METHODE ELECTRONICS INC, DEF 14A, 1997-08-12

METHODE ELECTRONICS INC
DEF 14A, 1997-08-12
ELECTRONIC CONNECTORS

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<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)

- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

[X] No fee required

[_] 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):

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(4) Proposed maximum aggregate value of transaction:

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(5) Total fee paid:

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[_] 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:

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(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 9, 1997

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 Holiday Inn
O'Hare International, 5440 North River Road, Rosemont, Illinois 60018 on
Tuesday, September 9, 1997 at 3:30 p.m. for the following purposes:

1. To elect a Board of Directors;

2. To consider and vote upon the Methode Electronics, Inc. 1997 Stock Plan;
and

3. To transact such other business as may properly come before said
meeting.

Stockholders of record as of the close of business on August 1, 1997 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
President and Chairman

Chicago, Illinois
August 13, 1997
<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 9, 1997

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 9, 1997 at 3:30 p.m., and any
adjournment thereof (the "Annual Meeting"), at the Holiday Inn O'Hare
International, 5440 North River Road, Rosemont, Illinois 60018.

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 in person. 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 13, 1997.

RECORD DATE; VOTING SECURITIES OUTSTANDING

The close of business on August 1, 1997 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 16, 1997, the Company had outstanding voting securities
consisting of 34,272,032 shares of Class A Common Stock, par value $0.50 per
share ("Class A Common Stock") and 1,200,854 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 Restated 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 OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, with respect to the Company's voting
securities, all persons known to be the beneficial owners of more than 5% of
the Company's voting securities as of July 16, 1997.

<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS OF TITLE OF AND NATURE OF PERCENT
BENEFICIAL OWNER CLASS BENEFICIAL OWNERSHIP(1) OF CLASS
------------------- ------------ ----------------------- --------
<S> <C> <C> <C>
William J. McGinley.......... Common Stock
7444 West Wilson Ave. Class A 348,767(2) 1.0%
Chicago, Illinois 60656-4549 Class B 890,902(2) 74.1%
Methode Electronics, Inc..... Common Stock
Employee Stock Ownership Class A 3,205,343(3) 9.4%
Trust
CTC Illinois Trust Co. Class B 66,623(3) 5.5%
209 W. Jackson Blvd.
Chicago, Illinois 60606
Fidelity Funds............... Common Stock
82 Devonshire Street Class A 3,467,800(4) 10.1%
Boston, Massachusetts 02109
The Prudential Insurance Common Stock
Company of America..........
Prudential Plaza Class A 2,033,350(4) 5.9%
Newark, New Jersey 07102
</TABLE>
- --------
(1) Beneficial ownership arises from sole voting and investment power unless
otherwise indicated by footnote.
(2) Includes 122,355 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; 70,530 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 and 10,000 shares of Class B Common
Stock held by his wife.
(3) Beneficial ownership is disclaimed due to restrictions on the trustee's
voting and investment power with respect to these shares. Includes 122,355
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 13G 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 16, 1997 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.

2
<PAGE>

<TABLE>
<CAPTION>
NUMBER OF SHARES
TITLE OF AND NATURE OF PERCENT
NAME OF BENEFICIAL OWNER CLASS BENEFICIAL OWNERSHIP(1) OF CLASS
------------------------ ------------ ----------------------- --------
<S> <C> <C> <C>
Raymond J. Roberts............ Common Stock
Class A 101,200 *
Class B 6,200 *
William C. Croft.............. Common Stock
Class A 100,220 *
Class B 2,020 *
Michael G. Andre.............. Common Stock
Class A 167,338(6) *
Class B 3,800(6) *
Kevin J. Hayes................ Common Stock
Class A 126,366(7) *
Class B 3,368(7) *
James W. McGinley(2).......... Common Stock
Class A 45,276(8) *
Class B 21(8) *
James W. Ashley, Jr........... Common Stock
Class A 3,000 *
Class B 0 0
John R. Cannon................ Common Stock
Class A 31,683(9) *
Class B 526(9) *
All Directors and Executive
Officers as a Group
(10 individuals)............. Common Stock
Class A 1,482,655(10) 4.3%
Class B 940,710(10) 78.2%
</TABLE>
- --------
*Percentage represents less than 1% of the total shares of Common Stock
outstanding as of July 16, 1997.
(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) Based solely upon a Form 4 filed by Mr. Jensen with the Securities and
Exchange Commission on January 10, 1997. 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.
(5) All of these shares are held in a living trust jointly with his wife.
(6) Includes 57,254 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 and 8,775 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 47,339 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 and 28,215 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 7,761 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

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<PAGE>

the terms of the Trust, no investment power and 14,110 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 8,774 and 26 shares of Class A and Class B Common Stock,
respectively, held by the Employee Stock Ownership Trust for which Mr.
Cannon has sole voting power and, prior to distribution under the terms of
the Trust, no investment power; 14,230 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; 436 and 187 shares of Class A and Class B
Common Stock, respectively, held by his wife and 1,428 shares of Class A
Common Stock held as custodian for his son.
(10) Includes 352,030 shares of Class A and 20,612 shares of Class B Common
Stock allocated to executive officers under the Employee Stock Ownership
Trust; 135,860 shares of Class A Common Stock granted to the executive
officers pursuant to the Incentive Stock Award Plan; and 1,864 and 10,187
shares of Class A and Class B Common Stock, respectively, with respect to
which voting and investment powers are shared.

ITEM 1

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, Kevin J.
Hayes, George C. Wright, Raymond J. Roberts, James W. McGinley and John R.
Cannon. 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
- ---- --- -------- ----------------------------------------------------
DIRECTORS TO BE ELECTED BY CLASS A COMMON STOCKHOLDERS

<S> <C> <C> <C>
Michael G. Andre........ 57 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........ 79 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..... 47 1995 Secretary of the Company since 1995. James W.
Ashley, Jr., P.C. is a partner of Keck, Mahin &
Cate (a law firm retained as counsel to the
Company).

