<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
/X/ Filed by the Registrant
/ / 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
Soliciting Material Pursuant to Rule 14a-11(e) or Rule 14a-12
SBS Technologies, Inc.
Payment of Filing Fee (Check the appropriate box):
/X/ No Filing Fee Required
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
-------------------------------------------------------------------------------
(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 which the filing fee is calculated and
state how it was determined):
-------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------------
/ / 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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<PAGE>
[LOGO]
2400 LOUISIANA BOULEVARD NE, #5-600
ALBUQUERQUE, NEW MEXICO 87110
TEL. (505) 875-0600
PROXY STATEMENT AND NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON NOVEMBER 9, 2000
Dear Shareholders:
You are cordially invited to attend the SBS Technologies, Inc. 2000 Annual
Meeting of Shareholders, which will be held at the Sheraton Uptown
Albuquerque on Thursday, November 9, 2000, 2600 Louisiana Boulevard NE,
Albuquerque, New Mexico 87110, at 8:30 a.m. Mountain Standard Time. The
purpose of the meeting is to act on the following:
(1) To elect seven Directors.
(2) To ratify the appointment of KPMG LLP as principal
independent auditors for fiscal year 2001.
(3) To ratify the 2000 Long-Term Equity Incentive Plan.
(4) Transact any other business as may properly come
before the meeting or any postponement(s) or
adjournment(s) of the meeting, including to adjourn
the meeting from time to time.
If you were a shareholder of record at the close of business on September 15,
2000, you may vote by proxy or in person at the Annual Meeting. Your vote is
important. Whether or not you plan to attend the meeting, please complete,
date, and sign the enclosed proxy card, then mail it in the enclosed business
reply envelope. For your convenience, you may also vote your shares via
telephone according to the instructions on the proxy card. If you vote your
proxy over the telephone, you do not need to mail in your completed proxy
card. If you attend the meeting and prefer to vote in person, you may do so
even if you have previously returned your proxy card. However, if you hold
your shares in Street Name and wish to vote your shares in person at the
meeting, you must indicate that on your proxy card as instructed and return
it before the meeting in the envelope provided.
Scott A. Alexander,
SECRETARY
October 2, 2000
<PAGE>
PROXY STATEMENT FOR THE SBS TECHNOLOGIES, INC.
2000 ANNUAL MEETING OF SHAREHOLDERS
INFORMATION ABOUT THE ANNUAL MEETING
WHY DID YOU SEND ME THIS PROXY STATEMENT?
We sent you this proxy statement and the enclosed proxy card because the
Board of Directors of SBS Technologies, Inc. ("SBS," or "We") is asking you
to vote for three items or, if you prefer, asking your permission to allow us
to vote your shares at the 2000 Annual Meeting of Shareholders. The Annual
Meeting will be held at the Sheraton Uptown Albuquerque on November 9, 2000,
2600 Louisiana Boulevard NE, Albuquerque, New Mexico 87110, at 8:30 a.m.
Mountain Standard Time. This proxy statement includes information about the
issues to be voted upon at the meeting, and on the transaction of such other
business as may properly come before the meeting or any postponement(s) or
adjournment(s) of the meeting, including to adjourn the meeting from time to
time.
On August 18, 2000, the SBS Board of Directors declared a two-for-one stock
split for shareholders of record on September 5, 2000, payable on September
20, 2000. All references to SBS Common Stock, stock options and stock pricing
have been restated to reflect this stock split.
On October 2, 2000, we began mailing these proxy materials to all
shareholders of record at the close of business on September 15, 2000. On
September 1, 2000, there were 13,554,998 shares of SBS Common Stock
outstanding and entitled to vote.
In accordance with New Mexico law, a list of shareholders entitled to vote at
the Annual Meeting will be available at the Sheraton Uptown Albuquerque on
November 9, 2000, 2600 Louisiana Boulevard NE, Albuquerque, New Mexico 87110,
and for 10 days before the meeting, between the hours of 8:30 a.m. and 5:30
p.m., at the corporate headquarters of SBS, 2400 Louisiana Boulevard NE, AFC
Building 5-600, Albuquerque, New Mexico 87110.
HOW MANY VOTES DO I HAVE?
If you were a shareholder at the close of business on September 15, 2000, you
will be entitled to vote. Each share of SBS Common Stock that you own
entitles you to one vote.
HOW CAN I VOTE MY SHARES?
You can vote on matters presented at the Annual Meeting in two ways:
a) By Proxy - You can vote by signing, dating and returning the enclosed proxy
card. In most cases, you may also vote your shares by telephone according
to the instructions on your proxy card. If you do this either by phone or
by returning the proxy card, the persons named on the card (your "proxies")
will vote your shares in the manner you indicate. You may specify on your
proxy card whether your shares should be voted for all, some, or none of
the nominees for Director and whether your shares should be voted for or
against the other proposals. If you sign the enclosed card but do not
indicate specific choices, you have granted permission to have your shares
voted as follows:
- "FOR" the election of all seven nominees for Director,
- "FOR" ratification of the appointment of the principal independent
auditors for fiscal year 2001, and
- "FOR" ratification of the 2000 Long-Term Equity Incentive Plan.
If a nominee becomes unable to serve as Director, which we do not
anticipate, your proxies intend to vote for the election of a substitute
nominee recommended by the Board of Directors.
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If any other matter is presented, your proxies will vote in accordance with
the best judgment of management. At the time this proxy went to press, we
knew of no matters that needed to be acted on at the Annual Meeting other
than those discussed in this proxy statement.
If you wish to give a proxy to someone other than the persons named on the
enclosed proxy card, you may strike out the names appearing on the card and
write in the name of any other person, sign the proxy, and deliver it to
the person whose name has been substituted.
b) In Person - If you are a shareholder of record, you may cast your vote in
person at the Annual Meeting. If you hold your shares in Street Name,
please see section below entitled "If I Hold Shares In Street Name, How Can
I Vote My Shares?" for information on how to vote your shares in person at
the Annual Meeting.
IF I HOLD SHARES IN STREET NAME, HOW CAN I VOTE MY SHARES?
You can submit voting instructions to your broker or nominee. Please refer to
the voting instruction card included in the materials provided by your broker or
nominee.
MAY I REVOKE MY PROXY?
If you give a proxy, you may revoke it at any time before it is exercised. You
may revoke your proxy in any one of three ways:
- send another proxy with a later date,
- notify SBS' Secretary in writing before the date of the annual meeting that
you have revoked your proxy, or
- vote in person at the annual meeting.
HOW CAN I PRESENT AN ISSUE TO BE ADDRESSED AT NEXT YEAR'S ANNUAL MEETING?
Shareholders must submit proposals, intended to be considered at the next annual
meeting, in writing to the Secretary of SBS, no later than June 1, 2001, for
inclusion in SBS' Proxy Statement and Form of Proxy relating to the meeting.
Also, shareholders who wish to propose proper business from the floor, for
consideration at the 2001 meeting of shareholders, and who have not properly
submitted that proposal for possible inclusion in SBS' 2001 proxy materials,
must notify SBS' Secretary in writing no later than August 15, 2001.
WHAT ARE THE COSTS OF SOLICITING THESE PROXIES?
SBS is paying all expenses to prepare, print, and mail this proxy material.
We will also pay the cost of soliciting the proxies, if necessary. We will
reimburse banks, brokerage firms, and other custodians, nominees, and
fiduciaries for reasonable expenses incurred in forwarding proxy materials to
beneficial owners and obtaining their instructions. We do not expect the
expenses to exceed $5,000.
HOW ARE THE PROXY STATEMENTS AND BALLOT FORMS DISTRIBUTED TO SHAREHOLDERS?
We have engaged our transfer agent, Wells Fargo Bank, N.A., to assist in the
distribution and tabulation of proxies. A few employees of SBS may also
participate, without additional compensation, in the distribution and
solicitation of proxies by telephone, facsimile, e-mail, and personally.
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WHAT VOTE IS REQUIRED TO APPROVE EACH PROPOSAL?
PROXY ITEM NO. 1
Election of Seven Directors: Each Director who receives the majority of
votes represented in person or by proxy at
the Annual Meeting will be elected. If you
vote to withhold authority to vote for all
listed nominees or if you vote to withhold
authority for a particular nominee, your
vote will count as a vote "AGAINST" the
nominee(s). Otherwise, your vote will count
"FOR" the nominee(s).
PROXY ITEM NO. 2
Ratification of Appointment of
Independent Auditors: A "FOR" vote by a majority of the
shares represented in person or by proxy at
the Annual Meeting is required to ratify the
appointment of KPMG LLP as the principal
independent auditors for fiscal year 2001.
If you "ABSTAIN" from voting, your
abstention has the same effect as if you
voted "AGAINST" the proposal.
PROXY ITEM NO. 3
Ratification of the 2000
Long-Term Equity Incentive
Plan: Ratification of the 2000 Long-Term Equity
Incentive Plan requires the affirmative vote
of a majority of outstanding shares of
Common Stock. A "FOR" vote by a majority of
the outstanding shares, whether or not
represented in person or by proxy at the
Annual Meeting, is required to ratify the
plan. If you "ABSTAIN" from voting, your
abstention has the same effect as if you
voted "AGAINST" the proposal.
PLEASE NOTE THE FOLLOWING:
Shares not voted by brokers and other entities holding shares on behalf of
beneficial owners will not be counted in calculating voting results on those
matters for which the broker or other entity has not voted.
OWNERSHIP OF SBS COMMON STOCK
HOW MUCH STOCK DO SHAREHOLDERS WHO HAVE MORE THAN 5% OF COMMON STOCK OWN?
The following table sets forth, as of June 30, 2000, the beneficial ownership of
Common Stock by each person who is known by SBS to own beneficially more than 5%
of the outstanding shares of Common Stock:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF CLASS
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) BENEFICIALLY OWNED (2)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Fidelity Management and Research (3) 1,602,000 12.04 %
Brinson Partners, Inc. (4) 871,400 6.55 %
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</TABLE>
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(1) The ownership information disclosed above is based on
Schedule 13F reports dated June 30, 2000 filed with the
Securities and Exchange Commission.
(2) To SBS' knowledge, except where otherwise noted, each person
listed has sole voting power of the shares.
(3) The address for the shareholder is in care of Fidelity
Management and Research, One Federal Street, Boston,
Massachusetts 02110.
(4) The address for the shareholder is in care of Brinson
Partners, Inc., 209 South La Salle Street, Chicago, Illinois
60604-1295.
HOW MUCH STOCK DO THE DIRECTORS AND NAMED EXECUTIVE OFFICERS OWN?
