10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended May 2, 2009

Commission File Number 0-2816

METHODE ELECTRONICS, INC.

(Exact name of Registrant as specified in its charter)

Delaware	36-2090085
(State or other jurisdiction of	(IRS Employer
incorporation or organization)	Identification No.)

7401 West Wilson Avenue
Chicago, Illinois	60706-4548
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number (including area code):  (708) 867-6777

Securities registered pursuant to Section 12(b) of the Act:

Title of each Class	Name of each exchange on which registered
Common Stock, $0.50 Par Value	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o     No x

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o     No x

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x    No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes o    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer   o	Accelerated filer   x
Non-accelerated filer   o	Smaller reporting company   o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   Yes   o    No    x

The aggregate market value of common stock, $0.50 par value, held by non-affiliates of the Registrant on November 1, 2008, based upon the average of the closing bid and asked prices on that date as reported by the New York Stock Exchange was $278.5 million.

Registrant had 38,174,261 shares of common stock, $0.50 par value, outstanding as of July 1, 2009.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual shareholders meeting to be held September 17, 2009 are incorporated by reference into Part III.

METHODE ELECTRONICS, INC.

FORM 10-K

May 2, 2009

TABLE OF CONTENTS

PART I
Item 1.	Business	1
Item 1A.	Risk Factors	5
Item 2.	Properties	9
Item 3.	Legal Proceedings	10
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	11
Item 6.	Selected Financial Data	13
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 8.	Financial Statements and Supplementary Data	38
Item 9A.	Controls and Procedures	39
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	40
Item 11.	Executive Compensation	40
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	40
Item 13.	Certain Relationships and Related Transactions, and Director Independence	40
Item 14.	Principal Accounting Fees and Services	40
PART IV
Item 15.	Exhibits, Financial Statement Schedules	41

PART I

Item 1.  Business

Methode Electronics, Inc. was incorporated in 1946 as an Illinois corporation and reincorporated in Delaware in 1966.  As used herein, “we,” “us,” “our,” the “Company” or “Methode” mean Methode Electronics, Inc. and its subsidiaries.

We are a global designer and manufacturer of electro-mechanical devices.  We design, manufacture and market devices employing electrical, radio remote control, electronic, wireless, sensing and optical technologies.  Our components are found in the primary end markets of the aerospace, appliance, automotive, consumer and industrial equipment markets, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), rail and other transportation industries.

On September 30, 2008, we acquired certain assets of Hetronic LLC (Hetronic) for $53.6 million in cash.  We also incurred $2.4 million in transaction costs related to the purchase.  Hetronic is a global leader in industrial safety radio remote controls with locations in the U.S., Malta, the Philippines and Germany.  Hetronic is represented in 45 countries by direct sales associates, licensed partners, distributors and representatives.  Hetronic provides application specific and standard controls to many different industries, such as material handling, transportation, mining, military, agriculture and construction.  The accounts and transactions of Hetronic have been included in the Interconnect segment in the Consolidated Financial Statements from the effective date of the acquisition.

Our business has been and will likely continue to be materially adversely affected by the current economic environment, particularly as it impacts the automotive industry.  The disruptions in global financial and credit markets have significantly impacted global economic activity and led to an economic recession.  As a result of these disruptions, our customers and markets have been adversely affected.  We have experienced a significant drop in sales in all our reporting segments.  If demand for our products continues to decline, our business, results of operations and financial condition could be materially adversely affected.  If we are unable to successfully anticipate changing economic and financial conditions, we may be unable to effectively plan for and respond to these changes and our business could be adversely affec ted.

We have recorded and may record additional impairment charges which would adversely impact our results of operations.  We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and we also review our goodwill annually in accordance with Statement of Financial Accounting Standards, (SFAS) No. 142, “Goodwill and Other Intangibles”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A decline in expectations, future cash flows, a change in strategic direction or our market capitalization remaining below our net book value for a significant additional period of time could result in further significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.  See Note 4 to our Consolidated Financial Statements for additional information regarding our goodwill and other intangible asset impairment charges.

On March 12, 2009, we announced several additional restructuring actions to further reduce our exposure to the North American automotive industry and to consolidate manufacturing facilities in lower cost regions to reduce costs.  After these actions, our principal manufacturing operations will be in Mexico, Malta and China.  In addition, we have decided to transfer certain new General Motors (GM) business to other suppliers.  This business was scheduled to be produced in our Shanghai, China automotive facility.

All Ford Motor Company production at our Reynosa, Mexico facility is being moved to another supplier.  TouchSensor manufacturing currently in west suburban Chicago, Illinois will be moved to Monterrey, Mexico.  Additionally, our operations in Shanghai, China will be consolidated to two facilities from three.

In total, this additional restructuring will affect approximately 850 employees worldwide. We estimate that we will record a pre-tax charge between $16.0 million and $25.0 million, during fiscal 2009 and 2010. The cash portion of this charge is estimated between $7.0 million and $8.0 million.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $7.3 million, which consisted of $0.1 million for employee severance, $1.4 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment,

1

Item 1.  Business - Continued

$5.4 million for customer funded tooling and $0.1 in forfeited security deposits related to the cancellation of the new GM business and $0.3 million relating to professional fees.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 between $8.7 million and $17.7 million.  See Note 2 to our Consolidated Financial Statements for additional information regarding the March 2009 restructuring.

On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and a decision to discontinue producing certain legacy products in the Interconnect segment.  The Automotive and Interconnect segment restructuring is expected to be completed during fiscal 2010.  On January 24, 2008, the total pre-tax charges were estimated to be between $19.0 million and $25.0 million.  Through May 2, 2009, we have recorded $23.2 million of charges, of which $18.0 million was recorded during fiscal 2009.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 between $0.5 million and $1.5 million, of which $0.5 million will relate to the termination of approximately 225 employees and the cost of one-time employee benefits, retention, COBRA and outplacement services.  See Note 2 to our Consolidated Financial Statements for additional information regarding the January 2008 restructuring.

We maintain our financial records on the basis of a fifty-two or fifty-three week fiscal year ending on the Saturday closest to April 30.  Due to the timing of our fiscal calendar, the fiscal year ended May 2, 2009 represents 52 weeks of results, the fiscal year ended May 3, 2008 represents 53 weeks of results and the fiscal year ended April 28, 2007 represents 52 weeks of results.

Segments.  Our business is managed and our financial results are reported on a segment basis, with those segments being Automotive, Interconnect, Power Products and Other.

The Automotive segment supplies electronic and electromechanical devices and related products to automobile OEMs, either directly or through their tiered suppliers, including control switches for electrical power and signals, connectors for electrical devices, integrated control components, switches and sensors that monitor the operation or status of a component or system, and packaging of electrical components.

The Interconnect segment provides a variety of copper and fiber-optic interconnect and interface solutions for the aerospace, appliance, commercial, computer, construction, consumer, material handling, medical, military, mining, networking, storage, and telecommunications markets.  Solutions include connectors, conductive polymer, thick film inks, custom cable assemblies, industrial safety radio remote controls, solid-state field effect interface panels, optical and copper transceivers, PC and express card packaging and terminators.  Services include the design and installation of fiber optic and copper infrastructure systems, and manufacturing active and passive optical components.

The Power Products segment manufactures braided flexible cables, current-carrying laminated bus devices, custom power-product assemblies, high-current low voltage flexible power cabling systems and powder coated bus bars that are used in various markets and applications, including aerospace, computers, industrial and power conversion, insulated gate bipolar transistor solutions, military, telecommunications, and transportation.

The Other segment includes a designer and manufacturer of magnetic torque sensing products, and independent laboratories that provide services for qualification testing and certification, and analysis of electronic and optical components.

Financial results by segment are summarized in Note 13 to the Consolidated Financial Statements.

2

Item 1.  Business - Continued

Sales.  The following table reflects the percentage of net sales of the segments of the Company for the last three fiscal years.

	Year Ended
	May 2,		May 3,		April 28,
	2009		2008		2007
Automotive	57.2	%	65.7	%	70.4	%
Interconnect	30.8	%	24.7	%	18.3	%
Power Products	10.0	%	8.3	%	9.6	%
Other	1.9	%	1.3	%	1.7	%

Our sales activities are directed by sales managers who are supported by field application engineers and other engineering personnel who work with customers to design our products into their systems.  Our field application engineers also help us identify emerging markets and new products.  Our products are sold through in-house sales staff and through independent manufacturers’ representatives with offices throughout the world.  Information about our sales and operations in different geographic regions is summarized in Note 13 to the Consolidated Financial Statements.  Sales are made primarily to OEMs, either directly or through their tiered suppliers as well as selling partners and distributors.

Sources and Availability of Raw Materials.  Principal raw materials that we purchase include coil and bar stock, die castings, ferrous and copper alloy sheet, glass, plastic molding materials, precious metals, semiconductor components, silicon and urethane.  All of these items are available from several suppliers and we generally rely on more than one supplier for each item.  We have not experienced any significant shortages of raw materials and normally do not carry inventories of raw materials or finished products in excess of those reasonably required to meet production and shipping schedules.  We did experience significant price increases in fiscal 2008 and 2007 for copper, precious metals and petroleum-based raw materials.

Patents; Licensing Agreements.  We have numerous United States and foreign patents and license agreements covering certain of our products and manufacturing processes, several of which are considered significant to our business.   Our ability to compete effectively with other companies depends, in part, on our ability to maintain the proprietary nature of our technology. Although we have been awarded, have filed applications for, or have been licensed under numerous patents in the United States and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihood that pending patents will be issued.

Seasonality.  A significant portion of our business is dependent on automotive sales and the vehicle production schedules of our customers.  The automotive market is cyclical and depends on general economic conditions, interest rates, fuel prices and consumer spending patterns.  During fiscal 2009, we experienced significantly lower automotive sales due to the global recession.  Also in fiscal 2009, we significantly reduced shipments to Chrysler, LLC (“Chrysler”) due to our decision to exit unprofitable or marginally profitable legacy business and we are transferring some Ford business from our Reynosa, Mexico facility to other suppliers.  In addition, new GM business from our Shanghai, China facility will be transferred to other suppliers during the first quarter of fiscal 2010.  This loss of business will affect our U.S. automotive results in future periods.  Traditionally, in prior fiscal years, our business was moderately seasonal as our North American automotive customers historically halt operations for approximately two weeks in July for model changeovers and one to two weeks during the December holiday period.   During the second half of fiscal 2009, we experienced additional customer plant shutdowns due to lower demand for their products.  Accordingly, if we experience additional shutdowns, future quarterly results may be affected.

Material Customers.  During the fiscal year ended May 2, 2009, shipments to Ford and Delphi Corporation (“Delphi”), each represented approximately 10% or greater of consolidated net sales and, in the aggregate, amounted to approximately 28.5% of consolidated net sales.  Such shipments included a wide variety of our automotive component products.

3

Item 1.  Business - Continued

Backlog. Our backlog of orders was approximately $66.7 million at May 2, 2009, and $120.6 million at May 3, 2008.  It is expected that most of the total backlog at May 2, 2009 will be shipped within fiscal 2010.

Competitive Conditions.  The markets in which we operate are highly competitive and characterized by rapid changes due to technological improvements and developments.  We compete with a large number of other manufacturers in each of our product areas; many of these competitors have greater resources and sales.  Price, service and product performance are significant elements of competition in the sale of our products.

Research and Development.  We maintain a research and development program involving a number of professional employees who devote a majority of their time to the development of new products and processes and the advancement of existing products.  Senior management of our Company participates directly in the program.  Expenditures for such activities amounted to $22.0 million, $25.6 million and $21.3 million for fiscal 2009, 2008 and 2007, respectively.

Environmental Quality.  Compliance with foreign, federal, state and local provisions regulating the discharge of materials into the environment has not materially affected our capital expenditures, earnings or our competitive position.  Currently, we do not have any environmental related lawsuits or material administrative proceedings pending against us.  Further information as to environmental matters affecting us is presented in Note 9 to the Consolidated Financial Statements.

Employees.  At May 2, 2009 and May 3, 2008, we had 2,876 and 3,580 employees, respectively.  We also from time to time employ part-time employees and hire independent contractors.  As of May 2, 2009 our employees from our Malta and Mexico facilities, which account for about 45% of the total number of employees, are represented by a collective bargaining agreement.  We have never experienced a work stoppage and we believe that our employee relations are good.

Segment Information and Foreign Sales.  Information about our operations by segment and in different geographic regions is summarized in Note 13 to the Consolidated Financial Statements.

Available Information.  We are subject to the informational requirements of the Securities Exchange Act of 1934 (Exchange Act) and file periodic reports, proxy statements and other information with the Securities and Exchange Commission (SEC). Such reports may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, NE, Washington, D.C. 20549, or by calling the SEC at (800) SEC-0330. In addition, the SEC maintains an internet site (www.sec.gov) that contains reports, proxy and information statements and other information.

Financial and other information can also be accessed on the investor section of our website at www.methode.com. We make available, free of charge, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC.   Also posted on our website are the Company’s Corporate Governance Guidelines, Code of Conduct and the charters of the Audit Committee, Compensation Committee, Nominating and Governance Committee and Technology Committee. Copies of these documents are also available free of charge by sending a request to Methode Electronics, Inc., 7401 West Wilson Avenue, Chicago, Illinois 60706, Attention: Investor Relations Department.  Information on our website is not incorporated into this Form 10-K or our other securities filings and is not a part of them.

Certifications.  As required by the rules and regulations of the New York Stock Exchange (“NYSE”), we delivered to the NYSE a certification signed by our Chief Executive Officer, Donald W. Duda, certifying that Mr. Duda was not aware of any violation by the Company of the NYSE’s corporate governance listing standards as of October 20, 2008.

As required by the rules and regulations of the SEC, the Sarbanes-Oxley Act Section 302 certifications regarding the quality of our public disclosures are filed as exhibits to this Annual Report on Form 10-K.

4

Item 1A.  Risk Factors

Certain statements in this report are forward-looking statements that are subject to certain risks and uncertainties.  We undertake no duty to update any such forward-looking statements to conform to actual results or changes in our expectations.  Our business is highly dependent upon two large automotive customers and specific makes and models of automobiles.  Our results will be subject to many of the same risks that apply to the automotive, appliance, computer and telecommunications industries, such as general economic conditions, interest rates, consumer spending patterns and technological changes.   Other factors, which may result in materially different results for future periods, include the following risk factors.  These risk factors should be considered in connection with evaluating the forward-looking statements contained in this report because these factors could cause our actual results and condition to differ materially from those projected in forward-looking statements.  The forward-looking statements in this report are subject to the safe harbor protection provided under the securities laws and are made as of the date of this report.  We undertake no duty to update any such forward-looking statements.

We depend on a small number of large customers.  If we were to lose any of these customers or any of these customers decreased the number of orders it placed, or if any of the customers declare bankruptcy, our future results could be adversely affected.

During the year ended May 2, 2009, shipments to Ford and Delphi, each represented 10% or greater of consolidated net sales and, in the aggregate, amounted to approximately 28.5% of consolidated net sales.  It is expected that in fiscal 2010, we will signifi cantly reduce sales to Ford in North America due to our decision to transfer business from our Reynosa, Mexico facility to other suppliers.  The exit of this business will affect our U.S. automotive segment results in future periods.  The loss of all or a substantial portion of the sales to Delphi, which has been in bankruptcy since October 2005, could have a material adverse effect on our sales, margins, profitability and, as a result, our share price.  The Company is involved in certain disputes with Delphi, which could have an adverse impact on the Company’s future sales to Delphi. The contracts we have entered into with many of our customers provide for supplying the customers’ requirements for a particular model, rather than for manufacturing a specific quantity of products. Such contracts range from one year to the life of the model, which is generally three to seven years. Therefore, the loss of a contract for a major model or a significant decrease in demand for certain key models or group of related models sold by Ford or Delphi could have a material adverse impact on our results of operations and financial condition. We also compete to supply products for successor models and are subject to the risk that Ford or Delphi will not select us to produce products on any such model, which could have a material adverse impact on our results of operations and financial condition.

In addition, we have significant receivable balances related to these customers and other major customers that would be at risk in the event of their bankruptcy.  Due to the financial stresses within the worldwide automotive industry, certain automakers and tiered customers ha ve already declared bankruptcy or may be considering bankruptcy.

Because we derive a substantial portion of our revenues from customers in the automotive, appliance, computer and communications industries, we are susceptible to trends and factors affecting those industries.

Our components are found in the primary end markets of the automotive, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), aerospace, rail and other transportation industries, appliances and the consumer and industrial equipment markets.  Factors negatively affecting these industries and the demand for products also negatively affect our business, financial condition and operating results. Recently, we have experienced slow-downs in all segments due to the recession.  Any adverse occurrence, including additional industry slowdown, recession, rising interest rates, political instability, costly or constraining regulations, armed hostilities, terrorism, excessive inflation, prolonged disruptions in one or more of our customers’ production schedules or labor disturbances, that results in significant decline in the volume of sales in these industries, or in an overall downturn in the business and operations of our customers in these industries, could materially adversely affect our business, financial condition and operating results.

Our business is cyclical and seasonal in nature and further downturns in the automotive industry could reduce the sales and profitability of our business.

A large portion of our business is dependent on automotive sales and the vehicle production schedules of our customers.  The automotive market is cyclical and depends on general economic conditions, interest rates and consumer spending patterns.  Any significant reduction in vehicle production by our customers would have a

5

Item 1A.  Risk Factors - Continued

material adverse effect on our business.  During fiscal 2009, we experienced significantly lower automotive sales due to the global recession.  Also in fiscal 2009, we significantly reduced shipments to Chrysler due to our decision to exit unprofitable or marginally profitable legacy business and we are transferring some Ford business from our Reynosa, Mexico facility to other suppliers during the first quarter of fiscal 2010.  In addition, we are in the process of transferring new GM business from our Shanghai, China facility to other suppliers, which is expected to be completed during the first quarter of fiscal 2010.  The loss of business will affect our U.S. automotive results in future periods.  Traditionally, in prior fiscal years, our business was moderately seasonal as our North American automotive customers historically halt operations for approximately two weeks in July for model changeovers and one to two weeks during the December holiday period.   During the second half of fiscal 2009, we experienced additional customer plant shutdowns due to lower demand for their products.  Accordingly, if we experience additional shutdowns, quarterly results may be affected.

If we are unable to protect our intellectual property or we infringe, or are alleged to infringe, on another person’s intellectual property, our business, financial condition and operating results could be materially adversely affected.

We have numerous United States and foreign patents and license agreements covering certain of our products and manufacturing processes, several of which are considered material to our business.  Our ability to compete effectively with other companies depends, in part, on our a bility to maintain the proprietary nature of our technology. Although we have been awarded, have filed applications for, or have been licensed under numerous patents in the United States and other countries, there can be no assurance concerning the degree of protection afforded by these patents or the likelihood that pending patents will be issued.  The loss of any significant patents and trade secrets could adversely affect our sales, margins, profitability and, as a result, share price.

We may become involved in litigation in the future to protect our intellectual property or because others may allege that we infringe on their intellectual property. These claims and any resulting lawsuit could subject us to liability for damages and invalidate our intellectual property rights. If an infringement claim is successfully asserted by a holder of intellectual property rights, we may be required to cease marketing or selling certain products, pay a penalty for past infringement and spend significant time and money to develop a non-infringing product or process or to obtain licenses for the technology, process or information from the holder. We may not be successful in the development of a non-infringing alternative, or licenses may not be available on commercially acceptable terms, if at all, in which case we may lose sales and profits. In addition, any litigation could be lengthy and costly and could materially adversely affect us even if we are successful in the litigation.

We face risks relating to our international operations.

Because we have significant international operations, our operating results and financial condition could be adversely affected by economic, political, health, regulatory and other factors existing in foreign countries in which we operate. Our international operations are subject to inherent risks, which may adversely affect us, including: fluctuations in exchange rates; political and economic instability in countries in which our products are manufactured; expropriation, or the imposition of government controls; changes in government regulations; export license requirements; trade restrictions; earnings expatriation restrictions; exposure to different legal standards; less favorable intellectual property laws; health conditions and standards; currency controls; increases in the duties and taxes we pay; high levels of inflation or deflation; greater difficulty in collecting our accounts receivable and longer payment cycles; changes in labor conditions and difficulties in staffing and managing our international operations; limitations on insurance coverage against geopolitical risks, natural disasters and business operations; and communication among and management of international operations. In addition, these same factors may also place us at a competitive disadvantage to some of our foreign competitors.

We cannot assure you that the newly acquired Hetronic business will be successful or that we can implement and profit from any new applications of the acquired technology.

We acquired Hetronic on September 30, 2008.  As a result of this acquisition, we now design and manufacture industrial safety radio remote controls that are used primarily in the material handling, transportation, mining, military, agriculture and construction industries.  The current economic recession has had an adverse effect on the Hetronic business and our operating results.  Also, the market for safety radio remote controls is competitive

6

Item 1A.  Risk Factors - Continued

and rapidly changing.  If we do not keep pace with technological innovations in the industry, our products may not be competitive and our revenue and operating results may suffer.  Furthermore, while we intend to expand the Hetronic business by integrating the technology into additional automotive and other applications, we can make no guarantee that such ventures will be successful or profitable.

Our technology-based business and the markets in which we operate are highly competitive.  If we are unable to compete effectively, our sales will decline.

The markets in which we operate are highly competitive and characterized by rapid changes due to technological improvements and developments.  We compete with a large number of other manufacturers in each of our product areas; many of these competitors have greater resources and sales.  Price, service and product performance are significant elements of competition in the sale of our products.  Competition may intensify further if more companies enter the markets in which we operate. Our failure to compete effectively could materially adversely affect our business, financial condition and operating results.

We may acquire businesses or divest business operations. These transactions may pose significant risks and may materially adversely affect our business, financial condition and operating results.

We intend to explore opportunities to acquire other businesses or technologies that could complement, enhance or expand our current business or product lines or that might otherwise offer growth opportunities. Any transactions that we are able to identify and complete may involve a number of risks, including: the diversion of our management’s attention from our existing business to integrate the operations and personnel of the acquired or combined business or joint venture; possible adverse effects on our operating results during the integration process; and our possible inability to achieve the intended objectives of the transaction. In addition, we may not be able to successfully or profitably integrate, operate, maintain and manage our newly acquired operations or employees. We may not be able to maintain uniform standards, controls, procedures and policies, and this may lead to operational inefficiencies. In addition, future acquisitions may result in dilutive issuances of equity securities, a reduction of cash or the incurrence of debt.

We have in the past, and may in the future, consider divesting certain business operations. Divestitures may involve a number of risks, including the diversion of management’s attention, significant costs and expenses, the loss of customer relationships and cash flow, and the disruption of operations in the affected business. Failure to timely complete a divestiture or to consummate a divestiture may negatively affect valuation of the affected business or result in restructuring charges.

We may be unable to keep pace with rapid technological changes, which would adversely affect our business.

The technologies relating to some of our products have undergone, and are continuing to undergo, rapid and significant changes. Specifically, end markets for electronic components and assemblies are characterized by technological change, frequent new product introductions and enhancements, changes in customer requirements and emerging industry standards.  These changes could render our existing products unmarketable before we can recover any or all of our research, development and other expenses. Furthermore, the life cycles of our products vary, may change and are difficult to estimate. If we are unable, for technological or other reasons, to develop and market new products or product enhancements in a timely and cost-effective manner, our business, financial condition and operating results could be materially adversely affected.

Products we manufacture may contain design or manufacturing defects that could result in reduced demand for our products or services and liability claims against us.

Despite our quality control and quality assurance efforts, defects may occur in the products we manufacture due to design or manufacturing errors or component failure. Product defects may result in delayed shipments and reduced demand for our products. We may be subject to increased costs due to warranty claims on defective products. Product defects may result in product liability claims against us where defects cause, or are alleged to cause, property damage, bodily injury or death. We may be required to participate in a recall involving products that are, or are alleged to be, defective. We carry insurance for certain legal matters involving product liability, however, we do not have coverage for all costs related to product defects and the costs of such claims, including costs of

7

Item 1A.  Risk Factors - Continued

defense and settlement, may exceed our available coverage.

We are dependent on the availability and price of raw materials.

We require substantial amounts of raw materials, including petroleum-based products, glass, copper and precious metals, and all raw materials we require are purchased from outside sources. The availability and prices of raw materials may be subject to curtailment or change due to, among other things, new laws or regulations, suppliers’ allocations to other purchasers, interruptions in production by suppliers, changes in exchange rates and worldwide price levels. Any change in the supply of, or price for, these raw materials could materially affect our results of operations and financial condition.   We did experience price increases in fiscal 2008 and 2007 for copper, precious metals and petroleum-based raw materials.

Because we derive approximately 57% of our revenues from customers in the automotive segment, rising oil prices could adversely affect future results.

A large portion of our revenue is derived from parts and components that are provided in our customers’ less fuel-efficient vehicles.  Increasing oil and gasoline prices have, and, are expected to continue to negatively affect the sales of those vehicles in the future, which could negatively impact our future automotive revenue.

We have and may continue to incur additional significant restructuring charges that will adversely affect our results of operations.

Due to the economic downturn, we have incurred $25.3 million in restructuring charges in fiscal 2009, and we expect to incur $9.2 million to $19.2 million of restructuring charges in fiscal 2010.  This will have an adverse effect on our financial condition and results of operations.  If economic conditions worsen, we could have additional restructuring efforts in addition to those mentioned above.

We may incur additional goodwill and other asset impairments.

Our business has been and may continue to be materially adversely affected by the current economic environment.  The recent disruptions in global financial and credit markets have significantly impacted global economic activity and led to an economic recession.  As a result of these disruptions, our customers and markets have been adversely affected.  We have recently experienced a significant drop in sales in all our reporting segments.  If we experience reduced demand because of these disruptions in the macroeconomic environment or other factors, our business, results of operation and financial condition could be materially adversely affected.  If we are unable to successfully anticipate changing economic and financial conditions, we may be unable to effectively plan for and respond to these changes and our business could be adversely affected.

We have recorded and may record additional impairment charges that would adversely impact our results of operations.  We review our goodwill and other assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and we also review our goodwill annually in accordance with SFAS No. 142, “Goodwill and Other Intangibles” as well as SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success a nd life cycle of products and technologies acquired.  A decline in expectations, future cash flows, a change in strategic direction or our market capitalization remaining below our net book value for a significant period of time could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.  See Note 4 to our Consolidated Financial Statements for additional information regarding our goodwill and other asset impairment charges.