DIRECTORS TO BE ELECTED BY CLASS B COMMON STOCKHOLDERS

William J. McGinley..... 74 1946 President since 1997 and Chairman since 1994. Prior
thereto, he was President of the Company from 1946
to 1994. William J. McGinley is the father of James
W. McGinley.
</TABLE>

4
<PAGE>

<TABLE>
<S> <C> <C> <C>
Kevin J. Hayes.......... 56 1984 Executive Vice President of the Company since 1997,
Chief Financial Officer since 1996 and Assistant
Secretary since 1995. Prior thereto, Vice President
and Treasurer of the Company since 1974.
George C. Wright........ 74 1968 President of Piedmont Co. Inc. (distributor of
marine products).
Raymond J. Roberts...... 68 1972 Chief Financial Officer and Secretary-Treasurer of
Coilcraft, Inc. (a manufacturer of coils and
transformers).
James W. McGinley....... 42 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.
John R. Cannon.......... 49 1997 Senior Executive Vice President of the Company since
1997; prior thereto Senior Executive Vice President
of dataMate Products since 1996; prior thereto,
Executive Vice President of dataMate Products.
</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 Audit 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 Compensation Committee.

The Board of Directors of the Company held four meetings during the last
fiscal year. No director attended less than 75% 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.

5
<PAGE>

EXECUTIVE COMPENSATION

The Summary Compensation Table below includes, for each of the fiscal years
ended April 30, 1997, 1996 and 1995, individual compensation paid for services
to the Company and its subsidiaries to: (i) the Chief Executive Officer, (ii)
the three other executive officers of the Company who were serving as
executive officers on April 30, 1997, and (iii) one former executive officer
of the Company (collectively, the "Named Executives").

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 ($)(1) BONUS ($)(2) ($)(3)(4)(5) ($)(6) ($)(7)
------------------ ---- ------------- ------------ ---------------- ------- ------------
<S> <C> <C> <C> <C> <C> <C>
William J. McGinley..... 1997 272,048 838,047 598,859 301,568 2,903
President and Chairman 1996 261,860 799,286 518,404 237,984 3,326
1995 251,700 741,345 412,511 179,422 3,904
Michael G. Andre........ 1997 190,236 188,131 52,678 68,625 3,695
Senior Executive Vice 1996 186,400 230,866 88,017 54,301 6,923
President 1995 180,720 200,543 69,786 40,572 8,895
Kevin J. Hayes.......... 1997 133,428 275,219 239,544 120,627 5,929
Executive Vice
President, 1996 127,620 259,715 207,362 95,193 8,945
Chief Financial Officer 1995 122,796 236,537 165,004 71,769 10,725
and Assistant Secretary
James W. McGinley....... 1997 123,998 86,272 119,772 36,188 2,903
President Optical
Inter- 1996 107,920 65,005 103,681 28,559 3,326
connect Products Group 1995 101,180 55,155 82,502 21,531 3,904
William T. Jensen....... 1997 216,825 433,052 0 302,229 5,286
Retired President(8) 1996 250,720 489,379 367,238 247,575 5,483
1995 240,860 506,874 400,304 182,730 5,857
</TABLE>
- --------
(1) Includes the following cash car allowances for the Named Executives in
1997, 1996 and 1995: $7,800 for Messrs. W. McGinley, Jensen and Andre;
$6,600 for Mr. Hayes and $3,900 for Mr. J. McGinley.
(2) Includes the following cash bonuses for the Named Executives in 1997, 1996
and 1995, respectively: Mr. W. McGinley, $438,047, $399,286 and $341,345;
Mr. Jensen, $233,052, $289,379 and $306,874; Mr. Andre, $88,131, $130,866
and $100,543; Mr. Hayes, $175,219, $159,715 and $136,537; and Mr. J.
McGinley, $86,272, $65,005 and $55,155. Also includes the following
payments to the following Named Executives in 1997, 1996 and 1995 pursuant
to the Supplemental Executive Benefit Plan ("SEBP"): Mr. W. McGinley,
$400,000; Mr. Jensen, $200,000; and Messrs. Andre and Hayes, $100,000. See
"Board Compensation Committee Report on Executive Compensation--Bonus
Compensation" below for a description of the SEBP.
(3) These shares of restricted stock were awarded pursuant to the Company's
Incentive Stock Award Plan (the "Incentive Plan"). See "Board Compensation
Committee Report on Executive Compensation--Incentive Award" below for a
description of the Incentive Plan.
(4) All restricted stock is valued at the closing price of the Class A Common
Stock on the date of grant. On April 30, 1997, Mr. W. McGinley held 67,292
restricted shares having a value of $930,915; Mr. Andre held 11,403
restricted shares having a value of $157,800; Mr. Hayes held 26,917
restricted shares having a value of $372,366; and Mr. J. McGinley held
13,462 restricted shares having a value of $189,183. All shares of
restricted stock held by Mr. Jensen vested upon his retirement. Dividends
are paid on restricted stock awards at the same rate as paid to all
stockholders.

6
<PAGE>

(5) Restricted stock awarded under the Incentive 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
Mr. W. McGinley has reached 65 years of age, if he were to retire, 67,292
shares would immediately vest.
(6) 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.
(7) 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, the
following amounts were allocated to the accounts of each of the Named
Executives in 1997, 1996 and 1995, respectively: $2,903, $3,326 and $3,904.
Pursuant to the CAP, in 1997, 1996 and 1995, 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, $2,383, $2,157
and $1,953; Mr. Andre, $793, $3,597 and $4,991; and Mr. Hayes, $3,026,
$5,619 and $6,821. 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. See "Board Compensation
Committee Report on Executive Compensation--Long-Term Incentive" below for
a description of the CAP and ESOP.
(8) Mr. Jensen retired effective January 9, 1997.

LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE PAYOUTS UNDER
OTHER PERIOD NON-STOCK PRICE-BASED PLANS
UNTIL MATURATION ------------------------------------
NAME OR PAYOUT THRESHOLD ($) TARGET ($) MAXIMUM ($)
- ---- ---------------- ------------- ---------- -----------
<S> <C> <C> <C> <C>
W. McGinley............... 3 years 438,047 438,047 438,047
Andre..................... 3 years 88,131 88,131 88,131
Hayes..................... 3 years 175,219 175,219 175,219
J. McGinley............... 3 years 86,272 86,272 86,272
Jensen.................... 3 years 233,052 233,052 233,052
</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. In addition, each director who is not 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. Pursuant to this Plan,
non-employee directors who have been such for at least twelve consecutive
months receive a certain number of shares of Class A Common Stock

7
<PAGE>

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, 1997 was $29,220. 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, George C. Wright and James W. Ashley, Jr., 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.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS

William J. McGinley, who is Chairman, President 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 forty years of service of Messrs. McGinley and Jensen, the SEBP
provides that on an annual basis over a ten 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 forty years. In
recognition of the past years of service of Messrs. Andre and Hayes, the SEBP
provides that on an annual basis over a ten 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 twenty 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

8
<PAGE>

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
1997.

