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 12, 2020
METHODE ELECTRONICS, INC.
(Exact name of Registrant as Specified in Its Charter)
Delaware |
001-33731 |
36-2090085 |
(State or Other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
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8750 West Bryn Mawr Avenue, Chicago, IL |
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60631 |
(Address of Principal Executive Offices) |
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(Zip Code) |
Registrant’s 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:
☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock, $0.50 par value |
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MEI |
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New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On November 12, 2020, Methode Electronics, Inc. (“Methode”) adopted an amendment and restatement of the Methode Electronics, Inc. Deferred Compensation Plan (the “Plan”), as authorized by the Board of Directors. The Plan permits our directors and a select group of key employees to defer receiving certain compensation. Employees may defer all or a portion of their annual base salaries, annual performance-based cash awards and/or long-term incentive cash awards. Directors may defer all or a portion of their annual directors’ fees. The Plan was amended and restated to add the ability for directors to also defer all or a portion of their annual stock awards. A copy of the Plan is included as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 9.01Financial Statements and Exhibits.
(d)Exhibits.
104Cover Page Interactive Data File (embedded within the Inline XBRL document)
SIGNATURES
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 thereunto duly authorized.
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Company Name |
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Date: November 13, 2020 |
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By: |
/s/ Ronald L.G. Tsoumas |
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Ronald L.G. Tsoumas |
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Chief Financial Officer |
Exhibit 10.1
Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
Effective January 1, 2021
Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
ARTICLE 1 Definitions |
1 |
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1.1 Account Balance |
1 |
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1.2 Annual Account |
1 |
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1.3 Annual Deferral Amount |
1 |
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1.4 Annual Installment Method |
2 |
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1.5 Base Salary |
2 |
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1.6 Beneficiary |
2 |
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1.7 Beneficiary Designation Form |
2 |
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1.8 Benefit Distribution Date |
2 |
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1.9 Board |
2 |
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1.10 Bonus |
2 |
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1.11 Change in Control |
3 |
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1.12 Code |
4 |
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1.13 Committee |
4 |
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1.14 Company |
4 |
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1.15 Company Contribution Amount |
4 |
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1.16 Company Restoration Matching Amount |
4 |
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1.17 Director |
4 |
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1.18 Director Deferred Shares of Common Stock |
4 |
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1.19 Director Fees |
4 |
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1.20 Director Stock Award |
5 |
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1.21 Director Stock Award Subaccount |
5 |
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1.22 Disability |
5 |
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1.23 Dividend Equivalents |
5 |
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1.24 Election Form |
5 |
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1.25 Employee |
5 |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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1.27 ERISA |
6 |
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1.28 401(k) Plan |
6 |
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1.29 Incentive Plan |
6 |
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1.30 LTIP Amounts |
6 |
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1.31 Participant |
6 |
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1.32 Performance-Based Compensation |
6 |
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1.33 Plan |
6 |
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1.34 Plan Agreement |
7 |
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1.35 Plan Year |
7 |
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1.36 Retirement |
7 |
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1.37 Separation from Service |
7 |
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1.38 Specified Employee |
8 |
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1.39 Trust |
9 |
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1.40 Unforeseeable Emergency |
9 |
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1.41 Years of Service |
9 |
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ARTICLE 2 Selection, Enrollment, Eligibility |
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2.1 Selection by Committee |
9 |
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2.2 Enrollment and Eligibility Requirements; Commencement of Participation |
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ARTICLE 3 Deferral Commitments/Company Contribution Amounts/ Company Restoration Matching Amounts/ Vesting/Crediting/Taxes |
10 |
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3.1 Minimum/Maximum Deferral |
10 |
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3.2 Timing of Deferral Elections; Effect of Election Form |
11 |
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3.3 Withholding and Crediting of Annual Deferral Amounts |
13 |
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3.4 Company Contribution Amount |
13 |
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3.5 Company Restoration Matching Amount |
13 |
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3.6 Vesting |
14 |
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3.7 Crediting/Debiting of Account Balances |
15 |
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3.8 FICA and Other Taxes |
16 |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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4.1 Scheduled Distributions |
17 |
