<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
METHODE ELECTRONICS, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
METHODE ELECTRONICS, INC.
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid: $125.00
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
METHODE ELECTRONICS, INC.
----------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD SEPTEMBER 10, 1996
To the Stockholders of
METHODE ELECTRONICS, INC.
Notice is hereby given that the annual meeting of stockholders of Methode
Electronics, Inc., a Delaware corporation, will be held at the Arlington Park
Hilton Conference Center, 3400 West Euclid Avenue, Arlington Heights, Illinois
60005 on Tuesday, September 10, 1996 at 3:30 p.m. for the following purposes:
1. To elect a Board of Directors; and
2. To transact such other business as may properly come before said
meeting.
Stockholders of record as of the close of business on August 1, 1996 will be
entitled to vote at such annual meeting. Shares should be represented as fully
as possible, since a majority is required to constitute a quorum.
You are requested to mark, sign, date and mail the accompanying proxy in the
enclosed, self-addressed, stamped envelope, whether or not you expect to
attend the meeting in person. You may revoke your proxy for any reason at any
time prior to the voting thereof, either by written revocation prior to the
meeting or by appearing at the meeting and voting in person. Your cooperation
is respectfully solicited.
By order of the Board of Directors.
WILLIAM J. McGINLEY
Chairman
Chicago, Illinois
August 12, 1996
<PAGE>
METHODE ELECTRONICS, INC.
7444 WEST WILSON AVENUE
CHICAGO, ILLINOIS 60656-4549
(708) 867-9600
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON SEPTEMBER 10, 1996
INTRODUCTION
The enclosed proxy is solicited on behalf of the Board of Directors of
Methode Electronics, Inc. (the "Company"), in connection with the annual
meeting of stockholders to be held on September 10, 1996 at 3:30 p.m., and any
adjournment thereof (the "Annual Meeting"), at the Arlington Park Hilton
Conference Center, 3400 West Euclid Avenue, Arlington Heights, Illinois 60005.
The cost of proxy solicitation will be borne by the Company. In connection
with the solicitation of proxies by the use of the mails, the Company has
retained Morrow & Co., Inc. to solicit proxies on behalf of the Board of
Directors for a fee estimated not to exceed $5,000 plus reasonable out-of-
pocket expenses and disbursements. Morrow & Co., Inc. may solicit proxies from
stockholders by mail, telephone, telex, telegraph or personal call. In
addition, certain officers and other regular employees of the Company may
devote part of their time (but will not be specifically compensated therefor)
to solicitation by the same means. Proxies may be revoked at any time prior to
the voting thereof. Revocation may be done prior to the Annual Meeting by
written revocation sent to the Secretary of the Company, 7444 West Wilson
Avenue, Chicago, Illinois 60656-4549; or it may be done personally upon oral
or written request at the Annual Meeting; or it may be done by appearing at
the Annual Meeting and voting in person.
This proxy statement was first mailed or delivered to stockholders on or
about August 12, 1996.
RECORD DATE; VOTING SECURITIES OUTSTANDING
The close of business on August 1, 1996 is the record date for determining
the holders of securities of the Company entitled to notice of and to vote at
the Annual Meeting.
As of July 15, 1996, the Company had outstanding voting securities
consisting of 34,105,330 shares of Class A Common Stock, par value $0.50 per
share ("Class A Common Stock") and 1,229,794 shares of Class B Common Stock
par value $0.50 per share ("Class B Common Stock"). The presence at the Annual
Meeting, in person or by proxy, of the holders of a majority of the issued and
outstanding shares of both Class A and Class B Common Stock entitled to vote
at the Annual Meeting is necessary to constitute a quorum. With respect to the
election of directors, the affirmative vote of the holders of a majority of
the outstanding Class A Common Stock present in person or by proxy, will elect
three Class A Directors, each Class A share having one vote; the affirmative
vote of the holders of a majority of the outstanding Class B Common Stock
present in person or by proxy, will elect six Class B Directors, each Class B
share having one vote. On all matters except the election of the directors and
where otherwise required by law or the Company's Certificate of Incorporation,
the holders of Class A Common Stock are entitled to one-tenth of a vote per
share and the holders of Class B Common Stock are entitled to one vote per
share. A broker non-vote is not counted in determining voting results. If a
stockholder, present in person or by proxy, abstains on any matter, the
stockholder's shares will not be voted on such matter. Thus, an abstention
from voting on a matter has the same legal effect as a vote "AGAINST" the
matter.
1
<PAGE>
SECURITY OWNERSHIP
The following table sets forth, with respect to the Company's voting
securities, all persons known to be the beneficial owners of more than five
percent of the Company's voting securities as of July 15, 1996.
