Exhibit 10.2

 

METHODE ELECTRONICS, INC.

 

FORM OF 2020 LONG-TERM PERFORMANCE-BASED

AWARD AGREEMENT (CFO & COO)

 

This Long-Term Performance-Based Award Agreement (the “Award Agreement”),
effective as of September 27, 2020 (the “Award Date”), is entered into by and
between Methode Electronics, Inc., a Delaware corporation (the “Company”) and
[_____________] (the “Grantee”).  

WHEREAS, the Company desires to reward Grantee for services to the Company and
to encourage Grantee to continue to work for the benefit of the Company in a
manner that will benefit all Company stockholders.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
obligations hereinafter set forth, the Company agrees to award to Grantee (i)
shares of Restricted Stock of the Company (the “Restricted Stock”), and (ii)
Performance Units (the “Performance Units”) under the Methode Electronics, Inc.
2014 Omnibus Incentive Plan (the “Plan”) on the terms and conditions set forth
herein and in the Plan (collectively, the “Awards”).

1.General.  This Award Agreement and the Restricted Stock and Performance Units
awarded herein are subject to all of the provisions of the Plan applicable to
such Awards. Unless the context otherwise requires, capitalized terms used
herein shall have the same meanings as in the Plan.  Grantee hereby acknowledges
receipt of a copy of the Plan and that Grantee has read the Plan and fully
understands its content.  In the event of any conflict between the terms of this
Award Agreement and the terms of the Plan, the terms of the Plan shall control.

2.Awards.  The Company hereby grants to Grantee (i) a total of [_______] shares
of Restricted Stock and (ii) a total of [_______] Performance Units payable in
cash.

3.Vesting.  Subject to the terms of this Award Agreement, the Restricted Stock
shall vest and the Performance Units shall be earned on the date (the “Vesting
Date”) that the Committee certifies performance under this Award Agreement,
subject to the Grantee’s continued employment by the Company or a Subsidiary or
Affiliate through the end of the Performance Period.  Any Restricted Stock that
does not vest and any Performance Units that are not earned pursuant to this
Section 3 shall be immediately cancelled and forfeited to the Company as of the
Vesting Date.  Except as provided in Section 3(d), 3(e) or 3(f) below, all
Restricted Stock and Performance Units shall be immediately cancelled and
forfeited to the Company in the event Grantee ceases to be employed by the
Company or a Subsidiary or Affiliate at any time prior the end of the
Performance Period.  To the extent Restricted Stock vests pursuant to Section
3(e) below or the Restricted Stock or Performance Units are forfeited pursuant
to Section 6 below, such Restricted Stock shall not be eligible for vesting
pursuant to Section 3(b), 3(d) or 3(f) and such Performance Units may not be
earned pursuant to Section 3(c) or Section 3(d).  Any fractional shares created
by the vesting calculations described below will be rounded down to a whole
share number; no fractional shares will vest pursuant to this Award Agreement.  

 

(a)

Performance Period and Fiscal 2025 EBITDA.  The “Performance Period” is the
fiscal year of the Company ending on or about May 3, 2025 (“Fiscal
2025”).  Except to the

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extent provided in Section 3(d), 3(e) or 3(f), the number of shares of
Restricted Stock that shall vest and the number of Performance Units that shall
be earned will be based on the Company’s EBITDA for the Performance Period
(“Fiscal 2025 EBITDA”), subject to the Grantee’s continued employment with the
Company or a Subsidiary or Affiliate through the end of such Performance Period,
and provided that a Change of Control has not occurred before the end of the
Performance Period.