The following table sets forth, as of August 16, 2000, the beneficial ownership
of Common Stock by each Director and nominee for Director of SBS, each Named
Executive Officer, and by all Directors and Officers as a group (see footnotes
for explanations):
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
NAME OF AMOUNT AND NATURE OF PERCENT OF CLASS
BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) BENEFICIALLY OWNED (7)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Scott A. Alexander (nominee) (8)* 390,024 (3,5) 2.78 %
Christopher J. Amenson (nominee) (8)* 460,784 (3,4) 3.29 %
Warren W. Andrews (nominee)* 45,854 (6) (2)
William J. Becker* 86,580 (6) (2)
Lawrence A. Bennigson (nominee)* 63,854 (6) (2)
James E. Dixon, Jr. (8)* 97,759 (3,6) (2)
Peter D. Fenner (nominee) -- --
Louis C. Golm (nominee)* -- --
Alan F. White (nominee)* 13,300 (6) (2)
--------------------------------------------------------------------------------------------------------------
All the Directors and
Officers as a group 1,158,155 8.27 %
--------------------------------------------------------------------------------------------------------------
</TABLE>
* Director as of August 16, 2000.
On August 16, 2000, there were 13,389,448 shares of SBS Common Stock
outstanding.
The address for each of these shareholders is in care of SBS at 2400 Louisiana
Boulevard NE, AFC Building 5-600, Albuquerque, NM 87110.
(1) A person is deemed to be the owner of securities that can be
acquired by that person within 60 days of the date of the
table upon exercise of options or warrants. Each beneficial
owner's percentage ownership is determined by assuming that
options or warrants that are held by that person and that are
exercisable within 60 days of the date of this table have been
exercised.
(2) Owns less than one percent of total outstanding stock.
(3) Includes Common Stock owned by this person through the SBS
Technologies, Inc. 401(k) Profit Sharing Plan ("401(k)
Plan").
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(4) Includes: 9,600 shares of Common Stock owned by spouse; 4,600
shares of Common Stock held by Mr. Amenson as trustee for the
benefit of his children; includes options to purchase 379,122
shares of Common Stock comprised of options to purchase
179,122 shares of Common Stock that are currently exercisable
under SBS' stock option plans and options to purchase
200,000 shares of Common Stock that are currently exercisable
under option agreements between Mr. Amenson and certain other
shareholders of SBS.
(5) Includes 60,000 shares of Common Stock held by Mr. Alexander
as trustee for the benefit of his children.
(6) Includes, as to the person listed, options to purchase shares
of Common Stock currently exercisable under SBS' stock option
plans: Warren W. Andrews 40,000 options, William J. Becker
47,000 options, Lawrence A. Bennigson 50,000 options, James E.
Dixon, Jr. 97,000 options, and Alan F. White 10,000 options.
(7) To SBS' knowledge, except where otherwise noted, each person
has sole voting and investment power as to the shares.
(8) Is a Named Executive Officer.
SBS knows of no arrangements concerning anyone's ownership of stock, which may,
at a subsequent date, result in a change in control of SBS.
WOULD YOU PLEASE DESCRIBE THE STRUCTURE OF THE BOARD OF DIRECTORS?
At the Annual Meeting, seven Directors will be elected by the holders of Common
Stock to hold office until the Annual Meeting of Shareholders in 2001, and until
their successors are elected, or until their earlier death, resignation, or
removal.
PROXY ITEM NO. 1 - ELECTION OF DIRECTORS
The following persons have consented to be nominated and, if elected, to serve
as Directors of SBS.
NOMINEES
SCOTT A. ALEXANDER, 50, is a founder of SBS and has served as Director since the
commencement of its business activity in September 1987, and as Secretary since
November 1987. Mr. Alexander was appointed Vice President in August 1991. Mr.
Alexander served as SBS' Treasurer from November 1987 to late 1991. From
November 1985 to September 1987, Mr. Alexander was a Senior Principal Staff
Member of BDM Corporation. Before November 1985, Mr. Alexander was employed at
the Naval Air Test Center as the Chief Architect of the Manned Flight Simulator
Facility. Mr. Alexander holds a Bachelor of Science Degree in Physics from Old
Dominion University and a Master's Degree in Electrical Engineering from
Virginia Polytechnic Institute.
CHRISTOPHER J. AMENSON, 50, became President and Chief Operating Officer of SBS
in April 1992, a Director in August 1992, Chief Executive Officer in October
1996 and Chairman of the Board in May 1997. For five years before joining SBS,
Mr. Amenson was President of Industrial Analytics, Inc., a Boston-based firm
engaged in consulting in support of operations, mergers and acquisitions. Mr.
Amenson also serves on the Board of Directors of CapRock Communications
Corporation and PointCross, Inc. Mr. Amenson holds a Bachelor's Degree in
Government from the University of Notre Dame and a Master's Degree in Business
Management from the Sloan Fellows Program at the Massachusetts Institute of
Technology ("MIT").
WARREN W. ANDREWS, 57, became a Director in November 1996. Mr. Andrews is a
Market and Technology Analyst, publishes a market report on the Embedded
Computer Industry, and is publisher and editorial director of RTC MAGAZINE
and COTS JOURNAL. The former is the leading publication in the open-systems,
embedded computer industry, and the latter covers embedded computers in the
military. From 1987 to 1994, Mr. Andrews served as a senior editor for
COMPUTER DESIGN MAGAZINE while, at the same time, publishing his own
newsletter, EMBEDDED COMPUTER TRENDS. From 1985 to 1987, he served as
managing editor of ELECTRONIC DESIGN MAGAZINE. Before 1985, Mr. Andrews was
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semiconductor editor for ELECTRONIC ENGINEERING TIMES and owned and operated
his own business providing electronic design services and developing,
manufacturing and selling microprocessor-based switching systems for a
variety of audio and video applications in the retail and host industries. In
addition, he holds one U.S. patent and has designed other products for the
cable TV, burglar and fire alarm, and educational communications markets. Mr.
Andrews holds a Bachelor of Science Degree from Fairleigh Dickinson
University.
LAWRENCE A. BENNIGSON, Ph.D., 62, became a Director in November 1995. Dr.
Bennigson has provided consulting services on corporate, business and
manufacturing strategy and related organizational issues to major corporations
and to governments in the U.S. and Europe since 1965. In 1998, he was appointed
a Senior Fellow of the Harvard Business School's Executive Development Center.
Dr. Bennigson serves on several advisory boards including Energy East Corp and
Toffler Associates, the strategic advisory firm founded by Alvin and Heidi
Toffler. As Senior Vice President and a Managing Partner of the former MAC
Group, Inc., Dr. Bennigson helped to lead the strategic development of the firm,
resulting in its 1991 acquisition and merger to become Gemini Consulting. Dr.
Bennigson taught executives and graduate students as a faculty member of the
School of Engineering, Stanford University, the Harvard University Graduate
School of Business, and as a visiting faculty member at the London Business
School and the Graduate School of Business, Lund University, Sweden. Before his
academic and consulting career, Dr. Bennigson served for six years as a U.S.
Naval Officer. Dr. Bennigson holds a Bachelor's Degree in General Engineering
from UCLA, as well as Master's and Doctorate Degrees in Industrial Engineering
(with specialization in Human Factors Engineering and Industrial Organization)
from Stanford University.
PETER D. FENNER, 64, is currently President and Chief Executive Officer of
Com21, Inc. (Nasdaq: CMTO), a leading global supplier of system solutions for
the broadband access market. Mr. Fenner joined Com21 in February 1996. Before
joining Com21, Mr. Fenner was with AT&T for over 30 years where he held numerous
sales, marketing, product planning, and senior management positions. Most
recently, from 1989 to 1992, Mr. Fenner was President and Corporate Officer of
AT&T Transmission Systems, a $3 billion business unit with 10,000 employees. In
this position, he was instrumental in the quality efforts that resulted in
winning the Malcolm Baldridge award. Before that, Mr. Fenner was Vice President
of Product Planning for AT&T's $12 billion Network Systems Division with
operations that included Transmission Systems, Switching, Cellular, Cable &
Wire, and Operations Support (Software). Mr. Fenner holds a Bachelor of Science
Degree in Industrial Engineering from Lehigh University and a Master's Degree in
Business Management from the Sloan Fellows Program at MIT.
LOUIS C. GOLM, 59, became a Director in 1999. Mr. Golm was formerly President of
AirTouch International, a leading wireless communication provider, which has
become part of the Vodaphone Group. He served in this position with AirTouch
from 1997 to 1999. From 1994 through 1997, Mr. Golm was President and Chief
Executive Officer of AT&T-Japan, where he led all AT&T businesses operating in
Japan. Before that, Mr. Golm served as Vice President, Business Network Sales
with AT&T Business Communications Services and was responsible for the
development of the sales organization and sales channels for AT&T
domestic/global network services. From 1964 through 1986, Mr. Golm held various
assignments with the AT&T long distance network organization in the areas of
marketing strategy, business planning, new market and product development, sales
management, operations management, personnel and engineering. Mr. Golm was
appointed to the Board of Directors of Clariti Telecommunications International
as Vice Chairman in April 1999, and joined the Board of Directors of U.S.
Wireless in March 2000. Mr. Golm holds a Bachelor of Science as well as a
Master's Degree in Business Administration from the University of Denver, and a
Master's Degree in Business Management from the Sloan Fellows Program at MIT.
ALAN F. WHITE, 62, became a Director in November 1997. Mr. White is Senior
Associate Dean at the MIT Sloan School of Management and a member of the MIT
Faculty (Ex Officio). Mr. White began his career at MIT in 1973, as an Alfred P.
Sloan Fellow, and later served as Director of that Program. From 1956 to 1965
Mr. White worked in the private sector, where he served as a printer, and later
worked in financial printing sales and production. He gained international
government experience as a Regional Director for the U.S. Peace Corps in the
Philippines from 1963 to 1967. Mr. White was the Director of the University of
Hawaii Center for Cross Cultural Training and Research from 1967 to 1970, and
served as Executive Assistant for the President of the University of Hawaii from
1971 to 1973. Mr. White has traveled extensively and has been responsible for
MIT programs in Asia, Europe and Latin America. His current responsibilities
include a major assignment in China, where MIT is working with three
universities to develop international MBA programs. Mr. White served as Director
of Executive Education at MIT from 1973 to 1988. His activities in Asia
encompass Korea, Japan, Thailand, Malaysia, Singapore, Indonesia and China. Mr.
White serves on the Boards of CIT Group, StartupAvenue.com (France), Management
Sciences Health, and the Advisory Board of the
6
<PAGE>
Japan Management Institute. Mr. White recently joined the Board of
JonesKnowledge.Com, a subsidiary of Jones International, Ltd., a private
company. JonesKnowledge.Com develops Internet education tools and customer
support services for high-quality online education at the university level.
Mr. White has served as a consultant in the area of management development
and business development to many organizations, including British Petroleum
PLC, Citicorp, Inc., Gemini Consulting, and the Young Presidents'
Organization. He has published several articles in leading journals in the
field of management development. Mr. White holds a Bachelor's Degree in
Political Science from the University of Miami (Ohio) and a Master's Degree
in Business Management from the Sloan Fellows Program at MIT.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ELECTION
OF EACH NAMED NOMINEE.