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS TITLE OF AND NATURE OF PERCENT
OF BENEFICIAL OWNER CLASS BENEFICIAL OWNERSHIP(1) OF CLASS
------------------- ------------ ----------------------- --------
<S> <C> <C> <C>
William J. McGinley.......... Common Stock
7444 West Wilson Ave. Class A 618,807(2) 1.6%
Chicago, Illinois 60656-4549 Class B 890,902(2) 71.4%
Methode Electronics, Inc..... Common Stock
Employee Stock Ownership Class A 3,333,027(3) 9.8%
Trust
CTC Illinois Trust Company Class B 72,378(3) 5.9%
209 W. Jackson Blvd.
Chicago, Illinois 60606
Fidelity Funds............... Common Stock
82 Devonshire Street Class A 2,411,750(4) 7.1%
Boston, Massachusetts 02109
The Prudential Insurance Common Stock
Company of America..........
Prudential Plaza Class A 2,617,600(4) 7.7%
Newark, New Jersey 07102
</TABLE>
- --------
(1) Beneficial ownership arises from sole voting and investment power unless
otherwise indicated by footnote.
(2) Includes 123,905 shares of Class A and 7,638 shares of Class B Common
Stock held by the Employee Stock Ownership Trust under which Mr. W.
McGinley has sole voting power and, prior to distribution under the terms
of the Trust, no investment power. Also includes 67,292 shares of Class A
Common Stock granted but not yet vested pursuant to the Incentive Stock
Award Plan as to which he has sole voting power.
(3) Beneficial ownership is disclaimed due to restrictions on the trustee's
voting and investment power with respect to these shares. Includes 123,905
shares and 7,638 shares of Class A and Class B Common Stock, respectively,
held for the account of Mr. W. McGinley.
(4) Based solely upon a Schedule 13D provided to the Company.
The following table sets forth information regarding the Class A and Class B
Common Stock of the Company beneficially owned as of July 15, 1996 by: (i)
each Director and nominee of the Company; (ii) each of the Named Executives
identified in the Summary Compensation Table under "Executive Compensation";
and (iii) all Directors and executive officers of the Company as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES
TITLE OF AND NATURE OF PERCENT
BENEFICIAL OWNER CLASS BENEFICIAL OWNERSHIP(1) OF CLASS
---------------- ------------ ----------------------- --------
<S> <C> <C> <C>
William J. McGinley(2)......... Common Stock
Class A 618,807(3) 1.6%
Class B 890,902(3) 71.4%
William T. Jensen.............. Common Stock
Class A 510,111(4) 1.5%
Class B 27,333(4) 2.2%
George C. Wright............... Common Stock
Class A 72,169(5) .2%
Class B 5,040(5) .4%
Raymond J. Roberts............. Common Stock
Class A 98,200 .3%
Class B 6,200 .5%
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF SHARES
TITLE OF AND NATURE OF PERCENT
BENEFICIAL OWNER CLASS BENEFICIAL OWNERSHIP(1) OF CLASS
---------------- ------------ ----------------------- --------
<S> <C> <C> <C>
William C. Croft.............. Common Stock
Class A 97,220 .3%
Class B 2,020 .2%
Michael G. Andre.............. Common Stock
Class A 176,752(6) .5%
Class B 3,800(6) .3%
Kevin J. Hayes................ Common Stock
Class A 144,086(7) .4%
Class B 3,368(7) .3%
James W. McGinley(2).......... Common Stock
Class A 66,438(8) .2%
Class B 21(8) --
James W. Ashley, Jr. ......... Common Stock
Class A 0 --
Class B 0 --
All Directors and Executive
Officers as a Group
(9 individuals).............. Common Stock
Class A 1,715,910(9) 5.0%
Class B 938,484(9) 75.9%
</TABLE>
- --------
(1) Beneficial ownership arises from sole voting and investment power unless
otherwise indicated by footnote.
(2) Mr. William J. McGinley is the father of Mr. James W. McGinley.
(3) See Note 2 on page 2 hereof regarding nature of stock ownership set forth
above.
(4) Includes 2,200 and 200 shares of Class A and Class B Common Stock,
respectively, owned in joint tenancy with his mother for which voting and
investment powers are shared and with respect to which beneficial
ownership is disclaimed. Includes 108,547 and 5,981 shares of Class A and
Class B Common Stock, respectively, held by the Employee Stock Ownership
Trust for which Mr. Jensen has sole voting power and, prior to
distribution under the terms of the Trust, no investment power. Also
includes 57,075 shares of Class A Common Stock granted but not yet vested
pursuant to the Incentive Stock Award Plan as to which he has sole voting
power.
(5) All these shares are held in a living trust jointly with his wife.
(6) Includes 73,108 and 3,800 shares of Class A and Class B Common Stock,
respectively, held by the Employee Stock Ownership Trust for which Mr.
Andre has sole voting power and, prior to distribution under the terms of
the Trust, no investment power. Also includes 11,402 shares of Class A
Common Stock granted but not yet vested pursuant to the Incentive Stock
Award Plan as to which he has sole voting power.
