def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
(Amendment No. ___)
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Preliminary Proxy Statement |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Rule 14a-12 |
METHODE ELECTRONICS, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
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Date Filed: |
METHODE
ELECTRONICS, INC.
7401 West Wilson Avenue
Chicago, Illinois 60706
(708) 867-6777
NOTICE OF ANNUAL MEETING OF
SHAREHOLDERS
September 18,
2008
To the Shareholders of Methode Electronics, Inc.:
Notice is hereby given that an annual meeting of shareholders of
Methode Electronics, Inc. will be held on Thursday,
September 18, 2008 at 11:00 a.m., Chicago time, at
Methode’s corporate offices at 7401 West Wilson
Avenue, Chicago, Illinois, for the following purposes:
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To elect a board of directors;
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To ratify the Audit Committee’s selection of
Ernst & Young LLP to serve as our independent
registered public accounting firm for the fiscal year ending
May 2, 2009; and
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3.
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To transact such other business as may properly come before the
annual meeting or any adjournment or postponement thereof.
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Our board of directors has fixed the close of business on
July 25, 2008 as the record date for the determination of
shareholders entitled to notice of and to vote at the annual
meeting and at any adjournment or postponement thereof.
It is important that your shares be represented and voted at the
annual meeting. Whether or not you plan to attend the annual
meeting, please complete, sign, date and mail the accompanying
proxy card in the enclosed self-addressed, stamped envelope, or
deliver your proxy by telephone or the Internet in accordance
with the instructions provided. We respectfully request your
cooperation.
By Order of the Board of Directors
Warren L. Batts
Chairman
August 11, 2008
Proxy
Statement for the
Annual Meeting of Stockholders of
METHODE ELECTRONICS, INC
To be held on Thursday, September 18, 2008
TABLE
OF CONTENTS
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METHODE
ELECTRONICS, INC.
7401 West Wilson Avenue
Chicago, Illinois 60706
(708) 867-6777
PROXY
STATEMENT
ANNUAL
MEETING OF SHAREHOLDERS
September 18, 2008
GENERAL
INFORMATION
The enclosed proxy is solicited on behalf of Methode
Electronics, Inc. (“Methode”) in connection with an
annual meeting of our shareholders to be held on Thursday,
September 18, 2008 at 11:00 a.m., Chicago time, at
Methode’s corporate offices at 7401 West Wilson
Avenue, Chicago, Illinois, and at any adjournment or
postponement of the annual meeting.
At the annual meeting, we will ask our shareholders to elect our
board of directors and to ratify the Audit Committee’s
selection of Ernst & Young LLP
(“Ernst & Young”) to serve as our
independent registered public accounting firm for the 2009
fiscal year.
This proxy statement and the accompanying proxy card are first
being mailed to our shareholders on or about August 11,
2008.
Record
Date; Shares Outstanding
Our board of directors has fixed the close of business on
July 25, 2008 as the record date for the determination of
shareholders entitled to notice of and to vote at the annual
meeting and at any adjournment or postponement thereof. As of
the record date, there were 38,137,555 shares of our common
stock outstanding and entitled to vote at the annual meeting.
Quorum;
Votes Required
The presence, in person or by proxy, of the holders of a
majority of the outstanding shares of our common stock is
necessary to constitute a quorum at the annual meeting. Both
abstentions and broker non-votes are counted as present for the
purpose of determining the presence of a quorum at the annual
meeting. Generally, broker non-votes occur when shares held by a
broker or nominee for a beneficial owner are not voted with
respect to a particular proposal because the broker or nominee
has not received voting instructions from the beneficial owner
and the broker or nominee lacks discretionary power to vote such
shares.
At the annual meeting, each holder of common stock will be
entitled to one vote per share. The election of our board of
directors and the ratification of the selection of our
independent registered public accounting firm require approval
by a majority of the shares of common stock represented at the
meeting and entitled to vote, assuming a quorum is present. Both
abstentions and broker non-votes will be considered as present
but will not be considered as votes in favor of any matter.
However, broker non-votes are excluded from the “for,”
“against” and “abstain” counts, and instead
are reported as simply “broker non-votes.”
Consequently, abstentions have the effect of voting against
these proposals, while broker non-votes have no effect as to
voting for or against any such matter.
Voting
Procedures
It is important that your shares be represented and voted at the
annual meeting. Whether or not you plan to attend the annual
meeting, please complete, sign, date and mail the accompanying
proxy card in the enclosed self-addressed, stamped envelope, or
deliver your proxy by telephone or the Internet. In order to
grant a proxy by Internet, go to www.proxyvote.com and
enter your individual
12-digit
control number found on your proxy card in order to obtain your
records and to create an electronic voting instruction form. In
order to grant a proxy by telephone, call
1-800-690-6903
and enter your individual
12-digit
control number found on your proxy card and then follow the
instructions given over the telephone. You may grant your proxy
by Internet or by telephone up until
11:59 p.m. Eastern Time the day before the annual
meeting date. Please do not submit a proxy card if you delivered
your proxy by telephone or the Internet unless you intend to
change your voting instructions.
If you return a proxy without direction, the proxy will be voted
“FOR” the election of all nine director nominees and
“FOR” the ratification of the selection of
Ernst & Young.
Revoking
Your Proxy
If you decide to change your vote, you may revoke your proxy at
any time before the annual meeting. You may revoke your proxy by
notifying our Corporate Secretary in writing that you wish to
revoke your proxy at the following address: Methode Electronics,
Inc., 7401 West Wilson Avenue, Chicago, Illinois 60706,
attention Corporate Secretary. You may also revoke your proxy by
submitting a later-dated and properly executed proxy (including
by means of the telephone or Internet) or by voting in person at
the annual meeting. Attendance at the annual meeting will not,
by itself, revoke a proxy.
Proxy
Solicitation Expenses
We will bear the entire cost of the solicitation of proxies,
including preparation, assembly, printing and mailing of this
proxy statement, the proxy card and any additional information
furnished to shareholders. Copies of solicitation materials will
be furnished to banks, brokerage houses, fiduciaries and
custodians holding shares of our common stock beneficially owned
by others to be forwarded to such beneficial owners. We will
reimburse such persons for their reasonable costs of forwarding
solicitation materials to such beneficial owners. Our directors,
officers or other regular employees may solicit proxies by
telephone, by
e-mail, by
fax or in person. No additional compensation will be paid to
directors, officers and other regular employees for such
services.
CORPORATE
GOVERNANCE
We are committed to maintaining high standards of corporate
governance intended to serve the long-term interests of Methode,
our shareholders and our employees.
Director
Independence
Our board of directors has considered the independence of its
members under the applicable standards of the Securities and
Exchange Commission and the New York Stock Exchange. Our board
has determined that all of our current directors are independent
under those standards, except for Donald Duda, our President and
Chief Executive Officer. Mr. Duda’s lack of
independence relates solely to his service as an executive
officer and is not due to any other transactions or
relationships.
In determining the independence of Mr. Aspatore, the board
considered the business consulting services provided by
Mr. Aspatore personally and by Amherst Partners, LLC
(“Amherst”) to Methode in fiscal 2007 and 2008.
Mr. Aspatore serves as Chairman and Co-Founder of Amherst
and holds a minority interest in Amherst. The board determined
that these arrangements would not impair the independence or
judgment of Mr. Aspatore, based on a consideration of all
relevant facts and circumstances. The Board considered that
Mr. Aspatore did not receive direct compensation from
Methode in excess of $100,000 in any
12-month
period in the last three years, that the one-time payment to
Amherst was less than $100,000, and that Mr. Aspatore and
Amherst are no longer providing consulting services to Methode.
In addition, our board of directors has determined that each
current member of our Audit Committee, our Compensation
Committee, our Nominating and Governance Committee and our
Technology Committee satisfies the independence requirements of
the applicable standards, if any, of the Securities and Exchange
Commission and the New York Stock Exchange.
2
Board
Committees
The following chart sets forth the committees of our board:
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Number of
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Meetings in
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Committee
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Members
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Principal Functions
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Fiscal 2008
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Audit
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Lawrence B. Skatoff (Chair)
Walter J. Aspatore(1)
Isabelle C. Goossen
Paul G. Shelton
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• Oversees accounting and financial reporting and
audits of financial statements.
• Monitors performance of internal audit function and
our system of internal control.
• Monitors performance, qualifications and
independence of our independent registered public accounting
firm and makes decisions regarding retention, termination and
compensation of the independent registered public accounting
firm and approves services provided by the independent
registered public accounting firm.
• Monitors compliance with legal and regulatory
requirements, including our Code of Business Conduct.
• Reviews our press releases and certain Securities
and Exchange Commission filings.
• Reviews related party transactions and potential
conflict of interest situations.
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Compensation
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Paul G. Shelton (Chair)
Warren L. Batts
Darren M. Dawson
Isabelle C. Goossen
Christopher J. Hornung
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• Oversees our compensation policies and plans.
• Approves goals and incentives for the compensation
of our Chief Executive Officer and with the advice of
management, other officers and managers.
• Approves grants under our stock and bonus plans.
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Nominating and Governance
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Christopher J. Hornung (Chair)
Warren L. Batts
J. Edward Colgate
Lawrence B. Skatoff
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• Selects director candidates for election to our
board at the annual meeting or to fill vacancies.
• Recommends board committee assignments.
• Recommends compensation and benefits for
directors.
• Reviews our Corporate Governance Guidelines.
• Conducts an annual assessment of board
performance.
• Annually reviews succession planning for our Chief
Executive Officer.
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Technology
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J. Edward Colgate (Chair)
Walter J. Aspatore(1)
Darren M. Dawson
Isabelle C. Goossen
Christopher J. Hornung
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• Reviews with management our technology assets and
future needs.
• Reviews technology research and development
activities and possible acquisitions of technology.
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(1) |
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Mr. Aspatore was elected a director and committee member
effective February 1, 2008 |
During the 2008 fiscal year, our board of directors held 15
meetings and no director attended less than 75% of the aggregate
of the total number of meetings of our board and the total
number of meetings held by the respective committees on which he
or she served. Under our Corporate Governance Guidelines, our
directors are expected to attend board and shareholder meetings
and meetings of committees on which they serve and to meet as
frequently as necessary to properly discharge their
responsibilities.
Our independent directors hold regularly scheduled executive
sessions at which only independent directors are present.
Pursuant to our Corporate Governance Guidelines, our Chairman of
the Board is the Presiding Director of such sessions.
Our Audit, Compensation, Nominating and Governance and
Technology Committees operate pursuant to charters adopted by
the board, which may be found on our website at
www.methode.com or made available in print to any
shareholder at their request. Our Corporate Governance
Guidelines also may be found on our website at
www.methode.com or made available in print to any
shareholder at their request.
3
Nominating
Process of the Nominating and Governance Committee
Our Nominating and Governance Committee is responsible for
identifying and recommending to our board of directors
individuals qualified to become directors consistent with
criteria approved by our board. In considering potential
candidates for our board, including with respect to nominations
for re-election of incumbent directors, the Committee considers
the potential candidate’s integrity and business ethics;
strength of character, judgment and experience, consistent with
our needs; specific areas of expertise and leadership roles; and
the ability to bring diversity to our board. The Committee also
considers the ability of the individual to allocate the time
necessary to carry out the tasks of board membership, including
membership on appropriate committees.
The Committee identifies potential nominees by asking current
directors and others to notify the Committee if they become
aware of persons, meeting the criteria described above, who may
be available to serve on our board. The Committee has sole
authority to retain and terminate any search firm used to
identify director candidates and has sole authority to approve
the search firm’s fees and other retention terms.
Historically, the Committee has not engaged third parties to
assist in identifying and evaluating potential nominees, but
would do so in those situations where particular qualifications
are required to fill a vacancy and our board’s contacts are
not sufficient to identify an appropriate candidate.
The Committee will consider suggestions from our shareholders.
Any recommendations received from shareholders will be evaluated
in the same manner that potential nominees suggested by board
members are evaluated. Upon receiving a shareholder
recommendation, the Committee will initially determine the need
for additional or replacement board members and evaluate the
candidate based on the information the Committee receives with
the shareholder recommendation or may otherwise acquire, and,
may, in its discretion, consult with the other members of our
board. If the Committee determines that a more comprehensive
evaluation is warranted, the Committee may obtain additional
information about the director candidate’s background and
experience, including by means of interviews with the candidate.