NAMED EXECUTIVE OFFICER WHO IS NOT A DIRECTOR
JAMES E. DIXON, JR., 55, was appointed Vice President of Finance and
Administration, Treasurer and Chief Financial Officer of SBS in September 1995
and served as a Director from November 1998 through the completion of his
current term ending November 2000. For eight years before joining SBS, Mr. Dixon
held the position of Director of Finance, Howden Group America, Inc., a wholly
owned subsidiary of Howden Group PLC. Howden Group America's subsidiaries, whose
combined annual revenue then exceeded $200 million, specialize in the design and
manufacture of air and gas handling equipment, defense-related products and food
processing equipment. Prior to that, Mr. Dixon held various controller positions
at Westinghouse Electric Corporation from 1971 to 1985. Mr. Dixon holds a
Bachelor's Degree in Business Education from Indiana University of Pennsylvania.
HOW OFTEN DID THE BOARD OF DIRECTORS MEET?
The Board of Directors held thirteen regular and special meetings during fiscal
year 2000. In addition to meetings of the full Board, Directors attended
meetings of Board Committees. Each Director attended more than 75% of the
aggregate Board Committee meetings for the Board year in which he served.
DURING THE LAST FISCAL YEAR, HAS ANY DIRECTOR, OFFICER, NOMINEE FOR DIRECTOR, OR
SHAREHOLDER IDENTIFIED IN THE OWNERSHIP OF SBS COMMON STOCK SECTION, OR ANY OF
THEIR IMMEDIATE FAMILY MEMBERS, BEEN INVOLVED IN ANY TRANSACTION, IN WHICH SBS
OR ANY OF ITS SUBSIDIARIES WAS INVOLVED, OR MAY BE INVOLVED IN THE FUTURE, WHICH
EXCEEDED $60,000?
SBS knows of no such transactions.
DOES SBS HAVE COMMITTEES OF THE BOARD OF DIRECTORS?
The Board of Directors has three standing committees Audit; Management
Development and Compensation; and Nominating.
AUDIT COMMITTEE
Members: Directors William J. Becker, Chairman; Lawrence A. Bennigson and Warren
W. Andrews
The Audit Committee, which held six meetings in fiscal year 2000, is
responsible for recommending to the Board of Directors the appointment of the
independent auditors of SBS and for providing a forum, independent of
management, for discussion of any issues or concerns the independent auditors
choose to raise.
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
Members: Directors Lawrence A. Bennigson, Chairman; William J. Becker, Alan F.
White and Louis C. Golm
The Management Development and Compensation Committee, which held five
meetings in fiscal year 2000, is responsible for making recommendations to
the Board of Directors concerning policies and procedures which will attract,
develop and retain key managers and executives critical to the long-term
success of SBS, and to align executive compensation with shareholder
interests. The Committee provides guidance and overview of all management
development, executive salary, incentive and benefit programs. In addition,
the Committee is responsible for evaluating the performance of the Chief
Executive Officer and the President and Chief Operating Officer, recommending
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Chairman, Chief Executive Officer, President and Chief Operating Officer
compensation to the full Board, and meeting annually with the Chief Executive
Officer to review management development programs and activities, and
succession planning. While the administration of management development and
compensation is the responsibility of SBS management, the review and
recommendation of the Committee is required for: overall executive
(individuals who lead businesses or functional responsibilities)
compensation, philosophy and policy; incentive programs; executive benefit
and perquisite programs; stock and stock option awards and their terms to be
awarded to officers subject to Section 16(b) of the Securities Exchange Act
of 1934; Board member compensation and any other compensation issues as may
be directed to it.
NOMINATING COMMITTEE
Members: Directors Alan F. White, Chairman; Christopher J. Amenson, Warren W.
Andrews and Louis C. Golm
The Nominating Committee, which held two meetings in fiscal year 2000, is
responsible for nominating a proposed slate of Directors for the ensuing
year. The Board of Directors approves the proposed slate of nominees for
recommendation to the shareholders. Nominated Directors stand for election by
the shareholders at SBS' annual meeting of shareholders. SBS has no provision
for recommendation by shareholders of nominees for Director.
HOW MUCH ARE THE DIRECTORS PAID?
Employees who are also Directors receive no additional compensation for serving
as Directors. Effective November 11, 1997, Directors who are not employees are
paid an annual retainer of $10,000 for service on the Board and $4,000 for each
committee of the Board on which a Director serves. Non-employee Directors are
also paid a meeting fee of $1,000 per Board meeting day and travel day. In
addition, non-employee Directors are paid $500 for each meeting of the Board
held telephonically. Expenses incurred in connection with attending Board and
committee meetings are reimbursed. Non-employee Directors are able to elect,
under SBS' 1998 Long-Term Equity Incentive Plan, to receive these payments in
equivalent shares of SBS' Common Stock subject to, and in accordance with,
Section 16(b) of the Securities Exchange Act of 1934. Effective November 9,
1998, each non-employee Director receives an initial option for 10,000 shares of
SBS' Common Stock upon election or appointment to the Board, and each year
thereafter receives an additional option for 10,000 shares. 5,000 options are
granted under the terms of the 1993 Director and Officer Stock Option Plan, as
amended, and 5,000 options are granted under the terms of the 1998 Long-Term
Equity Incentive Plan. The exercise price of all such options is the market
price of SBS' Common Stock on the respective dates of grant, determined as
provided in the Plans.
DID THE DIRECTORS AND OFFICERS FILE ALL OF THEIR REQUIRED SECTION 16(A)
BENEFICIAL OWNERSHIP REPORTS WITH THE SEC ON TIME?
Under the Securities Exchange Act of 1934, Directors and Officers of public
companies are required to report to the Securities and Exchange Commission all
personal transactions involving SBS' Common Stock. Based upon a review of Forms
3, 4 and 5 filed by Directors and Officers of SBS during fiscal year 2000, three
forms were filed late: one Form 4 for James E. Dixon, Jr., one Form 3 for Louis
C. Golm, and one Form 4 for Alan F. White. All other reports required by Section
16(a) of the Securities Exchange Act of 1934 were timely filed.
8
<PAGE>
COMPENSATION OF NAMED EXECUTIVE OFFICERS
HOW MUCH DO THE NAMED EXECUTIVE OFFICERS GET PAID?
The following table provides an overview of compensation that SBS paid to the
Named Executive Officers for the fiscal years ended June 30, 2000, 1999 and
1998.
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
SUMMARY COMPENSATION TABLE
--------------------------------------------------------------------------------------------------------
Long-Term
Compensation
Annual Compensation Securities All Other
Name and Principal Position Salary Bonus Underlying Options Compensation
--------------------------- ------ ----- ------------------ ------------
($) ($) (# Shares) ($)
<S> <C> <C> <C> <C> <C>
Christopher J. Amenson,
Chairman of the Board,
Chief Executive Officer and
President
2000 303,846 - - 6,400 (3)
1999 248,496 - - 6,400 (3)
1998 200,000 - 50,000 9,616 (3)
Scott A. Alexander,
Executive Vice President
and Secretary
2000 175,000 - - 6,400 (3)
1999 175,000 - - 6,400 (3)
1998 175,000 - - 9,354 (3)
James E. Dixon, Jr.,
Vice President, Finance and
Administration; Chief Financial
Officer and Treasurer
2000 198,077 15,000 (1) 40,000 6,400 (3)
1999 173,859 15,000 (2) - 6,400 (3)
1998 148,000 - 54,000 8,001 (3)
--------------------------------------------------------------------------------------------------------
</TABLE>
(1) Accrued bonus for fiscal year 2000.
(2) Accrued bonus for fiscal year 1999.
(3) Represents payments made by SBS pursuant to a contribution matching program
under its 401(k) plan. Amounts paid under SBS' other employee benefits
plans are not included because the benefits provided to officers under
these plans are identical to those provided to all other employees.
9
<PAGE>
The following table provides information about shares acquired upon exercise of
stock options and unexercised stock options held by the Named Executive Officers
in the Summary Compensation Table at June 30, 2000:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR END OPTION VALUES
--------------------------------------------------------------------------------------------------------------
Value of
Shares Number of Shares Unexercised In-
Acquired Value Underlying Unexercised the-Money Options
Name on Exercise Realized Options at June 30, 2000 at June 30, 2000
---- ----------- -------- ------------------------ ----------------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
C. Amenson 66,666 $ 927,734 379,122 100,000 $ 5,299,432 $ 297,000
S. Alexander 67,272 1,093,170 - 100,000 - 297,000
J. Dixon 57,000 722,720 77,000 80,000 (1) 768,780 347,600
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) 20,000 of these options became exercisable July 21, 2000.
The following table provides information about individual grants of stock
options made to the Named Executive Officers in the Summary Compensation
Table during the year ended June 30, 2000:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
OPTION GRANTS IN FISCAL YEAR 2000
--------------------------------------------------------------------------------------------------------------
Number of Percent of Total
Securities Options Granted Exercise
Underlying to Employees Price Expiration
Name Options Granted in Fiscal Year Per Share Date Grant Date Present Value
---- --------------- -------------- --------- ---- ------------------------
<S> <C> <C> <C> <C> <C>
J. Dixon 40,000 (1) 2.34% $17.00 01/04/10 $383,738 (2)
--------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Options were granted under the 1998 Long-Term Equity Incentive Plan;
beginning January 4, 2002, 20,000 per year become exercisable upon
continuous employment through January 4, 2003.
(2) Estimated using the Black-Scholes Model with the following weighted average
assumptions; expected life of 3.92 years, risk free rate of return of
5.875%, expected volatility of 70.09% and a dividend yield of 0%.
DOES SBS HAVE EMPLOYMENT AGREEMENTS FOR THE NAMED EXECUTIVE OFFICERS?
All of our Named Executive Officers have employment agreements with SBS.
Christopher J. Amenson serves as Chairman of the Board and Chief Executive
Officer under an employment agreement executed in April 1992. The agreement,
which initially had a five-year term, was amended in September 1997 to a
one-year agreement, which automatically renews each year unless terminated. The
agreement currently provides for a base annual salary of
10
<PAGE>
$350,000, assigns to SBS certain intellectual property developed by him on
SBS time, and is terminable by either party, with or without cause, upon six
months notice by Mr. Amenson and three months notice by SBS. In addition, the
agreement provides for a six-month salary continuance severance benefit, and
contains non-competition clauses, which apply during the employment period
and for two years thereafter, and restrictions against disclosure of
proprietary information. As part of his compensation and as an inducement to
Mr. Amenson to join SBS, he was awarded options under the 1992 Employee
Incentive Stock Option Plan and was granted options for 66,666 shares of
Common Stock from each of Andrew C. Cruce (a founder and former Chairman of
the Board and Chief Executive Officer), Scott A. Alexander, and Byron M.
Allen (a founder and former officer of SBS), exercisable at $3.00 per share,
and 66,668 shares from Seven Bar Enterprises, Inc. (a former affiliate), also
exercisable at $3.00 per share. The options from individuals each (i) terminate
not later than December 31, 2000 or one year from the date Mr. Amenson ceases
to be employed by SBS, (ii) are not transferable except on death, and (iii) may
be exercised only by Mr. Amenson or his personal heirs or devisees.
Scott A. Alexander serves as Vice President and Secretary pursuant to an
employment agreement with SBS that automatically renews each year unless
terminated. The employment agreement currently provides for a base annual salary
of $175,000, assigns to SBS certain intellectual property developed by him on
SBS time, and is terminable by either party, with or without cause. Besides
salary, the agreement provides for a six-month salary continuance severance
benefit. The agreement contains non-competition clauses, which apply during the
employment period and for two years thereafter. Restrictions against disclosure
of proprietary information are included.