(7) Includes 60,637 and 3,146 shares of Class A and Class B Common Stock,
respectively, held by the Employee Stock Ownership Trust for which Mr.
Hayes has sole voting power and, prior to distribution under the terms of
the Trust, no investment power. Also includes 26,917 shares of Class A
Common Stock granted but not yet vested pursuant to the Incentive Stock
Award Plan as to which he has sole voting power.
(8) Includes 7,165 and 21 shares of Class A and Class B Common Stock,
respectively, held by the Employee Stock Ownership Trust for which Mr. J.
McGinley has sole voting power and, prior to distribution under the terms
of the Trust, no investment power. Also includes 13,463 shares of Class A
Common Stock granted but not yet vested pursuant to the Incentive Stock
Award Plan as to which he has sole voting power.
(9) Includes 373,362 shares of Class A and 20,586 shares of Class B Common
Stock allocated to executive officers under the Employee Stock Ownership
Trust; 176,149 shares of Class A Common Stock granted to the executive
officers pursuant to the Incentive Stock Award Plan; and 74,369 and 5,240
shares of Class A and Class B Common Stock, respectively, with respect to
which voting and investment powers are shared.
3
<PAGE>
COMPLIANCE WITH SECTION 16(A)
OF THE SECURITIES EXCHANGE ACT OF 1934
Under the securities laws of the United States, the Company's Directors, its
executive officers, and any persons holding more than 10% of the Company's
Class A or Class B Common Stock are required to report their initial ownership
of the Company's Class A or Class B Common Stock and any subsequent changes in
that ownership to the Securities and Exchange Commission. Specific due dates
for these reports have been established and the Company is required to
disclose in this proxy statement any failure to file by the required dates
during its fiscal year ended April 30, 1996. All of these filing requirements
were satisfied, except that Mr. William J. McGinley, Chairman of the Company,
filed two late reports covering four charitable contributions and two
mandatory minimum distributions from the Employee Stock Ownership Trust. In
making these disclosures, the Company has relied solely on written
representations of its Directors and executive officers and copies of the
reports that they have filed with the Commission.
ELECTION OF DIRECTORS
A Board of nine (9) Directors is to be elected, and each Director will hold
office until the next succeeding annual meeting of stockholders and until his
successor is elected and shall qualify. It is intended that the persons named
in the first portion of the following list will be elected by holders of the
Class A Common Stock and the persons named in the second portion will be
elected by holders of the Class B Common Stock. The shares represented by the
proxies given pursuant to this solicitation will be voted for the following
nominees unless votes are withheld in accordance with the instructions
contained in the proxy: Directors to be elected by Class A Common Stockholders
are Michael G. Andre, William C. Croft and James W. Ashley, Jr.; Directors to
be elected by Class B Common Stockholders are William J. McGinley, William T.
Jensen, Kevin J. Hayes, George C. Wright, Raymond J. Roberts and James W.
McGinley. If any of said nominees is not a candidate for election as a
Director at the Annual Meeting, an event which the Board of Directors does not
anticipate, the proxies will be voted for a substitute nominee or nominees
appointed by the Board of Directors. Any such action will be consistent with
the right of the Class A Common Stockholders to elect a minimum of 25% of the
Directors.
INFORMATION CONCERNING NOMINEES:
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION FOR
NAME AGE SINCE LAST 5 YEARS AND OTHER DIRECTORSHIPS
- ---- --- -------- ----------------------------------------------------
<S> <C> <C> <C>
DIRECTORS TO BE ELECTED BY CLASS A COMMON STOCKHOLDERS
Michael G. Andre........ 56 1984 Senior Executive Vice President of the Company since
December 1994. Prior thereto, he was Executive Vice
President of Interconnect Products since 1984 and
Vice President of Interconnect Products since 1978.
William C. Croft........ 78 1975 Chairman of the Board, Clements National Company (a
manufacturer of electrical equipment) since 1977.
Also a director of Mercury Finance Co.
James W. Ashley, Jr..... 46 1995 Secretary of the Company since 1995. James W.
Ashley, Jr., P.C., partner, Keck, Mahin & Cate (a
law firm retained as counsel to the Company).
DIRECTORS TO BE ELECTED BY CLASS B COMMON STOCKHOLDERS
William J. McGinley..... 73 1946 Chairman. Prior thereto, he was President of the
Company since 1946. William J. McGinley is the
father of James W. McGinley.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR PRINCIPAL OCCUPATION FOR
NAME AGE SINCE LAST 5 YEARS AND OTHER DIRECTORSHIPS
- ---- --- -------- ----------------------------------------------------
<S> <C> <C> <C>
William T. Jensen....... 69 1959 President of the Company. Prior thereto, he was
Senior Executive Vice President of the Company
since 1952.
