Document:

exv10w1

 

Exhibit 10.1

METHODE ELECTRONICS, INC.

AMENDED CASH BONUS AGREEMENT

     THIS AMENDED CASH BONUS AGREEMENT, effective as of April 6, 2007 (the “Amended
Agreement”), is entered into by and between METHODE ELECTRONICS, INC., a Delaware corporation (the
“Company”), and Donald W. Duda (“Employee”).

     WHEREAS, Employee has served and continues to serve the Company as President of the Company;

     WHEREAS, Section 3 of the Methode Electronics, Inc. 2000 Stock Plan (the “Plan”) limits the
total number of shares of Company common stock with respect to which awards may be granted under
the Plan to a participant in any calendar year to 100,000 shares;

     WHEREAS, on May 4, 2001, the Company granted Employee a stock option award under the Plan with
respect to 200,000 shares of Company common stock;

     WHEREAS, on June 10, 2002, the Company granted Employee a stock option award under the Plan
with respect to 200,000 shares of Company common stock;

     WHEREAS, each of the two stock option awards described above is void to the extent that it
attempted to grant a stock option with respect to more than 100,000 shares of Company common stock;

     WHEREAS, on July 3, 2003, the Company granted Employee a stock option award under the Plan
with respect to 100,000 shares of Company common stock, but would have granted him a stock option
award with respect to 250,000 shares but for the 100,000 share annual limitation referred to above;

     WHEREAS, the Company desires to reward Employee for his services to the Company and to
encourage him to continue to work for the benefit of the Company in a manner that will benefit all
Company shareholders and to compensate him for the stock option awards described above that
exceeded or would have exceeded the Plan’s 100,000 share annual limitation;

     WHEREAS, the Company and Employee entered into a Cash Bonus Agreement effective as of August
22, 2003 (“the Cash Bonus Agreement”) to accomplish the foregoing;

     WHEREAS,
on April 4 and 5, 2007, the Employee exercised all of the vested stock options
awarded to him on June 10, 2002 and on July 3, 2003 and subsequently sold the underlying 175,000
shares of common stock at a weighted average sale price of $15.32 per share (the “Average Option
Sale Price”);

     WHEREAS, pursuant to the terms of the Cash Bonus Agreement, as of April 5, 2007, the Employee
elected to be paid as deferred compensation a cash bonus equal to $241,000.00 (the Average Option
Sale Price — $10.50) × 100,000 × 50%;

     WHEREAS, pursuant to the terms of the Cash Bonus Agreement, as of April 5, 2007, the Employee
elected to be paid as deferred compensation a cash bonus equal to $145,500.00 (the Average Option
Sale Price — $11.44) × 150,000 × 25%; and

 

 

     WHEREAS, pursuant to discussions between Employee and the Compensation Committee of the
Company’s Board of Directors and in consideration of the implications of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), the parties desire to amend the Cash Bonus
Agreement.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and obligations
herein after set forth and Employee’s agreement to convert his 2005 and 2006 Restricted Stock
Awards to Restricted Stock Units pursuant to the Amended and Restated Restricted Stock Award
Agreements dated as of the date hereof, the Company agrees to pay Employee certain deferred cash
bonuses on the terms and conditions set forth herein.

     1. The Company will pay Employee as deferred compensation a cash bonus equal to $241,000.00
(the Average Option Sale Price — $10.50) × 100,000 × 50%. The cash bonus payment pursuant to this
Section shall be payable on the earliest of the following:

     a. May 15, 2009;

     b. the date of Employee’s “separation from service” with the Company within the meaning of
Section 409A(a)(2)(A)(i) of the Code for any reason other than death or disability; or

     c. Employee’s death or disability.

     For all purposes of this Amended Agreement, Employee will be considered disabled only if
because of a medically determinable physical or mental impairment that can be expected to result in
death or that can be expected to last for a continuous period of at least 12 months: (i) he is
unable to engage in any substantial gainful activity; or (ii) he is receiving income replacement
benefits for a period of at least three months under an accident and health plan of the Company.

     If and to the extent that the Company reasonably anticipates that its income tax deduction
with respect to any payment under this Amended Agreement, including any payment under this Section
or Section 2 hereof, will be limited or eliminated by application of Code Section 162(m), the
payment shall be delayed until either (i) the earliest date at which the Company reasonably
anticipates that the Company’s deduction for the payment will not be limited or eliminated by
application of Code Section 162(m), or (ii) the calendar year in which occurs the Employee’s
separation from service.