Our shareholders may recommend candidates at any time, but the
Committee requires recommendations for election at an annual
meeting of shareholders to be submitted to the Committee no
later than 120 days before the first anniversary of the
date of the proxy statement sent to shareholders in connection
with the previous year’s annual meeting. The Committee
believes this deadline is appropriate and in the best interests
of Methode and our shareholders because it ensures that the
Committee has sufficient time to properly evaluate all proposed
candidates. Therefore, to submit a candidate for consideration
for nomination at the 2009 annual meeting of shareholders, a
shareholder must submit the recommendation, in writing, by
April 13, 2009. The written notice must include:
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the name, age, business address and residential address of each
proposed nominee and the principal occupation or employment of
each nominee;
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the number of shares of our common stock that each nominee
beneficially owns;
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a statement that each nominee is willing to be
nominated; and
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any other information concerning each nominee that would be
required under the rules of the Securities and Exchange
Commission in a proxy statement soliciting proxies for the
election of those nominees.
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Recommendations must be sent to the Nominating and Governance
Committee, Methode Electronics, Inc., 7401 West Wilson
Avenue, Chicago, Illinois 60706.
Communications
with Directors
Our annual meeting of shareholders provides an opportunity each
year for shareholders to ask questions of, or otherwise
communicate directly with, members of our board of directors on
appropriate matters. All of our directors other than
Mr. Skatoff attended the 2007 annual meeting. We anticipate
that all of our directors will attend the 2008 annual meeting.
In addition, shareholders may, at any time, communicate in
writing with any particular director, or independent directors
as a group, by sending such written communication to the
Corporate Secretary of Methode Electronics, Inc. at
7401 West Wilson Avenue, Chicago, Illinois 60706. Copies of
written communications received at such
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address will be provided to the relevant director or the
independent directors as a group unless such communications are
considered, in the reasonable judgment of the Corporate
Secretary, to be improper for submission to the intended
recipient(s). Examples of shareholder communications that would
be considered improper for submission include, without
limitation, customer complaints, solicitations, communications
that do not relate directly or indirectly to us or our business
or communications that relate to other improper or irrelevant
topics.
Codes of
Business Conduct and Ethics
Our board of directors has adopted a Code of Business Conduct
that applies to our directors, principal executive officer,
principal financial officer, principal accounting officer or
controller and persons performing similar functions, as well as
other employees. The code may be found on our website at
www.methode.com or made available in print to any
shareholder at their request.
If we make any substantive amendments to the Code of Business
Conduct or grant any waiver, including any implicit waiver, from
a provision of the Code of Business Conduct to our principal
executive officer, principal financial officer, principal
accounting officer or controller or persons performing similar
functions, we will disclose the nature of such amendment or
waiver on our website or in a report on
Form 8-K
in accordance with applicable rules and regulations.
DIRECTOR
COMPENSATION
We use a combination of cash and common stock to compensate our
non-employee directors. Directors who are also our full-time
employees are not paid for their services as directors or for
attendance at meetings.
For the fiscal year ended May 3, 2008, non-employee
directors are entitled to receive an annual cash retainer of
$35,000 and an attendance fee of $1,000 for all committee
meetings and for each board meeting other than the regularly
scheduled quarterly meetings. Our Chairman of the Board and the
Chairman of each of our board committees received supplemental
annual retainers in the following amounts: Chairman of the
Board, $25,000; Chairman of the Audit Committee and the
Compensation Committee, $20,000; and Chairman of the Nominating
and Governance Committee and Technology Committee, $10,000. In
addition, members of our Audit Committee receive an additional
annual retainer of $10,000. Pursuant to our Deferred
Compensation Plan, our directors may elect to defer up to 100%
of their retainers and attendance fees per year. Additional
information regarding the Deferred Compensation Plan is
described under the “Nonqualified Deferred
Compensation” section in this proxy statement.
In August 2007 and July 2008, each non-employee director
received a grant of 3,000 shares of common stock. These
awards were fully vested as of the date of grant.
The following table sets forth certain information regarding
compensation to our non-employee directors during the fiscal
year ended May 3, 2008.
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Fees Earned or
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Stock Awards
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All Other
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Paid in Cash
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(1)(2)
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Compensation
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Total
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Name
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($)
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($)
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($)(3)
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($)
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Walter J. Aspatore(4)
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11,250
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11,250
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Warren L. Batts
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83,000
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45,420
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750
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129,170
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J. Edward Colgate
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59,000
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56,105
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740
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115,845
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Darren M. Dawson
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64,500
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56,105
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750
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121,355
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Isabelle C. Goossen
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75,000
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56,105
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750
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131,855
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Christopher J. Hornung
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72,000
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56,105
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764
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128,869
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Paul G. Shelton
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85,000
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56,105
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764
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141,869
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Lawrence B. Skatoff
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76,000
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45,420
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764
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122,184
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These amounts reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal year ended
May 3, 2008 in accordance with Statement of Financial
Accounting Standards No. 123 (“SFAS |
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No. 123(R)), and include amounts from awards granted in and
prior to fiscal 2008. Under SFAS No. 123(R), the fair
value of these awards is recognized ratably over the vesting
period. Details of the assumptions used in valuing these awards
are set forth in Note 4 to our audited financial statements
included in our Annual Report on
Form 10-K
for the fiscal year ended May 3, 2008. |
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As of May 3, 2008, each of the non-employee directors held
an outstanding unvested restricted stock award for
1,000 shares of common stock and Mr. Batts held a
vested stock option with respect to 10,000 shares of common
stock. During fiscal 2008, each non-employee director other than
Mr. Aspatore was granted a stock award for
3,000 shares of common stock. The grant date fair value of
each of these equity awards as computed in accordance with
SFAS No. 123(R) is $45,420. |
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Amounts reflect dividends paid with respect to outstanding
restricted stock awards. |
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Mr. Aspatore was elected a director effective
February 1, 2008. |
SECURITY
OWNERSHIP
Five
Percent Shareholders
The following table sets forth information regarding all persons
known to be the beneficial owners of more than 5% of
Methode’s common stock as of July 25, 2008 (except as
set forth in the relevant footnotes).
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Number of Shares and
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Nature of Beneficial
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Percent of
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Name and Address of Beneficial Owner
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Title of Class
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Ownership(1)
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Class
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Dimensional Fund Advisors LP(2)
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Common Stock
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2,560,453
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6.7
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1299 Ocean Avenue
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Santa Monica, California 90401
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Royce & Associates, LLC(3)
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Common Stock
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2,247,493
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5.9
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1414 Avenue of the Americas
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New York, New York 10019
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State Street Bank and Trust Company(4)
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Common Stock
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1,965,745
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5.2
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State Street Financial Center
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One Lincoln Street
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Boston, Massachusetts 02111
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Beneficial ownership arises from sole voting and sole investment
power of all shares reported unless otherwise indicated by
footnote. |
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|
Based solely on an amendment to Schedule 13G filed by
Dimensional Fund Advisors LP with the Securities and Exchange
Commission on February 6, 2008. |
|
(3) |
|
Based solely on an amendment to Schedule 13G filed by
Royce & Associates, LLC with the Securities and
Exchange Commission on January 30, 2008. |
|
(4) |
|
Based solely on a Schedule 13G filed by State Street Bank
and Trust Company with the Securities and Exchange Commission on
February 12, 2008. Sole voting power and shared dispositive
power was reported with respect to these shares. |
6
Directors
and Executive Officers
The following table sets forth information regarding our common
stock beneficially owned as of July 25, 2008 by
(i) each director and nominee, (ii) each of the named
executive officers, and (iii) all current directors and
executive officers as a group.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares and
|
|
|
|
|
|
|
|
|
|
Nature of Beneficial
|
|
|
Percent of
|
|
Name of Beneficial Owner
|
|
Title of Class
|
|
|
Ownership(1)
|
|
|
Class
|
|
|
Walter J. Aspatore
|
|
|
Common Stock
|
|
|
|
3,000
|
|
|
|
*
|
|
Warren L. Batts
|
|
|
Common Stock
|
|
|
|
39,000
|
(2)
|
|
|
*
|
|
J. Edward Colgate
|
|
|
Common Stock
|
|
|
|
14,370
|
(3)
|
|
|
*
|
|
Darren M. Dawson
|
|
|
Common Stock
|
|
|
|
15,000
|
(3)
|
|
|
*
|
|
Donald W. Duda
|
|
|
Common Stock
|
|
|
|
643,557
|
(4)
|
|
|
1.5%
|
|
Isabelle C. Goossen
|
|
|
Common Stock
|
|
|
|
15,000
|
(3)
|
|
|
*
|
|
Christopher J. Hornung
|
|
|
Common Stock
|
|
|
|
35,850
|
(3)
|
|
|
*
|
|
Paul G. Shelton
|
|
|
Common Stock
|
|
|
|
24,850
|
(3)
|
|
|
*
|
|
Lawrence B. Skatoff
|
|
|
Common Stock
|
|
|
|
16,850
|
(3)
|
|
|
*
|
|
Timothy R. Glandon
|
|
|
Common Stock
|
|
|
|
62,669
|
(5)
|
|
|
*
|
|
Douglas A. Koman
|
|
|
Common Stock
|
|
|
|
276,426
|
(6)
|
|
|
*
|
|
Thomas D. Reynolds
|
|
|
Common Stock
|
|
|
|
240,829
|
(7)
|
|
|
*
|
|
Paul E. Whybrow
|
|
|
Common Stock
|
|
|
|
61,992
|
(8)
|
|
|
*
|
|
All current directors and executive officers as a group (15
individuals)
|
|
|
Common Stock
|
|
|
|
1,588,103
|
(9)
|
|
|
3.6%
|
|
|
|
|
* |
|
Percentage represents less than 1% of the total shares of common
stock outstanding as of July 25, 2008. |
|
(1) |
|
Beneficial ownership arises from sole voting and investment
power unless otherwise indicated in the footnotes below. |
|
(2) |
|
Includes 1,000 shares of restricted stock subject to
forfeiture and options to purchase 10,000 shares of common
stock exercisable within 60 days. |
|
(3) |
|
Includes 1,000 shares of restricted stock subject to
forfeiture. For Messrs. Batts and Skatoff, these shares
will automatically vest in the event of their retirement from
the Board. |
|
(4) |
|
Includes 372,879 shares of restricted stock subject to
forfeiture, options to purchase 154,413 shares of common
stock exercisable within 60 days, and 16,265 shares of
common stock held in our 401(k) Plan. |
|
(5) |
|
Includes 56,969 shares of restricted stock subject to
forfeiture and options to purchase 2,500 shares of common
stock exercisable within 60 days. |
|
(6) |
|
Includes 82,969 shares of restricted stock subject to
forfeiture, options to purchase 152,648 shares of common
stock exercisable within 60 days, and 14,000 shares of
common stock held in our 401(k) Plan. |
|
(7) |
|
Includes 143,939 shares of restricted stock subject to
forfeiture, options to purchase 72,000 shares of common
stock exercisable within 60 days and 10,622 shares of
common stock held in our 401(k) Plan. |
|
(8) |
|
Includes 46,469 shares of restricted stock subject to
forfeiture and 6,493 shares of common stock held in our
401(k) Plan. |
|
(9) |
|
Includes 783,951 shares of restricted stock subject to
forfeiture, options to purchase 394,561 shares of common
stock exercisable within 60 days, and 51,637 shares of
common stock held in our 401(k) Plan. |
7
PROPOSAL ONE:
ELECTION OF DIRECTORS
A board of nine directors will be elected at the annual meeting.
Each director will hold office until the next annual meeting of
shareholders and until his or her successor is elected and
qualified. All of the nominees listed below currently serve as
our directors, were recommended unanimously to our board of
directors by our Nominating and Governance Committee, and were
nominated by our board of directors. The shares represented by
the proxies given pursuant to this solicitation will be voted
for the following nominees unless votes are withheld in
accordance with the instructions contained in the proxy. If any
of these nominees is not a candidate for election at the annual
meeting, an event which our board of directors does not
anticipate, the proxies will be voted for a substitute nominee
recommended to our board of directors by our Nominating and
Governance Committee and nominated by our board of directors.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
ELECTION OF THE FOLLOWING NOMINEES.
Walter J.
Aspatore
Chairman and Co-Founder,
Amherst Partners, LLC
Director
since February 2008
Age 65
Mr. Aspatore has served as Chairman and Co-Founder of
Amherst Partners, LLC, a business consulting firm, since 1994.
Prior to co-founding Amherst Partners, Mr. Aspatore served
in various officer positions at diversified manufacturing and
technology businesses, including Cross and Trecker Corporation,
the Warner and Swasey Company, Bendix Corporation and TRW
Corporation. He also served as Vice Chairman and President of
Onset BIDCO, a venture capital and subordinated debt fund, from
1992 to 1994. Mr. Aspatore also serves as a director of
Mackinac Financial Corporation, a bank holding company.
