Table of Contents
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 11-K
x
ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the year ended
December 31, 2008
o
TRANSITION REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition
period from
to
Commission File
Number: 0-2816
A.
Full title of the plan and the address of
the plan, if different from that of the issuer named below:
Methode Electronics, Inc.
401(k) Savings Plan
B.
Name of issuer of the securities held
pursuant to the plan and the address of its principal executive office:
Methode
Electronics, Inc.
7401
West Wilson Avenue
Chicago,
IL 60706-4548
Table
of Contents
FINANCIAL STATEMENTS AND
SUPPLEMENTALSCHEDULE
Methode Electronics, Inc.
401(k) Savings Plan
Years Ended December 31,
2008 and 2007
Table of
Contents
Methode Electronics, Inc.
401(k) Savings Plan
Financial Statements and
Supplemental Schedule
Years Ended December 31, 2008 and 2007
Conten
ts
Table of
Contents
Report of Independent
Registered Public Accounting Firm
The Administration
Committee
Methode Electronics, Inc.
401(k) Savings
Plan
We have audited the accompanying statements of net
assets available for benefits of Methode Electronics, Inc. 401(k) Savings
Plan as of December 31, 2008 and 2007, and the related statements of
changes in net assets available for benefits for the years then ended. These
financial statements are the responsibility of the Plans management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. We were not engaged to perform an audit of the Plans internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Plans internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and significant
estimates made by management, and evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to
above present fairly, in all material respects, the net assets available for
benefits of the Plan at December 31, 2008 and 2007, and the changes in net
assets available for benefits for the years then ended, in conformity with
accounting principles generally accepted in the United States.
Our audits were performed for the purpose of forming
an opinion on the financial statements taken as a whole. The accompanying
supplemental schedule of assets (held at end of year) as of December 31,
2008, is presented for purposes of additional analysis and is not a required
part of the financial statements but is supplementary information required by
the Department of Labors Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974. This
supplemental schedule is the responsibility of the Plans management. The
supplemental schedule has been subjected to the auditing procedures applied in
our audits of the financial statements and, in our opinion, is fairly stated in
all material respects in relation to the financial statements taken as a whole.
As discussed in Note 2 to the financial statements,
the Plan initially adopted Financial Accounting Standards Board Statement No. 157,
Fair Value Measurements, for the year ended December 31, 2008.
/s/ Frank L.
Sassetti & Co.
|
|
|
|
June 23, 2009
|
|
Oak Park, Illinois
|
|
1
Table of Contents
Methode Electronics, Inc.
401(k) Savings Plan
Statements of Net Assets
Available for Benefits
|
|
December 31,
|
|
|
|
2008
|
|
2007
|
|
Assets
|
|
|
|
|
|
Cash
|
|
$
|
199,643
|
|
$
|
62,370
|
|
|
|
|
|
|
|
Investments,
at fair value:
|
|
|
|
|
|
Group
annuity investment contracts
|
|
6,869,428
|
|
6,249,262
|
|
Mutual
funds
|
|
23,093,852
|
|
36,664,062
|
|
Common
stock
|
|
1,834,834
|
|
4,107,986
|
|
Participant
loans
|
|
1,310,348
|
|
1,524,971
|
|
Total
investments
|
|
33,108,462
|
|
48,546,281
|
|
|
|
|
|
|
|
Receivables:
|
|
|
|
|
|
Employee
/ employer contributions
|
|
51,738
|
|
|
|
Unsettled
investment sales
|
|
4,923
|
|
57,421
|
|
Accrued
interest / dividends
|
|
25,621
|
|
33,140
|
|
Total
receivables
|
|
82,282
|
|
90,561
|
|
Total
assets
|
|
33,390,387
|
|
48,699,212
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Unsettled
investment purchases
|
|
186,876
|
|
97,553
|
|
Total
liabilities
|
|
186,876
|
|
97,553
|
|
|
|
|
|
|
|
Net
assets available for benefits, at fair value
|
|
33,203,511
|
|
48,601,659
|
|
|
|
|
|
|
|
Adjustment
from fair value to contract value for fully benefit-responsive investment
contracts
|
|
782,077
|
|
178,642
|
|
Net
assets available for benefits
|
|
$
|
33,985,588
|
|
$
|
48,780,301
|
|
See
accompanying notes.
2
Table of Contents
Methode Electronics, Inc.
