<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934. For the quarterly period ended March 29, 1998.
or
Transition report pursuant to Section 13 or 15(d) of the Securities
- ----- Exchange Act of 1934. For the transition period from _________________
to ________________.
Commission file number: 0-24020
SYPRIS SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 61-1321992
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
455 South Fourth Avenue
Louisville, Kentucky 40202
(Address of principal executive offices, including zip code)
(502) 585-5544
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ______.
-------
As of May 4, 1998 there were 9,428,990 shares of the Registrant's Common Stock
outstanding.
Page 1 of 13
<PAGE>
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Operations for the Three
Months ended March 29, 1998 and March 30, 1997........... 3
Consolidated Balance Sheets at March 29, 1998 and
December 31, 1997........................................ 4
Consolidated Statements of Cash Flows for the Three
Months ended March 29, 1998 and March 30, 1997........... 5
Notes to Interim Consolidated Financial Statements........ 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations............. 8
Part II. Other Information
Item 2. Changes in Securities..................................... 10
Item 4. Submission of Matters to a Vote of Security Holders....... 10
Item 6. Exhibits and Reports on Form 8-K.......................... 11
Signatures................................................................... 12
Exhibit Index................................................................ 13
Page 2 of 13
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
GROUP TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except for per share data)
<TABLE>
<CAPTION>
Three Months Ended
---------------------
March 29, March 30,
1998 1997
--------- ---------
(Unaudited)
<S> <C> <C>
Revenue..........................................$25,901 $26,438
Cost of operations............................... 23,999 27,797
------- -------
Gross profit (loss)............................ 1,902 (1,359)
Selling, general and administrative expense...... 1,538 1,499
------- -------
Operating income (loss)........................ 364 (2,858)
Interest expense................................. 17 513
Other income, net................................ (54) (13)
------- -------
Income (loss) before income taxes................ 401 (3,358)
Income tax expense............................... -- 21
------- -------
Net income (loss)................................$ 401 $(3,379)
======= =======
Net income (loss) per share:
Basic.......................................... $0.10 $ (0.83)
Diluted........................................ $0.09 $ (0.83)
Shares used in computing per share amounts:
Basic.......................................... 4,092 4,055
Diluted........................................ 4,334 4,055
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 3 of 13
<PAGE>
GROUP TECHNOLOGIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except for share data)
<TABLE>
<CAPTION>
March 29, December 31,
1998 1997
----------- ------------
(Unaudited)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents................................................ $ 5,772 $ 3,090
Accounts receivable, net................................................. 11,284 11,231
Inventories, net......................................................... 17,178 21,895
Other current assets..................................................... 2,631 2,861
------- -------
Total current assets.................................................... 36,865 39,077
Property and equipment, net............................................... 7,869 8,281
Other assets.............................................................. 6 6
------- -------
$44,740 $47,364
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................................... $ 6,652 $ 8,504
Accrued liabilities...................................................... 17,229 18,316
Current portion of long-term debt........................................ 193 198
------- -------
Total current liabilities............................................... 24,074 27,018
Redeemable Preferred Stock, $.01 par value; 1,000,000 shares authorized;
250,000 shares issued and outstanding in 1997............................ -- 3
Additional paid-in capital - Redeemable Preferred Stock................... -- 2,497
Shareholders' equity:
Common Stock, $.01 par value, 10,000,000 shares authorized;
4,660,246 and 4,058,466 shares issued and outstanding in
1998 and 1997, respectively............................................ 47 41
Additional paid-in capital............................................... 28,934 26,435
Accumulated deficit...................................................... (8,315) (8,630)
------- -------
Total shareholders' equity............................................. 20,666 17,846
------- -------
$44,740 $47,364
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 4 of 13
<PAGE>
GROUP TECHNOLOGIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------
March 29, March 30,
1998 1997
----------- ----------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income (loss).......................................................................... $ 401 $(3,379)
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization............................................................ 591 1,305
Other.................................................................................... (53) 120
Changes in operating assets and liabilities, net of
dispositions:
Accounts receivable.................................................................... (46) 6,716
Inventories............................................................................ 4,717 (2,741)
Other current and non-current assets................................................... 193 306
