Exhibit 10.5

 

METHODE ELECTRONICS, INC.

 

FORM OF 2020 LONG-TERM TIME-BASED

AWARD AGREEMENT (CFO & COO)

 

This Long-Term Time-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 set forth herein, the Company agrees to award to Grantee Restricted
Stock Units under the Methode Electronics, Inc. 2014 Omnibus Incentive Plan (the
“Plan”) on the terms and conditions set forth herein and in the Plan.

1.General.  This Award Agreement and the Restricted Stock Units awarded herein
are subject to all of the provisions of the Plan applicable to Restricted Stock
Units.  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.Grant.  The Company hereby grants to Grantee a total of [______] Restricted
Stock Units (the “Restricted Stock Units”), subject to the restrictions set
forth in Section 3 hereof and the Plan.

3.Restrictions.

 

(a)

None of the Restricted Stock Units may be sold, transferred, pledged,
hypothecated or otherwise encumbered or disposed of.

 

(b)

Except as provided below, any Restricted Stock Units that are not vested shall
be forfeited to the Company immediately upon termination of the Grantee’s
employment with the Company and all of its Subsidiaries and Affiliates.

 

(c)

Any Restricted Stock Units that are not vested may be forfeited to the Company
in accordance with Section 9 of this Award Agreement.

4.Payment for Restricted Stock Units.  

 

(a)

The Company will pay one share of Common Stock to the Grantee for each vested
Restricted Stock Unit as soon as reasonably possible following vesting under
this Award Agreement.

 

(b)

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

 

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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.

5.Rights as Stockholder.  The Grantee shall have no rights as a stockholder with
respect to any Restricted Stock Units.  The Grantee will only have stockholder
rights after a stock certificate is issued.

6.Vesting.  The Restricted Stock Units granted hereunder will vest as follows:
(i) thirty percent (30%) on April 29, 2023; (ii) thirty percent (30%) on May 4,
2024; and (iii) forty percent (40%) on May 3, 2025, (each a “Vesting Date”),
provided the Grantee continues to be employed by the Company (or a Subsidiary or
Affiliate thereof) until such dates.

7.Effect of Termination of Employment in Connection with Death, Disability or
Retirement or Involuntary Termination Without Cause.  Notwithstanding Section 6
above, the following provisions shall apply to the Restricted Stock Units in the
event of Grantee’s termination of employment in connection with death,
disability or retirement or involuntary termination without cause prior to May
3, 2025:

(a)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, the unvested Restricted Stock Units shall become vested and payable as
of the date of termination; and

(b)if Grantee experiences an involuntary termination of employment for reasons
other than Cause after May 1, 2021, then a pro rata portion of the Restricted
Stock Units will become immediately vested. If the involuntary termination of
employment for reasons other than Cause occurs on or before May 1, 2021, then no
Restricted Stock Units ‎shall vest. If the involuntary termination of employment
for reasons other than Cause occurs after May 1, 2021, then the number of
Restricted Stock Units to vest under 7(b) shall be calculated as follows:

 

Number of Restricted Stock Units

x

 

Number of fiscal months elapsed between May 2, 2020 and termination date
(rounded up to the nearest whole month)

 

x

1

60

 

−

Number of Restricted Stock Units previously vested under Section 6

 

Grantee’s right to this pro rata portion of Restricted Stock Units is
conditioned upon Grantee signing and delivering to the Company, within the time
period required by the Company, a written general release of all claims against
the Company in a form acceptable to the Company (the “Release”), and not
revoking the Release within any applicable revocation period.

(c)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 unvested Restricted Stock Units shall vest pro rata based
on the date of termination and be paid on such termination date.  