Kevin J. Hayes.......... 55 1984 Chief Financial Officer since 1996 and Assistant
Secretary since 1995. Prior thereto, Vice President
and Treasurer of the Company since 1974.
George C. Wright........ 73 1968 President of Piedmont Co. Inc. (distributor of
marine products).
Raymond J. Roberts...... 67 1972 Secretary-Treasurer Coilcraft, Inc. (a manufacturer
of coils and transformers).
James W. McGinley....... 41 1993 President since December 1994 and prior thereto
Executive Vice President since June 1993 of Optical
Interconnect Products. Prior thereto, he was
General Manager of Connector Products from November
1984 to January 1989, and Vice President, Corporate
Sales and Marketing from January 1989 to June 1993.
James W. McGinley is the son of William J.
McGinley.
</TABLE>
The Board of Directors of the Company has standing Audit and Compensation
Committees. The Board does not have a standing Nominating Committee.
The Audit Committee held two meetings during the last fiscal year. The
functions performed by the Committee are to meet with and review the results
of the audit of the Company performed by independent public accountants and to
recommend the selection of independent public accountants. Directors Raymond
J. Roberts and George C. Wright are members of the Committee.
The Compensation Committee held one meeting during the last fiscal year. The
functions performed by the Committee are to review salaries and bonuses of all
officers and key management personnel and the overall administration of the
Company's compensation program. Directors William J. McGinley, Raymond J.
Roberts and William C. Croft are members of the Committee.
The Board of Directors of the Company held four meetings during the last
fiscal year. No director attended less than 75 percent of the aggregate of the
total number of meetings of the Board and the total number of meetings held by
the respective committees on which he served.
EXECUTIVE COMPENSATION
The Summary Compensation Table below includes, for each of the fiscal years
ended April 30, 1996, 1995 and 1994, individual compensation paid for services
to the Company and its subsidiaries to: (i) the Chief Executive Officer and
(ii) the four other most highly compensated executive officers of the Company
(collectively, the "Named Executives").
5
<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------- ------------------------
AWARDS PAYOUTS
---------------- -------
RESTRICTED STOCK LTIP ALL OTHER
NAME AND PRINCIPAL AWARD(S) PAYOUTS COMPENSATION
POSITION YEAR SALARY ($) BONUS ($) ($)(1)(2) ($)(3) ($)(4)
- ------------------ ---- ----------- ----------- ---------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
William J. McGinley..... 1996 261,860(5) 799,286(6) 518,404 237,984 3,326
Chairman 1995 251,700(5) 741,345(6) 412,511 179,422 3,904
1994 239,768(5) 701,568(6) 341,539 179,708 6,310
William T. Jensen....... 1996 250,720(5) 489,379(7) 367,238 247,575 5,483
President 1995 240,860(5) 506,874(7) 400,304 182,730 5,857
1994 228,608(5) 502,229(7) 391,162 141,951 8,078
Michael G. Andre........ 1996 186,400(5) 230,866(8) 88,017 54,301 6,923
Senior Executive Vice 1995 180,720(5) 200,543(8) 69,786 40,572 8,895
President 1994 172,696(5) 168,625(8) 43,277 -0- 11,270
Kevin J. Hayes.......... 1996 127,620(9) 259,715(10) 207,362 95,193 8,945
Chief Financial Officer 1995 122,796(9) 236,537(10) 165,004 71,769 10,725
and Assistant Secretary 1994 117,228(9) 220,627(10) 136,616 71,882 12,927
James W. McGinley....... 1996 107,920(11) 65,005 103,681 28,559 3,326
President Optical
Inter- 1995 101,180(11) 55,155 82,502 21,531 3,904
connect Products 1994 85,992(11) 36,188 68,308 21,565 3,687
</TABLE>
- --------
(1) All restricted stock is valued at the closing price of the Class A shares
on the date of grant. On April 30, 1996, Mr. W. McGinley held 67,897
restricted shares having a value of $754,050; Mr. Jensen held 71,490
restricted shares having a value of $791,466; Mr. Andre held 10,124
restricted shares having a value of $113,063; Mr. Hayes held 27,157
restricted shares having a value of $301,620; and Mr. J. McGinley held
13,583 restricted shares having a value of $150,810. Dividends are paid
on restricted stock awards at the same rate as paid to all stockholders.
(2) Restricted stock awarded under the Company's Incentive Stock Award Plan
(the "Plan"), vests as of the earliest to occur of (i) the first day of
the third Plan year following the year with respect to which the award
was made; (ii) retirement at or after age 65; (iii) termination on
account of disability; or (iv) death, if termination of employment has
not occurred before the executive's death. As Messrs. W. McGinley and
Jensen have reached 65 years of age, if either were to retire, 67,897 and
71,490 shares, respectively, would immediately vest.