8

Item 2.  Properties

We operate the following manufacturing and other facilities, all of which we believe to be in good condition and adequate to meet our current and reasonably anticipated needs:

		Owned/	Approximate
Location	Use	Leased	Square Footage
Chicago, Illinois	Corporate Headquarters	Owned	15,000
Automotive Segment:
Carthage, Illinois	Manufacturing	Owned	261,000
Mriehel, Malta	Manufacturing	Leased	209,000
Reynosa, Mexico	Manufacturing	Leased	102,000
Golden, Illinois	Manufacturing	Owned	90,000
Shanghai, China	Manufacturing	Leased	75,500
McAllen, Texas	Warehousing	Leased	38,000
Monterrey, Mexico	Manufacturing	Leased	36,000
Southfield, Michigan	Sales and Engineering Design Center	Owned	17,000
Gau-Algesheim, Germany	Sales and Engineering Design Center	Leased	6,800
Burnley, England	Engineering Design Center	Leased	5,900
Interconnect Segment:
Rolling Meadows, Illinois	Manufacturing	Owned	75,000
Carol Stream, Illinois	Manufacturing	Leased	50,000
Shanghai, China	Manufacturing	Leased	49,000
Richardson, Texas	Manufacturing	Leased	45,000
Chicago, Illinois	Manufacturing	Owned	38,400
Jihlava, Czech Republic	Manufacturing	Owned	36,000
Mosta, Malta	Manufacturing	Leased	32,500
Laguna, Philippines	Manufacturing	Leased	22,800
Wheaton, Illinois	Manufacturing	Leased	22,500
Oklahoma City, Oklahoma	Manufacturing/Design Center	Leased	19,800
San Jose, California	Sales and Design	Leased	7,250
Warsaw, Poland	Sales and Distribution	Leased	5,700
Limerick, Ireland	Sales and Distribution	Leased	4,700
Singapore	Sales and Administrative	Leased	3,000
Kiev, Ukraine	Sales and Distribution	Leased	900
Bucharest, Romania	Sales and Distribution	Leased	400
Ljubljana, Slovenia	Sales and Distribution	Leased	400
Power Products Segment:
Shaghai, China	Manufacturing	Leased	60,000
Rolling Meadows, Illinois	Manufacturing	Owned	52,000
Naperville, Illinois	Manufacturing	Leased	30,000
Reynosa, Mexico	Manufacturing	Leased	27,000
San Jose, California	Prototype and Design Center	Leased	7,250
Other Segment:
Palatine, Illinois	Test Laboratory	Owned	27,000
Hunt Valley, Maryland	Test Laboratory	Owned	16,000
Chicago, Illinois	Manufacturing	Owned	10,000

9

Item 3.  Legal Proceedings

As of July 2, 2009, we were not involved in any material legal proceedings or any legal proceedings or material administrative proceedings with governmental authorities pertaining to the discharge of materials into the environment or otherwise.

Executive Officers of the Registrant

Name	Age	Offices and Positions Held and Length of Service as Officer
Donald W. Duda	54	Chief Executive Officer of the Company since May 1, 2004. President and Director of the Company since February 2001. Prior thereto Mr. Duda was Vice President-Interconnect Group since March 2000. Prior thereto Mr. Duda was with Amphenol Corporation through November 1998 as General Manager of its Fiber Optic Products Division since 1988.
Douglas A. Koman	59	Chief Financial Officer of the Company since May 1, 2004. Vice President, Corporate Finance, of the Company since April 2001. Prior thereto Mr. Koman was Assistant Vice President-Financial Analysis since December 2000. Prior thereto Mr. Koman was with Illinois Central Corporation through March 2000 as Controller since November 1997 and Treasurer since July 1991.
Thomas D. Reynolds	46	Senior Vice President, Worldwide Automotive Operations, of the Company since September 14, 2006. Vice President and General Manager, North American Automotive Operations, of the Company since October 2001. Prior thereto Mr. Reynolds was with Donnelly Corporation through October 2001 as Senior Manager of Operations since 1999, and as Director of Transnational Business Unit from 1995 to 1999.
Timothy R. Glandon	45	Vice President and General Manager, North American Automotive, of the Company since September 14, 2006. Prior thereto Mr. Glandon was General Manager of Automotive Safety Technologies since August 1, 2001. Prior thereto Mr. Glandon was Vice President and General Manager with American Components, Inc. from 1996 to 2001.
Theodore D. Kill	58	Vice President, Worldwide Automotive Sales, of the Company since August 2006. Prior thereto Mr. Kill was a principal with Kill and Associates from 2003 to 2006. Prior thereto Mr. Kill was a principal with Kill and Bolton Associates from 1995 to 2003.
Ronald L.G. Tsoumas	48	Controller and Treasurer of the Company since September 2007. Prior thereto Mr. Tsoumas was Assistant Controller of the Company since July 1998.

All executive officers are elected by the Board of Directors and serve a term of one year or until their successors are duly elected and qualified.

10

PART II

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The following is a tabulation of high and low sales prices for the periods indicated as reported by the New York Stock Exchange.

					Dividends
	Sales Price Per Share				Paid
	High		Low		Per Share
Fiscal Year ended May 2, 2009
First Quarter	$	12.51	$	9.50	$	0.05
Second Quarter	13.65		6.11		0.07
Third Quarter	9.66		4.45		0.07
Fourth Quarter	6.43		2.59		0.07
Fiscal Year ended May 3, 2008
First Quarter	$	18.90	$	14.30	$	0.05
Second Quarter	17.04		10.27		0.05
Third Quarter	16.94		10.53		0.05
Fourth Quarter	12.95		9.89		0.05

On June 23, 2009, the Board declared a dividend of $0.07 per share of common stock, payable on July 31, 2009, to holders of record on July 17, 2009.

As of July 1, 2009, the number of record holders of our common stock was 636.

Equity Compensation Plan Information

The following table provides information about shares of our common stock that may be issued upon exercise of stock options or granting of stock awards under all of the existing equity compensation plans as of May 2, 2009.

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column)
Equity compensation plans approved by security holders	910,633	$	7.97	394,718
Equity compensation plans not approved by security holders	—	—		—
Total	910,633	$	7.97	394,718

11

Purchase of Equity Securities by the Company and Affiliated Purchasers

				Total Number of	Maximum Number of
	Total			Shares Purchased as	Shares that
	Number of	Average		Part of Publicly	May Yet Be Purchased
	Shares	Price Paid		Announced Plans	Under the Plans or
Period	Purchased (1)	Per Share		or Programs (2)	Programs (2)
February 1, 2009 through February 28, 2009	297	$	4.62	—	2,360,120
March 1, 2009 through April 4, 2009	29,600	$	3.88	29,600	2,330,520
April 5, 2009 through May 2, 2009	14,252	$	6.20	—	2,330,520
	44,149	$	4.63	29,600	2,330,520

(1)  The amount includes the repurchase and cancellation of shares of common stock redeemed by the Company for the payment of minimum withholding taxes on the value of restricted stock awards vesting during the period.

(2)  On September 18, 2008, the Board of Directors adopted a plan to repurchase up to 3 million shares of its common stock.  The plan will expire on May 1, 2010.

12

Item 6.  Selected Financial Data

The following selected financial data should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the Company’s Consolidated Financial Statements and related notes included elsewhere in this report.  The consolidated statement of operations data for fiscal 2009, 2008 and 2007, and the consolidated balance sheet data as of May 2, 2009 and May 3, 2008, are derived from, and are qualified by reference to, the Company’s audited Consolidated Financial Statements included elsewhere in this report.  The consolidated statement of operations data for fiscal 2006 and 2005, and the consolidated balance sheet data as of April 28, 2007, April 29, 2006 and April 30, 2005, are derived from audited consolidated financial statements not included in this report.  Due to the timing of our fiscal calendar, fiscal 2008 represents 53 weeks of results.  Fiscal 2009, 2007, 2006 and 2005 represent 52 weeks of results.

	Fiscal Year Ended
	May 2,			May 3,			April 28,			April 29,			April 30,
	2009			2008 (53 wks)			2007			2006			2005
	(In Millions, Except Percentages and Per Share Amounts)
Income Statement Data:
Net sales	$	425.6		$	551.1		$	448.4		$	421.6		$	392.7
Income/(loss) before income taxes and cumulative affect of accounting change	(110.8		)(1)	49.5		(2)	35.8		(3)	32.4		(4)	38.4		(5)
Income taxes	1.7		(1)	9.7		(2)	9.8		(3)	15.3		(4)	12.9		(5)
Cumulative effect of accounting change	—			—			0.1			—			—
Net income/(loss)	(112.5		)(1)	39.8		(2)	26.1		(3)	17.0		(4)	25.5		(5)
Per Common Share:
Basic net income/(loss)	(3.05		)(1)	1.07		(2)	0.72		(3)	0.47		(4)	0.71		(5)
Diluted net income/(loss)	(3.05		)(1)	1.06		(2)	0.71		(3)	0.47		(4)	0.71		(5)
Dividends	0.26			0.20			0.20			0.20			0.20
Book Value	6.28			9.93			8.69			7.82			7.62
Long-term Debt	—			—			—			—			—
Retained Earnings	143.6			265.8			233.7			215.1			205.5
Fixed Assets (net)	69.9			90.3			86.9			90.5			92.6
Total Assets	305.3			470.2			411.7			374.6			356.7
Return on Average Equity	-37.2		%(1)	11.4		%(2)	8.5		%(3)	5.9		%(4)	9.6		%(5)
Pre-tax Income/(loss) as a Percentage of Sales	-26.0		%(1)	9.0		%(2)	8.0		%(3)	7.7		%(4)	9.8		%(5)
Net Income/(loss) as a Percentage of Sales	-26.4		%(1)	7.2		%(2)	5.8		%(3)	4.0		%(4)	6.5		%(5)

(1) Fiscal 2009 results include a pre-tax charge of $94.4 million relating to goodwill and other asset impairments.  In addition, fiscal 2009 results include a pre-tax charge of $25.3 million relating to restructuring activities.  The income tax expense includes a $28.0 million valuation charge related to the uncertainty of the future realization of our deferred tax assets.

(2) Fiscal 2008 results include a pre-tax charge of $5.2 million relating to a restructuring of our U.S.-based automotive operations and the decision to discontinue producing certain legacy products in the Interconnect segment.

(3) Fiscal 2007 results include a pre-tax and an after-tax restructuring charge of $2.0 million related to the closing of our Scotland automotive parts manufacturing plant and transfer of production lines from that facility to our automotive parts manufacturing facility in Malta.

(4) Fiscal 2006 results include $4.5 million of income tax expense related to the repatriation of $38.1 million of foreign earnings for which income taxes were not previously provided, and an after-tax charge of $1.5 million ($2.3 million pre-tax) related to receivables deemed to be impaired due to the Chapter 11 bankruptcy filing by Delphi.

(5) Fiscal 2005 results include $1.0 million of tax-free income from life insurance proceeds.

13

Item 7.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a global manufacturer of component and subsystem devices with manufacturing, design and testing facilities in China, Czech Republic, Germany, Malta, Mexico, the Philippines, Singapore, the United Kingdom and the United States.  We are a global designer and manufacturer of electro-mechanical devices.  We design, manufacture and market devices employing electrical, radio remote control, electronic, wireless, sensing and optical technologies.  Our business is managed on a segment basis, with those segments being Automotive, Interconnect, Power Products and Other.   For more information regarding the business and products of these segments, see “Item 1. Business.”

Our components are found in the primary end markets of the aerospace, appliance, automotive, consumer and industrial equipment markets, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), rail and other transportation industries.  Recent trends in the industries that we serve include:

·Automotive industry sales volume in the United States and European markets declined suddenly and substantially in fiscal 2009 and continue at historically low levels into fiscal 2010;

·The deteriorating condition of certain of our customers and the uncertainty as they undergo restructuring initiatives, including in some cases, reorganization under bankruptcy laws;

·Decline in demand for new houses and the over-supply of new and existing houses;

·Demand for construction and material handling equipment is cyclical and has been impacted by the weakness of the economy, availability of credit and higher interest rates;

Our business has been and will likely continue to be materially adversely affected by the current economic environment, particularly as it impacts the automotive industry.  The recent disruptions in global financial and credit markets have significantly impacted global economic activity and led to an economic recession.  As a result of these disruptions, our customers and markets have been adversely affected.  We have recently experienced a significant drop in sales in all of our reporting segments.  If we experience reduced demand because of these disruptions in the macroeconomic environment or other factors, our business, results of operation and financial condition could be materially adversely affected.  If we are unable to successfully anticipate changing economic and financial conditions, we may be unable to effectively plan for and respond to these changes and our business could be adversely affected.

We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and we also review our goodwill annually in accordance with SFAS No. 142, “Goodwill and Other Intangibles”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A severe decline in expectations, future cash flows, a change in strategic direction or our market capitalization remaining below our net book value for a significant period of time could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.  Based on events and general business declines, we performed “step one” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that have goodwill during fiscal 2009.  Based on this test, we determined that the fair value was less than the carrying value of the net assets for certain reporting units.  We completed  “step two” of the goodwill test and concluded that goodwill was impaired.  Therefore, during fiscal 2009, we recorded a goodwill impairment charge of $25.8 million in our Automotive segment, $30.8 million in our Interconnect segment, $5.4 million in our Power Products segment and $1.2 million in our Other segment for a total of $63.2 million related to these assets.

Also, in accordance with FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, we record impairment losses on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. During fiscal 2009, based on our future estimates of the

14

Overview - Continued

undiscounted cash flows, it was determined that certain identifiable assets of our TouchSensor and Hetronic businesses in the Interconnect segment, the Automotive Safety Technologies business in our Automotive segment and Magna-Lastic Devices, Inc. from our Other segment were impaired.  Therefore, we recorded an impairment charge of $26.2 million in the Interconnect segment, $4.6 million in the Automotive segment and $0.4 million in the Other segment for a total of $31.2 million for these assets.

On September 30, 2008, we acquired certain assets of Hetronic LLC (Hetronic) for $53.6 million in cash.  We also incurred $2.4 million in transaction costs related to the purchase.  Hetronic is a global leader in industrial safety radio remote controls with locations in the U.S., Malta, the Philippines and Germany.  Hetronic is represented in 45 countries by direct sales associates, licensed partners, distributors and representatives.  Hetronic provides application specific and standard controls to many different industries, such as material handling, transportation, mining, military, agriculture and construction.

On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and a decision to discontinue producing certain legacy products in the Interconnect segment.  The Automotive and Interconnect restructuring is expected to be completed during fiscal 2010.  We record the expense in the restructuring section of our Consolidated Statement of Operations. On January 24, 2008, the total pre-tax charges were estimated between $19.0 million and $25.0 million.  As of May 2, 2009, we have recorded $23.2 million of the charges.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 between $0.5 million and $1.5 million, of which $0.5 million will relate to the termination of approximately 225 employees and the cost of one-time employee benefits, retention, COBRA and outplacement services.  We continue to perform periodic impairment testing, if indicators exist, and will record any charges incurred as per SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, (“SFAS No. 144”) in the period when impairment is incurred.

On March 12, 2009, we announced several additional restructuring actions to further reduce our exposure to the North American automotive industry and to consolidate manufacturing facilities in lower cost regions to reduce costs.  After these actions our principal manufacturing operations will be in Mexico, Malta and China.  In addition, we decided to transfer certain new GM business to other suppliers.  This business was scheduled to be produced in our Shanghai, China automotive facility.

All Ford Motor Company production at Methode’s Reynosa, Mexico, facility will be moved to another supplier.  TouchSensor manufacturing currently in west suburban Chicago, Illinois, will be moved to Monterrey, Mexico.  Additionally, our operations in Shanghai, China, will be consolidated to two facilities from three. The addition of a plant in Morocco has been put on indefinite hold.

In total, this additional restructuring will affect approximately 850 employees worldwide. We estimate that we will record a pre-tax charge between $16.0 million and $25.0 million, during fiscal years 2009 and 2010. The cash portion of this charge is estimated between $7.0 million and $8.0 million.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 between $8.7 million and $17.7 million.

Business Outlook

We are very cautious about fiscal 2010, expecting that it will be another challenging year. The financial sector crisis and stagnant global economic conditions have increased uncertainty in the markets in every geographic region we serve. We expect the unprecedented current global economic environment to continue to affect near-term results and to create difficult conditions. Looking forward, visibility is low and forecasting is very challenging.  Sales of Automotive segment products are expected to decline, as our forecasted sales from North American and European automotive OEMs are lower. Additionally, we took actions in fiscal 2008 and 2009 to exit certain unprofitable or marginally profitable North American automotive business. Sales of sensor pads for passive occupant-detection systems are expected to decline due to lower North American automotive volumes, and as the current systems are replaced, with new technology.  We expect sales declines in the Interconnect and Power Products segments as well as demand for information processing and networking equipment, construction, voice and data communications systems, consumer electronics, appliance, aerospace vehicles and industrial equipment to be stagnant.  In our Interconnect segment, sales from our Hetronic acquisition will be offset by sales lost due to our decision to exit certain unprofitable component products in fiscal 2009.  While we have taken steps to restructure our businesses, operating margin improvement will not be realized until economic conditions begin to improve.

Results may differ materially from what is expressed or forecasted.  See “ Item 1A Risk Factors” herein.

15

Results of Operations

Results of Operations for the Fiscal Year Ended May 2, 2009 (52 weeks) as Compared to the Fiscal Year Ended May 3, 2008 (53 weeks)

Consolidated Results

Below is a table summarizing results for the years ended:

(in millions)

	May 2,			May 3,
	2009			2008			Net Change			Net Change
Net sales	$	425.6		$	551.1		$	(125.5	)	-22.8	%
Other income	3.2			1.9			1.3			68.5	%
	428.8			553.0			(124.2		)	-22.5	%
Cost of products sold	356.4			428.4			(72.0		)	-16.8	%
Gross margins (including other income)	72.4			124.6			(52.2		)	-41.9	%
Restructuring	25.3			5.2			20.1			386.5	%
Impairment of goodwill and other assets	94.4			1.5			92.9			6193.3	%
Selling and administrative expenses	57.5			61.5			(4.0		)	-6.5	%
Amortization of intangibles	6.9			6.0			0.9			15.0	%
Interest income, net	1.4			2.3			(0.9		)	-39.9	%
Other, net - expense	(0.5		)	(3.2		)	2.7			-85.0	%
Income taxes - expense	1.7			9.7			(8.0		)	-82.7	%
Net income/(loss)	$	(112.5	)	$	39.8		$	(152.3	)	-382.6	%

	May 2,		May 3,
Percent of sales:	2009		2008
Net sales	100.0	%	100.0	%
Other income	0.8	%	0.3	%
Cost of products sold	83.7	%	77.7	%
Gross margins (including other income)	17.0	%	22.6	%
Restructuring	5.9	%	0.9	%
Impairment of goodwill and other assets	22.2	%	0.3	%
Selling and administrative expenses	13.5	%	11.2	%
Amortization of intangibles	1.6	%	1.1	%
Interest income, net	0.3	%	0.4	%
Other, net - expense	-0.1	%	-0.6	%
Income taxes - expense	0.4	%	1.8	%
Net income/(loss)	-26.4	%	7.2	%

Net Sales.  Consolidated net sales decreased $125.5 million, or 22.8%, to $425.6 million for the fiscal year ended May 2, 2009 from $551.1 million for the fiscal year ended May 3, 2008.  The Automotive segment net sales declined $118.5 million or 32.7% to $243.6 million for fiscal 2009 from $362.1 million for fiscal 2008.  The decline is attributable to the softening of the global economic environment, especially the effect on the automotive industry.  The Automotive segment net sales were also negatively impacted by planned lower Chrysler sales volumes of $14.8 million in fiscal 2009, compared to $59.2 million in fiscal 2008.  In July 2007, we decided to exit production for certain Chrysler products at the expiration of our manufacturing commitment.  The transfer of the Chrysler product was completed during the second quarter of fiscal 2009.  Excluding Chrysler, the North American Automotive segment net sales declined 18.5% in fiscal 2009, as compared to fiscal 2008.  The Interconnect segment net sales

16

Consolidated Results - Continued

decreased $5.3 million, or 3.9% to $131.0 million in fiscal 2009 as compared to $136.3 million in fiscal 2008.  The Interconnect segment net sales were favorably impacted by the Hetronic acquisition, which was purchased on September 30, 2008, offset by lower sales in the other Interconnect businesses.  The Power Products segment net sales decreased $3.1 million to $42.7 million in fiscal 2009, compared to $45.8 million in fiscal 2008.  Translation of net sales from our foreign operations increased reported net sales by $1.6 million or 0.4% due to currency rate fluctuations.

Other Income.  Other income increased $1.3 million to $3.2 million for the fiscal year ended May 2, 2009 from $1.9 million for the fiscal year ended May 3, 2008.  Other income consisted primarily of earnings from engineering design fees and royalties.

Cost of Products Sold.  Consolidated cost of products sold decreased $72.0 million, or 16.8%, to $356.4 million for the fiscal year ended May 2, 2009 from $428.4 million for the fiscal year ended May 3, 2008.  The decrease is due to the lower sales volumes.  Consolidated cost of products sold as a percentage of sales was 83.7% for fiscal 2009 and 77.7% for fiscal 2008.  This increase relates to manufacturing inefficiencies experienced in the third and fourth quarters of fiscal 2009 due to a significant, unexpected drop in sales, in addition to the drop in the planned sales to Chrysler.  A large portion of the drop in sales is due to the North American automotive manufacturers extending plant shutdowns that occurred during the second half of fiscal 2009.

Gross Margins (including other income).  Consolidated gross margins (including other income) decreased $52.2 million, or 41.9%, to $72.4 million for the fiscal year ended May 2, 2009 as compared to $124.6 million for the fiscal year ended May 3, 2008.  Gross margins as a percentage of net sales were 17.0% for fiscal 2009 and 22.6% for fiscal 2008.  Gross margins were impacted negatively due to manufacturing inefficiencies during the third and fourth quarters of fiscal 2009 related to significantly lower sales volumes.  In addition, gross margins were impacted due to unfavorable product mix and production costs for the Power Products segment.

Restructuring.  On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and the decision to discontinue producing certain legacy products in the Interconnect segment.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $18.0 million, which consisted of  $6.1 million for employee severance, $10.8 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment, $0.2 million for inventory write-downs and $0.9 million relating to professional fees.  During fiscal 2008, we recorded restructuring charges of $5.2 million, which consisted of $3.4 million for employee severance, $1.3 million for asset write-downs and $0.5 million for professional fees.

On March 12, 2009, we announced several additional restructuring actions to further reduce our exposure to the North American automotive industry and to consolidate manufacturing facilities in lower cost regions to reduce costs.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $7.3 million, which consisted of $0.1 million for employee severance, $1.4 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment, $5.4 million for impairment of customer funded tooling and $0.1 million in forfeited security deposits related to the cancellation of the new GM business and $0.3 million relating to professional fees.

Impairment of Goodwill and Other Assets.  We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and we also review our goodwill annually in accordance with SFAS No. 142, “Goodwill and Other Intangibles”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A severe decline in expectations, future cash flows, a change in strategic direction or our market capitalization remaining below our net book value for a significant period of time could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.  Based on events and general business declines, we performed “step one” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that had goodwill during fiscal 2009.  Based on this test, we determined that the fair value was less than the carrying value of the net assets for certain reporting units.  We completed  “step two” of the goodwill test and concluded that goodwill was impaired.  During fiscal 2009, we recorded a goodwill impairment charge of $25.8 million in our Automotive segment, $30.8 million in our Interconnect segment, $5.4 million in our Power Products segment and $1.2 million in our Other segment for a total of $63.2 million related to these assets.

17

Consolidated Results - Continued

Also, in accordance with Financial Accounting Standards Board, (“FASB”) Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, we record impairment losses on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. During fiscal 2009, based on our future estimates of the undiscounted cash flows, it was determined that certain identifiable assets of our TouchSensor and Hetronic businesses in the Interconnect segment, the Automotive Safety Technologies business from our Automotive segment and Magna-Lastic Devices, Inc. from our Other segment were impaired.  Therefore, we recorded an impairment charge of $26.2 million in the Interconnect segment, $4.6 million in the Automotive segment and $0.4 million in the Other segment for a total of $31.2 million for these assets.

In fiscal 2008, we recorded a $1.5 million impairment of assets relating to a $0.7 million write-down of machinery and equipment as a result of lower anticipated revenues over the life of the related project and $0.8 million for the impairment of a particular patent (classified as an intangible asset) where the underlying technology was deemed to be commercially impractical.

Selling and Administrative Expenses.  Selling and administrative expenses decreased $4.0 million, or 6.5%, to $57.5 million for the fiscal year ended May 2, 2009 compared to $61.5 million for the fiscal year ended May 3, 2008.  Selling and administrative expenses were favorably impacted by an adjustment of pre-tax compensation expense associated with the performance-based restricted stock awards granted in fiscal 2007, 2008 and 2009.  The adjustment was made because we determined that these awards were unlikely to vest based on the Company’s performance under the revenue growth and return on invested capital targets.  The pre-tax compensation expense for fiscal 2009 was a reversal of expense of $0.6 million, which relates to compensation expense reversed from previous years.  The pre-tax compensation expense for fiscal 2008 was $3.3 million.  Partially offsetting the reversal of pre-tax compensation expense, selling and administrative expenses were impacted by higher amortization expense relating to the Hetronic, Value Engineered Products, Inc. and TouchSensor acquisitions.  In addition, management positions were filled for our testing facilities in fiscal 2009, which were vacant in fiscal 2008.  Selling and administrative expenses as a percentage of net sales increased to 13.5% in fiscal 2009 from 11.2% in fiscal 2008.

Amortization of Intangibles.  Amortization of intangibles increased $0.9 million, or 15.0%, to $6.9 million for the fiscal year ended May 2, 2009 compared to $6.0 million for the fiscal year ended May 3, 2008.  The increase is due to the amortization expenses for the Hetronic acquisition.

Interest Income, Net.  Net interest income was $1.4 million for the fiscal year ended May 2, 2009 and $2.3 million for the fiscal year ended May 3, 2008.  The average cash balance was $81.4 million during fiscal 2009 as compared to $83.0 million during fiscal 2008.  The average interest rate earned in fiscal 2009 was 2.22% compared to 3.07% in fiscal 2008.  The average interest rate earned includes both taxable interest and tax-exempt municipal interest.  Interest expense was $0.4 million for fiscal 2009 compared to $0.2 million for fiscal 2008.

Other, Net.  Other, net was an expense of $0.5 million for the fiscal year ended May 2, 2009, compared to an expense of $3.2 million for the fiscal year ended May 3, 2008.  The decrease is primarily due to the strengthening of the U.S. dollar versus the Euro and Czech koruna during fiscal 2009 as compared to fiscal 2008.  The functional currencies of our international operations are the British pound, Chinese yuan, Czech koruna, Euro, Mexican peso and Singapore dollar.  Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S. dollars and Euros, creating exchange rate sensitivities.

At May 2, 2009, approximately $3.5 million was invested in an enhanced cash fund sold as an alternative to traditional money-market funds. We have historically invested a portion of our on hand cash balances in this fund. These investments are subject to credit, liquidity, market and interest rate risk. Based on the information available to us, we have estimated the fair value of this fund at $0.72 per unit as of May 2, 2009. For fiscal 2009, we recorded a loss of $1.2 million, of which $0.6 million was realized on partial redemptions of  $8.8 million, and $0.6 million was unrealized.  See the Financial Condition, Liquidity and Capital Resources section for more information.

Income Taxes.  The effective income tax rate was a net provision of 1.5% in fiscal 2009 compared with a provision of 19.7% in fiscal 2008.  The income tax rate in fiscal 2009 was a benefit due to the impairment of goodwill and intangible assets, restructuring charges and slowing of business in our U.S.-based businesses, causing a loss before income taxes.  Offsetting the benefit recorded in fiscal 2009, a valuation allowance against our deferred

18

Consolidated Results - Continued

tax assets of $28.0 was recorded in accordance with FASB No. 109 “Accounting for Income Taxes”.  This was recorded due to the uncertainty of the future utilization of our deferred tax assets.  See Note 7 for additional information.  The effective tax rates for both fiscal 2009 and 2008 reflect utilization of foreign investment tax credits and the effect of lower tax rates on income of the Company’s foreign earnings and a higher percentage of earnings at those foreign operations.