James E. Dixon, Jr. serves as Vice President of Finance and Administration,
Treasurer and Chief Financial Officer pursuant to an employment agreement dated
August 8, 1995, which remains in effect until discharge or resignation, with or
without cause, upon two weeks written notice by either party. The employment
agreement contains restrictions against disclosure or independent use of SBS
confidential information during and after the employment period. The employment
agreement was amended in July 2000 to provide for a base annual salary of
$224,000.
REPORT OF THE BOARD MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE ON
EXECUTIVE COMPENSATION
The Board's Management Development and Compensation Committee is comprised
entirely of outside Directors who are not eligible to participate in the
compensation programs they oversee. The responsibility of the Management
Development and Compensation Committee is to:
- make recommendations to the Board of Directors concerning policy and
procedures that will attract, develop and retain key managers and
executives critical to the long-term success of SBS, and to align
executive compensation with shareholder interests,
- provide guidance and overview of all management development, executive
salary, incentive and benefit programs,
- evaluate the performance of the Chief Executive Officer and the
President and Chief Operating Officer, and to recommend Chairman, Chief
Executive Officer, President and Chief Operating Officer compensation
to the full Board, and
- meet annually with the Chief Executive Officer to review management
development programs and activities, and succession planning.
While the administration of management development and compensation is the
responsibility of SBS management, the review and recommendation of the
Management Development and Compensation Committee is required for:
- overall executive (individuals which lead businesses or functional
responsibilities) compensation, philosophy and policy,
- incentive programs,
11
<PAGE>
- executive benefit and perquisite programs,
- stock and stock option awards and their terms to be awarded to officers
subject to Section 16(b) of the Securities Exchange Act of 1934, and
- Board member compensation, and any other compensation issues as may be
directed to it.
CHIEF EXECUTIVE OFFICER COMPENSATION. The base salary of Christopher J. Amenson,
the Chairman and Chief Executive Officer, was increased from $250,000 to
$350,000 on January 1, 2000, as recommended by the Management Development and
Compensation Committee. The recommendation was based on independent compensation
surveys of similar companies of similar size in the electronics industry and
similar to companies compared on the accompanying performance graph. Mr. Amenson
participated in SBS' discretionary 2000 Management Incentive Plan ("MIP"),
although Mr. Amenson did not receive any awards under the MIP. Mr. Amenson's
threshold to participate in the MIP began once SBS' earnings per share, assuming
dilution, for fiscal 2000 exceeded $1.12, which SBS did not meet.
COMPENSATION FOR OTHER EXECUTIVE OFFICERS. Base salaries for Non-Executive
Officers ("NEO") and other executive officers have been set at competitive
levels by the Chief Executive Officer ("CEO") in consultation with the
Management Development and Compensation Committee, giving due regard to
individual performance and time in position. Incentive compensation for NEO and
other executive officers is set by the CEO, in consultation with the Committee,
based on factors similar to those used for establishing incentive compensation
for the CEO. Incentive compensation for corporate officers with line
responsibility for division operations is generally tied to performance targets
for the businesses under their authority and contribution to overall earnings
per share. These performance targets are set as part of the annual budgeting
process for SBS and its subsidiaries. Bonus compensation for 2000 has been
awarded in accordance with these factors.
MANAGEMENT DEVELOPMENT AND COMPENSATION COMMITTEE
L. A. Bennigson
William J. Becker
Louis C. Golm
Alan F. White
12
<PAGE>
HOW DID SBS COMMON STOCK PERFORM DURING THE FISCAL YEAR?
The graph below provides a comparison of SBS' cumulative total shareholder
return with performances of the NASDAQ Stock Market (U.S.) Index and the NASDAQ
Computer Manufacturer Index as a Peer Group. The following graph assumes the
investment of $100 on June 30, 1995 in SBS Common Stock. The NASDAQ Computer
Manufacturer Index's and the NASDAQ Stock Market (U.S.) Index's returns assume
reinvestment of stock and cash dividends.
[COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*, AND GRAPH]
<TABLE>
<CAPTION>
Research Data Group Peer Group Total Return Worksheet
SBS TECHNOLOGIES INC
Cumulative Total Return
-------------------------------------------------------------------
6/95 6/96 6/97 6/98 6/99 6/00
<S> <C> <C> <C> <C> <C> <C>
SBS TECHNOLOGIES, INC. 100.00 235.71 440.48 573.81 385.71 703.58
NASDAQ STOCK MARKET (U.S.) 100.00 128.39 156.15 205.58 296.02 437.30
NASDAQ COMPUTER MANUFACTURER 100.00 142.21 178.59 289.77 540.11 993.56
</TABLE>
13
<PAGE>
PROXY ITEM NO. 2 - RATIFICATION OF SELECTION OF AUDITORS
The Directors have selected KPMG LLP, independent certified public accountants,
as SBS' independent auditors for the 2001 fiscal year. KPMG LLP has no direct
interest in SBS and has had no such interest during the past fiscal year.
Representatives of KPMG LLP will be present at the Annual Meeting of
Shareholders and will be given the opportunity to make a statement if they so
wish, and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF THEIR
SELECTION OF KPMG LLP AS INDEPENDENT AUDITORS OF SBS.
PROXY ITEM NO. 3 - RATIFICATION OF 2000 LONG-TERM EQUITY INCENTIVE PLAN
BACKGROUND
In March 2000, the Management Development and Compensation Committee engaged the
services of a consulting firm, with expertise in employee compensation, to
recommend to the Committee a stock-based plan that could be used to attract and
retain directors, executive officers and other key employees essential to the
success of SBS, as well as to motivate any and all employees by means of
appropriate incentives. The proposed Plan is an outgrowth of that firm's
recommendation.
This Plan, if ratified by shareholders, will allow SBS to grant nonqualified
options to purchase SBS' Stock and a limited number of grants of Restricted
Stock. In addition, the Plan allows Directors to receive restricted shares in
lieu of cash compensation.
THE PLAN
On August 31, 2000, the Management Development and Compensation Committee and
the Board of Directors formally adopted, subject to the ratification of
shareholders of SBS, the SBS Technologies, Inc. 2000 Long-Term Equity Incentive
Plan (the "Plan"). A copy of the Plan is attached as Exhibit A to this Proxy
Statement. In the following paragraphs, the Plan and its principal provisions
are summarized. This summary does not purport to be complete and is qualified in
its entirety by reference to the Plan. Capitalized terms used but not defined in
this section are used as defined in the Plan.
PURPOSES OF THE PLAN
The purposes of the Plan are to attract able persons to enter the employ of SBS,
to encourage employees to remain in the employ of SBS and to provide motivation
to employees to achieve long-range goals by providing incentives through the
ownership and performance of SBS' Stock, to provide competitive incentive
compensation opportunities, and to further identify Participants' interests with
those of SBS. A further purpose of the Plan is to provide a means through which
SBS may attract able persons to become Directors of SBS and to provide Directors
with additional incentive and reward opportunities designed to strengthen their
alignment with other shareholders.
ADMINISTRATION
The Plan provides for administration by a Committee selected by the Board of
Directors. The Committee will consist solely of two or more members of the Board
who are not employees of SBS or any Subsidiary. The powers granted to the
Committee are the authority to interpret the Plan, establish, amend and rescind
rules and regulations for its operation and the terms and conditions of any
award agreements made pursuant to the Plan, select eligible persons to receive
awards under the Plan, and determine the amount and other terms and conditions
of the awards. Except to the extent prohibited by applicable law or the
applicable rules of a stock exchange, the Committee may allocate all or a
portion of its responsibilities and powers to any one or more of its members and
may delegate all or any part of its responsibilities and powers to any person or
persons selected by it. Any such allocation or delegation may be revoked by the
Committee at any time.
14
<PAGE>
PARTICIPATION
In order to participate in the Plan, an individual must be an employee of SBS or
any Subsidiary of SBS, and any consultant, director, or other person providing
services to SBS or a Subsidiary.
TYPES OF AWARDS
The Plan provides for the grant of nonqualified stock options for SBS Common
Stock and SBS Restricted Stock. All Awards are subject to the terms, conditions,
restrictions and limitations of the Plan. The market value of SBS Common Stock
was $25.0625 per share on September 1, 2000.
The grant of a nonqualified stock option entitles the Participant to purchase
shares of Stock at an Exercise Price established by the Committee. The Committee
shall have sole and complete discretion in determining the Exercise Price, the
duration of the option, the number of shares to which an option pertains, any
conditions imposed upon the exercisability or transferability of the options,
the conditions under which the option may be terminated, and any other
provisions as may be warranted to comply with the law or rules of any securities
trading system or stock exchange. The Exercise Price of each option shall be the
Fair Market Value of a share of Stock on the date of grant unless otherwise
specified by the Committee at the time of grant. However, if the option is
awarded in exchange for previously earned cash compensation by the Participant,
or in connection with an acquisition, merger, combination, or similar event
involving SBS, in substitution or replacement for options granted to its
employees by the other entities, the Committee shall have the authority to
establish an Exercise Price that is less than 100% of the Fair Market Value of a
share of Stock on the date of grant. Options shall be exercised by the delivery
of a written notice from the Participant to SBS in the form prescribed by the
Committee, setting forth the number of shares with respect to which the option
is to be exercised, accompanied by full payment for the shares. The Exercise
Price shall be payable to SBS in full, in cash, or its equivalent, or by
delivery of shares of Stock not subject to any security interest, pledge, or
withholding, valued at Fair Market Value at the time of exercise, or by a
combination of the foregoing. In addition, at the request of the Participant,
and subject to applicable laws and regulations, SBS may (but shall not be
required to) cooperate in a cashless exercise of the option. In addition, any
nonqualified stock option granted under the Plan may provide, at the Committee's
discretion, that the payment of the Exercise Price may be made in whole or in
part in the form of shares of Common Stock subject to risk of forfeiture or
other restrictions. As soon as practicable, after receipt of written notice and
payment, SBS shall deliver to the Participant, Stock certificates in an
appropriate amount based upon the number of shares with respect to which the
option is exercised, issued in the Participant's name.
A Restricted Stock Award is a grant of shares of Stock subject to a risk of
forfeiture or other restrictions that will lapse upon the achievement of one or
more goals relating to completion of service by the Participant, or achievement
of performance or other objectives, as determined by the Committee.
SHARES RESERVED
The shares of Stock with respect to which Awards may be made under the Plan
shall be shares of SBS Common Stock currently authorized but unissued, including
shares purchased in the open market or in private transactions that are returned
to authorized but unissued status. The number of shares of Stock available for
Awards under the Plan during any fiscal year of SBS shall equal 10% of the
adjusted average of the outstanding Stock, as that number is determined by SBS
to calculate fully diluted earnings per share for the preceding fiscal year,
reduced by any shares of Stock under the Plan subject to unexercised options and
any shares of Stock under the Plan subject to restrictions. The maximum number
of Restricted Stock Awards to be granted to any one individual, or to all
individuals, in any one year shall be limited to 50,000 shares of Restricted
Stock and the maximum number of nonqualified stock options granted to any one
individual, in any one year, is 200,000.
