Exhibit
10.1
THE
2010 SYPRIS OMNIBUS PLAN
1.1 Purpose - The purpose of the 2010 Sypris
Omnibus Plan (“Plan”) is to retain and to motivate
directors, officers, other employees and consultants (“Associates”) of Sypris Solutions, Inc. and its
subsidiaries (together with
such subsidiaries, as appropriate in context, the “Company”).
1.2 Eligibility - The Company’s Compensation Committee (“Committee”) shall determine those Associates who
may participate in the Plan (“Participants”).
1.3 Term - The Committee may grant awards under this
Plan (“Awards”) from May 11, 2010 (the “Effective Date”), through May 11, 2015, and such Awards may, subject to the terms and conditions
of an Award, survive the
Plan’s expiration. Upon the Effective Date, no
further awards will be made
under the Company’s 2004 Equity Plan (the “2004 Plan”).
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Article
II.
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Administration
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2.1 Interpretation - The Committee shall
have complete authority to interpret the Plan 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 Plan or any Award Agreements (including to establish or amend any rules
regarding the Plan 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”)). Notwithstanding the
foregoing, any action hereunder may be taken by the Board of Directors
of the Company (the “Board”) in lieu of the Committee and all
references herein to the Committee shall be deemed to be the Board when the
Board so acts.
2.2 Authority - The Committee shall have
final authority, in its
sole discretion, to determine or interpret any of the following terms
(collectively, “Terms”), with respect to both new and
outstanding Awards, subject to applicable Rules:
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eligibility criteria regarding any
participation or exercise
rights,
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types of Awards, including those qualified under
26 USC §422 or its
equivalent (“ISOs”) and cash awards,
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amounts, classes, registration
rights or restricted legends of related
Shares,
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timing and features of any rights,
benefits or payments due to Participants under any Award (including voting,
exercise, or dividend
rights),
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restrictions on assignment or
transfer of any Awards or rights
thereunder,
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vesting and forfeiture
terms,
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convertibility or deferral
rights,
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the amounts, methods and forms of
consideration due
from any Participant in exchange for the receipt or exercise of any Award
or rights thereunder (including the exchange of previously granted Awards)
and for any taxes incident
thereto,
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whether an Award should be subject
to the satisfaction of Performance Objectives as described in
Section 2.3, and
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any other terms or conditions as the
Committee specifies in written agreements, which shall govern the terms of each
Award (and which need not be identical) (the “Award Agreements”). The Committee may
condition Awards upon the
Participant’s execution of Award Agreements,
representations regarding resale, blank stock powers, and any other documents
that it may specify. Shares may be deposited together with stock
powers with any escrow agent (including the Company) as specified by the
Committee.
2.3 Performance Objectives – “Performance Objectives” may be expressed in terms of (a)
earnings per share, (b) Stock prices, (c) net income, (d) pre-tax income, (e)
operating income, (f) return on equity or
assets, (g) economic value added, (h) sales, (i) cash flow from operating
activities, (j) working capital, (k) productivity ratios, (l) expense
targets, (m) cost containment or reduction, (n) market share, (o) completion of
acquisitions of businesses or companies, (p) completion of divestitures and
asset sales, (q) completion of business relocation
activities, (r) other financial objectives, or
(s) any combination of the
foregoing, with respect to
the Company, any of its subsidiaries, any of its divisions or any combination thereof. Performance
Objectives may be absolute or relative (to prior performance of the Company or
to the performance of one or more other entities or external indices) and may be
expressed in terms of a progression within a specified range. Unless otherwise expressly waived by
the Committee, Performance Objectives shall be established in writing by the
Committee by the earlier of (x) the date on which a quarter of the performance
period has elapsed or (y) the date which is ninety (90) days after the commencement of the
performance period, and in any event while the performance relating to the
Performance Objectives remains substantially uncertain.
At the time Performance Objectives are
established, the Committee may also determine to exclude charges, credits or revenues related to an event or
occurrence which the Committee determines should appropriately be excluded,
including (a) restructurings, discontinued operations, reserves or allowances
for loan losses, extraordinary items, and other unusual or non-recurring revenues or
charges,
credits, (b) an event
either not directly related to the operations of the Company or not within the
reasonable control of the Company’s management, or (c) the cumulative
effects of or accounting changes in accordance with U.S. generally accepted
accounting principles or tax changes.
It is the intent of the Company that
Awards subject to the attainment of Performance Objectives that are granted to
persons who are designated by the Committee as likely to be “covered employees” within the meaning of Section 162(m) of
the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations thereunder shall,
if so designated by the Committee, constitute “qualified performance based
compensation” within the
meaning of Section 162(m) of the Code and
the regulations thereunder. If any provision of the Plan or any Award Agreement
relating to such Awards does not comply or is inconsistent with the requirements
of Section 162(m) of the Code or regulations thereunder, such provision shall be construed or
deemed amended to the extent necessary to conform to such
requirements.