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4.2 Postponing Scheduled Distributions |
17 |
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4.3 Other Benefits Take Precedence Over Scheduled Distributions |
18 |
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4.4 Unforeseeable Emergencies |
18 |
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ARTICLE 5 Change in Control Benefit |
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5.1 Change in Control Benefit |
18 |
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5.2 Payment of Change in Control Benefit |
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ARTICLE 6 Retirement Benefit |
19 |
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6.1 Retirement Benefit |
19 |
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6.2 Payment of Retirement Benefit |
19 |
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ARTICLE 7 Termination Benefit |
20 |
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7.1 Termination Benefit |
20 |
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7.2 Payment of Termination Benefit |
20 |
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ARTICLE 8 Disability Benefit |
20 |
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8.1 Disability Benefit |
20 |
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8.2 Payment of Disability Benefit |
21 |
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ARTICLE 9 Death Benefit |
21 |
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9.1 Death Benefit |
21 |
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9.2 Payment of Death Benefit |
21 |
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ARTICLE 10 Beneficiary Designation |
21 |
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10.1 Beneficiary |
21 |
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10.2 Beneficiary Designation; Change; Spousal Consent |
21 |
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10.3 Acknowledgment |
21 |
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10.4 No Beneficiary Designation |
22 |
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10.5 Doubt as to Beneficiary |
22 |
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10.6 Discharge of Obligations |
22 |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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11.1 Paid Leave of Absence |
22 |
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11.2 Unpaid Leave of Absence |
22 |
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ARTICLE 12 Termination of Plan, Amendment or Modification |
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12.1 Termination of Plan |
22 |
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12.2 Amendment |
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12.3 Plan Agreement |
23 |
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12.4 Effect of Payment |
23 |
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ARTICLE 13 Administration |
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13.1 Committee Duties |
23 |
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13.2 Administration Upon Change In Control |
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13.3 Agents |
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13.4 Binding Effect of Decisions |
24 |
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13.5 Indemnity of Committee |
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13.6 Employer Information |
24 |
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ARTICLE 14 Other Benefits and Agreements |
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14.1 Coordination with Other Benefits |
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ARTICLE 15 Claims Procedures |
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15.1 Presentation of Claim |
25 |
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15.2 Notification of Decision |
25 |
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15.3 Review of a Denied Claim |
25 |
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15.4 Decision on Review |
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15.5 Legal Action |
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ARTICLE 16 Trust |
26 |
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16.1 Establishment of the Trust |
26 |
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16.2 Interrelationship of the Plan and the Trust |
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16.3 Distributions From the Trust |
27 |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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17.1 Status of Plan |
27 |
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17.2 Unsecured General Creditor |
27 |
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17.3 Employer’s Liability |
27 |
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17.4 Nonassignability |
27 |
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17.5 Not a Contract of Employment |
27 |
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17.6 Furnishing Information |
28 |
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17.7 Terms |
28 |
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17.8 Captions |
28 |
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17.9 Governing Law |
28 |
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17.10 Notice |
28 |
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17.11 Successors |
28 |
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17.12 Spouse’s Interest |
29 |
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17.13 Validity |
29 |
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17.14 Incompetent |
29 |
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17.15 Domestic Relations Orders |
29 |
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17.16 Distribution in the Event of Income Inclusion Under Code Section 409A |
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17.17 Deduction Limitation on Benefit Payments |
29 |
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17.18 Insurance |
30 |
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ARTICLE 18 Director Deferred Shares of Common Stock |
30 |
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18.1 General |
30 |
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18.2 Deferral of Director Stock Awards |
30 |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
The purpose of this Plan is to provide specified benefits to Directors and a select group of management or highly compensated Employees who contribute materially to the continued growth, development and future business success of Methode Electronics, Inc., a Delaware corporation, and its subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.
This Plan is intended to comply with all applicable law, including Code Section 409A and related Treasury guidance and Regulations, and shall be operated and interpreted in accordance with this intention.