If a Change in Control of SBS occurs, each outstanding Award shall automatically
accelerate so that each Award shall, immediately before the effective date of
the Change in Control, become fully exercisable for all of the shares of Stock
at the time subject to that Award and may be exercised for any or all of those
shares as fully-vested shares of Stock. However, an outstanding Award shall not
so accelerate if and to the extent that Award is, in connection with the Change
in Control, either to be assumed by the successor corporation or its parent or
replaced with a comparable Award for
15
<PAGE>
shares of the capital stock of the successor corporation or its parent,
unless the Participant's employment is terminated by the Participant for good
reason or by SBS or successor not for cause.
EFFECTIVE DATE
The Plan became effective on July 1, 2000, subject to ratification by the
shareholders of SBS at SBS' 2000 annual meeting of its shareholders.
AMENDMENT AND TERMINATION OF PLAN
The Board of Directors may, at any time and from time to time, amend, in any and
all respects (including without limitation the categories of persons who are
eligible to participate and the maximum award that may be granted, but not
including an amendment to increase the total number of Shares available under
the Plan), or terminate, the Plan. Except for actions such as stock splits,
recapitalizations and mergers, and other similar events, actions that affect the
rights of outstanding Awards cannot adversely affect the rights of the
Participant holding the Award without that Participant's permission.
FEDERAL INCOME TAX CONSEQUENCES
The following summary is based upon an analysis of the Internal Revenue Code as
currently in effect, existing laws, judicial decisions, administrative rulings,
regulations, and proposed regulations, all of which are subject to change.
Moreover, the following is only a summary of federal income tax consequences and
the federal income tax consequences to participants may be either more or less
favorable than those described below depending on their particular
circumstances.
NONQUALIFIED STOCK OPTIONS. No income will be recognized by the Participant for
federal income tax purposes upon the grant of a nonqualified stock option
granted at Fair Market Value. Upon exercise of a nonqualified stock option, the
Participant will recognize ordinary income in an amount equal to the excess of
the Fair Market Value of the shares on the date of exercise over the amount paid
for those shares. Income recognized upon the exercise of nonqualified stock
options will be considered compensation subject to withholding at the time the
income is recognized, and, therefore, SBS must make the necessary arrangements
with the Participant to ensure that the amount of the tax required to be
withheld is available for payment. Nonqualified stock options are designed to
provide SBS with a tax deduction equal to the amount of ordinary income
recognized by the Participant at the time of recognition by the Participant.
The basis of shares transferred to a Participant pursuant to exercise of a
nonqualified stock option is the price paid for those shares plus an amount
equal to any income recognized by the Participant as a result of the exercise of
the option. If a Participant thereafter sells shares acquired upon exercise of a
nonqualified stock option, any amount realized over the basis of the shares will
constitute capital gain to the Participant for federal income tax purposes.
If a Participant uses already owned shares of Common Stock to pay the exercise
price for shares under a nonqualified stock option, the number of shares
received pursuant to the nonqualified stock option which is equal to the number
of shares delivered in payment of the exercise price will be considered received
in a nontaxable exchange, and the Fair Market Value of the remaining shares
received by the Participant upon the exercise will be taxable to the Participant
as ordinary income. If the already owned shares of Common Stock are not
"statutory option stock" or the statutory option stock with respect to which the
applicable holding period referred to in Section 424(c)(3)(A) of the Code has
been satisfied, the shares received pursuant to the exercise of the nonqualified
stock option will not be statutory option stock and the Participant's basis in
the number of shares received in exchange for the stock delivered in payment of
the exercise price will be equal to the basis of the shares delivered in
payment. The basis of the remaining shares received upon the exercise will be
equal to the Fair Market Value of the shares. However, if the already owned
shares of Common Stock are statutory option stock with respect to which the
applicable holding period has not been satisfied, it is not currently clear
whether the exercise will be considered a disqualifying disposition of the
statutory option stock, whether the shares received upon exercise will be
statutory option stock, or how the Participant's basis will be allocated among
the shares received.
RESTRICTED STOCK. If the restrictions on an award of Restricted Stock are of a
nature that shares are both subject to a substantial risk of forfeiture and are
not freely transferable within the meaning of Section 83 of the Code, the
Participant
16
<PAGE>
will not recognize income for federal income tax purposes at the time of the
award unless the Participant affirmatively elects to include the Fair Market
Value of the shares of Restricted Stock on the date of the Award, less any
amount paid therefor, in gross income for the year of the award pursuant to
Section 83(b) of the Code. In the absence of such an election, the
Participant will be required to include in income for federal income tax
purposes, in the year in which occurs the date the shares either become
freely transferable or are no longer subject to a substantial risk of
forfeiture within the meaning of Section 83 of the Code, the Fair Market
Value of the shares of Restricted Stock on such date, less any amount paid
therefor. SBS will be entitled to a deduction at the time of income
recognition to the Participant in an amount equal to the amount the
Participant is required to include in income with respect to the shares. If a
Section 83(b) election is made within 30 days after the date the Restricted
Stock is received, the Participant will recognize ordinary income at the time
of the receipt of the Restricted Stock and SBS will be entitled to a
corresponding deduction equal to the Fair Market Value (determined without
regard to applicable restrictions) of the Shares at that time, less the
amount paid, if any, by the Participant for the Restricted Stock. If a
Section 83(b) election is made, no additional income will be recognized by
the Participant upon the lapse of restrictions on the Restricted Stock, but,
if the Restricted Stock is subsequently forfeited, the participant may not
deduct the income that was recognized pursuant to the Section 83(b) election
at the time of the receipt of the Restricted Stock. Dividends paid to a
Participant holding Restricted Stock before the expiration of the restriction
period will be additional compensation taxable as ordinary income to the
Participant, unless the Participant made an election under Section 83(b). SBS
generally will be entitled to a corresponding tax deduction equal to the
dividends includable in the Participant's income as compensation. If the
Participant has made a Section 83(b) election, the dividends will be dividend
income, rather than additional compensation, to the Participant.
If the restrictions on an Award of Restricted Stock are not of a nature that the
Shares are both subject to a substantial risk of forfeiture and not freely
transferable, within the meaning of Section 83 of the Code, the Participant will
recognize ordinary income for federal income tax purposes at the time of the
Award in an amount equal to the Fair Market Value of the Shares of Restricted
Stock on the date of the Award, less any amount paid therefor. SBS will be
entitled to a deduction at such time in an amount equal to the amount the
Participant is required to include in income with respect to the shares.
LIMITATIONS ON SBS' COMPENSATION DEDUCTION.
Section 162(m) of the Code limits the deduction which SBS may take for otherwise
deductible compensation payable to certain executive officers of SBS to the
extent that compensation paid to those officers for that year exceeds $1.0
million, unless the compensation is performance-based, is approved by SBS'
shareholders, and meets certain other criteria. Compensation attributable to a
nonqualified stock option is deemed to satisfy the requirements for
performance-based compensation if (i) the grant or award is made by the
Management Development and Compensation Committee; (ii) the plan under which the
nonqualified stock option is granted states the maximum number of shares with
respect to which nonqualified stock options may be granted during a specified
period to any employee; and (iii) under the terms of the nonqualified stock
option, the amount of compensation the employee could receive is based solely on
an increase in the value of the stock after the date of the grant or award. The
Plan has been designed to enable awards of nonqualified stock options granted by
the Management Development and Compensation Committee to qualify as
performance-based compensation for purposes of Section 162(m) of the Code.
In addition, Section 280G of the Code limits the deduction which SBS may take
for otherwise deductible compensation payable to certain individuals if that
compensation constitutes an "excess parachute payment." Generally, excess
parachute payments arise from certain payments made to disqualified individuals
which are in the nature of compensation and are contingent on certain changes in
ownership or control of SBS. Disqualified individuals for this purpose include
certain employees and independent contractors who are officers, shareholders, or
highly-compensated individuals. Accelerated vesting or payment of awards under
the Plan upon a change in ownership or control of SBS could result in excess
parachute payments. In addition to the deduction limitation applicable to SBS, a
disqualified individual receiving an excess parachute payment is subject to a 20
percent excise tax on the amount thereof.
OTHER INFORMATION.
Because the issuance of Awards and the amounts of Stock issuable in connection
with the Awards is entirely within the discretion of the Committee, no estimate
can be given of what eligible employees and Directors would have received during
the last fiscal year had the Plan been in effect, or will receive during the
current fiscal year. Also, no estimate can
17
<PAGE>
be given as to which persons are to receive 5% or more of the Awards.
Of the persons currently eligible, or who will become eligible if elected as a
Director, to participate in the Plan, five are non-employee Directors, three are
Executive Officers and employee Directors, and the balance will be determined at
the sole discretion of the Committee; therefore, the total is currently unknown.
Six of the seven nominees for the Board of Directors are current Directors. The
number of persons eligible to participate in the Plan and the number of
Participants may vary from year to year.
Please refer to the item entitled "Compensation of Named Executive Officers" for
information concerning plans under which SBS paid or distributed cash or
non-cash compensation during the most recent fiscal year.
Ratification of the SBS Technologies, Inc. 2000 Long-Term Equity Incentive Plan
requires the affirmative vote of a majority of outstanding shares of Common
Stock.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE RATIFICATION OF THE
2000 LONG-TERM EQUITY INCENTIVE PLAN.
ANNUAL REPORT
The Annual Report to Shareholders concerning the operations of SBS for fiscal
year ended June 30, 2000, including the financial statements for that year, has
been enclosed with this Proxy Statement.
OTHER MATTERS
The Board of Directors is not aware of any other matters that are to be
presented at the meeting. However, if any other matters should properly come
before the meeting, the Proxies will vote on those matters in accordance with
their judgment.
The above Notice and Proxy Statement are sent by order of the Board of
Directors.
/s/ Scott A. Alexander
Scott A. Alexander, Secretary
18
<PAGE>
EXHIBIT A
SBS TECHNOLOGIES, INC.
2000 LONG-TERM EQUITY INCENTIVE PLAN
SECTION 1
GENERAL
1.1 PURPOSE. The SBS Technologies, Inc. 2000 Long-Term Equity Incentive Plan
(the "Plan") has been established by SBS Technologies, Inc. ("SBS") to (i)
attract and retain directors, executive officers, and other key employees
essential to the success of SBS; (ii) motivate other employees, by means of
appropriate incentives, to achieve long-range goals; (iii) provide
incentive compensation opportunities that are competitive with those of
other similar companies; and (iv) further identify Participants' interests
with those of SBS' other shareholders through compensation that is based on
SBS' Common Stock; and thereby promote the long-term financial interest of
SBS and its Subsidiaries, including the growth in value of SBS' equity and
enhancement of long-term shareholder return. The Plan permits the grant of
Nonqualified Stock Options and a limited number of grants of Restricted
Stock, as the Committee may determine under its sole and complete
discretion at the time of grant, subject to the provisions of this Plan
document and applicable law.
