SYPRIS SOLUTIONS INC, DEF 14A, 1998-05-22

SYPRIS SOLUTIONS INC
DEF 14A, 1998-05-22
PRINTED CIRCUIT BOARDS

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<PAGE>

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

Filed by the Registrant [X]

Filed by a Party other than the Registrant [_]

Check the appropriate box:

[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))

[X] Definitive Proxy Statement

[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12

SYPRIS SOLUTIONS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

(1) Title of each class of securities to which transaction applies:

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(2) Aggregate number of securities to which transaction applies:

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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] Fee paid previously with preliminary materials.

[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.

(1) Amount Previously Paid:

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(2) Form, Schedule or Registration Statement No.:

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(3) Filing Party:

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(4) Date Filed:

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Notes:
<PAGE>

MERGER COMPLETED!
SYPRIS SOLUTIONS INC. IS FORMED!

Fellow Shareholders:

We are pleased to report that the merger of Group Technologies Corporation with
Group Financial Partners Inc., Tube Turns Technologies Inc. and Bell
Technologies Inc. was completed on March 30, 1998. The reincorporation of the
company in Delaware occurred on the same day, the result of which was to form
our new company, Sypris Solutions Inc. Since the completion of the merger
occurred shortly after the close of 1997, we have elected not to publish a
traditional annual report for 1997. In its place, we have enclosed two important
documents for your review and information:

1. A copy of the Form 10-K for the fiscal year ended December 31, 1997, for
Group Technologies Corporation. This report is for the results of
operations for Group Technologies Corporation only.

2. A copy of the Form 8-K for Sypris Solutions Inc. This report was filed
with the SEC as a result of the merger and includes the pro forma results
of operations for 1997 for all companies that were a party to the merger.

The shares of common stock of Sypris Solutions began trading on the Nasdaq Stock
Market on Monday, March 30, 1998. The ticker symbol is SYPR.

WHAT'S IN A NAME?

The word "Sypris" is derived from the Latin word for Venus, which is the most
brilliant planet in our solar system. Since our mission is to provide superior
solutions to meet the needs of our customers, we wanted to select a name that
reflected this dedication to providing the best, or brightest, of solutions.
Hence, the name Sypris Solutions was born.

BUILDING NICHE BUSINESSES INTO MARKET LEADERS.

Our objective is to maximize the company's return on shareholder equity over the
longer term. We will pursue the realization of this objective through the
single-minded dedication of the company's resources to a select number of
industrial niches in which we believe we can achieve a position of market
leadership. We are convinced that the successful implementation of this strategy
will lead to higher operating margins, reduced risk through market
diversification and increased operating stability.

Today, we are in the process of building increasingly important franchises in
the markets for data retrieval and storage systems, for products that provide
for the uninterrupted measurement of electrical current and for special closures
that are used in high pressure environments. We are also working to increase our
solid position in a number of service industries, including the markets for the
testing of electronic components and subsystems, for the calibration and repair
of electronic instruments, and for the provision of engineering and
manufacturing services to a wide variety of commercial, industrial and
government agency customers.
<PAGE>

As we go forward, we intend to seek additional synergistic acquisitions to build
upon this existing foundation of product and service businesses. We also intend
to continue to operate on a decentralized basis with a small corporate staff to
insure that we support our objective of earnings growth and remain
ultra-responsive to our customers at the local level. Finally, we intend to
reinvest in existing businesses to increase productivity and the range of
products and services each business has to offer, thereby making Sypris
increasingly valuable to each of our customers. We believe that our special
skill is in the management of small- to medium-sized businesses and thus will
continue to dedicate ourselves to maintaining the small company, hands-on
culture that has benefited us so well over the years.

A BETTER COMPANY.

Over a year of planning and hard work was required to address the complex legal
and financial considerations that were associated with the formation of Sypris
Solutions. The result is a company with vastly improved earnings prospects, far
greater balance sheet strength, significantly increased market, customer and
geographic diversity, and a wider array of growth opportunities. We also believe
that the potential exists to achieve operating efficiencies in certain
administrative areas, including pension plan management, employee benefits,
treasury management, information systems and legal services. As achieved, the
benefits from the consolidation of these activities will further contribute to
our goal of earnings growth.

THANK YOU.

We sincerely appreciate the positive response that the establishment of Sypris
Solutions has received and recognize that the ultimate valuation accorded the
shares of Sypris stock will be determined by our ability to deliver superior
returns on shareholder equity over the longer term. We are confident that the
successful execution of our business strategy will lead to an increase in
shareholder value for our owners.

While expressing gratitude to our employees for their dedication over the past
year, we also want to thank our customers for giving us the opportunity to serve
them. We are dedicated to serving their needs through the specialized and
focused capabilities of the new Sypris Solutions.

We sincerely appreciate your investment in Sypris Solutions and encourage you to
contact us. We will be pleased to answer your questions and look forward to your
comments.

Sincerely,

/s/ Jeffrey T. Gill
President & CEO

/s/ Robert E. Gill
Chairman

May 22, 1998

<PAGE>

[INSERT LOGO]

To Our Shareholders:

You are cordially invited to attend the Annual Meeting of Shareholders of
Sypris Solutions, Inc., to be held at The Camberley Brown Hotel, 335 West
Broadway, Louisville, Kentucky on Wednesday, June 24, 1998, at 10:00 a.m., local
time.

Matters to be considered and acted upon at the Annual Meeting include: (i)
the election of directors, (ii) a proposal to approve an amendment to the
Company's 1994 Stock Option Plan for Key Employees to increase the number of
shares available for issuance thereunder, and (iii) such other matters as may
properly come before the meeting.

Information concerning the matters to be considered and voted upon at the
Annual Meeting is set forth in the enclosed Proxy Statement. We encourage you
to review this material carefully.

It is important that your shares be represented at the meeting. Whether or
not you plan to attend in person, you are requested to vote, sign, date, and
promptly return the enclosed proxy in the self-addressed envelope provided. A
proxy may be revoked prior to the meeting and will not affect your right to vote
in person in the event that you decide to attend the meeting.

Jeffrey T. Gill Robert E. Gill
President and Chief Executive Officer Chairman of the Board
<PAGE>

SYPRIS SOLUTIONS, INC.
455 South Fourth Street
Louisville, Kentucky 40202

----------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON WEDNESDAY, JUNE 24, 1998

----------------

To the Shareholders of Sypris Solutions, Inc.:

Notice is hereby given that the Annual Meeting of Shareholders of Sypris
Solutions, Inc. (the "Company") will be held on Wednesday, June 24, 1998, at
10:00 a.m., local time, at The Camberley Brown Hotel, 335 West Broadway,
Louisville, Kentucky 40202, for the following purposes:

1. To elect eight (8) directors of the Company to hold office until the next
Annual Meeting of Shareholders or until their successors have been duly elected;

2. To consider and act upon a proposal to approve an amendment to the Sypris
Solutions, Inc. 1994 Stock Option Plan for Key Employees to increase the number
of shares of Common Stock available for issuance thereunder; and

3. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.

The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice. Only shareholders of record at the close of
business on May 8, 1998 are entitled to notice of and to vote at the meeting and
any adjournment thereof.

By Order of the Board of Directors

R. Scott Gill
Secretary

Louisville, Kentucky
May 22, 1998

PLEASE INDICATE YOUR VOTING DIRECTIONS, SIGN AND DATE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE. IF YOU LATER FIND THAT YOU MAY BE
PRESENT OR FOR ANY OTHER REASON DESIRE TO REVOKE YOUR PROXY, YOU MAY DO SO AT
ANY TIME BEFORE IT IS VOTED.
<PAGE>

SYPRIS SOLUTIONS, INC.
455 South Fourth Street
Louisville, Kentucky 40202
(502) 585-5544

PROXY STATEMENT

INFORMATION CONCERNING SOLICITATION AND VOTING

General

The enclosed Proxy is solicited on behalf of Sypris Solutions, Inc. (the
"Company"), for use at the Annual Meeting of Shareholders (the "Annual Meeting")
to be held on Wednesday, June 24, 1998, at 10:00 a.m., local time, or at any
adjournment or postponement thereof, for the purposes set forth herein and in
the accompanying Notice of Annual Meeting of Shareholders. The Annual Meeting
will be held at The Camberley Brown Hotel, 335 West Broadway, Louisville,
Kentucky 40202. The Company's telephone number is (502) 585-5544.

These proxy solicitation materials were mailed on or about May 22, 1998 to
all shareholders entitled to notice of and to vote at the Annual Meeting and any
adjournment thereof. A copy of the Annual Report on Form 10-K of Group
Technologies Corporation ("GTC") for the fiscal year ended December 31, 1997,
including financial statements, was sent to the shareholders concurrently with
this Proxy Statement.

On March 30, 1998, Sypris Solutions, Inc. became the successor to GTC
pursuant to a reincorporation merger of GTC with and into Sypris Solutions,
Inc., which was a wholly-owned subsidiary of GTC (the "Reincorporation"). The
Reincorporation followed the merger of Tube Turns Technologies, Inc. and Bell
Technologies, Inc. with and into wholly-owned subsidiaries of GTC and the merger
of Group Financial Partners, Inc. with and into GTC (collectively, the
"Reorganization"). In addition, immediately after the Reorganization but prior
to the Reincorporation, GTC effected a 1-for-4 reverse stock split (the "Reverse
Stock Split"). All share and per share information in this Proxy Statement
reflects this Reverse Stock Split. However, the information incorporated by
reference from the Annual Report on Form 10-K of GTC for the fiscal year ended
December 31, 1997 does NOT reflect the effect of the Reverse Stock Split.

Record Date and Share Ownership

Shareholders of record at the close of business on May 8, 1998 (the "Record
Date") of the Company's Common Stock, par value $.01 per share (the "Common
Stock"), are entitled to notice of and to vote at the Annual Meeting and any
adjournment thereof. At the Record Date, 9,421,073 shares of Common Stock were
issued and outstanding. For information regarding security ownership by
management and by the beneficial owners of 5% or more of the Company's Common
Stock, see "Security Ownership of Certain Beneficial Owners and Management."

Voting and Solicitation

Each shareholder of Common Stock is entitled to one vote for each share of
Common Stock on all matters presented at the Annual Meeting. Shareholders do not
have the right to cumulate their votes in the election of directors. The holders
of a majority of the outstanding shares entitled to vote will constitute a
quorum for the transaction of business at the Annual Meeting. Shares present in
person or represented by proxy (including shares which abstain or do not vote
with respect to one or more of the matters presented for shareholder approval)
will be counted for purposes of determining whether a quorum exists.

If the enclosed form of proxy is executed, returned and not revoked, it will
be voted in accordance with the specifications, if any, made by the
shareholders, and if specifications are not made, it will be voted FOR the
election of director nominees named herein and FOR the proposal to approve the
amendment to the Sypris Solutions, Inc. 1994 Stock Option Plan for Key
Employees. If any other matter, not known or determined at the time of
solicitation of proxies, properly comes before the Annual Meeting, the proxies
will be voted in accordance with the discretion of the person or persons voting
the proxies.