     Notwithstanding anything herein to the contrary, in the event that the Employee is a
“specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, any payment under
this Amended Agreement, including any payment under this Section or Section 2 hereof, shall be
delayed until the earlier of (i) six months after the Employee’s separation from service with the
Company and (ii) the Employee’s death, if such a delay is necessary to avoid the imposition of
additional tax and interest on the Employee under Section 409A(a)(1)(B)
 of the Code.

     2. The Company will pay Employee as additional deferred compensation another cash bonus equal
to $436,500.00 (the Average Option Sale Price — $11.44) × 150,000 × 75%. The cash bonus payment
pursuant to this Section shall be payable on the earliest of the following:

     a. May 15, 2009;

     b. the date of Employee’s “separation from service” with the Company within the meaning of
Section 409A(a)(2)(A)(i) of the Code for any reason other than death or disability; or

     c. Employee’s death or disability.

 

 

     3. Nothing herein contained shall confer on Employee 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 Employee.

     4. This Amended Agreement may not be assigned by the Company without the written consent of
Employee but the obligations of the Company under this Amended Agreement shall be the binding legal
obligations of any successor to the Company by merger or other business combination, and in the
event of any business combination or transaction that results in the transfer of substantially all
of the assets or business of the Company, the Company will cause the transferee to assume the
obligations of the Company under this Amended Agreement. Neither this Amended Agreement nor the
bonuses hereunder may be assigned by Employee during Employee’s life, and any payment arising as
the result of Employee’s death shall be paid to one or more beneficiaries designated by Employee in
a form approved by the Company, or in the absence of any such designation, to Employee’s estate.

     5. The validity, interpretation, construction and performance of this Amended Agreement shall
be governed by the laws of the State of Illinois, without regard to the conflict of law principles
thereof.

     6. The Company may withhold from any payment that it is required to make under this Amended
Agreement amounts sufficient to satisfy applicable withholding requirements under any federal,
state or local law.

     7. This Amended Agreement supersedes the Cash Bonus Agreement. This Amended Agreement may be
amended at any time by written agreement between the Company and Employee. Any such amendment shall
be made pursuant to a resolution of the Compensation Committee of the Company’s Board of Directors.

     8. Cash payments under this Amended Agreement shall constitute general obligations of the
Company. Employee shall have only an unsecured right to payment thereof out of the general assets
of the Company.

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

     10. The parties initially shall attempt to resolve by direct negotiation any dispute,
controversy or claim arising out of or relating to this Amended 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, either party may initiate a confidential, binding
arbitration to resolve the Dispute. All such Disputes shall be arbitrated in Chicago, Illinois
pursuant to the arbitration rules of J.A.M.S. Endispute before a single arbitrator. (If, at the
time of any Dispute, J.A.M.S. Endispute has ceased to exist, all such Disputes shall be arbitrated
in Chicago, Illinois pursuant to the arbitration rules of the American Arbitration Association
before a single arbitrator.) Judgment upon any award rendered by the arbitrator may be entered in
any court having jurisdiction, and both parties consent and submit to the jurisdiction of such
court for purposes of such action. Nothing in this Amended Agreement shall preclude either party
from seeking equitable relief from a court of competent jurisdiction. The statute of limitations,
estoppel, waiver, laches and similar doctrines, which would otherwise be applicable in any action
brought by a party shall be applicable in any arbitration proceeding, and the commencement of an
arbitration proceeding shall be deemed the commencement of an action for those purposes. The Federal Arbitration Act shall apply to
the construction, interpretation and enforcement of this arbitration provision.

     11. This Amended 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.

     12. This Amended Agreement supersedes and cancels all prior written or oral agreements and
understandings relating to the terms of this Amended Agreement.

 

 

     IN WITNESS WHEREOF, the parties have executed this Amended Agreement as of the date written
above.

	 	 	 	 	 
	 
	 	 	 	 
	METHODE ELECTRONICS, INC.	 	EMPLOYEE
	 
	 	 	 	 
	By:

	 	/s/ Paul G. Shelton
	 	Donald W. Duda
	 

	 	Chairman of the Compensation Committeeexv10w2

 

Exhibit 10.2

METHODE ELECTRONICS, INC.