Warren L.
Batts
Retired Chairman and Chief Executive Officer,
Tupperware Corporation
Director
since 2001
Age 75
Mr. Batts is the retired Chairman and Chief Executive
Officer of Tupperware Corporation, a diversified consumer
products company. In 1997, Mr. Batts retired as Chairman of
Premark International, Inc., a diversified consumer products
company, where he also served as Chief Executive Officer from
1986 until 1996. Mr. Batts has taught as an Adjunct
Professor of Strategic Management at the University of Chicago
Graduate School of Business since 1998. Mr. Batts has also
served as a director and the Chairman of Chicago Children’s
Memorial Medical Center; a life trustee for the Art Institute of
Chicago; a director and the Chairman of the National Association
of Manufacturers; and a director of the National Association of
Corporate Directors.
Dr. J.
Edward Colgate
Pentair-Nugent Professor,
Department of Mechanical Engineering,
Northwestern University
Director
since 2004
Age 45
Dr. Colgate is currently a Professor in the Department of
Mechanical Engineering and the Founding Director of the
Institute for Design Engineering and Applications at
Northwestern University, where he has served in various
professor positions since 1988. From June 1999 until September
2000, Dr. Colgate took a sabbatical leave from Northwestern
University to serve as a founder and the President of Cobotics,
Inc., which is now part of Stanley Assembly Technologies, a
supplier of human interface technologies for the industrial
marketplace. His research
8
interests include human-machine systems, especially cobotics and
haptic interface. Dr. Colgate is currently the holder of
the Pentair-Nugent Teaching Professorship, and
co-Director
of the newly formed Segal Design Institute.
Dr. Darren
M. Dawson
McQueen Quattlebaum Professor,
Holcombe Department of Electrical and Computer Engineering,
Clemson University
Director
since 2004
Age 45
Dr. Dawson currently serves as a Professor in the
Electrical and Computer Engineering Department at Clemson
University, where he has held various professor positions since
1990. Dr. Dawson leads the Robotics and Mechatronics
Laboratory, which is jointly operated by the Electrical and
Mechanical Departments. His research interests include nonlinear
control techniques for mechatronic systems, robotic manipulator
systems and vision-based systems. Dr. Dawson’s work
has been recognized by several awards, including the Clemson
University Centennial Professorship in 2000.
Donald W.
Duda
Chief Executive Officer and President,
Methode Electronics, Inc.
Director
since 2001
Age 53
Mr. Duda has served as our Chief Executive Officer since
May 2004 and our President since 2001. Mr. Duda joined us
in 2000 and served as our Vice President —
Interconnect Products Group. Prior to his service with us,
Mr. Duda held several positions with Amphenol Corporation,
a manufacturer of electronic connectors, most recently as
General Manager of its Fiber Optic Products Division from 1988
through 1998.
Isabelle
C. Goossen
Vice President for Finance and Administration,
Chicago Symphony Orchestra Association
Director
since 2004
Age 56
Ms. Goossen has served as the Vice President for Finance
and Administration for the Chicago Symphony Orchestra
Association since 2001. From 1986 through 1999, Ms. Goossen
held several management positions with Premark International,
Inc., a diversified consumer products company, most recently as
Vice President and Treasurer from 1996 through 1999.
Christopher
J. Hornung
Chief Executive Officer
Next Testing, Inc.
Director
since 2004
Age 56
Mr. Hornung has served as Chief Executive Officer of Next
Testing, Inc. since January 2007. Next Testing provides
comprehensive, sport-specific athletic testing programs. From
February 2004 through December 2006, Mr. Hornung served as
President of the Pacific Cycle Division of Dorel Industries,
Inc., a global consumer products company. Prior to the
acquisition of Pacific Cycle by Dorel Industries Inc.,
Mr. Hornung served as the Chairman and Chief Executive
Officer of Pacific Cycle.
9
Paul G.
Shelton
Retired Vice President and Chief Financial Officer,
FleetPride, Inc.
Director
since 2004
Age 58
Mr. Shelton retired in 2003 as Vice President and Chief
Financial Officer of FleetPride Inc., an independent heavy-duty
truck parts distributor. From 1981 through 2001,
Mr. Shelton served in various management positions at AMCOL
International Corporation, a supplier of specialty minerals and
chemicals, most recently as Senior Vice President from 1995
through 2001 and Chief Financial Officer from 1984 through 2001.
Mr. Shelton also served on the board of directors of AMCOL
International Corporation for 12 years.
Lawrence
B. Skatoff
Retired Executive Vice President and Chief Financial Officer,
BorgWarner Inc.
Director
since 2004
Age 68
Mr. Skatoff retired in 2001 as Executive Vice President and
Chief Financial Officer of BorgWarner Inc., a manufacturer of
highly engineered systems and components for the automotive
industry. Prior to joining BorgWarner Inc., Mr. Skatoff was
Senior Vice President and Chief Financial Officer of Premark
International, Inc., a diversified consumer products company,
from 1991 through 1999. Before joining Premark, Mr. Skatoff
was Vice President-Finance of Monsanto Company, a worldwide
manufacturer of chemicals and pharmaceuticals.
10
PROPOSAL 2:
RATIFICATION OF SELECTION OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Audit Committee of our board of directors has selected
Ernst & Young to serve as our independent registered
public accounting firm for the fiscal year ending May 2,
2009, subject to ratification of the selection by our
shareholders. Ernst & Young has served as our
independent registered public accounting firm for many years and
is considered to be well qualified. We entered into an
engagement agreement with Ernst & Young for its fiscal
2008 services, which, among other things, contains contractual
provisions that subject us to alternative dispute resolution
procedures and exclude punitive damages from any monetary award.
It is anticipated that the services performed by
Ernst & Young for fiscal 2009 will be subject to a
similar engagement agreement.
Representatives of Ernst & Young will be present at
the annual meeting, will have the opportunity to make a
statement and will be available to respond to appropriate
questions.
If our shareholders do not ratify the selection of
Ernst & Young, our Audit Committee will reconsider the
selection. Even if the selection is ratified, our Audit
Committee may select a different independent registered public
accounting firm at any time during the year if it determines
that a change would be in the best interests of Methode and our
shareholders.
OUR BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE
RATIFICATION OF OUR AUDIT COMMITTEE’S SELECTION OF
ERNST & YOUNG AS OUR INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM.
11
AUDIT
COMMITTEE MATTERS
Report of
the Audit Committee
The Audit Committee oversees our financial reporting process on
behalf of our board of directors. Our management has the primary
responsibility for the financial statements and the reporting
process, including the system of internal controls. Our board
has determined that each member of our Audit Committee meets the
requirements as to independence, experience and expertise
established by the New York Stock Exchange. In addition, our
board has determined that Mr. Skatoff is an Audit Committee
financial expert as defined by the Securities and Exchange
Commission. In fulfilling its oversight responsibilities, our
Audit Committee reviewed and discussed the audited financial
statements in the Annual Report on
Form 10-K
for the year ended May 3, 2008 with management, including a
discussion of the quality, not just the acceptability, of the
accounting principles; the reasonableness of significant
judgments; and the clarity of disclosures in the financial
statements.
Our Audit Committee reviewed and discussed with our independent
registered public accounting firm, Ernst & Young,
which is responsible for expressing an opinion on the conformity
of the audited financial statements with U.S. generally
accepted accounting principles, the firm’s judgments as to
the quality, not just the acceptability, of our accounting
principles and such other matters as are required to be
discussed under the standards of the Public Company Accounting
Oversight Board (United States).
Ernst & Young provided to the Committee the written
disclosures and the letter required by Independence Standards
Board Standard No. 1, as amended (Independence Discussions
with Audit Committees). The Audit Committee discussed with
Ernst & Young the firm’s independence from
management and Methode and considered the compatibility of
nonaudit services with the firm’s independence.
Our Audit Committee discussed with our internal auditors and
Ernst & Young the overall scope and plans for their
respective audits. Our Audit Committee met with the internal
auditors and Ernst & Young, with and without
management present, to discuss the results of their
examinations, their evaluations of our internal controls, and
the overall quality of our financial reporting. The Committee
also discussed with Ernst & Young matters related to
the financial reporting process required to be discussed by
Statement on Auditing Standards No. 61, as amended
(Communication with Audit Committees).
In reliance on the reviews and discussions referred to above,
the Committee recommended to our board of directors (and our
board has approved) that the audited financial statements be
included in the Annual Report on
Form 10-K
for the year ended May 3, 2008 filed with the Securities
and Exchange Commission.
AUDIT COMMITTEE
Lawrence B. Skatoff, Chairman
Walter J. Aspatore
Isabelle C. Goossen
Paul G. Shelton
12
Auditing
and Related Fees
Our Audit Committee engaged Ernst & Young to examine
our consolidated financial statements for the fiscal year ended
May 3, 2008. Fees paid to Ernst & Young for
services performed during the 2008 and 2007 fiscal years were as
follows:
|
|
|
|
|
|
|
|
|
|
|
Fiscal 2008
|
|
|
Fiscal 2007
|
|
|
Audit Fees (1)
|
|
$
|
1,049,713
|
|
|
$
|
917,500
|
|
Audit-Related Fees (2)
|
|
|
—
|
|
|
|
1,900
|
|
Tax Fees (3)
|
|
|
21,668
|
|
|
|
22,400
|
|
All Other Fees (4)
|
|
|
48,700
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,120,082
|
|
|
$
|
941,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Audit fees represent aggregate fees billed for professional
services rendered by Ernst & Young for the audit of
our annual financial statements and review of our quarterly
financial statements, audit services provided in connection with
other statutory and regulatory filings and consultation with
respect to various accounting and financial reporting matters. |
|
(2) |
|
Audit-related fees in fiscal 2007 represent the aggregate fees
billed for assurance and related services by Ernst &
Young that are reasonably related to the performance of the
audit or review of our financial statements and are not reported
under the caption “Audit Fees” above. These
audit-related fees include fees for employee benefit plan audits
and due diligence services. |
|
(3) |
|
Tax fees principally included tax compliance fees. |
|
(4) |
|
All other fees in fiscal 2008 represent fees for due diligence
review and analysis. There were no other fees billed by
Ernst & Young in fiscal 2007. |
COMPENSATION
DISCUSSION AND ANALYSIS
Overview
This compensation discussion and analysis describes the key
elements of our executive compensation program, including an
analysis of compensation earned by or paid to our named
executive officers in the 2008 fiscal year. In this discussion,
the term “named executive officers” refers to the five
officers about whose compensation we provide detailed tabular
and narrative information in this proxy statement.
Our Compensation Committee oversees the design, implementation
and administration of our executive compensation program. The
primary goal of our compensation program is to reward
performance and align executives’ interests with those of
our shareholders. The principal elements of our executive
compensation program are base salary, annual cash incentive
compensation, long-term incentive compensation in the form of
cash and/or
equity-based awards, opportunities for tax-efficient retirement
savings and company contributions under our 401(k) savings plan,
perquisites and welfare benefits. We also provide for benefits
upon a change in control in certain circumstances.
Objectives
and Measurement Principles
Our executive compensation program supports our objective of
enhancing shareholder value through a competitive program that
attracts high-quality talent and rewards executives for
demonstrating strong leadership and delivering results. Our
executive compensation program is designed to:
|
|
|
|
•
|
Link pay to company and individual performance by targeting a
significant portion of an executive’s total direct
compensation as variable, at-risk compensation that is dependent
on successful achievement of specified annual and long-term
performance goals;
|
|
|
•
|
Align executive interests with shareholder interests by
establishing programs that promote increased shareholder value
and require a significant ownership of our common stock for our
executive officers; and
|
13
|
|
|
|
•
|
Attract and retain talent by paying competitively.
|
The primary metrics we use in structuring our performance-based
equity and cash awards include annual profit goals, return on
invested capital (over a three-year period) and revenue growth
(over a three-year period). In addition, we use individual
management by objectives (“MBOs”) to determine payouts
under our annual bonus program. MBOs include qualitative factors
which emphasize strong performance, such as product
diversification, technology acquisitions and talent management.
Our
Compensation Process
Our Compensation Committee meets as often as necessary to
perform its duties. In fiscal 2008, our Compensation Committee
met seven (7) times. Although most decisions regarding
executive compensation are made in the first quarter of our
fiscal year, our management and our Compensation Committee
continue to monitor developments during the year. Our
Compensation Committee typically meets with Donald Duda, Chief
Executive Officer, and, where appropriate, Douglas Koman, Chief
Financial Officer. From time to time, our Compensation Committee
engages compensation consultants to review the competitiveness
and effectiveness of our executive compensation program. In
connection with setting fiscal 2008 compensation, The Delves
Group was engaged to provide analyses of our executive
compensation program as compared to established market
benchmarks, as described more fully below.