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 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 1% 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 1997 were $438,047. He is
therefore eligible to receive payments totaling $438,047 in the year 2000.

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 10% 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 50% to 90% 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 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

9
<PAGE>

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) to the extent that the compensation exceeds $1,000,000 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 $1,000,000 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 law in order
to maximize the Company's income tax deductions.

COMPENSATION COMMITTEE

William J. McGinley
Raymond J. Roberts
William C. Croft

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<PAGE>

PERFORMANCE GRAPH

The following graph set forth a comparison of the cumulative total stockholder
returns for the five-year period ended April 30, 1997 for: 9i) the Class A
Common Stock of the Company, (ii) the Class B Common Stock Market, and (iv) the
CRSP Index for the Nasdaq Electronics Components Stocks. All returns were
calculated assuming dividend reinvestment on a quarterly basis.

[GRAPH APPEARS HERE]

Comparison Of Five Year Cumulative Total Return
Among Methode Class A, Methode Class B, NASDAQ (U.S.) Index and NASDAQ
Electronic Components Stocks

<TABLE>
<CAPTION>
Measurement Period Nasdaq Electronic
(Fiscal Year Covered) Methode Class A Methode Class B Nasdaq (U.S.) Components Stocks
- -------------------- --------------- --------------- ------------- -----------------
<S> <C> <C> <C> <C>
Measurement Pt-
4/30/92 $100 $100 $100 $100
FYE 4/30/93 $170.558 $201.558 $114.982 $149.296
FYE 4/30/94 $239.678 $236.929 $127.968 $201.508
FYE 4/30/95 $264.381 $252.303 $148.765 $318.089
FYE 4/30/96 $389.393 $357.985 $212.066 $424.214
FYE 4/30/97 $332.065 $302.621 $224.495 $688.225
</TABLE>

11
<PAGE>

ITEM 2

APPROVAL OF THE METHODE ELECTRONICS, INC. 1997 STOCK PLAN

At a meeting held on June 27, 1997, the Company's Board of Directors
approved, and recommended for adoption by the stockholders, the Methode
Electronics, Inc. 1997 Stock Plan (the "1997 Plan"). The purpose of the 1997
Plan is to provide officers, directors and key employees who have substantial
responsibility for the direction and management of the Company with an
additional incentive to promote the success of the Company's business, to
encourage such persons to remain in the service of the Company and to enable
them to acquire proprietary interests in the Company. The following is a
summary of the 1997 Plan. This summary, however, does not purport to be a
complete description of the 1997 Plan. A copy of the 1997 Plan is attached to
this Proxy Statement as Exhibit A.

The 1997 Plan. The 1997 Plan would provide for the granting of awards of
restricted stock ("Restricted Stock"), incentive stock options ("ISOs") within
the meaning of Section 422 of the Internal Revenue Code (the "Code"),
nonqualified stock options ("NSOs") and stock appreciation rights ("SARs")
(awards of Restricted Stock, ISOs, NSOs and SARs are sometimes hereinafter
collectively referred to as "Awards"), and would permit a total of 2,000,000
shares of Class A Common Stock to be awarded to Participants under the 1997
Plan in the form of ISOs, NSOs, Restricted Stock or any combination thereof.
The 1997 Plan does not provide for the issuance of any shares of Class B
Common Stock. As of July 29, 1997, the closing sale price of the Class A
Common Stock was $20.69 per share as reported by Nasdaq.

The Committee. The committee administering the 1997 Plan (the "Committee")
would from time to time grant Awards under the 1997 Plan to selected eligible
directors and employees (the "Participants"), without payment by the
Participant. The Committee shall be composed of two or more directors elected
by the Board of Directors from time to time. In the absence of an election by
the Board, the Committee shall mean the Compensation Committee of the Board.
Members of the Committee will be eligible to receive Awards under the 1997
Plan. Presently, approximately 200 employees and nine directors are eligible
to participate in the 1997 Plan.

Restricted Stock Awards. The Committee may in its discretion, grant an award
of Restricted Stock to any Participant under the 1997 Plan. Awards of
Restricted Stock would be issued to Participants without payment. Upon
completion of a vesting period and the fulfillment of any required conditions,
restrictions upon the Restricted Stock would expire and new certificates
representing unrestricted shares of Class A Common Stock would be issued to
the Participant. Generally, the Participant would have all of the rights of a
stockholder of the Company with respect to his shares of Restricted Stock
including, but not limited to, the right to vote such shares and the right to
receive dividends payable with respect to the shares of Restricted Stock.

Incentive Stock Options. The 1997 Plan would provide that the Committee
would have the authority to grant ISOs to any key employee of the Company and
to determine the terms and conditions of each grant, including without
limitation, the number of shares subject to each ISO and the option period.
The ISO exercise price would also be determined by the Committee and would not
be less than the fair market value of the Class A Common Stock on the date of
grant. The exercise price would not be less than 110% of such fair market
value and the exercise period would not exceed five years if the Participant
was the holder of more than 10% of the Company's outstanding voting
securities.

Nonqualified Stock Options. The 1997 Plan would provide the Committee with
the authority to grant NSOs to any Participant. The Committee would recommend
the grant of NSOs to any Participant and would determine the terms and
conditions of each grant including the number of shares subject to each NSO,
the option period and the option exercise price.

Option Period. Unless the Committee otherwise determines, the option period
for both ISOs and NSOs will expire upon the earliest of: (i) ten years after
the date of grant, (ii) three months after termination of employment or
service on the Board for any reason other than cause or death or total and
permanent disability, (iii)

12
<PAGE>

immediately upon termination of employment or service on the Board for cause,
or (iv) twelve months after death or total and permanent disability.

Stock Appreciation Rights. The Committee may, in its discretion, grant an SAR
to any Participant. SARs granted by the Committee pursuant to the 1997 Plan may
relate to and be associated with all or any part of a specific ISO or NSO. An
SAR shall entitle the Participant to surrender any then exercisable portion of
the SAR and, if applicable, the related ISO or NSO. In exchange, the
Participant would receive from the Company an amount equal to the product of
(i) the excess of the fair market value of a share of Class A Common Stock on
the date of surrender over the fair market value of the Class A Common Stock on
the date the SARs were issued, or, if the SARs are related to an ISO or an NSO,
the per share exercise price under such option and (ii) the number of shares of
Class A Common Stock subject to such SAR, and, if applicable, the related
option which is surrendered. SARs would be exercisable during a period
established by the Committee and, if related to an ISO or NSO, shall terminate
on the same date as the related option. Upon exercise, Participants would be
paid in shares of Class A Common Stock or cash, as determined by the Committee.

