SYNALLOY CORPORATION
DIVISIONAL MANAGEMENT INCENTIVE PLAN
FOR THE CHEMICALS SEGMENT

INCENTIVE POOL

A separate incentive pool will be established for 2006 and subsequent fiscal
years for the Chemicals Segment. The incentive pool will equal ten percent (10%)
of the fiscal year's Operating Income (as defined below) in excess of ten
percent (10%) of average shareholders' equity. Return on equity will be an
amount equal to ten percent (10%) of average equity at the beginning of each
quarter of the fiscal year. As used in the Divisional Management Incentive Plan
(the "Plan"), the term "Operating Income" shall mean the operating income as
generally reflected in the Chemicals Segment's internal statement of earnings.
It is intended that Operating Income shall be before the bonus compensation
payable under this Plan and before income and expenses not resulting from normal
operations, including but not limited to interest income and expense, gains and
losses from the sale or other disposition of capital assets and environmental
expenses related to preexisting conditions not resulting from recent operations.
The Synalloy Corporation Board of Directors' Compensation & Long-Term Incentive
Committee shall have sole discretion to determine which other items of income
and expenses are included in and/or excluded from Operating Income and their
determination shall be final, binding and conclusive upon the parties hereto.

DESIGNATED PARTICIPANTS

Designated Participants in this Plan will be limited to Officers and other key
managers of the Specialty Chemicals Segment, comprised of Manufacturers
Chemicals, L.P., Blackman Uhler Specialty Chemicals and Organic-Pigments Corp.,
who are designated by the Chief Executive Officer of Synalloy as employees who
are responsible for and significantly influence profits.

ALLOCATION OF INCENTIVE POOL

A maximum of thirty percent (30%) of the incentive pool may be distributed to
employees who are not Designated Participants in this Plan as recommended by the
Chief Executive Officer of Synalloy and approved by the Compensation Committee
of the Board of Directors. A minimum of sixty percent (60%) of the incentive
pool will be paid to Designated Participants pro rata to their salaries. A
minimum of ten percent (10%) and a maximum of forty percent (40%) of the
incentive pool may be paid to Designated Participants in any proportion as
recommended by the Chief Executive Officer of Synalloy and approved by the
Compensation Committee of the Board of Directors.

TIME OF PAYMENT

Payments will be made within two and one-half months of the fiscal year-end
subject to completion of the annual audit of financial statements for the fiscal
year in which the incentive is earned.

ADDITIONAL REQUIREMENTS FOR RECEIPT OF ANY PAYMENT UNDER THIS PLAN

a. Employed by the Specialty Chemicals Group at the year-end for which the
incentive is earned unless termination of employment results from death,
disability or retirement in which case payment will be prorated to cover time
worked during the year.

b. Also employed at the time of payment unless termination of employment results
from involuntary termination, retirement, disability or death between year-end
and payment date.

c. Designated participants must have entered into an agreement acceptable to the
Chief Executive Officer of Synalloy under which they agree not to compete with
the Specialty Chemicals Group for a minimum period of one year after the
termination of their employment.

DURATION OF PLAN

The Plan will remain in effect until modified or terminated by the Board of
Directors of Synalloy Corporation. The Plan will not be changed for a fiscal
year after the beginning of such year. Prior to the beginning of a fiscal year,
the Board of Directors of Synalloy may modify or cancel this Plan at their sole
discretion.

 

 

SYNALLOY CORPORATION
DIVISIONAL MANAGEMENT INCENTIVE PLAN
FOR THE METALS SEGMENT

INCENTIVE POOL

A separate incentive pool will be established for 2006 and subsequent fiscal
years for the Metals Segment. The incentive pool will equal ten percent (10%) of
the fiscal year's Operating Income (as defined below) in excess of ten percent
(10%) of average shareholders' equity. Return on equity will be an amount equal
to ten percent (10%) of average equity at the beginning of each quarter of the
fiscal year. As used in the Divisional Management Incentive Plan (the "Plan"),
the term "Operating Income" shall mean the operating income as generally
reflected in the Metals Segment's internal statement of earnings. It is intended
that Operating Income shall be before the bonus compensation payable under this
Plan and before income and expenses not resulting from normal operations,
including but not limited to interest income and expense, gains and losses from
the sale or other disposition of capital assets and environmental expenses
related to preexisting conditions not resulting from recent operations. The
Synalloy Corporation Board of Directors' Compensation & Long-Term Incentive
Committee shall have sole discretion to determine which other items of income
and expenses are included in and/or excluded from Operating Income and their
determination shall be final, binding and conclusive upon the parties hereto.

DESIGNATED PARTICIPANTS

Designated Participants in this Plan will be limited to Officers and other key
managers of the Metals Segment, comprised of Bristol Metals, L. P. who are
designated by the Chief Executive Officer of Synalloy as employees who are
responsible for and significantly influence profits.

ALLOCATION OF INCENTIVE POOL

A maximum of thirty percent (30%) of the incentive pool may be distributed to
employees who are not Designated Participants in this Plan as recommended by the
Chief Executive Officer of Synalloy and approved by the Compensation Committee
of the Board of Directors. A minimum of sixty percent (60%) of the incentive
pool will be paid to Designated Participants pro rata to their salaries. A
minimum of ten percent (10%) and a maximum of forty percent (40%) of the
incentive pool may be paid to Designated Participants in any proportion as
recommended by the Chief Executive Officer of Synalloy and approved by the
Compensation Committee of the Board of Directors.

TIME OF PAYMENT

Payments will be made within two and one-half months of the fiscal year-end
subject to completion of the annual audit of financial statements for the fiscal
year in which the incentive is earned.

ADDITIONAL REQUIREMENTS FOR RECEIPT OF ANY PAYMENT UNDER THIS PLAN

a. Employed by the Metals Segment at the year-end for which the incentive is
earned unless termination of employment results from death, disability or
retirement in which case payment will be prorated to cover time worked during
the year.

b. Also employed at the time of payment unless termination of employment results
from involuntary termination, retirement, disability or death between year-end
and payment date.

c. Designated participants must have entered into an agreement acceptable to the
Chief Executive Officer of Synalloy under which they agree not to compete with
the Metals Segment for a minimum period of one year after the termination of
their employment.

DURATION OF PLAN

The Plan will remain in effect until modified or terminated by the Board of
Directors of Synalloy Corporation. The Plan will not be changed for a fiscal
year after the beginning of such year. Prior to the beginning of a fiscal year,
the Board of Directors of Synalloy may modify or cancel this Plan at their sole
discretion.