3
<PAGE>

Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before its use by delivering to the Company (Attention: R.
Scott Gill, Secretary) a written notice of revocation or a duly executed proxy
bearing a later date, or by attending the meeting and voting in person. If a
shareholder is not attending the Annual Meeting, any proxy or notice should be
returned in time for receipt no later than the close of business on the day
preceding the Annual Meeting.

Abstentions and executed proxies returned by a broker holding shares of
Company Common Stock in street name which indicate that the broker does not have
discretionary authority as to certain shares to vote on one or more matters
("broker non-votes") will be considered present at the Annual Meeting for
purposes of establishing a quorum. Abstentions will not be voted. Broker non-
votes will not be counted as votes cast on any matter to which they relate.
Except as otherwise indicated, an affirmative vote of a majority of the number
of shares of stock present or represented by proxy at the Annual Meeting and
entitled to vote shall decide any question brought before the Annual Meeting.
The election of the directors named in this Proxy Statement will be determined
by the vote of a plurality of the shares present in person or represented by
proxy at the Annual Meeting and abstentions and broker non-votes will have no
effect on the outcome of the vote on such election.

As of May 8, 1998, Robert E. Gill, Virginia G. Gill, Jeffrey T. Gill and R.
Scott Gill (the "Gill Family") beneficially owned an aggregate of 8,361,711
shares of the Company Common Stock or approximately 88.8% of the shares of
Company Common Stock outstanding on such date. The members of the Gill Family
have indicated their intention to vote their shares of Company Common Stock in
favor of approval and adoption of each of the proposals.

The cost of soliciting proxies will be borne by the Company. In addition, the
Company may reimburse brokerage firms and other persons representing beneficial
owners of shares for expenses incurred in forwarding solicitation materials to
such beneficial owners. Proxies may be solicited by certain of the Company's
directors, officers and regular employees, without additional compensation,
personally or by telephone, telegram, letter or facsimile.

4
<PAGE>

Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information with respect to beneficial
ownership of Common Stock as of May 8, 1998, including beneficial ownership (i)
by each person (or group of affiliated persons) who is known by the Company to
own beneficially more than 5% of each class of stock, (ii) by each of the
Company's directors who owns shares, (iii) by each of the Named Officers
reflected in the Summary Compensation Table, and (iv) by all current directors
and executive officers as a group. The persons named in the table have sole
voting and investment power with respect to all shares of the Common Stock shown
as beneficially owned by them.

Shares Beneficially Owned
----------------------------
Common Stock
----------------------------
Name Number Percent
---- ------------ ---------
<S> <C> <C>
Robert E. Gill (1) 3,275,666 34.8%
455 South Fourth Street
Louisville, Kentucky 40202

Virginia G. Gill (2) 3,275,666 34.8%
455 South Fourth Street
Louisville, Kentucky 40202

Jeffrey T. Gill (3) 2,733,340 29.0%
455 South Fourth Street
Louisville, Kentucky 40202

R. Scott Gill (4) 2,352,705 25.0%
455 South Fourth Street
Louisville, Kentucky 40202

Henry F. Frigon (5) 32,970 *
William L. Healey 500 *
Roger W. Johnson (6) 12,080 *
Sidney R. Petersen (7) 32,657 *
Robert Sroka (8) 7,237 *
Thomas W. Lovelock (9) 12,731 *
David D. Johnson (10) 16,632 *
James G. Cocke (11) 3,125 *

Current directors and executive officers as a group (15 persons) 8,689,383 89.5%
</TABLE>

- ------------

* less than 1%.

(1) Includes 1,652,834 shares beneficially owned by Virginia G. Gill, his wife.
Mr. Gill is also a director and executive officer of the Company and was a
Named Officer during the fiscal year ended December 31, 1997.

(2) Includes 1,622,832 shares beneficially owned by Robert E. Gill, her husband.

(3) Includes 23,975 shares beneficially owned by Patricia Gill, his wife. Mr.
Gill is also a director and executive officer of the Company.

(4) Mr. Gill is also a director and executive officer of the Company. Mr. Gill
has notified the Company of his resignation as an officer effective June 15,
1998.

(5) Includes 31,720 shares issuable under currently exercisable stock options.

(6) Includes 12,080 shares issuable under currently exercisable stock options.

(7) Includes 32,032 shares issuable under currently exercisable stock options.

(8) Includes 7,237 shares issuable under currently exercisable stock options.

5
<PAGE>

(9) Includes 9,375 shares issuable under currently exercisable stock options.
Mr. Lovelock was a Named Officer during the fiscal year ended December 31,
1997.

(10) Includes 16,250 shares issuable under currently exercisable stock options.
Mr. Johnson was a Named Officer during the fiscal year ended December 31,
1997.

(11) Includes 3,125 shares issuable under currently exercisable stock options.
Mr. Cocke was a Named Officer during the fiscal year ended December 31,
1997.

Section 16(a) Beneficial Ownership Reporting Compliance

Incorporated by reference to Item 10, Section 16(a) Beneficial Ownership
Reporting Compliance, of the Annual Report on Form 10-K of GTC for the fiscal
year ended December 31, 1997.

Certain Relationships and Transactions

Incorporated by reference to Item 13 of the Annual Report on Form 10-K of
GTC for the fiscal year ended December 31, 1997.

PROPOSAL ONE

ELECTION OF DIRECTORS

A board of eight directors is to be elected at the Annual Meeting. Unless
otherwise instructed, the proxy holders will vote the proxies received by them
for the Company's eight nominees named below. In the event that any nominee of
the Company is unable or declines to serve as a director at the time of the
Annual Meeting, the proxies will be voted for any nominee who shall be
designated by the present Board of Directors to fill the vacancy. It is not
expected that any nominee will be unable or will decline to serve as a director.
The term of office of each person elected as a director will continue until the
next annual meeting of shareholders or until a successor has been elected and
qualified.

The following table contains certain information concerning the nominees,
all of whom are currently serving as directors, which has been furnished to the
Company by the individuals named.

Name Age Position and Principal Occupation
---- --- ---------------------------------
<S> <C> <C>
Robert E. Gill 72 Director; Chairman of the Board of the
Company

Jeffrey T. Gill 42 Director; President and Chief Executive
Officer of the Company

R. Scott Gill 39 Director; Senior Vice President and
Secretary of the Company

Henry F. Frigon 63 Director; Consultant; Former Executive Vice
President - Corporate Development and
Strategy and Chief Financial Officer of
Hallmark Cards, Inc.; Former President and
Chief Executive Officer of BATUS, Inc.

William L. Healey 53 Director; Chairman, President and Chief
Executive Officer of Smartflex Systems,
Inc.

Roger W. Johnson 63 Director; Consultant; Former Administrator
of U.S. General Services Administration;
Former Chairman and Chief Executive Officer
of Western Digital Corporation

Sidney R. Petersen 67 Director; Retired; Former Chairman and
Chief Executive Officer of Getty Oil, Inc.

Robert Sroka 49 Director; Consultant; Former Managing
Director of J.P. Morgan
</TABLE>

The following is a brief summary of the business experience of each of the
nominees.

6
<PAGE>

President and Chief Executive Officer from October 1996 until February 1997. Mr.
Gill co-founded Group Financial Partners, Inc. ("GFP"), the former parent
corporation of the Company, and served as Chairman of the Board of GFP since its
inception in 1983 until its merger with GTC in March, 1998 and as its President
and Chief Executive Officer from 1983 through 1992. Robert E. Gill is the father
of Jeffrey T. Gill and R. Scott Gill.

Jeffrey T. Gill served as a director of GTC since 1989, as Chairman of the
Board of GTC from 1992 until March 1998 and has served as a director, President
and Chief Executive Officer of the Company since September 1997. Mr. Gill co-
founded GFP and served as a director of GFP since its inception in 1983 and as
its President and Chief Executive Officer since 1992 until its merger with GTC
in March 1998. Jeffrey T. Gill is the son of Robert E. Gill and the brother of
R. Scott Gill.

R. Scott Gill has served as a director, Senior Vice President and Secretary
of the Company since September 1997. Mr. Gill co-founded GFP and served as a
director of GFP since its inception in 1983 and as its Vice President and
Secretary since 1983 until its merger with GTC in March 1998. R. Scott Gill is
the son of Robert E. Gill and the brother of Jeffrey T. Gill. Mr. Gill has
notified the Company of his resignation as Senior Vice President and Secretary
of the Company effective June 15, 1998.

Henry F. Frigon served as a director of GTC since 1994 and has served as a
director of the Company since September 1997. Mr. Frigon is currently a private
investor and business consultant. He most recently served as Executive Vice
President-Corporate Development and Strategy and Chief Financial Officer of
Hallmark Cards, Inc. from 1990 through 1994. He retired as President and Chief
Executive Officer of BATUS, Inc. in March 1990, after serving with that company
for over 10 years. Mr. Frigon currently serves as a director of H & R Block,
Inc., Buckeye Technologies Inc. and Dimon, Inc.

William L. Healey has served as a director of the Company since September
1997 and from 1996 to 1998 was a director of the Company's subsidiary, Bell
Technologies, Inc. Since 1993, Mr. Healey has served as a director of Smartflex
Systems, Inc. and as Chairman of the Board since 1996. He has also served as the
President and Chief Executive Officer of Smartflex since 1989. Prior to joining
Smartflex, Mr. Healey served in several executive positions with Silicon
Systems, Inc., a principal supplier to Smartflex Systems, Inc.

Roger W. Johnson served as a director of GTC since 1996 and has served as a
director of the Company since September 1997. Mr. Johnson is currently a private
investor and business consultant. Mr. Johnson served as Administrator of the
United States General Services Administration from 1993 through 1996. He served
as Chairman and Chief Executive Officer of Western Digital Corporation, a
manufacturer of computer hard drives, from 1982 through 1993. Mr. Johnson
currently serves as a director of Array Microsystems, Elexys International,
Inc., Needham Funds, Inc., JTS Corporation, Insulectro and AST Computer.

Sidney R. Petersen served as a director of GTC since 1994 and has served as
a director of the Company since September 1997. In 1984, Mr. Petersen retired as
Chairman of the Board and Chief Executive Officer of Getty Oil, Inc. where he
served in a variety of increasingly responsible management positions since 1955.
Mr. Petersen currently serves as director of Avery Dennison Corporation,
UnionBanCal Corporation and its subsidiary, Union Bank of California, Seagull
Energy Corporation, and NICOR, Inc. and its subsidiary, NICOR Gas Company.

Robert Sroka has served as a director of the Company since September 1997
and from 1995 to 1998 was a director of the Company's subsidiary, Bell
Technologies, Inc. Since April 1998, Mr. Sroka has served as the Managing
Director of Lighthouse Holdings, LLC, a private investment and business
consulting company. From 1994 to 1998, Mr. Sroka served as Managing Director of
Investment Banking-Mergers and Acquisitions for J.P. Morgan. From 1985 to 1998,
he held several senior executive positions at J.P. Morgan, including Vice
President-Investment Banking and Vice President-Corporate Finance.

Officers are appointed by the Board of Directors and serve at the
discretion of the Board.

MANAGEMENT RECOMMENDS A VOTE FOR THE NOMINEES LISTED ABOVE.

