SBS Technologies FY 2006 Long-Term Executive Incentive Plan

SBS Technologies
FY 2006 Long-Term Executive Incentive Plan

I. Purpose

The purpose of the Long-Term Incentive Plan (Plan) is to promote the long-term interests of SBS Technologies, Inc. (Company) and its stockholders by providing a means for attracting and retaining designated key executives of the Company through a system of cash bonuses and restricted stock based on the accomplishment of long-term, predefined objectives.

II. Philosophy

This Plan, sometimes referred to as a Performance Unit Plan, is intended to provide participants with a substantial incentive to achieve or surpass long-range financial goals for the Company based on the implementation of the Strategic Plan as presented by the CEO in April, 2005, resulting in attractive total compensation for the designated executives.

III. Performance Goals

The metrics established for the cash award under this Plan are Company average annual earnings per share growth and Operating Margin over the three-year period beginning July 1, 2005 and ending June 30, 2008. "Operating Margin" means operating income of the Company divided by sales, calculated in accordance with generally accepted accounting principles (GAAP).

Level I, Level II and Level III thresholds for each of the Company metrics will be established by the Board of Directors. The weighting of the two metrics is as shown in Figure A. The metrics have been weighted to reflect the ability of the executives as a whole to impact factors under their control, while holding them responsible for the health of the Company's business.

Figure A: