METHODE ELECTRONICS, INC.
AMENDED CASH BONUS AGREEMENT
THIS AMENDED CASH
BONUS AGREEMENT, effective as of April 6, 2007 (the
“Amended Agreement”), is entered into by and between
METHODE ELECTRONICS, INC., a Delaware corporation (the
“Company”), and Donald W. Duda
(“Employee”).
WHEREAS, Employee
has served and continues to serve the Company as President of the
Company;
WHEREAS,
Section 3 of the Methode Electronics, Inc. 2000 Stock Plan
(the “Plan”) limits the total number of shares of
Company common stock with respect to which awards may be granted
under the Plan to a participant in any calendar year to 100,000
shares;
WHEREAS, on
May 4, 2001, the Company granted Employee a stock option award
under the Plan with respect to 200,000 shares of Company common
stock;
WHEREAS, on
June 10, 2002, the Company granted Employee a stock option
award under the Plan with respect to 200,000 shares of Company
common stock;
WHEREAS, each of
the two stock option awards described above is void to the extent
that it attempted to grant a stock option with respect to more than
100,000 shares of Company common stock;
WHEREAS, on
July 3, 2003, the Company granted Employee a stock option
award under the Plan with respect to 100,000 shares of Company
common stock, but would have granted him a stock option award with
respect to 250,000 shares but for the 100,000 share annual
limitation referred to above;
WHEREAS, the
Company desires to reward Employee for his services to the Company
and to encourage him to continue to work for the benefit of the
Company in a manner that will benefit all Company shareholders and
to compensate him for the stock option awards described above that
exceeded or would have exceeded the Plan’s 100,000 share
annual limitation;
WHEREAS, the
Company and Employee entered into a Cash Bonus Agreement effective
as of August 22, 2003 (“the Cash Bonus Agreement”) to
accomplish the foregoing;
WHEREAS, on April
4 and 5, 2007, the Employee exercised all of the vested stock
options awarded to him on June 10, 2002 and on July 3,
2003 and subsequently sold the underlying 175,000 shares of common
stock at a weighted average sale price of $15.32 per share (the
“Average Option Sale Price”);
WHEREAS, pursuant
to the terms of the Cash Bonus Agreement, as of April 5, 2007,
the Employee elected to be paid as deferred compensation a cash
bonus equal to $241,000.00 (the Average Option Sale Price —
$10.50) × 100,000 × 50%;
WHEREAS, pursuant
to the terms of the Cash Bonus Agreement, as of April 5, 2007,
the Employee elected to be paid as deferred compensation a cash
bonus equal to $145,500.00 (the Average Option Sale Price —
$11.44) × 150,000 × 25%; and
WHEREAS, pursuant
to discussions between Employee and the Compensation Committee of
the Company’s Board of Directors and in consideration of the
implications of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”), the parties desire to
amend the Cash Bonus Agreement.
NOW, THEREFORE, in
consideration of the premises and the mutual covenants and
obligations herein after set forth and Employee’s agreement
to convert his 2005 and 2006 Restricted Stock Awards to Restricted
Stock Units pursuant to the Amended and Restated Restricted Stock
Award Agreements dated as of the date hereof, the Company agrees to
pay Employee certain deferred cash bonuses on the terms and
conditions set forth herein.
1. The
Company will pay Employee as deferred compensation a cash bonus
equal to $241,000.00 (the Average Option Sale Price — $10.50)
× 100,000 × 50%. The cash bonus payment pursuant to this
Section shall be payable on the earliest of the
following:
b. the date
of Employee’s “separation from service” with the
Company within the meaning of Section 409A(a)(2)(A)(i) of the
Code for any reason other than death or disability; or
c. Employee’s
death or disability.
For all purposes
of this Amended Agreement, Employee will be considered disabled
only if because of a medically determinable physical or mental
impairment that can be expected to result in death or that can be
expected to last for a continuous period of at least
12 months:
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