7
<PAGE>

Board of Directors and Committees of the Board

The Board of Directors of GTC held a total of seven regularly scheduled and
special meetings during the fiscal year ended December 31, 1997. All incumbent
directors attended more than 75% of the meetings of the Board of Directors and
the respective committees of which they are members. The Board of Directors
currently has four standing committees as described below.

The Audit and Finance Committee of the Board of Directors currently
consists of Roger W. Johnson, William L. Healey and Robert Sroka. The Audit and
Finance Committee has responsibility for consulting with the Company's officers
regarding the appointment of independent auditors, discussing the scope of the
auditor's examination, reviewing annual financial statements, and consulting
with the independent auditors on the adequacy of internal controls. During
fiscal 1997, the members of this Committee at GTC were Sidney R. Petersen,
Jeffrey T. Gill and Henry F. Frigon. The Audit Committee of GTC held one meeting
during the fiscal year ended December 31, 1997.

The Compensation Committee of the Board of Directors currently consists of
Henry F. Frigon, William L. Healey and Sidney R. Petersen. The functions
performed by the Compensation Committee include oversight of executive
compensation, review of the Company's overall compensation programs and
administration of certain of the Company's incentive compensation programs.
During fiscal 1997, the members of this Committee at GTC were Jeffrey T. Gill,
Robert E. Gill, Henry F. Frigon and Sidney R. Petersen. The Compensation
Committee of GTC held two meetings during the fiscal year ended December 31,
1997.

The Executive Committee of the Board of Directors currently consists of
Robert E. Gill, Jeffrey T. Gill, R. Scott Gill and Henry F. Frigon. Except for
certain powers which under Delaware law may only be exercised by the full Board
of Directors, the Executive Committee has and exercises the powers of the Board
in monitoring the management of the business of the Company between meetings of
the Board of Directors. During fiscal 1997, the members of this Committee at GTC
were Jeffrey T. Gill, Robert E. Gill and Thomas W. Lovelock. The Executive
Committee of GTC held one meeting during the fiscal year ended December 31,
1997.

The Nominating and Governance Committee of the Board of Directors currently
consists of Sidney R. Petersen, Roger W. Johnson and Robert Sroka. The
Nominating and Governance Committee evaluates the members of the Board of
Directors and the Chief Executive Officer and makes related recommendations to
the Board of Directors. This committee was established in April 1998. The
Nominating and Governance Committee will not consider nominations recommended by
security holders.

GTC previously had an Option Plan Committee consisting of Robert E. Gill
and Jeffrey T. Gill. The Option Plan Committee and the full Board of Directors
shared responsibility for the administration of GTC's stock option programs. The
Option Plan Committee of GTC held one meeting during the fiscal year ended
December 31, 1997.

GTC also previously had a Strategic Development Committee consisting of
Jeffrey T. Gill, Henry F. Frigon, Roger W. Johnson and Thomas W. Lovelock. The
Strategic Development Committee had responsibility for assisting management of
GTC in defining overall strategic goals and objectives for GTC. The Strategic
Development Committee held no meetings during the fiscal year ended December 31,
1997.

8
<PAGE>

Compensation of Directors

Independent Directors are paid an annual retainer of $15,000, a fee of $1,000
for attending each Board meeting ($300 if attendance is by phone), a fee of
$1,250 for acting in the capacity of chairman for each Committee meeting ($300
if attendance is by phone) and a fee of $1,000 for attending each Committee
meeting ($300 if attendance is by phone). Committee fees are only earned if the
Committee meetings are held on a date other than a Board meeting date.
Independent Directors may elect to receive their annual retainer and meeting
fees in the form of stock options granted pursuant to the Independent Directors'
Stock Option Plan in lieu of cash. During 1997, Mr. Frigon, Mr. Johnson and Mr.
Petersen elected to receive their annual retainer and meeting fees in the form
of stock options. Independent Directors also receive initial and annual grants
of stock options for each elected term as a director under the Company's
Independent Directors' Stock Option Plan. During 1997, Mr. Frigon, Mr. Johnson
and Mr. Petersen were granted options to purchase 13,800 shares, 6,546 shares
and 13,800 shares, respectively, for annual retainer and meeting fees. No
director exercised stock options in 1997. All directors are reimbursed for
travel and related expenses incurred by them in attending Board and Committee
meetings. Directors who are employees of the Company or any of its affiliates
are not eligible to receive compensation for services rendered as a director.

Executive Officers

The executive officers of the Company, their ages and their positions with
the Company are as follows:

Name Age Position with the Company
---- --- -------------------------
<S> <C> <C>

Robert E. Gill 72 Chairman of the Board

Jeffrey T. Gill 42 President and Chief Executive Officer

John M. Kramer 55 President and Chief Executive Officer of Tube Turns
Technologies, Inc.

John B. Krauss 62 President and Chief Executive Officer of Metrum-
Datatape, Inc.

Thomas W. Lovelock 55 President and Chief Executive Officer of Group
Technologies Corporation

Henry L. Singer II 52 President and Chief Executive Officer of Bell
Technologies, Inc.

R. Scott Gill 39 Senior Vice President, Secretary

Richard L. Davis 44 Senior Vice President

David D. Johnson 42 Vice President and Chief Financial Officer,
Treasurer

Anthony C. Allen 39 Vice President and Controller, Assistant Secretary
</TABLE>

Robert E. Gill served as a director of GTC since 1989 and began serving as a
director and Chairman of the Board of the Company in September 1997. He also
served as Chairman of the Board of GTC from 1989 to 1992 and as its President
and Chief Executive Officer from October 1996 until February 1997. Mr. Gill co-
founded Group Financial Partners, Inc. ("GFP"), the former parent corporation of
the Company, and served as Chairman of the Board of GFP since its inception in
1983 until its merger with GTC in March, 1998 and as its President and Chief
Executive Officer from 1983 through 1992. Robert E. Gill is the father of
Jeffrey T. Gill and R. Scott Gill.

Jeffrey T. Gill served as a director of GTC since 1989, and as Chairman of
the Board of GTC from 1992 until March 1998 and has served as a director,
President and Chief Executive Officer of the Company since September 1997. Mr.
Gill co-founded GFP and served as a director of GFP since its inception in 1983
and as its President and Chief Executive Officer since 1992 until its merger
with GTC in March 1998. Jeffrey T. Gill is the son of Robert E. Gill and the
brother of R. Scott Gill.

John M. Kramer has served as a director and President and Chief Executive
Officer of Tube Turns Technologies, Inc. since 1985. From 1977 to 1985, he
served in various executive positions at Tube Turns Technologies, Inc. Prior
thereto, Mr. Kramer served as Manager of Production Planning for Xerox from 1974
to 1976.

9
<PAGE>

John B. Krauss has served as President and Chief Executive Officer of
Metrum-Datatape, Inc. since December 1997. From February 1996 to December 1997,
Mr. Krauss served as Vice President of Bell Technologies, Inc. From April 1995
to December 1996, he served as General Manager of the Metrum Division of GTC and
the Metrum Division of Bell Technologies, Inc. From 1991 to 1995, Mr. Krauss
served as President and Chief Executive Officer of Kids, Kids, Kids, Inc., a
child entertainment company. Since 1983, Mr. Krauss has served as a director for
Research Products Corporation, a private heating and ventilation company.

Thomas W. Lovelock has served as President and Chief Executive Officer of
GTC since February 1997 and as a director from March 1997 to March 1998. He was
also Vice President of Operations of GTC from 1989 to 1993. From 1995 to 1997,
Mr. Lovelock served as President and Chief Executive Officer of Bell
Technologies, Inc. and from 1993 to 1995, Mr. Lovelock served as its Executive
Vice President and Chief Operating Officer.

Henry L. Singer II has served as President and Chief Executive Officer of
Bell Technologies, Inc. since March 1998. From 1991 to 1998, he served as
President of Powers Process Controls Unit of Crane Co., a manufacturer of
specialty commercial and institutional plumbing products. From 1975 to 1991, Mr.
Singer served in various other management positions at Powers Process Controls
Unit of Crane Co. From 1968 to 1971, he was a Production Value Engineer at
Lockheed Aircraft.

Richard L. Davis has served as Senior Vice President of the Company since
September 1997. From 1997 to March 1998, Mr. Davis served as Senior Vice
President of GFP. From 1985 to 1997, he served as Vice President and Chief
Financial Officer of GFP. From 1988 to 1998, he served as a director of Tube
Turns Technologies, Inc., and from 1989 to 1994, he served as a director of Bell
Technologies, Inc. and GTC. Prior to 1985, Mr. Davis was employed as a Corporate
Controller for Armor Elevator Company and as an Audit Supervisor for Coopers and
Lybrand.

David D. Johnson served as Vice President and Chief Financial Officer of
GTC since March 1996 and as Vice President and Chief Financial Officer of the
Company since September 1997. From 1993 to 1996, Mr. Johnson served as Financial
Director, Far East South for Molex Incorporated, which manufactures electronic
components and application tooling. He served Molex in various other management
positions since 1984. Prior to 1984, Mr. Johnson was a senior manager for KPMG
Peat Marwick in San Francisco, California.

Anthony C. Allen has served as Vice President, Controller and Assistant
Secretary of the Company since September 1997. From 1987 to 1994, he served as
Vice President and Controller of GFP and from 1994 to 1998, he served as Vice
President of Finance of GFP. Mr. Allen served as a director and Treasurer of
Bell Technologies, Inc. from 1994 to March 1998. From 1991 to 1997, he served as
a director of Unison Commercial Group, Inc., a subsidiary of GFP.

Executive Compensation

Incorporated by reference to Item 11 of the Annual Report on Form 10-K of
GTC for the fiscal year ended December 31, 1997.

Option Grants in Last Fiscal Year

Incorporated by reference to Item 11 of Annual Report on Form 10-K of GTC
for the fiscal year ended December 31, 1997.

10
<PAGE>

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
Values

Incorporated by reference to Item 11 of the Annual Report on Form 10-K of
GTC for the fiscal year ended December 31, 1997.

COMPENSATION COMMITTEE REPORT

Executive Compensation

Executive Compensation Philosophy. The Compensation Committee of the Board of
Directors (the "Compensation Committee") is composed entirely of outside
directors. The Committee is responsible for setting and administering the
policies and programs that govern both annual compensation and stock option
programs for the executive officers of the Company. The Company's executive
compensation policy is based on principles designed to insure that an
appropriate relationship exists between executive pay and corporate performance,
while at the same time motivating and retaining executive officers.

Executive Compensation Components. The key components of the Company's
compensation program are base salary, an annual incentive award and equity
participation through stock options. These components are administered with the
goal of providing total compensation that is competitive in the marketplace,
rewards successful financial performance and aligns the interests of executive
officers with those of stockholders. The Compensation Committee reviews each
component of executive compensation on an annual basis.

