Exhibit 10.1


 


AWARD CANCELLATION AGREEMENT


 


This award cancellation
agreement (the “Agreement”) entered into on December [   ], 2009, is by and between Methode
Electronics, Inc., a Delaware corporation (the “Company”) and [                            ] (the “Grantee”).


 


WHEREAS, the Company and
Grantee are parties to restricted stock award agreements dated September 13,
2007 (the “2007 RSA Agreement”)  and July 21,
2008 (the “2008 RSA Agreement;” the 2007 RSA Agreement and the 2008 RSA
Agreement are collectively referred to herein as the “RSA Agreements”);


 


WHEREAS, the Company and
Grantee are parties to cash incentive award agreements dated as of the same
dates (the “Tandem Cash Agreements”);


 


WHEREAS, pursuant to the
2007 RSA Agreement, the Grantee was granted [            ] shares of restricted stock
scheduled to vest as of May 1, 2010, provided certain performance measures
were satisfied;


 


WHEREAS, pursuant to the
2008 RSA Agreement, the Grantee was granted [            ] shares of restricted stock scheduled
to vest as of April 30, 2011, provided certain performance measures were
satisfied;


 


WHEREAS, pursuant to the
Tandem Cash Agreements, the Grantee was granted cash awards
scheduled to vest as of May 1, 2010 and April 30, 2011, respectively,
provided certain performance measures were satisfied;


 


WHEREAS, the Company’s
Compensation Committee has determined, and the Grantee has agreed, that, based
on the Company’s restructuring activities, impairment charges and the global
recession, it is extremely unlikely that any of the restricted stock or cash
incentives granted under the RSA Agreements or the Tandem Cash Agreements will
be earned or vested; and


 


WHEREAS, the Company and
the Grantee mutually agree that the RSA Agreements and the Tandem Cash
Agreements should be terminated and all awards thereunder cancelled.


 


NOW, THEREFORE, in
consideration of the premises and the mutual covenants and obligations
hereinafter set forth, the Company and the Grantee agree to cancel all awards
under the RSA Agreements and the Tandem Cash Agreements on the terms and
conditions set forth herein.


 


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1.             Termination of
RSA Agreements.  The
Company and the Grantee hereby agree that the RSA Agreements are terminated
immediately and the award of [           
] shares of restricted stock under the 2007 RSA Agreement and [            ] shares of restricted stock under
the 2008 RSA Agreement are cancelled immediately.  The Grantee acknowledges and agrees that he
shall have no further rights under the RSA Agreements.


 


2.             Termination of
Tandem Cash Agreements. 
The Company and the Grantee hereby agree that the Tandem Cash Agreements
are terminated immediately and no cash amounts shall be paid pursuant to such
agreements.  The Grantee acknowledges and
agrees that he shall have no further rights under the Tandem Cash Agreements.


 


3.             Bonus.  In consideration of agreeing to terminate the
RSA Agreements and the Tandem Cash Agreements, subject to Section 4 below,
the Company shall pay to Grantee the following amounts:


 


A.            If, at any time
between the date of this Agreement and May 1, 2010, the Company
declares and pays a cash dividend on its common stock, the Grantee will be paid
an amount equal to the per share dividend amount multiplied by [            ]; and


 


B.            If, at any time
between the date of this Agreement and April 30, 2011, the Company declares and
pays a cash dividend on its common stock, the Grantee will be paid an amount
equal to the per share dividend amount multiplied by [            ].


 


4.             Termination of
Employment. In the event Grantee’s employment with the
Company is terminated for any reason whatsoever, the Grantee shall not be
entitled to the payment of any bonus amounts under Section 3 above
following the date of such termination.


 


5.             Construction.  The construction and operation of this
Agreement is 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 Agreement to the substantive law
of another jurisdiction, and any litigation arising out of this 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.


 


6.             Amendment.  This Agreement may be amended at any time by
written agreement between the Company and Grantee.


 


7.             No Retention
Rights.  Nothing herein contained shall
confer on the Grantee any right with respect to continuation of employment 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 of the Grantee.


 


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8.             Counterparts.  This 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.


 


9.             Entire
Agreement.  This
Agreement supersedes and cancels all prior written or oral agreements and
understandings relating to the terms of this Agreement, including, without
limitation, the RSA Agreements and the Tandem Cash Agreements.


 


IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date set
forth above.


 


 


	
  GRANTEE

  	
   

  	
  METHODE ELECTRONICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Paul G. Shelton

  
	
   

  	
   

  	
   

  	
  Its:

  	
  Chairman, Compensation Committee

  



 


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