For this purpose and subject to Section 4 below, Fiscal 2025 EBITDA shall equal
the Company’s earnings before net interest, taxes, fixed asset depreciation and
intangible asset amortization (“EBITDA”) in Fiscal 2025 adjusted as follows: (A)
all positive EBITDA from acquisitions that close during the period from the
Award Date to the end of the Performance Period and that are not accretive (as
defined below) in Fiscal 2025 shall be excluded; and (B) ‎to the extent not
otherwise included in 2025 EBITDA, all EBITDA from business unit ‎divestitures
or spinoffs that were approved by the Company’s Board of Directors and close
‎during the period from the Award Date to the end of the Performance Period
shall be included.  ‎The amount of EBITDA to be included for a business unit
divestiture or spinoff shall be the ‎actual EBITDA of the business unit for the
four full quarters immediately preceding the ‎divestiture or spinoff, or if
greater, the amount of EBITDA that the Committee reasonably ‎determines more
appropriately reflects the amount of EBITDA the business unit would have
‎contributed to Fiscal 2025 EBITDA.‎  In order for an acquisition to qualify as
accretive, (Y) the EBITDA in Fiscal 2025 from the acquisition must exceed Fiscal
2025 interest expense related to any debt assumed or issued in connection with
the acquisition, and (Z) the net impact of the acquisition on Fiscal 2025
earnings per share (“EPS”) must be positive (i.e., Fiscal 2025 EPS with the
acquisition is greater than Fiscal 2025 EPS without the acquisition).  Exhibit D
hereto includes an illustrative calculation of the net impact on EPS.

The Threshold, Target and Maximum levels of Fiscal 2025 EBITDA are set forth on
Exhibit A attached hereto.  

 

(b)

Number of Shares of Restricted Stock that Vest.  Exhibit B attached hereto sets
forth the formula for calculating the vesting percentage applicable to the
Restricted Stock based on the Fiscal 2025 EBITDA achieved.  Pursuant to Exhibit
B, if the level of performance achieved is greater than or equal to Threshold
Fiscal 2025 EBITDA, then the number of shares of Restricted Stock that will vest
under this Award Agreement shall be determined by multiplying the number of
shares of Restricted Stock by a percentage (subject to a maximum of one hundred
percent (100%)), equal to (i) fifty percent (50%) plus (ii) fifty percent (50%)
multiplied by a fraction, the numerator of which shall equal (x) Fiscal 2025
EBITDA achieved minus Threshold Fiscal 2025 EBITDA, and the denominator of which
shall equal (y) Target Fiscal 2025 EBITDA minus Threshold Fiscal 2025
EBITDA.  If the level of performance achieved is less than Threshold Fiscal 2025
EBITDA, then no Restricted Stock shall vest pursuant to this Section
3.3(b).  Except as provided in Section 3(d), 3(e) or 3(f) below, if the Grantee
experiences a termination of employment or a Change of Control occurs, in either
case, prior to the end of the Performance Period, no vesting shall occur under
this Section 3(b).

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(c)

Number of Performance Units Earned.  Exhibit C attached hereto sets forth the
formula for calculating the number of Performance Units earned based on the
Fiscal ‎‎2025 EBITDA achieved.  Pursuant to Exhibit C, the number of Performance
Units earned shall be determined by ‎multiplying the number of Performance Units
by a fraction (subject to a maximum of one (1)), ‎the numerator of which shall
equal (i) Fiscal 2025 EBITDA achieved minus (ii) Target Fiscal 2025 ‎EBITDA, and
the denominator of which shall equal (a) Maximum Fiscal 2025 EBITDA minus (b)
‎Target Fiscal 2025 EBITDA.  If the level of performance achieved is less than
or equal to the Target ‎Fiscal 2025 EBITDA, then no Performance Units shall be
earned pursuant to this Section 3.3(c).  Except as provided in Section 3(d)
below, if the Grantee experiences a termination of employment or a Change of
Control occurs, in either case, prior to the end of the Performance Period, no
Performance Units shall be earned under this Section 3(c).

 

(d)

Effect of Termination of Employment in Connection with Death, Disability or
Retirement.  Notwithstanding Sections (b) and (c) above, the following
provisions shall apply to the Awards in the event of Grantee’s termination of
employment in connection with death, disability or retirement prior to the end
of the Performance Period:

 

(i)

if Grantee’s employment with the Company and its Subsidiaries and Affiliates is
terminated due to total and permanent disability as determined by the Company or
death, then all of the Restricted Stock will become immediately vested and no
Performance Units shall be earned and payable; and

 

(ii)

if Grantee’s employment with the Company and its Subsidiaries and Affiliates is
terminated due to retirement on or after Grantee’s sixty-fifth birthday or
retirement on or after Grantee’s fifty-fifth birthday with consent of the
Committee then, the shares of Restricted Stock and the Performance Units shall,
as of the Vesting Date, vest and be earned based on actual performance on a pro
rata basis based on the date of termination.  The fraction to be used to
determine the number of shares of Restricted Stock to vest and the number of
Performance Units to be earned hereunder shall have a numerator equal to the
number of fiscal months elapsed between May 2, 2020 and the date of termination
(rounded up to the nearest whole month), and the denominator of which shall be
sixty (60).  