(3) Long-Term Incentive Plan ("LTIP") payouts represent amounts paid pursuant
to the Company's Longevity Contingent Bonus Program. See "Long-Term
Incentive Plans-Awards in Last Fiscal Year" and "Board Compensation
Committee Report on Executive Compensation-Long-Term Incentive" below for
a description of the Longevity Contingent Bonus Program.
(4) The figures in this column include amounts allocated under the Methode
Employee Stock Ownership Plan ("ESOP") and, with respect to Messrs.
Jensen, Andre and Hayes, above-market accrued interest and matching
amounts under the Capital Accumulation Program ("CAP"). Pursuant to the
ESOP, Mr. J. McGinley had $3,326, $3,904 and $3,687 allocated to his
account in 1996, 1995 and 1994, respectively and the following amounts
were allocated to the accounts of each of the remaining Named Executives
in 1996, 1995 and 1994, respectively: $3,326, $3,904 and $6,310. Pursuant
to the CAP adopted in 1986, in 1996, 1995 and 1994, respectively, the
following Named Executives were provided with the matching amounts and
the amounts of accrued interest in excess of 120% of the applicable
federal long-term rate at the time the CAP was established as follows:
Mr. Jensen, $2,157, $1,953 and $1,768; Mr. Andre, $3,597, $4,991 and
$4,960; and Mr. Hayes, $5,619, $6,821 and $6,617. Payment of such
matching amounts and interest is contingent upon satisfaction of certain
terms of the CAP. Messrs. W. and J. McGinley elected not to participate
in the CAP.
6
<PAGE>
(5) Includes a cash car allowance of $7,800.
(6) Includes a cash bonus of $399,286, $341,345 and $301,568 in 1996, 1995
and 1994, respectively, and a $400,000 payment in 1996, 1995 and 1994
pursuant to the Supplemental Executive Benefit Plan.
(7) Includes a cash bonus of $289,379, $306,874 and $302,229 in 1996, 1995
and 1994, respectively, and a $200,000 payment in 1996, 1995 and 1994
pursuant to the Supplemental Executive Benefit Plan.
(8) Includes a cash bonus of $130,866, $100,543 and $68,625 in 1996, 1995 and
1994, respectively, and a $100,000 payment in 1996, 1995 and 1994,
pursuant to the Supplemental Executive Benefit Plan.
(9) Includes a cash car allowance of $6,660.
(10) Includes a cash bonus of $159,715, $136,537 and $120,627 in 1996, 1995
and 1994, respectively, and a $100,000 payment in 1996, 1995 and 1994,
pursuant to the Supplemental Executive Benefit Plan.
(11) Includes a cash car allowance of $3,900.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
Estimated Future Payouts Under Non-Stock Price Based Plans
<TABLE>
<CAPTION>
PERFORMANCE OR
OTHER PERIOD
UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME OR PAYOUT ($) ($) ($)
- ---- ---------------- --------- ------- -------
<S> <C> <C> <C> <C>
W. McGinley.......................... 3 years 399,286 399,286 399,286
Jensen............................... 3 years 289,379 289,379 289,379
Andre................................ 3 years 130,866 130,866 130,866
Hayes................................ 3 years 159,715 159,715 159,715
J. McGinley.......................... 3 years 65,005 65,005 65,005
</TABLE>
The Company has a Longevity Contingent Bonus Program which covers certain
officers and key management personnel. The longevity compensation amount is
equal to the current bonus received by an eligible employee for a given
quarter, and is earned and payable three years after the current quarter only
if the eligible employee is still an employee of the Company and his
employment performance is satisfactory. If for any reason other than death,
disability or retirement the officer or key employee terminates his employment
with the Company during the three-year period or his employment performance is
not satisfactory, no longevity compensation is payable under this program.
DIRECTOR COMPENSATION
The Company has a standard arrangement whereby directors who are not
officers and employees of the Company are each compensated at the rate of
$2,000 quarterly plus an attendance fee of $500 for each meeting of the Board
of Directors at which they are present. Directors who are members of the
Compensation or Audit Committees receive an additional $500 for each committee
meeting attended. Each director who is not paid as an officer or employee of
the Company participates in the Incentive Stock Award Plan for Non-Employee
Directors which was approved by stockholders in 1988. The Plan provides that
non-employee directors who have been such for at least twelve consecutive
months will receive shares of Class A Common Stock equal to five one-
hundredths of one percent of pre-tax earnings of the Company before
extraordinary items of gain or loss for the fiscal year or 3,000 shares,
whichever is greater, such shares to vest immediately upon the date of grant.
Five one-hundredths of one percent of the applicable earnings of the Company
for the fiscal year ended April 30, 1996 was $25,920. According to the
formula, each non-employee director of the Company who has been a director for
at least twelve consecutive months, at present consisting of William C. Croft,
Raymond J. Roberts, and George C. Wright, received 3,000 shares. No shares are
awarded if the Company does not have pre-tax earnings. Directors who are also
officers and employees of the Company are not paid for their services as
directors or for attendance at meetings.