1.2 PARTICIPATION. Subject to the terms and conditions of the Plan, the
Committee shall determine and designate, from time to time, from among the
Eligible Individuals, those persons who will be granted one or more Awards
under the Plan, and thereby become "Participants" in the Plan.
1.3 OPERATION, ADMINISTRATION, AND DEFINITIONS. The operation and
administration of the Plan, including the Awards made under the Plan, shall
be subject to the provisions of Section 4 (relating to operation and
administration). Capitalized terms in the Plan shall be defined as set
forth in the Plan (including the definition provisions of Section 8 of the
Plan).
SECTION 2
OPTIONS
2.1 DEFINITIONS. The grant of an "Option" entitles the Participant to purchase
shares of Stock at an Exercise Price established by the Committee. Any
Option granted under this Section 2 will be a nonqualified option (a
"NQO"). A "NQO" is an Option that is not intended to be an "incentive stock
option" as that term is described in section 422(b) of the Code. The
Committee shall have sole and complete discretion in determining the
Exercise Price (as hereinafter defined), the duration of the Option, the
number of Shares to which an Option pertains, any conditions imposed upon
the exercisability or transferability of the Options, the conditions under
which the Option may be terminated, and any other provisions as may be
warranted to comply with the law or rules of any securities trading system
or stock exchange. Notwithstanding the preceding, grants to Directors must
be approved by the full Board. Each Option grant shall have the specified
terms and conditions detailed in an award agreement. For purposes of this
Plan, any agreement, document or instrument required to be "in writing" or
"in written form" may also be sent, received, executed and saved, in
electronic form.
2.2. EXERCISE PRICE. The "Exercise Price" of each Option granted under this
Section 2 shall be the Fair Market Value of a share of Stock on the date of
grant unless otherwise specified by the Committee at the time of grant.
However, if the Option is awarded in exchange for previously earned cash
compensation by the Participant, or in connection with an acquisition,
merger, combination, or similar event involving SBS, in substitution or
replacement for options granted to its employees by the other entities, the
Committee shall have the authority to establish an Exercise Price that is
less than 100% of the Fair Market Value of a share of Stock on the date of
grant.
2.3. EXERCISE. An Option shall be exercisable in accordance with such terms and
conditions and during such periods as may be established by the Committee.
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2.4. PAYMENT OF OPTION EXERCISE PRICE. Options shall be exercised by the
delivery of a written notice from the Participant to SBS in the form
prescribed by the Committee setting forth the number of Shares with respect
to which the Option is to be exercised, accompanied by full payment for the
Shares. The Exercise Price shall be payable to SBS in full in cash, or its
equivalent, or by delivery of shares of Stock (not subject to any security
interest or pledge) or withholding (in the case of NQOs) shares which would
otherwise be acquired upon exercise, valued at Fair Market Value at the
time of exercise, or by a combination of the foregoing. In addition, at the
request of the Participant, and subject to applicable laws and regulations,
SBS may (but shall not be required to) cooperate in a Cashless Exercise of
the Option. In addition, any NQO granted under the Plan may provide, at the
Committee's discretion, that payment of the Exercise Price may also be made
in whole or in part in the form of shares of Common Stock subject to risk
of forfeiture or other restrictions. As soon as practicable, after receipt
of written notice and payment, SBS shall deliver to the Participant, Stock
certificates in an appropriate amount based upon the number of Shares with
respect to which the Option is exercised, issued in the Participant's name.
2.5 EXPIRATION DATE. The "Expiration Date" with respect to an Option means the
date established as the Expiration Date by the Committee at the time of the
grant; provided, however, that the Expiration Date with respect to any
vested Option shall not be later than the earliest to occur of:
(a) the ten year anniversary of the date on which the Option is granted;
(b) the Participant's date of termination occurs by reason of death,
disability, or retirement, the one year anniversary of that date
of termination;
(c) the Participant's date of termination occurs for any reason other
than retirement, death or disability, the 90-day anniversary of
that date of termination.
2.6. SETTLEMENT OF AWARD. Settlement of Options is subject to subsection 4.7.
2.7. REPRICING. Except for adjustments pursuant to subsection 4.2(e) (relating
to the adjustment of shares), the Exercise Price for any outstanding Option
granted under the Plan may not be decreased after the date of grant nor may
an outstanding Option granted under the Plan be surrendered to SBS as
consideration for the grant of a new Option with a lower exercise price.
2.8. TERMINATION OF UNVESTED OPTIONS. Any Options that are not vested on the
date of termination of employment, for any cause, shall be immediately
terminated.
2.9 MAXIMUM AWARD. The maximum number of nonqualified stock options that can be
granted to any one individual, in any one year, is 200,000.
SECTION 3
RESTRICTED STOCK AWARDS
3.1. DEFINITIONS. "Restricted Stock" Award is a grant of shares of Stock, and a
"Restricted Stock Unit" Award is the grant of a right to receive shares of
Stock in the future, with such shares of Stock or right to future delivery
of those shares of Stock subject to a risk of forfeiture or other
restrictions that will lapse upon the achievement of one or more goals
relating to completion of service by the Participant, or achievement of
performance or other objectives, as determined by the Committee.
3.2. RESTRICTIONS ON AWARDS. Restricted Stock Awards shall be subject to the
following:
(a) Any Restricted Stock Award shall be subject to such conditions,
restrictions and contingencies, as the Committee shall determine.
(b) The maximum number of Restricted Stock Awards and Restricted Stock
Unit Awards to be granted to either one individual, or to all
individuals, in any one year shall be limited to 50,000 shares of
Restricted Stock.
(c) The Committee may designate whether any Restricted Stock Award
being granted to any Participant is intended to be
"performance-based compensation" as that term is used in section
162(m) of the Code. Any Awards designated as "performance-based
compensation" shall be conditioned on the achievement of one or
more Performance Measures, to the extent required by Code section
162(m). The Performance
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Measures that may be used by the Committee for those Awards shall
be based on any one or more of the following alternatives, as
selected by the Committee:
(1) total shareholder return (absolute or peer group
comparative)
(2) stock price increase (absolute or peer group comparative)
(3) dividend payout as a percentage of net income (absolute or
peer group comparative)
(4) return on equity (absolute or peer group comparative)
(5) return on capital employed (absolute or peer group
comparative)
(6) cash flow, including operating cash flow, free cash flow,
discounted cash flow return on investment, and cash flow
in excess of cost of capital
(7) economic value added (income in excess of capital costs)
(8) market share
(9) earnings per share (absolute or peer group comparative)
(10) growth in earnings per share (absolute or peer group
comparative)
(11) net income (either pre-tax or after-tax and either
absolute or peer group comparative)
(12) operating earnings, earnings before interest and taxes
("EBIT"), earnings before interest, taxes, depreciation,
and amortization ("EBITDA") (absolute or peer group
performance)
For Awards under this Section 3 intended to be "performance-based
compensation," the grant of the Awards and the establishment of
the Performance Measures shall be made during the period required
under Code section 162(m).
(d) If the right to become vested in a Restricted Stock Award granted
under this Section 3 is conditioned on the completion of a
specified period of service with SBS or a Subsidiary, without
achievement of Performance Measures or other performance
objectives being required as a condition of vesting, and without
having been granted in lieu of other compensation, then the
required period of service for vesting shall not be less than one
year, subject to acceleration of vesting, to the extent permitted
by the Committee, in the event of the Participant's death,
disability, retirement, Change-in-Control, or involuntary
termination.
3.3 ELECTION BY DIRECTORS. For any service year as a Director of SBS, a
Director may elect to have up to 100% of the Director's cash compensation
to be payable by SBS during that year for the Director's services as a
Director applied to the purchase of shares of Restricted Stock ("Elected
Amount"), as provided in this Section. "Service year" means the period of a
Director's service beginning upon the Director's election or appointment
and ending at the next meeting of shareholders of SBS at which Directors
are elected, but will never be less than three months. The Director must
notify the Board of Directors in writing of that election before the first
day of the service year for which the election is made, or as required by
Section 16(b) of the Securities Exchange Act of 1934 ("Exchange Act"), or
before such later date as may be approved by the Board of Directors. Unless
otherwise determined by the Board of Directors, a separate election must be
made for each service year. An election made pursuant to this Section shall
be irrevocable from and after the first day of that service year; provided,
however, that an election made during a service year for the remaining
portion of that service year shall be irrevocable from and after the date
the election is made. Elections shall be made on a form prescribed by the
Board of Directors.
3.4 ISSUANCE OF SHARES PURSUANT TO ELECTION. Promptly following the end of each
year of a Director's service, SBS shall, subject to the provisions of this
Plan, issue to each Director who elected to receive shares of Restricted
Stock, effective as of the last day of that service year, a number of whole
shares determined by the Board of Directors. This issuance shall be deemed
to be a separate Award made to the Director. No fractional shares of
Restricted Stock shall be issued to an electing Director by SBS under this
Section, and no cash payment or other adjustment shall be made in respect
of any such fractional share that would otherwise be issuable.
3.5 ELIGIBILITY OF ELECTING DIRECTOR. A Director must be serving as a Director
on the last day of the service year in order to be eligible to receive
shares of Restricted Stock pursuant to this Section in respect of the
Director's Elected Amount, if any, for that service year. Any Director who
becomes ineligible to receive shares of Restricted Stock in respect of the
Director's Elected Amount for a service year, because the Director's
service as a Director terminated before the last day of the service year,
shall be paid any earned amounts of the Elected Amount in cash, without
interest, as promptly as practicable following the date of the termination
of service, and the election made by that Director with respect to the
Elected Amount shall be null and void effective as of the date of that
termination of service.
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3.6 RESTRICTIONS ON TRANSFER OF SHARES. No Restricted Stock issued to a
Director in respect of an Elected Amount shall be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of by the
Director, other than by will or pursuant to the laws of descent or
distribution (unless otherwise permitted under Section 16(b), as determined
by the Board of Directors in its sole discretion, and at the Board's sole
option), until six months have elapsed from the effective date of issuance
of those shares. SBS shall hold the certificates representing those shares
for the Director's benefit until the restrictions on transfer have lapsed.
3.7 REMOVAL OF RESTRICTION. Restricted Stock covered by each Award made under
the Plan shall be provided and become freely transferable by the
Participant after the last day of the Period of Restriction and/or upon the
satisfaction of other conditions as determined by the Committee. The
Committee shall have no authority to reduce or remove the restrictions or
to reduce or remove the Period of Restriction without the express consent
of the stockholders of SBS. Restricted Stock issued to Directors in lieu of
cash compensation pursuant to this Section 3 shall provide that the minimum
Period of Restrictions shall be three (3) years, which Period of
Restriction may permit the removal of restrictions on no more than
one-third (1/3) of the shares of Restricted Stock at the end of the first
year following the grant date, and the removal of the restrictions on an
additional one-third (1/3) of the Shares at the end of each subsequent
year. In no event shall any restrictions be removed from shares of
Restricted Stock during the first year following the grant date, except in
the event of a Change in Control.
3.8 VOTING RIGHTS. During the restriction period, Participants in whose name
Restricted Stock is granted under the Plan may exercise full voting rights
with respect to those Shares.