Accounts payable....................................................................... (1,852) (1,001)
Accrued and other liabilities.......................................................... (1,087) (2,603)
-------- -------
Net cash provided by (used in) operating
activities........................................................................... 2,864 (1,277)
Cash flows from investing activities:
Capital expenditures....................................................................... (182) (201)
Cash flows from financing activities:
Net repayments under revolving credit agreement............................................ -- (453)
Repayments of notes payable and long-term debt............................................. (5) (918)
Proceeds from issuance of preferred stock.................................................. -- 2,500
Net proceeds of common stock............................................................... 5 --
------- -------
Net cash provided by financing activities.............................................. -- 1,129
------- -------
Net increase (decrease) in cash and cash equivalents........................................ 2,682 (349)
Cash and cash equivalents at beginning of period............................................ 3,090 661
------- -------
Cash and cash equivalents at end of period.................................................. $ 5,772 $ 312
======= =======
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
Page 5 of 13
<PAGE>
GROUP TECHNOLOGIES CORPORATION
Notes to Interim Consolidated Financial Statements
(1) Organizational Structure
Group Technologies Corporation (the "Company") was incorporated on December
27, 1988 as a subsidiary of Group Financial Partners, Inc. (the "Parent"), a
private holding company. As of March 29, 1998, the Parent owned approximately
80% of the outstanding Common Stock of the Company. As more fully discussed in
Note 6, the Company executed a plan of reorganization effective March 30, 1998
whereby the Company merged with and into Sypris Solutions, Inc. However, the
financial statements for all periods presented in this report reflect the
results of operations, financial position and cash flows of the Company.
(2) Basis of Presentation
The unaudited consolidated financial statements and related notes have been
prepared in accordance with the rules and regulations of the Securities and
Exchange Commission and on substantially the same basis as the annual
consolidated financial statements. The consolidated financial statements include
the accounts of the Company and its subsidiaries. All significant intercompany
transactions and accounts have been eliminated.
In the opinion of management, the consolidated financial statements reflect
all adjustments, consisting only of normal recurring adjustments, necessary for
a fair presentation of the financial position, operating results, and cash flows
for those periods presented. Operating results for the three-month period ended
March 29, 1998 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1998. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements, and notes thereto, for the year ended December 31, 1997 as presented
in the Company's annual report on Form 10-K.
(3) Net Income (Loss) Per Share
The following sets forth the number of shares of Common Stock included in the
computation of basic and diluted net income (loss) per share for the three
months ended March 29, 1998 and March 30, 1997.
<TABLE>
<CAPTION>
Three months ended
------------------
March 29, March 30,
1998 1997
--------- ---------
<S> <C> <C>
Denominator for basic net income (loss) per share:
Weighted average shares outstanding.............. 4,092,499 4,058,466
Denominator for diluted net income (loss) per share:
Weighted average shares outstanding.............. 4,092,499 4,058,466
Effect of dilutive options and warrants.......... 241,122 --
--------- ---------
4,333,621 4,058,466
========= =========
</TABLE>
Page 6 of 13
<PAGE>
(4) Inventories
Inventories consist of the following:
(in thousands)
<TABLE>
<CAPTION>
March 29, December 31,
1998 1997
----------- ------------
(Unaudited)
<S> <C> <C>
Raw materials............................................................................... $ 4,558 $ 8,514
Work in process............................................................................. 3,756 4,514
Costs relating to long-term contracts and programs, net of
amounts attributed to revenue recognized to date.......................................... -- 15,366
Progress payments related to long-term contracts and programs............................... (4,291) (5,189)
Reserve for inactive, obsolete and unsalable inventories.................................... (2,211) (3,673)
-------- -------
$ 17,178 $21,895
======== =======
</TABLE>
(5) Shareholders' Equity
During the three-month period ended March 29, 1998, the Company issued the
following shares of its Common Stock:
<TABLE>
<CAPTION>
Shares of Common
Stock Issued
----------------
<S> <C>
Exercise of 38,500 Common Stock options..................................................... 14,590
Exercise of 81,250 Common Stock warrants.................................................... 80,940
Conversion of Preferred Stock............................................................... 506,250
-------
601,780
=======
</TABLE>
During the three months ended March 29, 1998, the Company recognized an
increase in its accumulated deficit of $86,000 resulting from a non-cash
exercise of 37,500 Common Stock options.
(6) Subsequent Events
The Company consummated the transactions contemplated by the Fourth Amended
and Restated Agreement and Plan of Reorganization by and among the Company, the
Parent, Tube Turns Technologies, Inc. and Bell Technologies, Inc. effective
March 30, 1998 (the "Reorganization") and related transactions. Accordingly, the
Company has issued approximately 4,769,000 shares of its Common Stock subsequent
to March 29, 1998 and has increased the authorized number of Common Shares to
20,000,000.