Net Income/(Loss).  Net income decreased $152.3 million to a loss of $112.5 million for the fiscal year ended May 2, 2009 as compared to net income of $39.8 million for the fiscal year ended May 3, 2008 due to the impairment of goodwill and intangible assets, lower sales volumes, the income tax valuation allowance recorded against our deferred tax assets, increased restructuring expenses, offset by favorable other income and lower selling and administrative expenses.

Operating Segments

Automotive Segment Results

Below is a table summarizing results for the years ended:

(in millions)

	May 2,			May 3,
	2009			2008			Net Change			Net Change
Net sales	$	243.6		$	362.1		$	(118.5	)	-32.7	%
Other income	2.5			0.9			1.6			177.8	%
	246.1			363.0			(116.9		)	-32.2	%
Cost of products sold	206.0			282.1			(76.1		)	-27.0	%
Gross margins (including other income)	40.1			80.9			(40.8		)	-50.4	%
Restructuring	19.3			4.4			14.9			338.6	%
Impairment of goodwill and other assets	30.5			1.5			29.0			1933.3	%
Selling and administrative expenses	14.6			18.0			(3.4		)	-18.9	%
Other, net - income/(expense)	0.3			(1.7		)	2.0			-117.6	%
Income/(loss) before income taxes	$	(24.0	)	$	55.3		$	(79.3	)	-143.4	%

	May 2,		May 3,
Percent of sales:	2009		2008
Net sales	100.0	%	100.0	%
Other income	1.0	%	0.2	%
Cost of products sold	84.6	%	77.9	%
Gross margins (including other income)	16.5	%	22.3	%
Restructuring	7.9	%	1.2	%
Impairment of goodwill and other assets	12.5	%	0.4	%
Selling and administrative expenses	6.0	%	5.0	%
Other, net	0.1	%	-0.5	%
Income/(loss) before income taxes	-9.9	%	15.3	%

Net Sales.  Automotive segment net sales decreased $118.5 million, or 32.7%, to $243.6 million for the fiscal year ended May 2, 2009 from $362.1 million for the fiscal year ended May 3, 2008.  The decline is attributable to the softening of the global economic environment, especially the effect on the North American automotive industry.  Net sales have declined in fiscal 2009 as compared to fiscal 2008 by 34.2% in North America, 30.6% in Europe and 30.7% in Asia.  A large portion of the drop in sales is due to the North American automotive

19

Automotive Segment Results - Continued

manufacturers extending plant shutdowns that occurred during the third and fourth quarters of fiscal 2009.  The Automotive segment net sales were also negatively impacted by anticipated lower Chrysler sales volumes of $14.8 million in fiscal 2009, compared to $59.2 million in fiscal 2008.  Excluding Chrysler, the North American Automotive segment net sales declined 18.5% in fiscal 2009, as compared to fiscal 2008.  Translation of net sales from our foreign operations in the fiscal year ended May 2, 2009 increased reported net sales by $1.3 million, or 0.5%, due to currency rate fluctuations.

Other Income.  Other income increased $1.6 million, or 177.8%, to $2.5 million for the fiscal year ended May 2, 2009 from $0.9 million for the fiscal year ended May 3, 2008.  Other income consisted primarily of earnings from engineering design fees and royalties.

Cost of Products Sold.  Automotive segment cost of products sold decreased $76.1 million to $206.0 million for the fiscal year ended May 2, 2009 from $282.1 million for the fiscal year ended May 3, 2008.  The decrease relates to lower sales volumes.  Automotive segment costs of products sold as a percentage of sales increased to 84.6% for fiscal 2009 from 77.9% for fiscal 2008.  This increase relates to manufacturing inefficiencies experienced in the third and fourth quarters of fiscal 2009 due to a significant, unexpected drop in sales, in addition to lower planned sales to Chrysler.  A large portion of the drop in sales is due to the North American automotive manufacturers extending plant shutdowns that occurred during the second half of fiscal 2009.

Gross Margins (including other income).  Automotive segment gross margins (including other income) decreased $40.8 million, or 50.4%, to $40.1 million for the fiscal year ended May 2, 2009 as compared to $80.9 million for the fiscal year ended May 3, 2008.  Gross margins as a percentage of net sales decreased to 16.5% for fiscal 2009 from 22.3% for fiscal 2008.  Gross margins were impacted negatively due to manufacturing inefficiencies during the second half of fiscal 2009 due to significantly lower sales volumes.  In addition, gross margins were impacted by the planned lower Chrysler sales volumes in fiscal 2009.

Restructuring.   On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations.  During fiscal 2009, we recorded a restructuring charge of $12.8 million, which consisted of $4.7 million for employee severance, $7.4 million for impairment and accelerated depreciation for buildings, building improvements and machinery and equipment and  $0.7 million for professional fees.  We expect the restructuring to be complete during fiscal 2010.

In fiscal 2008, we recorded a restructuring charge of $4.4 million, $2.7 million relating to employee severance, $1.3 million relating to impairment and accelerated depreciation for assets and $0.4 million for professional fees relating to the January 2008 restructuring.

On March 12, 2009, we announced several additional restructuring actions to further reduce our exposure to the North American automotive industry and to consolidate manufacturing facilities in lower cost regions to reduce costs.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $6.5 million, which consisted of  $1.0 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment and $5.4 million for customer funded tooling and $0.1 million in forfeited security deposits related to the cancellation of the new GM business.

Impairment of Goodwill and Other Assets.  Based on events and general business declines, we performed “step one” and “step two” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that had goodwill during fiscal 2009.  Based on these tests, we concluded that goodwill was impaired.  We recorded a goodwill impairment charge of $25.8 million in our Automotive segment related to these assets.  See Note 4 for more information.

Also, in accordance with FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, during the fourth quarter of fiscal 2009, based on our future estimates of the undiscounted cash flows, it was determined that certain identifiable assets were impaired.  We recorded an impairment charge of $4.7million for these assets.  See Note 4 for more information.

In fiscal 2008, we recorded a $1.5 million impairment of assets relating to a $0.7 million write-down of machinery and equipment as a result of lower anticipated revenues over the life of the related project and $0.8

20

Automotive Segment Results - Continued

million for the impairment of a particular patent (classified as an intangible asset) where the underlying technology was deemed to be commercially impractical.

Selling and Administrative Expenses.  Selling and administrative expenses decreased $3.4 million, or 18.9%, to $14.6 million for the fiscal year ended May 2, 2009 compared to $18.0 million for the fiscal year ended May 3, 2008.  The decrease is due to lower commission expense as a result of lower sales during fiscal 2009.  Selling and administrative expenses as a percentage of net sales increased to 6.0% in fiscal 2009 from 5.0% in fiscal 2008.

Other, Net.  Other, net was income of $0.3 million for the fiscal year ended May 2, 2009, compared to an expense of $1.7 million for the fiscal year ended May 3, 2008.  The decrease is primarily due to the strengthening of the U.S. dollar versus the Euro during fiscal 2009 as compared to fiscal 2008.  The functional currencies of our international operations are the British pound, Chinese yuan, Euro and Mexican peso.  Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S. dollars and Euros, creating exchange rate sensitivities.

Income/(Loss) Before Income Taxes.  Automotive segment income/(loss) before income taxes decreased $79.3 million, or 143.4%, to a loss of $24.0 million for the fiscal year ended May 2, 2009 compared to income of $55.3 million for the fiscal year ended May 3, 2008.  The decrease occurred due to goodwill and intangible asset write-offs, manufacturing inefficiencies due to significantly lower sales volumes during the third and fourth quarters of fiscal 2009, increased restructuring expenses, partially offset by lower selling and administrative expenses.

21

Interconnect Segment Results

Below is a table summarizing results for the years ended:

(in millions)

	May 2,			May 3,
	2009			2008			Net Change			Net Change
Net sales	$	131.0		$	136.3		$	(5.3	)	-3.9	%
Other income	0.2			0.3			(0.1		)	-33.3	%
	131.2			136.6			(5.4		)	-4.0	%
Cost of products sold	99.7			104.7			(5.0		)	-4.8	%
Gross margins (including other income)	31.5			31.9			(0.4		)	-1.3	%
Restructuring	5.5			0.6			4.9			816.7	%
Impairment of goodwill and other assets	56.9			—			56.9			—
Selling and administrative expenses	31.0			25.9			5.1			19.7	%
Interest income	0.5			0.4			0.1			25.0	%
Other, net - income/(expense)	0.7			(1.2		)	1.9			-158.3	%
Income/(loss) before income taxes	$	(60.7	)	$	4.6		$	(65.3	)	-1419.6	%

	May 2,		May 3,
Percent of sales:	2009		2008
Net sales	100.0	%	100.0	%
Other income	0.2	%	0.2	%
Cost of products sold	76.1	%	76.8	%
Gross margins (including other income)	24.0	%	23.4	%
Restructuring	4.2	%	0.4	%
Impairment of goodwill and other assets	43.4	%	0.0	%
Selling and administrative expenses	23.7	%	19.0	%
Interest income	0.4	%	0.3	%
Other, net	0.5	%	-0.9	%
Income/(loss) before income taxes	-46.3	%	3.4	%

Net Sales.  Interconnect segment net sales decreased $5.3 million, or 3.9%, to $131.0 million for the fiscal year ended May 2, 2009 from $136.3 million for the fiscal year ended May 3, 2008.  Net sales were favorably impacted by the Hetronic acquisition on September 30, 2008.  Excluding Hetronic, North American net sales decreased 14.7%, Europe decreased 22.8% and Asia decreased 7.8% in fiscal 2009 as compared to fiscal 2008.  The net sales decline was primarily due to the general economic slowdown.  Translation of net sales from our foreign operations in the fiscal year ended May 2, 2009 increased reported net sales by $0.3 million, or 0.2%, due to currency rate fluctuations.

Other Income.  Other income was $0.2 million for the fiscal year ended May 2, 2009 and $0.3 million for the fiscal year ended May 3, 2008.  Other income consisted primarily of earnings from engineering design fees and royalties.

Cost of Products Sold.  Interconnect segment cost of products sold decreased $5.0 million to $99.7 million for the fiscal year ended May 2, 2009 compared to $104.7 million for the fiscal year ended May 3, 2008.  The majority of the decrease is due to lower net sales.  Interconnect segment cost of products sold as a percentage of net sales decreased to 76.1% in fiscal 2009 compared to 76.8% in fiscal 2008.  The decrease in cost of products sold as a percentage of net sales relates primarily to product mix related to the Hetronic acquisition and the impact of the Interconnect restructuring.

22

Interconnect Segment Results - Continued

Gross Margins (including other income)  Interconnect segment gross margins (including other income) decreased $0.4 million, or 1.3%, to $31.5 million for the fiscal year ended May 2, 2009 as compared to $31.9 million for the fiscal year ended May 3, 2008.  Gross margins as a percentage of net sales increased to 24.0% in fiscal 2009 from 23.4% in fiscal 2008.  The increase in gross margins as a percentage of net sales relates primarily to product mix related to the Hetronic acquisition and the impact of the Interconnect restructuring.

Restructuring.  On January 24, 2008, we announced our decision to discontinue producing certain legacy products in the Interconnect segment.  During fiscal 2009, we recorded a restructuring charge of $5.2 million, which consisted of $1.4 million for employee severance, $3.4 million for impairment and accelerated depreciation for buildings, building improvements and machinery and equipment, $0.2 million for inventory write-downs and $0.2 million relating to professional fees.  We expect the Interconnect restructuring to be complete in fiscal 2010.

In fiscal 2008, we recorded a restructuring charge of $0.7 million, $0.6 million for employee severance and $0.1 million for professional fees relating to the January 2008 restructuring.

On March 12, 2009, we announced several additional restructuring actions to consolidate manufacturing facilities in lower cost regions to reduce costs.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $0.3 million, which consisted of  $0.1 million for employee severance and $0.2 million relating to professional fees.

Impairment of Goodwill and Intangible Assets.  Based on events and general business declines, we performed “step one” and “step two” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that had goodwill during fiscal 2009.  Based on these tests, we concluded that goodwill was impaired.  We recorded a goodwill impairment charge of $30.8 million in our Interconnect segment related to these assets.  See Note 4 for more information.

Also, in accordance with FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, during the fourth quarter of fiscal 2009, based on our future estimates of the undiscounted cash flows, it was determined that certain identifiable assets were impaired.  We recorded an impairment charge of $26.1 million for these assets.  See Note 4 for more information.

Selling and Administrative Expenses.  Selling and administrative expenses increased $5.1 million, or 19.7%, to $31.0 million for the fiscal year ended May 2, 2009 compared to $25.9 million for the fiscal year ended May 3, 2008.  Selling and administrative expenses are higher due to the Hetronic acquisition, higher amortization expense, slightly offset by lower commission expense due to lower sales in fiscal 2009 as compared to fiscal 2008.  Selling and administrative expenses as a percentage of net sales increased to 23.7% in fiscal 2009 from 19.0% in fiscal 2008.

Interest Income, Net.  Net interest income was $0.5 million for the fiscal year ended May 2, 2009, compared to $0.4 million for the fiscal year ended May 3, 2008.

Other, Net.  Other, net was income of $0.7 million for the fiscal year ended May 2, 2009, compared to an expense of $1.2 million for the fiscal year ended May 3, 2008.  The increase is primarily due to the strengthening of the U.S. dollar versus the Euro and Czech koruna during fiscal 2009 as compared to fiscal 2008.  The functional currencies of these operations are the Chinese yuan, Czech koruna, Euro and Singapore dollar.  Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S. dollars and Euros, creating exchange rate sensitivities.

Income/(Loss) Before Income Taxes.  Interconnect segment income/(loss) before income taxes decreased $65.3 million to a loss of $60.7 million for the fiscal year ended May 2, 2009 compared to income of $4.6 million for the fiscal year ended May 3, 2008 due to the goodwill and intangible asset write-off, higher selling and administrative expenses, increased amortization expense and increased restructuring expenses.

23

Power Products Segment Results

Below is a table summarizing results for the years ended:

(in millions)

	May 2,			May 3,
	2009			2008		Net Change			Net Change
Net sales	$	42.7		$	45.8	$	(3.1	)	-6.8	%
Cost of products sold	37.2			33.2		4.0			12.0	%
Gross margins	5.5			12.6		(7.1		)	-56.0	%
Restructuring	0.5			—		0.5			0.0	%
Impairment of goodwill and other assets	5.4			—		5.4			—
Selling and administrative expenses	5.1			4.1		1.0			25.4	%
Other - expense	(0.2		)	—		(0.2		)	0.0	%
Income/(loss) before income taxes	$	(5.7	)	$	8.5	$	(14.2	)	-166.7	%

	May 2,		May 3,
Percent of sales:	2009		2008
Net sales	100.0	%	100.0	%
Cost of products sold	87.1	%	72.5	%
Gross margins (including other income)	13.0	%	27.5	%
Restructuring	1.2	%	0.0	%
Impairment of goodwill and other assets	12.5	%	0.0	%
Selling and administrative expenses	12.0	%	9.0	%
Other - expense	-0.4	%	0.0	%
Income/(loss) before income taxes	-13.3	%	18.6	%

Net Sales.  Power Products segment net sales decreased $3.1 million, or 6.8%, to $42.7 million for the fiscal year ended May 2, 2009 from $45.8 million for the fiscal year ended May 3, 2008.  Net sales were favorably impacted by the VEP acquisition on August 31, 2007.  Excluding VEP, Power Products net sales decreased 10.9% in fiscal 2009 as compared to fiscal 2008.

Cost of Products Sold.  Power Products segment cost of products sold increased $4.0 million, or 12.0%, to $37.2 million for the fiscal year ended May 2, 2009 compared to $33.2 million for the fiscal year ended May 3, 2008.  The Power Products segment cost of products sold as a percentage of sales increased to 87.1% for fiscal 2009 from 72.5% for fiscal 2008.   The increase is partially due to a product that reached end-of-life at the end of fiscal 2008 and had a lower cost as a percentage of sales than the remaining sales during fiscal 2009.  In addition, we experienced an unfavorable product mix in our busbar businesses, as well as, increased shipping and distribution costs.

Gross Margins.  Power Products segment gross margins decreased $7.1 million, or 56.0%, to $5.5 million for the fiscal year ended May 2, 2009 as compared to $12.6 million for the fiscal year ended May 3, 2008. Gross margins as a percentage of net sales decreased to 13.0% in fiscal 2009 from 27.5% in fiscal 2008.  The decrease is due to a product that reached end-of-life at the end of fiscal 2008 and had higher gross margins than the remaining sales and gross margins during fiscal 2009.  We also experienced an unfavorable product mix, and increases in labor costs, as well as, shipping and distribution costs.

24

Power Products Segment Results - Continued

Restructuring.  On March 12, 2009, we announced several additional restructuring actions to consolidate manufacturing facilities in lower cost regions to reduce costs.  During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $0.5 million, which consisted of  $0.4 million for impairment and accelerated depreciation for buildings and improvements and machinery and equipment and $0.1 million relating to professional services.

Impairment of Goodwill and Intangible Assets.  Based on events and general business declines, we performed “step one” and “step two” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that had goodwill during fiscal 2009.  Based on these tests, we concluded that goodwill was impaired.  We recorded a goodwill impairment charge of $5.4 million in our Power Products segment related to these assets.  See Note 4 for more information.

Selling and Administrative Expenses.  Selling and administrative expenses increased $1.0 million, or 25.4%, to $5.1 million for the fiscal year ended May 2, 2009 compared to $4.1 million for the fiscal year ended May 3, 2008.  Selling and administrative expenses increased due to the Tribotek acquisition on March 30, 2008, partially offset by lower commission and bonus expenses in fiscal 2009.  Selling and administrative expenses as a percentage of net sales increased to 12.0% in the fiscal 2009 from 9.0% in fiscal 2008.

Other, Net.  Other, net was an expense of $0.2 million for the fiscal year ended May 2, 2009, compared to no other, net for the fiscal year ended May 3, 2008.

Income/(Loss) Before Income Taxes.  Power Products segment income/(loss) before income taxes decreased by $14.2 million to a loss of $5.7 million for the fiscal year ended May 2, 2009 from a profit of $8.5 million for the fiscal year ended May 3, 2008 due to impairment of goodwill, decreased sales of products which became end-of-life at the end of fiscal year 2008, restructuring costs, higher material, labor and shipping costs, expenses related to Tribotek, partially offset by lower commission and bonus expenses.

Other Segment Results

Below is a table summarizing results for the years ended:

(in millions)

	May 2,			May 3,
	2009			2008			Net Change			Net Change
Net sales	$	8.2		$	6.9		$	1.3		18.8	%
Cost of products sold	8.9			6.7			2.2			32.8	%
Gross margins	(0.7		)	0.2			(0.9		)	0.0	%
Impairment of goodwill and intangible assets	1.6			—			1.6			0.0	%
Selling and administrative expenses	2.8			2.0			0.8			40.0	%
Loss before income taxes	$	(5.1	)	$	(1.8	)	$	(3.3	)	183.3	%

	May 2,		May 3,
Percent of sales:	2009		2008
Net sales	100.0	%	100.0	%
Cost of products sold	108.5	%	97.1	%
Gross margins	-8.5	%	2.9	%
Impairment of goodwill and intangible assets	19.5	%	0.0	%
Selling and administrative expenses	34.1	%	29.0	%
Loss before income taxes	-62.2	%	-26.1	%

25

Other Segment Results - Continued

Net Sales.  The Other segment net sales increased $1.3 million to $8.2 million for the fiscal year ended May 2, 2009 as compared to $6.9 million for the fiscal year ended May 3, 2008.  Net sales from our torque-sensing business increased 60.6% and net sales from our testing facilities increased 11.2% in fiscal 2009 as compared to fiscal 2008.

Cost of Products Sold.  Other segment cost of products sold increased $2.2 million to $8.9 million for the fiscal year ended May 2, 2009 compared to $6.7 million for the fiscal year ended May 3, 2008.  The increase is due to additional support staff in our U.S. testing facilities and a new testing facility that was opened in Shanghai, China during the second quarter of fiscal 2009.

Gross Margins .  The Other segment gross margins was a loss of $0.7 million for fiscal 2009, compared to income $0.2 million for fiscal 2008.  Gross margins declined in fiscal 2009 due to the increase in additional support staff in our U.S. testing facilities and the new testing facility in Shanghai, China.

Impairment of Goodwill and Intangible Assets.  Based on events and general business declines, we performed “step one” and “step two” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that had goodwill during fiscal 2009.  Based on these tests, we concluded that goodwill was impaired.  We recorded a goodwill impairment charge of $1.2 million in our Other segment related to these assets.  See Note 4 for more information.

Also, in accordance with FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, during the fourth quarter of fiscal 2009, based on our future estimates of the undiscounted cash flows, it was determined that certain identifiable assets were impaired.  We recorded an impairment charge of $0.4 million for these assets.  See Note 4 for more information.

Selling and Administrative Expenses.  Selling and administrative expenses increased $0.8 million to $2.8 million for the fiscal year ended May 2, 2009 compared to $2.0 million for the fiscal year ended May 3, 2008.   The increase is primarily due to the new testing facility in Shanghai, China.  Selling and administrative expenses as a percentage of net sales increased to 34.1% in fiscal 2009 from 29.0% in fiscal 2008.

Loss Before Income Taxes.  The Other segment loss before income taxes was $5.1 million for the fiscal year ended May 2, 2009 compared to $1.8 million for the fiscal year ended May 3, 2008.   The increase in the loss before income taxes is due the impairment of goodwill and intangible assets, additional support staff for our North American testing facilities as well as costs associated with the new testing facility in Shanghai, China.

26

Results of Operations for the Fiscal Year Ended May 3, 2008 (53 weeks) as Compared to the Fiscal Year Ended April 28, 2007 (52 weeks)

Consolidated Results

Below is a table summarizing results for the years ended:

(in millions)

	May 3,			April 28,
	2008			2007			Net Change			Net Change
Net sales	$	551.1		$	448.4		$	102.7		22.9	%
Other income	1.9			1.6			0.3			18.8	%
	553.0			450.0			103.0			22.9	%
Cost of products sold	428.4			359.9			68.5			19.0	%
Gross margins (including other income)	124.6			90.1			34.5			38.3	%
Restructuring	5.2			2.0			3.2			160.0	%
Selling and administrative expenses	61.5			50.2			11.3			22.5	%
Amortization of intangibles	6.0			4.7			1.3			27.7	%
Impairment of assets	1.5			0.4			1.1			290.5	%
Interest income, net	2.3			3.4			(1.1		)	-32.4	%
Other, net	(3.2		)	(0.4		)	(2.8		)	700.0	%
Income taxes	9.7			9.8			(0.1		)	-1.0	%
Cumulative effect of accounting change	—			0.1			(0.1		)	-100.0	%
Net income	$	39.8		$	26.1		$	13.7		52.5	%

	May 3,		April 28,
Percent of sales:	2008		2007
Net sales	100.0	%	100.0	%
Other income	0.3	%	0.4	%
Cost of products sold	77.7	%	80.3	%
Gross margins (including other income)	22.6	%	20.1	%
Restructuring	0.9	%	0.4	%
Selling and administrative expenses	11.2	%	11.2	%
Amortization of intangibles	1.1	%	1.0	%
Impairment of assets	0.3	%	0.1	%
Interest income, net	0.4	%	0.8	%
Other, net	-0.6	%	-0.1	%
Income taxes	1.8	%	2.2	%
Cumulative effect of accounting change	0.0	%	0.0	%
Net income	7.2	%	5.8	%

Net Sales.  Consolidated net sales increased $102.7 million, or 22.9%, to $551.1 million for the fiscal year ended May 3, 2008 from $448.4 million for the fiscal year ended April 28, 2007.  Of the increase, $51.3 million relates to our TouchSensor and VEP acquisitions.   The increase was also driven by strong organic growth from our European and Asian operations.  Sales from those operations increased 36.1% during fiscal 2008 as compared to fiscal 2007.  Automotive segment sales were also favorably impacted by price increases of $20.7 million on what were previously marginally profitable and unprofitable products, which we had decided to exit at the expiration of our manufacturing commitment, but, at the request of the customer, have agreed to continue to produce at higher prices.  Excluding TouchSensor, the Interconnect segment sales increased 9.9% for fiscal 2008 due to strong sales from our Asian connector and European optical businesses.  Excluding VEP, the Power Products segment sales decreased 3.6% for fiscal 2008 as compared to fiscal 2007.  Translation of foreign operations net sales in fiscal 2008

27

Consolidated Results - Continued

increased reported net sales by $10.5 million or 1.9% due to the weaker U.S. dollar versus foreign currencies.

Other Income.  Other income increased $0.3 million, or 18.8%, to $1.9 million for the fiscal year ended May 3, 2008 from $1.6 million for the fiscal year ended April 28, 2007.  Other income consisted primarily of earnings from our automotive joint venture, grants, engineering design fees and royalties.

Cost of Products Sold.  Consolidated cost of products sold increased $68.5 million, or 19.0%, to $428.4 million for fiscal 2008 from $359.9 million for fiscal 2007.  The increase is due to the higher sales volumes.  Consolidated cost of products sold, as a percentage of sales was 77.7% for the fiscal year ended May 3, 2008 and 80.3% for the fiscal year ended April 28, 2007.  Automotive segment cost of goods sold as a percentage of sales were favorably impacted by price increases and the transfer of certain operations from Scotland to Malta during the third quarter of fiscal 2007. Additionally, in anticipation of the forecasted lower automotive sales in the U.S. market, we had previously made our North American operations more efficient and cost effective.

Gross Margins (including other income).  Consolidated gross margins (including other income) increased $34.5 million, or 38.3%, to $124.6 million for the fiscal year ended May 3, 2008 as compared to $90.1 million for the fiscal year ended April 28, 2007.  Gross margins as a percentage of net sales increased to 22.6% for fiscal 2008 from 20.1% for fiscal 2007.  The increase in gross margins as a percentage of sales is primarily due to the North American automotive segment price increases and integration of the Scotland operation to Malta.

Restructuring.  On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and the decision to discontinue producing certain legacy electronic Interconnect products.  As a result, we recorded a restructuring charge of $5.2 million for the fiscal year ended May 3, 2008.  We recorded $2.0 million of restructuring and impairment costs in the third quarter of fiscal 2007 relating to the closing of our Scotland automotive parts manufacturing plant and transferred all production lines from that facility to our automotive parts manufacturing operation in Malta.

Selling and Administrative Expenses.  Selling and administrative expenses increased $11.3 million, or 22.5%, to $61.5 million for the fiscal year ended May 3, 2008 compared to $50.2 million for the fiscal year ended April 28, 2007.  Of the increase, $3.3 million relates to the recently acquired TouchSensor and VEP businesses.  The majority of the additional increase relates to additional global support staff and increased long-term incentive compensation due to improved performance and higher share price and higher professional fees.  Selling and administrative expenses as a percentage of net sales were 11.2% in both fiscal 2008 and 2007.

Amortization of Intangibles.  Amortization of intangibles increased $1.3 million, or 27.7%, to $6.0 million for the fiscal year ended May 3, 2008 compared to $4.7 million for the fiscal year ended April 28, 2007.  The increase is due to the amortization expenses for the TouchSensor and VEP acquisitions.