 

(e)

Change of Control.  Notwithstanding (b) and (c) above, the following provisions
shall apply to the Awards in the event of a Change of Control prior to the end
of the Performance Period‎:

 

(i)

in the event of a Change of Control, the surviving or successor entity (or its
parent corporation) may continue, assume or replace the Awards on substantially
the same terms and conditions (with such adjustments as may be required or
permitted by Section 15 of the Plan), and such Awards or replacements therefor
shall remain outstanding and be governed by their respective terms, subject to
(iii) and (iv) below;

 

(ii)

if and to the extent that the Awards are not continued, assumed or replaced in
‎‎connection with a Change of Control that occurs after May 1, 2021‎, then a pro
rata

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portion of the shares of Restricted Stock will ‎‎become immediately vested and
no Performance Units ‎shall be earned and payable.  ‎ If the Change of ‎Control
occurs on or before May 1, 2021, then no shares of Restricted Stock ‎shall be
earned and payable.  If the Change of Control occurs after May 1, 2021‎, then
the fraction (subject to a maximum of one (1)) to be used to ‎determine the
number of shares of Restricted Stock to vest hereunder shall have a denominator
equal ‎to sixty (60), and the numerator shall be determined as follows: (A) if
the ‎Change of Control occurs after May 1, 2021 and on or before April 29, 2023,
the ‎numerator shall be equal to the number of fiscal months elapsed between May
2, 2020 ‎and the date of the Change of Control (rounded up to the nearest whole
month); and (B) ‎if the Change of Control occurs after April 29, 2023, the
numerator shall be sixty (60)‎;

 

(iii)

‎ if and to the extent that the Awards are continued, assumed or replaced under
the ‎circumstances described in Section 3(e)(i) in connection with a Change of
Control that occurs after May 1, 2021‎, and if within two years after the Change
of ‎Control, Grantee experiences an involuntary termination of employment or
other service ‎for reasons other than Cause or Grantee shall terminate
employment with Good Reason, ‎then a pro rata portion of the shares of
Restricted Stock will become immediately vested and no ‎Performance Units shall
be earned and payable.  ‎ If the Change of ‎Control occurs on or before May 1,
2021, then no shares of Restricted Stock ‎shall be earned and payable.  If the
Change of Control occurs after May 1, 2021‎, then the fraction ‎‎(subject to a
maximum of one (1)) to be used to determine the number of shares of Restricted
Stock ‎to vest hereunder shall have a denominator equal to sixty (60), and the
numerator shall ‎be determined as follows: (A) if the termination of employment
occurs ‎after May 1, 2021 and on or before April 29, 2023, the numerator shall
be equal to the ‎number of fiscal months elapsed between May 2, 2020 and the
date of the termination of ‎employment (rounded up to the nearest whole month);
and (B) if the termination of ‎employment occurs after April 29, 2023, the
numerator shall be sixty (60)‎; and

 

(iv)

Notwithstanding whether the Awards are continued, assumed or replaced in
connection with a Change of Control, if Grantee experiences an involuntary
termination of employment or other service for reasons other than Cause or
Grantee shall terminate employment with Good Reason during the period beginning
on the date an agreement is entered into by the Company with respect to a
merger, consolidation or similar transaction of the Company, which would
constitute a Change of Control, and the effective time of such merger,
consolidation or similar transaction of the Company, and such effective time
occurs after May 1, 2021‎, then a pro rata portion of the shares of Restricted
Stock will become immediately vested and no Performance Units shall be earned
and payable.  If the Change of ‎Control occurs on or before May 1, 2021, then no
shares of Restricted Stock ‎shall be earned and payable.  If the Change of
Control occurs after May 1, 2021‎, then the fraction (subject to a maximum of
one (1)) to be used to determine the number of shares of Restricted Stock to
vest hereunder shall have a denominator equal to sixty (60), and the numerator
shall be determined as follows: (A) if the Change of Controls occurs after May
1, 2021 and on or before April 29, 2023, the numerator shall be equal to the
number of fiscal months elapsed between May 2, 2020 and the date of the Change
of Control (rounded up to the nearest whole month); and (B)

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if the Change of Control occurs after April 30, 2023, the numerator shall be
sixty (60).  