Our Compensation Committee annually reviews tally sheets
summarizing our named executive officers’ total
compensation, including direct compensation; benefits under
equity compensation programs; perquisites; and potential
payments on termination of employment, whether on a change in
control of Methode or otherwise.
Our Chief Executive Officer’s compensation is determined by
our Compensation Committee. The Delves Group provides relevant
survey and other data to the Committee that it may consider for
this purpose. Management does not make recommendations to our
Compensation Committee regarding compensation elements with
respect to Mr. Duda’s compensation. For named
executive officers other than Mr. Duda, total compensation
packages are developed and recommended by Mr. Duda, in
consultation with Mr. Koman, our Chief Financial Officer,
and based on guidelines provided by our Compensation Committee.
Our Compensation Committee determines whether to approve these
recommendations, subject to any further modifications that it
may deem appropriate.
Market
Benchmarking and Positioning
We strive to provide compensation opportunities that are
competitive with comparable positions at other companies of
similar size and complexity. As appropriate to further this
objective, we review market compensation data and evaluate our
executive compensation program as compared to a group of peer
companies and various compensation surveys and databases, in
each case as provided by our compensation consultants.
For compensation decisions affecting fiscal 2008 compensation,
our peer group included the following companies: Arris Group,
CTS Corporation, Foundry Networks, Inc., Franklin Electric
Co., Inc., Gentex Corporation, Littelfuse, Inc., Nu Horizons
Electronics Corp., Polycom Inc., Powerwave Technologies Inc.,
Richardson Electronics Ltd., Standard Motor Products, Inc., and
Stoneridge, Inc. In consultation with The Delves Group, the peer
group was restructured in fiscal 2008 in order to include
companies that more closely match the various industries in
which Methode operates. In setting fiscal 2008 compensation, our
Compensation Committee also reviewed the following compensation
surveys and databases: Watson Wyatt Compensation Calculation
(durable goods and manufacturing sector); Mercer Benchmark
Database (durable goods manufacturing industry); and Peer
Company Compensation Data (manufacturing companies). In
identifying appropriate comparisons, our Compensation Committee
focuses on revenues, net profit margins, return on equity and
total shareholder return.
As a general policy, we target total direct compensation (that
is, base salary, annual and long-term cash incentives and
equity-based compensation) for our named executive officers in
the 50th to 75th percentile among companies in our
peer group and comparable companies within the applicable
compensation surveys and databases. In making all benchmarking
and positioning determinations, the Compensation Committee
assumed that each executive would achieve the target level of
performance under all performance-based awards. In setting
compensation for each named executive officer, our Compensation
Committee also reviews historical compensation
14
levels, internal equity and consistency, tenure and industry
conditions. These and other factors may affect whether total pay
for each of our named executive officers falls within the
benchmark range. For fiscal 2008 compensation, other factors
considered included the successful diversification of our
products, international expansion and implementation of cost
cutting measures. In addition, if we or the relevant business
unit performs particularly well or poorly, total direct
compensation for one or more of our named executive officers
could be above or below the target levels. As a general policy,
we structure the executive compensation program so that
approximately 45% to 65% of total direct compensation is in the
form of cash.
Consistent with our pay-for-performance philosophy, our
executive compensation program is structured so that a
significant amount of each of our named executive officers’
compensation is variable compensation and “at risk”
for non-payment if we fail or the executive fails to meet
performance targets. The proportion of compensation that is at
risk increases with the executive’s level of
responsibility. For fiscal 2008, the majority of each named
executive officers’ total direct compensation is at risk
(on average, 64%). At risk compensation for fiscal 2008 includes
the annual bonus and the restricted stock awards, together with
the RSA tandem cash awards (described below).
In calculating the number of shares of restricted stock to be
awarded in 2007, the Compensation Committee determined an
aggregate dollar value of the award for each executive and then
divided that number by the market value of our common stock as
of that committee meeting date in July 2007. These shares of
restricted stock were not actually issued until September 2007,
following shareholder approval of our 2007 Stock Plan. In
targeting the percentage of cash compensation and at-risk
compensation described above, the Compensation Committee used
the aggregate dollar value established in July, not the actual
market value on the September grant date.
Elements
of Compensation
Base Salary. Our Compensation Committee
establishes base salaries on an annual basis, taking into
account levels of responsibility, prior experience and breadth
of knowledge, potential for advancement, recent promotions, past
performance, internal equity issues and external pay practices.
In general, we target annual base salaries for our named
executive officers at the 50th percentile among companies
in our peer group and comparable companies within the applicable
compensation surveys and databases. For fiscal 2008, our
Compensation Committee did not increase the base salary of
Mr. Duda. Messrs. Koman, Reynolds, Glandon and Whybrow
received salary increases of 3.0%, 3.1%, 13.6% and 5.1%,
respectively. The Compensation Committee increased
Mr. Glandon’s salary to reflect increased management
responsibility associated with our TouchSensor acquisition.
Annual Performance-Based Bonus. At the
beginning of fiscal 2008, our Compensation Committee established
annual performance-based cash bonus awards, expressed as a
percentage of base salary, and subject to the achievement of
performance goals for all executive officers and management
personnel. In general, we target annual bonuses for our named
executive officers in the 50th to 75th percentile
among companies in our peer group and comparable companies
within the applicable compensation surveys and databases.
Bonuses are paid annually and are capped at 140% of the
established target bonus amount. The awards generally reflect a
threshold payment, a target payment and a maximum payment,
depending on the level of performance measure achieved. For
fiscal 2008, the performance measures for each of the named
executive officers include earnings before interest and taxes
(EBIT) as compared to budget. Commencing in fiscal 2008, the
awards include a formula to address acquisitions and
divestitures. For Messrs. Duda and Koman, the measure is
based on our overall consolidated financial results. For
Messrs. Reynolds, Glandon and Whybrow, 70% of the bonus at
the target level is based on our overall consolidated financial
(previously based on the results of their respective business
units), and 30% is based on MBOs specific to the
executive’s area of responsibility. Commencing in fiscal
2009, the performance measure for these awards will be based on
pre-tax earnings instead of EBIT. The Compensation Committee
believes using pre-tax earnings as the performance measure
encourages management to use cash to make accretive acquisitions
as appropriate.
MBOs include profitability and sales goals at the business unit
level as well as qualitative factors, such as product
diversification and planning, technology acquisitions,
integration of newly acquired companies and talent management,
including succession planning. In general, the most importance
is given to profit measures, followed by the MBOs. Our
Compensation Committee believes that using profit as a key
performance measure focuses the
15
executives on balancing investment and cost control to achieve
growth. In setting the measures, our Compensation Committee
considered, among other matters, past performance, the fiscal
2008 operating budget, and general economic conditions. Our
Compensation Committee believes that the performance measures
are challenging. No amounts are payable unless a specified
“threshold” performance level is reached for the
applicable period.
Discretionary Cash Bonus. From time to time,
our Compensation Committee awards discretionary cash bonuses to
the executive officers for exceptional or unusual performance.
Historically, such discretionary cash bonuses have been granted
in connection with significant involvement in the negotiation,
due diligence and integration of an acquired business, the
development of a new product line or the recruitment of a
significant new customer. In fiscal 2008, no discretionary cash
bonuses were awarded to the named executive officers.
Stock Awards. Our Compensation Committee
believes that equity-based compensation is the most effective
means of ensuring that our executive officers have a continuing
stake in our long-term success. In general, we target equity
awards for our named executive officers in the 50th to
75th percentile among companies in our peer group and
comparable companies within the applicable compensation surveys
and databases. We currently utilize restricted stock awards and
restricted stock units as our equity compensation component. Our
Compensation Committee believes that these awards serve the
following purposes: (i) reward executive officers for
long-term shareholder value creation; (ii) provide
competitive long-term incentive award opportunities;
(iii) retain employees through wealth accumulation
opportunities; and (iv) focus executive officers on
long-term, sustained performance. The restricted stock awards
granted to our executive officers in fiscal 2008 are subject to
a performance-based vesting condition linked to the revenue
growth and return on invested capital achieved during a
three-year vesting period. These performance-based awards do not
vest unless we achieve a minimum target level of revenue growth
and return on invested capital. Commencing in fiscal 2008, the
awards include a formula to address acquisitions and
divestitures.
RSA Tandem Cash Bonus. In connection with the
grant of the fiscal 2008 restricted stock awards, we agreed to
pay each executive officer a cash bonus if we exceed our
financial targets for revenue growth and return on invested
capital, which will be measured as of May 1, 2010. The
maximum amount of the tandem cash bonus will equal the product
of the closing price of our common stock as of May 1, 2010,
and 50% of the number of shares awarded to such executive under
the 2008 restricted stock award.
Legacy Longevity Bonus Program. For fiscal
2006 and previous years, our executive officers received
long-term incentive awards under the Longevity Contingent Bonus
Program (the “Longevity Bonus Program”). The Longevity
Bonus Program awards a matching bonus equal to the amount of the
quarterly bonus, which will be considered as earned and payable
in three years, provided that the participant is still employed
and performance has been satisfactory. If, for any reason other
than death, disability, or retirement, the participant
terminates his or her employment with us during the three-year
period, or his or her performance is not satisfactory, no
longevity compensation is payable under this program. Commencing
with fiscal 2007, the named executive officers are not eligible
to receive future awards under the Longevity Bonus Program.
Amounts previously earned by these executives under the
Longevity Bonus Program will continue to be paid through fiscal
2009.
Other Benefits and Perquisites. Executive
officers are eligible to participate in all of our employee
benefit plans, such as medical, dental, vision, group life,
disability, and our 401(k) savings plan (with a company
contribution), in each case on the same basis as other
employees, subject to applicable law. Our executive officers are
also provided deferred compensation opportunities through a
non-qualified Deferred Compensation Plan. In fiscal 2008, we did
not contribute any amounts to the Deferred Compensation Plan on
behalf of any of the named executive officers. For a description
of the Deferred Compensation Plan, please see the section
entitled “Nonqualified Deferred Compensation” below.
Dividends are paid with respect to all vested and unvested
outstanding restricted stock awards held by our employees.
Mr. Duda is also paid an amount equal to the dividend
payment with respect to the restricted stock units converted at
our request from restricted stock awards (described in more
detail below). In addition, a few perquisites are provided to
the named executive officers. Perquisites include a company car
allowance, association dues, limited corporate aircraft usage
and provision for an annual physical exam.
Change of Control Payments. We have entered
into change of control agreements with our executive officers.
These agreements are designed to promote stability and
continuity of senior management, both of which are in the
16
best interest of Methode and our shareholders. Our change of
control provisions for the named executive officers are
summarized below under “Potential Payments Upon Termination
or Change of Control.”
Significant
Policies and Procedures
Stock Ownership Policy. Our Compensation
Committee considers stock ownership by management to be an
important means of linking management’s interests with
those of shareholders. We maintain stock ownership guidelines
for our executive officers. The amount of stock required to be
owned increases with the level of responsibility of each
executive. The requirements are subject to a phase-in period in
the event of a new hire or a promotion. The Committee increased
the ownership requirements of our Chief Executive Officer and
Chief Financial Officer from 80,000 and 28,000 shares,
respectively, to five times base salary and three times base
salary, respectively. All other executive officers are expected
to own stock with a value at least equal to their current base
salary. Restricted stock awards and restricted stock units, as
well as any holdings of Methode stock in the executives’s
401(k) plan, are included in the calculation of stock ownership
for purposes of these guidelines. In valuing restricted stock
awards and restricted stock units for this purpose, the policy
permits the use of the greater of the grant date fair market
value or the current fair market value. Considering the
applicable phase-in periods, all of our named executive officers
were in compliance with our stock ownership policy for fiscal
2008.
Practices Regarding Grants of Equity
Awards. Our broad-based equity grants are
generally made at a scheduled meeting of our Compensation
Committee occurring during the first quarter of each fiscal
year. Commencing with the fiscal 2008 grants, the Committee
determined an aggregate dollar value for each executive officer
and the number of shares was determined based on the closing
share price reported three business days after the issuance of
the annual earnings press release. Our Compensation Committee
may choose to make grants of equity awards outside the annual
broad-based grant, including in the case of newly hired
employees and in connection with promotions.