Impairment of Assets.  Impairment of assets increased $1.1 million to $1.5 million for the fiscal year ended May 3, 2008 compared to $0.4 million for the fiscal year ended April 28, 2007.  The increase includes a $0.7 million write-down of machinery and equipment as a result of lower anticipated revenues over the life of the related project and $0.4 million for the impairment of a particular patent (classified as an intangible asset) where the underlying technology was deemed to be commercially impractical.

Interest Income, Net.  Net interest income decreased 32.4% in the fiscal year ended May 3, 2008 to $2.3 million as compared to $3.4 million in the fiscal year ended April 28, 2007.  The average cash balance was $83.0 million during fiscal 2008 as compared to $89.0 million during fiscal 2007.  The average interest rate earned in fiscal 2008 was 3.07% as compared to 4.23% in fiscal 2007.  The average interest rate earned includes both taxable interest and tax-exempt municipal interest.  The cash balance decreased primarily due to the recent acquisitions of TouchSensor and VEP.  Interest expense was $0.2 million and $0.3 million for fiscal 2008 and 2007, respectively.

Other, Net.  Other, net was an expense of $3.2 million for the fiscal year ended May 3, 2008 versus an expense of $0.4 million for the fiscal year ended April 28, 2007.  Other, net consists primarily of currency exchange gains and losses at the Company’s foreign operations.  The functional currencies of these operations are the British pound, Chinese yuan, Czech koruna, Euro, Maltese lira, Mexican peso and Singapore dollar.  Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S.

28

Consolidated Results - Continued

dollars and Euros, creating exchange rate sensitivities.  Effective January 1, 2008, the Euro replaced the Maltese lira as the functional currency of Malta.

During fiscal 2008, we recorded a charge of $0.5 million relating to a reduction of the net asset value (NAV) on a portion of our short-term investments which is an enhanced cash fund sold as an alternative to traditional money market funds. We have historically invested a portion of our cash in the fund. During the third quarter, the fund was overwhelmed with withdrawal requests and a restriction was placed on the redemption ability of the fund. Therefore, during the fiscal year, we recorded a realized loss of $0.1 million on partial redemptions and an unrealized loss of  $0.4 million for the reduction in the NAV’s principal balance.

Income Taxes.  The effective income tax rate was 19.7% for fiscal 2008 compared with 27.4% for the fiscal 2007.  During fiscal 2008, we recognized a benefit of $0.3 million relating to the expiration of certain statute of limitations for tax positions that were not challenged by the taxing authorities.  In addition, we recognized $1.5 million relating to tax return reconciliations compared to income tax provisions during the fiscal year ended May 3, 2008.  The effective tax rates for both fiscal years 2008 and 2007 reflect utilization of foreign investment tax credits and the effect of lower tax rates on income of our foreign earnings and higher earnings at those operations.

Net Income.  Net income increased $13.7 million, or 52.5%, to $39.8 million for the fiscal year ended May 3, 2008 as compared to $26.1 million for the fiscal year ended April 28, 2007 due to the automotive segment price increases, strong sales and increased efficiencies from our European and Asian operations, offset slightly by higher selling and administrative expenses.  In addition, restructuring costs increased by $3.2 million and our effective tax rate was 19.7% during fiscal 2008.  Net income as a percentage of sales increased to 7.2% for the fiscal year ended May 3, 2008 as compared to 5.8% for fiscal 2007.

29

Operating Segments

Automotive Segment Results

Below is a table summarizing results for the years ended:

(in millions)

	May 3,			April 28,
	2008			2007			Net Change			Net Change
Net sales	$	362.1		$	315.7		$	46.4		14.7	%
Other income	0.9			—			0.9			0.0	%
	363.0			315.7			47.3			15.0	%
Cost of products sold	282.0			265.1			16.9			6.4	%
Gross margins (including other income)	81.0			50.6			30.4			60.1	%
Restructuring	4.5			2.0			2.5			125.0	%
Impairment of assets	1.5			0.4			1.1			275.0	%
Selling and administrative expenses	18.0			19.2			(1.2		)	-6.3	%
Interest, net - income/(expense)	—			(0.3		)	0.3			0.0	%
Other, net - income/(expense)	(1.7		)	(1.3		)	(0.4		)	30.8	%
Income before income taxes	$	55.3		$	27.4		$	27.9		101.8	%

	May 3,		April 28,
Percent of sales:	2008		2007
Net sales	100.0	%	100.0	%
Other income	0.2	%	0.0	%
Cost of products sold	77.9	%	84.0	%
Gross margins (including other income)	22.4	%	16.0	%
Restructuring	1.2	%	0.6	%
Impairment of assets	0.4	%	0.1	%
Selling and administrative expenses	5.0	%	6.1	%
Interest income, net	0.0	%	-0.1	%
Other, net	-0.5	%	-0.4	%
Income before income taxes	15.3	%	8.7	%

Net Sales.  Automotive segment net sales increased $46.4 million, or 14.7%, to $362.1 million for the fiscal year ended May 3, 2008 from $315.7 million for the fiscal year ended April 28, 2007.  Sales were also favorably impacted by price increases of $20.7 million on what was previously marginally profitable and unprofitable products, which we had decided to exit at the expiration of our manufacturing commitment, but, at the request of the customer, have agreed to continue to produce at higher prices.  Additionally, automotive segment net sales increased from organic growth from our European and Asian operations.  Net sales from these operations increased 32.7% for fiscal 2008.    We expect to discontinue producing these products during fiscal 2009.  Excluding the price increases, North American automotive segment sales decreased 5.5% in fiscal 2008.  Translation of foreign operations net sales in fiscal 2008 increased reported net sales by $9.2 million, or 2.5%, due to the weaker U.S. dollar versus foreign currencies.

Other Income.  Other income was $0.9 million for the fiscal year ended May 3, 2008 from no other income for fiscal year ended April 28, 2007.  Other income consisted primarily of earnings from engineering design fees and royalties.

Cost of Products Sold.  Automotive segment cost of products sold increased $16.9 million to $282.0 million for the fiscal year ended May 3, 2008 from $265.1 for the fiscal year ended April 28, 2007.  The increase

30

Automotive Segment Results - Continued

relates to higher sales volumes.  Automotive segment costs of products sold as a percentage of sales decreased to 77.9% for fiscal 2008 from 84.0% for fiscal 2007.  Automotive segment cost of goods sold as a percentage of sales was favorably impacted by the price increases.  The integration of our Scotland operation to our Malta operation has increased efficiency in our European manufacturing processes.  Additionally, in anticipation of the forecasted lower automotive sales in the U.S. market, we had previously made our North American operations more efficient and cost effective.

Gross Margins (including other income).  Automotive segment gross margins (including other income) increased $30.4 million, or 60.1%, to $81.0 million for the fiscal year ended May 3, 2008 as compared to $50.6 million for the fiscal year ended April 28, 2007.  The increase in gross profit as a percentage of sales is primarily due to the price increases and integration of the Scotland operation to Malta.  Gross margins (including other income) as a percentage of net sales increased to 22.4% for fiscal 2008 from 16.0% for fiscal 2007.

Restructuring.  On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations.  As a result, we recorded a restructuring charge of $4.5 million, $2.7 million relating to employee severance, $1.3 million relating to impairment and accelerated depreciation for assets and $0.5 million for professional fees.  We recorded $2.0 million of restructuring and impairment costs in the third quarter of fiscal 2007 relating to the closing of our Scotland automotive parts manufacturing plant and transferred all production lines from that facility to our automotive parts manufacturing operation in Malta.

Impairment of Assets.  Impairment of assets increased $1.1 million to $1.5 million for the fiscal year ended May 3, 2008 compared to $0.4 million for the fiscal year ended April 28, 2007.  The increase includes a $0.7 million write-down of machinery and equipment as a result of lower anticipated revenues over the life of the related project and $0.4 million for the impairment of a particular patent (classified as an intangible asset) where the underlying technology was deemed to be commercially impractical.

Selling and Administrative Expenses.  Selling and administrative expenses decreased $1.2 million, or 6.3%, to $18.0 million for the fiscal year ended May 3, 2008 compared to $19.2 million for the fiscal year ended April 28, 2007.  The decrease is due the integration of the Scotland operation to Malta in the third quarter of fiscal 2007.  Selling and administrative expenses as a percentage of net sales decreased to 5.0% in fiscal 2008 from 6.1% in fiscal 2007.

Interest Expense, Net.  Net interest expense was zero for the fiscal year ended May 3, 2008, compared to an expense of $0.3 million for the fiscal year ended April 28, 2007.

Other Expense, Net.  Other expense, net was $1.7 million for the fiscal year ended May 3, 2009, compared to $1.3 million for the fiscal year ended April 28, 2007.  The increase is primarily due to the weakening of the U.S. dollar versus the Euro and Czech koruna during fiscal 2008 as compared to fiscal 2007.  The functional currencies of these operations are the British pound, Chinese yuan, Czech koruna, Euro, Mexican peso and Singapore dollar.  Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S. dollars and Euros, creating exchange rate sensitivities.

Income Before Income Taxes.  Automotive segment income before income taxes increased $27.9 million, or 101.8%, to $55.3 million for the fiscal year ended May 3, 2008 compared to $27.4 million for the fiscal year ended April 28, 2007 due to the price increases, strong sales in Europe and Asia and integration of our Scotland operation to our Malta operation, offset by restructuring costs.

31

Interconnect Segment Results

Below is a table summarizing results for the years ended:

(in millions)

	May 3,			April 28,
	2008			2007		Net Change			Net Change
Net sales	$	136.3		$	82.1	$	54.2		66.0	%
Other income	0.3			0.6		(0.3		)	-50.0	%
	136.6			82.7		53.9			65.2	%
Cost of products sold	104.7			58.0		46.7			80.5	%
Gross margins (including other income)	31.9			24.7		7.2			29.1	%
Restructuring	0.7			—		0.7			0.0	%
Selling and administrative expenses	25.8			16.3		9.5			58.3	%
Interest, net - income/(expense)	0.4			0.4		—			0.0	%
Other, net - income/(expense)	(1.2		)	0.5		(1.7		)	-340.0	%
Income before income taxes	$	4.6		$	9.3	$	(4.7	)	-50.5	%

	May 3,		April 28,
Percent of sales:	2008		2007
Net sales	100.0	%	100.0	%
Other income	0.2	%	0.7	%
Cost of products sold	76.8	%	70.6	%
Gross margins (including other income)	23.4	%	30.1	%
Restructuring	0.5	%	0.0	%
Selling and administrative expenses	18.9	%	19.9	%
Interest income, net	0.3	%	0.5	%
Other, net	-0.9	%	0.6	%
Income before income taxes	3.4	%	11.3	%

Net Sales.  Interconnect segment net sales increased $54.2 million, or 66.0%, to $136.3 million for the fiscal year ended May 3, 2008 from $82.1 million for the fiscal year ended April 28, 2007.  A majority of the sales increase is due to the TouchSensor acquisition.  Sales from our Asian connector business increased 73.3% for fiscal 2008.  Excluding TouchSensor, the Interconnect segment sales increased 9.9% for fiscal 2008 due to the strong sales from our Asian connector business.  In addition, sales increased from our European optical business, offset by lower sales in our domestic data installation business.  Translation of foreign operations net sales in fiscal 2008 increased reported net sales by $1.3 million, or 0.9%, due to the weaker U.S. dollar versus foreign currencies.

Other Income.  Other income was $0.3 million for the fiscal year ended May 3, 2008 and $0.6 million for the fiscal year ended April 28, 2007.  Other income consisted primarily of earnings from engineering design fees and royalties.

Cost of Products Sold.  Interconnect segment cost of products sold increased $46.7 million to $104.7 million for the fiscal year ended May 3, 2008 compared to $58.0 million for the fiscal year ended April 28, 2007.  The majority of the increase is due to cost of products sold from our TouchSensor acquisition.  Interconnect segment cost of products sold as a percentage of net sales increased to 76.8% for fiscal 2008 compared to 70.6% for fiscal 2007.  The increase is primarily due to the TouchSensor business, which has higher cost of products sold as a percentage of sales as compared to the other businesses in the Interconnect segment.  We experienced lower sales in our domestic data center installation business and higher costs related to PC card adapters during fiscal 2008.  In addition, we experienced increased costs due to overall lower sales volumes in our North American operations (excluding TouchSensor).

32

Interconnect Segment Results - Continued

Gross Margins (including other income).  Interconnect segment gross margins (including other income) increased $7.2 million, or 29.1%, to $31.9 million for the fiscal year ended May 3, 2008 as compared to $24.7 million for the fiscal year ended April 28, 2007.  The majority of the increase is due to the TouchSensor acquisition.  In addition, gross margins increased in our Asian connector business and European optical business, partially offset by increased cost of products sold in our PC card adapter and data installation businesses.  Gross margins (including other income) as a percentage of net sales decreased to 23.4% for fiscal 2008 from 30.1% for fiscal 2007.

Restructuring.  On January 24, 2008, we announced our decision to discontinue producing certain legacy electronic Interconnect products.  As a result, we recorded a restructuring charge of $0.7 million, $0.6 million for employee severance and $0.1 million for professional fees.

Selling and Administrative Expenses.  Selling and administrative expenses increased $9.5 million, or 58.3%, to $25.8 million for the fiscal year ended May 3, 2008 compared to $16.3 million for the fiscal year ended April 28, 2007.  Selling and administrative expenses are higher due to the TouchSensor acquisition and higher amortization expense in fiscal 2008 as compared to fiscal 2007.  Selling and administrative expenses as a percentage of net sales decreased to 18.9% in fiscal 2008 from 19.9% in fiscal 2007.

Interest Income, Net.  Net interest income was $0.4 million for both the fiscal years ended May 3, 2008 and April 28, 2007.

Other, Net.  Other, net was expense of $1.2 million for the fiscal year ended May 3, 2008, compared to income of $0.5 million for the fiscal year ended April 28, 2007.  The increase is primarily due to the weakening of the U.S. dollar versus the Euro and Czech koruna during fiscal 2008 as compared to fiscal 2007.  The functional currencies of these operations are the British pound, Chinese yuan, Czech koruna, Euro, Mexican peso and Singapore dollar.  Some foreign operations have transactions denominated in currencies other than their functional currencies, primarily sales in U.S. dollars and Euros, creating exchange rate sensitivities.

Income Before Income Taxes.  Interconnect income before income taxes decreased $4.7 million, or 50.5%, to $4.6 million for the fiscal year ended May 3, 2008 compared to $9.3 million for the fiscal year ended April 28, 2007 due to the gross margin declines in our PC card adapter and data installation businesses, partially offset with increases from the TouchSensor business.

33

Power Products Segment Results

Below is a table summarizing results for the years ended:

(in millions)

	May 3,		April 28,
	2008		2007		Net Change			Net Change
Net sales	$	45.8	$	43.0	$	2.8		6.5	%
Cost of products sold	33.2		30.8		2.4			7.8	%
Gross margins	12.6		12.2		0.4			3.3	%
Selling and administrative expenses	4.1		3.4		0.7			20.6	%
Income before income taxes	$	8.5	$	8.8	$	(0.3	)	-3.4	%

	May 3,		April 28,
Percent of sales:	2008		2007
Net sales	100.0	%	100.0	%
Cost of products sold	72.5	%	71.6	%
Gross margins (including other income)	27.5	%	28.4	%
Selling and administrative expenses	9.0	%	7.9	%
Income before income taxes	18.6	%	20.5	%

Net Sales.  Power Products segment net sales increased $2.8 million to $45.8 million for the fiscal year ended May 3, 2008 from $43.0 million for the fiscal year ended April 28, 2007.  Net sales increased due to the VEP acquisition and were more than offset by lower sales from our bus bar business.  Excluding VEP, the Power Products segment sales decreased 3.6% in fiscal 2008.  The majority of the decrease relates to certain projects for a customer, which reached end of life at the end of fiscal 2007.  In addition, effective at the beginning of fiscal 2008, we are no longer the sole supplier for another customer.

Cost of Products Sold.  Power Products segment cost of products sold increased $2.4 million, or 7.8%, to $33.2 million for the fiscal year ended May 3, 2008 compared to $30.8 million for the fiscal year ended April 28, 2007.  The Power Products segment cost of products sold as a percentage of sales increased to 72.5% for fiscal 2008 from 71.6% for fiscal 2007.  The increase is primarily due to higher material costs and price erosion at our North American operations, partially offset by margin improvement at our Shanghai, China operation.

Gross Margins.  Power Products segment gross margins increased $0.4 million, or 3.3%, to $12.6 million for the fiscal year ended May 3, 2008 as compared to $12.2 million for the fiscal year ended April 28, 2007. Gross margins as a percentage of net sales decreased to 27.5% for fiscal 2008 from 28.4% for fiscal 2007.  The increase is primarily due to the VEP business, offset by higher material costs from our bus bar business.

Selling and Administrative Expenses.  Selling and administrative expenses increased $0.7 million, or 20.6%, to $4.1 million for the fiscal year ended May 3, 2008 compared to $3.4 million for the fiscal year ended April 28, 2007.  Selling and administrative expenses increased due to the VEP and Tribotek acquisitions during fiscal 2008.  Selling and administrative expenses as a percentage of net sales increased to 9.0% in fiscal 2008 from 7.9% in fiscal 2007.

Income Before Income Taxes.  Power Products segment income before income taxes decreased $0.3 million to $8.5 million for the fiscal year ended May 3, 2008 compared to $8.8 million for the fiscal year ended April 28, 2007, due to certain projects ending at the end of fiscal 2007, no longer being the sole supplier for another customer and higher material costs and customer price erosion at our North American operation.

34

Other Segment Results

Below is a table summarizing results for the years ended:

(in millions)

	May 3,			April 28,
	2008			2007			Net Change			Net Change
Net sales	$	6.9		$	7.6		$	(0.7	)	-9.2	%
Cost of products sold	6.7			5.8			0.9			15.5	%
Gross margins	0.2			1.8			(1.6		)	-88.9	%
Selling and administrative expenses	2.0			2.1			(0.1		)	-4.8	%
Loss before income taxes	$	(1.8	)	$	(0.3	)	$	(1.5	)	500.0	%

	May 3,		April 28,
Percent of sales:	2008		2007
Net sales	100.0	%	100.0	%
Cost of products sold	97.1	%	76.3	%
Gross margins	2.9	%	23.7	%
Selling and administrative expenses	29.0	%	27.6	%
Loss before income taxes	-26.1	%	-3.9	%

Net Sales.  The Other segment net sales decreased $0.7 million to $6.9 million for the fiscal year ended May 3, 2008 as compared to $7.6 million for the fiscal year ended April 28, 2007.  Sales from our testing facilities decreased 11.9% during the fiscal year ended May 3, 2008 compared to the fiscal year ended April 28, 2007 primarily due to lower demand for vibration testing.

Cost of Products Sold.  Other segment cost of products sold increased $0.9 million to $6.7 million for the fiscal year ended May 3, 2008 compared to $5.8 million for the fiscal year ended April 28, 2007.  The majority of the increase is due to increased initiatives in our torque-sensing business.

Gross Margins.  The Other segment gross margins decreased $1.6 million to $0.2 million for the fiscal year ended May 3, 2008 as compared to $1.8 million for the fiscal year ended April 28, 2007.  The majority of the decrease is due to increased cost initiatives in our torque-sensing business and the decrease in net sales in our test facilities.

Selling and Administrative Expenses.  Selling and administrative expenses decreased $0.1 million to $2.0 million for the fiscal year ended May 3, 2009 compared to $2.1 million for the fiscal year ended April 28, 2007.  Selling and administrative expenses as a percentage of net sales increased to 29.0% in fiscal 2008 from 27.6% in fiscal 2007.

Loss Before Income Taxes.  The Other segment loss before income taxes was $1.8 million for the fiscal year ended May 3, 2008 compared to a loss of $0.3 million for the fiscal year ended April 28, 2007 due to the increased initiatives in our torque-sensing business and lower sales volumes in our test facilities.

Financial Condition, Liquidity and Capital Resources

We have historically financed our cash requirements through cash flows from operations.  Our future capital requirements will depend on a number of factors, including our future net sales and the timing and rate of expansion of our business.  We believe our current cash balances together with the cash flow expected to be generated from future domestic and foreign operations will be sufficient to support current operations.

We have an agreement with our primary bank for a revolving credit facility to

35

Financial Condition, Liquidity and Capital Resources - Continued

provide up to $75,000 ready financing for general corporate purposes, including acquisition opportunities that may become available.  The bank credit agreement, which expires on January 31, 2011, requires maintenance of certain financial ratios and a minimum net worth level. At May 2, 2009, we were in compliance with these covenants and had no borrowings against this credit facility.

At May 2, 2009, approximately $3.5 million remains invested in an enhanced cash fund sold as an alternative to traditional money-market funds. We had historically invested a portion of our on hand cash balances in this fund. These investments are subject to credit, liquidity, market and interest rate risk. In December 2007, the fund was overwhelmed with withdrawal requests from investors and was closed with a restriction placed upon the cash redemption ability of its holders. Based on the information available to us, we have estimated the fair value of this fund at $0.72 per unit as of May 2, 2009.  For fiscal 2009, we recorded a loss of $1.2 million, of which $0.6 million was realized on partial redemptions of $8.8 million, and  $0.6 million was unrealized. Since December 2007, we recorded a loss of $1.7 million, of which, $0.7 million was realized on partial redemptions of $17.4 million, and $1.0 million was unrealized.

To date, 83% of the fund has been liquidated. The latest information from fund management states that its goal is to have 92% of the portfolio liquidated by December 2009. Information and the markets relating to these investments remain dynamic, and there may be further declines in the value of these investments, the value of the collateral held by these entities, and the liquidity of our investments. To the extent we determine that there is a further decline in fair value, we may recognize additional losses in future periods.

Net cash provided by operations was $43.2 million, $77.0 million and $53.9 million in fiscal 2009, 2008 and 2007, respectively.  The primary factor in the Company’s ability to generate cash from operations is our net income.  Net income/(loss) decreased $152.3 million, or 382.6%, to a loss of $112.5 million for the fiscal year ended May 2, 2009 as compared to net income of $39.8 million for the fiscal year ended May 3, 2008.  Additionally, cash flows from operations exceed net income because non-cash charges (impairment charges, depreciation, amortization of intangibles and restricted stock awards) negatively impact net income but do not result in the use of cash. Similarly, non-cash credits such as deferred income tax benefits increase net income but do not provide cash.

Operating cash flow is summarized below (in millions):

	Fiscal Year Ended
	May 2,			May 3,		April 28,
	2009			2008		2007
Net income/(loss)	$	(112.5	)	$	39.8	$	26.1
Depreciation and amortization	37.0			28.2		23.6
Changes in operating assets and liabilities	6.3			6.8		1.0
Other non-cash items	112.4			2.2		3.2
Cash flow from operations	$	43.2		$	77.0	$	53.9

Net cash used in investing activities was $76.1 million for fiscal 2009, $29.0 million for fiscal 2008 and $73.4 million for fiscal 2007.  Purchases of property, plant and equipment were $17.1 million, $20.0 million and $10.7 million for the fiscal years ended May 2, 2009, May 3, 2008 and April 28, 2007, respectively.  On September 30, 2008, we acquired certain assets of Hetronic LLC for $53.6 million in cash.  We also incurred $2.4 million in transaction costs related to the purchase.  In fiscal 2009, we made a contingent payment of $0.8 million related to the VEP acquisition and a contingent payment of $0.6 million for Cableco Technologies.  In fiscal 2008, net cash used in investing activities also included $9.6 million relating to the TouchSensor, VEP and Tribotek acquisitions.  During fiscal 2008, we also paid a $1.0 million dividend for our automotive joint venture.  Cash used in investing activities in fiscal 2007 included $60.3 million for the acquisition of TouchSensor and $2.7 million final contingent payment related to the AST acquisition.

Net cash used in financing activities was $15.1 million in fiscal 2009, $7.1 million in fiscal 2008 and $2.7 million in fiscal 2007.  We paid cash dividends of $9.8 million, $7.6 million and $7.5 million in fiscal 2009, 2008

36

Financial Condition, Liquidity and Capital Resources - Continued

and 2007, respectively.  We repurchased 53,012 shares, 95,420 shares and 134,807 shares in fiscal 2009, 2008 and 2007, respectively, of our common stock from the former owners of Cableco in accordance with the terms of the earn-out provision of the Cableco purchase agreement.  Our board of directors approved a stock repurchase plan in September 2009, which expires May 1, 2010.  We repurchased 669,480 shares of common stock at an average price of $7.85 in fiscal 2009 on the open market.

Contractual Obligations

The following table summarizes contractual obligations and commitments, as of May 2, 2009 (in thousands):

	Payments Due By Period
			Less than						More than
	Total		1 year		1-3 years		4-5 years		5 years
Operating leases	$	7,820	$	3,685	$	3,042	$	993	$	100
Purchase obligations	34,550		34,550		—		—		—
Deferred compensation	4,884		1,023		1,132		291		2,438
Other obligations	1,250		1,250		—		—		—
Total	$	48,504	$	40,508	$	4,174	$	1,284	$	2,538

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements, other than the operating leases and purchase obligations noted in the preceding table.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. Actual results may differ from these estimates under different assumptions or conditions; however, we do not believe that it is reasonably likely that changes will occur.  We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.

Revenue Recognition.  We recognize revenue on product sales when i) persuasive evidence of an agreement exists, ii) the price is fixed or determinable, iii) delivery has occurred or services have been rendered, and iv) collection of the sales proceeds is reasonably assured.  Revenue from our product sales not requiring installation, net of trade discounts and estimated sales allowances, is recognized when title passes, which is generally upon shipment.  We do not have any additional obligations or customer acceptance provisions after shipment of such products.  We handle returns by replacing, repairing or issuing credit for defective products when returned.  Revenue from cabling infrastructure systems installations is recognized when the installation is completed, tested and accepted by the customer.

Allowance for Doubtful Accounts.  We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of customers to make required payments. The amount of the allowance is based on the age of unpaid amounts, information about the creditworthiness of customers, and other relevant information. Estimates of uncollectible amounts are revised each period, and changes are recorded in the period they become known. If the financial condition of our customers were to deteriorate, resulting in an impairment of their ability to make payments, additional allowances may be required.

In addition, our revenues and accounts receivable are concentrated in a relatively small number of customers.  A significant change in the liquidity or financial position of any one of these customers or a

37

Critical Accounting Policies and Estimates - Continued

deterioration in the economic environment or automotive industry, in general, could have a material adverse impact on the collectability of our accounts receivable and our future operating results, including a reduction in future revenues and additional allowances for doubtful accounts.

Allowance for Excess and Obsolete Inventory.  Inventories are valued at the lower-of-cost-or-market value and have been reduced by allowances for excess and obsolete inventories. The estimated allowances are based on our review of inventories on hand compared to estimated future usage and sales, using assumptions about future product life cycles, product demand and market conditions.  If actual product life cycles, product demand and market conditions are less favorable than those projected by us, additional inventory write-downs may be required.

Intangible Assets.  We have significant intangible assets related to goodwill and other acquired intangibles.  The determination of related estimated useful lives and whether these assets are impaired involves significant judgment.  In assessing the recoverability of our intangibles, we must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets.  If these estimates or their related assumptions change in the future, we may be required to record impairment charges for these assets.  In accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” on May 1, 2002, we ceased amortizing goodwill.  In lieu of amortization, we are required to perform an annual impairment review (see Note 4 to the Consolidated Financial Statements).