 

(f)

Effect of Involuntary Termination of Employment Without Cause.  Notwithstanding
Sections (b) and (c) above, if Grantee experiences an involuntary termination of
employment for reasons other than Cause after May 1, 2021, then shares of
Restricted Stock and the Performance Units shall, as of the Vesting Date, vest
and be earned based on actual performance on a pro rata basis based on the date
of Grantee’s termination of employment.  If the involuntary termination of
employment for reasons other than Cause occurs on or before May 1, 2021, then no
shares of Restricted Stock and no Performance Units ‎shall be earned and
payable. If the involuntary termination of employment for reasons other than
Cause occurs after May 1, 2021, then the fraction (subject to a maximum of one
(1)) to be used to determine the number of shares of Restricted Stock to vest
and the number of Performance Units to be earned hereunder shall have a
denominator equal to sixty (60) and the numerator shall be equal to the number
of fiscal months elapsed between May 2, 2020 and the date of the termination of
employment (rounded up to the nearest whole month). Grantee’s right to this pro
rata portion of Restricted Stock and Performance Units is conditioned upon
Grantee signing and delivering to the Company, within the time period required
by the Company, a written general release of claims against the Company in a
form acceptable to the Company (the “Release”), and not revoking the Release
within any applicable revocation period.  

“Good Reason” shall exist under (e)(iii) or (iv) above if, without Grantee’s
express written consent any of the following events or actions occurs, provided
that no finding of Good Reason shall be effective unless and until the Grantee
has provided the Company, within sixty (60) calendar days of becoming aware of
the facts and circumstances underlying the finding of Good Reason, with written
notice thereof stating with specificity the facts and circumstances underlying
the finding of Good Reason and, if the basis for such finding of Good Reason is
capable of being cured by the Company, providing the Company with an opportunity
to cure the same within thirty (30) calendar days after receipt of such notice:
(A) the Company shall materially reduce the nature, scope or level of Grantee’s
responsibilities from the nature, scope or level of such responsibilities prior
to the Change of Control, or shall fail to provide Grantee with adequate office
facilities and support services to perform such responsibilities; (B) the
Company shall require Grantee to move Grantee’s principal business office more
than 25 miles from Grantee’s principal business office at the time of this Award
Agreement, or assign to Grantee duties that would reasonably require such move;
provided, however, that if Grantee’s principal business office is not located at
the Company’s then current corporate headquarters, and the Company requires
Grantee to move Grantee’s principal business office to such corporate
headquarters, or assigns to Grantee duties that would reasonably require such
move, such actions shall not constitute “Good Reason” under this subsection; (C)
the Company shall require Grantee, or assign duties to Grantee which would
reasonably require Grantee, to increase, by more than twenty-four, the number of
normal working days (determined at the time of this Award Agreement) that
Grantee spends away from Grantee’s principal business office during any
consecutive twelve-month period; (D) the Company shall reduce Grantee’s annual
salary below that in effect as of the date of this Award Agreement (or as of the
Change of Control, if greater); (E) the Company shall materially reduce or fail
to continue in effect any cash or stock-based incentive or bonus plan,
retirement plan, welfare benefit plan, or other benefit plan, program or
arrangement, unless the aggregate value (as computed by an independent employee
benefits consultant selected by the Company) of all such incentive, bonus,
retirement and benefit plans, programs and arrangements provided

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to Grantee is not materially less than their aggregate value as of the date of
this Award Agreement (or as of the Change of Control, if greater); or (F) if the
Board of Directors fails to act in good faith with respect to the Company’s
obligations hereunder, or the Company breaches its obligations hereunder.

 

Grantee agrees, as a condition of this Award, to make acceptable arrangements to
pay any withholding or other taxes or deductions that may be due or may arise as
a result of the vesting of the Restricted Stock, the settlement of the
Performance Units, or any other payment or issuance of shares of Common Stock
under this Award Agreement.  In the event that the Company determines that any
federal, state, local or foreign tax or withholding payment or other deduction
is required relating to the vesting or issuance of shares or the payment of cash
under this Award Agreement, the Company shall have the right to require such
amounts or deductions from Grantee, or withhold such amounts or deductions from
other payments due Grantee from the Company or any Subsidiary or Affiliate.