7
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
William J. McGinley, who is Chairman and a director of the Company, is on
the Compensation Committee.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's compensation philosophy is comprised of several elements
designed to retain key management personnel, reward performance, reward
dedication and historical service to the Company, and to relate executive pay
to long-term Company performance. These elements consist of a base salary,
bonus compensation, incentive awards directly relating pay to performance, and
long-term incentive awards designed to align executive interests with
stockholder interests.
Base Salary
The base salaries of the Company's executive officers have remained
relatively flat, with small increases to reflect inflation. Base salaries,
including that of founder William J. McGinley, were originally set by Mr. W.
McGinley. Over the years, the Compensation Committee of the Board has reviewed
the founder's recommendations as to the salaries of the Company's officers and
key management personnel. Although base salaries have not been high relative
to other companies of comparable size, the bonus has been a key tool for
rewarding performance.
Bonus Compensation
Bonus amounts paid to the Named Executives are comprised of two elements:
(i) a quarterly cash bonus; and (ii), with respect to Messrs. W. McGinley,
Jensen, Andre and Hayes, the Supplemental Executive Benefit Plan (the "SEBP").
Cash bonuses for all officers and managerial personnel are determined
pursuant to a bonus plan reviewed from time to time by the Compensation
Committee. Pursuant to the bonus plan, bonus amounts are calculated according
to a formula which assigns certain percentages to different levels of pre-tax
profits.
The SEBP recognizes the dedication and contributions made by certain of the
Named Executives and such other persons as determined by the Compensation
Committee during their past years of service to the Company. In recognition of
the more than 40 years of service of Messrs. McGinley and Jensen, the SEBP
provides that on an annual basis over a 10-year period commencing with fiscal
1992, Messrs. McGinley and Jensen will each receive an amount equal to $10,000
and $5,000, respectively, for each year of past service up to 40 years. In
recognition of the past years of service of Messrs. Andre and Hayes, the SEBP
provides that on an annual basis over a 10-year period commencing with fiscal
1992, Messrs. Andre and Hayes will each receive an amount equal to $5,000 and
$5,263 respectively, for each year of past service up to 20 years. No benefits
may be paid under the SEBP in any fiscal year in which the Company has a net
loss, nor may benefits be paid in an amount in excess of 20% of pre-tax income
(income before federal and state income taxes and before extraordinary income
and losses) in any year. To the extent that benefits due are postponed because
of a loss or insufficient earnings, they are to be paid in subsequent years
when earnings are sufficient. Reductions in benefits shall be allocated pro
rata to the participants and no interest is to be paid on deferred amounts.
Pursuant to the SEBP, Mr. McGinley received a $400,000 payment in fiscal
1996.
Incentive Award
The Company's Incentive Stock Award Plan (the "Incentive Plan") is
administered by Directors Roberts and Croft (the "Committee") who are not
eligible to receive awards under the Incentive Plan. The Committee determines
which individuals shall participate in the Incentive Plan in any given year,
which profit centers will be the basis for each participant's award, the
earnings for each profit center and the number of shares of Class A
8
<PAGE>
Common Stock to be awarded to each participant. The number of shares awarded
to any participant in any given year is determined by the Committee and
historically has been determined by dividing one percent of the pre-tax
earnings of the applicable profit center for that year by the fair market
value of the Company's Class A Common Stock on the first business day of the
subsequent Incentive Plan year. Shares awarded to a participant under the
Incentive Plan vest on the first day of the third Incentive Plan year
following the year the award was made, or earlier upon retirement after age 65
or termination of employment on account of death or disability.
Long-Term Incentive
The Company has instituted several plans which are designed to provide long-
term incentives for executives by relating executive compensation to Company
performance over time as well as by rewarding continued service to the
Company. The Company's Longevity Contingent Bonus Program (the "Bonus
Program") awards officers and key management personnel a matching bonus (equal
to the amount of the current quarterly bonus) which will be considered as
earned and payable in three years provided that the participant is still
employed by the Company at that time and performance has been satisfactory.
If, for any reason, other than death, disability, or retirement, the officer
or key employee terminates his employment with the Company during the three-
year period, or his employment performance is not satisfactory, no longevity
compensation is payable under this program.
Mr. McGinley's total quarterly bonus awards in 1996 were $399,286. He is
therefore eligible to receive payments totalling $399,286 in 1999.