For the purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:
If a Participant is both an Employee and a Director and participates in the Plan in each capacity, then separate Account Balances (and separate Annual Accounts, if applicable) shall be established for such Participant as a device for the measurement and determination of the (a) amounts deferred under the Plan that are attributable to the Participant’s status as an Employee, and (b) amounts deferred under the Plan that are attributable to the Participant’s status as a Director.
Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
years in accordance with the applicable provisions of the Plan. The amount of each annual payment due to the Participant shall be calculated by multiplying the balance of the Participant’s benefit by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due to the Participant. The amount of the first annual payment shall be calculated as of the close of business on or around the Participant’s Benefit Distribution Date, and the amount of each subsequent annual payment shall be calculated on or around each anniversary of such Benefit Distribution Date. For purposes of this Plan, the right to receive a benefit payment in annual installments shall be treated as the entitlement to a single payment. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
In order for an event described below to constitute a Change in Control with respect to a Participant, except as otherwise provided in part (b)(ii) of this Section, the applicable event must relate to the corporation for which the Participant is providing services, the corporation that is liable for payment of the Participant’s Account Balance (or all corporations liable for payment if more than one), as identified by the Committee in accordance with Treas. Reg. §1.409A-3(i)(5)(ii)(A)(2), or such other corporation identified by the Committee in accordance with Treas. Reg. §1.409A-3(i)(5)(ii)(A)(3).
In determining whether an event shall be considered a “change in the ownership,” a “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of a corporation, the following provisions shall apply:
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(a) |
A “change in the ownership” of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires ownership of stock of such corporation that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of such corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(v). If a person or group is considered either to own more than 50% of the total fair market value or total voting power of the stock of such corporation, or to have effective control of such corporation within the meaning of part (b) of this Section, and such person or group acquires additional stock of such corporation, the acquisition of additional stock by such person or group shall not be considered to cause a “change in the ownership” of such corporation. |
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(b) |
A “change in the effective control” of the applicable corporation shall occur on either of the following dates: |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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the acquisition of additional stock by such person or group shall not be considered to cause a “change in the effective control” of such corporation; or |
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(ii) |
The date on which a majority of the members of the applicable corporation’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of such corporation’s board of directors before the date of the appointment or election, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vi). In determining whether the event described in the preceding sentence has occurred, the applicable corporation to which the event must relate shall only include a corporation identified in accordance with Treas. Reg. §1.409A-3(i)(5)(ii) for which no other corporation is a majority shareholder. |
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(c) |
A “change in the ownership of a substantial portion of the assets” of the applicable corporation shall occur on the date on which any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the corporation that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the corporation immediately before such acquisition or acquisitions, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii). A transfer of assets shall not be treated as a “change in the ownership of a substantial portion of the assets” when such transfer is made to an entity that is controlled by the shareholders of the transferor corporation, as determined in accordance with Treas. Reg. §1.409A-3(i)(5)(vii)(B). |
1.12 |
Code. “Code” shall mean the Internal Revenue Code of 1986, as it may be amended from time to time. |
1.14 |
Company. “Company” shall mean Methode Electronics, Inc., a Delaware corporation, and any successor to all or substantially all of the Company’s assets or business. |
1.15 |
Company Contribution Amount. “Company Contribution Amount” shall mean, for any one Plan Year, the amount determined in accordance with Section 3.4. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
1.20 |
Director Stock Award. “Director Stock Award” shall mean that portion of Director compensation that is awarded in shares of Company stock, if any, for serving on the board of directors. |
1.21 |
Director Stock Award Subaccount. “Director Stock Award Subaccount” shall mean the subaccount created to represent the Director Deferred Shares of Common Stock. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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(b) |
For the purpose of determining whether a Participant has experienced a Separation from Service, the term “Employer” shall mean: |
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(i) |
The entity for which the Participant performs services and with respect to which the legally binding right to compensation deferred or contributed under this Plan arises; and |
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(ii) |
All other entities with which the entity described above would be aggregated and treated as a single employer under Code Section 414(b) (controlled group of corporations) and Code Section 414(c) (a group of trades or businesses, whether or not incorporated, under common control), as applicable. In order to identify the group of entities described in the preceding sentence, the Committee shall use an ownership threshold of at least 50% as a substitute for the 80% minimum ownership threshold that appears in, and otherwise must be used when applying, the applicable provisions of (A) Code Section 1563 for determining a controlled group of corporations under Code Section 414(b), and (B) Treas. Reg. §1.414(c)-2 for determining the trades or businesses that are under common control under Code Section 414(c). |
1.27 |
ERISA. “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time. |
1.29 |
Incentive Plan. “Incentive Plan” shall mean the Methode Electronics, Inc. 2014 Omnibus Incentive Plan or any subsequently adopted equity incentive plan adopted by the Company or its affiliates. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
1.35 |
Plan Year. “Plan Year” shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
If a Participant is on military leave, sick leave, or other bona fide leave of absence, the employment relationship between the Participant and the Employer shall be treated as continuing intact, provided that the period of such leave does not exceed 6 months, or if longer, so long as the Participant retains a right to reemployment with the Employer under an applicable statute or by contract. If the period of a military leave, sick leave, or other bona fide leave of absence exceeds 6 months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship shall be considered to be terminated for purposes of this Plan as of the first day immediately following the end of such 6-month period. In applying the provisions of this paragraph, a leave of absence shall be considered a bona fide leave of absence only if there is a reasonable expectation that the Participant will return to perform services for the Employer.
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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services for such Employer as an independent contractor, the Participant will not be considered to have experienced a Separation from Service until the Participant has ceased providing services for such Employer in both capacities, as determined in accordance with the applicable provisions set forth in parts (a) and (b) of this Section. |
Notwithstanding the foregoing provisions in this part (c), if a Participant provides services for an Employer as both an Employee and as a Director, to the extent permitted by Treas. Reg. §1.409A-1(h)(5) the services provided by such Participant as a Director shall not be taken into account in determining whether the Participant has experienced a Separation from Service as an Employee, and the services provided by such Participant as an Employee shall not be taken into account in determining whether the Participant has experienced a Separation from Service as a Director.
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(a) |
The Committee’s identification of the individuals who fall within the definition of “key employee” under Code Section 416(i) (without regard to paragraph (5) thereof) shall be based upon the 12-month period ending on each December 31st (referred to below as the “identification date”). In applying the applicable provisions of Code Section 416(i) to identify such individuals, “compensation” shall be determined in accordance with Treas. Reg. §1.415(c)-2(a) without regard to (i) any safe harbor provided in Treas. Reg. §1.415(c)-2(d), (ii) any of the special timing rules provided in Treas. Reg. §1.415(c)-2(e), and (iii) any of the special rules provided in Treas. Reg. §1.415(c)-2(g); and |
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(b) |
Each Participant who is among the individuals identified as a “key employee” in accordance with part (a) of this Section shall be treated as a Specified Employee for purposes of this Plan if such Participant experiences a Separation from Service during the 12-month period that begins on the April 1st following the applicable identification date. |
1.39 |
Trust. “Trust” shall mean one or more trusts established by the Company in accordance with Article 16. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
beyond the control of the Participant, all as determined by the Committee based on the relevant facts and circumstances. |
ARTICLE 2
Selection, Enrollment, Eligibility
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(a) |
As a condition to participation, each Director or selected Employee shall complete, execute and return to the Committee a Plan Agreement, an Election Form and a Beneficiary Designation Form by the deadline(s) established by the Committee in accordance with the applicable provisions of this Plan. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines, in its sole discretion, are necessary. |
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(c) |
If a Director or an Employee fails to meet all requirements established by the Committee within the period required, that Director or Employee shall not be eligible to participate in the Plan during such Plan Year. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
ARTICLE 3
Deferral Commitments/Company Contribution Amounts/
Company Restoration Matching Amounts/ Vesting/Crediting/Taxes
Deferral |
Maximum Percentage |
Minimum Deferral |
Base Salary |
75% |
$3,000 aggregate with Bonus and LTIP Amounts |
Bonus |
100% |
$3,000 aggregate with Base Salary and LTIP Amounts |
LTIP Amounts |
100% |
$3,000 aggregate with Base Salary and Bonus |
Director Fees |
100% |
$0 |
Director Stock Award |
100% |
0% |
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(b) |
Short Plan Year. Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, then to the extent required by Section 3.2 and Code Section 409A and related Treasury Regulations, the minimum and maximum amount of the Participant’s Base Salary, Bonus, LTIP Amounts, Director Fees, or Director Stock Award that may be deferred by the Participant for the Plan Year shall be determined by applying the percentages or amounts set forth in Section 3.1(a) to the portion of such compensation attributable to services performed after the date that the Participant’s deferral election is made. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
Any deferral election made in accordance with this Section 3.2(a) shall be irrevocable; provided, however, that if the Committee permits or requires Participants to make a deferral election by the deadline described above for an amount that qualifies as Performance-Based Compensation, the Committee may permit a Participant to subsequently change his or her deferral election for such compensation by submitting a new Election Form in accordance with Section 3.2(d) below.