AMENDED AND RESTATED

RESTRICTED STOCK UNIT AWARD AGREEMENT

(EXECUTIVE AWARD / PERFORMANCE-BASED)

     This agreement (the “Award Agreement”) effective as of June 15, 2005 (the “Award Date”), is
entered into by and between Methode Electronics, Inc., a Delaware corporation (the “Company”) and
Donald W. Duda (the “Grantee”). This Award Agreement amends and restates the Restricted Stock
Award Agreement by and between the Company and the Grantee dated June 15, 2005 (the “Predecessor
Agreement”). As of the date this Award Agreement is accepted by both parties, the Predecessor
Agreement will be void and otherwise superseded by this Award Agreement, and the Grantee will
return any Restricted Stock awarded to him under the Predecessor Agreement. All capitalized terms
used and not otherwise defined herein shall have the meanings ascribed to them by the Methode
Electronics, Inc. 2004 Stock Plan (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
otherwise provided herein, the Plan provisions are incorporated by reference and made a part hereof
to the same extent as if set forth in their entirety herein. A copy of the Plan is on file in the
offices of the Company.

     2. Grant. The Company hereby grants to Grantee a total of 125,000 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)	 	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 7 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 upon the earlier of the following events, but in no case earlier
than the date the Award becomes vested under Section 6:

	 	(i)	 	thirty (30) days after the Grantee’s date of termination of
employment with the Company and all of the Company’s Subsidiaries and
Affiliates; or
	 
	 	(ii)	 	the last day of the Company’s fiscal year in which the payment
of

 

 

	 	 	 	Common Stock in satisfaction of the Restricted Stock Units becomes
deductible to the Company under Section 162(m) of the Code, in which case
the Company may pay out a portion of the Restricted Stock Unit Award if
payment of the entire Award would not be deductible to the Company and the
remaining portion of the Award shall be paid when, and to the extent, the
payment becomes deductible. If the Grantee has other outstanding vested
awards that are conditioned on payment being deductible to the Company, the
vested awards that do not have performance-based criteria shall be paid
first and in the order they were first granted.

	 	(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, any payment under
this Award Agreement shall be delayed until the earlier of (i) six months after the
Grantee’s separation from service with the Company and (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.

	 	(a)	 	Vesting Date. The determination as to the number of Restricted Stock
Units which shall vest pursuant to Section 6(b) shall be made as of May 3, 2008 (the
“Vesting Date”), provided Grantee is employed by the Company (or a Subsidiary or
Affiliate thereof) continuously between the Award Date and the Vesting Date.

	 	(b)	 	Amount of Restricted Stock Units that Vest. Exhibit A sets
forth a table of percentages which vary based upon certain performance criteria of the
Company between the Award Date and the Vesting Date. Grantee shall vest in the
percentage of Restricted Stock Units granted to Grantee on the Award Date that
corresponds to the performance of the Company on the Vesting Date. The percentage used
to determine the amount of Grantee’s Restricted Stock Units that vest shall be
determined in the absolute discretion of the Committee. As set forth in Section 7(a),
the percentage of Restricted Stock Units not vested on the Vesting Date shall
be forfeited.
	 
	 	(c)	 	Termination of Employment Prior to the Vesting Date. Notwithstanding
the provisions of 6(a) and 6(b) herein, Restricted Stock Units granted hereunder shall
vest, in an amount determined according to the calculation set forth below, if the
Grantee’s employment with the Company and all of its Subsidiaries and Affiliates is
terminated prior to the Vesting Date, due to: (i) retirement on or after Grantee’s
sixty-fifth birthday; (ii) retirement on or after Grantee’s fifty-fifth birthday with
consent of the Company; (iii) retirement at any age on account of total and permanent
disability as determined by the Company; (iv) death; or (v) a Change

 

 

	 	 	 	of Control as defined in the Plan. For purposes of this Section 6(c), “Early
Termination Date” shall refer to the occurrence of one of the events set forth in
(i), (ii), (iii) and (iv), and “Change of Control Date” shall refer to the
occurrence of the event set forth in (v). For clarity, Exhibit B attached
hereto and incorporated herein sets forth an example in which the Restricted Stock
Units vest upon the Change of Control Date as described in Section 6(b)(v). If
Grantee’s employment terminates on the Early Termination Date or there is a Change
of Control, then Grantee’s Restricted Stock Units shall vest as of the Early
Termination Date or Change of Control Date, as follows: Grantee shall vest in the
percentage of Restricted Stock Units that, extrapolated from the performance growth
of the Company from the Award Date to the most recent prior fiscal quarter to the
Early Termination Date or the Change of Control Date, would have vested on the
Vesting Date, multiplied by a fraction the numerator of which is the number of
months elapsed since May 1, 2004 (rounded up) and the denominator of which is 36.
	 	(d)	 	Change of Control. In the event of a Change of Control, Section 6(c)
of this Award Agreement shall govern vesting hereunder, and Section 11.3 of the Plan
shall be inapplicable.