The Manner of Exercise. The Committee may permit the exercise price for
options granted under the 1997 Plan to be paid in cash or shares of Class A
Common Stock, including shares of Class A Common Stock which the Participant
received upon the exercise of one or more options. The Committee may also
permit the option exercise price to be paid by the Participant's delivery of an
election directing the Company to withhold shares of Class A Common Stock from
the Class A Common Stock otherwise due upon exercise of the option or any
method permitted by law.

Vesting. Unless the Committee establishes a different vesting schedule at the
time of grant, Awards generally vest 20% after one year, 40% after two years,
60% after three years, 80% after four years and 100% after five years. A
Participant may not exercise an option or SAR or transfer shares of Restricted
Stock until the Award has vested.

Generally, if a Participant's employment with the Company or service on the
Board is terminated due to retirement, death, disability or a change in control
of the Company (as determined by the Committee), the Committee may, in its
discretion, accelerate vesting. If a Participant's employment with or service
to the Company is terminated for any other reason, any Awards that are not yet
vested are forfeited.

Nontransferability. Awards are not transferable other than by will or the
laws of descent and distribution or pursuant to a qualified domestic relations
order as defined by the Code; provided, however, that NSOs, SARs and Restricted
Stock are transferable in the Committee's discretion after vesting. During a
Participant's lifetime, his ISOs may be exercised only by him.

Withholding Tax. The Company shall have the right to withhold in cash or
shares of Class A Common Stock with respect to any payments made to
Participants, any taxes required by law to be withheld because of such
payments.

Amendment; Termination. The Board of Directors may amend the 1997 Plan at any
time, but may not impair the rights of Participants with respect to any
outstanding Awards without the consent of Participants.

The 1997 Plan will terminate ten years after its adoption by the Board of
Directors; provided, however, that the Board of Directors may terminate the
1997 Plan at any time. Termination of the 1997 Plan will not affect the rights
of Participants with respect to any Awards granted before the termination date.

Federal Tax Consequences-Incentive Stock Options. Provided a Participant is
an employee of the Company during the period beginning on the date of grant of
the ISO and ending on the day three months before the date of exercise, neither
the grant nor the exercise of an ISO has an immediate tax consequence to the
Participant or the Company. If subsequent to the exercise of an ISO the
Participant does not dispose of the acquired Class A Common Stock within two
years after the date of the grant of the ISO, or within one year after the date
of the transfer of the Class A Common Stock to the Participant (the "Holding
Period"), the Company is not entitled to

13
<PAGE>

a tax deduction, the Participant realizes no ordinary income, and any gain or
loss that is realized on the subsequent sale or taxable exchange of the Class A
Common Stock is treated as a long-term capital gain or loss. Certain tax
deductions and exclusions, known as "tax preference items", give rise to an
"alternative minimum tax" enacted to recapture some of the tax savings provided
by such tax preference items. The tax benefits associated with an ISO are tax
preference items that may affect the alternative minimum tax that must be paid
by certain high income individuals.

If a Participant exercises an ISO and disposes of the acquired Class A Common
Stock before the end of the Holding Period, the Participant's and the Company's
tax treatment will be the same as if the Participant had exercised an NSO
(described below). Therefore, the Participant realizes ordinary income in an
amount equal to the excess, if any, between the option price of the Class A
Common Stock and the fair market value of such Class A Common Stock on the date
of exercise. The Company will be entitled to a corresponding tax deduction in
the same amount and at the same time.

Federal Tax Consequences-Nonqualified Stock Options. Generally, the recipient
of an NSO realizes no taxable income at the time of grant. Similarly, the
Company is not entitled to a deduction with respect to the grant of an NSO.

Upon the exercise of an NSO, a Participant realizes income at ordinary income
tax rates. The amount included in income is the excess of the fair market value
of the Class A Common Stock acquired (as of the date of exercise) over the
exercise price. The Company will generally be entitled to a corresponding
deduction equal to this amount for the Company's taxable year that ends with or
includes the end of the Participant's taxable year of income inclusion. The
Company's deduction is only allowed, however, to the extent the amount is
considered "reasonable compensation".

A Participant's basis in the Class A Common Stock acquired upon the exercise
of an NSO will be the exercise price, plus any amount includable in the
Participant's gross income upon the exercise of the NSO. The gain or loss
realized by the Participant upon a subsequent sale or exchange of the shares
will be a capital gain or loss.

Federal Tax Consequences-Restricted Stock. Generally, because of the risk of
forfeiture prior to vesting (and certain other restrictions that may be imposed
by the Committee), no taxable income will be recognized by the Participant upon
an Award of Restricted Stock. However, a Participant may make an election under
Section 83(b) of the Code, within 30 days of the date of issuance of the
Restricted Stock, to be taxed at the time of issuance. Any Participant who
makes such an election recognizes ordinary income on the date of issuance of
the Restricted Stock equal to its fair market value at that time. The Company
is entitled to an equivalent deduction. No additional income would then be
recognized by the Participant upon the lapse of restrictions on the Restricted
Stock. Absent an election under Section 83(b) of the Code, a Participant does
not recognize taxable income upon the Award of Restricted Stock. Rather, the
Participant is deemed to receive ordinary income at the time the restrictions
on the Restricted Stock lapse. The amount of the Participant's taxable income
is equal to the fair market value of the unrestricted stock, less any amount
paid by the Participant for the Restricted Stock. The Company is entitled to a
corresponding deduction at such time for the same amount.

Unless an election under Code Section 83(b) is made, dividends paid to a
Participant while the Restricted Stock remains subject to restrictions are
treated as compensation for federal income tax purposes. Any dividends paid on
the Restricted Stock subsequent to an election under Code Section 83(b) are
treated as dividend income, rather than compensation, for federal income tax
purposes.

BOARD RECOMMENDATION

Proxies will be voted for or against approval of the 1997 Plan in accordance
with the specifications marked thereon, and will be voted in favor of approval
if no specification is made. Assuming a quorum is present, the affirmative vote
of a majority of the shares of Class A and Class B Common Stock represented in
person or by proxy at the Annual Meeting and entitled to vote thereon voting
together as a single class, with each share of

14
<PAGE>

Class A Common Stock having one-tenth of a vote per share and each share of
Class B Common Stock having one vote per share, is required to adopt the 1997
Plan.

THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR ADOPTION OF
THE 1997 PLAN.

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, 1998. Ernst & Young LLP has
served the Company in this capacity since 1966. Representatives of Ernst &
Young LLP are expected to be present at the Annual Meeting to be held on
September 9, 1997 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.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

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, 1997. All of these filing requirements were
satisfied, except that Mr. Jensen and Mr. Wright each filed one late report
covering one transaction. 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.

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 1998 must be received by the Company on or
before April 10, 1998.

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 Secretary, 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
President and Chairman

Chicago, Illinois
August 13, 1997

15
<PAGE>

EXHIBIT A

METHODE ELECTRONICS, INC. 1997 STOCK PLAN

1. Preamble.

Methode Electronics, Inc., a Delaware corporation (the "Company"), hereby
establishes the Methode Electronics, Inc. 1997 Stock Plan (the "Plan") as a
means whereby the Company may, through awards of (i) incentive stock options
("ISOs") within the meaning of Section 422 of the Code, (ii) non-qualified
stock options ("NSOs"), (iii) stock appreciation rights ("SARs"), and (iv)
restricted stock ("Restricted Stock"):

(a) provide officers, directors and key employees who have substantial
responsibility for the direction and management of the Company with
additional incentive to promote the success of the Company's business;

(b) encourage such persons to remain in the service of the Company; and

The provisions of this Plan do not apply to or affect any option, stock,
stock appreciation right, restricted stock or phantom stock heretofore or
hereafter granted under any other stock plan of the Company, and all such
options, stock, stock appreciation rights, restricted stock or phantom stock
shall be governed by and subject to the applicable provisions of the plan
under which they were or will be granted.

2. Definitions and Rules of Construction.

2.01 "Award" means the grant of Options, SARs and/or Restricted Stock to a
Participant.

2.02 "Award Date" means the date upon which an Option, SAR or Restricted
Stock is awarded to a Participant under the Plan.

2.03 "Board" or "Board of Directors" means the board of directors of the
Company.

2.04 "Code" means the Internal Revenue Code of 1986, as amended from time to
time or any successor thereto.

2.05 "Committee" means two (2) or more directors elected by the Board of
Directors from time to time; provided, however, that in the absence of an
election by the Board, the Committee shall mean the Compensation Committee of
the Board of Directors.

2.06 "Common Stock" means the Class A Common Stock of the Company, par value
$.50 per share.

2.07 "Company" means Methode Electronics, Inc., a Delaware corporation, and
any successor thereto.

2.08 "Exchange Act" shall mean the Securities Exchange Act of 1934, as it
exists now or from time to time may hereafter be amended.

2.09 "Fair Market Value" as of any date means the average closing sale price
for the Common Stock as of the close of business on the three most recent
trading days (including such date) on which actual sales occurred (as reported
by the Nasdaq Stock Market System or any securities exchange or automated
quotation system of a registered securities association on which the Common
Stock is then traded or quoted).

2.10 "ISO" means incentive stock options within the meaning of Section 422
of the Code.

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<PAGE>

2.11 "NSO" means non-qualified stock options, which are not intended to
qualify under Section 422 of the Code.

2.12 "Option" means the right of a Participant, whether granted as an ISO or
an NSO, to purchase a specified number of shares of Common Stock, subject to
the terms and conditions of the Plan.

2.13 "Option Price" means the price per share of Common Stock at which an
Option may be exercised.

2.14 "Participant" means an individual to whom an Award has been granted
under the Plan.

2.15 "Plan" means the Methode Electronics, Inc. 1997 Stock Plan, as set forth
herein and from time to time amended.

2.16 "Restricted Stock" means the Common Stock awarded to a Participant
pursuant to Section 8 of this Plan.

2.17 "SAR" means a stock appreciation right issued to a Participant pursuant
to Section 9 of this Plan.

2.18 "Subsidiary" means any entity of which the Company owns or controls more
than 50 percent of (i) the outstanding capital stock, or (ii) the combined
voting power of all classes of stock.

2.19 Rules of Construction:

2.19.1 Governing Law. The construction and operation of this Plan are
governed by the laws of the State of Illinois.

2.19.2 Undefined Terms. Unless the context requires another meaning, any
term not specifically defined in this Plan is used in the sense given to it
by the Code.

2.19.3 Headings. All headings in this Plan are for reference only and are
not to be utilized in construing the Plan.

2.19.4 Conformity with Section 422. Any ISOs issued under this Plan are
intended to qualify as incentive stock options described in Section 422 of
the Code, and all provisions of the Plan relating to ISOs shall be
construed in conformity with this intention. Any NSOs issued under this
Plan are not intended to qualify as incentive stock options described in
Section 422 of the Code, and all provisions of the Plan relating to NSOs
shall be construed in conformity with this intention.

2.19.5 Gender. Unless clearly inappropriate, all nouns of whatever gender
refer indifferently to persons or objects of any gender.

2.19.6 Singular and Plural. Unless clearly inappropriate, singular terms
refer also to the plural and vice versa.

2.19.7 Severability. If any provision of this Plan is determined to be
illegal or invalid for any reason, the remaining provisions are to continue
in full force and effect and to be construed and enforced as if the illegal
or invalid provision did not exist, unless the continuance of the Plan in
such circumstances is not consistent with its purposes.

3. Stock Subject to the Plan.

Except as otherwise provided in Section 12, the aggregate number of shares of
Common Stock that may be issued under Options or as Restricted Stock through
this Plan may not exceed 2,000,000 shares. Reserved shares may be either
authorized but unissued shares or treasury shares, in the Board's discretion.
If any Awards of Options and Restricted Stock hereunder shall terminate or
expire, as to any number of shares, new Options and Restricted Stock may
thereafter be awarded with respect to such shares.

17
<PAGE>

4. Administration.

The Committee shall administer the Plan. All determinations of the Committee
are made by a majority vote of its members. The Committee's determinations are
final and binding on all Participants. In addition to any other powers set
forth in this Plan, the Committee has the following powers:

(a) to construe and interpret the Plan;

(b) to establish, amend and rescind appropriate rules and regulations
relating to the Plan;

(c) subject to the terms of the Plan, to select the individuals who will
receive Awards, the times when they will receive them, the number of
Options, Restricted Stock and/or SARs to be subject to each Award, the
Option Price, the vesting schedule (including any performance targets to be
achieved in connection with the vesting of any Award), the expiration date
applicable to each Award and other terms and provisions and restrictions of
the Awards (which need not be identical) and to amend or modify any of the
terms of outstanding Awards;

(d) to contest on behalf of the Company or Participants, at the expense
of the Company, any ruling or decision on any matter relating to the Plan
or to any Awards;

(e) generally, to administer the Plan, and to take all such steps and
make all such determinations in connection with the Plan and the Awards
granted thereunder as it may deem necessary or advisable; and

(f) to determine the form in which tax withholding under Section 15 of
this Plan will be made (i.e., cash, Common Stock or a combination thereof).