401(k) Savings Plan
Statements of Changes in Net
Assets Available for Benefits
|
|
Years Ended December 31,
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
Additions:
|
|
|
|
|
|
Additions
to net assets attributed to:
|
|
|
|
|
|
Investment
Income:
|
|
|
|
|
|
Interest
and dividends
|
|
$
|
1,209,043
|
|
$
|
2,340,456
|
|
Net
appreciation / (depreciation) in fair value of investments
|
|
(15,120,176
|
)
|
2,302,281
|
|
Total
investment gain / (loss)
|
|
(13,911,133
|
)
|
4,642,737
|
|
|
|
|
|
|
|
Contributions:
|
|
|
|
|
|
Participants
|
|
3,242,853
|
|
3,171,479
|
|
Employer
|
|
2,121,229
|
|
1,941,368
|
|
Rollovers
|
|
254,953
|
|
613,418
|
|
|
|
5,619,035
|
|
5,726,265
|
|
Total
additions, net
|
|
(8,292,098
|
)
|
10,369,002
|
|
|
|
|
|
|
|
Deductions
|
|
|
|
|
|
Deductions
from net assets attributed to:
|
|
|
|
|
|
Benefits
paid to participants
|
|
6,493,573
|
|
4,315,752
|
|
Administrative
expenses
|
|
9,042
|
|
9,424
|
|
Total
deductions
|
|
6,502,615
|
|
4,325,176
|
|
|
|
|
|
|
|
Net
increase / (decrease)
|
|
(14,794,713
|
)
|
6,043,826
|
|
Net
assets available for benefits:
|
|
|
|
|
|
Beginning
of year
|
|
48,780,301
|
|
42,736,475
|
|
End
of year
|
|
$
|
33,985,588
|
|
$
|
48,780,301
|
|
See
accompanying notes.
3
Table of Contents
Methode
Electronics, Inc.
401(k) Savings
Plan
Notes to Financial Statements
Years Ended December 31,
2008 and 2007
1.
Description of the Plan
The following description of the Methode Electronics, Inc.
401(k) Savings Plan (Plan) provides only general information. Participants
should refer to the Summary Plan Description (SPD) for a more complete
description of the Plans provisions. Copies of the SPD are available from
Methode Electronics, Inc.
General
The Plan is a defined-contribution plan established to
provide additional retirement and other benefits for eligible employees, to
enable eligible employees, through systematic savings, to accumulate funds on a
tax-advantageous basis, and to provide a vehicle through which the plan
sponsor, Methode Electronics, Inc. and its subsidiaries (the Company), can
attract and retain qualified employees.
Participation
Employees who are employed by the Company for three full
calendar months are eligible to participate in the Plan on the first day of the
following calendar month.
Contributions
Participants may elect to contribute a minimum of 2%
of their annual compensation (as defined in the Plan) on a pre-tax, after tax
Roth 401(k) or any combination, up to the maximum annual dollar limit
allowable by the Internal Revenue Service (IRS).
The Company contributes to the Plan, on behalf of each
participant, a safe-harbor non-elective contribution of 3% of each
participants eligible compensation (as defined by the Plan), subject to the
IRS maximum amount, for the portion of the Plan year in which the employee was
a participant in the Plan.
Participants may direct contributions into various
investment options offered by the Plan.
4
Table of Contents
Methode Electronics, Inc.
401(k) Savings Plan
Notes to Financial
Statements (continued)
1.
Description of Plan (continued)
Participant
Withdrawals
Withdrawals are permitted in the event of termination
of employment, disability, death, retirement, attainment of age 59 1/2, or
financial hardship. A financial hardship withdrawal is currently permitted by
the IRS for certain authorized purposes. Such withdrawals must be approved by
the 401(k) Hardship Committee. Withdrawals prior to the attainment of age
59 1/2 may be subject to an additional 10% tax penalty.
Vesting
Participants are immediately vested in Company
contributions, their contributions, and actual earnings (losses) thereon.
Participant
Loans
Participants may borrow from their fund accounts a
minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of
their account balance. Loan terms range from 1 to 5 years or up to 15 years for
the purchase of a primary residence. The loans are secured by the balance in
the participants account and bear interest at the prime rate plus 1%.
Principal and interest are paid ratably through payroll deductions.
Participant
Accounts
Each participants account is credited with the
participants contributions and allocations of Company contributions and Plan
earnings (losses). Allocations are based on participant earnings or account
balances as defined. The benefit to which a participant is entitled is the
benefit that can be provided from the participants account.
Plan
Termination
Although it has not expressed any intent to do so, the
Company has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of the Employee
Retirement Income Security Act of 1974.
5
Table of Contents
Methode Electronics, Inc.
401(k) Savings Plan
Notes to Financial
Statements (continued)
2.