Base Salary. Base salaries for executive officers are set near the average
levels believed by the Compensation Committee to be sufficient to attract and
retain qualified executive officers. Base pay increases are provided to
executive officers based upon an evaluation of each executive's performance, as
well as the performance of the Company as a whole. While the Compensation
Committee does not establish a specific formula or target to determine base
salaries, the Compensation Committee does review detailed survey data from a
number of independent sources and services regarding the base salaries of
executive officers in companies of similar size and in similar industries. In
this regard, the Compensation Committee also considers the relative financial
performance of these companies, especially with regard to growth in earnings and
return on net assets. The Compensation Committee also considers the success of
the executive officers in developing and executing the Company's strategic
plans, developing management employees and demonstrating leadership.

Annual Incentive. The Compensation Committee believes that a significant
proportion of total cash compensation for executive officers should be subject
to the attainment of specific Company objectives, as well as the attainment of
specific individual objectives that are established annually with each of the
executive officers. This approach creates a direct incentive for executive
officers to achieve desired performance goals and places a significant
percentage of each officer's compensation at risk. Consequently, at the
beginning of each year, the Compensation Committee establishes potential bonuses
for executive officers based upon their (i) ability to increase earnings, and
(ii) achievement of specific operational objectives.

For 1997, the Compensation Committee of GTC established a bonus target of
approximately 35% to 40% of base salaries, contingent upon the successful
restructuring of GTC's operations. The Compensation Committee of GTC established
the potential bonuses based upon its judgment regarding the appropriate
percentage of compensation which should be based on the attainment of such
results. For 1997, the Compensation Committee of GTC awarded bonuses equal to
35% to 40% of base salary based upon the successful restructuring of GTC, which
included the sale of the Latin American operations and the retirement of all of
GTC's outstanding debt with its lender. In addition, the Compensation Committee
of GTC awarded Thomas W. Lovelock and James G. Cocke a supplemental bonus in the
amount of $40,000 and $20,000, respectively, for their contribution to the
successful restructuring of GTC.

Equity Participation Through Stock Options. The Compensation Committee believes
that equity participation through stock options is a key component of its
executive compensation program. The use of such awards provides a long-term link
between the results achieved for the Company's stockholders and the reward
provided to executive officers. Stock options are granted to executive officers
primarily based on the officer's actual and potential contribution to the
Company's growth in earnings and the practices of other companies of similar
size and in similar industries. Option grants are designed to retain executive
officers and motivate them to enhance shareholder value by aligning the

11
<PAGE>

financial interests of the executive officers with those of the Company's
stockholders. Stock options also provide an effective incentive for management
to create stockholder value over the long term since the full benefit of the
compensation package cannot be realized unless an appreciation in the price of
the Company's stock occurs over a number of years. Currently, the Compensation
Committee makes recommendations to the Board of Directors for the granting of
options with the actual grant of such options to be made by the Board of
Directors.

Options to purchase a total of 115,000 shares of Company Common Stock were
granted to Thomas W. Lovelock, James G. Cocke and David D. Johnson in 1997 with
an exercise price equal to the fair market value of the underlying Company
Common Stock on the date of grant. To encourage long term performance, these
options vest cumulatively in equal annual installments ranging from three to
eight years and expire within five to ten years from the date of grant. The
Compensation Committee of GTC granted this number of options based on its
judgment that this number is appropriate and desirable considering the executive
officers' actual and potential contribution to the Company. The assessment of
actual and potential contribution was based upon the Compensation Committee's
subjective evaluation of each of the executive officers' abilities, skills,
efforts and leadership.

Compensation of Chief Executive Officer. Consistent with the executive
compensation policy and components described above, the Compensation Committee
of GTC determined the salary, bonus and stock options received by Thomas W.
Lovelock, the President and Chief Executive Officer of GTC, the predecessor to
the Company, for services rendered in 1997. Mr. Lovelock received a base salary
of $166,893 for the period from February 28 to December 31, 1997. On an
annualized basis, Mr. Lovelock's base salary would have been $200,000. The
Compensation Committee believes that this base salary was average for salaries
paid to chief executive officers of companies of similar size and in similar
industries. Mr. Lovelock earned a total bonus of $115,000 for 1997 for
successfully restructuring GTC in a manner that was consistent with the
objectives of the Board of Directors. Mr. Lovelock received options to purchase
75,000 shares of GTC Common Stock in 1997 in addition to a one-time right to
purchase up to 25,000 shares of GTC Common Stock from the Company for a price
equal to 70.0% of the fair market value of the stock. Mr. Lovelock purchased
4,105 shares under the one-time right program, of which 3,158 shares were issued
in 1997 and 947 shares will be issued at the end of a three (3) year vesting
period. The Compensation Committee of GTC determined the number of options
granted to Mr. Lovelock based on its judgment that this number was appropriate
and desirable in light of his actual and potential contribution to the Company
and his leadership in connection with the implementation of the GTC
restructuring efforts. The Compensation Committee of GTC determined the number
of shares to be made available for purchase by Mr. Lovelock on a one-time basis,
and the associated discount from fair market, based on its judgment that this
number was appropriate and fair to compensate Mr. Lovelock for certain equity
holdings that he was required to liquidate by his former employer. The
assessment of actual and potential contribution was based on the Compensation
Committee's subjective evaluation of Mr. Lovelock's abilities, skills, efforts
and leadership.

Compensation Committee Interlocks and Insider Participation

The Compensation Committee was formed in August of 1994 and currently is
composed of Henry F. Frigon, William L. Healey and Sidney R. Petersen. None of
the current members of the Compensation Committee are employees of the Company.
No interlocking relationship currently exists between the Company's Board of
Directors or Compensation Committee and the board of directors or compensation
committee of any other company, nor has any such interlocking relationship
existed in the past.

Section 162(m) of the Internal Revenue Code

Recently enacted Section 162(m) of the Code generally limits the corporate
deduction for compensation paid to certain executive officers to one million
dollars ($1,000,000), unless the compensation is performance-based. It is the
Compensation Committee's intention that, so long as it is consistent with its
overall compensation objectives, virtually all executive compensation shall be
deductible for federal income tax purposes. It is the Compensation Committee's
opinion that the shareholders' interest will be better served over the longer
term by preserving the deductibility of its executive officers' compensation.

12
<PAGE>

Members of the Compensation Committee

Henry F. Frigon
William L. Healey
Sidney R. Petersen

Members of the Former GTC Compensation Committee

Jeffrey T. Gill
Robert E. Gill
Henry F. Frigon
Sidney R. Petersen

13
<PAGE>

PERFORMANCE GRAPH

The following graph shows a comparison of cumulative total shareholder
return, calculated on a dividend reinvestment basis, from the effective date of
the initial public offering of the Company's Common Stock (May 18, 1994) through
December 31, 1997 for the Company, the Nasdaq Stock Market Total Return Index--
US Companies, and the Nasdaq Stock Market--Electronic Component Stocks Index.
The Performance Graph assumes $100 was invested on May 18, 1994 in the Company's
Common Stock or the respective indexes.

[GRAPH APPEARS HERE]

<TABLE>
<CAPTION>
Group Technologies Nasdaq Electronic The Nasdaq
Corporation Component Stocks Stock Market (US)
------------------ ----------------- -----------------
<S> <C> <C> <C>
5/18/94 100.00 100 100
6/30/94 100.00 94.23 96.58
9/30/94 90.00 104.97 104.57
12/31/94 60.00 109.2 103.38
3/31/95 52.50 136.67 112.7
6/30/95 46.23 194.24 128.91
9/30/95 57.50 209.28 144.44
12/31/95 25.00 180.89 146.2
3/31/96 25.00 179.77 152.91
6/30/96 30.00 205.36 165.91
9/30/96 20.00 248.91 171.28
12/31/96 10.00 312.82 179.69
3/31/97 13.13 315.28 169.95
6/30/97 14.38 336.98 201.11
9/30/97 37.50 437.62 235.13
12/31/97 28.13 328.02 220.57
</TABLE>

14
<PAGE>

PROPOSAL TWO

APPROVAL OF AMENDMENT TO 1994 STOCK OPTION PLAN FOR KEY EMPLOYEES

The Sypris Solutions, Inc. 1994 Stock Option Plan for Key Employees (the
"Key Employees Plan") was adopted by the Board of Directors and approved at the
1995 annual meeting of shareholders of GTC. The Board of Directors has adopted a
proposal to amend the Key Employees Plan to increase the aggregate number of
shares of Common Stock reserved for issuance under the Key Employees Plan from
1,250,000 shares to 2,500,000 shares. The proposal to amend the Key Employees
Plan is subject to shareholder approval. The Key Employees Plan provides for the
grant of incentive stock options (which satisfy the requirements of Section
422(b) of the Code) ("ISOs") and nonqualified stock options (which do not
satisfy such requirements) ("NSOs") to key employees of the Company, including
directors of the Company who are also employees. The material features of the
Key Employees Plan as currently in effect are described below.

As of May 8, 1998, there were stock options outstanding covering 982,554
shares of Common Stock held by 86 persons and only 265,146 shares of Common
Stock remained available for future awards under the Key Employees Plan. The
purpose of the proposal is to increase the aggregate number of shares of Common
Stock that may be issued under the Key Employees Plan by 1,250,000 shares. This
proposal will provide for sufficient shares under the Key Employees Plan to
accommodate the increase in the number of key employees of the Company which
resulted from the Reorganization. In addition, if the proposal is adopted, the
key employees of the Company who are eligible to participate in the Key
Employees Plan, including the Company's President and Chief Executive Officer,
who is also a member of the Company's Board of Directors, could receive more
benefits under the Key Employees Plan than they could if the proposal is not
adopted.

The following constitutes a brief discussion of the material features of
the Key Employees Plan and is qualified in its entirety by reference to the full
text of the Key Employees Plan, as amended, a copy of which is attached as
Exhibit A to this Proxy Statement.

Subject to the authority vested in the full Board of Directors, the
Compensation Committee generally administers the Key Employees Plan. None of
the members of the Compensation Committee are eligible to receive options under
the Key Employees Plan. An employee is selected to receive options under the
Key Employees Plan at the discretion of the full Board of Directors based upon
the employee's past contributions to the Company or the Board's expectations of
the employee's ability to contribute materially in the future to the successful
performance of the Company. The Board also determines the number of shares
subject to each option, fixes the period during which each option may be
exercised and fixes the prices at which shares subject to options may be
purchased. The aggregate fair market value (determined as of the date the option
is granted) of Common Stock for which ISOs will first become exercisable by a
grantee in any calendar year under all ISO plans of the Company and its
subsidiaries can not exceed $100,000. Either the Compensation Committee or the
Board will make any other determinations necessary or advisable for the
administration of the Key Employees Plan.

The Key Employees Plan, as amended, will authorize the issuance of up to
2,500,000 shares of Common Stock. Currently the Key Employees Plan has
1,250,000 shares of Common Stock authorized for issuance. The shares to be
issued under the Key Employees Plan will be currently authorized but unissued
shares or shares held by the Company in its treasury. The number of shares of
Common Stock available under the Key Employees Plan will be subject to
adjustment by either the Compensation Committee or the Board to prevent dilution
in the event of a stock split, reorganization, merger, consolidation,
combination, exchange of shares, stock dividend or certain other events. Shares
of Common Stock subject to unexercised options that expire or are terminated
prior to the end of the period during which options may be granted will be
restored to the number of shares available for issuance under the Key Employees
Plan.