Income Taxes.  As part of the process of preparing our Consolidated Financial Statements, we are required to estimate income taxes in each of the jurisdictions in which we operate. The process involves estimating actual current tax expense along with assessing temporary differences resulting from differing treatment of items for book and tax purposes. These temporary differences result in deferred tax assets and liabilities, which are included in our consolidated balance sheet. We record a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We have considered future taxable income and ongoing tax planning strategies in assessing the need for the valuation allowance.  The tax laws of Malta provide for investment tax credits of 50% of certain qualified expenditures.  Unused credits can be carried forward indefinitely.  We have accumulated investment tax credits in excess of amounts more likely than not to be realized based upon projections of taxable income to be generated within a reasonable time period.  Valuation allowances have been provided for this excess.

Contingencies.  We are subject to various investigations, claims, legal and administrative proceedings covering a wide range of matters that arise in the ordinary course of business activities.  A significant amount of judgment and use of estimates is required to quantify our ultimate exposure in these matters. For those matters that we can estimate a range of loss, we have established reserves at levels within that range to provide for the most likely scenario based upon available information.  The valuation of reserves for contingencies is reviewed on a quarterly basis to assure that the Company is properly reserved. Reserve balances are adjusted to account for changes in circumstances for ongoing issues and the establishment of additional reserves for emerging issues. While we believe that the current level of reserves is adequate, changes in the future could impact these determinations.

Item 7A.  Quantitative and Qualitative Disclosures About Market Risk

Certain of our foreign operations enter into transactions in currencies other than their functional currency, primarily the U.S. dollar and the Euro.  A 10% change in foreign currency exchange rates from balance sheet date levels could impact our income before income taxes by $2.8 million and $1.1 million at May 2, 2009 and May 3, 2008, respectively.  We also have foreign currency exposure arising from the translation of our net equity investment in our foreign operations to U.S. dollars.  We generally view our investments in foreign operations with functional currencies other than the U.S. dollar as long-term.  The currencies to which we are exposed are the British pound, Chinese yuan, Czech koruna, Euro, Mexican peso and Singapore dollar.  A 10% change in foreign currency exchange rates from balance sheet date levels could impact our net foreign investments by $10.8 million at May 2, 2009 and $15.1 million at May 3, 2008.

Item 8.  Financial Statements and Supplementary Data

See Item 15 for an Index to Financial Statements and Financial Statement Schedule.  Such Financial Statements and Schedule are incorporated herein by reference.

38

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this annual report on Form 10-K, we performed an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”).  Our disclosure controls and procedures are designed to ensure that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s applicable rules and forms.  As a result of this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of May 2, 2009 based on the guidelines established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Our internal control over financial reporting includes policies and procedures that provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. generally accepted accounting principles.

Management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Hetronic LLC, acquired on September 30, 2008, which is included in our fiscal 2009 consolidated financial statements and constituted $21.9 million and $20.0 million of total and net assets, respectively, as of May 2, 2009 and $14.4 million of revenue and a net loss of $36.1 million as of May 2, 2009.

Based on the results of our evaluation, with the exception of Hetronic LLC mentioned above, our management concluded that our internal control over financial reporting was effective as of May 2, 2009. Management reviewed the results of its assessment with the Audit Committee.  Our independent registered public accounting firm, Ernst and Young, LLP, has issued an attestation report on our internal control over financial reporting.  This report is included on page F-2 of this report on Form 10-K.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that was conducted during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, do not expect that our disclosure controls or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may

39

Inherent Limitations on Effectiveness of Controls - Continued

deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

PART III

Item 10.  Directors, Executive Officers and Corporate Governance

Information regarding our directors will be included under the caption “Proposal One:  Election of Directors” and “Corporate Governance” in the definitive proxy statement for our 2009 annual meeting to be held on September 17, 2009, and is incorporated herein by reference.  Information regarding our executive officers is included under a separate caption in Part I hereof, and is incorporated herein by reference, in accordance with General Instruction G(3) to Form 10-K and Instruction 3 to Item 401(b) of Regulation S-K.  Information regarding compliance with Section 16(a) of the Exchange Act is included under the caption “Section 16(a) Beneficial Ownership Reporting Compliance” and “Audit Committee Matters” in the definitive proxy statement for our 2009 annual meeting and is incorporated herein by reference.

We have adopted a Code of Business Conduct (the “Code”) that applies to our directors, our principal executive officer, principal financial officer, principal accounting officer or controller and persons performing similar functions, as well as other employees.  The Code of Business Conduct is publicly available on our website at www.methode.com.  If we make any substantive amendments to the Code or grant any waiver, including any implicit waiver, from a provision of the Code to our principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions, we will disclose the nature of such amendment or waiver on our website or in a report on Form 8-K in accordance with applicable rules and regulations.

Item 11.  Executive Compensation

Information regarding the above will be included under the caption “ Compensation Discussion and Analysis,” “Compensation Committee Report,” “Executive Compensation Tables” and “Director Compensation” in the definitive proxy statement for our 2009 annual meeting to be held on September 17, 2009, and is incorporated herein by reference.

Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Information regarding the above will be included under the caption “Security Ownership” and “Executive Compensation Discussion and Analysis” and in subsequent compensation tables in the definitive proxy statement for our 2009 annual meeting to be held on September 17, 2009, and is incorporated herein by reference.

Item 13.  Certain Relationships and Related Transactions, and Director Independence

Information regarding the above will be included under the caption “Corporate Governance” in the definitive proxy statement for our 2009 annual meeting to be held on September 17, 2009, and is incorporated herein by reference.

Item 14.  Principal Accounting Fees and Services

Information regarding the above will be included under the caption “Audit Committee Matters” in the definitive proxy statement for our 2009 annual meeting to be held on September 17, 2009, and is incorporated herein by reference.

40

PART IV

Item 15.  Exhibits and Financial Statement Schedule

(a) The documents included in the following indexes are filed as part of this annual report on Form 10-K.

(1) (2)	The response to this portion of Item 15 is included in this report under the caption “Financial Statements” and “Financial Statement Schedule” below, which is incorporated herein by reference.
(3)	See “Index to Exhibits” immediately following the financial statement schedule.
(a)	See “Index to Exhibits” immediately following the financial statement schedule.
(b)	See “Financial Statements” and “Financial Statement Schedule.”

41

SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

METHODE ELECTRONICS, INC.
(Registrant)
By:	/s/ DOUGLAS A. KOMAN
Douglas A. Koman
Chief Financial Officer
(Principal Accounting and Financial Officer)

Dated:  July 2, 2009

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s / WARREN L. BATTS	Chairman of the Board	July 2, 2009
Warren L. Batts
/s/ DONALD W. DUDA	Chief Executive Officer, President & Director	July 2, 2009
Donald W. Duda	(Principal Executive Officer)
/s / DOUGLAS A. KOMAN	Chief Financial Officer	July 2, 2009
Douglas A. Koman
/s / WALTER J. ASPATORE	Director	July 2, 2009
Walter J. Aspatore
/s/ J. EDWARD COLGATE	Director	July 2, 2009
J. Edward Colgate
/s/ DARREN M. DAWSON	Director	July 2, 2009
Darren M. Dawson
/s / ISABELLE C. GOOSSEN	Director	July 2, 2009
Isabelle C. Goossen
/s / CHRISTOPHER J. HORNUNG	Director	July 2, 2009
Christopher J. Hornung
/s / LAWRENCE B. SKATOFF	Director	July 2, 2009
Lawrence B. Skatoff
/s / PAUL G. SHELTON	Director	July 2, 2009
Paul G. Shelton

42

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

FORM 10-K

ITEM 15 (a) (1) and (2)

(1)Financial Statements

The following consolidated financial statements of Methode Electronics, Inc. and subsidiaries are included in Item 8:

Report of Independent Registered Public Accounting Firm	F1
Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting	F2
Consolidated Balance Sheets — May 2, 2009 and May 3, 2008	F3
Consolidated Statements of Operations — Years Ended May 2, 2009, May 3, 2008 and April 28, 2007	F4
Consolidated Statements of Shareholders’ Equity — Years Ended May 2, 2009, May 3, 2008 and April 28, 2007	F5
Consolidated Statements of Cash Flows — Years Ended May 2, 2009, May 3, 2008 and April 28, 2007	F6
Notes to Consolidated Financial Statements	F7

(2)Financial Statement Schedule

Schedule II — Valuation and Qualifying Accounts F34

All other schedules for which provision is made in the applicable accounting regulation of the Securities and Exchange Commission are not required under the related instructions or are immaterial and, therefore, have been omitted.

43

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Methode Electronics, Inc.

We have audited the accompanying consolidated balance sheets of Methode Electronics, Inc. and subsidiaries as of May 2, 2009 and May 3, 2008, and the related consolidated statements of operations, shareholders’ equity and cash flows for each of the three years in the period ended May 2, 2009.  Our audits also included the financial statement schedule listed in the Index at Item 15(a)(2).  These financial statements and schedule are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Methode Electronics, Inc. and subsidiaries at May 2, 2009 and May 3, 2008, and the consolidated results of their operations and their cash flows for each of the three years in the period ended May 2, 2009, in conformity with U.S. generally accepted accounting principles.  Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

As discussed in Note 7 to the consolidated financial statements, effective April 29, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Methode Electronics, Inc.’s internal control over financial reporting as of May 2, 2009, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated July 1, 2009 expressed an unqualified opinion thereon.

/s/  ERNST & YOUNG LLP

Chicago, Illinois

July 1, 2009

F1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Board of Directors and Shareholders

Methode Electronics, Inc.

We have audited Methode Electronics, Inc.’s internal control over financial reporting as of May 2, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). Methode Electronics, Inc.’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Report on Internal Control Over Financial Reporting.  Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As indicated in the accompanying Report on Internal Control over Financial Reporting, management’s assessment of and conclusion on the effectiveness of internal control over financial reporting did not include the internal controls of Hetronic LLC, which is included in the May 2, 2009 consolidated financial statements of Methode Electronics, Inc. and constituted $21.9 million and $20.0 million of total and net assets, respectively, as of May 2, 2009 and $14.4 million and $36.1 million of revenues and net loss, respectively, for the year then ended.  Our audit of internal control over financial reporting of Methode Electronics, Inc. also did not include an evaluation of the internal control over financial reporting of Hetronic LLC.

In our opinion, Methode Electronics, Inc. maintained effective internal control over financial reporting as of May 2, 2009, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Methode Electronics, Inc. as of May 2, 2009 and May 3, 2008, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended May 2, 2009 and our report dated July 1, 2009 expressed an unqualified opinion thereon.

/s/  ERNST & YOUNG LLP

Chicago, Illinois

July 1, 2009

F2

METHODE ELECTRONICS, INC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	May 2, 2009			May 3, 2008
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	54,030		$	104,305
Accounts receivable, net, less allowance (2009 — $1,444; 2008 —$2,309)	60,406			85,805
Inventories:
Finished products	11,865			15,384
Work in process	10,765			20,715
Materials	17,796			19,850
	40,426			55,949
Deferred income taxes	4,928			8,730
Refundable income taxes	14,764			—
Prepaid expenses and other current assets	6,692			6,028
TOTAL CURRENT ASSETS	181,246			260,817
PROPERTY, PLANT AND EQUIPMENT
Land	3,236			3,205
Buildings and building improvements	54,378			44,894
Machinery and equipment	231,470			260,165
	289,084			308,264
Less allowances for depreciation	219,167			217,984
	69,917			90,280
OTHER ASSETS
Goodwill	11,771			54,476
Other intangibles, less accumulated amortization	20,501			41,282
Cash surrender value of life insurance	11,177			10,345
Deferred income taxes	4,993			10,099
Other	5,683			2,921
	54,125			119,123
	$	305,288		$	470,220
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable	$	24,495		$	42,810
Salaries, wages and payroll taxes	7,918			13,317
Other accrued expenses	19,921			19,207
Income taxes	1,184			1,378
TOTAL CURRENT LIABILITIES	53,518			76,712
OTHER LIABILITIES	16,686			13,833
DEFERRED COMPENSATION	3,308			6,890
SHAREHOLDERS’ EQUITY
Common stock, $0.50 par value, 100,000,000 shares authorized, 38,290,776 and 38,225,379 shares issued as of May 2, 2009 and May 3, 2008, respectively	19,145			19,113
Unearned common stock issuances	(3,632		)	(4,257		)
Additional paid-in capital	68,506			69,953
Retained earnings	143,577			265,838
Accumulated other comprehensive income	15,675			28,381
Treasury stock, 1,372,188 and 702,708 shares as of May 2, 2009 and May 3, 2008, respectively	(11,495		)	(6,243		)
	231,776			372,785
	$	305,288		$	470,220

See notes to consolidated financial statements.

F3

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

	Fiscal Year Ended
	May 2,			May 3,			April 28,
	2009			2008			2007
INCOME
Net sales	$	425,644		$	551,073		$	448,427
Other	3,202			1,879			1,596
	428,846			552,952			450,023
COSTS AND EXPENSES
Cost of products sold	356,496			428,355			359,914
Restructuring	25,278			5,159			2,027
Impairment of goodwill and other assets	94,374			1,472			377
Selling and administrative expenses	57,471			61,550			50,182
Amortization of intangibles	6,933			6,013			4,708
	540,552			502,549			417,208
Income/(loss) from operations	(111,706		)	50,403			32,815
Interest income, net	1,382			2,324			3,428
Other, net	(479		)	(3,250		)	(468		)
Income/(loss) before income taxes and cumulative effect of accounting change	(110,803		)	49,477			35,775
Income taxes	1,680			9,723			9,792
Income/(loss) before cumulative effect of accounting change	(112,483		)	39,754			25,983
Cumulative effect of accounting change, net of taxes of $28	—			—			101
NET INCOME/(LOSS)	$	(112,483	)	$	39,754		$	26,084
Amounts per common share:
Basic net income/(loss)	$	(3.05	)	$	1.07		$	0.72
Diluted net income/(loss)	$	(3.05	)	$	1.06		$	0.71
Cash dividends:
Common stock	$	0.26		$	0.20		$	0.20

See notes to consolidated financial statements.

F4

METHODE ELECTRONICS, INC AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Years Ended May 2, 2009, May 3, 2008 and April 28, 2007

(Dollar amounts in thousands, except share data)

						Unearned
	Common		Common			Common			Additional						Currency						Total
	Stock		Stock			Stock			Paid-in			Retained			Translation			Treasury			Shareholders’			Comprehensive
	Shares		$			Issuances			Capital			Earnings			Adjustments			Stock			Equity			Income/(loss)
Balance at April 29, 2006	37,700,484		$	18,850		$	(9,132	)	$	59,411		$	215,072		$	11,039		$	(3,531	)	$	291,709
Release of restriction pursuant to acquisition earn-out	—		—			1,233			—			—			—			—			1,233
Purchase and cancellation of shares related to acquisition earn-out	(95,420	)	(48		)	—			(1,077		)	—			—			—			(1,125		)
Reversal of unvested stock awards for adoption of SFAS 123R	(463,957	)	(232		)	3,382			(3,150		)	—			—			—			—
Cumulative effect of accounting change	—		—			—			(129		)	—			—			—			(129		)
Earned portion of restricted stock awards	145,765		73			—			(73		)	—			—			—			—
Stock award and stock option amortization expense	—		—			—			3,026			—			—			—			3,026
Vested stock awards withheld for payroll taxes	(35,060	)	(18		)	—			(529		)	—			—			—			(547		)
Exercise of options	699,017		350			—			6,858			—			—			—			7,208
Common stock repurchased	—		—			—			—			—			—			(1,924		)	(1,924		)
Tax benefit from stock options	—		—			—			1,175			—			—			—			1,175
Foreign currency translation adjustments	—		—			—			—			—			4,971			—			4,971			$	4,971
Net income for year	—		—			—			—			26,084			—			—			26,084			26,084
Cash dividends on common stock	—		—			—			—			(7,472		)	—			—			(7,472		)	$	31,055
Balance at April 28, 2007	37,950,829		$	18,975		$	(4,517	)	$	65,512		$	233,684		$	16,010		$	(5,455	)	$	324,209
Cumulative impact of change in accounting for uncertainties in income taxes (FIN 48 adoption)	—		—			—			—			(25		)	—			—			(25		)
Release of restriction pursuant to acquisition earn-out	—		—			260			—			—			—			—			260
Earned portion of restricted stock awards	188,982		94			—			(94		)	—			—			—			—
Stock award and stock option amortization expense	—		—			—			3,359			—			—			—			3,359
Vested stock awards withheld for payroll taxes	(40,140	)	(20		)	—			(441		)	—			—			—			(461		)
Exercise of options	125,708		64			—			1,234			—			—			—			1,298
Common stock repurchased	—		—			—			—			—			—			(788		)	(788		)
Tax benefit from stock options	—		—			—			383			—			—			—			383
Foreign currency translation adjustments	—		—			—			—			—			12,371			—			12,371			$	12,371
Net income for year	—		—			—			—			39,754			—			—			39,754			39,754
Cash dividends on common stock	—		—			—			—			(7,575		)	—			—			(7,575		)	$	52,125
Balance at May 3, 2008	38,225,379		$	19,113		$	(4,257	)	$	69,953		$	265,838		$	28,381		$	(6,243	)	$	372,785
Release of restriction pursuant to acquisition earn-out	(53,012	)	(27		)	625			(598		)	—			—			—			—
Earned portion of restricted stock awards	120,041		60			—			(60		)	—			—			—			—
Stock award and stock option amortization expense	—		—			—			(553		)	—			—			—			(553		)
Vested stock awards withheld for payroll taxes	(20,721	)	(11		)	—			(130		)	—			—			—			(141		)
Exercise of options	19,089		10			—			103			—			—			—			113
Common stock repurchased	—		—			—			—			—			—			(5,252		)	(5,252		)
Tax expense from stock options	—		—			—			(209		)	—			—			—			(209		)
Foreign currency translation adjustments	—		—			—			—			—			(12,706		)	—			(12,706		)	$	(12,706	)
Net income/(loss) for year	—		—			—			—			(112,483		)	—			—			(112,483		)	(112,483		)
Cash dividends on common stock	—		—			—			—			(9,778		)	—			—			(9,778		)	$	(125,189	)
Balance at May 2, 2009	38,290,776		$	19,145		$	(3,632	)	$	68,506		$	143,577		$	15,675		$	(11,495	)	$	231,776

See notes to consolidated financial statements

F5

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Fiscal Year Ended
	May 2,			May 3,			April 28,
	2009			2008			2007
OPERATING ACTIVITIES
Net income/(loss)	$	(112,483	)	$	39,754		$	26,084
Adjustments to reconcile net income/(loss) to net cash provided by operating activities:
Provision for minority interest	343			329			241
(Gain)/loss of sale of fixed assets	(407		)	(120		)	268
Provision for depreciation	30,103			22,146			18,915
Amortization of intangible assets	6,933			6,013			4,708
Impairment of tangible assets	10,313			1,472			377
Impairment of goodwill and other assets	94,374			—			—
Stock-based compensation	(553		)	3,359			2,897
Provision for bad debt	120			195			372
Deferred income taxes	8,078			(2,948		)	(1,012		)
Changes in operating assets and liabilities:
Accounts receivable	33,347			(793		)	4,942
Inventories	19,918			(482		)	1,875
Prepaid expenses and other current assets	(16,086		)	7,989			2,478
Accounts payable and accrued expenses	(30,832		)	107			(8,230		)
NET CASH PROVIDED BY OPERATING ACTIVITIES	43,168			77,021			53,915
INVESTING ACTIVITIES
Purchases of property, plant and equipment	(17,064		)	(20,018		)	(10,667		)
Acquisition of businesses	(57,469		)	(9,647		)	(63,168		)
Acquisition of technology licenses	(1,575		)	—			(113		)
Proceeds from the sale of property and equipment	—			1,706			800
Joint venture dividend	—			(1,000		)	—
Other	(14		)	(27		)	(218		)
NET CASH USED IN INVESTING ACTIVITIES	(76,122		)	(28,986		)	(73,366		)
FINANCING ACTIVITIES
Purchase of common stock	(5,252		)	(1,249		)	(3,596		)
Proceeds from exercise of stock options	113			1,298			7,208
Tax (expense)/benefit from stock options and awards	(209		)	383			1,175
Cash dividends	(9,778		)	(7,575		)	(7,472		)
NET CASH USED IN FINANCING ACTIVITIES	(15,126		)	(7,143		)	(2,685		)
Effect of foreign currency exchange rate changes on cash	(2,195		)	3,322			581
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(50,275		)	44,214			(21,555		)
Cash and cash equivalents at beginning of year	104,305			60,091			81,646
CASH AND CASH EQUIVALENTS AT END OF YEAR	$	54,030		$	104,305		$	60,091

See notes to condensed consolidated financial statements.

F6

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

1.  Significant Accounting Policies

Principles of Consolidation.  The consolidated financial statements include the accounts and operations of Methode Electronics, Inc. (“the Company”) and its subsidiaries.  As used herein, “we,” “us,” “our,” the “Company” or “Methode” means Methode Electronics, Inc. and its subsidiaries.

Financial Reporting Periods.  We maintain our financial records on the basis of a fifty-two or fifty-three week fiscal year ending on the Saturday closest to April 30.  Due to the timing of our fiscal calendar, the fiscal year ended May 2, 2009 and the fiscal year ended April 28, 2007 represent 52 weeks of results and the fiscal year ended May 3, 2008 represents 53 weeks of results.

Cash Equivalents.  Generally, all highly liquid investments with a maturity of three months or less when purchased are carried at their approximate fair value and classified in the consolidated balance sheets as cash equivalents.

Accounts Receivable and Allowance for Doubtful Accounts.  We carry accounts receivable at their face amounts less an allowance for doubtful accounts. On a regular basis, we record an allowance for uncollectible receivables based upon past transaction history with customers, customer payment practices and economic conditions. Actual collection experience may differ from the current estimate of net receivables. A change to the allowance for uncollectible amounts may be required if a future event or other change in circumstances results in a change in the estimate of the ultimate collectability of a specific account.  We do not require collateral for our accounts receivable balances.  Accounts are written off against the allowance account when they are determined to be no longer collectible.

Inventories.  Inventories are stated at the lower-of-cost (first-in, first-out method)-or-market.

Property, Plant and Equipment.  Properties are stated on the basis of cost.  We amortize such costs by annual charges to income, computed on the straight-line method using estimated useful lives of 5 to 40 years for buildings and improvements and 3 to 15 years for machinery and equipment for financial reporting purposes.  Accelerated methods are generally used for income tax purposes.

Income Taxes.  Deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Revenue Recognition.  We recognize revenue on product sales when i) persuasive evidence of an agreement exists, ii) the price is fixed or determinable, iii) delivery has occurred or services have been rendered, and iv) collection of the sales proceeds is reasonably assured.  Revenue from our product sales not requiring installation, net of trade discounts and estimated sales allowances, is recognized when title passes, which is generally upon shipment.  We do not have any additional obligations or customer acceptance provisions after shipment of such products.  We handle returns by replacing, repairing or issuing credit for defective products when returned.  Return costs were not significant in fiscal 2009, 2008 and 2007.  Revenue from cabling infrastructure systems installations is recognized when the installation is completed, tested and accepted by the customer.

Shipping and Handling Fees and Costs.  Shipping and handling fees billed to customers are included in net sales, and the related costs are included in cost of products sold.

Foreign Currency Translation.  The functional currencies of the majority of our foreign subsidiaries are in their local currencies.  Accordingly, the results of operations of these foreign subsidiaries are translated into U.S. dollars using average exchange rates during the year, while the assets and liabilities are translated using period end exchange rates.  Adjustments from the translation process are classified as a component of shareholders’ equity.  Exchange gains and losses arising from transactions denominated in a currency other than the functional currency of the foreign subsidiary are included in the Consolidated Statements of Operations in other, net.  In fiscal 2009, 2008 and 2007, we had foreign exchange losses of $479, $3,250 and $468, respectively.

F7

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

1.  Significant Accounting Policies - Continued

Long-Lived Assets.  In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” we continually evaluate whether events and circumstances have occurred which indicate that the remaining estimated useful lives of our intangible assets, excluding goodwill, and other long-lived assets, may warrant revision or that the remaining balance of such assets may not be recoverable. In the event that the undiscounted cash flows resulting from the use of the asset group is less than the carrying amount, an impairment loss equal to the excess of the asset’s carrying amount over its fair value is recorded.

In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, we record impairment losses on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. During fiscal 2009, based on our future estimates of the undiscounted cash flows, it was determined that certain identifiable intangible assets of our TouchSensor and Hetronic businesses in the Interconnect segment, the Automotive Safety Technologies business in our Automotive segment and Magna-Lastic Devices, Inc from our Other segment were impaired.  Therefore, we recorded an impairment charge of $26.2 million in the Interconnect segment, $4.6 million in the Automotive segment and $0.4 million in the Other segment for a total of $31.2 million for these assets.

Goodwill and Intangibles.  Costs assigned to the fair value of intangible assets acquired with finite lives are being amortized over periods ranging from 3 to 20 years, generally on a straight-line basis or accelerated basis, depending on the nature of the intangible asset.  The fair value of certain intangible assets is being amortized over projected revenues used to initially value such intangible assets.  Goodwill represents the excess of purchase price over the estimated fair value of net assets of acquired companies, which has not been allocated to other intangible assets.

The Company evaluates goodwill for impairment at the reporting unit level, which is one level below the operating segment level (herein referred to as the reporting unit).  The impairment test for goodwill is a two-step process.  The first step is to identify when goodwill impairment has occurred by comparing the fair value of a reporting unit with its carrying amount, including goodwill.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired.  If the carrying amount of the reporting unit exceeds its fair value, the second step of the goodwill test is performed to measure the amount of the impairment loss, if any.  In this second step, the implied fair value of the reporting unit’s goodwill is compared with the carrying amount of the goodwill.  If the carrying amount of the reporting unit’s goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to that excess, not to exceed the carrying amount of the goodwill.  Based on events and general business declines, we performed “step one” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, “Goodwill and Other Intangible Assets”, on the reporting units that have goodwill during fiscal 2009.  Based on this test, we determined that the fair value was less than the carrying value of the net assets for certain reporting units.  We completed  “step two” of the goodwill test and concluded that goodwill was impaired.  During fiscal 2009, we recorded a goodwill impairment charge of $25,840 in our Automotive segment, $30,750 in our Interconnect segment, $5,358 in our Power Products segment and $1,203 in our Other segment for a total of $63,151 related to these assets.

Research and Development Costs.  Costs associated with the development of new products are charged to expense when incurred.  Research and development costs for the fiscal years ended May 2, 2009, May 3, 2008 and April 28, 2007 amounted to $21,995, $25,595 and $21,336, respectively.

Stock-Based Compensation.  See Note 5, Shareholders’ Equity for a description of our stock-based compensation plans.  In the first quarter of fiscal 2007, we adopted SFAS No. 123(R), “Share Based Payments,” which revises SFAS No. 123, “Accounting for Stock Based Compensation.”  SFAS No. 123(R) requires us to record compensation expense for all share-based payments, including employee stock options, at fair value.

Use of Estimates.  The preparation of financial statements in conformity with accounting principles

F8

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

1.  Significant Accounting Policies - Continued

generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes.  Actual results could differ from those estimates.

Fair Value of Other Financial Instruments.  The carrying values of our short-term financial instruments, including cash and cash equivalents, accounts receivable and accounts payable approximate their fair values because of the short maturity of these instruments.

