Key Tronic Corp.s top executives received big pay raises in the companys 2003 fiscal year ended June 28, due mostly to bonuses, according to a proxy statement Key Tronic has filed with the U.S. Securities and Exchange Commission.


President and CEO Jack W. Oehlkes total compensation jumped 78 percent to about $548,000, the proxy statement shows. Executive Vice President and General Manager Craig Gates and Chief Financial Officer Ron Klawitter, meanwhile, both had compensation increases of roughly 60 percent, to about $367,000 and $366,000, respectively, according to the document.


Efren Perez, Key Tronics vice president of Southwest operations, and Michael Chard, its vice president of materials, also received sizable pay increases, boosting their total compensation to about $271,000 and $201,000, respectively.


In the companys previous fiscal year, it awarded no bonuses and had cut the base salaries of all five executives as cost-cutting measure. Key Tronic posted a net loss of $25.4 million for that year, but rebounded in its 2003 fiscal year, reporting net income of $13.4 million.


Much of its financial downturn in fiscal 2002 stemmed from a lawsuit brought against it by F&G Scrolling Mouse LLC over alleged misappropriation of trade secrets and the claimed breach of a confidentiality agreement.


Key Tronic vigorously disputed the allegations, but it says it experienced a sharp decline in new business due to customer uncertainty caused by the litigation, which ultimately resulted in a $7 million settlement. Since then it has signed agreements with a host of new customers and has had profitable operations for a number of consecutive quarters, prompting it to lift a two-year pay freeze and rescind wage cuts.


Oehlkes salary climbed to about $329,400 in fiscal 2003 from about $300,600 the previous year. Gates and Klawitters salaries rose to about $240,000 and $238,800, respectively, from $220,150, for both, in 2002.


Still, it was bonuses, rather than salaries, that accounted for the biggest part of the sizable jumps in compensation in 2003. Oehlke received a $211,250 bonus and Gates and Klawitter each received $119,000.


Likewise, Perez and Chard received bonuses of about $55,500 and $43,600, respectively.


Oehlke, Gates, and Klawitter received no stock-option grants in fiscal 2003, while Perez and Chard each were granted options to buy 25,000 shares.


Despite an improved profit picture, Key Tronics overall revenues were down in its latest fiscal year, at $130.9 million, compared with $175.6 million the previous year, which Oehlke attributed largely to the lingering effects of the F&G litigation.


He said in August that the company expects in the first and second quarters of fiscal 2004 to have revenues of $31 million to $34 million per quarterdown from $35.7 million in its fiscal 2003 fourth quarterand a break-even bottom line. In the second half of the year, though, he said, We anticipate growing revenue as a number of our new programs move from the design and the development stage into full production.


Keyboards, once the companys main product, now account for only about 10 percent of its sales. In recent years, it has moved aggressively into the contract design and manufacturing of a broad range of other products, from the Clorox ReadyMop and childrens electronic books.


The company currently employs about 2,300 people, all but a couple of hundred outside the U.S.