Policy With Respect to Deductibility of
Compensation. Section 162(m) of the Code, as
clarified by guidance from the Internal Revenue Service,
generally denies corporate tax deductions for annual
compensation exceeding $1 million paid to certain employees
(generally the chief executive officer and the three other most
highly compensated executive officers of a public company, but
excluding the chief financial officer), unless that compensation
qualifies as performance-based compensation under a shareholder
approved plan and meets certain other technical requirements.
While it is the general intention of our Compensation Committee
to maximize the deductibility of executive compensation in
structuring our compensation plans and programs, our
Compensation Committee has approved, and may continue to approve
awards that may not qualify as performance-based compensation
under Section 162(m). Our Compensation Committee reserves
the flexibility and authority to make decisions that are in the
best interest of Methode and our shareholders, even if those
decisions do not result in full deductibility under
Section 162(m).
Resolution
of Issues Regarding Section 162(m) and Section 409A of
the Internal Revenue Code
During fiscal 2007, our Compensation Committee and Donald Duda,
our Chief Executive Officer, worked together to address certain
issues under Section 162(m) and Section 409A of the
Internal Revenue Code related to Mr. Duda’s
compensation. The scheduled lapse of the restrictions on
Mr. Duda’s 2004, 2005 and 2006 restricted stock awards
in April 2007, 2008 and 2009, respectively, would not qualify
for an exception under Section 162(m). As such, the value
of these awards would be required to be included for purposes of
determining whether the $1 million limit has been exceeded
in each such fiscal year. Section 409A subjects the
recipient of certain forms of non-qualified deferred
compensation to an additional 20% tax. Certain payments to be
made to Mr. Duda under the 2003 Cash Bonus Agreement
described below would be subject to this additional tax.
In order to mitigate the Section 162(m) deductibility
issue, eliminate the 409A tax consequences to Mr. Duda, and
eliminate variable accounting with respect to the 2003 Cash
Bonus Agreement, our Compensation Committee approached
Mr. Duda regarding the available alternatives.
Mr. Duda and our Compensation Committee worked diligently
to review and assess the alternatives with the assistance of
external legal and compensation advisors. The resolution agreed
upon involved multiple steps, including the exercise of stock
options and sale of all of the underlying stock by
Mr. Duda, the current payment of a portion of the cash
bonus to Mr. Duda under the 2003 Cash
17
Bonus Agreement, the amendment of the 2003 Cash Bonus Agreement
and Mr. Duda’s 2004, 2005 and 2006 Restricted Stock
Award Agreements, and the deferral of certain bonus amounts by
Mr. Duda. In fiscal 2008, we were not permitted to deduct
approximately $120,000 in compensation paid to Mr. Duda. We
currently expect to deduct all compensation payable to
Mr. Duda in fiscal 2009.
Amended and Restated Restricted Stock Unit Award
Agreements. During fiscal 2007, we entered into
Amended and Restated Restricted Stock Unit Award Agreements with
Mr. Duda. Pursuant to these agreements, the 2004, 2005 and
2006 restricted stock awards were amended and restated into the
form of restricted stock units. Under the terms of the amended
restricted stock units, at such time as the value of the award
is deductible by us or Mr. Duda’s employment
terminates, shares of non-restricted common stock will be
delivered to Mr. Duda. The conversion mitigates the
Section 162(m) issue because restricted stock units are
deductible by us when paid to the executive, in contrast to
restricted stock which is deductible upon vesting and, as such,
would result in non-deductible compensation. The Amended and
Restated Restricted Stock Unit Award Agreements do not amend or
modify any other provisions under the 2004, 2005 and 2006
restricted stock awards, including, without limitation, the
vesting period or performance criteria.
Deferral of 2004, 2005 and 2006 RSA Tandem Cash
Bonuses. In 2004, 2005 and 2006, in connection
with the award of restricted stock awards, we agreed to pay
Mr. Duda a cash bonus if we met certain financial targets
measured as of the end of a three-year period. These cash
bonuses do not qualify for an exception under
Section 162(m) and will be included for purposes of
calculating the $1 million cap in the year paid.
Mr. Duda has deferred one hundred percent (100%) of these
bonuses pursuant to our Deferred Compensation Plan. The bonuses
are deferred until 2011, 2012 and 2013, respectively. It is
currently anticipated that at such time, a substantial portion
of Mr. Duda’s annual compensation would qualify for an
exception under Section 162(m).
Amended Cash Bonus Agreement. Pursuant to the
2003 Cash Bonus Agreement, Mr. Duda was entitled to two
cash bonuses. The amount of the first cash bonus was to be
determined by multiplying 100,000 by the value of our common
stock in excess of $10.50 (the value of common stock on the date
of Mr. Duda’s 2002 stock option grant). The bonus
vested in 25% annual increments commencing in June 2003 and
ending in June 2006. The amount of the second cash bonus was to
be determined by multiplying 150,000 by the value of the common
stock in excess of $11.44 (the value of common stock on the date
of Mr. Duda’s 2003 stock option grant). The bonus
vests in 25% annual increments commencing in July 2004 and
ending in July 2007. Under the 2003 Cash Bonus Agreement,
Mr. Duda was required to exercise all vested options under
the 2002 and the 2003 grants prior to receiving any cash bonuses
thereunder. Pursuant to Section 409A, any portion of the
cash bonuses which were vested as of January 1, 2005 are
grandfathered and not subject to Section 409A. The portions
of the cash bonuses that were not vested as of that date are
subject to Section 409A and, pursuant to the terms of the
Cash Bonus Agreement, would subject Mr. Duda to an
additional 20% tax on these bonus amounts.
In connection with addressing the issues outlined above,
Mr. Duda agreed to elect to receive payment of all cash
bonus amounts payable under the 2003 Cash Bonus Agreement that
were vested as of January 1, 2005 and not subject to the
provisions of Section 409A. In order to make this election,
Mr. Duda was required to exercise all vested options under
the 2002 and 2003 stock option grants (175,000 shares). The
provision of Section 409A prohibited the amendment of the
2003 Cash Bonus Agreement to waive this condition without
triggering the 20% additional tax. Mr. Duda exercised these
options on April 4 and April 5, 2007, and subsequently sold
the underlying 175,000 shares of common stock at a weighted
average sale price of $15.32 per share. Also on April 6,
2007, Mr. Duda elected to receive a partial payment under
the 2003 Cash Bonus Agreement. We and Mr. Duda agreed that
for purposes of this payment and the payments pursuant to the
Amended Cash Bonus Agreement described below, the value of our
common stock would equal $15.32 per share, the weighted average
sales price of the sale of the 175,000 shares. Pursuant to
the terms of the Cash Bonus Agreement, these cash bonuses
totaled $241,000 [($15.32 - $10.50) × 100,000 × 50%]
and $145,500 [($15.32 - $11.44) × 150,000 × 25%],or
$386,500 in the aggregate. These amounts were included for
purposes of determining whether Mr. Duda’s
compensation exceeded the $1 million limit in fiscal 2007.
We entered into an Amended Cash Bonus Agreement with
Mr. Duda. Pursuant to the Amended Cash Bonus Agreement, we
will pay Mr. Duda cash bonuses in the amount of $241,000
[($15.32-$10.50) × 100,000 × 50%] and $436,500
[($15.32-$11.44) × 150,000 × 75%], or $677,500 in the
aggregate. These cash bonuses are payable
18
on the earliest of the following: (i) May 15, 2009;
(ii) the date of Mr. Duda’s termination of
employment for any reason; or (iii) Mr. Duda’s
death or disability; provided, however, that if, upon the
payment date, the payment is not deductible by us under
Section 162(m), the payment will be delayed until such time
as it is deductible. In such case, the amount may be payable in
one or more installments. Mr. Duda is not entitled to any
other compensation pursuant to the Amended Cash Bonus Agreement.
Amendment of the 2003 Cash Bonus Agreement eliminated variable
accounting with respect to the 2003 Cash Bonus Agreement.
COMPENSATION
COMMITTEE REPORT
Our Compensation Committee has reviewed and discussed the
Compensation Discussion and Analysis with management and, based
on such review and discussions, our Compensation Committee
recommended to our board of directors that the Compensation
Discussion and Analysis be included in this proxy statement.
THE COMPENSATION COMMITTEE
Paul G. Shelton, Chariman
Warren L. Batts
Darren M. Dawson
Isabelle C. Goossen
Christopher J. Hornung
19
EXECUTIVE
COMPENSATION TABLES
Summary
Compensation Table
The following table sets forth certain summary information
regarding the compensation awarded to, earned by or paid by us
to or for the account of our Chief Executive Officer, our Chief
Financial Officer and our three other most highly compensated
executive officers for the two fiscal years ended May 3,
2008.
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|
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|
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|
|
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Non-Equity
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Stock
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Option
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Incentive Plan
|
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All Other
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|
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Salary
|
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Bonus
|
|
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Awards
|
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Awards
|
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Compensation
|
|
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Compensation
|
|
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Total
|
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Name and Principal Position
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Year
|
|
|
(1)($)
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(2)($)
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|
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(3)($)
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(3)($)
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(4)($)
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(5)($)
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(1)($)
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Donald W. Duda
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President and Chief
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2008
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|
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560,168
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|
0
|
|
|
|
1,216,352
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|
|
|
4,548
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|
|
|
1,073,642
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|
|
|
96,466
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|
|
|
2,951,176
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|
Executive Officer
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|
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2007
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|
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|
560,168
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|
|
|
0
|
|
|
|
1,129,295
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|
|
|
44,911
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|
|
|
1,089,616
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|
|
|
87,015
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|
|
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2,911,005
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Douglas A. Koman
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Chief Financial Officer,
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|
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|
|
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|
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|
|
|
|
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|
Vice President,
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2008
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266,000
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|
0
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|
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249,743
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|
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1,592
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340,037
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34,373
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891,745
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Corporate Finance
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2007
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258,232
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0
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218,812
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|
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17,166
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|
|
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334,379
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|
|
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27,558
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856,147
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Thomas D. Reynolds
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|
|
|
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Senior Vice President,
Worldwide Automotive
|
|
|
2008
|
|
|
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330,000
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|
|
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0
|
|
|
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371,576
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|
|
|
1,364
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|
|
|
426,529
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|
|
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39,462
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|
|
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1,168,932
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Operations
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2007
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|
|
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320,000
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40,000
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269,635
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|
|
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13,471
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|
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307,147
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|
|
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126,822
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1,077,075
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Timothy Glandon
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Vice President and
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General Manager, North
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2008
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250,000
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0
|
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107,102
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|
|
|
0
|
|
|
|
299,038
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|
|
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27,492
|
|
|
|
683,632
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American Automotive
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2007
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|
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220,000
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|
|
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30,000
|
|
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60,297
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|
|
|
0
|
|
|
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148,030
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|
|
|
19,257
|
|
|
|
477,584
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Paul E. Whybrow*
Vice President,
Interconnect Products
|
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2008
|
|
|
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205,000
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|
|
|
0
|
|
|
|
86,617
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|
|
|
0
|
|
|
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152,008
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29,068
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|
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472,693
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* |
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Mr. Whybrow was not a named executive officer in fiscal
2007. |
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(1) |
|
Amounts reflect annual salary. Amounts actually paid in fiscal
2008 were slightly higher than the annual salary set forth in
the table since fiscal 2008 included 53 weeks. |
|
(2) |
|
Amounts reflect a discretionary cash bonus granted in connection
with significant involvement in the negotiation, due diligence
and integration of the TouchSensor business. |
|
(3) |
|
These amounts reflect the dollar amount recognized for financial
statement reporting purposes for the fiscal years ended
May 3, 2008 and April 28, 2007, in accordance with
SFAS No. 123(R), and include amounts from awards
granted in and prior to such fiscal years. Under SFAS No.