Comprehensive Income.  SFAS No. 130, “Reporting Comprehensive Income,” requires companies to report all changes in equity during a period, except those resulting from investment by owners and distribution to owners, in a financial statement for the period in which they were recognized.  We chose to disclose comprehensive income, which encompasses net income and foreign currency translation adjustments, in the Consolidated Statement of Shareholders’ Equity.

Recent Accounting Pronouncements

We adopted Financial Accounting Standards Board (“FASB”) SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”) as of May 4, 2008 for financial assets and liabilities, and non-financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. SFAS No. 157 defines fair value, establishes a framework for measuring fair value as required by other accounting pronouncements and expands fair value measurement disclosures. The provisions of SFAS No. 157 are applied prospectively upon adoption and did not have a material impact on our Consolidated Financial Statements. The disclosures required by SFAS No. 157 are included in Note 15, “Fair Value Measurements,” to our Consolidated Financial Statements.

In February 2008, the FASB issued FASB Staff Position No. 157-2, which delays the effective date of SFAS No. 157 for non-financial assets and liabilities, which are not measured at fair value on a recurring basis (at least annually) until fiscal years beginning after November 15, 2008, which is our fiscal year 2010 that began May 3, 2009.  We are currently assessing the impact of adopting SFAS No. 157 for non-financial assets and liabilities on our Consolidated Financial Statements.

We adopted SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an Amendment of FASB Statement No. 115” (“SFAS No. 159”) as of May 4, 2008. SFAS No. 159 permits entities to elect to measure many financial instruments and certain other items at fair value. We did not elect the fair value option for any assets or liabilities that were not previously carried at fair value. Accordingly, the adoption of SFAS No. 159 had no impact on our Consolidated Financial Statements.

We adopted Emerging Issues Task Force (EITF) No. 06-4, “Accounting for Deferred Compensation and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements” (“EITF No. 06-4”) as of May 4, 2008. EITF No. 06-4 requires that endorsement split-dollar life insurance arrangements, which provide a benefit to an employee beyond the postretirement period be recorded in accordance with SFAS No. 106, “Employer’s Accounting for Postretirement Benefits Other Than Pensions” or Accounting Principle Board (“APB”) Opinion No. 12, “Omnibus Opinion—1967” based on the substance of the agreement with the employee.  The adoption of EITF No. 06-4 had no impact on our Consolidated Financial Statements.

In December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS No. 141R”), a revision of SFAS No. 141, “Business Combinations.” SFAS No. 141R establishes requirements for the recognition and measurement of acquired assets, liabilities, goodwill and non-controlling interests.  SFAS No. 141R also provides disclosure requirements related to business combinations. SFAS No. 141R is effective for fiscal years beginning after December 15, 2008, which is our fiscal year 2010 that began May 3, 2009.  SFAS No. 141R will be applied prospectively to business combinations with an acquisition date on or after the effective date.  This statement will generally affect acquisitions occurring after the adoption date.

F9

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

1.  Significant Accounting Policies - Continued

In December 2007, the FASB issued SFAS No. 160, “Non-Controlling Interests in Consolidated Financial Statements, an amendment of ARB No. 51” (“SFAS No. 160”). SFAS No. 160 establishes new standards for the accounting for and reporting of non-controlling interests (formerly minority interests) and for the loss of control of partially owned and consolidated subsidiaries. SFAS No. 160 does not change the criteria for consolidating a partially owned entity. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008, which is our fiscal year 2010 that began May 3, 2009. The provisions of SFAS No. 160 will be applied prospectively upon adoption except for the presentation and disclosure requirements, which will be applied retrospectively. We do not expect the adoption of SFAS No. 160 to have a material impact on our Consolidated Financial Statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of SFAS No. 133” (“SFAS No. 161”). SFAS No. 161 requires enhanced disclosures about an entity’s derivative and hedging activities and is effective for fiscal years and interim periods beginning after November 15, 2008, which is our fiscal year 2010 that began May 3, 2009. We do not believe the adoption of SFAS No. 161 will have a material impact on our Consolidated Financial Statements.

In April 2008, the FASB issued FASB Staff Position No. FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP 142-3”).  FSP 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement No. 142, “Goodwill and Other Intangible Assets.”  The provision of FSP 142-3 will be effective for financial statements issued for fiscal years beginning after December 15, 2008, which is our fiscal year 2010 that began May 3, 2009.  Since this guidance will be applied prospectively, upon adoption, there will be no impact to our financial position, results of operations or cash flows.

In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles” (“SFAS No 162”).  SFAS No. 162 identifies the sources of accounting principles and the framework for selecting the principles to be used in the preparation of financial statements.  SFAS No. 162 is effective 60 days following the SEC’s approval of the Public Company Accounting Oversight Board (“PCAOB”) amendments to AU Section 411, “The Meaning of ‘Present Fairly in Conformity With Generally Accepted Accounting Principles “.  We do not believe the adoption of this standard will have a material impact on our Consolidated Financial Statements.

In April 2009, the Financial Accounting Standards Board (FASB) issued three FSPs related to fair value measurements. The first, FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly, provides guidance on determining whether a market is inactive and whether transactions in that market are distressed.  The second FSP issued, FSP FAS 115-2, FAS 124-2, and EITF 99-20-2, Recognition and Presentation of Other-Than-Temporary Impairments, provides guidance on how to assess whether an asset has experienced an other-than-temporary impairment and, if so, where the impairment should be recorded in the financial statements.  The third FSP issued, FSP FAS 107-1 and APB 28-1, Interim Disclosures About Fair Value of Financial Instruments, requires that disclosures currently required under SFAS No. 107, Disclosures about Fair Value of Financial Instruments, be presented for interim periods as well as annual periods.  These FSPs are first effective for interim periods ending after June 15, 2009 and are not expected to have a material impact on our Consolidated Financial Statements.

In June 2008, the FASB issued EITF Issue No. 03-6-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities”; (“EITF 03-6-1”). EITF 03-6-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share (EPS) under the two-class method described in paragraphs 60 and 61 of FASB No. 128,  “Earnings per Share”. EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008 and is to be applied retrospectively. The adoption of EITF 03-6-1 is not expected to have a material impact on the Company’s consolidated financial position and results of operations.

F10

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

2.  Restructurings

March 2009 Restructuring

On March 12, 2009, we announced several additional restructuring actions to further reduce our exposure to the North American automotive industry and to consolidate manufacturing facilities in lower cost regions to reduce costs.  After these actions our principal manufacturing operations will be in Mexico, Malta and China.  In addition, we have decided to transfer certain new GM business to other suppliers.  This business was scheduled to be produced in our Shanghai, China automotive facility.

All Ford Motor Company production at Methode’s Reynosa, Mexico, facility will be moved to another supplier.  TouchSensor manufacturing currently in west suburban Chicago, Illinois, will be moved to Monterrey, Mexico.  Additionally, our operations in Shanghai, China, will be consolidated to two facilities from three.

In total, this additional restructuring will affect approximately 850 employees worldwide. We estimate that we will record a pre-tax charge between $16,000 and $25,000, during fiscal years 2009 and 2010. The cash portion of this charge is estimated between $7,000 and $8,000.

During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $7,263, which consisted of $100 for employee severance, $1,373 in impairment for buildings and improvements and machinery and equipment, $5,418 for impairment of customer funded tooling and $133 in forfeited security deposits related to the transfer of the new GM business and $239 relating to professional fees.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 of between $8,700 and $17,700.

As of May 2, 2009, we had an accrued restructuring liability of $141 reflected in the current liabilities section of our consolidated balance sheet.  We expect this liability to be paid out during fiscal 2010.

The table below reflects the activity related to the March 2009 restructuring as of May 2, 2009:

	One-Time
	Employee		Asset			Other
	Severance		Write-Downs			Costs			Total
Accrued balance at May 3, 2008	$	—	$	—		$	—		$	—
FY 2009 restructuring charges	100		6,924			239			7,263
Payments and asset write-downs	—		(6,924		)	(198		)	(7,122		)
Accrued balance at May 2, 2009	$	100	$	—		$	41		$	141

January 2008 Restructuring

On January 24, 2008, we announced a restructuring of our U.S.-based automotive operations and a decision to discontinue producing certain legacy products in the Interconnect segment.  The Automotive and Interconnect restructuring is expected to be completed during fiscal 2010.  We record the expense in the restructuring section of our Consolidated Statement of Operations. On January 24, 2008, the total pre-tax charges were estimated between $19,000 and $25,000.  As of May 2, 2009, we have recorded $23,174 of the charges.  We estimate that we will record pre-tax restructuring charges in fiscal 2010 of between $500 and $1,500, of which $500 will relate to the termination of approximately 225 employees and the cost of one-time employee benefits, retention, COBRA and outplacement services.  We continue to perform periodic impairment testing, if indicators exist, and will record any charges incurred as per SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, (“SFAS No. 144”) in the period when impairment is incurred.

During the fiscal year ended May 3, 2008, we recorded a restructuring charge of $5,159, which consisted of

F11

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

January 2008 Restructuring - Continued

$3,355 for employee severance, $1,346 in impairments and accelerated depreciation for buildings and improvements and machinery and equipment and $458 relating to professional fees.  As of May 3, 2008, we had an accrued restructuring liability of $3,176 reflected in the current liabilities section of our consolidated balance sheet.

During the fiscal year ended May 2, 2009, we recorded a restructuring charge of $18,015, which consisted of $6,099 for employee severance, $3,522 and $7,276 in impairments and accelerated depreciation, respectively, for buildings and improvements and machinery and equipment, $153 in inventory write-downs and $965 relating to professional fees.  As of May 2, 2009, we had an accrued restructuring liability of $1,849 reflected in the current liabilities section of our consolidated balance sheet.  We expect this liability to be paid out during fiscal 2010.

The table below reflects the January 2008 restructuring activity for fiscal years ended May 3, 2008 and May 2, 2009.

	One-Time
	Employee			Asset			Other
	Severance			Write-Downs			Costs			Total
Accrued balance at April 28, 2007	$	—		$	—		$	—		$	—
Fiscal 2008 restructuring charges	3,355			1,346			458			5,159
Fiscal 2008 payments and asset write-downs	(203		)	(1,346		)	(434		)	(1,983		)
Accrued balance at May 3, 2008	3,152			—			24			3,176
Fiscal 2009 restructuring charges	6,099			10,951			965			18,015
Fiscal 2009 payments and asset write-downs	(7,402		)	(10,951		)	(989		)	(19,342		)
Accrued balance at May 2, 2009	$	1,849		$	—		$	—		$	1,849

Fiscal 2007 Restructuring

In the third quarter of fiscal 2007, we closed our Scotland automotive parts manufacturing plant and transferred all production lines from that facility to our automotive parts manufacturing operation in Malta.  We recorded charges of $2,518 related to the closing and transfer of operations, consisting of involuntary severance of $1,525 for termination of 140 employees, equipment moving and installation costs of $667, provision for the permanent impairment of assets of $174, and professional fees and lease and other obligations of $152, reduced by a cumulative currency translation credit of $491.   All restructuring costs relating to the Scotland restructuring have been paid out as of May 3, 2008.

F12

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

3.  Acquisitions

Fiscal 2009 Acquisitions

On September 30, 2008, we acquired certain assets of Hetronic LLC (Hetronic) for $53,639 in cash.  We also incurred $2,447 in transaction costs related to the purchase.  Hetronic is a global leader in industrial safety radio remote controls with locations in the U.S., Malta, the Philippines and Germany.  Hetronic is represented in 45 countries by direct sales associates, licensed partners, distributors and representatives.  Hetronic provides application specific and standard controls to many different industries, such as material handling, transportation, mining, military, agriculture and construction.

Based on a third-party valuation report, the tangible net assets acquired had a fair value of $20,533.  The fair values assigned to intangible assets acquired were $12,170 for customer relationships, $2,700 for the trade name and trademarks, $1,450 for technology valuation, and $170 for non-competes, resulting in $19,063 of goodwill.  The customer relationships, technology valuation and non-competes are being amortized over 5 to approximately 12 years.  The trade name and trademarks are not subject to amortization but are subject to periodic impairment testing.  The accounts and transactions of Hetronic have been included in the Interconnect segment in the consolidated financial statements from the effective date of the acquisition.

Fiscal 2008 Acquisitions

On August 31, 2007, we acquired 100% of the assets of Value Engineered Products, Inc. (VEP) for $5,750 in cash.  We also incurred $79 in transaction costs related to the purchase.  VEP is a thermal management solutions provider, manufacturing heat sinks and related products for high-powered applications.  These components complement our Power Product offerings and, in some instances, are joined with bus bars to aid thermal management of power systems.  The terms of the acquisition provide for an additional payment of up to a maximum of $1,000 if sales reach specified targets during the twelve-month period following the closing.  The final payout was $758 and was recorded in the second quarter of fiscal 2009.

Based on a third-party valuation report, the tangible net assets acquired in the VEP transaction had a fair value of $915.  The fair values assigned to intangible assets acquired were $2,900 for customer relationships and $600 for trademarks, resulting in $2,172 of goodwill.  The customer relationships acquired are being amortized over a period of approximately 16 years, which began in September 2007.  The trademark intangible assets are not subject to amortization but are subject to periodic impairment testing.  The accounts and transactions of the acquired business have been included in the Power Products segment in the consolidated financial statements from the effective date of the acquisition.

On March 30, 2008, we acquired 100% of the assets of Tribotek, Inc for $1,750 in cash.  We also incurred $61 in transaction costs related to the purchase.  Tribotek designs, develops and manufactures high current power connectors and power product systems for products such as power supplies, servers, rectifiers, inverters, robotics and automated test equipment, in addition to various military and telecommunication applications.

The tangible net assets acquired in the Tribotek transaction had a fair value of $1,445.  The fair values assigned to intangible assets acquired were $366 for patents that are being amortized over a period of approximately 18 years beginning March 2008.  There was no goodwill recorded for this acquisition.  The accounts and transactions of the acquired business have been included in the Power Products segment in the consolidated financial statements from the effective date of the acquisition.

Fiscal 2007 Acquisition

As of March 1, 2007, we acquired 100% of the member interest of TouchSensor Technologies, LLC from Gemtron Corporation for $58,474 in cash and assumed liabilities of $7,061.  We also incurred $2,239 in transaction costs related to the purchase.  TouchSensor is a North American market leader in solid-state, field-effect switching.  Using its patented technology, TouchSensor designs and manufactures touch-sensitive user interface panels found

F13

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

3.  Acquisitions - Continued

on products such as home appliances, exercise equipment, electronic bath/shower controls, commercial beverage dispensers and automobiles.

The tangible net assets acquired had a fair value of $6,886.  The fair values assigned to intangible assets acquired were $9,800 for patents, $250 for covenants not to compete, $18,200 for customer relationships, and $2,900 for trade name, resulting in $22,677 of goodwill.  The intangible assets acquired are being amortized over periods of 15 to 20 years.  The accounts and transactions of the acquired business have been included in the Interconnect segment in the consolidated financial statements from the effective date of the acquisition.  The pro forma results of operations, assuming the purchase occurred at May 2, 2005, would not differ materially from the reported amounts.  Included in our results for fiscal 2007 are approximately 8 weeks of TouchSensor sales of $7,100 and operating income of $400.

4.  Intangible Assets and Goodwill

Goodwill and Intangible Asset Write-Offs

We review our goodwill and other intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable, and we also review our goodwill annually in accordance with SFAS No. 142, “Goodwill and Other Intangibles”.  The values assigned to goodwill and intangible assets are normally based on estimates and judgments regarding expectations for the success and life cycle of products and technologies acquired.  A severe decline in expectations, future cash flows, a change in strategic direction or our market capitalization remaining below our net book value for a significant period of time could result in significant impairment charges, which could have a material adverse effect on our financial condition and results of operations.  Based on events and general business declines, we performed “step one” of the goodwill impairment test in accordance with paragraph 19 of SFAS No. 142, on the reporting units that have goodwill during fiscal 2009.  Based on this test, we determined that the fair value was less than the carrying value of the net assets for certain reporting units.  We completed  “step two” of the goodwill test and concluded that goodwill was impaired.  Therefore, during fiscal 2009, we recorded a goodwill impairment charge of $25,840 in our Automotive segment, $30,750 in our Interconnect segment, $5,358 in our Power Products segment and $1,203 in our Other segment for a total of $63,151 related to these assets.

Also, in accordance with FASB Statement No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, we record impairment losses on long-lived assets used in operations when events and circumstances indicate that long-lived assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amounts of those assets. During fiscal 2009, based on our future estimates of the undiscounted cash flows, it was determined that certain identifiable intangible assets of our TouchSensor and Hetronic businesses in the Interconnect segment, the Automotive Safety Technologies business in our Automotive segment and Magna-Lastic Devices, Inc. from our Other segment were impaired.  Therefore, we recorded an impairment charge of $26,176 in the Interconnect segment, $4,626 in the Automotive segment and $421 in the Other segment for a total of $31,063 for these assets.

F14

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

4.  Intangible Assets and Goodwill - Continued

The following table presents details of the goodwill and other asset impairments during fiscal 2009:

				Intangible
Segment	Reporting Unit	Goodwill		Assets		Total
Automotive	Methode Electronics Malta Ltd.	$	16,987	$	160	$	17,147
	Automotive Safety Technologies, Inc.	8,853		4,466		13,319
	Subtotal Automotive	25,840		4,626		30,466
Interconnect	Hetronic	19,063		11,587		30,650
	TouchSensor Technologies	11,528		14,589		26,117
	Methode Development Company	159		—		159
	Subtotal Interconnect	30,750		26,176		56,926
Power Products	Cableco Technologies, Inc.	3,186		—		3,186
	Value Engineered Products, Inc.	2,172		—		2,172
	Subtotal Power Products	5,358		—		5,358
Other	Magna-Lastic Devices, Inc.	933		421		1,354
	Trace Laboratories	270		—		270
	Subtotal Other	1,203		421		1,624
	Total	$	63,151	$	31,223	$	94,374

F15

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

4.  Intangible Assets and Goodwill - Continued

Intangible Assets

The following tables present details of our remaining identifiable intangible assets:

	May 2, 2009
							Wtd. Avg.
							Remaining
			Accumulated				Amortization
	Gross		Amortization		Net		Periods (Years)
Customer relationships and agreements	$	14,995	$	12,718	$	2,277	14.7
Patents and technology licenses	23,244		5,169		18,075		13.4
Covenants not to compete	480		331		149		2.8
Total	$	38,719	$	18,218	$	20,501
	May 3, 2008
							Wtd. Avg.
							Remaining
			Accumulated				Amortization
	Gross		Amortization		Net		Periods (Years)
Customer relationships and agreements	$	41,324	$	19,168	$	22,156	16.2
Patents and technology licenses	24,692		5,795		18,897		15.5
Covenants not to compete	2,480		2,251		229		12.1
Total	$	68,496	$	27,214	$	41,282

The estimated aggregate amortization expense for each of the five succeeding fiscal years is as follows:

2010	$	2,248
2011	2,187
2012	1,675
2013	1,298
2014	1,185

As of May 2, 2009, the patents and technology licenses include $2,400 of trade names that are not subject to amortization.

5.  Shareholders’ Equity

Preferred Stock.  We have 50,000 authorized shares of Series A Junior Participating Preferred Stock, par value $100 per share, of which none were outstanding during any of the periods presented.

Common Stock.

Common stock, par value $0.50 per share, authorized, issued and in treasury, was as follows:

	May 2, 2009	May 3, 2008
Authorized	100,000,000	100,000,000
Issued	38,290,776	38,225,379
In treasury	1,372,188	702,708

F16

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

5.  Shareholders’ Equity - Continued

At May 2, 2009, 394,718 shares of common stock are reserved for future issuance in connection with our stock plans.

Shareholders’ Rights Agreement.  On January 8, 2004, our Board of Directors declared a dividend of one preferred share purchase right (a “Right”) for each share of common stock (“Common Shares”) outstanding on January 18, 2004 to the stockholders of record on that date.  Each Right entitles the registered holder to purchase from us one ten-thousandth of a share of our Series A Junior Participating Preferred Stock at an exercise price of $65.00 per one ten-thousandth of a preferred share, subject to adjustment.

The Rights, which are not detachable, will trade automatically with the Common Shares and will not be exercisable until it is announced that a person or group has become an “acquiring person” by acquiring 15% or more of the Common Shares, or a person or group commences a tender offer that will result in such person or group owning 15% or more of the Common Shares.  Thereafter, separate right certificates will be distributed, and each right will entitle its holder to purchase for the exercise price, a fraction of a share of our Series A Junior Participating Preferred Stock having economic and voting terms similar to one share of common stock.

Upon announcement that any person or group has become an acquiring person, each Right will entitle all right-holders (other than the acquiring person) to purchase, for the exercise price, a number of shares of Common Shares having a market value of twice the exercise price.  Right-holders would also be entitled to purchase the common stock of another entity having a value of twice the exercise price if, after a person has become an acquiring person, the Company were to enter into certain mergers or other transactions with such other entity.  If any person becomes an acquiring person, the Company’s Board of Directors may, at its option and subject to certain limitations, exchange one share of common stock for each Right.

The Rights may be redeemed by our Board of Directors for $0.01 per Right at any time prior to a person or group having become an acquiring person.  The Rights will expire on January 8, 2014.

Dividends

We paid quarterly dividends totaling  $9,778 during fiscal 2009.  We intend to retain the remainder of our earnings not used for dividend payments to provide funds for the operation and expansion of our business.  Our board of directors approved a stock repurchase plan in September 2008, which expires at the end of fiscal 2010.  There were 669,480 shares purchased at an average price of $7.85 under the plan in fiscal 2009.

2007 Stock Plan

On June 21, 2007, our Board of Directors, on the recommendation of our Compensation Committee, adopted the Methode Electronics, Inc. 2007 Stock Plan (the “Stock Plan”).  The Stock Plan was voted on and approved by the shareholders at our annual meeting on September 13, 2007.  Upon adoption of the Stock Plan, our board of directors elected to terminate the 2004 Plan and the 2000 Plan with respect to the shares reserved under these plans that are not subject to outstanding awards.

The Stock Plan permits a total of 1,250,000 shares of our common stock to be awarded to participants.  Shares issued under the Stock Plan may be either authorized but unissued shares, or treasury shares.  If any award terminates, expires, is cancelled or forfeited as to any number of shares of common stock, new awards may be granted with respect to such shares.  The total number of shares with respect to which awards may be granted to any participant in any calendar year shall not exceed 200,000 shares.  As of May 2, 2009 there were 394,718 shares still available for award under the Stock Plan.

F17

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

5.  Shareholders’ Equity - Continued

Stock Options Granted Under the 2000 and 2004 Stock Plans

There are 625,633 stock options that were granted in previous years under the 2000 and 2004 stock plans that are outstanding and exercisable as of May 2, 2009.  No options were granted under the Plans since the first quarter of fiscal 2005.  Stock options granted under the Plans vest over a period of six months to forty-eight months after the date of the grant and have a term of ten years.  There was no remaining compensation expense relating to these options in fiscal 2009.

	Options Outstanding				Exercisable Options
			Wtd. Avg.			Wtd. Avg.
			Exercise			Exercise
	Shares		Price		Shares	Price
April 29, 2006	1,657,699		$	10.38	1,463,623	$	10.28
Granted	—		—
Exercised	(699,017	)	10.31
Cancelled	(139,764	)	11.45
April 28, 2007	818,918		10.26		777,668	10.20
Granted	—		—
Exercised	(125,708	)	10.32
Cancelled	(3,521	)	8.03
May 3, 2008	689,689		10.26		689,689	10.26
Granted	—		—
Exercised	(19,089	)	5.90
Cancelled	(44,967	)	10.65
May 2, 2009	625,633		10.36		625,633	10.36

Options Outstanding and
Exercisable at May 2, 2009
		Wtd. Avg.		Avg.
Range of		Exercise		Remaining
Exercise Prices	Shares	Price		Life (Years)
$5.12 - $7.69	154,125	$	6.68	2.0
$8.08 - $11.64	336,748	10.60		1.9
$12.11 - $17.66	134,760	13.98		1.0
	625,633	10.36

F18

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

5.  Shareholders’ Equity - Continued

Stock Options Granted Under the 2007 Stock Plan

On March 16, 2009, the Compensation Committee approved 285,000 stock option grants to our executive officers under the Company’s 2007 Stock Plan.  These options vest in full on March 16, 2012, and have a ten-year term.

	Options Outstanding
		Exercise
	Shares	Price
May 3, 2008	—	$	—
Granted	285,000	2.72
Exercised	—	—
Cancelled	—	—
May 2, 2009	285,000	$	2.72

Options Outstanding
at May 2, 2009
			Avg.
			Remaining
Exercise Price		Shares	Life (Years)
$	2.72	285,000	9.9

We estimated the fair value of our employee stock options on the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Expected volatility	69.58		%
Risk-Free interest rate	1.39		%
Dividend yield	2.26		%
Expected life of options	6.87 years
Weighted-average grant-date fair value	$	1.46

Expected volatility was based on the monthly changes in our historical common stock prices over the expected life of the award.  The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of the grant corresponding to the expected life of the options.  Our dividend yield is based on the average dividend yield for the previous two years from the date of grant.  The expected life of options is based on historical stock option exercise patterns and the terms of the options.

Restricted Stock Awards and Restricted Stock Units

In April 2007, 225,000 shares of common stock subject to performance-based Restricted Stock Awards (RSAs) granted to our CEO in fiscal 2006 and 2007 were converted to Restricted Stock Units (RSUs).  The RSUs are subject to the same vesting schedule and other major provisions of the RSAs they replaced, except the RSUs are not payable until the earlier of: (1) thirty days after the CEO’s date of termination of employment with the Company and all of its subsidiaries and affiliates; or (2) the last day of our fiscal year in which the payment of common stock in satisfaction of the RSUs becomes deductible to the Company under Section 162(m) of the Internal Revenue Code.  All further discussion of RSAs in this report includes the RSUs described above.

At the beginning of fiscal 2009, there were 525,589 performance-based and time-based RSAs outstanding.  The time-based RSAs vest in three equal annual installments from the grant date.  All RSAs awarded to senior

F19

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

5.  Shareholders’ Equity - Continued

management are performance-based and vest after three years if the recipient remains employed by the Company until that date and we have met certain revenue growth and return on invested capital targets.  All of the unvested RSAs are entitled to voting rights and to payment of dividends.  During fiscal 2009, we awarded 356,665 restricted stock awards.  Of the shares granted, 24,000 shares vested immediately upon grant, 255,065 are performance-based RSAs and 77,600 are time-based RSAs.

During fiscal 2009, it was determined that based on the current economic environment, the performance shares granted in fiscal years 2007, 2008 and 2009 are not meeting the revenue growth and return on invested capital targets.  Due to the performance shares not meeting financial targets, all of the 220,750, performance-based stock awards granted in fiscal 2007, were cancelled.  In addition, we have recorded an adjustment to the pre-tax compensation expense to reflect the performance shares not meeting current and future anticipated revenue growth and return on invested capital targets.  We recognized pre-tax compensation expense reversal for RSAs in the fiscal year ended May 2, 2009 of $570, a pre-tax compensation expense of $3,348 for the fiscal year ended May 3, 2008 and $2,922 for the fiscal year ended April 28, 2007.  We record the expense in the selling and administrative section of our Consolidated Statement of Operations.