5. Eligible Participants.

Present and future directors, officers and key employees of the Company shall
be eligible to participate in the Plan. The Committee from time to time shall
select those officers, directors and key employees of the Company and any
Subsidiary or affiliate of the Company who shall be designated as Participants
and shall designate in accordance with the terms of the Plan the number, if
any, of ISOs, NSOs, SARs and shares of Restricted Stock or any combination
thereof, to be awarded to each Participant.

6. Terms and Conditions of Non-Qualified Stock Options.

Subject to the terms of the Plan, the Committee, in its discretion, may award
an NSO to any Participant. Each NSO shall be evidenced by an agreement, in such
form as is approved by the Committee, and except as otherwise provided by the
Committee in such agreement, each NSO shall be subject to the following express
terms and conditions, and to such other terms and conditions, not inconsistent
with the Plan, as the Committee may deem appropriate:

6.01 Option Period. Each NSO will expire as of the earliest of:

(i) the date on which it is forfeited under the provisions of Section
11.1;

(ii) ten (10) years from the Award Date;

(iii) three (3) months after the Participant's termination of
employment with the Company and its parent and Subsidiaries or service
on the Board for any reason other than for cause or death or total and
permanent disability;

(iv) immediately upon the Participant's termination of employment
with the Company and its parent and Subsidiaries or service on the
Board for cause;

(v) twelve (12) months after the Participant's death or total and
permanent disability; or

(vi) any other date specified by the Committee when the NSO is
granted.

6.02 Option Price. At the time granted, the Committee shall determine the
Option Price of any NSO, and in the absence of such determination, the Option
Price shall be One Hundred percent (100%) of the Fair Market Value of the
Common Stock subject to the NSO on the Award Date.

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<PAGE>

6.03 Vesting. Unless otherwise determined by the Committee and set forth in
the Award agreement, NSO Awards shall vest in accordance with Section 11.1;
provided, that in no event shall an NSO granted to a Participant who is
subject to Section 16 of the Exchange Act be exercisable earlier than six (6)
months from the Award Date.

6.04 Other Option Provisions. The form of NSO authorized by the Plan may
contain such other provisions as the Committee may from time to time
determine.

7. Terms and Conditions of Incentive Stock Options

Subject to the terms of the Plan, the Committee, in its discretion, may
award an ISO to any employee Participant. Each ISO shall be evidenced by an
agreement, in such form as is approved by the Committee, and except as
otherwise provided by the Committee, each ISO shall be subject to the
following express terms and conditions and to such other terms and conditions,
not inconsistent with the Plan, as the Committee may deem appropriate:

7.01 Option Period. Each ISO will expire as of the earliest of:

(i) the date on which it is forfeited under the provisions of Section
11.1;

(ii) ten (10) years from the Award Date, except as set forth in
Section 7.02 below;

(iii) immediately upon the Participant's termination of employment
with the Company and any parent and Subsidiary of the Company for
cause;

(iv) three (3) months after the Participant's termination of
employment with the Company and any parent and Subsidiary of the
Company for any reason other than for cause or death or total and
permanent disability;

(v) twelve (12) months after the Participant's death or total and
permanent disability; or

(vi) any other date (within the limits of the Code) specified by the
Committee when the ISO is granted.

Notwithstanding the foregoing provisions granting discretion to the
Committee to determine the terms and conditions of ISOs, such terms and
conditions shall meet the requirements set forth in Section 422 of the Code
or any successor thereto.

7.02 Option Price and Expiration. The Option Price of any ISO shall be
determined by the Committee at the time an ISO is granted, and shall be no
less than one hundred percent (100%) of the Fair Market Value of the Common
Stock subject to the ISO on the Award Date; provided, however, that if an
ISO is granted to a Participant who, immediately before the grant of the
ISO, beneficially owns stock representing more than ten percent (10%) of
the total combined voting power of all classes of stock of the Company or
its parent or subsidiary corporations, the Option Price shall be at least
one hundred ten percent (110%) of the Fair Market Value of the Common Stock
subject to the ISO on the Award Date and in such cases, the exercise period
specified in the Option agreement shall not exceed five (5) years from the
Award Date.

7.03 Vesting. Unless otherwise determined by the Committee and set forth
in the Award agreement, ISO Awards shall vest in accordance with Section
11.1; provided that in no event shall an ISO granted to a Participant who
is subject to Section 16 of the Exchange Act be exercisable earlier than
six (6) months from the Award Date.

7.04 Other Option Provisions. The form of ISO authorized by the Plan may
contain such other provisions as the Committee may, from time to time,
determine; provided, however, that such other provisions may not be
inconsistent with any requirements imposed on incentive stock options under
Code Section 422 and related Treasury regulations.

19
<PAGE>

8. Terms and Conditions of Restricted Stock Awards.

Subject to the terms of the Plan, the Committee, in its discretion, may award
Restricted Stock to any Participant at no additional cost to the Participant.
Each Restricted Stock Award shall be evidenced by an agreement, in such form as
is approved by the Committee, and all shares of Common Stock awarded to
Participants under the Plan as Restricted Stock shall be subject to the
following express terms and conditions and to such other terms and conditions,
not inconsistent with the Plan, as the Committee shall deem appropriate:

(a) Restricted Period. Shares of Restricted Stock awarded under this
Section 8 may not be sold, assigned, transferred, pledged or otherwise
encumbered before they vest.

(b) Vesting. Restricted Stock Awards under this Section 8 shall vest in
accordance with Section 11.2.

(c) Certificate Legend. Each certificate issued in respect of shares of
Restricted Stock awarded under this Section 8 shall be registered in the
name of the Participant and shall bear the following (or a similar) legend
until such shares have vested:

"The transferability of this certificate and the shares of stock
represented hereby are subject to the terms and conditions (including
forfeiture) relating to Restricted Stock contained in Section 8 of the
Methode Electronics, Inc. 1997 Stock Plan and an Agreement entered into
between the registered owner and Methode Electronics, Inc. Copies of
such Plan and Agreement are on file at the principal office of Methode
Electronics, Inc."