If a deferral election made in accordance with this Section 3.2(b) relates to compensation earned based upon a specified performance period, the amount eligible for deferral shall be equal to (i) the total amount of compensation for the performance period, multiplied by (ii) a fraction, the numerator of which is the number of days remaining in the service period after the Participant’s deferral election is made, and the denominator of which is the total number of days in the performance period.
Any deferral election made in accordance with this Section 3.2(b) shall become irrevocable no later than the 30th day after the date the Director or selected Employee becomes eligible to participate in the Plan.
12
Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
A deferral election made in accordance with this Section 3.2(c) shall be irrevocable; provided, however, that if the Committee permits or requires Participants to make a deferral election by the deadline described in this Section 3.2(c) for an amount that qualifies as Performance-Based Compensation, the Committee may permit a Participant to subsequently change his or her deferral election for such compensation by submitting a new Election Form in accordance with 3.2(d) below.
In order for a Participant to be eligible to make a deferral election for Performance-Based Compensation in accordance with the deadline established pursuant to this Section 3.2(d), the Participant must have performed services continuously from the later of (i) the beginning of the performance period for such compensation, or (ii) the date upon which the performance criteria for such compensation are established, through the date upon which the Participant makes the deferral election for such compensation. In no event shall a deferral election submitted under this Section 3.2(d) be permitted to apply to any amount of Performance-Based Compensation that has become readily ascertainable.
Any deferral election(s) made in accordance with this Section 3.2(e) shall become irrevocable no later than the 30th day after the Participant obtains the legally binding right to the compensation subject to such deferral election(s).
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
equal amounts, as adjusted from time to time for increases and decreases in Base Salary. The Bonus, LTIP Amounts, Director Fees, and/or Director Stock Award portion of the Annual Deferral Amount shall be withheld at the time the Bonus, LTIP Amounts, Director Fees, or Director Stock Award are or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself. Annual Deferral Amounts shall be credited to the Participant’s Annual Account for such Plan Year at the time such amounts would otherwise have been paid to the Participant. |
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(a) |
For each Plan Year, an Employer may be required to credit amounts to a Participant’s Annual Account in accordance with employment or other agreements entered into between the Participant and the Employer, which amounts shall be part of the Participant’s Company Contribution Amount for that Plan Year. Such amounts shall be credited to the Participant’s Annual Account for the applicable Plan Year on the date or dates prescribed by such agreements. |
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(c) |
If not otherwise specified in the Participant’s employment or other agreement entered into between the Participant and the Employer, the amount (or the method or formula for determining the amount) of a Participant’s Company Contribution Amount shall be set forth in writing in one or more documents, which shall be deemed to be incorporated into this Plan in accordance with Section 1.33, no later than the date on which such Company Contribution Amount is credited to the applicable Annual Account of the Participant. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
Plan Year. The Participant’s Company Restoration Matching Amount, if any, shall be credited to the Participant’s Annual Account for the applicable Plan Year on a date or dates to be determined by the Committee. The amount (or the method or formula for determining the amount) of a Participant’s Company Restoration Matching Amount shall be set forth in writing in one or more documents, which shall be deemed to be incorporated into this Plan in accordance with Section 1.33, no later than the date on which such Company Restoration Matching Amount is credited to the applicable Annual Account of the Participant. |
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(a) |
A Participant shall at all times be 100% vested in the portion of his or her Account Balance attributable to Annual Deferral Amounts, plus amounts credited or debited on such amounts pursuant to Section 3.7. |
Years of Service [Alternate language: Years of Plan Participation] |
Vested Percentage |
Less than 3 years |
0% |
3 years or more |
100% |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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(f) |