The following table summarizes the RSA activity:

	Fiscal Year
	2009		2008		2007
Unvested at beginning of fiscal year	582,298		525,589		471,957
Awarded	356,665		246,123		316,390
Vested	(105,522	)	(188,982	)	(245,765	)
Cancelled	(220,750	)	—		—
Forfeited	(34,404	)	(432	)	(16,993	)
Unvested at end of period	578,287		582,298		525,589

The table below shows the Company’s unvested RSAs at May 2, 2009:

					Probable		Target
					Unearned		Unearned
Grant			Weighted		Compensation		Compensation
Fiscal			Average		Expense at		Expense at
Year	RSAs	Vesting Period	Value		May 2, 2009		May 2, 2009
2006	125,000	3-year cliff performanced-based	$	12.42	$	—	$	—
2007	834	3-year equal annual installments	11.07		—		—
2007	—	3-year cliff performanced-based	—		—		—
2008	18,460	3-year equal annual installments	14.77		91,228		91,228
2008	149,730	3-year cliff performanced-based	15.14		—		933,944
2009	49,724	3-year equal annual installments	10.64		322,004		322,004
2009	234,539	3-year cliff performanced-based	11.35		—		2,031,495

At May 2, 2009, the aggregate unvested RSAs had a weighted average fair value of $12.61 and a weighted average vesting period of approximately 15 months.

In connection with the performance-based RSAs, we agreed to pay each recipient a cash bonus if the Company meets certain additional financial targets, which shall be measured as of the vesting date. The amount of the cash bonuses, if any, will be calculated by multiplying the number representing up to 50% of each recipient’s RSAs described in the paragraphs above by the closing price of our common stock as of the vesting date.  This

F20

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

5.  Shareholders’ Equity - Continued

additional cash bonus is recorded as compensation expense ratably over the vesting period, based upon the market value of our common stock as of the latest balance sheet date, if such targets are being met as of the latest balance sheet date.  As of May 2, 2009, we were not meeting certain of these additional financial targets, no compensation expense has been accrued as a liability.

6.  Employee 401(k) Savings Plan

We have an Employee 401(k) Savings Plan covering substantially all U.S. employees to which we make contributions equal to 3% of eligible compensation.  Our contributions to the Employee 401(k) Savings Plan were $1,950, $2,075 and $1,806 in fiscal 2009, 2008 and 2007, respectively.

7.  Income Taxes

Significant components of our deferred tax assets and liabilities were as follows:

	May 2,		May 3,
	2009		2008
Deferred tax liabilities:
Accelerated tax depreciation	$	2,104	$	2,101
Deferred tax assets:
Deferred compensation and stock award amortization	3,576		3,083
Inventory valuation differences	2,855		3,015
Property valuation differences	1,031		1,001
Accelerated book amortization	22,025		2,656
Environmental reserves	1,191		994
Bad debt reserves	639		562
Vacation accruals	966		1,383
Restructuring accruals	866		1,261
Foreign investment tax credit	26,518		28,986
Foreign net operating loss carryover	3,032		252
State net operating loss carryover	443		—
Other accruals	260		1,699
	63,402		44,892
Less valuation allowance	51,377		23,962
Total deferred tax assets	12,025		20,930
Net deferred tax assets	$	9,921	$	18,829
Balance sheet classification:
Current asset	$	4,928	$	8,730
Non-current asset	4,993		10,099
	$	9,921	$	18,829

F21

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

7.  Income Taxes - Continued

At May 2, 2009, we had valuation allowances against our deferred tax assets of $51,377.  In accordance with FASB No. 109, “Accounting for Income Taxes”, a valuation allowance is required to be recorded when it is more likely than not that deferred tax assets will not be realized.  Future realization depends on the existence of sufficient taxable income within the carry forward period available under the tax law.  Sources of future taxable income include future reversals of taxable temporary differences, future taxable income exclusive of reversing taxable differences, taxable income in carry back years and tax planning strategies.  These sources of positive evidence of realizability must be weighed against negative evidence, such as cumulative losses in recent years.

In forming a judgment about the future realization of our deferred tax assets, we considered both the positive and negative evidence of realizability and gave significant weight to the negative evidence from our recent cumulative loss.  We will continue to assess this situation and make appropriate adjustments to the valuation allowance based on our evaluation of the positive and negative evidence existing at the time.  We are currently unable to forecast when there will be sufficient positive evidence for us to reverse the remainder of the valuation allowances that we have recorded.

The valuation allowance is associated with the deferred tax assets for the differences between book and tax that result from net operating losses (NOL), foreign investment tax credits with unlimited carryovers generated in the current and prior years and temporary differences which become deductible when the related asset is recovered or related liability is settled.

The foreign and state NOL carry forwards relate to the current years’ NOLs, which may be used to reduce tax liabilities in future years.  If not realized, the state tax benefits of $443 expire over a twelve to twenty year period.

Income taxes consisted of the following:

	Fiscal Year Ended
	May 2,			May 3,			April 28,
	2009			2008			2007
Current
Federal	$	(6,956	)	$	10,580		$	8,414
Foreign	867			1,502			(4		)
State	(309		)	589			2,422
	(6,398		)	12,671			10,832
Deferred	8,078			(2,948		)	(1,012		)
	$	1,680		$	9,723		$	9,820

F22

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

7.  Income Taxes - Continued

A reconciliation of the consolidated provisions for income taxes to amounts determined by applying the prevailing statutory federal income tax rate to pre-tax earnings/(loss) is as follows:

	Fiscal Year Ended
	May 2,					May 3,					April 28,
	2009					2008					2007
Income tax at statutory rate	$	(38,779	)	35.0	%	$	17,317		35.0	%	$	12,566		35.0	%
Effect of:
State income taxes, net of federal benefit	(2,559		)	2.3		244			0.5		1,609			4.5
Foreign operations with lower statutory rates	(2,578		)	2.3		(5,718		)	(11.6	)	(4,179		)	(11.6	)
Foreign losses with no tax benefit	13,498			(12.2	)	12			0.0		1,802			5.0
Foreign investment tax credit (FTC)	(2,027		)	1.8		(6,360		)	(12.8	)	(4,059		)	(11.3	)
Change in tax contingency reserve	37			—		1,910			3.9		(213		)	(0.6	)
Manufacturing deduction	—			—		(318		)	(0.6	)	(53		)	(0.1	)
Research and development credit	(255		)	0.2		(470		)	(1.0	)	—			—
Foreign plant closing benefit	—			—		(1,846		)	(3.7	)	—			—
Goodwill	6,422			(5.8	)	—			—		—			—
Other - net	(32		)	—		213			0.4		(485		)	(1.4	)
Valuation allowance	27,953			(25.1	)	4,739			9.6		2,832			7.9
Income tax provision	$	1,680		-1.5	%	$	9,723		19.7	%	$	9,820		27.4	%

We paid income taxes of $8,280 in 2009, $10,628 in 2008 and $13,963 in 2007.  No provision has been made for income taxes on undistributed net income of foreign operations, as we expect them to be indefinitely reinvested in our foreign operations.  If the undistributed net income of $49,860 were distributed as dividends, we would be subject to foreign tax withholdings and incur additional income tax expense of approximately $19,944, before available foreign tax credits.  It is not practical to estimate the amount of foreign tax withholdings or foreign tax credits that may be available.

We adopted FIN 48 on April 29, 2007.  As a result of the implementation of FIN 48, we recognized a $1,039 increase in the liability for unrecognized tax benefits which was accounted for as an increase of $1,014 to the April 29, 2007 balance of deferred tax assets and a decrease of $25 to the April 29, 2007 balance of retained earnings.

As of May 2, 2009, our FIN 48 gross unrecognized tax benefits totaled $6,126.  After considering the federal impact on the state issues, $5,905 of this total would favorably affect the effective tax rate if resolved in our favor.

The following table presents a reconciliation of the beginning and ending amounts of unrecognized tax benefits:

Balance at May 3, 2008	$	5,770
Increases for positions related to the current year	—
Increases for positions related to the prior years	570
Decreases for positions related to prior years	(135		)
Lapsing of statutes of limitations	(79		)
Balance at May 2, 2009	$	6,126

We believe that it is reasonably possible that the total amount of unrecognized tax benefits will change within the next twelve months.  We have certain tax return years subject to statutes of limitation, which will close within twelve months from the end of the fiscal 2009.  Unless challenged by tax authorities, the closure of those

F23

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

7.  Income Taxes - Continued

statutes of limitation is expected to result in the recognition of uncertain tax positions in the range between $100 and $2,500.

We are generally no longer subject to U.S. federal, state or non-U.S. income tax examinations by tax authorities for years prior to fiscal year ended April 30, 2006.

The continuing practice of the Company is to recognize interest and penalties related to income tax matters in the provision for income taxes.  We had $935 accrued for interest and no accrual for penalties at May 2, 2009.  We recorded interest expense related to unrecognized tax provision of $155 in fiscal 2009 and no expense for penalties.

8.  Earnings Per Share

A basic earnings per share (EPS) is calculated by dividing net earnings by the weighted average number of common shares outstanding for the applicable period.  Diluted EPS is calculated after adjusting the numerator and the denominator of the basic EPS calculation for the effect of all potential dilutive common shares outstanding during the period.

The following table sets forth the computation of basic and diluted earnings/(loss) per share:

	Fiscal Year Ended
	May 2,			May 3,		April 28,
	2009			2008		2007
Numerator - net income/(loss)	$	(112,483	)	$	39,754	$	26,084
Denominator:
Denominator for basic earnings per share-weighted average shares (in thousands)	36,879			37,069		36,328
Dilutive potential common shares-employee and director stock options (in thousands)	—			424		315
Denominator for diluted earnings per share adjusted weighted average shares and assumed conversions (in thousands)	36,879			37,493		36,643
Basic and diluted net income/(loss) per share:
Basic income/(loss) per share	$	(3.05	)	$	1.07	$	0.72
Diluted net income/(loss) per share	$	(3.05	)	$	1.06	$	0.71

Options to purchase 625,633, 35,296 and 370,506  shares of common stock were outstanding at May 2, 2009, May 3, 2008 and April 28, 2007, respectively, but were not included in the computation of diluted earnings/(loss) per share because the exercise price was greater than the average market price of the common shares; therefore, the effect would have been anti-dilutive.  Potential common shares have not been included in the calculation of diluted net loss per share, as the effect would be anti-dilutive.  As such, the numerator and the demoninator used in computing both basic and diluted net loss per share for the fiscal year ended May 2, 2009 are the same.

9.  Environmental Matters

We apply the guidance of SOP 96-1 Environmental Remediation Liabilities in accounting for known environmental obligations.  We are not aware of any potential unasserted environmental claims that may be brought

F24

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

9.  Environmental Matters - Continued

against us.  We are involved in environmental investigation and/or remediation at two of our former plant sites.  We use environmental consultants to assist us in evaluating our environmental liabilities in order to establish appropriate accruals in our financial statements.  Accruals are recorded when environmental remediation is probable and the costs can be reasonably estimated.  A number of factors affect the cost of environmental remediation, including the determination of the extent of contamination, the length of time remediation may require, the complexity of environmental regulations and the advancement of remediation technology.  Considering these factors, we have estimated (without discounting) the costs of remediation, which will be incurred over a period of several years.  Recovery from insurance or other third parties is not anticipated.  We are not yet able to determine when such remediation activity will be complete, but estimates for certain remediation efforts are projected through 2015.

At May 2, 2009 and May 3, 2008, we had accruals, primarily based upon independent engineering studies, for environmental matters of $4,271 and $2,580, respectively, of which $600 was classified in other accrued expenses and the remainder was included in other liabilities.  We believe the provisions made for environmental matters are adequate to satisfy liabilities relating to such matters, however it is reasonably possible that costs could exceed accrued amounts if the selected methods of remediation do not reduce the contaminates at the sites to levels acceptable to federal and state regulatory agencies.

In fiscal 2009, we spent $685 on remediation cleanups and related studies compared with $387 in fiscal 2008 and $591 in fiscal 2007.  The costs associated with environmental matters as they relate to day-to-day activities were not material.

10.  Pending Litigation

Certain litigation arising in the normal course of business is pending against us.  We, from time to time, are subject to various legal actions and claims incidental to our business, including those arising out of alleged defects, breach of contracts, employment-related matters and environmental matters.  We consider insurance coverage and third party indemnification when determining required accruals for pending litigation and claims.  Although the outcome of potential legal actions and claims cannot be determined, it is the opinion of our management, based on the information available, that we have adequate reserves for these liabilities and that the ultimate resolution of these matters will not have a significant effect on our consolidated financial statements.

11.  Material Customers

Sales to two customers in the Automotive segment, either directly or through their tiered suppliers, represented a significant portion of our business.  Net sales to these two customers approximated 18.8% and 9.7% of consolidated net sales in fiscal 2009; three customers accounted for 25.1%, 13.8% and 9.4% of consolidated net sales, respectively in fiscal 2008 and three customers accounted for 27.3%, 16.5% and 13.6% of consolidated net sales in fiscal 2007.  Sales of PODS sensor pads to one of these customers were 9.7%, 9.4% and 13.6% of consolidated net sales in fiscal 2009, 2008 and 2007, respectively.

At May 2, 2009 and May 3, 2008, accounts receivable from customers in the automotive industry were approximately $26,834 and $49,774, respectively, which included $14,386 and $22,888, respectively, at our Maltese subsidiary.  Accounts receivable are generally due within 30 to 60 days.  Credit losses relating to all customers generally have been within management’s expectation.

12.  Line of Credit

We have an agreement with our primary bank for a revolving credit facility to provide up to $75,000 ready financing for general corporate purposes, including acquisition opportunities that may become available.  This facility, which expires January 31, 2011, bears interest at (a) LIBOR plus 2.75% or (b) the bank’s prime rate (or, if

F25

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

12.  Line of Credit - Continued

higher, the Federal Funds Rate plus 0.5%) plus 1.50%.  The facility also includes a fee of 0.50% of the unused balance.  The facility requires that we maintain a minimum consolidated net worth equal to 85% of consolidated net worth ($197,010 at May 2, 2009) plus 50% of consolidated net income earned in each fiscal quarter, with no deduction for a net loss in any quarter, and maintain consolidated interest coverage, as defined, of not less than 3.50:1.00, and maintain on a monthly basis a consolidated debt to EBITDA ratio, as defined, of not more than 2.50:1.00.  We were in compliance at May 2, 2009.  We borrowed $10,000 under this facility to finance a portion of the Hetronic acquisition on September 30, 2009.  The amount was repaid in full the following month.

13.  Segment Information and Geographic Area Information

We are a global manufacturer of component and subsystem devices.  We design, manufacture and market devices employing electrical, electronic, wireless, sensing and optical technologies.  Our components are found in the primary end markets of the automotive, appliance, communications (including information processing and storage, networking equipment, wireless and terrestrial voice/data systems), aerospace, rail and other transportation industries; and the consumer and industrial equipment markets.

SFAS No. 131, Disclosures about Segments of an Enterprise and Related Information (“SFAS No. 131”), establishes annual and interim reporting standards for an enterprise’s operating segments and related disclosures about its products, services, geographic areas and major customers. An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenues and incur expenses, and about which separate financial information is regularly evaluated by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources.  The CODM, as defined by SFAS No. 131, is the Company’s President and Chief Executive Officer (“CEO”).

The Automotive segment supplies electronic and electromechanical devices and related products to automobile OEMs, either directly or through their tiered suppliers, including control switches for electrical power and signals, connectors for electrical devices, integrated control components, switches and sensors that monitor the operation or status of a component or system, and packaging of electrical components.

The Interconnect segment provides a variety of copper and fiber-optic interconnect and interface solutions for the appliance, computer, networking, telecommunications, storage, medical, military, aerospace, commercial and consumer markets.  Solutions include solid-state field effect interface panels, PC and express card packaging, optical and copper transceivers, terminators, connectors, custom cable assemblies and conductive polymer and thick film inks.  Services include the design and installation of fiber optic and copper infrastructure systems, and manufacture of active and passive optical components.

The Power Products segment manufactures current-carrying laminated bus devices, custom power-product assemblies; powder coated bus bars, braided flexible cables and high-current low voltage flexible power cabling systems that are used in various markets and applications, including telecommunications, computers, transportation, industrial and power conversion, insulated gate bipolar transistor solutions, aerospace and military.

The Other segment includes a designer and manufacturer of magnetic torque sensing products, and independent laboratories that provide services for qualification testing and certification, and analysis of electronic and optical components.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies.  We allocate resources to and evaluate performance of segments based on operating income. Transfers between segments are recorded using internal transfer prices set by us.

F26

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

13.  Segment Information and Geographic Area Information - Continued

The table below presents information about our reportable segments:

	Fiscal Year Ended May 2, 2009
				Inter-			Power
	Automotive			Connect			Products			Other			Eliminations			Consolidated
Net sales	$	243,650		$	131,998		$	43,097		$	8,353		$	1,454		$	425,644
Transfers between segments	—			(952		)	(399		)	(103		)	(1,454		)	—
Net sales to unaffiliated customers	$	243,650		$	131,046		$	42,698		$	8,250		$	—		$	425,644
Segment income (loss) before restructuring charge, impairment of goodwill and intangible assets	$	25,782		$	1,681		$	137		$	(3,506	)	$	—		$	24,094
Restructuring	(19,283		)	(5,468		)	(527		)	—			—			(25,278		)
Impairment of goodwill and intangible assets	(30,466		)	(56,926		)	(5,358		)	(1,624		)	—			(94,374		)
Segment income (loss) including restructuring charge, impairment of goodwill and intangible assets	$	(23,967	)	$	(60,713	)	$	(5,748	)	$	(5,130	)	$	—		$	(95,558	)
Corporate expenses, net																(15,245		)
Loss before income taxes																$	(110,803	)
Depreciation and amortization	$	17,408		$	15,262		$	2,153		$	1,019		$	—		$	35,842
Corporate depreciation and amortization																1,194
																$	37,036
Identifiable assets	$	121,572		$	115,085		$	23,925		$	6,613		$	—		$	267,195
General corporate assets																38,093
Total assets																$	305,288

F27

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

13.  Segment Information and Geographic Area Information - Continued

	Fiscal Year Ended May 3, 2008
				Inter-			Power
	Automotive			Connect			Products			Other			Eliminations			Consolidated
Net sales	$	362,165		$	137,239		$	46,839		$	6,982		$	2,152		$	551,073
Transfers between segments	(69		)	(979		)	(1,023		)	(81		)	(2,152		)	—
Net sales to unaffiliated customers	$	362,096		$	136,260		$	45,816		$	6,901		$	—		$	551,073
Segment income (loss) before restructuring charge	$	59,783		$	5,268		$	8,546		$	(1,798	)				$	71,799
Restructuring	(4,487		)	(672		)	—			—						(5,159		)
Segment income (loss) including restructuring charge	$	55,296		$	4,596		$	8,546		$	(1,798	)				$	66,640
Corporate expenses, net																(17,163		)
Income before income taxes and cumulative effect of accounting change																$	49,477
Depreciation and amortization	$	19,007		$	6,257		$	1,409		$	602					$	27,275
Corporate depreciation and amortization																884
																$	28,159
Indentifiable assets	$	185,905		$	134,412		$	37,063		$	7,332					$	364,712
General corporate assets																105,508
Total assets																$	470,220

F28

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

13.  Segment Information and Geographic Area Information - Continued

The table below presents information about our reportable segments:

	Fiscal Year Ended April 28, 2007
				Inter-			Power
	Automotive			Connect			Products			Other			Eliminations			Consolidated
Net sales	$	315,691		$	83,221		$	43,398		$	7,715		$	1,598		$	448,427
Transfers between segments	—			(1,082		)	(402		)	(114		)	(1,598		)	—
Net sales to unaffiliated customers	$	315,691		$	82,139		$	42,996		$	7,601		$	—		$	448,427
Segment income (loss) before restructuring charge	$	29,328		$	9,264		$	8,845		$	(321	)	$	—		$	47,116
Restructuring	(2,027		)	—			—			—			—			(2,027		)
Segment income (loss) including restructuring charge	$	27,301		$	9,264		$	8,845		$	(321	)				$	45,089
Corporate expenses, net																(9,314		)
Income before income taxes and cumulative effect of accounting change																$	35,775
Depreciation and amortization	$	18,927		$	3,122		$	585		$	475					$	23,109
Corporate depreciation and amortization																514
																$	23,623
Indentifiable assets	$	197,107		$	119,979		$	22,979		$	7,799					$	347,864
General corporate assets																63,876
Total assets																$	411,740

F29

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

13.  Segment Information and Geographic Area Information - Continued

The following table sets forth certain geographic financial information for fiscal years ended May 2, 2009, May 3, 2008 and April 28, 2007.  Geographic net sales and income are determined based our sales and income from our various operational locations.

	Fiscal Year Ended
	May 2,			May 3,		April 28,
	2009			2008		2007
Net Sales:
North American	$	259,539		$	356,240	$	305,232
Asia Pacific	53,378			51,915		30,141
Malta	100,594			127,880		75,425
Europe, excluding Malta	12,133			15,038		37,629
	$	425,644		$	551,073	$	448,427
Income (loss) before income taxes and cumulative effect of accounting change:
North American	$	(82,328	)	$	26,922	$	22,873
Asia Pacific	(30,610		)	4,598		1,346
Europe	753			15,633		8,128
Income and expenses not allocated	1,382			2,324		3,428
	$	(110,803	)	$	49,477	$	35,775
Property, Plant and Equipment:
United States	$	30,200		$	35,921	$	48,097
Mexico	2,389			7,149		564
Asia Pacific	7,523			11,847		8,893
Malta	24,561			29,255		23,434
Europe, excluding Malta	5,244			6,108		5,869
	$	69,917		$	90,280	$	86,857

F30

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

14.  Lease Commitments

We lease certain office and manufacturing properties under non-cancelable operating leases expiring at various dates through fiscal 2014.  Rental expense under non-cancelable operating leases amounted to $4,841, $4,032 and $3,123 in fiscal years 2009, 2008 and 2007, respectively.

Our aggregate minimum rental commitments under all non-cancelable operating leases are summarized in the table below for the next succeeding five fiscal years:

2010	$	3,685
2011	1,887
2012	1,155
2013	621
2014	371

15.  Pre-Production Costs Related to Long-Term Supply Arrangements

We incur pre-production tooling costs related to the products produced for our customers under long-term supply agreements.  We had $3,182 and $8,211 as of fiscal year ended May 2, 2009 and May 3, 2008, respectively, of pre-production tooling costs related to customer-owned tools for which reimbursement is contractually guaranteed by the customer or for which the customer has provided a non-cancelable right to use the tooling.  These amounts are included in our work-in-process inventory in the consolidated balance sheets.  Net revenues and costs on projects are deferred and recognized over the life of the related long-term supply agreement.

16.  Fair Value Measurements

We adopted SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”) as of May 4, 2008.  SFAS No. 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants.

In February 2008, the FASB issued FASB Staff Position No. 157-2, which delays the effective date of SFAS No. 157 for non-financial assets and liabilities, which are not measured at fair value on a recurring basis (at least annually) until fiscal years beginning after November 15, 2008, which is our fiscal year 2010 that began May 3, 2009.  We are currently assessing the impact of adopting SFAS No. 157 for non-financial assets and liabilities on our consolidated financial statements.

SFAS No. 157 also specifies a fair value hierarchy based upon the observation of inputs in valuation techniques.  Observable inputs (highest level) reflect market data obtained from independent sources, while unobservable inputs (lowest level) reflect internally developed market assumptions.  In accordance with SFAS No. 157, fair value measurements are classified under the following hierarchy:

·Level 1 – Quoted prices in active markets for identical assets and liabilities.

·Level 2 – Quoted prices in active markets for similar assets and liabilities, or other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

·Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities.  This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The adoption of SFAS No. 157 had no effect on our consolidated financial position or results of operations.  Assets and liabilities recorded at fair value are valued using quoted market prices or under a market approach using

F31

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

16.  Fair Value Measurements - Continued

other relevant information generated by market transactions involving identical or comparable instruments and included:

Below is a table that summarizes the fair value of assets and liabilities as of May 2, 2009:

	Fair Value Measurement Used
			Quoted prices		Quoted prices
			in active		in active
			markets for		markets for		Other
			identical		similar		unobservable
	Recorded		instruments		instruments		inputs
	Value		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash and cash equivalents (1)	$	54,030	$	51,520	$	2,510	$	—
Assets related to deferred compensation plan	$	2,443	$	—	$	2,443	$	—
Total assets at fair value	$	56,473	$	51,520	$	4,953	$	—
Liabilities:
Deferred compensation plan	$	2,252	$	2,252	$	—	$	—
Total liabilities at fair value	$	2,252	$	2,252	$	—	$	—

(1) Includes cash, money-market investments and certificates of deposit.

17.  Summary of Quarterly Results of Operations (Unaudited)

The following is a summary of unaudited quarterly results of operations for the two years ended May 2, 2009 and May 3, 2008:

	Fiscal Year 2009
	Quarter Ended
			Restated
	August 2		November 1		January 31			May 2
Net sales	$	134,514	$	121,304	$	80,781		$	89,045
Gross profit	29,084		23,489		10,269			6,306
Net income/(loss)	6,816		238		(26,985		)	(92,552		)
Net income/(loss) per basic common share	0.18		0.01		(0.74		)	$	(2.50	)

	Fiscal Year 2008
	Quarter Ended
	July 28		October 27		February 2		May 3
Net sales	$	125,009	$	133,239	$	138,465	$	154,360
Gross profit	26,674		27,339		29,433		39,272
Net income	8,272		8,806		9,757		12,919
Net income per basic common share	0.22		0.24		0.26		0.35

Quarter ended November 1, 2009 Restatement:

We have restated our balance sheet as of November 1, 2008 and the related statement of income and cash flows.  We discovered an error related to unrealized currency exchange losses arising from an intercompany loan between our corporate headquarters and one of our foreign subsidiaries in conjunction with a recent acquisition of

F32

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Dollar amounts in thousands, except number of shares and per share data)

17.  Summary of Quarterly Results of Operations (Unaudited) - Continued

Hetronic, LLC, purchased on September 30, 2008.  The loan amount was $20,858.  Due to the U.S. Dollar increasing versus the Euro, from 0.69230 on September 30, 2008 to 0.78500 on November 1, 2008, an unrealized currency loss of $2,463 should have been recorded during the second quarter.

The effects of the restatement are as follows:

·Adjustment to the November 1, 2008 Condensed Consolidated Balance Sheet decreases retained earnings by $2,463 from $270,826 as previously reported, to $268,363 and increases the accumulated other comprehensive income by $2,463 from $11,472 as previously reported, to $13,935.

·Adjustment to the three months ended November 1, 2008 Condensed Consolidated Statement of Income decreases other income by $2,463 from $1,853 as previously reported to an expense of $610.  Net income for the three months ended November 1, 2008 decreased $2,463 from $2,701 as previously reported to $238.  Basic and diluted earnings per share both decreased $0.06, from $0.07 as previously reported to $0.01.

·Adjustment to the six months ended November 1, 2008 Condensed Consolidated Statement of Income decreases other income by $2,463 from $1,584 as previously reported to an expense of $879.  Net income for the six months ended November 1, 2008 decreased $2,463 from $9,517 as previously reported to $7,054.  Basic earnings per share decreased $0.06, from $0.26 as previously reported to $0.19.  Diluted earnings per share decreased $0.05, from $0.25 as previously reported to $0.19.