2.4 Amendments and Approvals - The
Committee, at its discretion, may amend the Plan, its interpretations or any
Award at any time, subject to applicable Rules. 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.
2.5 Delegation - The Committee may delegate
any portion of their responsibilities and powers to one or more
persons selected by them, subject to applicable Rules. Such
delegation may be revoked by the Committee at any time.
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Article
III.
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Stock
Subject to Plan
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3.1 Limit on Shares – The Committee shall limit Awards in the
aggregate to an aggregate
maximum amount (“Cap”) of: (a) total shares of the
Company’s $.01 par value common stock
(“Common Stock”), and (b) total shares of any other
classes of the Company’s then authorized common stock as are
determined by the Committee to be no more dilutive than the Common
Stock (collectively, the “Stock” or, individually, the “Shares”); and no more than 50% of all Awards
shall be ISOs. Upon the Effective Date, such Cap shall be Three Million
(3,000,000) Shares, plus
the number of Shares that
remain outstanding and available for issuance under the Company’s 2004 Plan as of the Effective
Date as calculated pursuant
to Section 3.2. Otherwise the Cap shall be increased
only: (x) if approved by a majority of the Company’s stockholders, (y) pursuant to Article VI, or (z) if
approved by the Committee to replace any acquired business’ equity plan with an appropriate number
of additional Shares, pursuant to applicable Rules.
3.2 Share Usage and Unvested Shares
– Each Award shall be
counted, as of the grant
date, against the limit set forth in Section 3.1 as one Share for every one
Share subject to an Award. Awards granted in substitution for awards held by
employees of a business entity acquired by the Company shall not count against
the Shares available for issuance under the
Plan.
If, following the Effective
Date, any Awards under
the Plan or the 2004 Plan shall expire, be forfeited,
exchanged or cancelled without having been fully exercised or vested (excluding, however, the use of
Shares to satisfy the tax
withholding obligations or the payment of the purchase price of an
Award), the reserved but
unused Shares subject thereto shall again be available for new Awards under the Plan.
3.3 Individual Limits – The maximum number of Shares
subject to options or
appreciation rights that can be issued under the Plan to any Participant is
500,000 in any one calendar year. The maximum number of Shares
subject to an Award other than options or appreciation rights that can be issued
under the Plan to any Participant is 250,000 in any
one calendar year. The maximum amount that can be earned by any Participant as a
cash award subject to the attainment of Performance Objectives in any
performance period of up to one calendar year is year is $750,000 and the maximum amount that can be
earned by any Participant as a cash award subject to the attainment of
Performance Objectives over any performance period of greater than one calendar
year is $2,000,000.
3.4 Share Issuance Book Entry – Notwithstanding any other provision of this Plan to the
contrary, the issuance of Shares under the Plan may be evidenced in such manner
as the Committee, in its discretion, deems appropriate, including, without
limitation, book-entry registration or issuance of one or more share certificates.
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Article
IV.
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Types of
Awards
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4.1 Stock - The Committee may grant Awards
of Stock to Participants on Terms specified in the Award
Agreements.
4.2 Options - The Committee may grant Awards
of options to purchase or sell Stock, to Participants on Terms specified in
the Award Agreements. The purchase price under any such Award shall
be the closing price of the Stock on the date of grant, and the sale price under
any such Award shall be the closing price of the Stock on the date of the sale, unless the Committee
designates another price in the Award Agreement; provided further that, the fair
market value (on each ISO’s Award date) of all ISOs’ Shares which first become exercisable
by a Participant in any calendar year under all Company plans shall not exceed
$100,000. Awards above this limit or to non-employees shall be deemed
separate, non-qualified Awards under 26 USC §422.
4.3 Appreciation Rights – The Committee may grant Awards of
rights to receive all or a portion of the appreciation in the value of the Shares
over a period of time, to Participants on Terms specified in the Award
Agreements.
4.4 Cash Awards – The Committee may grant cash-based
Awards to Participants which may be based on the successful attainment of one
or more Performance
Objectives.
4.5 Other Awards - The Committee may grant
Awards in tandem with, contingent upon, or convertible into, other Awards on
Terms specified in the Award Agreements.
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Article
V.
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Termination
of Awards
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5.1 Unvested Rights - Except as otherwise provided in an Award
Agreement or by the Committee, every unvested, unexercised right under this
Plan shall terminate and expire at the earlier of: the expiration date in the
Award Agreement or
termination of the Participant’s employment.
5.2 Vested Rights - Except as otherwise provided in an Award
Agreement or by the Committee, every vested, unexercised right under this
Plan shall terminate and expire at the earlier of: (a) the expiration date in
the Award Agreement, (b) thirty days after termination of employment, (c)
three months after a Participant’s retirement, or (d) one year after a
Participant’s death or disability, provided that all of the foregoing
shall be administered subject to the Committee’s Rules.
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Article
VI.