Immediately after the Reorganization, the Company effected a 1-for-4
reverse stock split. Accordingly, all share, per share and option/warrant data
included herein have been restated to reflect the 1-for-4 reverse stock split.
Page 7 of 13
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
The following table sets forth certain data, expressed as a percentage of
revenue, from the Company's Consolidated Statement of Operations for the
three-month periods ended March 29, 1998 and March 30, 1997.
<TABLE>
<CAPTION>
Three Months Ended
----------------------
March 29, March 30,
1998 1997
---------- ----------
<S> <C> <C>
Revenue...................................... 100.0% 100.0%
Cost of operations........................... 92.7 105.1
----- ------
Gross profit (loss).......................... 7.3 (5.1)
Selling, general and administrative expense.. 5.9 5.7
----- ------
Operating income (loss)...................... 1.4 (10.8)
Interest expense............................. 0.1 1.9
Other income, net............................ (0.2) (0.0)
----- ------
Income (loss) before income taxes............ 1.5 (12.7)
Income tax expense........................... 0.0 0.1
----- ------
Net income (loss)............................ 1.5% (12.8)%
===== ======
</TABLE>
Revenue for the first quarter of 1998 was $25.9 million, a decrease of $0.5
million or 2.0% from $26.4 million for the first quarter of 1997. Revenue for
the Company's domestic manufacturing and engineering services businesses
increased by $5.8 million from the first three months of the prior year. The
majority of the domestic manufacturing services revenue increase was related to
the timing of revenue associated with delivery schedules on certain long-term
contracts. The foregoing revenue increase was offset by a $6.3 million decrease
in revenue for first quarter 1998 as compared to first quarter 1997 which
resulted from the disposition of the Company's Latin American operations during
the third quarter of 1997.
The Company reported gross profit of $1.9 million in the first quarter of
1998 compared to a gross loss of $1.4 million in the first quarter of 1997. The
$3.3 million increase in gross profit in the first quarter of 1998 is primarily
attributable to a $2.6 million gross profit increase from the Company's domestic
manufacturing and engineering services business resulting from the
aforementioned higher level of revenue and from a realignment of Company
resources and cost reductions, including workforce reductions. Additionally,
$0.7 million of the gross profit increase is attributable to the absence of
losses from the previously owned Latin American operations.
Selling, general and administrative expense for the first quarter of 1998
of $1.5 million was consistent with the amount in the first quarter of 1997.
While certain selling, general and administrative costs were reduced as a result
of the Company selling its Latin American operations and as a result of other
cost reduction efforts, the Company has expanded its marketing and sales staff
since the first quarter of 1997.
Page 8 of 13
<PAGE>
Interest expense for the first quarter of 1998 decreased $0.5 million from
the comparable prior year period. This decrease is attributable to the Company's
use of proceeds from the sale of its Latin American operations to repay all of
its bank debt during the third quarter of 1997.
Income tax expense for the first quarter of 1997 consisted primarily of
income taxes on earnings in foreign countries. The Company has historically
recorded a valuation allowance for its deferred tax assets and therefore has not
recognized income tax expense during the first quarter of 1998.
Liquidity and Capital Resources
Net cash provided by operating activities was $2.9 million for the first
quarter of 1998. Inventories decreased by $4.7 million during this period
primarily due to the utilization of inventory which was acquired during 1997
according to expected demand based on customer provided forecasts. This positive
cash flow was partially offset by a reduction of accounts payable associated
with lower inventory additions, plus a reduction in the balance of accrued
liabilities attributable to the timing of scheduled payments.
During the first quarter of 1997, the Parent invested $2.5 million in the
Company in exchange for 250,000 shares of Redeemable Preferred Stock. During the
first quarter of 1998 the Parent converted this Preferred Stock into 506,250
shares of the Company's Common Stock. Also during the first quarter of 1998,
certain holders of options or warrants exercised their rights to purchase 95,530
shares of the Company's Common Stock.