 

4.Discretion to Adjust and Modify the Fiscal 2025 EBITDA Performance
Levels.  The Committee shall have the authority to specify adjustments or
modifications to be made to ‎the Threshold, Target and Maximum levels of Fiscal
2025 EBITDA based on and in order to ‎appropriately reflect the effect of the
following events: (i) asset write-downs; (ii) litigation or claim judgments or
‎settlements; (iii) the effect of changes in tax laws, accounting principles, or
other laws or ‎regulatory rules affecting reported results; (iv) any
reorganization and restructuring programs; (v) ‎any change in the Company’s
fiscal year; (vi) circumstances that impact the Company’s financial ‎performance
that are outside of the control of the Company, such as acts of God;
earthquakes; ‎fires; floods; severe weather events; natural or manmade
disasters; wars; civil or military ‎disturbances; acts of terrorism; sabotage;
embargoes; martial law; acts of civil or military ‎authorities; political
unrest; riots; global economic events; strikes; labor disputes; lockouts;
‎epidemics; or pandemics; or (vii) unforeseen impacts related to mergers,
acquisitions and ‎divestitures‎.

5.Settlement of Performance Units.  Except as otherwise provided herein, the
‎Performance Units shall ‎‎be ‎settled and paid in cash in an amount equal to
the number of earned Performance Units multiplied by the Fair Market Value of
the Company’s Common Stock as of the Vesting Date.  The payment will be made
within 2½ months after the end of the Performance ‎Period (or ‎earlier ‎as
provided ‎in the Plan).  At any time prior to the end of the Performance Period,
the Committee shall have the authority to provide that the Performance Units
will be settled in shares of the Company’s Common Stock instead of cash (the
date of such Committee action referred to herein as the “Conversion Date”).  In
such event, if requested by the Committee, Grantee and the Company shall enter
into an appropriate amendment to this Award Agreement to document such
change.  Notwithstanding the foregoing, in the event that the Grantee is a
“specified employee” ‎within the meaning of Section 409A(a)(2)(B)(i) of the Code
and the Award is considered ‎to be Nonqualified Deferred Compensation upon the
Grantee’s “Separation from ‎Service” as defined below, any payment under this
Award Agreement which results ‎from a Separation from Service shall be delayed
until the earlier of (i) first day of the ‎seventh (7th) month beginning after
the Grantee’s Separation from Service, or (ii) the ‎Grantee’s death, if such a
delay is necessary to avoid the imposition of additional tax ‎and interest on
the Grantee under Section 409A(a)(1)(B) of the Code.‎

6.Forfeiture.  If at any time any of the following events occur: (i) Grantee’s
conviction of a felony other than a traffic violation; ‎(ii)‎ Grantee’s
commission of any act or acts of personal dishonesty intended to ‎result in
‎personal enrichment to Grantee to the material detriment of the Company;‎
‎(iii) a failure to perform assigned duties,‎ provided that such failure has
continued for more than ten (10) days

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after the Board of Directors or the ‎Chief Executive Officer of the Company has
given written notice of such failure;‎ ‎(iv)‎ any willful misconduct by the
Grantee which materially affects the business ‎reputation ‎of the Company; ‎(v)
breach in any material respect by the Grantee of any provision of any
‎employment, ‎consulting, advisory, nondisclosure, non-competition, proprietary
information, or ‎other similar agreement ‎between the Grantee and the Company;
or ‎(vi)‎ Grantee’s material violation of the Company’s code of conduct‎, ‎then
the unvested Restricted Stock and unearned Performance Units shall be forfeited
to the Company effective as of the date on which the Grantee entered into such
‎activity, unless terminated sooner by operation of another term or condition of
this Award Agreement or ‎the Plan.‎