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Adjustment of
Number of Shares
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6.1 Dividends - In the event that any stock
dividend is declared on the Stock, the number of Shares in any Award Agreement
and the maximum limit on Shares in Section 3.1 shall be adjusted by adding to
each such Share the number of Shares which would be distributable
thereon (or any equivalent value of Stock as determined by the Committee in its
sole discretion) if such Share had been outstanding on the date fixed for
determining the stockholders entitled to receive such dividend. In the event of any other distribution to
the Company’s stockholders of securities of any
other entity or other assets (including an extraordinary dividend but excluding
a non-extraordinary dividend) without receipt of consideration by the Company,
the Company shall in such manner as the Company
deems appropriate adjust (i) the number and kind of Shares subject to
outstanding Awards and/or (ii) the purchase price of (or other consideration
for) outstanding Awards to reflect such distribution.
6.2 Reorganization - In the event that the
outstanding Stock is exchanged for or changed into any different number or class
of securities, whether through reorganization, recapitalization, stock split,
reverse stock split, combination of shares, merger or consolidation, then there shall be substituted for
each Share subject to any Award and for the maximum limit on Shares
in Section 3.1, the number and class of securities for which each outstanding
Share shall be so exchanged or into which each such Share shall be
changed.
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Article
VII.
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Change
OF
Control
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7.1 Change of Control – A “Change of Control” includes any transaction (or series of
transactions): (a) if the stockholders of the Company immediately before the transaction do
not retain immediately after the transaction, in substantially the same
proportions, direct or indirect beneficial ownership of more than 50% of the
total combined voting power of the outstanding voting stock of the company; (b)
in which any person or group acquires, after the Effective Date, more than 25% of the voting power of
the Company’s voting securities; (c) in which
substantially all of the assets of the Company are sold; or (d) any similar
event determined by the Committee to constitute a change in the control of the
Company. Unless
otherwise provided by the
Committee in an Award Agreement or any other agreement with a Participant,
in the event of a Change
of Control, the vesting date for all
unvested or forfeitable rights in any Award shall be accelerated to the earlier
of: (x) the date of such
Change of Control or (y) any other date
established by the Committee in its discretion to allow Participants an
effective opportunity to enjoy such rights under the
circumstances.
Without limiting the generality of the
foregoing, in connection
with a Change of Control the Committee may elect, in its sole discretion, to (a)
cancel any outstanding Awards and pay or deliver, or cause to be paid or
delivered, to the holder thereof an amount in cash or securities having a value
(as determined by the Committee acting in good faith) equal
to the product of the number of Shares subject to the Award (the “Grant Shares”) multiplied by the amount, if any, by
which (i) the formula or fixed price per Share paid to holders of Shares
pursuant to such Change of Control exceeds (ii) the purchase
price applicable to such Grant Shares, (b) provide in connection with such
Change of Control for the assumption or continuation of the Awards theretofore
granted, or for the substitution for such Awards for new Awards relating to the stock of a successor
entity, or a parent or subsidiary thereof, with appropriate adjustments as to
the number of shares (disregarding any consideration that is not common stock)
and exercise prices, such that Awards theretofore granted shall continue in the manner and under the
terms so provided, or (c) cancel any outstanding Awards to the extent the
purchase price applicable to the Grant Shares issuable thereunder is greater
than the formula or fixed price per share paid to holders of Shares pursuant to such Change of Control, with
or without any payment to the holders thereof. If the Company
establishes an exercise window in connection with a scheduled consummation of a
Change of Control, any exercise of an Option during such period shall
be conditioned upon the consummation of
the event and shall be effective only immediately before the consummation of the
event.
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Article VIII.
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Miscellaneous
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8.1 No Other Rights - Participation under
the Plan shall not be construed as giving an employee any future right of employment with the
Company. Subject to applicable Rules, acceptance of any Award shall constitute
acceptance of the Company’s right to terminate employment at will,
and acceptance of all provisions of the Plan.
8.2 Vesting Causing Loss of Compensation Deduction
– No part of an Award shall vest, settle or be
delivered to the extent
such vesting, settlement or
delivery would cause the
Participant to have compensation which is nondeductible by the Company pursuant
to applicable Rules. Any Award not vested, settled or delivered because of this limitation shall
vest, settle or be
delivered in any subsequent
year in which the vesting,
settlement or delivery
would not cause the loss of such deduction.
8.3 Governing Law - This Plan and
all matters relating to the
Plan shall be interpreted and construed under the laws of the State of Delaware
using any dispute resolution methods selected by the
Committee.
8.4 Termination of Plan - The Board of
Directors may, at its discretion, terminate the Plan at any time for any
reason. Except
as provided in Section 7.1, termination of the Plan shall not affect unexpired
outstanding Awards previously granted.
8.5 Repricing
– The terms of outstanding options and appreciation rights may not be amended,
without stockholder approval, to reduce the purchase price applicable to such
Awards or cancel, exchange, substitute, buyout or surrender such outstanding
options or appreciation rights in exchange for cash, other Awards or options or
appreciation rights with an option price that is less than the purchase price of
the original options or appreciation rights.