The Company also instituted a Capital Accumulation Program (the "CAP") under
which, from calendar years 1986 to 1989, the Company matched the amount of
compensation deferred by any executive or director on a dollar-for-dollar
basis, with a limit of $5,000 in any given year. If a participant retires at
age 55 and has been a participant in the CAP for ten years, then that
individual is eligible to receive payments with an annual yield of not less
than ten percent on the deferred amount, plus the matching amount. If the
participant retires at age 55 and has been a participant in the CAP between
five and nine years, he is eligible to receive the deferred amount plus
interest, plus between fifty to ninety percent of the matching amount plus
interest. If the participant resigns or retires before age 55 with at least
four years participation in the CAP, he is eligible to receive the deferred
amount with interest although he is not eligible to receive the matching
amount. In the event that an individual is discharged for cause, he is able to
receive the deferred amount without interest or the matching amount.
Mr. McGinley did not participate in the CAP.
The Company's Employee Stock Ownership Plan (the "ESOP") provides additional
long-term incentive to employees. The Company contributes, either in cash or
Company securities, to a trust established for the benefit of its employees.
Employees may not make contributions. The primary purpose of the ESOP is to
enable the Company's employees to earn a proprietary interest in the Company
thereby aligning employee interests with those of the stockholders. If cash is
contributed to the ESOP, the cash is used, to the extent practicable, to
purchase Company securities. Any employee who completes 1,000 hours of service
in a twelve month period is eligible to participate in the ESOP. The Company's
contributions to the ESOP are allocated to the accounts of participants in the
same proportion as each participant's compensation bears to the aggregate
compensation of all participants. In compliance with applicable law, the ESOP
provides for gradual vesting of 20% after two years through 100% after seven
years. The ESOP further provides that an employee's account will fully vest
upon termination of employment due to retirement, disability or death, or
resignation or dismissal after seven years of service. The vested portion of
an employee's account is to be distributed upon retirement, disability,
termination or death.
During 1993, the Internal Revenue Code of 1986 (the "Code") was amended to
include a provision which denies a deduction to any publicly held corporation
for compensation paid to any "covered employee" (defined as the CEO and the
Company's other four most highly compensated officers, as of the end of a
taxable year)
9
<PAGE>
to the extent that the compensation exceeds $1 million in any taxable year of
the corporation beginning after 1993. Compensation which is payable pursuant
to written binding agreements entered into before February 18, 1993 and
compensation which constitutes "performance-based compensation" is excludable
in applying the $1 million limit. It is the Company's policy to qualify
compensation paid to its top executives, in a manner consistent with the
Company's compensation policies, for deductibility under the new law in order
to maximize the Company's income tax deductions.
COMPENSATION COMMITTEE
William J. McGinley
Raymond J. Roberts
William C. Croft
10
<PAGE>
PERFORMANCE GRAPH
The following graph sets forth a five-year comparison of the cumulative
total returns for: (i) the Class A Common Stock of the Company, (ii) the Class
B Common Stock of the Company, (iii) the CRSP Index for the Nasdaq Stock
Market, and (iv) the CRSP Index for the Nasdaq Electronics Components Stocks.
All returns were calculated assuming dividend reinvestment on a quarterly
basis.
COMPARISON OF FIVE YEAR
CUMULATIVE TOTAL RETURNS
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
1991 1992 1993 1994 1995 1996
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Methode Class A........... $100 $159 $272 $382 $421 $620
Methode Class B........... 100 159 320 376 400 568
NASDAQ (U.S.)............. 100 121 139 155 180 257
NASDAQ Elect. Comp. ...... 100 113 169 227 359 479
</TABLE>
11
<PAGE>
OTHER MATTERS
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors of the Company has selected Ernst & Young LLP to
examine the consolidated financial statements of the Company and its
subsidiaries for the fiscal year ending April 30, 1997. Ernst & Young has
served the Company in this capacity since 1966. Representatives of Ernst &
Young are expected to be present at the Annual Meeting to be held on September
10, 1996 and will have the opportunity to make a statement if they so desire.
These representatives are also expected to be available to respond to
appropriate questions of stockholders.
STOCKHOLDER PROPOSALS
Stockholder proposals intended to be included in the Company's proxy
statement and form of proxy relating to, and to be represented at, the Annual
Meeting of the Company to be held in 1997 must be received by the Company on
or before April 11, 1997.
SEC FORM 10-K
A copy of the Company's annual report to the Securities and Exchange
Commission will be provided to stockholders without charge upon written
request directed to William T. Jensen, President, Methode Electronics, Inc.,
7444 West Wilson Avenue, Chicago, Illinois 60656-4549.
OTHER BUSINESS
The Board of Directors knows of no other business that will be presented at
the Annual Meeting. Should any other business come before the Annual Meeting,
it is the intention of the persons named in the enclosed proxy form to vote in
accordance with their best judgment.