Section 3.6(e) shall not prevent the acceleration of the vesting schedules described in Sections 3.6(b) and 3.6(c) if such Participant is entitled to a “gross-up” payment, to eliminate the effect of the Code section 4999 excise tax, pursuant to his or her employment agreement or other agreement entered into between such Participant and the Employer. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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(c) |
Proportionate Allocation. In making any election described in Section 3.7(b) above, the Participant shall specify on the Election Form, in increments of one percent (1%), the percentage of his or her Account Balance or Measurement Fund, as applicable, to be allocated/reallocated. |
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(d) |
Crediting or Debiting Method. The performance of each Measurement Fund (either positive or negative) will be determined on a daily basis based on the manner in which such Participant’s Account Balance has been hypothetically allocated among the Measurement Funds by the Participant. |
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(e) |
No Actual Investment. Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant’s election of any such Measurement Fund, the allocation of his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant’s Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Company or the Trustee (as that term is defined in the Trust), in its own discretion, decides to invest funds in any or all of the investments on which the Measurement Funds are based, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant’s Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall at all times remain an unsecured creditor of the Company. |
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(a) |
Annual Deferral Amounts. For each Plan Year in which an Annual Deferral Amount is being withheld from a Participant, the Participant’s Employer(s) shall withhold from that portion of |
17
Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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the Participant’s Base Salary, Bonus, and/or LTIP Amounts that is not being deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such Annual Deferral Amount. If necessary, the Committee may reduce the Annual Deferral Amount in order to comply with this Section 3.8. |
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(b) |
Company Restoration Matching Amounts and Company Contribution Amounts. When a Participant becomes vested in a portion of his or her Account Balance attributable to any Company Restoration Matching Amounts and/or Company Contribution Amounts, the Participant’s Employer(s) shall withhold from that portion of the Participant’s Base Salary, Bonus, and/or LTIP Amounts that is not deferred, in a manner determined by the Employer(s), the Participant’s share of FICA and other employment taxes on such amounts. If necessary, the Committee may reduce the vested portion of the Participant’s Company Restoration Matching Amount or Company Contribution Amount, as applicable, in order to comply with this Section 3.8. |
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(c) |
Distributions. The Participant’s Employer(s), or the trustee of the Trust, shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Employer(s), or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Employer(s) and the trustee of the Trust. |
ARTICLE 4
Scheduled Distribution; Unforeseeable Emergencies
Subject to the other terms and conditions of this Plan, each Scheduled Distribution elected shall be paid out during a 60 day period commencing immediately after the Benefit Distribution Date. By way of example, if a Scheduled Distribution is elected for Annual Deferral Amounts that are earned in the Plan Year commencing January 1, 2021, the earliest Benefit Distribution Date that may be designated by a
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
Participant would be January 1, 2025, and the Scheduled Distribution would be paid out during the 60 day period commencing immediately after such Benefit Distribution Date.
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(a) |
The election of the new Benefit Distribution Date shall have no effect until at least 12 months after the date on which the election is made; |
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(b) |
The new Benefit Distribution Date selected by the Participant for such Scheduled Distribution must be the first day of a Plan Year that is no sooner than 5 years after the previously designated Benefit Distribution Date; and |
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(c) |
The election must be made at least 12 months prior to the Participant’s previously designated Benefit Distribution Date for such Scheduled Distribution. |
For purposes of applying the provisions of this Section 4.2, a Participant’s election to postpone a Scheduled Distribution shall not be considered to be made until the date on which the election becomes irrevocable. Such an election shall become irrevocable no later than the date that is 12 months prior to the Participant’s previously designated Benefit Distribution Date for such Scheduled Distribution.