SECTION 4
OPERATION AND ADMINISTRATION
4.1. EFFECTIVE DATE. Subject to the ratification of the shareholders of SBS at
SBS' 2000 Annual Meeting of its shareholders, the Plan shall be effective
as of July 1, 2000 (the "Effective Date"). The Plan shall expire on the
tenth anniversary of the Effective Date and, if the Plan is terminated,
shall remain in effect as long as any Awards under it are outstanding;
provided, however, that no Awards may be granted under the Plan after the
ten-year anniversary of the Effective Date (except for Awards granted
pursuant to commitments entered into before the ten-year anniversary).
4.2. SHARES SUBJECT TO PLAN. The shares of Stock for which Awards may be granted
under the Plan shall be subject to the following:
(a) The shares of Stock with respect to which Awards may be made under
the Plan shall be shares currently authorized but unissued,
including shares purchased in the open market or in private
transactions that are returned to authorized but unissued status.
(b) Subject to the following provisions of this subsection 4.2, the
number of shares of Stock available for Awards under the Plan
during any fiscal year of SBS shall equal (i) ten percent of the
adjusted average of the outstanding Stock, as that number is
determined by SBS to calculate fully diluted earnings per share
for the preceding fiscal year; REDUCED BY (ii) any shares of Stock
under the Plan subject to unexercised options and any shares of
Stock under the Plan subject to restrictions.
(c) To the extent any shares of Stock covered by an Award are not
delivered to a Participant or beneficiary because the Award is
forfeited or canceled, or the shares of Stock are not delivered
because the Award is used to satisfy the applicable tax
withholding obligation, those shares shall not be deemed to have
been delivered for purposes of determining the maximum number of
shares of Stock available for delivery under the Plan.
(d) If the exercise price of any stock option granted under the Plan
or any prior Plan is satisfied by tendering shares of Stock to SBS
(by either actual delivery or by attestation), only the number of
shares of Stock issued net of the shares of Stock tendered shall
be deemed delivered for purposes of determining the maximum number
of shares of Stock available for delivery under the Plan.
(e) In the event of a corporate transaction involving SBS (including,
without limitation, any stock dividend, stock split, extraordinary
cash dividend, recapitalization, reorganization, merger,
consolidation, split-up,
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spin-off, combination or exchange of shares), the Committee may, but
is not required to, adjust Awards to preserve the benefits or
potential benefits of the Awards. Action by the Committee may
include:
(1) adjustment of the number and kind of shares which may be
delivered under the Plan;
(2) adjustment of the number and kind of shares subject to
outstanding Awards;
(3) adjustment of the Exercise Price of outstanding Options;
and
(4) any other adjustments that the Committee determines to
be equitable.
4.3. GENERAL RESTRICTIONS. Delivery of shares of Stock or other amounts under
the Plan shall be subject to the following:
(a) Notwithstanding any other provision of the Plan, SBS shall have no
liability to deliver any shares of Stock under the Plan or make
any other distribution of benefits under the Plan unless the
delivery or distribution would comply with all applicable laws
(including, without limitation, the requirements of the Securities
Act of 1933), and the applicable requirements of any securities
exchange or similar entity.
(b) To the extent that the Plan provides for issuance of stock
certificates to reflect the issuance of shares of Stock, the
issuance may be effected on a non-certificated basis, to the
extent not prohibited by applicable law or the applicable rules of
any stock exchange.
4.4. TAX WITHHOLDING. All distributions under the Plan are subject to
withholding of all applicable taxes, and the Committee may condition the
delivery of any shares or other benefits under the Plan on satisfaction of
the applicable withholding obligations. The Committee, in its discretion,
and subject to such requirements as the Committee may impose before the
occurrence of withholding, may permit withholding obligations to be
satisfied through cash payment by the Participant, through the surrender of
shares of Stock that the Participant already owns, or through the surrender
of shares of Stock to which the Participant is otherwise entitled under the
Plan.
4.5. GRANT AND USE OF AWARDS. In the discretion of the Committee, a Participant
may be granted any Award permitted under the provisions of the Plan, and
more than one Award may be granted to a Participant. Awards may be granted
as alternatives to or replacement of awards granted or outstanding under
the Plan, or any other plan or arrangement of SBS or a Subsidiary
(including a plan or arrangement of a business or entity, all or a portion
of which is acquired by SBS or a Subsidiary). Subject to the overall
limitation on the number of shares of Stock that may be delivered under the
Plan, the Committee may use available shares of Stock as the form of
payment for compensation, grants or rights earned or due under any other
compensation plans or arrangements of SBS or a Subsidiary, including the
plans and arrangements of SBS or a Subsidiary assumed in business
combinations.
4.6. DIVIDENDS AND DIVIDEND EQUIVALENTS. An Award may provide the Participant
with the right to receive dividend payments or dividend equivalent payments
with respect to Stock subject to the Award (both before and after the Stock
subject to the Award is earned, vested, or acquired), which payments may be
either made currently or credited to an account for the Participant, and
may be settled in cash or Stock, as determined by the Committee. Any such
settlements, and any such crediting of dividends or dividend equivalents or
reinvestment in shares of Stock, may be subject to such conditions,
restrictions and contingencies as the Committee shall establish, including
the reinvestment of the credited amounts in Stock equivalents.
4.7 SETTLEMENT OF AWARDS. The obligation to make payments and distributions
with respect to Awards may be satisfied through cash payments, the delivery
of shares of Stock, the granting of replacement Awards, or combination
thereof as the Committee shall determine. Satisfaction of any such
obligations under an Award, which is sometimes referred to as "settlement"
of the Award, may be subject to such conditions, restrictions and
contingencies as the Committee shall determine. The Committee may permit or
require the deferral of any Award payment, subject to such rules and
procedures as it may establish, which may include provisions for the
payment or crediting of interest or dividend equivalents, and may include
converting those credits into deferred Stock equivalents.
4.8. TRANSFERABILITY. Except as otherwise provided by the Committee, Awards
under the Plan are not transferable except as designated by the Participant
by will or by the laws of descent and distribution.
4.9. FORM AND TIME OF ELECTIONS. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other
person entitled to benefits under the Plan, and any permitted modification,
or revocation thereof, shall be in writing filed with the Committee at such
times, in such form, and subject to such restrictions and limitations, not
inconsistent with the terms of the Plan, as the Committee shall require.
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4.10. AGREEMENT WITH COMPANY. An Award under the Plan shall be subject to such
terms and conditions, not inconsistent with the Plan, as the Committee
shall, in its sole discretion, prescribe. The terms and conditions of any
Award to any Participant shall be reflected in such form of written or
electronic document as is determined by the Committee. A copy of that
document shall be provided to the Participant, and the Committee may, but
need not require that the Participant sign a copy of that document. The
document is referred to in the Plan as an "Award Agreement" regardless of
whether any Participant signature is required.
4.11. ACTION BY SBS OR A SUBSIDIARY. Any action required or permitted to be
taken by SBS or a Subsidiary shall be by resolution of its Board of
Directors, or by action of one or more members of the Board (including a
committee of the Board) who are duly authorized to act for the Board, or
(except to the extent prohibited by applicable law or applicable rules of
any stock exchange) by a duly authorized officer of that company.
4.12. GENDER AND NUMBER. Where the context admits, words in any gender shall
include the other gender, words in the singular shall include the plural
and the plural shall include the singular.
4.13. LIMITATION OF IMPLIED RIGHTS.
(a) Neither a Participant nor any other person shall, by reason of
participation in the Plan, acquire any right in or title to any
assets, funds or property of SBS or any Subsidiary whatsoever,
including, without limitation, any specific funds, assets, or
other property which SBS or any Subsidiary, in its sole
discretion, may set aside in anticipation of a liability under the
Plan. A Participant shall have only a contractual right to the
Stock or amounts, if any, payable under the Plan, unsecured by any
assets of SBS or any Subsidiary, and nothing contained in the Plan
shall constitute a guarantee that the assets of SBS or any
Subsidiary shall be sufficient to pay any benefits to any person.
(b) The Plan does not constitute a contract of employment, and
selection as a Participant will not give any participating
employee or other individual the right to be retained in the
employ of SBS or any Subsidiary or the right to continue to
provide services to SBS or any Subsidiary, nor any right or claim
to any benefit under the Plan, unless that right or claim has
specifically accrued under the terms of the Plan. Except as
otherwise provided in the Plan, no Award under the Plan shall
confer upon the holder thereof any rights as a shareholder of SBS
before the date on which the individual fulfills all conditions
for receipt of those rights.
4.14. EVIDENCE. Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person
acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.
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SECTION 5
CHANGE IN CONTROL
Except as otherwise provided in the Plan or the Award Agreement reflecting
the applicable Award, upon the occurrence of a Change in Control each
outstanding Award shall automatically accelerate (and restrictions on
Restricted Stock shall lapse) so that each Award shall, immediately before
the effective date of the Change in Control, become fully exercisable for
all of the shares of Stock at the time subject to that Award and may be
exercised for any or all of those shares as fully-vested shares of Stock.
However, an outstanding Award shall NOT so accelerate (and restrictions on
Restricted Stock shall not lapse) if and to the extent that Award is, in
connection with the Change in Control, either to be assumed by the
successor corporation (or parent thereof) or to be replaced with a
comparable Award for shares of the capital stock of the successor
corporation (or parent thereof). The determination of Award comparability
shall be made by the Committee, and its determination shall be final,
binding and conclusive.
In addition, if the Award is assumed by the successor corporation (or
parent thereof) and the Participant terminates the Participant's employment
For Good Reason or SBS (or successor) terminates the Participant's
employment NOT For Cause within twelve months following a Change in
Control, each outstanding Award shall automatically accelerate (and
restrictions on Restricted Stock shall lapse) so that each such Award
shall, immediately before the effective date of the termination, become
fully exercisable for all of the shares of Stock at the time subject to
that Award and may be exercised for any or all of those shares as
fully-vested shares of Stock.
SECTION 6
COMMITTEE
6.1. ADMINISTRATION. The authority to control and manage the operation and
administration of the Plan shall be vested in a committee (the "Committee")
in accordance with this Section 6. The Committee shall be selected by the
Board, and shall consist solely of two or more members of the Board who are
not employees of SBS or any Subsidiary. If the Committee does not exist, or
for any other reason determined by the Board, the Board may take any action
under the Plan that would otherwise be the responsibility of the Committee.
6.2. POWERS OF COMMITTEE. The Committee's administration of the Plan shall be
subject to the following:
(a) Subject to the provisions of the Plan, the Committee will have the
authority and discretion to select from among the Eligible
Individuals those persons who shall receive Awards, to determine
the time or times of receipt, to determine the types of Awards and
the number of shares covered by the Awards, to establish the
terms, conditions, performance criteria, restrictions, and other
provisions of such Awards, and (subject to the restrictions
imposed by Section 7) to cancel or suspend Awards.
(b) To the extent that the Committee determines that the restrictions
imposed by the Plan preclude the achievement of the material purposes
of the Awards in jurisdictions outside the United States, the
Committee will have the authority and discretion to modify those
restrictions as the Committee determines to be necessary or
appropriate to conform to applicable requirements or practices of
jurisdictions outside of the United States.