123(R), the fair value of these awards is recognized ratably
over the vesting period. Details of the assumptions used in
valuing these awards are set forth in Note 4 to our audited
financial statements included in our Annual Report on
Form 10-K
for such fiscal years. |
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(4) |
|
Amounts include performance-based bonuses pursuant to the annual
bonus plan. Pursuant to the annual bonus plan, the executive
officers’ bonus amounts are based on fiscal sales and
profit performance compared to budget and on achieving
individual objectives. Bonuses are paid annually and are capped
at 140% of the established target bonus amount. For the named
executive officers other than Mr. Glandon, also includes
amounts paid pursuant to tandem cash awards granted in
connection with the grant of restricted stock. Amounts paid in
fiscal 2008 relate to awards made in fiscal 2005 and amounts
paid in fiscal 2007 relate to awards made in fiscal 2004. In
connection with these restricted stock awards, we agreed to pay
each such officer a cash bonus if we exceeded certain financial
targets for revenue growth and return on invested capital,
measured as of each fiscal year end. The amount of the cash
bonuses was calculated by multiplying the number representing
50% of each officer’s respective earned and vested
restricted stock award by the closing price of our common stock
as of fiscal year end. Also includes amounts paid pursuant to
our legacy Longevity Contingent Bonus Program. The Longevity
Bonus Program awards a matching bonus equal to the amount of the
current quarterly bonus, which will be considered as earned and
payable in three years, provided that the participant is still
employed and performance has been satisfactory. Commencing with
fiscal year 2007, our Compensation Committee has determined that
the named executive officers will not be eligible to receive
future awards under the Longevity |
20
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|
|
|
|
Bonus Program. Amounts previously earned by these executives
under the Longevity Bonus Program will continue to be paid
through fiscal 2009. The chart below reflects the annual
bonuses, the tandem cash awards and the Longevity Bonus Program
payments for fiscal 2008 and 2007. |
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Fiscal 2008
|
|
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Fiscal 2007
|
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|
|
|
|
|
|
|
|
Tandem
|
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|
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Tandem
|
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|
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|
|
|
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Annual
|
|
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Cash
|
|
|
Longevity
|
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Annual
|
|
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Cash
|
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Longevity
|
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|
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Bonus
|
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|
Award
|
|
|
Bonus
|
|
|
Bonus
|
|
|
Award
|
|
|
Bonus
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Duda
|
|
$
|
448,000
|
|
|
$
|
432,554
|
|
|
$
|
193,088
|
|
|
$
|
399,681
|
|
|
$
|
410,020
|
|
|
$
|
279,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Koman
|
|
$
|
182,000
|
|
|
$
|
79,595
|
|
|
$
|
78,442
|
|
|
$
|
164,970
|
|
|
$
|
75,444
|
|
|
$
|
93,965
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Reynolds
|
|
$
|
204,800
|
|
|
$
|
86,515
|
|
|
$
|
135,214
|
|
|
$
|
94,028
|
|
|
$
|
64,783
|
|
|
$
|
148,336
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Glandon
|
|
$
|
146,616
|
|
|
$
|
0
|
|
|
$
|
152,422
|
|
|
$
|
65,588
|
|
|
$
|
0
|
|
|
$
|
82,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Whybrow
|
|
$
|
115,200
|
|
|
$
|
17,308
|
|
|
$
|
19,500
|
|
|
|
|
*
|
|
|
|
*
|
|
|
|
*
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* |
|
Mr. Whybrow was not a named executive officer in fiscal
2007. As such, amounts paid to Mr. Whybrow for fiscal 2007
pursuant to these plans are not included in this proxy statement. |
|
(5) |
|
Amounts included in All Other Compensation reflect the following
for fiscal 2008: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aircraft
|
|
|
|
|
|
|
|
|
Dividend
|
|
|
|
|
|
|
401(k)
|
|
|
Life
|
|
|
Car
|
|
|
Personal
|
|
|
Membership/
|
|
|
Executive
|
|
|
Replacement
|
|
Executive
|
|
Dividends
|
|
|
Contribution
|
|
|
Insurance
|
|
|
Allowance
|
|
|
Use*
|
|
|
Clubs
|
|
|
Physical
|
|
|
Bonus
|
|
|
Mr. Duda
|
|
$
|
8,966
|
|
|
$
|
6,900
|
|
|
$
|
1,417
|
|
|
$
|
9,600
|
|
|
$
|
0
|
|
|
$
|
550
|
|
|
$
|
4,033
|
|
|
$
|
65,000
|
|
Mr. Koman
|
|
$
|
12,361
|
|
|
$
|
6,900
|
|
|
$
|
1,112
|
|
|
$
|
9,600
|
|
|
$
|
0
|
|
|
$
|
1,450
|
|
|
$
|
2,950
|
|
|
$
|
0
|
|
Mr. Reynolds
|
|
$
|
19,273
|
|
|
$
|
6,900
|
|
|
$
|
1,222
|
|
|
$
|
9,000
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
3,068
|
|
|
$
|
0
|
|
Mr. Glandon
|
|
$
|
6,348
|
|
|
$
|
6,900
|
|
|
$
|
236
|
|
|
$
|
8,400
|
|
|
$
|
636
|
|
|
$
|
0
|
|
|
$
|
4,972
|
|
|
$
|
0
|
|
Mr. Whybrow
|
|
$
|
4,641
|
|
|
$
|
6,900
|
|
|
$
|
798
|
|
|
$
|
9,600
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
7,128
|
|
|
$
|
0
|
|
|
|
|
* |
|
Reflects the aggregate incremental cost of personal use of the
corporate aircraft. The aggregate incremental cost is based on
the cost of fuel, trip-related maintenance, crew travel
expenses, on-board catering, landing fees, trip-related
hangar/parking costs and smaller variable costs. Since our
aircraft is used primarily for business travel, we do not
include the fixed costs that do not change based on usage, such
as pilots’ salaries, the purchase costs of the
company-owned aircraft, and the cost of maintenance not related
to these trips. |
Grants of
Plan-Based Awards
The following table sets forth certain information regarding
grants of plan-based awards to the named executive officers
during the fiscal year ended May 3, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
|
|
|
|
Estimated Future Payouts Under
|
|
|
Estimated Future Payouts Under
|
|
|
of Stock
|
|
|
|
|
|
|
Non-Equity Incentive Plan Awards
|
|
|
Equity Incentive Plan Awards(3)
|
|
|
and Option
|
|
|
|
Grant
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Awards
|
|
Name
|
|
Date
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
(#)
|
|
|
(#)
|
|
|
(#)
|
|
|
(4)($)
|
|
|
Donald W. Duda
|
|
|
9/13/07
|
|
|
|
272,000
|
(1)
|
|
|
320,000
|
(1)
|
|
|
448,000
|
(1)
|
|
|
11,955
|
|
|
|
59,773
|
|
|
|
59,773
|
|
|
|
904,963
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
452,489
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas A. Koman
|
|
|
9/13/07
|
|
|
|
110,500
|
(1)
|
|
|
130,000
|
(1)
|
|
|
182,000
|
(1)
|
|
|
2,989
|
|
|
|
14,943
|
|
|
|
14,943
|
|
|
|
226,237
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
113,126
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
95,200
|
(1)
|
|
|
160,000
|
(1)
|
|
|
204,800
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas D. Reynolds
|
|
|
9/13/07
|
|
|
|
0
|
|
|
|
0
|
|
|
|
226,237
|
(2)
|
|
|
5,977
|
|
|
|
29,886
|
|
|
|
29,886
|
|
|
|
452,474
|
|
Timothy R. Glandon
|
|
|
9/13/07
|
|
|
|
71,400
|
(1)
|
|
|
120,000
|
(1)
|
|
|
153,600
|
(1)
|
|
|
2,989
|
|
|
|
14,943
|
|
|
|
14,943
|
|
|
|
226,237
|
|
|
|
|
|
|
|
|
0
|
|
|
|
0
|
|
|
|
113,126
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
53,550
|
(1)
|
|
|
90,000
|
(1)
|
|
|
115,200
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul E. Whybrow
|
|
|
9/13/07
|
|
|
|
0
|
|
|
|
0
|
|
|
|
113,126
|
(2)
|
|
|
2,989
|
|
|
|
14,943
|
|
|
|
14,943
|
|
|
|
226,237
|
|
21
|
|
|
(1) |
|
Reflects cash incentive awards pursuant to the annual bonus
plan. The executive officers’ bonus amounts are based on
fiscal 2008 sales and profit performance compared to budget and
on achieving individual management objectives. Bonuses are paid
annually and are capped at 140% of the established target bonus
amount. Amounts earned in fiscal 2008 by the executive officers
under this plan are reported in the column titled
“Non-Equity Incentive Plan Compensation” in the
“Summary Compensation Table.” |
|
(2) |
|
Reflects tandem cash awards granted in connection with the
fiscal 2008 grant of restricted stock (see footnote 3 below).
Pursuant to the awards, we agree to pay each such officer a cash
bonus if we exceed certain financial targets for revenue growth
and return on invested capital over a three-year period,
measured as of May 1, 2010. The maximum amount of the
tandem cash bonus will equal the product of the closing price of
our common stock as of May 1, 2010, and 50% of each
officer’s earned and vested restricted stock award. |
|
(3) |
|
Reflects restricted stock awards which vest on May 1, 2010
if we have met certain financial targets based upon revenue
growth and return on invested capital. The restricted stock
awards are entitled to payments of dividends. |
|
(4) |
|
Amounts represent the total fair value of restricted stock
granted in fiscal 2008 under SFAS No. 123(R). Details
of the assumptions used in valuing these equity awards are set
forth in Note 4 to our audited financial statements
included in our Annual Report on
Form 10-K
for the fiscal year ended May 3, 2008. |
22
Outstanding
Equity Awards at Fiscal Year-End
The following table sets forth certain information regarding the
outstanding equity awards of the named executive officers at
May 3, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
Market or
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
Payout Value
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
of Unearned
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Unearned
|
|
|
Shares, Units
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Shares, Units
|
|
|
or Other
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
|
|
|
or Other Rights That
|
|
|
Rights That
|
|
|
|
Options
|
|
|
Options
|
|
|
Exercise
|
|
|
Option
|
|
|
Have Not
|
|
|
Have Not
|
|
|
|
(#)
|
|
|
(#)
|
|
|
Price
|
|
|
Expiration
|
|
|
Vested
|
|
|
Vested
|
|
Name
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
($)
|
|
|
Date
|
|
|
(3)(#)
|
|
|
($)
|
|
|
Donald W. Duda
|
|
|
29,413
|
(1)
|
|
|
0
|
|
|
|
17.658
|
|
|
|
3/1/2010
|
|
|
|
59,773
|
|
|
|
647,837
|
|
|
|
|
100,000
|
(1)
|
|
|
0
|
|
|
|
6.350
|
|
|
|
5/3/2011
|
|
|
|
100,000
|
|
|
|
1,129,000
|
|
|
|
|
25,000
|
(2)
|
|
|
0
|
|
|
|
11.440
|
|
|
|
7/3/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas A. Koman
|
|
|
17,648
|
(1)
|
|
|
0
|
|
|
|
10.624
|
|
|
|
12/11/2010
|
|
|
|
14,943
|
|
|
|
168,706
|
|
|
|
|
25,000
|
(1)
|
|
|
0
|
|
|
|
7.450
|
|
|
|
5/3/2011
|
|
|
|
23,000
|
|
|
|
259,670
|
|
|
|
|
75,000
|
(2)
|
|
|
0
|
|
|
|
10.500
|
|
|
|
6/19/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
35,000
|
(2)
|
|
|
0
|
|
|
|
11.440
|
|
|
|
7/3/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Thomas D. Reynolds
|
|
|
12,000
|
(1)
|
|
|
0
|
|
|
|
8.530
|
|
|
|
11/19/2011
|
|
|
|
29,886
|
|
|
|
337,413
|
|
|
|
|
30,000
|
(2)
|
|
|
0
|
|
|
|
10.500
|
|
|
|
6/10/2012
|
|
|
|
25,000
|
|
|
|
282,250
|
|
|
|
|
30,000
|
(2)
|
|
|
0
|
|
|
|
11.440
|
|
|
|
7/3/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Timothy R. Glandon
|
|
|
2,500
|
(1)
|
|
|
0
|
|
|
|
11.440
|
|
|
|
8/1/2011
|
|
|
|
20,000
|
|
|
|
225,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,943
|
|
|
|
168,706
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Paul E. Whybrow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,000
|
|
|
|
79,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,943
|
|
|
|
168,706
|
|
|
|
|
(1) |
|
These options vest 50% after one year and 100% after two years. |
|
(2) |
|
These options vest 25% after one year, 50% after two years, 75%
after three years and 100% after four years. |
|
(3) |
|
These performance-based restricted stock awards vest as of the
end of the third fiscal year following the grant date, provided
certain financial targets are satisfied. |
Option
Exercises and Stock Vested
The following table sets forth certain information regarding the
vesting of restricted stock held by the named executive officers
during the fiscal year ended May 3, 2008. None of the named
executive officers exercised stock options during fiscal 2008.