Each option granted under the Key Employees Plan will be evidenced by an
agreement which will establish the period in which the option may be exercised.
The maximum term of each ISO is ten (10) years except for an ISO granted to an
employee beneficially owning ten percent (10%) of Common Stock ("Ten Percent
Owner"). The exercise period for ISOs granted to a Ten Percent Owner may not
exceed five (5) years from the date of grant. The exercise price of all ISOs
and NSOs granted under the Key Employees Plan must be at least 100% of the fair
market value of such shares on the date of grant or, in the case of an ISO
granted to a Ten Percent Owner, 110% of the fair market value of such shares.

15
<PAGE>

No part of any option may be exercised to the extent that the exercise
would cause the grantee to have compensation from the Company in any year in
excess of $1,000,000 and which is nondeductible to the Company pursuant to
Section 162(m) of the Code and regulations issued thereunder. The purchase price
of the shares to be paid to the Company at the time of exercise may be paid in
cash or in such other consideration as the Board deems appropriate, including
Common Stock already owned by the grantee.

Options granted pursuant to the Key Employees Plan are not transferable
except upon the death of a grantee, in which event they may be transferred only
in accordance with and to the extent provided for in the laws of descent and
distribution. If a grantee's employment with the Company shall terminate for
any reason other than death, disability or retirement, all rights to exercise
his options shall terminate at the date of such termination of employment. If a
grantee dies while employed by the Company or within three (3) months after
termination of his employment due to a disability, the grantee's options may be
exercised by the person to whom the grantee's options have passed by will or
applicable law, at the earlier of the expiration date of the options or one (1)
year after the grantee's death. If the grantee's employment is terminated
because of a disability and the grantee has not died within the three (3) months
following such termination, the grantee may exercise his options at the earlier
of the expiration date or one (1) year after termination of his employment. If
the grantee's employment terminates by reason of his retirement, generally his
right to exercise his options shall terminate at the earlier of the expiration
date of the options or three (3) months after the termination of employment.
However, in certain cases, the Board of Directors, pursuant to the provisions of
the Key Employees Plan, has authorized the Company to extend the amount of time
that a grantee has to exercise an option after the grantee has terminated
employment from the Company.

ISOs granted under the Key Employees Plan are intended to be "incentive
stock options" as defined by Section 422 of the Code. Under present law, the
grantee of an ISO will not realize taxable income upon the grant or the exercise
of the ISO. The Company will not receive an income tax deduction at either of
such times. If the grantee does not dispose of the shares of Common Stock
acquired upon exercising an ISO within either (i) two (2) years after the date
of grant of the ISO, or (ii) one (1) year after the date shares of Common Stock
are transferred to the grantee pursuant to the exercise of the ISO, the gain
upon a subsequent disposition of the shares will be taxed at capital gain rates.
If the grantee, within either of the above periods, disposes of the shares of
Common Stock acquired upon the exercise of an ISO, the grantee will recognize as
ordinary income in the year of disposition in an amount equal to the difference
between the exercise price and the fair market value of the shares on the date
of exercise. In such event, the Company would be entitled to a corresponding
income tax deduction equal to the amount recognized as ordinary income by the
grantee. The gain in excess of such amount recognized by the grantee as ordinary
income would be taxed as a long-term capital gain or short-term capital gain
(subject to the holding period requirements for long-term or short-term capital
gain treatment).

The exercise of an ISO will result in the inclusion of the excess of the
stock's fair market value on the date of exercise over the exercise price in the
grantee's alternative minimum taxable income. Liability for the alternative
minimum tax is complex and depends upon an individual's overall tax situation.

Upon exercise of an NSO granted under the Key Employees Plan or upon the
exercise of an ISO that does not qualify for the tax treatment described above,
the grantee will realize ordinary income in an amount equal to the excess of the
fair market value of the shares of Common Stock received over the exercise price
of such shares, which is subject to applicable income and employment tax
withholding. That amount increases the grantee's basis in the stock acquired
pursuant to the exercise of the NSO or ISO not qualifying for the tax treatment
described above. Upon a subsequent sale of the stock, the grantee will
recognize short-term or long-term capital gain or loss depending on his holding
period for the stock and upon the stock's subsequent appreciation or
depreciation in value. The Company will be allowed a federal income tax
deduction for the amount recognized as ordinary income by the grantee upon the
grantee's exercise of the option.

16
<PAGE>

The following options were granted during the year ended December 31, 1997.
The options become exercisable over various periods ranging from one (1) year to
eight (8) years from the date of grant and have terms ranging from five (5)
years to ten (10) years from the date of grant. The number of such options
granted with respect to the Key Employees is set forth below:

<TABLE>
<CAPTION>
Weighted
Average
Number of Exercise Value of Options
Name Options Granted Price at May 8, 1998 (1)
- ---- --------------- -------- ------------------
<S> <C> <C> <C>
Thomas W. Lovelock..................................... 75,000 $4.75 $450,250
David D. Johnson....................................... 15,000 4.24 97,650
James G. Cocke......................................... 25,000 5.00 143,750
All current executive officers as a group (2 persons).. 90,000 4.66 547,900
All employees, including all current officers who are
not executive officers as a group (20 persons)....... 77,575 $5.37 $346,723(2)
</TABLE>
- -----------------
(1) Based on the closing price of Common Stock as reported in the Nasdaq Stock
Market on May 8, 1998 of $10.75 per share.

(2) Value is based on options to purchase 56,575 shares at a weighted average
exercise price of $4.62. All other options were not "in the money" on May
8, 1998, or were cancelled due to employee terminations. The actual value
of these options, if any, will depend on the excess of the stock price over
the exercise price on the date the option is exercised.

While the Board intends to continue the Key Employees Plan in effect until
the scheduled termination date on October 27, 2004, the Board may modify, amend,
or terminate the Key Employees Plan without a vote of the shareholders. The
terms of the Key Employees Plan require shareholder approval for certain
modifications and amendments to the Key Employees Plan. The Board may also seek
shareholder approval of material amendments to the Key Employees Plan in order
to qualify the options issued as ISOs under the Code and/or to meet the
requirements for inclusion on the Nasdaq Stock Market or listing on any exchange
on which the Company's securities are or may be listed.

The affirmative vote of at least a majority of the shares of Common Stock
present at the Annual Meeting in person or by proxy and entitled to vote is
required to approve the proposal to amend the Key Employees Plan. If not
approved, the amendment will not become effective.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE PROPOSAL TO AMEND THE KEY
EMPLOYEES PLAN. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED IN
FAVOR OF THE PROPOSAL UNLESS SHAREHOLDERS SPECIFY OTHERWISE.

INDEPENDENT AUDITORS

The Company has not yet selected an independent public accountant and
auditor for the fiscal year ending December 31, 1998. Management of the Company
is currently reviewing whether it is in the best interest of the Company to
solicit competitive proposals from a number of accounting firms, including Ernst
& Young LLP, for the current year. If a decision is made to solicit competitive
proposals, it is anticipated that the Company will select an independent
accountant and auditor from those submitting proposals on or before September
30, 1998. Otherwise, the Company anticipates it will again select Ernst & Young
LLP to serve as the Company's independent public accountants and auditors for
the fiscal year ending December 31, 1998. Ernst & Young LLP has audited the
Company's financial statements for the fiscal years ending December 31, 1985
through December 31, 1997. Representatives of Ernst & Young LLP are expected to
be present at the Annual Meeting, will be available to respond to appropriate
questions and will have the opportunity to make a statement if they desire to do
so.

17
<PAGE>

OTHER MATTERS

The Board of Directors does not intend to bring any other matter before the
Annual Meeting and has not been informed that any other matter is to be
presented by others. If any other matter properly comes before the Annual
Meeting, the proxies will be voted in accordance with the discretion of the
person or persons voting the proxies.

You are cordially invited to attend the Annual Meeting. Regardless of
whether you plan to attend the Annual Meeting, you are urged to complete, date,
sign and return the enclosed proxy in the accompanying envelope at your earliest
convenience.

DEADLINE FOR RECEIPT OF SHAREHOLDER PROPOSALS

Proposals of shareholders of the Company which are intended to be presented
by such shareholders at the Company's Annual Meeting for the fiscal year ending
December 31, 1998 must be received by the Company no later than January 22,
1999, in order to be considered for inclusion in the proxy statement and form of
proxy relating to that meeting.

ANNUAL REPORT

A copy of the Annual Report on Form 10-K for the fiscal year ended December
31, 1997 is being mailed with this Proxy Statement, but is not to be considered
a part hereof except as specifically incorporated by reference herein.
Additional copies of the Annual Report on Form 10-K, including the financial
statements and schedules thereto, but excluding the exhibits, will be provided
free of charge upon written request to:

Sypris Solutions, Inc.
Investor Relations Department
455 South Fourth Street
Louisville, Kentucky 40202

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

Items 10 (Section 16(a) Beneficial Ownership Reporting Compliance), 11 and
13 of the Annual Report on Form 10-K of GTC for the fiscal year ended December
31, 1997 are incorporated herein by reference.

By Order of the Board of Directors

R. Scott Gill
Secretary

Louisville, Kentucky
May 22, 1998

18
<PAGE>

EXHIBIT A
SYPRIS SOLUTIONS, INC.
1994 STOCK OPTION PLAN FOR KEY EMPLOYEES
ADOPTED ON OCTOBER 27,1994

AS AMENDED AND RESTATED EFFECTIVE MARCH 30, 1998

PREAMBLE
--------

The Sypris Solutions, Inc. Stock Option Plan for Key Employees is a
restatement of the Group Technologies Corporation 1994 Stock Option Plan for Key
Employees 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. 1994 Stock Option
Plan for Key Employees is to promote the interests of Company by affording an
incentive to certain key employees to remain in the employ of Company and its
Subsidiaries and to use their best efforts in its behalf and to aid Company and
its Subsidiaries in attracting, maintaining, and developing capable personnel of
a caliber required to ensure the continued success of Company and its
Subsidiaries by means of an offer to such persons of an opportunity to acquire
or increase their proprietary interest in Company through the granting of
incentive stock options and nonstatutory stock options to purchase Company's
stock pursuant to the terms of the 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. "Disability" means, as defined by and to be construed in
accordance with Code Section 22(e)(3), any medically determinable physical
or mental impairment that can be expected to result in death or that has
lasted or can be expected to last for a continuous period of not less than
twelve (12) months, and that renders Optionee unable to engage in any
substantial gainful activity. An Optionee shall not be considered to have a
Disability unless Optionee furnishes proof of the existence thereof in such
form and manner, and at such time, as the Committee may require.
<PAGE>

F. "ISO" means an option to purchase Common Stock which at the time
the option is granted under the Plan qualifies as an incentive stock option
within the meaning of Code Section 422.

G. "NSO" means a nonstatutory stock option to purchase Common Stock
which at the time the option is granted under the Plan does not qualify as
an ISO.

H. "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.

I. "Optionee" means an employee to whom options have been granted
under the Plan.

J. "Plan" means the Sypris Solutions, Inc. 1994 Stock Option Plan for
Key Employees, as set forth herein, and as amended from time to time.