(c) The Committee will have the authority and discretion to interpret
the Plan, to establish, amend, and rescind any rules and
regulations relating to the Plan, to determine the terms and
provisions of any Award Agreement made pursuant to the Plan, and
to make all other determinations that may be necessary or
advisable for the administration of the Plan.
(d) The Committee will have the authority and discretion to modify the
provisions of any outstanding Award under the Plan so long as the
modification does not adversely affect the rights of any
Participant or beneficiary.
(e) Any interpretation of the Plan by the Committee and any decision
made by it under the Plan is final and binding on all persons.
(f) In controlling and managing the operation and administration of
the Plan, the Committee shall take action in a manner that
conforms to the articles and by-laws of SBS, and applicable state
corporate law.
6.3. DELEGATION BY COMMITTEE. Except to the extent prohibited by applicable law
or the applicable rules of a stock exchange, the Committee may allocate all
or any portion of its responsibilities and powers to any one or more of its
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members and may delegate all or any part of its responsibilities and powers
to any person or persons selected by it. Any such allocation or delegation
may be revoked by the Committee at any time.
6.4. INFORMATION TO BE FURNISHED TO COMMITTEE. SBS and Subsidiaries shall
furnish the Committee with such data and information as it determines may
be required for it to discharge its duties. The records of SBS and
Subsidiaries as to an employee's or Participant's employment (or other
provision or services), termination of employment (or cessation of the
provision of services), leave of absence, reemployment and compensation
shall be conclusive on all persons unless determined to be incorrect by
SBS. Participants and other persons entitled to benefits under the Plan
must furnish the Committee such evidence, data or information as the
Committee considers desirable to carry out the terms of the Plan.
SECTION 7
AMENDMENT AND TERMINATION
The Board may, at any time, and from time to time, amend in any and all respects
(including, without limitation, the categories of persons who are eligible to be
participants and the maximum Award which may be granted) or terminate the Plan,
provided that no amendment or termination may, in the absence of written consent
to the change by the affected Participant (or, if the Participant is not then
living, the affected beneficiary), adversely affect the rights of any
Participant or beneficiary under any Award granted under the Plan before the
date the amendment is adopted by the Board. Adjustments pursuant to paragraph
4.2(e) shall not be subject to the foregoing limitations of this Section 7. The
Board may not, however, amend paragraph 4.2(b) of the Plan to increase the total
number of shares available for Awards under the Plan unless the amendment is
approved by shareholders.
SECTION 8
DEFINED TERMS
In addition to the other definitions contained herein, the following definitions
shall apply:
(a) AWARD. The term "Award" shall mean any award or benefit granted
under the Plan, including, without limitation, the grant of
Options or Restricted Stock Awards.
(b) BOARD. The term "Board" shall mean the Board of Directors of SBS.
(c) CASHLESS EXERCISE. The term "Cashless Exercise" means the exercise
of an Option by the Participant through the use of a brokerage
firm to make payments to SBS of the exercise price either from the
proceeds of a loan to the Participant from the brokerage firm or
from the proceeds of the sale of Stock issued pursuant to the
exercise of the Option, and upon receipt of such payment, SBS
delivers the exercised Shares to the brokerage firm. The date of
exercise of a Cashless Exercise shall be the date the broker
executes the sale of exercised Shares, or if no sale is made, the
date the broker receives the exercise loan notice from the
Participant to pay SBS for the exercised Shares.
(d) CHANGE-IN-CONTROL. The term "Change-in-Control" means a change
in control of SBS of a nature that would be required to be
reported in response to Item 1(a) of the Current Report on Form
8-K, as in effect on the date hereof, pursuant to Section 13 or
15(d) of the Exchange Act; provided, that without limitation, such
a Change-in-Control shall be deemed to have occurred at such time
as a "person" (as used in Section 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of 20% or more of the
combined voting power of SBS' outstanding securities ordinarily
having the right to vote in elections of directors; or (b)
individuals who constitute the Board of Directors of SBS on the
date hereof (the "Incumbent Board") cease for any reason to
constitute at least a majority thereof, provided that any person
becoming a Director subsequent to the date hereof whose election,
or nomination for election by SBS' shareholders, was approved by a
vote of at least a majority of the Directors comprising the
Incumbent Board shall be, for purposes of the subsection (b),
considered as though such person were a member of the Incumbent
Board. Notwithstanding the foregoing definition, no
Change-in-Control shall be deemed to have occurred unless and
until the Participant has actual knowledge from one of the
following sources: a report filed with the Securities and Exchange
Commission, a public statement issued by SBS, or a periodical of
general circulation, including but not limited to The New York
Times or The Wall Street Journal.
26
<PAGE>
(e) CODE. The term "Code" means the Internal Revenue Code of 1986, as
amended. A reference to any provision of the Code shall include
reference to any successor provision of the Code.
(f) ELIGIBLE INDIVIDUAL. The term "Eligible Individual" shall mean any
employee of SBS or a Subsidiary, and any consultant, director, or
other person providing services to SBS or a Subsidiary if an Award
to that consultant, director or other person is eligible to be
registered on Form S-8 or any successor form.
(g) FAIR MARKET VALUE. For purposes of determining the "Fair Market
Value" of a share of Stock as of any date means the closing price
of the Stock as reported on the NASDAQ on the immediately
preceding trading day, all as reported by such sources as the
Committee may select.
(h) FOR CAUSE. The term "For Cause" shall mean (1) the willful and
continued failure by the Participant substantially to perform his
or her duties and obligations to SBS (other than any such failure
resulting from his or her incapacity due to physical or mental
illness); (2) the willful engaging by the Participant in
misconduct which is materially injurious to SBS; (3) the
commission by the Participant of a felony; or (4) the commission
by the Participant of a crime against SBS which is materially
injurious to SBS. For purposes of this Plan, no act, or failure to
act, on a Participant's part shall be considered "willful" unless
done, or omitted to be done, by the Participant in bad faith and
without reasonable belief that his or her action or omission was
in the best interest of SBS. Determination of Cause shall be made
by the Committee in its sole discretion.
(i) FOR GOOD REASON. The term "For Good Reason" shall mean any of
the following other than in connection with the termination of
employment For Cause (as defined above) or in connection with the
Participant's disability: (1) the assignment to the Participant by
SBS of duties substantially inconsistent with the positions,
duties, responsibilities, titles, or offices held by the
Participant immediately before the Change-in-Control; (2) a
material reduction by SBS in the Participant's base salary or
target bonus as in effect at the date immediately before the
Change-in-Control; or (3) the relocation of the Participant's
principal place of employment outside of a sixty (60) mile radius
of the office's current location.
(j) SUBSIDIARIES. The term "Subsidiary" means any corporation,
partnership, joint venture or other entity during any period in
which at least a fifty percent voting or profits interest is
owned, directly or indirectly, by SBS, or by any entity that is a
successor to SBS.
(k) STOCK. The term "Stock" shall mean shares of Common Stock of SBS.
27
<PAGE>
SBS TECHNOLOGIES, INC.
ANNUAL MEETING OF SHAREHOLDERS
THURSDAY, NOVEMBER 9, 2000
8:30 A.M.
MOUNTAIN STANDARD TIME
THE SHERATON UPTOWN ALBUQUERQUE
2600 LOUISIANA BOULEVARD NE
ALBUQUERQUE
NEW MEXICO
-------------------------------------------------------------------------------
SBS TECHNOLOGIES, INC. PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
I appoint Christopher J. Amenson and James E. Dixon, Jr., together and
separately, as proxies to vote all shares of common stock which I have power to
vote at the annual meeting of shareholders to be held on November 9, 2000 in
Albuquerque, New Mexico, and at any adjournment(s) or postponement(s) thereof,
in accordance with the instructions on the reverse side of this card and with
the same effect as though I were present in person and voting such shares. The
proxies are authorized in their discretion to vote upon such other business as
may properly come before the meeting, including matters as to which the Company
did not have timely notice, and they may name others to take their place.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEM, WILL BE VOTED FOR EACH OF THE FOLLOWING BOARD OF DIRECTOR'S PROPOSALS.
<PAGE>
-------------------
THERE ARE TWO WAYS TO VOTE YOUR PROXY COMPANY #
CONTROL #
-------------------
Your telephone vote authorizes the Names Proxies to vote
your shares in the same manner as if you marked, signed
and returned your proxy card. The deadline for telephone
voting is noon (EST), November 8, 2000.
VOTE BY PHONE - TOLL FREE - 1-800-240-63260 - QUICK *** EASY *** IMMEDIATE
- Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week until 12:00 p.m. (EST) on November 8, 2000.
- You will be prompted to enter your 3-digit Company Number and our 7-digit
Control Number which are located above.
- Follow the simple instructions the Voice provides you.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to SBS Technologies, Inc., c/o Shareowner
ServicesSM, P.O. Box 64873, St. Paul, MN 55164-0873
IF YOU VOTE BY PHONE, PLEASE DO NOT MAIL YOUR PROXY CARD
--------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1, 2 AND 3.
1. Election of seven directors:
01 Scott A. Alexander 05 Peter D. Fenner
02 Christopher J. Amenson 06 Louis C. Golm
03 Warren W. Andrews 07 Alan F. White
04 Lawrence A. Bennigson
/ / Vote FOR / / Vote WITHHELD
all nominees from all nominees
(except as marked)
Please fold here
--------------------------------------------------------------------------------
Each Director who received the majority of votes represented in person or by
proxy at the annual meeting will be elected. If you vote to withhold authority
to vote for all listed nominees or if you vote to withhold authority for a
particular nominee, your vote will count as a vote "AGAINST" the nominee(s).
Otherwise, your vote will count "FOR" the nominee(s).
_____________________
(INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY
INDICATED NOMINEE, WRITE THE NUMBER(S) OF THE NOMINEE(S) _____________________
IN THE BOX PROVIDED TO THE RIGHT.)
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
/ / For / / Against / / Abstain
A "FOR" vote by a majority of the shares represented in person or by
proxy at the Annual Meeting is required to ratify the appointment of KPMG
LLP as the principal independent auditors for fiscal year 2001. If you
"ABSTAIN" from voting, your abstention has the same effect as if you voted
"AGAINST" the appointment.
3. RATIFICATION OF THE 2000 LONG-TERM EQUITY INCENTIVE PLAN
/ / For / / Against / / Abstain
Ratification of the 2000 Long-Term Equity Incentive Plan requires the
affirmative vote of a majority of outstanding shares of Common Stock. A
"FOR" vote by a majority of the outstanding shares, whether or not
represented in person or by proxy at the Annual Meeting, is required to
ratify the plan. If you "ABSTAIN" from voting, your abstention has the same
effect as if you voted "AGAINST" the ratification.
Address Change? Mark Box / / Indicate changes below: Date___________________
Signature(s) in Box
Please sign exactly as
your name(s) appear on
Proxy. If held in joint
tenancy, all persons
must sign. Trustees,
administrators, etc.,
should include title
and authority.
Corporations should
provide full name of
corporation and title
of authorized officer
signing the proxy.
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