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Exhibit
99.(a)(1)(b)
Congratulations!
Each
year, the Compensation Committee of our Board of Directors reviews the Sypris
compensation program, including all outstanding stock option awards. As a
result, the Committee has granted you the right to exchange all of your vested,
“underwater” stock options for new shares of stock or new stock options with an
exercise price of $7.90.
Please
read the enclosed materials carefully. This exchange offer expires on June
12,
2007. You must complete an election form - even if you wish to keep your
existing stock options.
All
of
your vested stock options which have an exercise price (or “strike” price)
greater than $7.90 per share are “Eligible Options” for this exchange offer. All
of the Eligible Options that you received in any one grant, having the same
strike price, are called an “Eligible Grant.”
Your
choices for each Eligible Grant, as listed on your election form (attached
as
Exhibit A), are:
| 1. |
Keep
all of your Eligible Options in that grant, with no
changes;
|
| 2. |
Trade
all Eligible Options in that grant for a specified number of shares
of
vested stock;
|
| 3. |
Trade
all Eligible Options in that grant for a specified number of new,
vested
stock options with a new strike price of $7.90 per share, exercisable
through May 14, 2011.
|
We
have
calculated the numbers of the new vested shares or new vested options in an
approximately “cost neutral” manner, as described in the attached materials, but
you should carefully evaluate each choice based upon your own analysis. Attached
you will find:
| · |
an
Offer to Exchange, with detailed explanations of the exchange
offer,
|
| · |
the
terms of the 2007 Stock Option Exchange Program,
|
| · |
your
new Exchange Agreement,
|
| · |
the
election form on Exhibit A which provides a summary of your equity
grants,
|
| · |
a
copy of the 2004 Sypris Equity Plan, and
|
| · |
the
forms you can use to change your election before June 12,
2007.
|
We
have
also included a Stock Value Calculator that allows you to assume various stock
prices for Sypris stock and calculates the value of each of your choices at
that
price.
In
the
most “conservative risk” scenarios - where you assume that Sypris stock falls in
price or increases very little - then trading your Eligible Options for shares
of vested stock would be an appropriate choice. In the most “aggressive risk”
scenarios - where you are willing to assume that the price of Sypris stock
will
rise well above the strike price of those Eligible Options - then you might
elect to keep your Eligible Options without any changes. In the “moderate risk”
scenarios - where you believe that Sypris stock will rise in price, but may
not
rise significantly above your current strike prices - then trading Eligible
Options for new options might be your best choice.
We
have
scheduled a teleconference on Friday, May 18, 2007 at 2:00 pm EST, to address
frequently asked questions. You may participate by dialing into 1-XXX-XXX-XXXX
(and then entering: XXXXXX#). Questions that pertain to your personal situation
should be directed to your local Human Resource Representative. Again, you
may
change any election up to June 12th,
but
after June 12th
all
decisions are final.
Congratulations
again on the opportunity to participate in this
program!