Significant Accounting Policies
Basis
of Accounting
The financial statements have been prepared on the
accrual basis of accounting.
Valuation
of Investments
The shares of mutual funds are valued at quoted market
prices, which represent the net asset values of shares on the last business day
of the Plan year. The fair value of common stock is determined by quoted market
prices. Participant loans are valued at their outstanding balances, which
approximate fair value
Purchases and sales are recorded on a trade-date
basis. Interest is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
In December, 2005, the Financial Accounting Standards
Board (FASB) issued a Staff Position (FSP),
Reporting of Fully Benefit-Responsive Investment Contracts Held by
Certain Investment Companies Subject to the AICPA Investment Company Guide and
Defined Contribution Health and Welfare and Pension Plans.
This FSP
amends the guidance in AICPA Statement of Position 94-4,
Reporting of Investment Contracts Held by Health and
Welfare Benefit Plans and Defined-Contribution Pension Plans
, with
respect to the definition of fully benefit-responsive investment contracts and
the presentation and disclosure of fully benefit-responsive investment
contracts in plan financial statements. The FSP requires that investments in
common/collective trusts that include benefit-responsive investment contracts
be presented at fair value in the statement of net assets available for
benefits and that the amount representing the difference between fair value and
contract value of these investments also be presented on the face of the
statement of net assets available for benefits. The Plan has group annuity
investment contracts with the Hartford Life Insurance Company (Hartford) and
Lincoln National Life Insurance Company (Lincoln).
The Hartford group annuity contract fair value and
contract value are estimated by Hartford Life Insurance Company. Contract value
represents contributions made, plus interest at the contract rate, less funds
used to pay participants benefits. The Plan does not allow for new investment
in this contract. There are significant penalties if the entire contract were
prematurely terminated.
6
Table of Contents
Methode Electronics, Inc.
401(k) Savings Plan
Notes to Financial
Statements (continued)
2. Significant Accounting Policies
(continued)
The Hartford group annuity contract had an average
yield of 3.09% (annualized) for each of the years ended December 31, 2008
and 2007, respectively. The crediting interest rate was 3.00% at December 31,
2008 and 2007, respectively. The crediting interest rate is set at the
beginning of the calendar year and is periodically reviewed for adjustment.
The Lincoln Stable Value Account is a fixed group
annuity issued by The Lincoln National Life Insurance Company. Contract value
represents contributions made, plus interest at the contract rate, less funds
used to pay participants benefits. There are penalties or delays in payments
if significant withdrawals are made prior to August 2011.
The Lincoln contract had an average yield of 4.41% and
4.15% (annualized) for the years ended December 31, 2008 and 2007,
respectively. The crediting interest rate was 4.40% and 4.34% at December 31,
2008 and 2007, respectively. The crediting interest rate is set at the
beginning of each calendar quarter and is periodically reviewed for adjustment.
Use
of Estimates
The preparation of financial statements in conformity
with U.S. generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
Risks
and Uncertainties
The Plan invests in various
investment securities. Investment securities are exposed to various risks such
as interest rate, market, and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible that
changes in the values of investment securities will occur in the near term and
that such changes could materially affect participants account balances and
the amounts reported in the statements of net assets available for benefits.
Administrative
Expenses
Generally, expenses of the Plan are paid by the
Company.
Fair Value Measurements
On January 1, 2008, the Plan adopted Financial
Accounting standard Board (FASB) Statement 157,
Fair Value Measurements
and subsequently adopted certain
related FASB staff positions. Refer to Note 4 for disclosures provided for fair
value measurements of plan investments.
7
Table of Contents
Methode Electronics, Inc.
401(k) Savings Plan
Notes to Financial
Statements (continued)
3.
Investments
The Plans investments (including investments
purchased, sold, as well as held during the year) appreciated / depreciated in
fair value as determined by quoted market prices as follows:
|
|
Years Ended December 31
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
Mutual
funds
|
|
$
|
(12,897,749
|
)
|
$
|
725,716
|
|
Common
stock
|
|
(2,222,427
|
)
|
1,576,565
|
|
|
|
$
|
(15,120,176
|
)
|
$
|
2,302,281
|
|
Investments that represent 5% or more of the Plans
net assets are as follows:
|
|
December 31,
|
|
|
|
2008
|
|
2007
|
|
Hartford
Life Insurance Company Group Annuity Contract
|
|
$
|
1,788,477
|
|
$
|
2,782,620
|
|
Lincoln
Stable Value Fund
|
|
5,080,951
|
|
3,466,642
|
|
|
|
|
|
|
|
American
Funds
|
|
|
|
|
|
American
Balanced Fund
|
|
7,217,414
|
|
10,153,327
|
|
American
Mutual Fund
|
|
3,427,384
|
|
5,154,965
|
|
American
Growth Fund of America
|
|
3,818,711
|
|
6,670,195
|
|
Euro
Pacific Fund
|
|
2,459,841
|
|
4,454,123
|
|
|
|
|
|
|
|
Davis
NY Venture Fund
|
|
2,551,684
|
|
4,789,388
|
|
Methode
Electronics, Inc. Common Stock Fund
|
|
1,834,834
|
|
4,107,986
|
|
|
|
|
|
|
|
|
|
8
Table of Contents
Methode Electronics, Inc.