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For purposes of this calculation, the number of Restricted Stock Units to vest
under 7(c) shall be calculated as follows:

 

 

Number of Restricted Stock Units

x

 

Number of fiscal months elapsed between May 2, 2020 and termination date
(rounded up to the nearest whole month)

 

x

1

60

 

−

Number of Restricted Stock Units previously vested under Section 6

 

8.Change of Control.  Notwithstanding Section 6 above, the following provisions
shall apply to the Award in the event of a Change of Control prior to May 3,
2025‎:

(a)In the event of a Change of Control, the surviving or successor entity (or
its parent corporation) may continue, assume or replace the Restricted Stock
Units outstanding as of the date of the Change of Control on substantially the
same terms and conditions (with such adjustments as may be required or permitted
by Section 15 of the Plan), and such Restricted Stock Units or replacements
therefor shall remain outstanding and be governed by their respective terms,
subject to (c) and (d) below.

(b)If and to the extent that the outstanding Restricted Stock Units are not
continued, assumed or replaced in connection with a Change of Control, then all
unvested Restricted Stock Units will become immediately vested and
non-forfeitable and payable as of the date of the Change of Control.

(c)If and to the extent that the Restricted Stock Units are continued, assumed
or replaced under the circumstances described in (a), and if within two years
after the Change of Control the Grantee experiences an involuntary termination
of employment or other service for reasons other than Cause or Grantee shall
terminate employment with Good Reason, then all unvested Restricted Stock Units
will become immediately vested and non-forfeitable and payable as of the date of
termination of employment.

(d)Notwithstanding whether an Award is 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, then all unvested
Restricted Stock Units will become immediately vested and non-forfeitable and
payable as of the date of the Change of Control.

“Good Reason” shall exist hereunder 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

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Exhibit 10.5

 

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 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.

9.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 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
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.

10.Additional Delivery.  Within 2½ months of the date Restricted Stock Units
have vested ‎pursuant to this ‎Award Agreement, the Company shall pay to the
Grantee a dividend equivalent ‎equal to the aggregate per ‎share cash dividends
with respect to all cash dividend record dates that ‎fall between the Award
‎Date and the relevant Vesting Date multiplied by the number of Restricted Stock
Units ‎that vest ‎as of such Vesting Date (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 federal, state or local law due in connection with ‎this Award ‎or the
payment described in this section.  No dividends shall be paid to the Grantee
‎with respect ‎to any Restricted Stock Unit that does not vest and is forfeited
by the Grantee‎.

11.Applicable Law.  The validity, construction, interpretation and
enforceability of this Award Agreement shall be determined and 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

 

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District Court of the Eastern Division of the Northern District of Illinois and
the Grantee consents to the jurisdiction and venue of those courts.

12.Severability.  The provisions of this Award Agreement are severable and if
any one or more provisions may be determined to be illegal or otherwise
unenforceable, in whole or in part, the remaining provisions, and any partially
unenforceable provision to the extent enforceable in any jurisdiction, shall
nevertheless be binding and enforceable.

13.Waiver.  The waiver by the Company of a breach of any provision of this Award
Agreement by Grantee shall not operate or be construed as a waiver of any
subsequent breach by Grantee.

14.Binding Effect.  The provisions of this Award Agreement shall be binding upon
the parties hereto, their successors and assigns, including, without limitation,
the Company, its successors or assigns, the estate of the Grantee and the
executors, administrators or trustees of such estate and any receiver, trustee
in bankruptcy or representative of the creditors of the Grantee.

15.Withholding.  Grantee agrees, as a condition of this grant, 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 Units
or other payments 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 of shares or other
payments arising from this grant, 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.

16.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.

17.Section 409A Compliance.  It is the intention of the Company and the Grantee
that the Restricted Stock Units and other benefits awarded under this Award
Agreement shall comply with Section 409A of the Code and its implementing
regulations (“Section 409A”) and shall be interpreted in a manner consistent
with this intent.  Notwithstanding anything to the contrary contained herein, a

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termination of Grantee’s employment shall not be deemed to have occurred for
purposes of making any payments under this Award Agreement 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 any award 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.

18.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.

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

20.Entire Agreement and 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 Restricted Stock
Units 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 Company
and Grantee, as the same may be amended from time to time, if any.

 

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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.

 

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
RESTRICTED STOCK UNITS GRANTED 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

 

____________________________________

[___________________]

 

 

 

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