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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shall not be eligible to receive a payout from the Plan to the extent that the Unforeseeable Emergency is or may be relieved (A) through reimbursement or compensation by insurance or otherwise, (B) by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not itself cause severe financial hardship or (C) by cessation of deferrals under this Plan. |
If the Committee, in its sole discretion, approves a Participant’s petition for payout from the Plan, the Participant’s Benefit Distribution Date for such payout shall be the date on which such Committee approval occurs and such payout shall be distributed to the Participant in a lump sum no later than 60 days after such Benefit Distribution Date. In addition, in the event of such approval the Participant’s outstanding deferral elections under the Plan shall be cancelled.
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(b) |
A Participant’s deferral elections under this Plan shall also be cancelled to the extent the Committee determines that such action is required for the Participant to obtain a hardship distribution from an Employer’s 401(k) Plan pursuant to Treas. Reg. §1.401(k)-1(d)(3). |
ARTICLE 5
Change in Control Benefit
If a Participant elects not to receive a Change in Control Benefit, or fails to make an election in connection with his or her commencement of participation in the Plan, the Participant’s Account Balance shall be paid in accordance with the other applicable provisions of the Plan.
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
lump sum or annual installment payments, as elected by the Participant in accordance with Section 6.2 (the “Retirement Benefit”). A Participant’s Retirement Benefit shall be calculated as of the close of business on or around the applicable Benefit Distribution Date for such benefit, which shall be (i) the first day after the end of the 6-month period immediately following the date on which the Participant experiences such Separation from Service if the Participant is a Specified Employee, and (ii) for all other Participants, the date on which the Participant experiences a Separation from Service; provided, however, if a Participant changes the form of distribution for one or more Annual Accounts in accordance with Section 6.2(b), the Benefit Distribution Date for the Annual Account(s) subject to such change shall be determined in accordance with Section 6.2(b). |
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(a) |
In connection with a Participant’s election to defer an Annual Deferral Amount, the Participant shall elect the form in which his or her Annual Account for such Plan Year will be paid. The Participant may elect to receive each Annual Account in the form of a lump sum or pursuant to an Annual Installment Method of up to 15 years. If a Participant does not make any election with respect to the payment of an Annual Account, then the Participant shall be deemed to have elected to receive such Annual Account as a lump sum. |
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(b) |
A Participant may change the form of payment for an Annual Account by submitting an Election Form to the Committee in accordance with the following criteria: |
|
(i) |
The election shall not take effect until at least 12 months after the date on which the election is made; |
|
(ii) |
The new Benefit Distribution Date for such Annual Account shall be 5 years after the Benefit Distribution Date that would otherwise have been applicable to such Annual Account; and |
|
(iii) |
The election must be made at least 12 months prior to the Benefit Distribution Date that would otherwise have been applicable to such Annual Account. |
For purposes of applying the provisions of this Section 6.2(b), a Participant’s election to change the form of payment for an Annual Account shall not be considered to be made until the date on which the election becomes irrevocable. Such an election shall become irrevocable no later than the date that is 12 months prior to the Benefit Distribution Date that would otherwise have been applicable to such Annual Account. Subject to the requirements of this Section 6.2(b), the Election Form most recently accepted by the Committee that has become effective for an Annual Account shall govern the form of payout of such Annual Account.