9. Terms and Conditions of Stock Appreciation Rights.

The Committee may, in its discretion, grant a SAR to any Participant under
the Plan. Each SAR shall be evidenced by an agreement between the Company and
the Participant, and may relate to and be associated with all or any part of a
specific ISO or NSO. A SAR shall entitle the Participant to whom it is granted
the right, so long as such SAR is exercisable and subject to such limitations
as the Committee shall have imposed, to surrender any then exercisable portion
of his SAR and, if applicable, the related ISO or NSO, in whole or in part, and
receive from the Company in exchange, without any payment of cash (except for
applicable employee withholding taxes), that number of shares of Common Stock
having an aggregate Fair Market Value on the date of surrender equal to the
product of (i) the excess of the Fair Market Value of a share of Common Stock
on the date of surrender over the Fair Market Value of the Common Stock on the
date the SARs were issued, or, if the SARs are related to an ISO or an NSO, the
per share Option Price under such ISO or NSO on the Award Date, and (ii) the
number of shares of Common Stock subject to such SAR, and, if applicable, the
related ISO or NSO or portion thereof which is surrendered.

A SAR granted in conjunction with an ISO or NSO shall terminate on the same
date as the related ISO or NSO and shall be exercisable only if the Fair Market
Value of a share of Common Stock exceeds the Option Price for the related ISO
or NSO, and then shall be exercisable to the extent, and only to the extent,
that the related ISO or NSO is exercisable. The Committee may at the time of
granting any SAR add such additional conditions and limitations to the SAR as
it shall deem advisable, including, but not limited to, limitations on the
period or periods within which the SAR shall be exercisable and the maximum
amount of appreciation to be recognized with regard to such SAR. If a
Participant is subject to Section 16(a) and Section 16(b) of the Exchange Act,
the Committee may at any time add such additional conditions and limitations to
such SAR which, in its discretion, the Committee deems necessary or desirable
to comply with such Section 16(a) or Section 16(b) and the rules and
regulations issued thereunder, or to obtain any exemption therefrom. Any ISO or
NSO or portion thereof which is surrendered with an SAR shall no longer be
exercisable. An SAR that is not granted in conjunction with an ISO or NSO shall
terminate on such date as is specified by the Committee in the SAR agreement
and shall vest in accordance with Section 11.2. The Committee, in its sole
discretion, may allow the Company to settle all or part of the Company's
obligation arising out of the exercise of an SAR by the payment of cash equal
to the aggregate Fair Market Value of the shares of Common Stock which the
Company would otherwise be obligated to deliver.

20
<PAGE>

10. Manner of Exercise of Options.

To exercise an Option in whole or in part, a Participant (or, after his
death, his executor or administrator) must give written notice to the
Committee, stating the number of shares with respect to which he intends to
exercise the Option. The Company will issue the shares with respect to which
the Option is exercised upon payment in full of the Option Price. The
Committee may permit the Option Price to be paid in cash or shares of Common
Stock held by the Participant having an aggregate Fair Market Value, as
determined on the date of delivery, equal to the Option Price. The Committee
may also permit the Option Price to be paid by any other method permitted by
law, including by delivery to the Committee from the Participant of an
election directing the Company to withhold the number of shares of Common
Stock from the Common Stock otherwise due upon exercise of the Option having
an aggregate Fair Market Value on that date equal to the Option Price. If a
Participant pays the Option Price with shares of Common Stock which were
received by the Participant upon exercise of one or more ISOs, and such Common
Stock has not been held by the Participant for at least the greater of:

(a) two (2) years from the date the ISOs were granted; or

(b) one (1) year after the transfer of the shares of Common Stock to the
Participant;

the use of the shares shall constitute a disqualifying disposition and the ISO
underlying the shares used to pay the Option Price shall no longer satisfy all
of the requirements of Code Section 422.

11. Vesting.

11.1 Options. A Participant may not exercise an Option until it has become
vested. The portion of an Award of Options that is vested depends upon the
period that has elapsed since the Award Date. The following schedule applies
to any Award of Options under this Plan unless the Committee establishes a
different vesting schedule on the Award Date:

<TABLE>
<CAPTION>
NUMBER OF YEARS VESTED
SINCE AWARD DATE PERCENTAGE
---------------- ----------
<S> <C>
Fewer than one................................................ None
One but fewer than two........................................ 20%
Two but fewer than three...................................... 40%
Three but fewer than four..................................... 60%
Four but fewer than five...................................... 80%
Five or more.................................................. 100%
</TABLE>

If a Participant's employment with the Company or service on the Board is
terminated due to: (i) retirement on or after his sixty-fifth (65th) birthday;
(ii) retirement on or after his fifty-fifth (55th) birthday with consent of
the Company; (iii) retirement at any age on account of total and permanent
disability as determined by the Company; (iv) death; or (v) a change in
control of the Company (as determined by the Committee), the Committee may, in
its discretion, accelerate vesting. Unless the Committee otherwise provides in
the Award agreement, if a Participant's employment with or service to the
Company terminates for any other reason, any Awards that are not yet vested
are forfeited. A transfer from the Company to a Subsidiary or affiliate, or
vice versa, is not a termination of employment for purposes of this Plan.

11.2 Restricted Stock and SARs. The Committee shall establish the vesting
schedule to apply to any Award of Restricted Stock or SAR that is not
associated with an ISO or NSO granted under the Plan to a Participant, and in
the absence of such a vesting schedule, such Award shall vest according to the
vesting schedule set forth in Section 11.1. In no event, however, will a SAR
or Restricted Stock Award granted to a Participant who is subject to Section
16 of the Exchange Act be exercisable until at least six (6) months from its
Award Date.

21
<PAGE>

the Company; (iii) retirement at any age on account of total and permanent
disability as determined by the Company; (iv) death; or (v) a change in control
of the Company (as determined by the Committee), the Committee may, in its
discretion, accelerate vesting. Unless the Committee otherwise provides in the
Award agreement, if a Participant's employment with or service to the Company
is terminated for any other reason, any Awards that are not yet vested are
forfeited. A transfer from the Company to a Subsidiary or affiliate, or vice
versa, is not a termination of employment for purposes of this Plan.

