Document:

exv10w5

 

Exhibit 10.5

METHODE ELECTRONICS, INC.

2007 CASH INCENTIVE PLAN

RSA TANDEM CASH AWARD

FORM AWARD AGREEMENT

     This Cash Incentive Award Agreement (the “Agreement”), effective as of September 13, 2007 (the
“Effective Date”), is entered into by and between Methode Electronics, Inc., a Delaware corporation
(the “Company”), and
_________________ (“Grantee”).

     WHEREAS, the Company desires to reward Grantee 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.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and obligations
hereinafter set forth, the Company agrees to pay Grantee certain cash amounts under the Company’s
2007 Cash Incentive Plan (the “Plan”) on the terms and conditions set forth herein.

     1. Award Amount. The Company shall pay to Grantee a cash award (the “Cash Award”)
based on achievement of performance criteria based on return on invested capital (“ROIC”) achieved
during the three-year period ending on May 1, 2010 (the “Vesting Date”) and net sales growth by
the Company. In calculating net sales growth, the net sales in fiscal 2007 (the “Base Year”) shall
be compared to the net sales in the fiscal year ending on the Vesting Date (the “Final Year”). The
amount of the Cash Award, if any, shall be based upon the percentage corresponding to the Company’s
actual performance as set forth on Exhibit A (“Performance Percentage”), and the number of
shares of restricted stock awarded to Grantee pursuant to the Performance Based RSA Award Agreement
dated as of the date hereof (the “RSA Award Agreement”). The Cash Award shall be calculated
according to the following formula: Cash Award = (Performance
Percentage) x (____________ shares) x
(May 1, 2010 closing price of the Common Stock of the Company). Grantee must remain an employee of
the Company between the Effective Date and May 1, 2010.

     Unless the Award is properly deferred under the terms of the Plan, the Award shall be paid to
the Grantee within 2 1/2 months after the end of the Company’s or the Grantee’s taxable year in which
the Grantee became entitled to the Award payment. The Company may withhold from any payment that
it is required to make under this Agreement amounts sufficient to satisfy applicable withholding
requirements under any federal, state or local law.

     2. Deferrals. The Grantee may defer receipt of his Award, subject to the deferral
rules under the Plan and applicable law.

     3. Payment Acceleration. Payment of the Award hereunder shall accelerate if the
Grantee’s employment with the Company and its Subsidiaries and Affiliates is terminated due to: (i)
retirement on or after his sixty-fifth birthday; (ii) retirement on or after his 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; or (iv) death. If payment is accelerated, payment of the
Award shall be made on a pro rata basis based on ROIC performance to date and based on net sales in
the four most recently completed fiscal quarters, as calculated pursuant to the RSA Award
Agreement.

 

 

     4. Change of Control. Payment of any outstanding Award shall be accelerated
immediately following a Change of Control. If payment is accelerated, payment of the Award shall
be made on a pro rata basis, based on based on ROIC performance to date and based on net sales in
the four most recently completed fiscal quarters, as calculated pursuant to the RSA Award
Agreement.

     5. Adjustments for Acquisitions or Dispositions. In the event of any acquisition of
one or more businesses during the Base Year, the net sales of the acquired business(es) for such
full fiscal year (including pre-acquisition sales) will be included in the Base Year net
sales. In the event of any disposition (or related dispositions as determined by the board of
directors) with Base Year net sales in the aggregate in excess of Fifty Million Dollars
($50,000,000) (a “Large Disposition”), the net sales of such business(es) will be deducted from the
Base Year net sales and the Final Year net sales, if any. For all acquisitions and all
dispositions other than a Large Disposition, the net sales of such businesses will be offset
against each other. In such calculation, the net sales for the twelve months prior to the closing
will be used for dispositions and the net sales for the full fiscal year of the transaction
(including pre-acquisition sales) will be used for acquisitions. After offsetting such
net sales, if such amount is greater than Fifty Million Dollars ($50,000,000), such amount will be
deducted from the Final Year net sales.

     6. Construction. This 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 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 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.

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

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

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

     10. 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 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. Each party shall pay: the fees of his or its attorneys; the expenses
of his or its witnesses; and all other expenses connected with presenting his or its case. Other
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.

     11. 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.

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

	 	 	 	 	 	 	 	 
	GRANTEE	 	 	 	METHODE ELECTRONICS, INC.	 
	 
	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 
	   	 	 	 	   	 
	 

	 	 	 	 	 	Paul G. Shelton, Compensation Committee Chairman	 
	[_________________________]exv10w6

 

Exhibit 10.6

METHODE ELECTRONICS, INC. 

2007 STOCK PLAN

DIRECTOR RSA

FORM AWARD AGREEMENT

     This restricted stock award agreement (the “Award Agreement”), effective as of September 13,
2007 (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 his/her service as a director of the
Company and to encourage him/her to continue to work for the benefit of the Company in a manner
that will benefit all Company shareholders.

     NOW, THEREFORE, in consideration of the premises and the mutual covenants and obligations
hereinafter set forth, the Company agrees to deliver to Grantee restricted stock of the Company
under the Methode Electronics, Inc. 2007 Stock Plan (the “Plan”) on the terms and conditions set
forth herein.

     1. Grant. The Company hereby grants to Grantee a total of [_______] shares of
Restricted Stock (the “Restricted Shares”).

     2. Vesting. The Restricted Shares granted hereunder are fully vested as of the date
hereof.

     Grantee agrees, as a condition of this Award, to make acceptable arrangements to pay any
withholding or other taxes that may be due as a result of the vesting of the Restricted Shares
acquired under this Award. 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 the Restricted Shares
arising from this Award, 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.

     3. 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 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.

 

 

     4. Amendment. This Award Agreement may be amended at any time by written agreement
between the Company and Grantee. Any such amendment shall be made pursuant to a resolution of the
Compensation Committee of the Company’s Board of Directors.

     5. 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.

     6. 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.

     7. Entire Agreement. This Award Agreement supersedes and cancels all prior written or
oral agreements and understandings relating to the terms of this Agreement.

	 	 	 	 	 	 	 	 
	GRANTEE	 	 	 	METHODE ELECTRONICS, INC.	 
	 
	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 
	   	 	 	 	   	 
	 

	 	 	 	 	 	Paul G. Shelton, Compensation Committee Chairman	 
	[_________________________]

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