Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
At the Annual Meeting of Stockholders on September 13, 2007, the stockholders of Methode
Electronics, Inc. (the Company) approved, upon recommendation of the Companys Board of
Directors, adoption of the Methode Electronics, Inc. 2007 Stock Plan (the Stock Plan) and the
Methode Electronics, Inc. 2007 Cash Incentive Plan (the Cash Plan).
The Stock Plan
The Stock Plan permits a total of 1,250,000 shares of our common stock to be awarded to
participants in the form of nonqualified stock options, incentive stock options, restricted stock,
restricted stock units, stock appreciation rights, and performance share units, any of which may be
performance-based awards. The Stock Plan is designed to allow for performance-based compensation
under Section 162(m) of the Internal Revenue Code of 1986, as amended (Section 162(m)). As
such, qualified awards payable pursuant to the Stock Plan should be deductible for federal income
tax purposes under most circumstances. Our Compensation Committee will determine the type and
amount of each award, as well as the terms and conditions. We currently grant equity incentive
awards in the form of restricted stock and restricted stock units under the Methode Electronics,
Inc. 2004 Stock Plan (the 2004 Plan) or the Methode Electronics, Inc. 2000 Stock Plan (the 2000
Plan). As of April 28, 2007, awards with respect to 400,900 shares and 171,877 shares of our
common stock were subject to issuance under the 2004 Plan and the 2000 Plan, respectively. Upon
the adoption of the 2007 Stock Plan, our Board of Directors elected to terminate the 2004 Plan and
the 2000 Plan with respect to the shares reserved under these plans that are not subject to
outstanding awards.
In July 2007, our Compensation Committee authorized restricted stock awards to executive
officers under the Stock Plan, subject to stockholder approval of the Stock Plan. These restricted
stock awards are subject to a performance-based vesting condition linked to the net sales growth
and return on invested capital of the Company, measured as of May 1, 2010. At this time, our
Compensation Committee also authorized restricted stock awards to our non-employee directors under
the Stock Plan, subject to stockholder approval of the Stock Plan. Each of our non-employee
directors received a contingent grant of 3,000 shares of restricted stock.
The Cash Plan
The Cash Plan is intended to provide cash incentives for senior management to improve company
performance and increase value for stockholders. The Cash Plan is designed to provide
performance-based compensation under Section 162(m). As such, qualified awards payable pursuant
to the Cash Plan should be deductible for federal income tax purposes under most circumstances.
Our Compensation Committee will determine the amounts and terms of each award, including the
performance criteria, performance goals and performance period.
In July 2007, our Compensation Committee authorized certain incentive awards to executive
officers under the Cash Plan, subject to stockholder approval of the Cash Plan. These awards
include an annual performance-based bonus award and an RSA tandem cash bonus
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