12. Adjustments to Reflect Changes in Capital Structure.

If there is any change in the corporate structure or shares of the Company,
the Committee may make any adjustments necessary to prevent accretion, or to
protect against dilution, in the number and kind of shares authorized by the
Plan and, with respect to outstanding Awards, in the number and kind of shares
covered thereby and in the applicable Option Price. For the purpose of this
Section 12, a change in the corporate structure or shares of the Company
includes, without limitation, any change resulting from a recapitalization,
stock split, stock dividend, consolidation, rights offering, separation,
reorganization, or liquidation and any transaction in which shares of Common
Stock are changed into or exchanged for a different number or kind of shares of
stock or other securities of the Company or another corporation.

13. Nontransferability of Awards.

ISOs are not transferable, voluntarily or involuntarily, other than by will
or by the laws of descent and distribution or pursuant to a qualified domestic
relations order as defined by the Code. During a Participant's lifetime, his
ISOs may be exercised only by him. All other Awards granted pursuant to this
Plan are transferable by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order as defined by the Code, or in
the Committee's discretion after vesting.

14. Rights as Stockholder.

No Common Stock may be delivered upon the exercise of any Option until full
payment has been made. A Participant has no rights whatsoever as a stockholder
with respect to any shares covered by an Option until the date of the issuance
of a stock certificate for the shares.

15. Withholding Tax.

The Committee may, in its discretion and subject to such rules as it may
adopt, permit or require a Participant to pay all or a portion of the federal,
state and local taxes, including FICA and Medicare withholding tax, arising in
connection with any Awards by (i) having the Company withhold shares of Common
Stock, (ii) tendering back shares of Common Stock received in connection with
such Award or (iii) delivering other previously acquired shares of Common Stock
having a Fair Market Value approximately equal to the amount to be withheld.

16. No Right to Employment.

Participation in the Plan will not give any Participant a right to be
retained as an employee or director of the Company or its parent or
Subsidiaries, or any right or claim to any benefit under the Plan, unless the
right or claim has specifically accrued under the Plan.

17. Amendment of the Plan.

The Board of Directors may from time to time amend or revise the terms of
this Plan in whole or in part and may, without limitation, adopt any amendment
deemed necessary; provided, however, that no change in any Award previously
granted to a Participant may be made that would impair the rights of the
Participant without the Participant's consent.

22
<PAGE>

18. Stockholder Approval.

Operation of the Plan shall be subject to approval by the stockholders of the
Company within twelve months before or after the date the Plan is adopted by
the Board of Directors. If such stockholder approval is obtained at a duly held
stockholders' meeting, it may be obtained by the affirmative vote of the
holders of a majority of the shares of the Company present at the meeting or
represented and entitled to vote thereon. The approval of such stockholders of
the Company shall be solicited substantially in accordance with Section 14(a)
of the Exchange Act and the rules and regulations promulgated thereunder.

19. Conditions Upon Issuance of Shares.

An Option shall not be exercisable and a share of Common Stock shall not be
issued pursuant to the exercise of an Option, and Restricted Stock shall not be
awarded until such time as the Plan has been approved by the stockholders of
the Company and unless the award of Restricted Stock, exercise of such Option
and the issuance and delivery of such share pursuant thereto shall comply with
all relevant provisions of law, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange or national
securities association upon which the shares of Common Stock may then be listed
or quoted, and shall be further subject to the approval of counsel for the
Company with respect to such compliance.

As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the shares of Common Stock are being purchased only for
investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is
required by any of the aforementioned relevant provisions of law.

20. Effective Date and Termination of Plan.

20.01 Effective Date. This Plan is effective as of the date of its adoption
by the Board of Directors; provided, however, that the Plan and any Awards
granted hereunder shall be null and void if shareholder approval is not
obtained within twelve months of the date of such adoption.

20.02 Termination of the Plan. The Plan will terminate ten (10) years after
the date it is approved by the Board of Directors; provided, however, that the
Board of Directors may terminate the Plan at any time prior thereto with
respect to any shares that are not then subject to Awards. Termination of the
Plan will not affect the rights and obligations of any Participant with respect
to Awards granted before termination.

23
<PAGE>

PROXY CARD METHODE ELECTRONICS, INC.
CLASS A COMMON STOCK
Annual Meeting of Stockholders, September 9, 1997

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, Kevin J. Hayes 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 9, 1997 at 3:30 p.m. Chicago time at the Holiday
Inn O'Hare International, 5440 North River Road, Rosemont, Illinois 60018, and
at any adjournments thereof:

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) [ ] WITHHOLD AUTHORITY
WRITTEN BY THE UNDERSIGNED TO VOTE FOR ALL
IN THE SPACE BELOW NOMINEES

----------------------------------------------------------------------

2. The proposal to adopt the Methode Electronics, Inc. 1997 Stock
Plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

(PLEASE SIGN ON THE OTHER SIDE)

- --------------------------------------------------------------------------------

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

Any proxy heretofore given by the undersigned to vote at said Annual
Meeting is hereby revoked.

This proxy shall be voted in accordance with the instructions given
and in the absence of such instructions shall be voted for Item 1 and Item 2.
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 above.

You are urged to mark, sign, date 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 _____________________________, 1997

________________________________________

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
shares are registered in the names of two
or more persons, each person should sign.
Executors, administrators, trustees and
guardians should so indicate when
signing.

DO NOT FOLD OR PERFORATE THIS CARD
<PAGE>

PROXY CARD METHODE ELECTRONICS, INC.
CLASS B COMMON STOCK
Annual Meeting of Stockholders, September 9, 1997

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, Kevin J. Hayes 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 9, 1997 at 3:30 p.m. Chicago time at the Holiday
Inn O'Hare International, 5440 North River Road, Rosemont, Illinois 60018, and
at any adjournments thereof:

1. The election of William J. McGinley, Kevin J. Hayes, George C.
Wright, Raymond J. Roberts, James W. McGinley and John R. Cannon
as Class B directors.

[ ] FOR ALL NOMINEES EXCEPT NOMINEE(S) [ ] WITHHOLD AUTHORITY
WRITTEN BY THE UNDERSIGNED TO VOTE FOR ALL
IN THE SPACE BELOW NOMINEES

----------------------------------------------------------------------

2. The proposal to adopt the Methode Electronics, Inc. 1997 Stock
Plan.

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

(PLEASE SIGN ON THE OTHER SIDE)

- --------------------------------------------------------------------------------

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

Any proxy heretofore given by the undersigned to vote at said Annual
Meeting is hereby revoked.

You are urged to mark, sign, date 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 _____________________________, 1997

________________________________________

DO NOT FOLD OR PERFORATE THIS CARD