K. "Compensation Committee" means the Compensation Committee of the
Board that administers the Plan, pursuant to Section 4.

L. "Optionee Representative" means the Optionee's estate or the
person or persons entitled thereto by will or by applicable laws of descent
and distribution.

M. "Subsidiary" shall mean 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.

N. "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).

O. "Ten Percent Shareholder" means an employee who, at the time an
option is granted, owns stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of Company or
Subsidiary employing the Optionee or of its parent (within the meaning of
Code Section 424(e)) or subsidiary (within the meaning of Code Section
424(f)) corporation.

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 effective March 30, 1998 shall not exceed one million two hundred
fifty thousand (1,250,000) of Company's authorized shares of Common Stock.
Effective as of the date of approval by shareholders of Company holding not less
than a majority of the votes represented and entitled to be voted at a duly held
meeting of Company's shareholders, the aggregate number of shares shall be
increased to two million five hundred thousand (2,500,000) of Company's
authorized shares of Common Stock.

2
<PAGE>

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, the 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.

A. Board Authority. 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 employees to whom options shall be granted; (ii) to authorize
the granting of ISOs, NSOs or a combination of ISOs and NSOs; (iii) to determine
the number of shares of Common Stock subject to each option; (iv) to determine
the time or times when options shall be granted, the manner in which each option
shall be exercisable, and the duration of the exercise period; (v) to fix such
other provisions of the option agreement as it may deem necessary or desirable
consistent with the terms of the Plan; and (vi) 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.

B. $100,000 ISO Limitation. Notwithstanding the foregoing, the
aggregate fair market value (determined as of the date the option is granted) of
the Common Stock for which ISOs shall first become exercisable by an Optionee in
any calendar year under all ISO plans of Company and its Subsidiaries shall not
exceed $100,000. Options in excess of this limitation shall constitute NSOs.

6. Eligibility. Key employees of Company and its subsidiaries including
officers and directors, shall be eligible to receive options under the Plan. No
director of Company who is not also an employee of Company or a Subsidiary shall
be entitled to receive an option under the Plan. Key employees to whom options
may be granted under the Plan shall be those elected by the Board from time to
time who, in the sole discretion of the Board, have contributed in 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 on behalf of Company. 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. Each option agreement shall specify the period for
which the option thereunder is granted and shall provide that the option shall
expire at the end of such period. The Board may extend such period provided
that, in the case of an ISO, such extension shall not in any way disqualify the
option as an ISO without the Optionee's consent. In no case shall such period,
including

3
<PAGE>

any such extensions, exceed ten (10) years from the date of grant, provided,
however, that in the case of an ISO granted to a Ten Percent Stockholder, such
period, including extensions, shall not exceed five (5) years from the date of
grant.

B. Option Price. The Option Price for ISOs and NSOs shall be: (i)
the fair market value of the Common Stock on the date the option is granted, or
(ii) in the case of an ISO granted to a Ten Percent Shareholder, one hundred ten
percent (110%) of 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 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 closing 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 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 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, determined in

4
<PAGE>

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 an Optionee fails to accept delivery of the Common Stock, the
Optionee's rights to exercise the applicable portion of the option shall
terminate.

F. Exercises Causing Loss of Compensation Deduction. No part of an
option may be exercised to the extent the exercise would cause the Optionee to
have compensation from Company and its affiliated companies for any year in
excess of $1 million and which is nondeductible by Company and its affiliated
companies pursuant to Code Section 162(m). Any option not exercisable because
of this limitation shall continue to be exercisable in any subsequent year in
which the exercise would not cause the loss of Company's or its affiliated
companies compensation tax deduction, provided such exercise occurs before lapse
of the option, and otherwise complies with the terms and conditions of the Plan
and option agreement.

G. 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.

H. ISOs. Each option agreement which provides for the grant of an
ISO to an employee shall contain such terms and provisions as the Board deems
necessary or desirable to qualify such option as an ISO within the meaning of
Code Section 422.

I. Exercise in the Event of Death or Termination of Employment.
Unless the Board, in its sole discretion, provides otherwise in the option
agreement, with these conditions shall apply to the ability of an Optionee to
exercise his or her options:

[1] If an Optionee dies; (i) while an employee of Company or a
Subsidiary, or (ii) within three (3) months after termination of
employment with Company or a Subsidiary because of a Disability, the
Optionee's options may be exercised by Optionee Representative, to the
extent that the Optionee shall have been entitled to do so on the date
of death or employment termination, but not later than the expiration
date specified in Section 7.A or one (1) year after the Optionee's
death, whichever date is earlier.

[2] If an Optionee's employment by Company or a Subsidiary
terminates because of the Optionee's Disability and the Optionee has
not died within the following three (3) months, the Optionee may
exercise his or her options, to the extent that he or she shall have
been entitled to do so at the date of employment termination, at any
time, or from time to time, but not later than the expiration date
specified in Section 7.A or one (1) year after termination of
employment, whichever date is earlier.

[3] If an Optionee's employment terminates by reason of
retirement in accordance with the terms of Company's tax-qualified
retirement plans or with the

5
<PAGE>

consent of the Board, all right to exercise his or her options shall
terminate at the expiration date specified in Section 7.A or three (3)
months after employment termination, whichever date is earlier.

[4] If an Optionee's employment terminates for any reason other
than death, Disability, or retirement, all rights to exercise his or
her options shall terminate on the date of employment termination.

J. Leaves of Absence. The Board may, in its discretion, treat all or
any portion of any period during which an Optionee is on military or on an
approved leave of absence from Company or a Subsidiary as a period of employment
of such Optionee by Company or Subsidiary for purposes of accrual of the
Optionee's rights under the Plan. Notwithstanding the foregoing, if a leave of
absence exceeds ninety (90) days and reemployment is not guaranteed by contract
or statute, the Optionee's employment by Company or a Subsidiary for the
purposes of the Plan shall be deemed to have terminated on the 91st day of the
leave.

K. Transferability of Options. An option granted under the Plan may
not be transferred by the Optionee otherwise than by will or the laws of descent
and distribution, and during the lifetime of the Optionee to whom granted, may
be exercised only by the Optionee.

L. No Rights as Shareholder. No Optionee or Optionee Representative
shall have any rights as a shareholder with respect to Common Stock subject to
option before the date of transfer to the Optionee of a certificate or
certificates for the shares.

M. No Rights To Continued Employment. The Plan and any option
granted under the Plan shall not confer upon any Optionee any right with respect
to continuance of employment by Company or any Subsidiary, nor shall it
interfere in any way with the right of Company or any Subsidiary by which an
Optionee is employed to terminate employment at any time.

N. 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
already owned by the Optionee. 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.

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

6
<PAGE>

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 shall 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 (a) 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, (b) 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 Option 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 in any respect that
it may deem to be in the best interests of Company, except that, without
approval by shareholders of Company holding not less than a majority of the
votes represented and entitled to be voted at a duly held meeting of Company's
shareholders, no amendment shall be made that would:

A. increase the maximum number of shares of Common Stock which may be
delivered under the Plan, except as provided in Section 9;

B. change the Option Price for an ISO, except as provided in Section
9;

C. extend the period during which an ISO may be exercised beyond the
period provided in Section 7.A;

D. make any changes in any outstanding option, without the consent of
the Optionee, which would adversely affect the rights of the Optionee; or

E. extend the termination date of the Plan.

7
<PAGE>

11. Effective Date, Term and Approval. The effective date of the Plan is
October 27, 1994 (the date of Board adoption of the Plan). The Plan was
approved by stockholders of Company holding not less than a 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 and Chief Executive Officer

8
<PAGE>
SYPRIS SOLUTIONS INC.

Revocable Proxy for Annual Meeting of Shareholders
to be held on June 24, 1998

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
SYPRIS SOLUTIONS, INC.

The undersigned hereby appoints Robert E. Gill and Jeffrey T. Gill, and
each of them, as proxies for the undersigned, with full power of substitution to
vote all shares the undersigned is entitled to vote at the Annual Meeting of
Shareholders of Sypris Solutions, Inc. (the "Company") to be held at The
Camberley Brown Hotel, 335 West Broadway, Louisville, Kentucky on Wednesday,
June 24, 1998, at 10:00 a.m. local time, or any adjournment thereof, as follows,
hereby revoking any proxy previously given.

[X] Please mark your votes as in this example.

1. Election of directors. Unless authority is withheld, this proxy will be
voted for the election of all nominees.

[ ] FOR the nominees listed below [ ] WITHHOLD AUTHORITY to vote
(except as marked to the for the nominees listed below
contrary below)

INSTRUCTIONS: TO WITHHOLD authority to vote for any individual nominee,
strike a line through the nominee named in the list below.

Henry F. Frigon Jeffrey T. Gill R. Scott Gill Robert E. Gill

William L. Healey Roger W. Johnson Sidney R. Petersen Robert Sroka

2. To approve an amendment to the Sypris Solutions, Inc. 1994 Stock Option Plan
for Key Employees to increase the number of shares available for issuance
thereunder.

[ ] FOR proposal 2 [ ] AGAINST proposal 2 [ ] ABSTAIN proposal 2

3. In their discretion, the proxies are authorized to vote upon such other
business as may properly be brought before the meeting or any adjournment
thereof.

All as set out in the Notice and Proxy Statement relating to the meeting,
receipt of which is hereby acknowledged.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.

Shares represented by this proxy will be voted as directed by the
shareholder. If no direction is supplied, the proxy will be voted "FOR" all the
nominees listed in proposal 1 and "FOR" proposal 2.

Dated ______________ 1998

-------------------------
Signature

-------------------------
Signature if held jointly

Please sign exactly as name appears hereon. When shares are held by joint
tenants, both should sign. When signing as attorney, executor, administrator,
trustee, or guardian, please give full title as such. If a corporation, please
sign full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person. Your shares
can not be voted unless you sign and return this card.

<PAGE>

APPENDIX

Material Incorporated by Reference

Item 10. Section 16(a) Beneficial Ownership Reporting Compliance

Based solely on GTC's review of the copies of reports of ownership on Form
3 and changes in ownership on Forms 4 and 5 filed with the Securities and
Exchange Commission (the "Commission") by GTC's officers, directors and certain
beneficial shareholders, or written representations furnished to GTC by these
reporting persons, GTC believes that, during 1997, its officers, directors, and
greater than 10% beneficial owners were in compliance with all applicable filing
requirements.

<PAGE>

Item 11. Executive Compensation

Summary Compensation Table

The following table sets forth the annual and long-term compensation paid
or accrued by GTC during the years indicated to each of GTC's Chief Executive
Officers and its other highest paid executive officers whose total salary and
bonus exceeded $100,000 for the year ended December 31, 1997 (collectively, the
"Named Officers").

