994
---------------------------------
(the date of Board adoption of the Plan). The Plan was approved by stockholders
of Company holding not less than a
5
majority of the shares present and voting at its 1995 annual meeting on April
21, 1995. The Plan shall terminate ten (10) years after the effective date of
the Plan and no options may be granted under the Plan after such time, but any
option granted prior thereto may be exercised in accordance with its terms.
12. Governing Law; Severability. The Plan shall be governed by the laws of the
---------------------------
State of Delaware. The invalidity or unenforceability of any provision of the
Plan or any option granted pursuant to the Plan shall not affect the validity
and enforceability of the remaining provisions of the Plan and the options
granted hereunder, and such invalid or unenforceable provision shall be stricken
to the extent necessary to preserve the validity and enforceability of the Plan
and the options granted hereunder.
Dated this 28th day of April, 1998.
SYPRIS SOLUTIONS, INC.
By: /s/ Jeffrey T. Gill
--------------------
Jeffrey T. Gill
President & CEO
6