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
7.2 |
Payment of Termination Benefit. The Termination Benefit shall be paid to the Participant no later than 60 days after the Participant’s Benefit Distribution Date. |
8.2 |
Payment of Disability Benefit. The Disability Benefit shall be paid to the Participant no later than 60 days after the Participant’s Benefit Distribution Date. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
9.2 |
Payment of Death Benefit. The Death Benefit shall be paid to the Participant’s Beneficiary(ies) no later than 60 days after the Participant’s Benefit Distribution Date. |
ARTICLE 10
Beneficiary Designation
10.3 |
Acknowledgment. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
ARTICLE 12
Termination of Plan, Amendment or Modification
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
interpretation of the Plan, and the power to make benefit entitlement determinations. Upon and after the effective date of such appointment, (a) the Company must pay all reasonable administrative expenses and fees of the Administrator, and (b) the Administrator may only be terminated with the written consent of the majority of Participants with an Account Balance in the Plan as of the date of such proposed termination. |
ARTICLE 14
Other Benefits and Agreements
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
|
(a) |
that the Claimant’s requested determination has been made, and that the claim has been allowed in full; or |
|
(b) |
that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant’s requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant: |
|
(i) |
the specific reason(s) for the denial of the claim, or any part of it; |
|
(ii) |
specific reference(s) to pertinent provisions of the Plan upon which such denial was based; |
|
(iii) |
a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; |
|
(iv) |
an explanation of the claim review procedure set forth in Section 15.3 below; and |
|
(v) |
a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse benefit determination on review. |
27
Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
|
(a) |
may, upon request and free of charge, have reasonable access to, and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the claim for benefits; |
|
(b) |
may submit written comments or other documents; and/or |
|
(c) |
may request a hearing, which the Committee, in its sole discretion, may grant. |
|
(a) |
specific reasons for the decision; |
|
(b) |
specific reference(s) to the pertinent Plan provisions upon which the decision was based; |
|
(c) |
a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of, all documents, records and other information relevant (as defined in applicable ERISA regulations) to the Claimant’s claim for benefits; and |
|
(d) |
a statement of the Claimant’s right to bring a civil action under ERISA Section 502(a). |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
29
Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
30
Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
Attn: Chief Financial Officer |
8750 W. Bryn Mawr Ave., Suite 1000 |
Chicago, IL 60631 |
Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.
Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant.
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
ARTICLE 18
Director Deferred Shares of Common Stock
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
|
(a) |
Annual Accounting. For each Director who elects to defer a portion of a Director Stock Award, a separate Director Stock Award Subaccount (defined below) shall be established for each Plan Year to represent the Participant’s Director Deferred Shares of Common Stock. |
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(b) |
Director Stock Award Deferral Elections. A Participant may elect to defer all or a portion of a Director Stock Award as provided in Article 3. |
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(c) |
Director Stock Award Subaccounts. A Participant’s Director Deferred Shares of Common Stock shall be fully vested at all times and shall be distributed in accordance with the provisions and elections applicable. Distributions from a Participant’s Director Stock Award Subaccount shall be made in the form of shares of the Company’s common stock for each Director Deferred Share of Common Stock, which shares shall be issued pursuant to the Incentive Plan’s terms. Section 3.7 shall not apply to the Director Stock Award Subaccount. |
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(d) |
Dividend Equivalents. |
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(i) |
Each Director Stock Award Subaccount shall be credited, as applicable, with Dividend Equivalents. Any Dividend Equivalents shall be credited in the form of additional Director Deferred Shares and shall automatically and irrevocably be deemed to be part of the Participant’s Director Stock Award Subaccount until distributed to the Participant. The number of Directed Deferred Shares credited to the Participant’s Director Stock Award Subaccount for a particular Dividend Equivalent shall, in the case of a stock dividend, be equal to (A) the number of Director Deferred Shares credited to the Participant’s Director Stock Award Subaccount as of the payment date for such dividend in respect of each share of common stock of the Company, multiplied by (B) the number of additional or fractional shares of common stock of the Company actually paid as a dividend in respect of each share of common stock or, in the case of a cash dividend, shall be equal to (1) the number of Director Deferred Shares credited to the Participant’s Director Stock Award Subaccount, multiplied by (2) the fair market value of the dividend in respect of each share of common stock, divided by (3) the Fair Market Value (as defined in the Incentive Plan) of the common stock on the payment date for such dividend. |
|
(ii) |
Dividend Equivalents credited to a Participant’s Director Stock Award Subaccount shall be fully vested at all times. |
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Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
|
(iv) |
If, at the time of distribution, any fractional shares of common stock are credited to a Director Stock Award Subaccount, such fractional shares shall be paid in cash. |
34
Methode Electronics, Inc.
Deferred Compensation Plan
Master Plan Document
IN WITNESS WHEREOF, the Company has signed this Plan document as of November 12, 2020.
“Company”
Methode Electronics, Inc.,
a Delaware corporation
By: /s/ Ronald L.G. Tsoumas
Title: Chief Financial Officer
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