Long-Term
Annual Compensation (1) Compensation Awards
----------------------- ---------------------------
Restricted Options/ All
Stock SARs Other
Name and Principal Position Year Salary Bonus Awards (# ) Compensation
- --------------------------- ---- -------- ------- ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Gill (2).............. 1997 $ -- $ -- $ -- -- $ --
President & Chief Executive 1996 -- -- -- -- --
Officer

Thomas W. Lovelock (3).......... 1997 166,893(4) -- 14,208(5)(6) 400,000(7) 23,592(8)
President & Chief Executive
Officer

David D. Johnson (9)............ 1997 157,308 10,000(10) -- 60,000 44,721(11)
Vice President of 1996 115,962 50,000 -- 120,000 6,206
Finance & Chief
Financial Officer

James G. Cocke (12)............. 1997 110,385 -- -- 100,000 80,307(13)
Vice President &
Manager of Federal
Systems Division
</TABLE>
________________

(1) Includes amounts deferred, at the election of the Named Officers, pursuant
to GTC's 401(k) Plan. The Named Officers received certain perquisites and
benefits; however, GTC has concluded that the aggregate amount of such
personal benefits and other compensation is the lesser of $50,000 or 10% of
the total annual salary and bonus paid to each of the Named Officers.
(2) Robert E. Gill served as President and Chief Executive Officer of GTC,
without compensation of any kind from GTC or any third party, from October
31, 1996 until he resigned and was replaced by Thomas W. Lovelock on
February 28, 1997 .
(3) Mr. Lovelock began serving as President and Chief Executive Officer of GTC
on February 28, 1997.
(4) Pursuant to an arrangement between GTC and Bell Technologies, Inc.
("Bell"), Bell reimbursed GTC for $15,578 of the amount of Mr. Lovelock's
base salary shown above.
(5) On September 30, 1997, Mr. Lovelock, in connection with his exercise of a
one-time right and option to purchase shares of the Common Stock, was
awarded the right to receive 3,789 shares of restricted stock, subject to a
three-year vesting requirement. The dollar value shown above for such
restricted shares was determined based upon closing market price for the
Common Stock on September 30, 1997.
(6) As of December 31, 1997, Mr. Lovelock continued to hold the right to
receive 3,789 shares of restricted stock, subject to a three-year vesting
requirement. Such shares were valued at $10,657 based upon the closing
market price of the Common Stock on December 31, 1997. Any dividends paid
on the Company's Common Stock will also be paid on these restricted shares
once the vesting requirement has been fulfilled and the shares are issued.

(7) The total number of securities underlying options granted to Mr. Lovelock
during 1997 consist of 300,000 shares for options granted to Mr. Lovelock
pursuant to GTC's 1994 Stock Option Plan for Key Employees and 100,000
shares for a one-time right and option to purchase shares of Common Stock
which was granted to Mr. Lovelock on April 4, 1997 and which was
exercisable by Mr. Lovelock between the dates of July 1, 1997 and September
30, 1997. On September 30, 1997, Mr. Lovelock exercised his right to
purchase 12,632 shares of Common Stock at their full fair market value and
he was awarded the right to receive 3,789 shares of restricted shares at no
cost, subject to a three-year vesting requirement.

<PAGE>

(8) The amount shown includes $14,824 for reimbursed relocation costs, $7,567
for Matching and Profit Sharing Contributions made by GTC pursuant to its
401(k) Plan, and $1,200 of premiums paid by GTC during 1997 for term life
insurance for the benefit of Mr. Lovelock.
(9) David D. Johnson was hired as Vice President and Chief Financial Officer on
March 22, 1996.
(10) Mr. Johnson received a lump sum cash bonus in the amount of $10,000 on
April 18, 1997.
(11) The amount shown includes $6,909 for Matching and Profit Sharing
Contributions made by GTC pursuant to GTC's 401(k) Plan and $37,812 for
reimbursed relocation costs. Pursuant to an arrangement between GTC and its
parent company, Group Financial Partners, Inc. ("GFP"), GFP paid for
$34,888 of the relocation costs incurred by Mr. Johnson in connection with
his move to Louisville, Kentucky in August 1997.
(12) James G. Cocke was hired as Vice President & Manager of Federal Systems
Division on March 17, 1997.
(13) The amount shown includes $74,976 for reimbursed relocation expenses and
$5,331 for Matching and Profit Sharing Contributions made by GTC pursuant
to GTC's 401(k) Plan.

<PAGE>

Option Grants in Last Fiscal Year

Set forth below is information on stock options granted during the fiscal
year ended December 31, 1997 to the Named Officers.
<TABLE>
<CAPTION>

Individual Grants(1) Potential Realizable
------------------------------------------------------- Value at Assumed
No. of % of Total Rates of Stock Price
Securities Options Exercise Appreciation for
Underlying Granted to or Base Option Term (2)
Options Employees in Price Expiration ---------------------
Name Granted Fiscal Year ($/Share) Date 5% 10%
- ---- ---------- ------------ --------- ---------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Gill(3)........... -- -- -- -- -- --

Thomas W. Lovelock(4)....... 100,000 13.0% (5) 09/30/97 0 0
12,500 1.6% 1.0625 04/06/07 8,353 21,167
12,500 1.6% 1.0625 04/06/07 8,353 21,167
12,500 1.6% 1.0625 04/06/07 8,353 21,167
12,500 1.6% 1.0625 04/06/07 8,353 21,167
12,500 1.6% 1.0625 04/06/07 8,353 21,167
12,500 1.6% 1.0625 04/06/07 8,353 21,167
12,500 1.6% 1.0625 04/06/07 8,353 21,167
12,500 1.6% 1.0625 04/06/07 8,353 21,167
25,000 3.2% 1.25 06/30/07 19,653 49,804
25,000 3.2% 1.25 06/30/07 19,653 49,804
25,000 3.2% 1.25 06/30/07 19,653 49,804
25,000 3.2% 1.25 06/30/07 19,653 49,804
25,000 3.2% 1.25 06/30/07 19,653 49,804
25,000 3.2% 1.25 06/30/07 19,653 49,804
25,000 3.2% 1.25 06/30/07 19,653 49,804
25,000 3.2% 1.25 06/30/07 19,653 49,804

David D. Johnson(6)......... 20,000 2.6% 1.0625 04/06/07 13,364 33,867
20,000 2.6% 1.0625 04/06/07 13,364 33,867
20,000 2.6% 1.0625 04/06/07 13,364 33,867

James G. Cocke(7)........... 12,500 1.6% 1.25 03/16/07 9,826 24,902
12,500 1.6% 1.25 03/16/07 9,826 24,902
12,500 1.6% 1.25 03/16/07 9,826 24,902
12,500 1.6% 1.25 03/16/07 9,826 24,902
12,500 1.6% 1.25 03/16/07 9,826 24,902
12,500 1.6% 1.25 03/16/07 9,826 24,902
12,500 1.6% 1.25 03/16/07 9,826 24,902
12,500 1.6% 1.25 03/16/07 9,826 24,902
</TABLE>
__________
(1) Except as disclosed in footnote 5 below, each grant was made pursuant to
the GTC 1994 Stock Option Plan for Key Employees.
(2) The 5% and 10% assumed rates of appreciation are required by rules of the
Commission and do not represent GTC's estimate or projection of the future
GTC Common Stock price.
(3) Robert E. Gill served as President and Chief Executive Officer from October
31, 1996 until February 28, 1997 and did not receive any options or other
compensation for his services.
(4) During 1997, GTC granted Mr. Lovelock three separate stock options for the
purchase of shares of GTC's Common Stock. On April 7, 1997, GTC granted Mr.
Lovelock a one-time right and option to, at any time between the dates of
July 1, 1997 and September 30, 1997, purchase up to 100,000 shares of GTC
Common Stock pursuant to the terms and conditions of that Stock Purchase
Right Agreement dated April 7, 1997. GTC granted Mr. Lovelock two
additional stock options pursuant to the GTC 1994 Stock Option Plan for Key

<PAGE>

Employees. On April 7, 1997, the Company granted Mr. Lovelock a second
stock option for the purchase of 100,000 shares of GTC's Common Stock. This
option becomes exercisable in annual increments of 12,500 shares each,
beginning one year from the date of grant. On July 1, 1997, the Company
granted Mr. Lovelock a stock option for the purchase of 200,000 shares of
GTC's Common Stock. This option becomes exercisable in annual increments of
25,000 shares each, beginning one year from the date of grant.

(5) Pursuant to the Stock Purchase Right Agreement dated April 7, 1997, the
exercise price of the one-time right and option to purchase up to 100,000
shares of GTC Common Stock was to be equal to the fair market value of the
Common Stock on the date of exercise, as defined in the agreement. Upon
exercise, however, the Company was to, subject to a three-year vesting
requirement, award Mr. Lovelock with a certain number of shares of
restricted stock at no cost, which number of shares was to be determined
according to a formula specified in the agreement. Mr. Lovelock exercised
his right to purchase 12,632 shares of GTC Common Stock on September 30,
1997 at a per share price of $3.958. Concurrent with this exercise, he was
awarded the right to receive 3,789 shares of restricted stock at no cost,
subject to a three-year vesting requirement.

(6) On April 7, 1997, the Company granted Mr. Johnson an option to purchase
60,000 shares of GTC's Common Stock. The option becomes exercisable in
annual increments of 20,000 shares each, beginning one year from the date
of grant.

(7) On March 17, 1997, the Company granted Mr. Cocke an option to purchase
100,000 shares of GTC's Common Stock. The option becomes exercisable in
annual increments of 12,500 shares each, beginning one year from the date
of grant.

Aggregated Option Exercises in Last Fiscal Year and Fiscal Year-End Option
Values

Set forth below is information on each exercise of stock options during the
fiscal year ended December 31, 1997, and the value as of December 31, 1997, of
unexercised stock options held by the Named Officers.

<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Number of Underlying Unexercised In-the-Money Options at
Shares Options at Fiscal Year-End Fiscal Year-End(1)
Acquired on Value -------------------------- --------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert E. Gill(2)... -- $ -- -- -- $ -- $ --
Thomas W. Lovelock.. 12,632 0(3) -- 300,000 -- 487,500
David D. Johnson.... -- -- 15,000 165,000 8,438 164,063
James G. Cocke...... -- -- -- 100,000 -- 156,250
- ----------------
</TABLE>

(1) Based on a market value of the underlying securities of $2.8125 at December
31, 1997 minus the exercise price of the options.

(2) Robert E. Gill served as President and Chief Executive Officer of GTC,
without compensation of any kind from GTC or any third party, from October
31, 1996 until he resigned and was replaced by Thomas W. Lovelock on
February 28, 1997.

(3) Mr. Lovelock exercised a one-time right and option to purchase 12,632
shares of GTC's Common Stock on September 30, 1997. Pursuant to the terms
of the Stock Purchase Right Agreement dated April 7, 1997, Mr. Lovelock
paid GTC an exercise price for these shares equal to the fair market value
of the Common Stock on September 30, 1997. However, concurrent with the
exercise of this option, GTC awarded Mr. Lovelock the right to receive
3,789 shares of restricted stock at no cost, subject to three-year vesting
requirement.

