- Current report filing (8-K)
November 12 2010 - 6:11AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of Report (Date of earliest event reported):
November 8,
2010
METHODE ELECTRONICS, INC.
(Exact name of registrant as specified in its charter)
Delaware
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0-2816
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36-2090085
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(State or other jurisdiction
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(Commission File Number)
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(IRS Employer
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of incorporation)
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Identification No.)
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7401 West Wilson Avenue, Chicago, Illinois 60706
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code:
(708) 867-6777
Not Applicable
(Former name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
o
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Item 5.02
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Departure of Directors or
Certain Officers; Election of Directors; Appointment of Certain Officers;
Compensatory Arrangements of Certain Officers.
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On
November 8, 2010, the Compensation Committee (the Committee) of Methode
Electronics, Inc. (Methode) authorized awards of performance-based
restricted stock (RSAs) and time-based restricted stock units (RSUs) to
executive officers under Methodes 2010 Stock Plan. In addition, the Committee authorized tandem
cash awards (Tandem Cash Awards) to executive officers under Methodes 2010
Cash Incentive Plan. A description of
the material terms and conditions of these awards is set forth below. These descriptions are qualified by reference
to the full text of the Performance Based Restricted Stock Form Award
Agreement, the Restricted Stock Unit Form Award Agreement and the RSA
Tandem Cash Award Form Award Agreement attached hereto as Exhibit 10.1,
Exhibit 10.2 and Exhibit 10.3, respectively. On November 8,
2010, the Committee also approved the terms of a Cash Bonus Form Award
Agreement to be used in the future for cash bonus awards under Methodes 2010
Cash Incentive Plan. A copy of the Cash
Bonus Form Award Agreement is attached hereto as Exhibit 10.4. In addition, the Committee and management
agreed to amend the Change In Control Agreements to modify the definition of Good
Reason and the circumstances pursuant to which an executive is entitled to
certain additional payments. A
description of the material terms of the amendment is set forth below. This description is qualified by reference to
the full text of the Amendment to Change in Control Agreement attached hereto
as Exhibit 10.5.
Performance-Based
Restricted Stock Awards
Set
forth below is a table outlining the number of RSAs awarded to our management
team on November 8th. The number of
RSAs that will vest depends on the level of performance achieved in fiscal
2015. The performance measure is Methodes
internal enterprise value at the end of fiscal 2015. For this purpose, internal
enterprise value shall equal the product of (i) fiscal 2015 EBITDA and (ii) 7.5
(the historic multiple of EBITDA), subject to adjustment for cash,
short-term investments, debt, preferred stock, certain equity issuances,
certain acquisitions and changes in the dividend rate. The awards reflect a threshold and a target
level of performance. In the event of a
Change of Control, the number of RSAs that vest will depend on the Companys
external enterprise value as of the date of the Change of Control. For this purpose, external enterprise value
shall equal the fair market value of the Company as determined by the bona fide
offer for the purchase of the Companys Common Stock causing the Change of
Control. In the event of an executives
termination of employment due to death, disability or qualified retirement
prior to the end of fiscal 2015, vesting will be determined based on fiscal
2015 performance, subject to proration based on the date of termination. Dividends will not be paid on the RSAs until
the shares have vested. At such time as
the shares vest, the executive is entitled to a payment based on the dividends
declared during the restricted period and the number of shares earned.
Name
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Number of RSAs
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Donald
W. Duda
President and Chief Executive Officer
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200,000
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2
Douglas
A. Koman
Chief Financial Officer,
Vice President, Corporate Finance
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80,000
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Timothy
R. Glandon
Vice President and General Manager, North American Automotive
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60,000
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Joseph
E. Khoury
Vice President, Europe
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60,000
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Thomas
D. Reynolds
Chief Operating Officer
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100,000
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Total
Executive Group (7 people)
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600,000
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Total
Non-Executive Officer Employee Group (1 person)
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40,000
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Performance-Based
Tandem Cash Awards
In
connection with the RSAs, the Committee granted Tandem Cash Awards to our
management team. These cash incentive
awards will become payable if Methodes internal enterprise value at the end of
fiscal 2015 exceeds the RSA target performance level. If the target performance level for the RSAs
is exceeded, the executives are entitled to a cash payment based on the level
of performance achieved, 40% of the RSAs awarded to the executive and the closing
price of our common stock as of May 1, 2015. In the event of a change of control or a
qualified termination event (death, disability or retirement), the Tandem Cash
Awards will vest in the same manner as the RSA awards.
Time-Based
Restricted Stock Unit Awards
Set
forth below is a table outlining the number of RSUs awarded to our management
team on November 8th. The RSUs
will vest 20% each year on the last day of Methodes fiscal year and be 100%
vested on the last day of fiscal 2015, provided the executive remains
employed. Shares of common stock
underlying the vested RSUs will be delivered to the executive upon the earlier
of executives termination of employment or a change of control. In the event of a change in control prior to
the end of fiscal 2015, all unvested RSUs will become immediately and fully
vested. Dividends will not be paid on
the RSUs until the units have vested.
Following vesting and until the delivery of the underlying common stock,
each executive is entitled to a quarterly payment in an amount equal to the
aggregate per share cash dividend paid during the quarter multiplied by the
number of vested RSUs held by the executive.
Name and position
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Number of RSUs
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Donald
W. Duda
President and Chief Executive Officer
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100,000
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Douglas
A. Koman
Chief Financial Officer,
Vice President, Corporate Finance
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40,000
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3
Timothy
R. Glandon
Vice President and General Manager, North American Automotive
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30,000
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Joseph
E. Khoury
Vice President, Europe
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30,000
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Thomas
D. Reynolds
Chief Operating Officer
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50,000
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Total
Executive Group (7 people)
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300,000
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Total
Non-Executive Officer Employee Group (1 person)
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20,000
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Amendment
to Change in Control Agreement
On
November 8, 2010, the Committee and management agreed to amend the Change
In Control Agreements to provide that in the event of a Change in Control
occurring on or after May 1, 2015, the executives are no longer entitled
to a Gross-Up Payment. In addition, the
amendments modify the definition of Good Reason to require the executive to
provide Methode with notice and an opportunity to cure in the event the
executive believes he has grounds to terminate employment with Good Reason as
provided in the Change in Control Agreement.
Item
9.01
Financial
Statements and Exhibits.
(d)
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Exhibits
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10.1
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Performance
Based Restricted Stock Form Award Agreement
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10.2
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Restricted
Stock Unit Form Award Agreement
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10.3
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RSA
Tandem Cash Award Form Award Agreement
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10.4
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Cash
Bonus Form Award Agreement
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10.5
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Form
of Amendment to Change in Control Agreement
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4
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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METHODE
ELECTRONICS, INC.
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Date:
November 12, 2010
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By:
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/s/
Douglas A. Koman
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Douglas
A. Koman
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Chief
Financial Officer
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5
INDEX TO EXHIBITS
Exhibit No.
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Description of Exhibit
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10.1
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Performance
Based Restricted Stock Form Award Agreement
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10.2
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Restricted
Stock Unit Form Award Agreement
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10.3
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RSA
Tandem Cash Award Form Award Agreement
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10.4
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Cash
Bonus Form Award Agreement
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10.5
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Form
of Amendment to Change in Control Agreement
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6
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