7.Additional Delivery.  Within 2½ months of the date Restricted Stock vests
under Section 3, the Company shall pay to the Grantee an amount equal to the
aggregate per share cash dividends with respect to all cash dividend record
dates that fall between the Award Date and the date the unrestricted shares are
registered with the Company’s transfer agent in the name of the Grantee,
multiplied by the number of shares of Restricted Stock that vest pursuant to
this Award Agreement (without interest).  In addition, if the Committee provides
that the Performance Units will be settled in shares of the Company’s Common
Stock instead of cash, then within 2½ months of the date the Performance Units
vest under Section 3, the Company shall pay to the Grantee an amount equal to
the aggregate per share cash dividends with respect to all cash dividend record
dates that fall between the Conversion Date and the date the unrestricted shares
are registered with the Company’s transfer agent in the name of the Grantee,
multiplied by the number of Performance Units that vest pursuant to this Award
Agreement (without interest). The Company may withhold from any payment that it
is required to make under this Award Agreement amounts sufficient to satisfy
applicable withholding requirements under any foreign, federal, state or local
law due in connection with this Award or the payment described in this Section
7.  No dividends shall be paid to the Grantee with respect to the Performance
Units or Restricted Stock that does not vest and is forfeited by the Grantee.

8.Restrictions.  None of the Restricted Stock or Performance Units may be sold,
transferred, pledged, hypothecated or otherwise encumbered or disposed of until
it has vested in accordance with the terms of this Award Agreement.  Any
Restricted Stock that is not vested and any Performance Units that are not
earned shall be forfeited to the Company immediately upon termination of the
Grantee’s employment with the Company and all of its Subsidiaries and Affiliates
or upon the expiration of this Award Agreement.

9.Stock Delivery.  Within ten (10) days of the date of this Award Agreement, the
Company will cause the Restricted Stock to be issued in the Grantee’s name
either by book-entry registration or issuance of a stock certificate.  While the
Restricted Stock remains forfeitable, the Company will cause an appropriate
stop-transfer order to be issued and to remain in effect with respect to the
Restricted Stock. Any stock certificate evidencing any Restricted Stock shall
contain such legends and stock transfer instructions or limitations as may be
determined or authorized by the Committee in its sole discretion; and the
Company may, in its sole discretion, retain custody of any such certificate
throughout the period during which any restrictions are in effect and require
that the Grantee tender to the Company a stock power duly executed in blank
relating thereto as a condition to issuing any such certificate.

10.Rights as Stockholder.  The Grantee shall have no rights as a stockholder
with respect to any Restricted Stock until the Restricted Stock is issued in
Grantee’s name either by book-entry registration or issuance of a stock
certificate.  Once the Restricted Stock is issued in Grantee’s name, the

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Grantee shall be entitled to all rights associated with ownership of the
Restricted Stock, except that the Grantee shall not be entitled to receive any
dividends (cash or stock) with respect to the Restricted Stock until such time
as the restrictions lapse in accordance with the terms of this Award
Agreement.    The Grantee shall have no rights as a stockholder with respect to
the Performance Units.

11.Construction.  This Award Agreement is subject to the terms of the Plan and
shall be construed in accordance therewith.  All capitalized and undefined terms
herein are subject to the definitions contained in the Plan.  The construction
and operation of this Award Agreement are governed by the laws of the State of
Illinois without regard to any conflicts or choice of law rules or principles
that might otherwise refer construction or interpretation of this Award
Agreement to the substantive law of another jurisdiction, and any litigation
arising out of this Award Agreement shall be brought in the Circuit Court of the
State of Illinois or the United States District Court for the Eastern Division
of the Northern District of Illinois and the Grantee consents to the
jurisdiction and venue of those courts.

12.Severability.  In the event that any provision or portion of this Award
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Award Agreement shall be unaffected thereby and
shall remain in full force and effect.

13.Dispute Resolution.  The parties initially shall attempt to resolve by direct
negotiation any dispute, controversy or claim arising out of or relating to this
Award Agreement or its breach or interpretation (each, a “Dispute”).  For
purposes of this negotiation, the Company shall be represented by one or more of
its independent directors appointed by the Board of Directors. If the parties
are unable to resolve the Dispute by direct negotiation within 30 days after
written notice by one party to the other of the Dispute, the Dispute shall be
settled by submission by either party of the Dispute to binding arbitration in
Chicago, Illinois (unless the parties agree in writing to a different location),
before a single arbitrator in accordance with the American Arbitration
Association's National Rules for the Resolution of Employment Disputes then in
effect.  The arbitrator will be an attorney licensed to practice law in the
State of Illinois.  The decision and award made by the arbitrator shall be
final, binding and conclusive on all parties hereto for all purposes, and
judgment may be entered thereon in any court having jurisdiction
thereof.  Except as set forth below, each party shall pay:  the fees of their or
its attorneys; the expenses of their or its witnesses; and all other expenses
connected with presenting their or its case.  Except as set forth below, the
costs of the arbitration, including the cost of any record or transcripts of the
arbitration hearing, administrative fees, the fees of the arbitrator, and all
other fees and costs shall be borne equally by the parties.  In the event of a
Dispute following or in connection with a Change of Control, the Company shall
pay the fees of the arbitrator as well as the cost of any record or transcripts
of the arbitration hearing and other administrative fees and costs.  In all
Disputes, the arbitrator will have discretion to make an award of fees, costs
and expenses to the prevailing party.