Page 9 of 13
<PAGE>
PART II OTHER INFORMATION
Item 2. Changes in Securities
During the quarter ended March 29, 1998, the Company issued the following
securities which were not registered under the Securities Act of 1933 (the "1933
Act") as restated for the 1-for-4 reverse stock split:
(i) On March 25, 1998, First Union Commercial Corporation ("FUCC") exercised
its right to purchase 72,647 shares of the Company's common stock, $0.01
par value (the "Common Stock"), pursuant to the terms of a Stock Purchase
Warrant (the "Warrant") which was issued to FUCC by the Company on March
29, 1996 in connection with the execution of and Amended and Restated
Credit and Security Agreement (the "Credit Agreement"). The aggregate
purchase price of these shares was $2,905.88 (the "Purchase Price"). In
accordance with the terms of the Warrant, as amended, FUCC paid the
Company the Purchase Price by instructing the Company to withhold a
sufficient number of the underlying shares of the Warrant, which shares
had a fair market value on the date of exercise equal to the Purchase
Price. The transaction did not involve any public offering of the Common
Stock and, thus, the Company issued a net number of 72,370 shares to FUCC
pursuant to the exemption stated in Section 4(2) of the 1933 Act.
(ii) On March 27, 1998, FUCC exercised its right to purchase an additional
8,603 shares of Common Stock pursuant to the terms of the Warrant. The
aggregate purchase price of these shares was $344.12. In accordance with
the terms of the Warrant, as amended, FUCC paid the Company the Purchase
Price by instructing the Company to withhold a sufficient number of the
underlying shares of the Warrant, which shares had a fair market value on
the date of exercise equal to the Purchase Price. The transaction did not
involve any public offering of the Common Stock and, thus, the Company
issued a net number of 8,570 shares to FUCC pursuant to the exemption
stated in Section 4(2) of the 1933 Act.
(iii) On March 28, 1998, Group Financial Partners, Inc. ("GFP") elected to
convert 250,000 shares of the Company's 8.5% Cumulative Convertible
Preferred Stock (the "Preferred Shares") into 506,250 shares of Common
Stock. In connection with an amendment to the Credit Agreement on March
28, 1997, the Company issued the Preferred Shares to GFP in exchange for
$2,500,000. As stated in the Statement of Designation of Relative Rights
and Preferences and Other Terms of the Preferred Shares, the Preferred
Shares were converted into as many shares of Common Stock as was equal to
the number which is the result of dividing $10.00 by the Average Quoted
Price of the Common Stock for the three trading days immediately preceding
March 28, 1997. The transaction did not involve any public offering of
Common Stock and, thus, the Company issued the 506,250 shares to GFP
pursuant to the exemption stated in Section 4(2) of the 1933 Act.
Item 4. Submission of Matters to a Vote of Security Holders
The Company held a Special Meeting of Shareholders on March 16, 1998.
Proxies were solicited by the Company's board of directors pursuant to
Regulation 14 under the Securities Exchange Act of 1934. At the meeting, the
following proposals received the respective number of votes shown below as
restated for the 1-for-4 reverse stock split:
Proposal 1. Approval of the Fourth Amended and Restated Agreement and Plan
of Reorganization dated as of February 5, 1998 by and among the Company, Group
Financial Partners, Inc., Tube Turns Technologies, Inc., and Bell Technologies,
Inc., including the issuance of shares of the Company's voting
Page 10 of 13
<PAGE>
common stock, par value $0.01 per share, contemplated thereby. 4,130,899 shares
were voted in favor of the proposal; 7,373 shares were voted against the
proposal; the holders of 11,078 shares abstained from voting on the proposal;
and there were 8,858 broker non-votes.
Proposal 2. Subject to the approval of Proposal 1 and further conditioned
upon the failure to approve Proposal 4, to approve an amendment to the Company's
Articles of Incorporation to increase the number of authorized shares of the
Company's voting common stock, $0.01 par value per share, from 10,000,000 to
15,000,000 shares. 4,133,870 shares were voted in favor of the proposal; 10,480
shares were voted against the proposal; and the holders of 13,858 shares
abstained from voting on the proposal.
Proposal 3. Subject to the approval of Proposal 1, to approve an amendment
to the Company's Articles of Incorporation to effect a 1-for-4 reverse stock
split. 4,124,819 shares were voted in favor of the proposal; 20,118 shares were
voted against the proposal; and the holders of 13,271 shares abstained from
voting on the proposal.
Proposal 4. Subject to the approval of Proposal 1, to approve the
reincorporation of the Company in Delaware through the merger of the Company
with and into a newly formed Delaware corporation wholly-owned by the Company.
