SYPRIS SOLUTIONS, INC.

INCENTIVE BONUS PLAN
2005 FISCAL YEAR



1.     ESTABLISHMENT OF PLAN.



          Sypris
Solutions, Inc., a Delaware corporation (the “Company”), established this
corporate bonus plan effective as of January 1, 2005 (the “Plan”), to provide a
financial incentive for employees of the Company to advance the growth and prosperity of
the Company. 



2.     ELIGIBILITY.



          Employees
of the Company who are specifically designated by the Compensation Committee of the Board
of Directors of the Company (the “Compensation Committee”) for participation
during the current year shall be eligible to participate in the Plan. 



3.     PARTICIPANT’S PERCENTAGE SHARE.



          The
bonus target for each participant will be established and approved by the Compensation
Committee at the beginning of each Plan year. Each participant will be provided with a
copy of this Plan, which will include an exhibit that lists the participant’s full
name, salary, bonus potential based upon the current year’s operating budget, and his
or her objectives for the current year. 



4.     Bonus Pool. 



          The
Bonus Pool will be generated by taking 50% of the consolidated profit before tax (pre
bonus accrual) for Sypris Solutions, Inc. in excess of 85% of the 2005 Plan before tax
(pre bonus accrual). 



     5.     Bonus Award.



          Each
qualified participant will be eligible for a Bonus Award that is equal to the bonus
target, subject to the provisions of Sections 8.1, 8.2, 8.3 and the following: 



	  	
Management Objectives. Each participant will have from three to five Management Objectives for
the Plan year, each of which will be specific with regard to (i) the expected outcome,
(ii) the expected financial impact on the Company and (iii) the date or dates by which the
objective must be achieved. Each objective will receive a weighting, the total of which
for all objectives will be equal to 100%. The chief executive officer of the Company will
have the responsibility to review and determine each participant’s performance to
objectives and to assign each individual a percentage that will be used as a factor to
determine the actual amount of the awards to be distributed. 







          Each
participant will have two mandatory objectives: 


	  	
1.  Business appropriate EVA target.


2.  Business critical Financial / Performance metric 




          Both
of these objectives will have an established corporate weighting 














          5.2
Discretionary Review. The chief executive officer of the Company will have the
discretion to increase the actual amount of the awards to be distributed by up to 20% of
the participant’s bonus potential, based upon the individual’s specific
performance and contribution to the Company. Such discretion will be used sparingly and
will generally be limited to the recognition of extenuating circumstances and/or
exceptional accomplishments that may or may not have been captured by the Management
Objectives. 



          5.3
Approval of the Compensation Committee. The Bonus Award for each participant will
be subject to the review of and approval by the Compensation Committee. 



          5.4
Qualification. Awards will be payable to each eligible participant as soon as
administratively practicable after release of the audited annual financial statements of
the Company and the approval of the Compensation Committee; provided, however, that the
Plan shall be in effect as of the date of payment and such employee shall be employed by
the Company as of the date of payment. NO EMPLOYEE SHALL HAVE ANY RIGHT TO PAYMENT OF
AN AWARD UNLESS THE PLAN IS IN EFFECT AND THE EMPLOYEE IS EMPLOYED BY THE COMPANY AS OF
THE DATE OF PAYMENT. 



        5.5
5.6  Caps and Limitations. There will be no caps or other such limitations
established with regard to the amount of individual potential Bonus Awards, other than the
provisions of Sections 4 and 5, which could result in Bonus Awards that are less in value
than those listed on the attached Exhibit A. 



     6.     METHOD OF DISTRIBUTION. 



          Cash
awards shall be payable by check in lump sum. All such payments will be subject to
withholding for income, social security or other such payroll taxes as may be appropriate. 




7.     ADMINISTRATION.



          The
Compensation Committee shall administer this Plan. The decisions of the Compensation
Committee in interpreting and applying the Plan shall be final. 



     8.     MISCELLANEOUS. 



          8.1
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 any employee at any time. 



          8.2
Acquisitions and Divestitures. The variables to be used in the calculation of PBT
will be prorated for any acquisition and/or divestiture to reflect the timing of such
event or events during the current Plan year at the time of such acquisition or
divestiture. 



          8.3
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. 


          8.4
Governing Law. This Plan shall be governed by and  construed in accordance  with the laws of the
State of Delaware.



          8.5
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



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invalidity or unenforceability of any provision hereunder shall not affect
the validity or enforceability of the balance hereof. This Plan represents the entire
undertaking by the Company concerning its subject matter and supersedes all prior
undertakings with respect thereto. No provision hereof may be waived or discharged except
by a written document approved by the Compensation Committee and signed by a duly
authorized representative of the Company. 



          The
parties indicate their acknowledgement of the terms and conditions of this Plan as of the
date first written above. 



				
	 	SYPRIS SOLUTIONS, INC.	 	PARTICIPANT
	
 	
 	
 	
 
	 	_____________________________________

Robert E. Gill
Chairman	 	_____________________________________
	
 	
 	
 	
 
	 	_____________________________________

Jeffrey T. Gill
President and CEO	 	 










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