14.Section 409A Compliance.  It is the intention of the Company and the Grantee
that the Restricted Stock and related benefits awarded under this Award
Agreement shall be exempt from the requirements of Section 409A of the Code and
its implementing regulations (“Section 409A”) and shall be interpreted in a
manner consistent with this intention.  In the event that the Company or the
Grantee reasonably determines that the Restricted Stock and/or any related
benefits under this Award Agreement may be subject to Section 409A, the Company
and Grantee shall work together to adopt such amendments to this Award Agreement
or adopt other policies or procedures (including amendments, policies and
procedures with retroactive effective to the extent allowed under applicable
laws), or take

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any other commercially reasonable actions necessary or appropriate to cause the
Restricted Stock and related benefits awarded under this Award Agreement to (i)
be exempt from Section 409A, or (ii) otherwise comply with the requirements of
Section 409A.

It is the intention of the Company and the Grantee that the Performance Units
and related benefits awarded under this Award Agreement shall comply with
Section 409A and shall be interpreted in a manner consistent with this
intent.  Notwithstanding anything to the contrary contained herein, a
termination of Grantee’s employment shall not be deemed to have occurred for
purposes of making any payments under this Award Agreement related to the
Performance Units unless such termination gives rise to a “Separation from
Service” (within the meaning of Section 409A, a “Separation from Service”) and
references to “termination of employment” shall mean Separation from
Service.  In the event that the Company or the Grantee reasonably determines
that the Performance Units and/or any related benefits under this Award
Agreement fails to comply with Section 409A, the Company and Grantee shall work
together to adopt such amendments to this Award Agreement or adopt other
policies or procedures (including amendments, policies and procedures with
retroactive effective to the extent allowable by applicable laws), or take any
other commercially reasonable actions necessary or appropriate to comply with
the requirements of Section 409A.  Nothing in this Agreement shall be construed
as a guarantee of any particular tax treatment to Grantee.  Grantee shall be
solely responsible for the tax consequences with respect to all amounts payable
under this Award Agreement, and in no event shall the Company have any
responsibility or liability if this Award Agreement does not meet any applicable
requirements of Section 409A.

 

15.No Retention Rights.  Nothing herein contained shall confer on the Grantee
any right with respect to continuation of employment or services by the Company
or its Subsidiaries or Affiliates, or interfere with the right of the Company or
its Subsidiaries or Affiliates to terminate at any time the employment or
service of the Grantee.

16.No Guarantee of Future Awards.  The grant of Awards is exceptional, voluntary
and occasional and does not create any contractual or other right to receive
future grants, even if Awards have previously been granted.

17.Counterparts.  This Award Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

18.Entire Agreement; Clawback Policy.  This Award Agreement supersedes and
cancels all prior written or oral agreements and understandings relating to the
terms of this Award Agreement.  This Award Agreement and the Awards granted
hereunder are subject to any Company Clawback Policy in effect as of the date of
this Award Agreement or as subsequently amended, modified or replaced, and the
terms of the Change in Control Agreement between the Grantee and the Company, as
the same may be amended from time to time, if any.

[Signature Page to Follow]

-9-

 

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IN WITNESS WHEREOF, the Company by one of its duly authorized representatives
has executed this Award Agreement as of the day and year first above written.

 

 

METHODE ELECTRONICS, INC.

[gj4uhcx1wumu000001.jpg]

By:
      Darren M. Dawson

Its:Chair, Compensation Committee

 

Please indicate your acceptance of the terms and conditions of this Award
Agreement by signing in the space provided below and returning a signed copy of
this Award Agreement to the Company.  IF A FULLY EXECUTED COPY OF THIS AWARD
AGREEMENT HAS NOT BEEN RECEIVED BY THE COMPANY BY OCTOBER 23, 2020, THE AWARD
UNDER THIS AWARD AGREEMENT SHALL BE CANCELLED.  