3,949,116 shares were voted in favor of the proposal; 187,352 shares were voted
against the proposal; the holders of 12,882 shares abstained from voting on the
proposal; and there were 8,858 broker non-votes.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed on the Exhibit Index on page 12 of this Form 10-Q are
filed as a part of this report.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the quarter ended
March 29, 1998. However, Sypris Solutions, Inc. filed one report on Form 8-K
dated April 14, 1998 which reported the consummation of a Fourth Amended and
Restated Agreement and Plan of Reorganization.
Page 11 of 13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SYPRIS SOLUTIONS, INC.
(Registrant)
Date: May 6, 1998 By: /s/ Jeffrey T. Gill
------------- ----------------------------------------
(Jeffrey T. Gill)
President & Chief Executive Officer
Date: May 6, 1998 By: /s/ David D. Johnson
------------- ----------------------------------------
(David D. Johnson)
Vice President & Chief Financial Officer
Page 12 of 13
<PAGE>
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
Number Note Description
- ------- ---- -----------
<C> <C> <S>
2 (1) Fourth Amended Agreement and Plan of Reorganization dated
February 5, 1998
10.23 Group Technologies Corporation Profit Sharing Bonus Plan,
effective as of January 2, 1998
10.24 Description of Special Bonus Arrangements for Certain Executive
Officers
27 Financial Data Schedule (for SEC use only)
</TABLE>
- ----------------
(1) Incorporated by reference to Appendix A to the Joint Proxy
Statement/Prospectus forming a part of the Registrant's Form S-4 (No. 333-
20299) filed on January 24, 1997, as amended September 24, 1997, as amended
December 5, 1997, as amended January 12, 1998, as amended February 9, 1998,
as amended February 12, 1998.
Page 13 of 13
<PAGE>
EXHIBIT 10.23
GROUP TECHNOLOGIES CORPORATION
PROFIT SHARING BONUS PLAN
1998 Fiscal Year
1. Establishment of Plan.
----------------------
Group Technologies Corporation (the "Company"), established this profit
sharing and bonus plan effective as of January 2, 1998 (the "Plan"), to provide
a financial incentive for employees of the Company to advance the growth and
prosperity of the Company.
2. Eligibility.
------------
All full-time employees of the Company, as listed on Exhibit A, shall be
eligible to participate in the Plan, other than those employees who are
specifically included in another plan.
3. Profit Sharing Pool.
--------------------
(a) Award amounts will be based on a Profit Sharing Pool that shall be
comprised of thirty percent (30%) of the Profit Before Bonus and Taxes for the
current Plan year, as reported on the financial statements of the Company. No
award shall be granted should the Profit Before Bonus and Taxes decline from
year-to-year.
(b) The dollar value of the sum of all accounts receivable which have not
been collected within ninety (90) days of the date of invoice as of December 31,
1998 shall be deducted from the Profit Sharing Pool and classified as a "Delayed
Bonus Payment." Invoices which are involved in litigation shall be excluded from
the calculation. If an invoice is determined to be uncollectable and is
subsequently written-off, the amount of the Delayed Bonus Payment will be
reduced accordingly.
(c) The Profit Sharing Pool shall be divided into two award levels, with
thirty-five percent (35%) of the Profit Sharing Pool set aside for award to Key
Executives and sixty-five percent (65%) of the Profit Sharing Pool set aside for
Key Employees.
4. Key Executive Award.
--------------------
(a) Eligibility. Employees of the Company who are specifically designated
by the Compensation Committee for participation during the current Plan year. A
list of the participants shall be attached to a copy of this Plan and shall
include each participant's name, salary, start date (for purposes of the current
Plan year), maximum percentage share of the Key Executive Award, and objectives
for the year.
(b) Amount of Award. Each eligible employee shall be entitled to an
amount equal to his or her maximum percentage share of the Key Executive Award,
subject to an adjustment to reflect actual contribution during the course of the
Plan year, portion of the Plan year employed, performance to goals, and the
recommendation of the President and CEO, subject to the approval of the
Compensation Committee. The maximum amount payable to an eligible employee shall
be equal to the lesser of his or her maximum percentage share or one hundred
percent (100%) of the eligible employee's base salary.