By order of the Board of Directors
WILLIAM J. McGINLEY
Chairman
Chicago, Illinois
August 12, 1996
12
<PAGE>
PROXY CARD METHODE ELECTRONICS, INC
CLASS A COMMON STOCK
Annual Meeting of Stockholders, September 10, 1996
The undersigned stockholder of Methode Electronics, Inc. does hereby
acknowledge receipt of Notice of said Annual Meeting and accompanying Proxy
Statement and constitutes and appoints William J. McGinley, William T. Jensen
and James W. Ashley, Jr., or any one or more of them, with full powers of
substitution and revocation, to be the attorneys and proxies to vote all shares
of Class A Common Stock of Methode Electronics, Inc. which the undersigned is
entitled to vote, with all the powers which the undersigned would possess if
personally present at the Annual Meeting of Stockholders of said Corporation to
be held on Tuesday, September 10, 1996 at 3:30 p.m. Chicago time at the
Arlington Park Hilton Conference Center, 3400 West Euclid Avenue, Arlington
Heights, Illinois 60005, and at any adjournments thereof:
(PLEASE SIGN ON THE OTHER SIGN)
.FOLD AND DETACH HERE.
<PAGE>
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN AND IN THE
ABSENCE OF SUCH INSTRUCTIONS SHALL BE VOTED FOR ITEM 1. If other business is
presented at said meeting, this proxy shall be voted in accordance with the
best judgment of the persons named as proxies on reverse side.
Please mark your votes as indicated in this example [X]
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
1. The election of Michael G. Andre, William C. Croft and James W. Ashley, Jr.
as Class A directors.
FOR ALL NOMINEES EXCEPT NOMINEE(S) WRITTEN BY THE UNDERSIGNED IN THE SPACE
PROVIDED [_]
WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES [_]
-------------------------------------------------------
- --------------------------------------------------------------------------------
I plan to attend the meeting [_]
Any proxy heretofore given by the undersigned
to vote at said Annual Meeting is hereby
revoked.
You are urged to mark, sign and return your
proxy without delay in the return envelope
provided for that purpose, which requires no
postage if mailed in the United States.
Date _________________________________, 1996
____________________________________________
____________________________________________
When signing the proxy, please date it and
take care to have the signature conform to the
stockholder's name as it appears on this side
of the proxy. If share are registered in the
names of two or more persons, each should
sign. Executors, administrators, trustees and
guardians should so indicate when signing.
DO NOT FOLD OR PERFORATE THIS CARD
.FOLD AND DETACH HERE.
<PAGE>
PROXY CARD METHODE ELECTRONICS, INC.
CLASS B COMMON STOCK
Annual Meeting of Stockholders, September 10, 1996
The undersigned stockholder of Methode Electronics, Inc. does hereby
acknowledge receipt of Notice of said Annual Meeting and accompanying Proxy
Statement and constitutes and appoints William J. McGinley, William T. Jensen
and James W. Ashley, Jr., or any one or more of them, with full powers of
substitution and revocation, to be the attorneys and proxies to vote all shares
of Class B Common Stock of Methode Electronics, Inc. which the undersigned is
entitled to vote, with all the powers which the undersigned would possess if
personally present at the Annual Meeting of Stockholders of said Corporation to
be held on Tuesday, September 10, 1996 at 3:30 p.m. Chicago time at the
Arlington Park Hilton Conference Center, 3400 West Euclid Avenue, Arlington
Heights, Illinois 60005, and at any adjournments thereof:
(PLEASE SIGN ON THE OTHER SIDE}
.FOLD AND DETACH HERE.
<PAGE>
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH THE INSTRUCTIONS GIVEN AND IN THE
ABSENCE OF SUCH INSTRUCTIONS SHALL BE VOTED FOR ITEM 1. If other business is
presented at said meeting, this proxy shall be voted in accordance with the best
judgment of the persons named as proxies on reverse side.
Please mark your votes as indicated in this example [X]
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
- --------------------------------------------------------------------------------
1. The election of William J. McGinley, William T. Jensen, Kevin J. Hayes,
George C. Wright, Raymond J. Roberts and James W. McGinley as Class B
directors.
FOR ALL NOMINEES EXCEPT NOMINEES(S) WRITTEN BY THE UNDERSIGNED IN THE SPACE
PROVIDED [_]
WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES [_]
--------------------------------------------------------
- --------------------------------------------------------------------------------
I plan to attend the meeting [_]
Any proxy heretofore given by the undersigned
to vote at said Annual Meeting is hereby
revoked.
You are urged to mark, sign and return your
proxy without delay in the return envelope
provided for that purpose, which requires no
postage if mailed in the United States.
Date _________________________________, 1996
____________________________________________
____________________________________________
When signing the proxy, please date it and
take care to have the signature conform to the
stockholder's name as it appears on this side
of the proxy. If share are registered in the
names of two or more persons, each should
sign. Executors, administrators, trustees and
guardians should so indicate when signing.
DO NOT FOLD OR PERFORATE THIS CARD
.FOLD AND DETACH HERE.