|
|
|
|
|
|
|
|
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
|
|
Acquired on Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
Donald W. Duda
|
|
|
125,000
|
|
|
|
1,411,250
|
|
Douglas A. Koman
|
|
|
23,000
|
|
|
|
259,670
|
|
Thomas D. Reynolds
|
|
|
25,000
|
|
|
|
282,250
|
|
Timothy R. Glandon
|
|
|
533
|
|
|
|
6,018
|
|
Paul E. Whybrow
|
|
|
2,500
|
|
|
|
28,225
|
|
23
Nonqualified
Deferred Compensation
The following table sets forth certain information regarding
deferred compensation with respect to the named executive
officers for the fiscal year ended May 3, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Registrant
|
|
|
|
|
|
|
|
|
|
Executive
|
|
|
Contributions in
|
|
|
Aggregate
|
|
|
Aggregate
|
|
|
|
Contributions
|
|
|
Last
|
|
|
Earnings (Loss)
|
|
|
Balance at
|
|
|
|
in Last Fiscal Year
|
|
|
Fiscal Year
|
|
|
in Last Fiscal Year
|
|
|
Last Fiscal Year-End
|
|
Name
|
|
(1)($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Donald W. Duda
|
|
|
471,457
|
|
|
|
0
|
|
|
|
10,766
|
|
|
|
507,978
|
|
Douglas A. Koman
|
|
|
145,309
|
|
|
|
0
|
|
|
|
4,954
|
|
|
|
185,617
|
|
Thomas D. Reynolds
|
|
|
0
|
|
|
|
0
|
|
|
|
(50
|
)
|
|
|
21,920
|
|
Timothy R. Glandon
|
|
|
0
|
|
|
|
0
|
|
|
|
1,611
|
|
|
|
29,706
|
|
Paul E. Whybrow
|
|
|
71,526
|
|
|
|
0
|
|
|
|
(5,589
|
)
|
|
|
110,817
|
|
|
|
|
(1) |
|
All executive contributions were reported as compensation in the
“Summary Compensation Table” under the
“Salary” and/or “Non-Equity Incentive Plan
Compensation” columns, depending on the source of the
executive contribution. |
The Methode Electronics, Inc. Nonqualified Deferred Compensation
Plan (the “Deferred Compensation Plan”) allows a
select group of management and highly compensated employees to
defer up to 75% of their annual base salary, 100% of their
annual bonus,
and/or 100%
of their RSA tandem cash bonus, with an aggregate minimum
deferral of $3,000. The minimum period of deferral is three
years. Participants are immediately 100% vested. All of our
executive officers participate in the Deferred Compensation Plan.
In addition to employee-directed deferrals, we may be required
to make contributions to a participant’s account in the
Deferred Compensation Plan under a separate agreement, such as
an employment agreement. We may also make contributions to the
Deferred Compensation Plan to make up for limits applicable
under our qualified plans and may make additional discretionary
contributions as well. Participants shall vest in company
contributions in accordance with the schedule set forth in the
applicable agreement or plan governing such contributions. We
made no contributions to the Deferred Compensation Plan in
fiscal 2008.
Participants may elect from a list of certain mutual funds to
determine any amounts credited or debited from their accounts,
although we are under no obligation to invest the deferred
amounts in any specified fund. This list is made available to
all participants and account balances are credited or debited
based on the current market rates for these funds. Participants
may reallocate account balances
and/or
future deferrals on a daily basis.
Participants are entitled to receive a distribution from their
account balances at the earlier of the end of the elected
deferral period or retirement, disability, termination of
employment, or a change in control. Accounts are distributed in
a lump sum or, in certain circumstances, in installments over a
period of up to fifteen years. Participants can also petition
the Compensation Committee to receive a full or partial payout
from the Deferred Compensation Plan in the event of an
unforeseeable financial emergency.
POTENTIAL
PAYMENTS UPON TERMINATION OR CHANGE OF CONTROL
The following summaries set forth potential payments payable to
our named executive officers upon termination of their
employment or a change of control of Methode. Our executive
officers are entitled to these payments under their change of
control agreements, our stock plans and certain other benefit
plans. The amounts shown assume that such termination was
effective as of May 2, 2008 (the last business day of our
2008 fiscal year), and reflect the price of our common stock on
such date ($11.29). The tables below do not reflect amounts
payable to our executive officers pursuant to plans or
arrangements that are available generally to all of our salaried
employees, such as payments under the 401(k) Plan, the life
insurance plan, the disability insurance plan and the vacation
pay policy, and payment of accrued base salary and accrued
bonuses.
24
In the event of a change of control of Methode or the retirement
(at or after 65, or after 55 with our consent), death or
disability of an executive officer, the executive officer is
entitled to the following:
|
|
|
|
•
|
payment of a pro rata portion of the annual performance-based
cash bonus based on performance to date;
|
|
|
•
|
immediate vesting of a pro rata portion of the executive’s
outstanding performance-based restricted stock awards based on
performance to date;
|
|
|
•
|
payment of a pro rata portion of the cash bonus associated with
the executive’s outstanding performance-based restricted
stock awards based on performance to date;
|
|
|
•
|
continued payments under the Longevity Contingent Bonus Program
pursuant to the original payment schedule; and
|
|
|
•
|
in certain cases, the executive’s account balance in the
Deferred Compensation Plan (depending on the officer’s
election under this plan).
|
If within two years of a change of control or during a period
pending a change of control, we terminate the executive’s
employment without good cause or the executive voluntarily
terminates his or her employment for good reason, the executive
is entitled to the following:
|
|
|
|
•
|
a lump sum payment in an amount equal to three times (two times
in the case of Messrs. Reynolds, Glandon and Whybrow) the
executive’s annual salary;
|
|
|
•
|
a lump sum cash bonus payment equal to the sum of the following
amounts: (i) three times (two times in the case of
Messrs. Reynolds, Glandon and Whybrow) the lesser of:
(a) the executive’s target bonus amount for the fiscal
year in which executive’s employment termination occurs, or
(b) the bonus the executive earned in the prior fiscal
year; plus (ii) all of executive’s unpaid, but accrued
matching bonus pursuant to the Longevity Contingent Bonus Plan;
|
|
|
•
|
a gross-up
payment to provide the executive officer with an amount, on an
after-tax basis, equal to any excise taxes payable by the
executive officer under the tax laws in connection with the
payments described above; and
|
|
|
•
|
continued participation in our welfare benefit plans for three
years (two years in the case of Messrs. Reynolds, Glandon
and Whybrow) or until the executive becomes covered under other
welfare benefit plans providing substantially similar benefits.
|
In addition to the applicable benefits described above, in the
event Mr. Duda’s employment terminates for any reason,
he will receive one share of common stock for each outstanding
and vested restricted stock unit.
25
Donald W.
Duda
The following table shows the potential payments of additional
benefits upon termination or a change of control of the Company
for Donald W. Duda, our Chief Executive Officer. This table does
not reflect (i) the continuation of quarterly payments
during fiscal 2009 under our Longevity Contingent Bonus Program
following death, disability or retirement ($165,600 in the
aggregate) or (ii) amounts to be paid from our deferred
compensation plan ($507,978) or the delivery of common stock
underlying outstanding vested restricted stock units ($3,548,250
in value as of May 2, 2008) to Mr. Duda in the
event of his termination from the Company under any and all
circumstances.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change of Control
|
|
|
|
|
|
|
Change of Control
|
|
|
on 5/2/08 and
|
|
|
|
|
|
|
on 5/2/08 and
|
|
|
Executive Resigns
|
|
|
Death, Disability
|
|
|
|
Executive’s
|
|
|
for Good Reason or
|
|
|
or Qualified
|
|
Benefits and Payments Upon
|
|
Employment
|
|
|
Is Terminated
|
|
|
Retirement on
|
|
Termination
|
|
Continues
|
|
|
Without Cause(1)
|
|
|
5/2/08
|
|
|
Salary Severance
|
|
$
|
—
|
|
|
$
|
1,680,504
|
|
|
$
|
—
|
|
Bonus Severance
|
|
$
|
—
|
|
|
$
|
1,125,600
|
|
|
$
|
—
|
|
Pro Rata Vesting of Restricted Stock Awards and Restricted Stock
Units(2)
|
|
$
|
977,613
|
|
|
$
|
—
|
|
|
$
|
977,613
|
|
Pro Rata Payment of Tandem Cash Bonus(2)
|
|
$
|
388,309
|
|
|
$
|
—
|
|
|
$
|
388,309
|
|
Health and Welfare Benefits(3)
|
|
$
|
—
|
|
|
$
|
36,900
|
|
|
$
|
—
|
|
Excise Tax &
Gross-Up
|
|
$
|
—
|
|
|
$
|
1,551,729
|
|
|
$
|
—
|
|
|
|
|
(1) |
|
These amounts are in addition to amounts payable under the
preceding column “Change of Control on 5/3/08 and
Executive’s Employment Continues.” |
|
(2) |
|
For purposes of this table, we have assumed that our
Compensation Committee has elected to accelerate all awards in
each instance in which the acceleration is subject to the
discretion of our Compensation Committee. |
|
(3) |
|
Reflects the estimated lump-sum present value of all future
premiums which will be paid on behalf of the executive under our
health and welfare benefit plans. |
26
Douglas
A. Koman
The following table shows the potential payments of additional
benefits upon termination or a change of control of the Company
for Douglas A. Koman, our Chief Financial Officer. This table
does not reflect (i) the continuation of quarterly payments
during fiscal 2009 under our Longevity Contingent Bonus Program
following death, disability or retirement ($67,275 in the
aggregate) or (ii) amounts to be paid from our deferred
compensation plan to Mr. Koman in the event of his
termination from the Company under any and all circumstances
($185,617).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change of Control
|
|
|
|
|
|
|
Change of Control
|
|
|
on 5/2/08 and
|
|
|
|
|
|
|
on 5/2/08 and
|
|
|
Executive Resigns
|
|
|
Death, Disability
|
|
|
|
Executive’s
|
|
|
for Good Reason or
|
|
|
or Qualified
|
|
Benefits and Payments Upon
|
|
Employment
|
|
|
Is Terminated
|
|
|
Retirement on
|
|
Termination
|
|
Continues
|
|
|
Without Cause(1)
|
|
|
5/2/08
|
|
|
Salary Severance
|
|
$
|
—
|
|
|
$
|
797,999
|
|
|
$
|
—
|
|
Bonus Severance
|
|
$
|
—
|
|
|
$
|
457,275
|
|
|
$
|
—
|
|
Pro Rata Vesting of Restricted Stock Awards and Payout(2)
|
|
$
|
320,357
|
|
|
$
|
—
|
|
|
$
|
320,357
|
|
Pro Rata Payment of Tandem Cash Bonus(2)
|
|
$
|
114,720
|
|
|
$
|
—
|
|
|
$
|
114,720
|
|
Health and Welfare Benefits(3)
|
|
$
|
—
|
|
|
$
|
36,900
|
|
|
$
|
—
|
|
Excise Tax &
Gross-Up
|
|
$
|
—
|
|
|
$
|
617,714
|
|
|
$
|
—
|
|
|
|
|
(1) |
|
These amounts are in addition to amounts payable under the
preceding column “Change of Control on 5/3/08 and
Executive’s Employment Continues.” |
|
(2) |
|
For purposes of this table, we have assumed that our
Compensation Committee has elected to accelerate all awards in
each instance in which the acceleration is subject to the
discretion of our Compensation Committee. |
|
(3) |
|
Reflects the estimated lump-sum present value of all future
premiums which will be paid on behalf of the executive under our
health and welfare benefit plans. |
Thomas D.