<PAGE>
GROUP TECHNOLOGIES CORPORATION
PROFIT SHARING BONUS PLAN
1998 FISCAL YEAR
(c) Time of Payment. Awards shall be payable to each eligible employee
within 45 days after release of the audited annual financial statements of the
Company; provided, however, that such employee shall be employed by the Company
as of the date of payment.
(d) Delayed Bonus Payment. Distribution of the Delayed Bonus Payment will
be made to each eligible employee when payment of all invoices which created the
Delayed Bonus Payment have been received and/or the amounts have been written-
off by the Company; provided, however, that such employee shall be employed by
the Company as of the date of payment.
5. Key Employee Award.
-------------------
(a) Eligibility. All full-time employees who are not otherwise
participants in another plan. A list of the participants shall be attached to a
copy of this Plan and shall include each participant's name, salary, start date
(for purposes of the current Plan year) and maximum percentage share of the Key
Employee Award.
(b) Amount of Award. Each eligible employee shall be entitled to an
amount equal to his or her maximum percentage share of the Key Employee Award,
subject to an adjustment to reflect actual contribution during the course of the
Plan year, portion of the Plan year employed, performance to goals, and the
recommendation of management, subject to approval by the Compensation Committee.
The maximum amount payable to an eligible employee shall be equal to the lesser
of his or her maximum percentage share or one hundred percent (100%) of the
eligible employee's base salary.
(c) Time of Payment. Awards shall be payable to each eligible employee
within 45 days after release of the audited annual financial statements of the
Company; provided, however, that such employee shall be employed by the Company
as of the date of payment.
(d) Delayed Bonus Payment. Distribution of the Delayed Bonus Payment will
be made to each eligible employee when payment of all invoices which created the
Delayed Bonus Payment have been received and/or the amounts have been written-
off by the Company; provided, however, that such employee shall be employed by
the Company as of the date of payment.
6. Method of Payment.
------------------
Awards shall be payable by check in lump sum. All such payments shall be
subject to withholding for income, social security, 401(k) or other such payroll
taxes as may be appropriate.
2
<PAGE>
GROUP TECHNOLOGIES CORPORATION
PROFIT SHARING BONUS PLAN
1998 FISCAL YEAR
7. Administration.
---------------
This Plan shall be administered by the Board of Directors of Group
Technologies Corporation (and its successor, Sypris Solutions, Inc.) and/or the
Compensation Committee of the Board, as the case may be. The decisions of the
Board of Directors and/or the Compensation Committee in interpreting and
applying the Plan shall be final.
8. Miscellaneous.
--------------
(a) Employment Rights. The adoption and maintenance of this Plan is not
an employment agreement between the Company and any employee. Nothing herein
contained shall be deemed to give any employee the right to be retained in the
employ of the Company nor to interfere with the right of the Company to
discharge or any employee's right to terminate his or her employment at any
time.
(b) Amendment and Termination. The Company may, without the consent of
any employee or beneficiary, amend or terminate the Plan at any time and from
time-to-time.
(c) Construction. The headings and subheadings of this Plan have been
inserted for convenience for reference only and are to be ignored in any
construction of the provisions hereof. The masculine shall be deemed to include
the feminine, the singular shall include the plural, and the plural shall
include the singular unless the context otherwise requires. The invalidity or
unenforceability of any provision hereunder shall not affect the validity or
enforceability of the balance hereof. This Plan represents the entire
undertaking by the Company concerning its subject matter and supersedes all
prior undertakings with respect thereto. No provision hereof may be waived or
discharged except by a written document signed by a duly authorized
representative of the Company.
GROUP TECHNOLOGIES CORPORATION
----------------------------------------
Chairman of the Board
----------------------------------------
Date
3
<PAGE>
Exhibit 10.24
DESCRIPTION OF SPECIAL BONUS ARRANGEMENTS FOR CERTAIN EXECUTIVE OFFICERS
Effective March 23, 1998, the Company's Board of Directors, acting upon a
recommendation from the Compensation Committee of the Board, approved lump sum
cash bonus payments to Thomas W. Lovelock, the Company's President and Chief
Executive Officer, and James G. Cocke, the Company's Vice President and Manager
of its Federal Systems Division, in the amounts of $40,000 and $20,000,
respectively. The Board approved such bonus payments in order to recognize the
efforts of Messrs. Lovelock and Cocke in connection with the Company's
performance during the second half of 1997.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted from the
consolidated balance sheet at March 29, 1998 and the consolidated statement of
operations for the quarter ended March 29, 1998 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
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0
0
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