Exhibit 10.21
SYPRIS SOLUTIONS INC.
EXECUTIVE BONUS PLAN
2002 FISCAL YEAR
1. Establishment of Plan.
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Sypris Solutions Inc., a Delaware corporation (the "Company"),
established this executive bonus plan effective as of January 2, 2002 (the
"Plan"), to provide a financial incentive for employees of the Company to
advance the growth and prosperity of the Company.
2. Eligibility.
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Officers of the Company who are specifically designated by the
Compensation Committee of the Board of Directors of the Company (the
"Compensation Committee") for participation during the current year shall be
eligible to participate in the Plan.
3. Bonus Potential.
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The Bonus Potential for each participant will be established and
approved by the Compensation Committee at the beginning of each Plan year. Each
participant will be provided with a copy of this Plan, which will include an
exhibit that lists the participant's full name, salary, start date (for purposes
of the current fiscal year), cash bonus potential, stock option bonus potential,
the Company's (and the subsidiary's, in the case of a subsidiary president)
financial plan benchmarks and management objectives for the current year.
Participants who serve in the capacity of president of a Company subsidiary will
derive 20% of their Bonus Potential from the performance of the Company and 80%
of their Bonus Potential from the performance of the individual subsidiary for
which they are responsible, as more fully described below, in accordance with
the provisions of this Plan.
(a) Cash Bonus Potential. The Cash Bonus Potential will be divided into
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five award components of equal amount. Four of the award components will be
allocated to each of the four quarters of the year, while the fifth award
component will be allocated to the fiscal year. An award component will be
deemed to have been activated and therefore available for future payment upon
the achievement of at least 90% of the Company's (and/or the subsidiary's, in
the case of a subsidiary president) financial plan for profit before bonus and
tax and no more than 105% of the financial plan for average monthly net working
capital for the period to which the award component has been allocated, with the
exception of the fiscal year, for which at least 100% of the Company's (and/or
the subsidiary's, in the case of a subsidiary president) financial plan must be
achieved (the "Plan Metrics").
Should the Company's financial performance for any given quarter
fail to meet the Plan Metrics for that quarter, the participant will still have
the opportunity to activate that award component currently, or at some future
point during the Plan year, based upon the achievement of the Company's Plan
Metrics on a year-to-date basis. Once an award component has been activated, it
will remain available for future payment regardless of any subsequent shortfall
in financial performance by the Company.
(b) Stock Option Bonus Potential. The Stock Option Bonus Potential will
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also be divided into five award components of equal amount. Four of the award
components will be allocated to each of the four quarters of the year, while the
fifth award component will be allocated to the fiscal year. An award component
will be deemed to have been activated and therefore available for future grant
upon the
achievement of the Company's (and/or the subsidiary's, in the case of a
subsidiary president) Plan Metrics for the period to which the award component
has been allocated.
Should the Company's financial performance for any given quarter
fall short of the Plan Metrics for that quarter, the participant will still have
the opportunity to activate that award component currently, or at some future
point during the Plan year, based upon the achievement of the Company's Plan
Metrics on a year-to-date basis. Once an award component has been activated, it
will remain available for future grant regardless of any subsequent shortfall in
financial performance by the Company.
(c) Acquisitions and Divestitures. The Plan Metrics will be adjusted to
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reflect the expected impact of any acquisitions and/or divestitures that are
completed during the current Plan year at the time of such acquisition or
divestiture.
4. Bonus Award.
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Each eligible participant will be entitled to an amount equal to the
sum of the cash award components and the sum of the shares represented by the
stock option award components that have been activated during the Plan year,
subject to the provisions of Sections 7(a), 7(b) and the following:
(a) Management Objectives. Each participant will have up to five
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Management Objectives for the Plan year, each of which will be specific with
regard to (i) the expected outcome, (ii) the expected financial impact on the
Company and (iii) the date or dates by which the objective must be achieved.
Each objective will receive a weighting, the total of which for all objectives
will be equal to 100%. The president and chief executive officer of the Company
will have the responsibility to review and determine each participant's
performance to objectives and to assign each individual a percentage that will
be used as a factor to determine the actual amount of the awards to be
distributed.
(b) Discretionary Review. The president and chief executive officer of
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the Company will have the discretion to increase the actual amount of the awards
to be distributed by up to 20% of the participant's Bonus Potential, based upon
the individual's specific performance and contribution to the Company. Such
discretion will be used sparingly and will generally be limited to the
recognition of extenuating circumstances and/or exceptional accomplishments that
may or may not have been captured by the Management Objectives.
(c) Approval of the Compensation Committee. The Bonus Award for each
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participant will be subject to the review of and approval by the Compensation
Committee. As a matter of policy, the Compensation Committee will not approve
the award of any bonus that would otherwise lead or contribute to an operating
loss as reported on the consolidated financial statements of Sypris Solutions
Inc.
(d) Qualification. Awards will be payable to each eligible participant
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as soon as administratively practicable after release of the audited annual
financial statements of the Company and the approval of the Compensation
Committee; provided, however, that the Plan shall be in effect as of the date of
payment and such employee shall be employed by the Company as of the date of
payment. No employee shall have any right to payment of an award unless the Plan
is in effect and the employee is employed by the Company as of the date of
payment.
5. Method of Distribution.
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Cash awards shall be payable by check in lump sum. All such payments
will be subject to withholding for income, social security or other such payroll
taxes as may be appropriate. Stock option
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grants will be granted under and subject to the Sypris Solutions Inc. 1994 Stock
Option Plan for Key Employees and will contain an option price that will be
equal to the closing price of the common stock on the over-the-counter market,
as reported by the Nasdaq Stock Market, on the date of grant.
6. Administration.
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The Compensation Committee shall administer this Plan. The decisions of
the Compensation Committee in interpreting and applying the Plan shall be final.
7. Miscellaneous.
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(a) Employment Rights. The adoption and maintenance of this Plan is
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not an employment agreement between the Company and any employee. Nothing herein
contained shall be deemed to give any employee the right to be retained in the
employ of the Company nor to interfere with the right of the Company to
discharge any employee at any time.
(b) Amendment and Termination. The Company may, without the consent of
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any employee or beneficiary, amend or terminate the Plan at any time and from
time-to-time.
(c) Governing Law. This Plan shall be governed by and construed in
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accordance with the laws of the State of Delaware.
(d) Construction. The headings and subheadings of this Plan have been
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inserted for convenience for reference only and are to be ignored in any
construction of the provisions hereof. The masculine shall be deemed to include
the feminine, the singular shall include the plural, and the plural shall
include the singular unless the context otherwise requires. The invalidity or
unenforceability of any provision hereunder shall not affect the validity or
enforceability of the balance hereof. This Plan represents the entire
undertaking by the Company concerning its subject matter and supersedes all
prior undertakings with respect thereto. No provision hereof may be waived or
discharged except by a written document approved by the Compensation Committee
and signed by a duly authorized representative of the Company.
The parties indicate their acknowledgement of the terms and conditions
this Plan as of the date first written above.
SYPRIS SOLUTIONS INC. PARTICIPANT
_________________________ __________________________
Robert E. Gill
Chairman
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Henry F. Frigon
Chairman
Compensation Committee
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Jeffrey T. Gill
President and CEO
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