401(k) Savings Plan
Notes to Financial
Statements (continued)
4.
Fair Value Measurements
On January 1, 2008, the Plan adopted FASB
Statement No. 157,
Fair Value
Measurements
and subsequently adopted certain related FASB staff
positions. Statement 157 defines fair value as the price that would be received
from selling an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. When determining the fair
value measurements for assets and liabilities required to be recorded at fair
value, the Plan considers the principal or most advantageous market in which it
would transact and considers assumptions that market participants would use
when pricing the asset or liability, such as inherent risk, transfer
restrictions, and risk of nonperformance.
Statement 157 also establishes a fair value hierarchy
that requires the Plan to maximize the use of observable inputs and minimize
the use of unobservable inputs when measuring fair value. A financial
Instrumentss categorization within the fair value hierarchy is based upon the
lowest of input that is significant to the fair value measurement. Statement
157 establishes three levels of inputs that may be used to measure fair value:
·
Level 1 : quoted prices in active markets for identical assets or
liabilities;
·
Level 2 : inputs other than Level 1 that are observable, either
directly or indirectly, such as quoted prices in active markets for similar
assets or liabilities, quoted prices for identical or similar assets or
liabilities in markets that are not active,
or other inputs that are observable or can be corroborated by observable
market data for substantially the full term of the assets or liabilities ; or
·
Level 3 : observable inputs that are supported by little or no market
activity and that are significant to the fair value of the assets or
liabilities.
9
Table of Contents
Methode
Electronics, Inc.
401(k) Savings
Plan
Notes to Financial
Statements (continued)
Investments measured at Fair Value
on a recurring Basis
The following summarizes the classification of
Investments by classification and method of valuation in accordance with the
requirements of SFAS 157:
|
|
Fair Value Measurements Using Input Type
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
Mutual
Funds
|
|
$
|
23,093,852
|
|
$
|
|
|
$
|
|
|
$
|
23,093,852
|
|
|
|
|
|
|
|
|
|
|
|
Common
Stock
|
|
1,834,834
|
|
|
|
|
|
1,834,834
|
|
|
|
|
|
|
|
|
|
|
|
Group
Annuity / Investment Contracts
|
|
|
|
|
|
6,869,428
|
|
6,869,428
|
|
|
|
|
|
|
|
|
|
|
|
Participant
Loans
|
|
|
|
|
|
1,310,348
|
|
1,310,348
|
|
|
|
$
|
24,928,686
|
|
$
|
|
|
$
|
8,179,776
|
|
$
|
33,108,462
|
|
The Plans valuation methodology used to measure the
fair values of mutual funds and common stock were derived from quoted market
prices as all of these instruments have active markets.
10
Table of Contents
Methode
Electronics, Inc.
401(k) Savings
Plan
Notes to Financial
Statements (continued)
The table below is a summary of changes in the fair
value of the Plans Level 3 assets for the year ended December 31, 2008.
|
|
Level 3 Assets
|
|
|
|
Participant
|
|
Group Annuity /
|
|
|
|
Loans
|
|
Investment Contracts
|
|
|
|
|
|
|
|
Balance
as of January 1, 2008
|
|
$
|
1,524,971
|
|
$
|
6,249,260
|
|
|
|
|
|
|
|
Issuances,
repayments and settlements, net
|
|
(214,623
|
)
|
620,168
|
|
|
|
|
|
|
|
Balance
as of December 31, 2008
|
|
$
|
1,310,348
|
|
$
|
6,869,428
|
|
5.
Income Tax Status
The Plan has received a determination letter from the
IRS dated September 11, 2002, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is
exempt from taxation. Subsequent to this determination by the IRS, the Plan was
amended. Once qualified, the Plan is required to operate in conformity with the
Code to maintain its qualification. The plan administrator believes the Plan is
being operated in compliance with the applicable requirements of the Code and,
therefore, believes that the Plan is qualified and the related trust is
tax-exempt.