 

BY SIGNING BELOW, YOU ACKNOWLEDGE AND AGREE THAT YOU HAVE RECEIVED A COPY OF THE
PLAN AND ARE FAMILIAR WITH THE TERMS AND PROVISIONS THEREOF, INCLUDING THE TERMS
AND PROVISIONS OF THIS AWARD AGREEMENT.  YOU HAVE REVIEWED THE PLAN AND THIS
AWARD AGREEMENT IN THEIR ENTIRETY, HAVE HAD AN OPPORTUNITY TO OBTAIN THE ADVICE
OF COUNSEL PRIOR TO EXECUTING THIS AWARD AGREEMENT AND FULLY UNDERSTAND ALL
PROVISIONS OF THIS AWARD AGREEMENT.  FINALLY, YOU HEREBY AGREE TO ACCEPT AS
BINDING, CONCLUSIVE AND FINAL ALL DECISIONS OR INTERPRETATIONS OF THE
ADMINISTRATOR UPON ANY QUESTIONS ARISING UNDER THE PLAN OR THIS AWARD
AGREEMENT.  

 

The undersigned hereby accepts, and agrees to, all terms and provisions of this
Award Agreement and the Plan as they pertain hereto.

 

 

GRANTEE

 

____________________________________

[___________________]

 

 

-10-

 

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Exhibit A

 

Threshold Fiscal 2025 EBITDA$270 million

Target Fiscal 2025 EBITDA$300 million

Maximum Fiscal 2025 EBITDA‎$330 million‎

 

-11-

 

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Exhibit B

 

If Fiscal 2025 EBITDA achieved is less than Threshold Fiscal 2025 EBITDA, then
no Restricted Stock will vest.  If Fiscal 2025 EBITDA achieved equals or exceeds
Threshold Fiscal 2025 EBITDA, then the following formula will be used to
calculate the percentage of Restricted Stock that will vest (subject to a
maximum of 100%):

 

(i) 50%, plus (ii) 50% multiplied by a fraction equal to (Fiscal 2025 EBITDA
achieved less Threshold Fiscal 2025 EBITDA) divided by (Target Fiscal 2025
EBITDA less Threshold Fiscal 2025 EBITDA)

-12-

 

 

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Exhibit C

 

If Fiscal 2025 EBITDA achieved is less than Target Fiscal 2025 EBITDA, then no
Performance Units shall be earned.  If Fiscal 2025 EBITDA achieved equals or
exceeds Target Fiscal 2025 EBITDA, then the following formula will be used to
calculate the number of Performance Units earned:

 

The number of Performance Units multiplied by a fraction (subject to a maximum
of one (1)), ‎the numerator of which shall equal (i) Fiscal 2025 EBITDA achieved
minus (ii) Target Fiscal 2025 ‎EBITDA, and the denominator of which shall equal
(a) Maximum Fiscal 2025 EBITDA minus (b) ‎Target Fiscal 2025 EBITDA.    

                                                                                                                

-13-

 

 

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Exhibit D

 

 

Following is an example (not actual numbers) of the calculation of whether the
net impact of an acquisition on Fiscal 2025 earnings per share (EPS) is
positive.  

 

 

 

 

Fiscal 2025

 

Methode

 

Acquired

 

Methode

 

Actual

-

Unit

=

Pro Forma

EBITDA

$      300,000,000

 

$        11,000,000

 

$      289,000,000

Depr. & Amor.

$        50,000,000

 

$          1,000,000

 

$        49,000,000

Interest expense (income)

$          5,000,000

 

$             200,000

 

$          4,800,000

Income before taxes

$      245,000,000

 

$          9,800,000

 

$      235,200,000

Income tax (20% eff. tax rate)

$        49,000,000

 

$          1,960,000

 

$        47,040,000

Net income

$      196,000,000

 

$          7,840,000

 

$      188,160,000

Basic common shares O/S

           39,600,866

 

 

 

           38,100,866

Shares issued for acquisition

                          -  

 

             1,500,000

 

 

Basic EPS

$                   4.95

 

 

 

$                   4.94

 

Actual > Pro Forma = Accretive

 

Actual < Pro Forma = Not Accretive

83692453v.1

 

-14-