     7. Forfeiture.

	 	(a)	 	Forfeiture of Restricted Stock Units not Vested. As of the Vesting
Date, Grantee shall forfeit all Restricted Stock Units not vested pursuant to Section
6(b) or Section 6(c) hereof. By example, pursuant to Section 6(b), if Grantee vests in
65% of the Restricted Stock Units granted to Grantee on the Award Date, Grantee thereby
forfeits 35% of the Restricted Stock Units granted to Grantee on the Award Date.
	 
	 	(b)	 	Forfeiture if the Grantee Engages in Certain Activities. If at any
time the Grantee engages in any activity adverse, contrary or harmful to the interests
of the Company, including, but not limited to: (i) conduct related to the Grantee’s
employment for which either criminal or civil penalties against the Grantee may be
sought, (ii) while employed by the Company or any Subsidiary or Affiliate, serving as a
consultant, advisor or in any other capacity to an entity that is, or proposes to be,
in competition with or acting against the interests of the Company, (iii) employing or
recruiting any present, former or future employee of the Company, whether individually
or on behalf of another person or entity, that is, or proposes to be, in competition
with or acting against the interests of the Company, (iv) disclosing or misusing any
confidential information or material concerning the Company, or (v) participating in a
hostile takeover attempt, 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.
	 
	 	(c)	 	Right of Set-off. If the Grantee owes the Company any amount by virtue
of Section 7(b) above, then the Company (or any Subsidiary or Affiliate) may

 

 

	 	 	 	recover such amount by setting it off from any amounts the Company (or any
Subsidiary or Affiliate) owes or may owe the Grantee from time to time. By
accepting these Restricted Stock Units and signing this Award Agreement in the space
provided below, the Grantee consents to a deduction of any amount the Grantee may
owe the Company by virtue of Section 7(b) above from any amounts the Company (or any
Subsidiary or Affiliate) owes or may owe the Grantee from time to time (including
amounts owed to the Grantee as wages or other compensation, fringe benefits, or
vacation pay, as well as any other amounts owed to the Grantee). Whether or not the
Company elects to make any set-off in whole or in part, if the Company does not
recover by means of set-off the full amount the Grantee owes it, calculated as set
forth above, the Grantee agrees to pay immediately the unpaid balance to the
Company.
	 	(d)	 	Committee Discretion. The Committee may release the Grantee from the
obligations under Section 7(b) above if the Committee determines in its sole discretion
that such action is in the best interest of the Company.

     8. Other Terms and Conditions. The Committee shall have the discretion to determine
such other terms and provisions hereof as stated in the Plan.

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

     10. 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.

     11. 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.

     12. 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.

     13. Withholding. Grantee agrees, as a condition of this grant, to make acceptable
arrangements to pay any withholding or other taxes that may be due as a result of the vesting of
the Restricted Stock Units acquired under this grant. In the event that the Company determines

 

 

that any federal, state, local or foreign tax or withholding payment is required relating to
the vesting of shares arising from this grant, the Company shall have the right to require such
payments from Grantee, or withhold such amounts from other payments due Grantee from the Company or
any Subsidiary or Affiliate.

     14. 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.

     15. Construction. This Award Agreement is subject to and shall be construed in
accordance with the Plan, the terms of which are explicitly made applicable hereto. In the event
of any conflict between the provisions hereof and those of the Plan, the provisions of the Plan
shall govern.

GRANTEE

	 	 	 	 	 
	 	 	 
	/s/ Donald W. Duda
 	 
	Donald W. Duda 	 
	 	 
	 

METHODE ELECTRONICS, INC.

	 	 	 	 	 
	 	 	 
	 	By:  	/s/
Douglas A. Koman
 	 
	 	 	Douglas A. Koman 	 
	 	Its: 	Vice President, Corporate Finance and Chief Financial Officer

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