11
Table of Contents
Methode
Electronics, Inc.
401(k) Savings
Plan
Notes to Financial
Statements (continued)
6. Reconciliation of Financial
Statements to Form 5500
The following is a reconciliation of investments at
fair value per the financial statements to the Form 5500 at December 31,
|
|
2008
|
|
2007
|
|
Investments,
at fair value, per the financial statements
|
|
$
|
33,108,462
|
|
$
|
48,546,281
|
|
|
|
|
|
|
|
Adjustment
from fair value to contract value for investments in fully benefit-responsive
insurance contracts
|
|
782,077
|
|
178,642
|
|
|
|
|
|
|
|
Investments,
per Form 5500
|
|
$
|
33,890,539
|
|
$
|
48,724,923
|
|
12
Table of Contents
Methode
Electronics, Inc.
401(k) Savings
Plan
Notes to Financial
Statements (continued)
Supplemental Schedule
Table of Contents
Methode Electronics, Inc.
401(k) Savings Plan
Schedule H, Line 4i
Schedule of Assets
(Held at End of Year)
EIN #36-2090085 Plan #002
December 31,
2008
Identity of Issue
|
|
Description of
Investment
|
|
Shares
or
Units
|
|
Cost
|
|
Current
Value
|
|
Group annuity investment
contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hartford Life Insurance Company
|
|
Group
Annuity Contract
|
|
N/A
|
|
**
|
|
$
|
1,788,477
|
|
|
|
|
|
|
|
|
|
|
|
Lincoln Financial Group *
|
|
Lincoln
Stable Value Fund
|
|
5,080,951
|
|
**
|
|
5,080,951
|
|
|
|
|
|
|
|
|
|
|
|
Mutual funds
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The American Funds Group
|
|
American
Balanced Fund
|
|
523,760
|
|
**
|
|
7,217,414
|
|
|
|
American
Mutual Fund
|
|
179,632
|
|
**
|
|
3,427,384
|
|
|
|
Europacific
Growth Fund
|
|
87,820
|
|
**
|
|
2,459,841
|
|
|
|
Growth
Fund of America
|
|
186,461
|
|
**
|
|
3,818,711
|
|
|
|
New
Economy Fund
|
|
64,056
|
|
**
|
|
997,355
|
|
|
|
|
|
|
|
|
|
|
|
Delaware Investments
|
|
Delaware
Diversified Income
|
|
156,689
|
|
**
|
|
1,240,976
|
|
|
|
Delaware Select Growth
|
|
74,482
|
|
**
|
|
723,218
|
|
|
|
|
|
|
|
|
|
|
|
Davis Funds
|
|
Davis
NY Venture
|
|
107,711
|
|
**
|
|
2,551,684
|
|
|
|
|
|
|
|
|
|
|
|
Vanguard
|
|
Total
Stock Market Index
|
|
4,984
|
|
**
|
|
108,653
|
|
|
|
|
|
|
|
|
|
|
|
Victory
|
|
Victory
Special Value
|
|
53,523
|
|
**
|
|
548,616
|
|
|
|
|
|
|
|
|
|
|
|
Common stock
|
|
|
|
|
|
|
|
|
|
Methode Electronics, Inc.*
|
|
Methode
Electronics, Inc.
|
|
|
|
|
|
|
|
|
|
Common Stock
|
|
300,321
|
|
**
|
|
1,834,834
|
|
|
|
|
|
|
|
|
|
|
|
Total investments at fair value
|
|
|
|
|
|
|
|
31,798,114
|
|
|
|
|
|
|
|
|
|
|
|
Adjustment from fair value to contract value for
fully responsive investment contracts
|
|
|
|
|
|
782,077
|
|
|
|
|
|
|
|
|
|
|
|
Total investments, as adjusted
|
|
|
|
|
|
|
|
32,580,191
|
|
|
|
|
|
|
|
|
|
|
|
Participant loans
|
|
Interest
rates range from 5.0% to 9.25%
|
|
|
|
**
|
|
1,310,348
|
|
|
|
|
|
|
|
|
|
$
|
33,890,539
|
|
*Party in
interest.
**Cost information
is not required for participant directed investments and participant loans and,
therefore, is not included.
13
Table of Contents
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the Plan Administrator has duly caused this
annual report to be signed on its behalf by the undersigned hereunto duly
authorized.
|
METHODE ELECTRONICS, INC.
|
|
|
|
|
Date: June 26,
2009
|
By:
|
/s/Douglas A. Koman
|
|
|
Douglas A. Koman
|
|
|
Chief Financial Officer
|
14
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