Compensation of Directors

Directors who are employees of GTC or any affiliate of GTC are not eligible
to receive any compensation for services rendered as a director, but they are
reimbursed for travel and related expenses they incur in order to attend Board
meetings. Directors of GTC who are not employees of GTC or any affiliate of GTC
("Independent Directors") are compensated pursuant to the terms and conditions
of GTC's Independent Directors' Compensation Program (the "Program") which was
adopted by the Board on September 1, 1995. As amended by the Board on June 25,
1997 the Program provides that each Independent Director shall be granted a
stock option for the purchase of 10,000 shares of GTC's Common Stock each time
he or she is elected and reelected to serve for a full term on the Board. If an

<PAGE>

Independent Director is elected to the Board after the beginning of a term, the
Program states that the number of underlying shares for the option shall be
prorated accordingly.

In addition to the aforementioned stock options, the Program, as amended on
June 25, 1997, provides that each of the Independent Directors is paid an annual
retainer of $15,000 and an attendance fee of $1,000 for each Board meeting the
director attends in person, or alternatively, a fee of $300 for each meeting the
director participates in by telephone. 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 $1,250 per meeting, and each of the other
Independent Directors who attend such a committee meeting in person shall
receive the sum of $1,000 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. Each of
the Independent Directors is also reimbursed for travel and related expenses he
or she incurs in order to attend Board and/or committee meetings.

An Independent Director may elect to receive his or her annual retainer and
attendance fees either in cash or in the form of stock options granted to him or
her by GTC pursuant to the GTC Independent Directors' Stock Option Plan. Those
Independent Directors who elect to receive cash compensation may elect to defer
any of their compensation by participating in GTC's Management Deferred
Compensation Plan. Upon their election to the Board in 1996, Henry F. Frigon and
Sidney R. Petersen each elected to receive their annual retainer and attendance
fees in the form of stock options to be granted on a quarterly basis throughout
the term which ended on June 25, 1997. Roger W. Johnson, however, elected to
receive his annual retainer and attendance fees, for the term which ended on
June 25, 1997, in the form of cash, without any deferral. Upon their reelection
to the Board on June 25, 1997, each of the Independent Directors received an
option to purchase 10,000 shares of the Company's Common Stock at $1.03125 per
share and each of them elected to receive his annual retainer and attendance
fees, for the upcoming term, in the form of stock options to be granted on a
quarterly basis. Accordingly, during 1997, Mr. Johnson received total cash
payments of $10,500 and stock options to purchase 16,183 shares at a weighted
average exercise price of $2.02, pursuant to the terms of the Program. During
1997, Messrs. Frigon and Petersen each received stock options to purchase 45,198
shares at a weighted average exercise price of $1.43, pursuant to the terms of
the Program. Additionally, under a separate compensation arrangement for special
committee activities in connection with evaluating a plan of reorganization for
the Company, the Company made cash payments to Messrs. Johnson, Frigon and
Petersen during 1997 in the amounts of $5,900, $4,500 and $4,200, respectively.
None of the Independent Directors exercised stock options in 1996.

Employment Contracts

GTC entered into an employment agreement in June, 1997, with Thomas W.
Lovelock, GTC's President and Chief Executive Officer. Subject to certain
conditions, the term of the employment agreement extends from July 1, 1997
through June 30, 1999. During the term of the agreement, Mr. Lovelock is to
receive a base salary of $200,000, which amount may be adjusted by GTC at its
sole discretion. Additionally, upon meeting certain conditions, Mr. Lovelock is
also eligible to receive a one-time, lump sum cash bonus in the amount of
$75,000. The agreement also provides that, if GTC terminates Mr. Lovelock
without cause or for other than certain specified reasons, Mr. Lovelock shall
receive pay continuance for a period of two years from the date of termination,
along with customary medical and dental benefits and life insurance coverage for
a period of one year from the date of termination, and GTC shall take the
necessary actions to permit all stock options held by Mr. Lovelock to remain
valid beyond the date of such termination. Mr. Lovelock agreed to certain
nonsolicitation, noncompetition and confidentiality provisions which shall
remain in force beyond the term of the agreement and shall, accordingly, survive
any termination thereof.

GTC also entered into an employment agreement in June, 1997, with James G.
Cocke, GTC's Vice President and Manager of the Federal Systems Division. Subject
to certain conditions, the term of the employment agreement extends from July 1,
1997 through June 30, 1998. During the term of the agreement, Mr. Cocke is to
receive a base salary of $140,000, which amount may be adjusted by GTC at its
sole discretion. Additionally, upon meeting certain conditions, Mr. Cocke is
also eligible to receive a one-time, lump sum cash bonus in the amount of
$50,000. The agreement also provides that, if GTC terminates Mr. Cocke without
cause or for other than certain

<PAGE>

specified reasons, Mr. Cocke shall receive pay continuance, along with customary
medical and dental benefits and life insurance coverage, for a period of one
year from the date of termination. Mr. Cocke agreed to certain confidentiality
provisions which shall remain in force beyond the term of the agreement and
shall, accordingly, survive any termination thereof.

Compensation Committee Interlocks and Insider Participation

The Committee was formed in August 1994 and is composed of Jeffrey T. Gill,
Robert E. Gill, Henry F. Frigon and Sidney R. Petersen. Two members of the
Compensation Committee were also executive officers of GTC during 1997: Jeffrey
T. Gill served as Chairman of the Board of GTC for the entire year and Robert E.
Gill served as the President and Chief Executive Officer of GTC until February
28, 1997. Neither Jeffrey T. Gill nor Robert. E. Gill received any compensation
from GTC for their services as executive officers of GTC.

Jeffrey T. Gill and Robert E. Gill beneficially own 32.4% and 39.0%,
respectively, of the GFP Common Stock and they each serve as a director, officer
and member of the compensation committees of GFP and several other entities
which are also subsidiaries of GFP, including Bell. Pursuant to an arrangement
between GTC and Bell, Bell agreed to reimburse GTC for a portion of the salary
paid through June 30, 1997 to Thomas W. Lovelock, GTC's President and Chief
Executive Officer. Additionally, pursuant to an arrangement between GTC and GFP,
GFP agreed to reimburse David D. Johnson, GTC's Vice President of Finance and
Chief Financial Officer, for a portion of the relocation expenses Mr. Johnson
incurred in connection with his move to Louisville, Kentucky in August 1997. As
described more fully in Item 13 below, GTC has engaged or has proposed to engage
in certain other transactions with GFP, Bell and other subsidiaries of GFP.

<PAGE>

Item 13. Certain Relationships and Related Transactions

Robert E. Gill served as President and Chief Executive Officer of GTC until
February 28, 1997. He currently is a director of GTC and he also serves as
Chairman of the Board of GFP, a private holding company which holds controlling
interests in GTC, Tube Turns Technologies, Inc. ("TTT") and Bell, and as a
Director and executive officer of TTT and Bell. Robert E. Gill is the father of
Jeffrey T. Gill and R. Scott Gill. Jeffrey T. Gill, a director and Chairman of
the Board of GTC, also serves as a director and President and Chief Executive
Officer of GFP, as Chairman of the Board of TTT and as Chairman of the Board of
Bell. R. Scott Gill serves as Vice President and a director of GFP, and as a
director of TTT and Bell. Robert E. Gill (including those shares owned by his
wife Virginia G. Gill) and Jeffrey T. Gill (including those shares owned by his
wife Patricia G. Gill) and R. Scott Gill own 39.0%, 32.4%, and 28.0%
respectively, of the outstanding shares of GFP Common Stock.

GTC and its subsidiaries are parties to a tax sharing agreement with GFP
and were included in the consolidated federal income tax return of GFP from
GTC's inception through March 22, 1995. Effective March 23, 1995, as a result of
a decrease in GFP's ownership percentage of GTC, GTC did not meet the
80-percent-voting power and value requirements defined by the Internal Revenue
Code for affiliated group membership and ceased to be an includable member of
GFP's affiliated group. Effective March 29, 1996, as a result of an investment
by GFP of $1,000,000 in GTC as described below, GFP's ownership percentage in
GTC exceeded 80% and, therefore, GTC expects to be included as a member of GFP's
affiliated group as of that date.

On January 24, 1997, GTC filed a registration statement on Form S-4 with
the Commission regarding its proposal to merge with GFP, Bell, and TTT. In
connection with this proposed merger, the Board of GTC formed a special
committee of Independent Directors to evaluate the fairness of the transaction
to the unaffiliated shareholders of GTC and to make a recommendation to the
Board regarding the transaction. GTC filed several amendments to the
registration statement during 1997, and it was declared effective by the
Securities and Exchange Commission on February 12, 1998. Shareholders voted in
favor or the merger on March 16, 1998 and it is expected to be effective on or
about March 30, 1998.

In connection with an amendment to GTC's credit agreement executed on March
28, 1997, but effective on December 1, 1996, GFP, invested $2,500,000 in GTC in
exchange for 250,000 shares of 8.5% cumulative convertible preferred stock of
GTC (the "Preferred Shares"). GFP, or any subsequent holders of record of each
of the Preferred Shares, is entitled to the rights and preferences stated in the
Statement of Designation of Relative Rights and Preferences filed by GTC with
the Florida Department of State on March 28, 1997 as part of the Third Amendment
to GTC's Articles of Incorporation. Such rights and preferences include the
right of the holder to, among other things: (i) exchange each of the Preferred
Shares for 8.1 shares of GTC Common Stock, which number was determined on March
28, 1997 by dividing the fair market value of GTC Common Stock into the value of
the Liquidation Preference of the Preferred Shares, and (ii) at any time after
GTC repays the amount it owes its lender under the credit agreement, the right
to put the Preferred Shares to GTC for repurchase at a price of $10.00 per
share, plus any accrued dividends and any interest thereon. Additionally, in
connection with the issuance of the Preferred Shares to GFP, GTC and GFP
executed a Stock Purchase and Registration Rights Agreement dated March 28,
1997, wherein GTC, among other things, granted GFP demand and incidental
registration rights for any shares of GTC Common Stock which are acquired by GFP
upon the conversion of the Preferred Shares.

On February 9, 1996, the assets of the instrumentation products business
unit of Metrum were sold by GTC to Bell for $10,104,000 cash and an earn-out
provision which provides for additional payments to GTC of up to $3,000,000 in
the event annual earnings before interest and taxes exceeds defined amounts
through December 31, 2000. During 1997, GTC earned $1,454,000 under the terms of
the earn-out provision. GTC recorded such amount as a contribution to its
capital in its 1997 financial statements.

Effective November 14, 1997, the Company, GFP and certain other
subsidiaries of GFP (collectively, the "Loan Parties") entered into a loan
agreement with a bank (the "1997 Agreement"). The 1997 Agreement provides credit
availability to the Loan Parties by means of a total revolving credit line of
$30,000,000 and a term note of $15,000,000. As of December 31, 1997, $13,850,000
was available to the Loan Parties. The 1997 Agreement is secured by the assets
of all of the Loan Parties. Under the terms of the 1997 Agreement, the Loan
Parties pay interest monthly at the LIBOR rate plus a variable spread, or
approximately 7.4% at December 31, 1997. The 1997 Agreement also requires
compliance with a number of financial and non-financial covenants and prohibits
the Company from paying dividends. Principal payments on the term note are due
quarterly through September 30,

<PAGE>

2002, which is also the maturity date for the revolving credit line. Since the
inception of the 1997 Agreement, the Company has not drawn upon the credit
facility.