Reynolds
The following table shows the potential payments of additional
benefits upon termination or a change of control of the Company
for Thomas D. Reynolds, our Senior Vice President, Worldwide
Automotive Operations. This table does not reflect (i) the
continuation of quarterly payments during fiscal 2009 under our
Longevity Contingent Bonus Program following death, disability
or retirement ($94,677 in the aggregate) or (ii) amounts to
be paid from our deferred compensation plan to Mr. Reynolds
in the event of his termination from the Company under any and
all circumstances ($21,969).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change of Control
|
|
|
|
|
|
|
Change of Control
|
|
|
on 5/2/08 and
|
|
|
|
|
|
|
on 5/2/08 and
|
|
|
Executive Resigns
|
|
|
Death, Disability
|
|
|
|
Executive’s
|
|
|
for Good Reason or
|
|
|
or Qualified
|
|
Benefits and Payments Upon
|
|
Employment
|
|
|
Is Terminated
|
|
|
Retirement on
|
|
Termination
|
|
Continues
|
|
|
Without Cause(1)
|
|
|
5/2/08
|
|
|
Salary Severance
|
|
$
|
—
|
|
|
$
|
640,000
|
|
|
$
|
—
|
|
Bonus Severance
|
|
$
|
—
|
|
|
$
|
414,697
|
|
|
$
|
—
|
|
Pro Rata Vesting of Restricted Stock Awards and Payout(2)
|
|
$
|
451,171
|
|
|
$
|
—
|
|
|
$
|
451,171
|
|
Pro Rata Payment of Tandem Cash Bonus(2)
|
|
$
|
180,096
|
|
|
$
|
—
|
|
|
$
|
180,096
|
|
Health and Welfare Benefits(3)
|
|
$
|
—
|
|
|
$
|
24,600
|
|
|
$
|
—
|
|
Excise Tax &
Gross-Up
|
|
$
|
—
|
|
|
$
|
565,821
|
|
|
$
|
—
|
|
|
|
|
(1) |
|
These amounts are in addition to amounts payable under the
preceding column “Change of Control on 5/3/08 and
Executive’s Employment Continues.” |
|
(2) |
|
For purposes of this table, we have assumed that our
Compensation Committee has elected to accelerate all awards in
each instance in which the acceleration is subject to the
discretion of our Compensation Committee. |
|
(3) |
|
Reflects the estimated lump-sum present value of all future
premiums which will be paid on behalf of the executive under our
health and welfare benefit plans. |
27
Timothy
R. Glandon
The following table shows the potential payments of additional
benefits upon termination or a change of control of the Company
for Timothy Glandon, our Vice President and General Manager,
North American Automotive. This table does not reflect
(i) the continuation of quarterly payments during fiscal
2009 under our Longevity Contingent Bonus Program following
death, disability or retirement ($185,250 in the aggregate) or
(ii) amounts to be paid from our deferred compensation plan
to Mr. Glandon in the event of his termination from the
Company under any and all circumstances ($29,706).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change of Control
|
|
|
|
|
|
|
Change of Control
|
|
|
on 5/2/08 and
|
|
|
|
|
|
|
on 5/2/08 and
|
|
|
Executive Resigns
|
|
|
Death, Disability
|
|
|
|
Executive’s
|
|
|
for Good Reason or
|
|
|
or Qualified
|
|
Benefits and Payments Upon
|
|
Employment
|
|
|
Is Terminated
|
|
|
Retirement on
|
|
Termination
|
|
Continues
|
|
|
Without Cause(1)
|
|
|
5/2/08
|
|
|
Salary Severance
|
|
$
|
—
|
|
|
$
|
500,000
|
|
|
$
|
—
|
|
Bonus Severance
|
|
$
|
—
|
|
|
$
|
425,250
|
|
|
$
|
—
|
|
Pro Rata Vesting of Restricted Stock Awards and Payout(2)
|
|
$
|
206,768
|
|
|
$
|
—
|
|
|
$
|
206,768
|
|
Pro Rata Payment of Tandem Cash Bonus(2)
|
|
$
|
83,022
|
|
|
$
|
—
|
|
|
$
|
83,022
|
|
Health and Welfare Benefits(3)
|
|
$
|
—
|
|
|
$
|
24,600
|
|
|
$
|
—
|
|
Excise Tax &
Gross-Up
|
|
$
|
—
|
|
|
$
|
369,641
|
|
|
$
|
—
|
|
|
|
|
(1) |
|
These amounts are in addition to amounts payable under the
preceding column “Change of Control on 5/3/08 and
Executive’s Employment Continues.” |
|
(2) |
|
For purposes of this table, we have assumed that our
Compensation Committee has elected to accelerate all awards in
each instance in which the acceleration is subject to the
discretion of our Compensation Committee. |
|
(3) |
|
Reflects the estimated lump-sum present value of all future
premiums which will be paid on behalf of the executive under our
health and welfare benefit plans. |
Paul E.
Whybrow
The following table shows the potential payments of additional
benefits upon termination or a change of control of the Company
for Paul Whybrow, our Vice President, Interconnect Products.
This table does not reflect (i) the continuation of
quarterly payments during fiscal 2009 under our Longevity
Contingent Bonus Program following death, disability or
retirement ($39,795 in the aggregate) or (ii) amounts to be
paid from our deferred compensation plan to Mr. Whybrow in
the event of his termination from the Company under any and all
circumstances ($110,817).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change of Control
|
|
|
|
|
|
|
Change of Control
|
|
|
on 5/2/08 and
|
|
|
|
|
|
|
on 5/2/08 and
|
|
|
Executive Resigns
|
|
|
Death, Disability
|
|
|
|
Executive’s
|
|
|
for Good Reason or
|
|
|
or Qualified
|
|
Benefits and Payments Upon
|
|
Employment
|
|
|
Is Terminated
|
|
|
Retirement on
|
|
Termination
|
|
Continues
|
|
|
Without Cause(1)
|
|
|
5/2/08
|
|
|
Salary Severance
|
|
$
|
—
|
|
|
$
|
410,000
|
|
|
$
|
—
|
|
Bonus Severance
|
|
$
|
—
|
|
|
$
|
219,795
|
|
|
$
|
—
|
|
Pro Rata Vesting of Restricted Stock Awards and Payout(2)
|
|
$
|
108,922
|
|
|
$
|
—
|
|
|
$
|
108,922
|
|
Pro Rata Payment of Tandem Cash Bonus(2)
|
|
$
|
46,476
|
|
|
$
|
—
|
|
|
$
|
46,476
|
|
Health and Welfare Benefits(3)
|
|
$
|
—
|
|
|
$
|
24,600
|
|
|
$
|
—
|
|
|
|
|
(1) |
|
These amounts are in addition to amounts payable under the
preceding column “Change of Control on 5/3/08 and
Executive’s Employment Continues.” |
|
(2) |
|
For purposes of this table, we have assumed that our
Compensation Committee has elected to accelerate all awards in
each instance in which the acceleration is subject to the
discretion of our Compensation Committee. |
|
(3) |
|
Reflects the estimated lump-sum present value of all future
premiums which will be paid on behalf of the executive under our
health and welfare benefit plans. |
28
OTHER
INFORMATION
Section 16(a)
Beneficial Ownership Reporting Compliance
Under the securities laws, our directors and executive officers
are required to report their initial ownership of our common
stock and any subsequent changes in that ownership to the
Securities and Exchange Commission. Specific due dates for these
reports have been established and we are required to disclose in
this proxy statement if a director or executive officer filed a
late report. During fiscal 2008, there were no delinquent
reports. In making these disclosures, we have relied solely on
written representations of our directors and executive officers
and copies of the reports filed with the Securities and Exchange
Commission.
Shareholder
Proposals
Our Corporate Secretary must receive shareholder proposals no
later than April 13, 2009 to be considered for inclusion in
our proxy materials for our next annual meeting. Additionally,
our advance notice by-law provisions require that any
shareholder proposal to be presented from the floor of the next
annual meeting must be received by our Corporate Secretary not
later than the 60th day nor earlier than the 90th day
prior to September 18, 2009 (the first anniversary of the
preceding year’s annual meeting). If the date of our next
annual meeting is more than 30 days before or more than
60 days after September 18, 2009, shareholder
proposals must be delivered no earlier than the 90th day
prior to such annual meeting date and not later than the later
of the 60th day prior to such annual meeting date or the
10th day following our public announcement of the meeting
date for such annual meeting. Also, such proposal must be, under
law, an appropriate subject for shareholder action in order to
be brought before the meeting and must contain the information
required by the advance notice by-law provision. These notices
should be directed to the Corporate Secretary of Methode
Electronics, Inc. at 7401 West Wilson Avenue, Chicago,
Illinois 60706.
Additional
Information
A copy of our Annual Report on
Form 10-K
for the fiscal year ended May 3, 2008, as filed with the
Securities and Exchange Commission, will be provided to
shareholders without charge upon written request directed to
Investor Relations, Methode Electronics, Inc., 7401 West
Wilson Avenue, Chicago, Illinois 60706.
Other
Matters
Neither our board of directors nor management knows of any other
business that will be presented at the annual meeting. Should
any other business properly come before the annual meeting, the
persons named in the enclosed proxy will vote on such matters in
accordance with their best judgment.
By Order of the Board of Directors,
Warren L. Batts
Chairman
Chicago, Illinois
August 11, 2008
29
METHODE ELECTRONICS, INC.
COMMON STOCK
PROXY
FOR THE ANNUAL MEETING OF THE SHAREHOLDERS OF
METHODE ELECTRONICS, INC.
THIS PROXY IS SOLICITED ON BEHALF OF
THE BOARD OF DIRECTORS
The undersigned hereby appoints Warren L. Batts, Donald W. Duda and Douglas A. Koman, and each
of them, with full power of substitution, as proxies to vote all shares of Methode Electronics,
Inc. common stock which the undersigned is entitled to vote at the Annual Meeting of Methode
Electronics, Inc. to be held on Thursday, September 18, 2008 at 11:00 a.m., Chicago time, at
Methode’s corporate offices at 7401 West Wilson Avenue, Chicago, Illinois, and at any adjournment
or postponement thereof.
This proxy when properly signed will be voted in the manner directed herein by the undersigned
shareholder. IF NO DIRECTION IS PROVIDED, THIS PROXY WILL BE VOTED AS RECOMMENDED BY THE BOARD OF
DIRECTORS. If other business is presented at the Annual Meeting, this proxy shall be voted in
accordance with the best judgment of the persons named as proxies above.
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED
Vote On Proposal One
|
1. |
|
The election of the following nominees as directors: 01) Walter J. Aspatore, 02) Warren
L. Batts, 03) J. Edward Colgate, 04) Darren M. Dawson, 05) Donald W. Duda, 06) Isabelle C.
Goossen, 07) Christopher J. Hornung, 08) Paul G. Shelton and 09) Lawrence B. Skatoff. |
|
|
|
|
|
|
|
|
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FOR ALL
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WITHHOLD
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FOR ALL
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To withhold authority
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ALL
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EXCEPT
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to vote for any individual nominee(s), mark |
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“FOR ALL EXCEPT” and write the |
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number(s) of the nominee(s) on the line |
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below. |
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Vote on Proposal Two
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2. |
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The ratification of the Audit Committee’s selection of Ernst & Young LLP to serve as
our independent registered public accounting firm for the fiscal year ending May 2, 2009. |
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FOR
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AGAINST
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ABSTAIN |
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IMPORTANT — PLEASE VOTE, SIGN AND RETURN PROMPTLY. When there is more than one owner of shares,
both should sign. Signatures should correspond with names printed on this proxy card. When
signing as an attorney, executor, administrator, trustee, or guardian, please add your full title
as such. If a corporation, please sign in full corporate name, and this proxy should be signed by
a duly authorized officer. If a partnership, please sign in partnership name by an authorized
person.
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Signature |
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Dated:
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[Please sign within box] |
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Signature (Joint Owners)
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Dated: |
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METHODE ELECTRONICS, INC.
7401 West Wilson Avenue, Chicago, IL 60706
If you grant a proxy by telephone or the Internet,
DO NOT mail back the proxy card.
THANK YOU FOR VOTING!
YOU CAN GRANT YOUR PROXY BY TELEPHONE OR INTERNET!
Methode Electronics, Inc. encourages you to take advantage of convenient ways to vote these shares.
If voting by proxy, you may grant a proxy by mail, or choose one of the two methods described
below. Your telephone or Internet proxy authorizes the named proxies to vote your shares in the
same manner as if you marked, signed, and returned your proxy card. To grant your proxy by
telephone or Internet, read the annual meeting proxy statement and then follow these easy steps:
Grant your proxy by Internet — www.proxyvote.com
Use the Internet to transmit your voting instructions for electronic delivery of information up
until 11:59 P.M. Central Time the day before the annual meeting date. Have your proxy card in hand
when you access the web site and follow the instructions to obtain your records and to create an
electronic voting instruction form.
Grant your proxy by phone — 1-800-690-6903
Use any touch-tone telephone to transmit your voting instructions up until 11:59 P.M. Central Time
the day before the annual meeting date. Have your proxy card in hand when you call and then follow
the simple instructions the vote voice provides you.
Grant your proxy by mail
Mark, sign, and date your proxy card and return it in the postage-paid envelope we have provided or
return it to Methode Electronics, Inc., c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
ELECTRONIC DELIVERY OF FUTURE SHAREHOLDER COMMUNICATIONS
If you would like to reduce the costs incurred by Methode Electronics, Inc. in mailing proxy
materials, you can consent to receiving all future proxy statements, proxy cards and annual reports
electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the
instructions above to vote using the Internet and, when prompted, indicate that you agree to
receive or access shareholder communications electronically in future years.