·Adjustment to the six months ended November 1, 2008 condensed consolidated statement of cash flows decreases net income by $2,463, from $9,517 as previously reported to $7,054.  In addition, a non-cash add-back of translation loss of $2,463 has been added in the operating activities section.

·The loan has been fully paid to corporate and all transactions have been properly recorded as of May 2, 2009.

Other Significant Items for Fiscal 2009

The first, second, third and fourth quarter of fiscal 2009 includes a pre-tax restructuring charge of $4,917, $6,284, $3,796 and $10,281, respectively.  In addition, the third and fourth quarter of fiscal 2009 include impairment charges for goodwill and intangible assets write-down of $32,678 and $61,696, respectively.

Significant Items for Fiscal 2008

The third and fourth quarter of fiscal 2008 include a pre-tax restructuring charges of $450 and $4,709, respectively, relating to a restructuring of our U.S.-based automotive operations and a decision to discontinue producing certain legacy electronic connector products.

Quarter ended February 2, 2008 includes 14 weeks of activity due to the timing of our fiscal calendar.

Significant Items for Fiscal 2007

Third quarter fiscal 2007 results include a restructuring charge of $2,027 for the closing of our Scotland facility.

F33

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

METHODE ELECTRONICS, INC. AND SUBSIDIARIES

(in thousands)

COL. A	COL. B		COL. C					COL. D.			COL. E
			Additions
Description	Balance at Beginning of Period		Charged to Costs and Expenses		Charged to Other Accounts— Describe			Deductions— Describe			Balance at End of Period
YEAR ENDED MAY 2, 2009:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible accounts	$	2,309	$	120	$	625	(1)	$	360	(2)	$	1,444
Deferred tax valuation allowance	31,164		27,506		(7,293		)(1)				51,377
YEAR ENDED MAY 3, 2008:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible accounts	$	2,231	$	195	$	45	(1)	$	162	(2)	$	2,309
Deferred tax valuation allowance	25,762		3,892		1,510		(1)				31,164
YEAR ENDED APRIL 28, 2007:
Reserves and allowances deducted from asset accounts:
Allowance for uncollectible accounts	$	3,752	$	372	$	140	(1)	$	2,032	(2)	$	2,231
Deferred tax valuation allowance	25,187		298		277		(1)				25,762

(1) Impact of foreign currency translation and other reclassifications.

(2) Uncollectible accounts written off, net of recoveries.

F34

INDEX TO EXHIBITS

Exhibit  Number		Description
3.1		Certificate of Incorporation of Registrant, as amended and currently in effect (1)
3.2		Bylaws of Registrant, as amended and currently in effect (17)
4.1		Article Fourth of Certificate of Incorporation of Registrant, as amended and currently in effect (included in Exhibit 3.1) (1)
4.2		Rights Agreement dated as of January 8, 2004 between Methode Electronics, Inc. and Mellon Investor Services LLC, which includes as Exhibit A thereto, the Certificate of Designation of Series A Junior Participating Preferred Stock of Methode Electronics, Inc.; as Exhibit B thereto, the Form of Right Certificate; as Exhibit C thereto, the Summary of Rights to Purchase Preferred Shares. (2)
10.1*		Methode Electronics, Inc. Managerial Bonus and Matching Bonus Plan (also referred to as the Longevity Contingent Bonus Program) (3)
10.2*		Methode Electronics, Inc. 2000 Stock Plan (4)
10.3*		Methode Electronics, Inc. 2004 Stock Plan (5)
10.4*		Form of Methode Electronics, Inc. Restricted Stock Award Agreement (Executive Award/Cliff Vesting) under the 2000 Stock Plan (6)
10.5		Credit Agreement dated as of December 19, 2002 among Methode Electronics, Inc. as the Borrower, Bank of America, N.A., as Administrative Agent and L/C Issuer, and The Other Lenders Party Thereto (7)
10.6		Amendment to Credit Agreement dated as of November 2005 among Methode Electronics, Inc. as the Borrower, Bank of America, N.A., as Administrative Agent and L/C Issuer, and The Other Lenders Party Thereto (6)
10.7*		Form of Methode Electronics, Inc. Restricted Stock Award Agreement (Outside Director) under the 2004 Stock Plan (8)
10.8*		Form of Methode Electronics, Inc. Restricted Stock Award Agreement (Executive Award/Performance Based) under the 2004 Stock Plan (8)
10.9		Amendment to Credit Agreement dated as of January 31, 2006, among Methode Electronics, Inc., the Borrower, Bank of America, N.A., as Administrative Agent, and L/C Issuer, and The Other Lenders Party Thereto (9)
10.10*		Change in Control Agreement dated September 1, 2006 between Methode Electronics, Inc. and Donald W. Duda (10)
10.11*		Change in Control Agreement dated September 1, 2006 between Methode Electronics, Inc. and Douglas A. Koman (10)
10.12*		Change in Control Agreement dated September 1, 2006 between Methode Electronics, Inc. and Thomas D. Reynolds (10)
10.13*		Change in Control Agreement dated September 1, 2006 between Methode Electronics, Inc. and Paul E. Whybrow (10)
10.14*		Change in Control Agreement dated September 14, 2006 between Methode Electronics, Inc. and Theodore P. Kill (11)
10.15*		Change in Control Agreement dated September 14, 2006 between Methode Electronics, Inc. and Timothy R. Glandon (11)
10.16*		First Amendment to Methode Electronics, Inc. 2000 Stock Plan effective as of December 14, 2006 (12)
10.17*		Amended and Restated Restricted Stock Unit Award Agreement (Executive Award/Performance Based) effective as of June 18, 2004 between Methode Electronics, Inc. and Donald W. Duda (12)
10.18*		Amended and Restated Restricted Stock Unit Award Agreement (Executive Award/Cliff Vesting) effective as of June 18, 2004 between Methode Electronics, Inc. and Donald W. Duda (12)
10.19		Waiver and Amendment dated as of February 28, 2007 among Methode Electronics, Inc., the Borrower, Bank of America, N.A., as Administrative Agent, and L/C Issuer, and The Other Lenders Party Thereto (13)
10.20*		Amended Cash Bonus Agreement effective as of April 6, 2007 between Methode Electronics, Inc. and Donald W. Duda (14)
10.21*	Amended and Restated Restricted Stock Unit Award Agreement (Executive Award/Performance Based) effective as of June 15, 2005 between Methode Electronics, Inc. and Donald W. Duda (14)

10.22*	Amended and Restated Restricted Stock Unit Award Agreement (Executive Award/Performance Based) effective as of August 7, 2006 between Methode Electronics, Inc. and Donald W. Duda (14)
10.23*	Methode Electronics, Inc. 2007 Stock Plan (15)
10.24*	Methode Electronics, Inc. 2007 Cash Incentive Plan (15)
10.25*	Form Performance Based RSA Award Agreement (15)
10.26*	Form Annual Cash Bonus Award Agreement (15)
10.27*	Form RSA Tandem Cash Award Agreement (15)
10.28*	Form Director RSA Award Agreement (15)
10.29*	Change in Control Agreement dated July 15, 2008 between Methode Electronics, Inc. and Ronald L. G. Tsoumas (17)
10.30	Asset and Share Purchase Agreement for Hetronic (18)
21	Subsidiaries of Methode Electronics, Inc.
23	Consent of Ernst & Young LLP
31.1	Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer
31.2	Rule 13a-14(a)/15d-14(a) Certification of Principal Financial Officer
32	Certification of Periodic Financial Report Pursuant to 18 U.S.C. Section 1350

(1)	Previously filed with Registrant’s Form 8-K filed January 9, 2004, and incorporated herein by reference.
(2)	Previously filed with Registrant’s Form 8-A filed January 8, 2004, and incorporated herein by reference.
(3)	Previously filed with Registrant’s Form 10-K for the year ended April 30, 2005, and incorporated herein by reference.
(4)	Previously filed with Registrant’s Form 10-Q for the three months ended October 31, 2000, and incorporated herein by reference.
(5)	Previously filed with Registrant’s Form 8-K filed December 7, 2004, and incorporated herein by reference.
(6)	Previously filed with Registrant’s Form 10-Q for the three months ended October 31, 2004, and incorporated herein by reference.
(7)	Previously filed with Registrant’s Form 10-Q for the three months ended January 31, 2003, and incorporated herein by reference.
(8)	Previously filed with Registrant’s Form 8-K filed August 11, 2006, and incorporated herein by reference.
(9)	Previously filed with Registrant’s Form 8-K filed February 3, 2006, and incorporated herein by reference.
(10)	Previously filed with Registrant’s Form 8-K filed September 6, 2006, and incorporated herein by reference.
(11)	Previously filed with Registrant’s Form 8-K filed September 18, 2006, and incorporated herein by reference.
(12)	Previously filed with Registrant’s Form 10-Q for the three months ended January 27, 2007, and incorporated herein by reference.
(13)	Previously filed with Registrant’s Form 8-K filed March 12, 2007, and incorporated herein by reference.
(14)	Previously filed with Registrant’s Form 8-K filed April 6, 2007, and incorporated herein by reference.
(15)	Previously filed with Registrant’s Form 8-K filed September 19, 2007, and incorporated herein by reference.
(16)	Previously filed with Registrant’s Form 8-K filed November 2, 2007, and incorporated herein by reference.
(17)	Previously filed with Registrant’s Form 10-K filed July 17, 2008, and incorporated herein by reference.
(18)	Previously filed with Registrant’s Form 10-K filed July 2, 2009, and incorporated herein by reference.

*  Management Compensatory Plan

EX-10.30

EXHIBIT 10.30

ASSET AND SHARE PURCHASE AGREEMENT

This ASSET AND SHARE PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of September 30, 2008, by and among Methode Electronics, Inc., a Delaware corporation (“Methode”); and Hetronic Holding LLC, an Oklahoma limited liability company (“Hetronic Holding”), Hetronic International, Inc., an Oklahoma corporation (“Hetronic International”), Hetronic USA Inc., an Oklahoma corporation (“Hetronic USA”), Hetronic West, Inc., an Oklahoma corporation (“Hetronic West”), Hetronic Europe GmbH, a German company with limited liability (“Hetronic Europe”), Hetronic Malta Limited, a limited liability company incorporated and registered in Malta with registration number C16025 (“Hetronic Malta”), and Max Heckl (the “Shareholder”).  Hetronic International, Hetronic USA, Hetronic West, Hetronic Europe and Hetronic Malta are herein sometimes referred to individually as a “Seller” and collectively, on a joint and several basis, as the “Sellers.” The Sellers, Hetronic Holding and the Shareholder are herein sometimes referred to individually as a “Selling Party” and collectively, on a joint and several basis, as the “Selling Parties.”  Capitalized terms used but not defined in this Agreement shall have the respective meanings set forth in the Appendix of Definitions attached hereto and made a part hereof.

RECITALS:

WHEREAS, the Shareholder is the record and beneficial owner of ninety seven percent of the outstanding membership interest of Hetronic Holding, which in turn directly or indirectly holds all or a substantial majority of the stock or other equity interest in each of the Sellers and Hetronic Asia Manufacturing & Trading Corp., a corporation incorporated in the Republic of the Philippines (“Hetronic Asia,” together with the Sellers, collectively the “Target Companies” and each, individually, a “Target Company”);

WHEREAS, Hetronic Holding is the record and beneficial owner of seventy nine thousand four hundred eighty (79,480) shares, par value of One Hundred Philippine pesos per share, of the issued and outstanding stock of Hetronic Asia (the “Purchased Shares”);

WHEREAS, the individuals identified on Schedule 5.4.2 hereto (each an “Management Shareholder” and collectively the “Management Shareholders”) are collectively the record and beneficial owners of three thousand twenty (3,020) shares, par value of One Hundred Philippine pesos per share, of the issued and outstanding stock of Hetronic Asia (the “Management Shares” and, together with the Purchased Shares, the “Hetronic Asia Shares”);

WHEREAS, the Management Shareholders and Hetronic Holding (each a “Hetronic Asia Shareholder” and collectively the “Hetronic Asia Shareholders”) are the beneficial owners of all of the Hetronic Asia Shares;

WHEREAS, the Target Companies are engaged in the business of developing, manufacturing, marketing and selling radio remote control products for use in applications such

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as tower cranes, overhead cranes, concrete pumps, work platforms, container handling equipment and other specialty equipment;

WHEREAS, Methode has or will form Subsidiaries in the various jurisdictions in which the Sellers have assets or are engaged in business and will designate one or more such Subsidiaries (or Methode itself) as the “Buyer” or “Buyers” pursuant to Section 8.3.3 below (individually, each a “Buyer” and, collectively, the “Buyers”);

WHEREAS, Hetronic Holding wishes to sell, transfer and assign to the Buyers, and the Buyers wish to purchase from Hetronic Holding, all of the Purchased Shares in exchange for the consideration set forth herein upon and subject to the terms and conditions herein set forth;

WHEREAS, the Sellers wish to sell, transfer and assign to the Buyers, and the Buyers wish to purchase from the Sellers, substantially all of the Sellers’ assets and properties (other than the Excluded Assets) and to assume certain specified liabilities of Sellers in exchange for the consideration set forth herein upon and subject to the terms and conditions herein set forth; and

WHEREAS, Hetronic Holding owns all of the issued and outstanding capital stock of Hetronic Deutschland GmbH, a German company with limited liability formerly known as Hetronic Steuersysteme GmbH (“Hetronic Deutschland”), which the parties acknowledge is not included among the Sellers and is not selling its assets or properties;

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and in reliance upon the representations and warranties hereinafter set forth, the parties agree as follows.

1.PURCHASE AND SALE OF ASSETS AND SHARES.

1.1.Agreement to Purchase and Sell Assets. Subject to the terms and conditions contained herein, each of the Sellers agrees to sell, assign, transfer, convey and deliver to the Buyers, and Methode agrees to cause a Buyer to acquire from each of the Sellers, at the Closing, free and clear of all claims or Liens of any nature whatsoever, (except as otherwise disclosed in and permitted by this Agreement), all right, title and interest in and to all of their respective assets and properties wherever situated, except for those assets and properties specifically excluded by Section 1.3 hereof (the “Purchased Assets”). The Purchased Assets shall include, but not be limited to, the following:

1.1.1.Machinery and Equipment.  All machinery and equipment (including spare parts), vehicles, fixtures, capital works in process, tools, dies, patterns, molds, furniture, data processing hardware, computer and systems hardware and telephone system equipment and office equipment and supplies and similar tangible personal property (including any of the foregoing which have been purchased subject to any conditional sales or title retention agreement in favor of any other Person) employed or utilized by Sellers, as the same may exist at the Closing, and including the property described in Schedule 1.1.1 hereto, and all rights to computer software embedded in or installed upon the foregoing.

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1.1.2.Receivables.  The Receivables of the Sellers as the same may exist at the Closing, including all Receivables payable by any Target Company to any Seller, together with Hetronic Malta’s right to receive payment under the note receivable payable by Hetronic Asia to Hetronic Malta under the loan agreement dated August 5, 2004 between Hetronic Asia and Hetronic Malta, as amended (the “Asia-Malta Receivable”).

1.1.3.Inventories.  All Inventories of the Sellers as the same may exist at the Closing, together with all rights against suppliers of such Inventories and all bills of lading, warehouseman’s receipts and other instruments or documents representing rights to any item of Inventory in the possession of third parties.

1.1.4.Contract and Other Rights.  All of the Seller’s rights and interests in, to and under all Contracts between it or them and any other party or parties and all Contracts which have been acquired by it or them by assignment or in any other manner (whether or not disclosed or required to be disclosed in any schedule hereto), including the Contracts described in Schedule 1.1.4 hereof, and all rights of any of the Sellers thereunder; all prepayments and deposits thereunder, and all claims, rights and causes of action of Sellers arising thereunder against the other party to each such Contract and all other claims, rights and causes of action of the Sellers against third parties.

1.1.5.Intellectual Property and Proprietary Rights.  All Intellectual Property owned by, licensed by or used by any Seller, including all Intellectual Property incorporated into the radio remote control products developed, manufactured, marketed or sold by the Sellers, the corporate and trade name “Hetronic,” derivatives and all telephone numbers of the Sellers, including those rights described in Schedule 5.19 hereto.

1.1.6.Records.  All books, records (including records relating to Inventories of the Target Companies, all maintenance reports and repair logs relating to any other Acquired Assets), customer lists, personnel files, laboratory notebooks, budgets, plans, projections, reports and documentation (including call reports, customer and regulatory correspondence) and other current or historical files of Sellers and all confidential or proprietary information embodied thereby or relating thereto (collectively, the “Acquired Records”).

1.1.7.Other Assets.  All other assets of the Sellers, whether real, personal, or tangible, intangible or mixed and whether or not reflected in the Financial Statements or on the books or records of the Sellers, including all goodwill arising from or in connection with the business of the Sellers, deposits under all leases and any prepaid expenses and other deposits or rights of Sellers, permits and licenses (including rights to club memberships, sky boxes arrangements and tickets) to the extent transferable under law, and all of Sellers’ choses in action, causes of action and judgments, express and implied warranties and existing and inchoate claims, rights and remedies related to any of the foregoing.

1.2.Agreement to Purchase and Sell Shares. Subject to the terms and conditions contained herein, Hetronic Holding agrees to sell, assign, transfer, convey and deliver to the Buyer designated by Methode, and Methode agrees to cause a Buyer to acquire from Hetronic Holding, at the Closing, free and clear of all claims or Liens of any nature whatsoever, all right, title and interest in and to the Purchased Shares.

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1.3.Excluded Assets.  Notwithstanding anything to the contrary contained herein, the following assets shall not be sold to the Buyers pursuant to Section 1.1 and all of such Excluded Assets shall be retained by the Sellers (the “Excluded Assets”):

1.3.1.Certain Cash, Cash Equivalents and Investments.  All of the petty cash, cash on deposit in banks or other financial institutions, prepaid accounts and security deposits of Sellers and other cash equivalents of Sellers, and any prepayments for Taxes; and all certificates of deposit, bonds, stock and other securities and investments of Sellers (other than the Purchased Shares), including the stock issued by any Seller held by the Shareholder or any other Seller (other than the Purchased Shares).

1.3.2.Excluded Contracts.  All of the Sellers’ rights, Liabilities and interests in, to and under (a) the Contracts described on Schedule 1.3, (b) Contracts between any of the Selling Parties and third parties with whom any of the Selling Parties have discussed the potential sale of the Purchased Assets (or any substantial portion thereof), or the securities of any of the Selling Parties pursuant to which such third parties have agreed to preserve the confidentiality of information relating to the business of the Sellers disclosed in the course of such discussions (the “Existing NDAs”), (c) letters of intent and similar Contracts between any of the Selling Parties and third parties pursuant to which the Selling Parties have discussed the potential sale of the Purchased Assets (or any substantial portion thereof), or the securities of any of the Selling Parties, and (d) this Agreement and any other additional Contracts executed and delivered in connection with this Agreement.

1.3.3.Corporate and Tax Documents.  All rights in and to each Seller’s corporate seal and other corporate documents and records of the Sellers, including the corporate minute books, books and records relating to the Taxes of the Sellers and all confidential or proprietary information embodied thereby or relating thereto (collectively, the “Excluded Records”).

1.3.4.Employee Plans.  All rights in and to the Employee Plans maintained by the Sellers and the underlying Contracts.

1.3.5.Insurance Policies.  All of the Sellers’ rights in and to the insurance policies maintained by the Sellers.

1.3.6.Certain Affiliate Obligations. Any debt, obligation, Indebtedness or other Liability arising outside the Ordinary Course of Business and owed or otherwise payable by any of the other Selling Parties to any Seller, including Hetronic Malta’s right to receive payment under the note receivable payable by Hetronic Deutschland to Hetronic Malta; provided that, notwithstanding the foregoing, Hetronic Malta’s right to receive payment under the Asia-Malta Receivable is acknowledged to be a Purchased Asset.

1.3.7.Hummer. One Hummer and one Ford Mustang.

1.3.8.Other Excluded Assets.  All rights in the assets and properties described on Schedule 1.3.

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1.4.Documentation.  In order to effectuate the sale, conveyance, transfer and assignment contemplated by Sections 1.1 and 1.2 hereof, the Selling Parties shall execute and deliver on the Closing Date (or, if requested by Methode, after the Closing) all such warranty deeds, bills of sale and other documents or instruments of conveyance, transfer or assignment as shall be necessary or appropriate to vest or confirm in the Buyer(s) marketable title to all right, title and interest of the Selling Parties in and to all of the Purchased Assets and Purchased Shares, all of which documents shall be prepared by counsel for Methode and the Buyers acting reasonably, which documents may include (i) separate instruments of conveyance for each Seller for each class of assets in each jurisdiction in which Purchased Assets are located, (ii) certificates of title or similar instruments duly endorsed by the applicable the Selling Party in favor of the Buyer designated by Methode, and (iii) duly endorsed stock certificates and/or instruments of assignment conveying to a Buyer designated by Methode (and/or one or more individuals nominated by Methode) all right, title and interest in the Purchased Shares.

2.CONSIDERATION.

2.1.Purchase Price.  Subject to the terms and conditions contained herein, in consideration of the Sellers’ sale of the Purchased Assets and Hetronic Holding’s sale of the Purchased Shares to the Buyers at the Closing, the Buyers shall assume, pay, perform and discharge, when and as due, the Assumed Liabilities and Methode shall pay on behalf of the Buyers, or cause the Buyers to pay, to the Selling Parties the aggregate consideration (the “Purchase Price”) of Fifty Three Million Six Hundred Thirty Eight Thousand Six Hundred Seventy Three United States Dollars ($53,638,673), subject to post-Closing adjustment as provided in Section 2.2.  The Purchase Price shall be payable as provided in Section 4.3, subject to adjustment as provided in Section 2.3.

2.2.Reconciliation of Net Book Value.

2.2.1.June 30 Statement.  Exhibit A sets forth the book value of the Acquired Assets, as they existed on June 30, 2008, less the book value of the Acquired Liabilities, as they existed on June 30, 2008 (the “June 30 Net Book Value”), calculated consistent with the historical practice of the Selling Parties in preparing the Financial Statements (the “Historic Accounting Principles and Procedures”).

2.2.2.Closing Statement.  Promptly following the Closing Date, the Shareholder shall direct HSPG & Associates, P.C. (the “Seller’s Accountant”) to prepare and submit to Methode a statement (the “Closing Statement”) setting forth the book value of the Acquired Assets, as they exist at the Closing Date, less the book value of the Acquired Liabilities, as they exist at the Closing Date (“Closing Net Book Value”).  In each case, the book value of Acquired Assets and the Acquired Liabilities shall be determined in accordance with the Historic Accounting Principles and Procedures (except that an accrual shall be made for earned vacation). The Closing Statement and the schedules thereto shall show in reasonable detail the means by which Closing Net Book Value was calculated (including listings of Acquired Assets and the Acquired Liabilities).  The Shareholder shall direct Seller’s Accountant to submit the Closing Statement as soon as reasonably practical after the Closing and in no event later than ninety days following the Closing Date. Methode shall provide to Seller’s Accountant all information

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reasonably requested by Seller’s Accountant and take all other reasonable actions required for the preparation of the Closing Statement, and Methode shall provide Seller’s Accountant with access to all records of the business of the Target Companies and to all former employees of the Target Companies in order to assist in the preparation of the Closing Statement.

2.2.3.Disputed Adjustments. Upon receipt of the Closing Statement, Methode and its accountants and representatives shall be permitted during the succeeding thirty (30) day period to examine the accounting records and work papers prepared by Seller’s Accountant in connection with the preparation of the Closing Statement.  If Methode agrees to the Closing Statement delivered by Seller’s Accountant, it shall become the final Closing Statement (the “Final Closing Statement”).  If Methode does not agree that the Closing Statement accurately sets forth the Closing Net Book Value determined in accordance with the Historic Accounting Principles and Procedures (except that an accrual shall be made for earned vacation), Methode shall within thirty (30) days after delivery of the Closing Statement to Methode, prepare and deliver to the Shareholder a detailed list of disputed adjustments, including the amount of each of the adjustment claimed by Methode (the “Disputed Adjustments”) to the Closing Statement.  If Methode fails to deliver a list of Disputed Adjustments within thirty (30) days after the delivery of the Closing Statement to Methode, Methode shall be deemed to have agreed to the Closing Statement.  The Shareholder and Methode shall use their best efforts to resolve any Disputed Adjustments.  If the Shareholder and Methode are able to reach an agreement on the Disputed Adjustments, the Closing Statement shall be amended to reflect such agreement and shall become the Final Closing Statement.  If the Shareholder and Methode are unable to reach an agreement on the Disputed Adjustments within thirty (30) days after receipt of all Disputed Adjustments, then the Shareholder and Methode shall select an Independent Accounting Firm in accordance with Section 2.4 and shall cause such Independent Accounting Firm to review the Disputed Adjustments and determine the final value of each of the Disputed Adjustments in a prompt manner (and in any event within sixty (60) days of receipt of the Disputed Adjustments).  In making such determination, the Independent Accounting Firm shall only apply the Historic Accounting Principles and Procedures (except that an accrual shall be made for earned vacation).  In making such determination, the Independent Accounting Firm shall consider only the items or amounts in dispute (and any other items or amounts relating thereto), and the determination of each Disputed Adjustment’s value, as so computed, shall not, in any event,  exceed the amount of dollars claimed by Methode.  The Closing Statement shall then be amended to reflect the determination of the final value of each of the Disputed Adjustments and shall become the Final Closing Statement.  The Final Closing Statement shall be deemed to be and shall be conclusive and binding on the parties to this Agreement for purposes of determining the Closing Net Book Value.

2.3.Settlement.  In the event that the Closing Net Book Value set forth on the Final Closing Statement is less than the June 30 Net Book Value plus One Million Five Hundred Thousand United States Dollars ($1,500,000), the Purchase Price shall be reduced by an amount equal to such shortfall (the “Adjustment Amount”); provided that the Adjustment Amount shall not exceed the funds in the Net Book Value Escrow Account.  Within twenty (20) calendar days after the Final Closing Statement is determined and becomes final, the parties shall jointly instruct the Escrow Agent to (i) pay the Adjustment Amount (if any) to Methode out of the funds in the Net Book Value Escrow Account by wire transfer in accordance with the instructions provided by Methode, and then (ii) release any remaining funds in the Net Book Value Escrow

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Account to the Selling Parties by wire transfer in accordance with the instructions provided by the Shareholder.  The parties acknowledge and agree that the Selling Parties shall have no obligation to pay to Methode any portion of the Adjustment Amount not covered by the Net Book Value Escrow Account, that Methode shall look solely to the Net Book Value Escrow Account for payment of the Adjustment Amount and that the Selling Parties shall be and hereby are released from any portion of the Adjustment Amount that exceeds the Net Book Value Escrow Account.

2.4.Independent Accounting Firm.

2.4.1.Selection. The “Independent Accounting Firm” shall be the firm of certified public accountants of national or regional standing mutually agreed by Methode and Shareholder.  In the event that the Shareholder and Methode are unable to agree upon the selection of the Independent Accounting Firm, either party may provide written notice to the other, in which case the Shareholder shall select a firm of certified public accountants of national or regional standing and Methode shall select a firm of certified public accountants of national or regional standing, and the two firms so selected shall select a third firm of certified public accountants of national or regional standing which Methode shall retain to act as the Independent Accounting Firm.  In the event that an Independent Accounting Firm selected hereunder is or becomes unwilling to perform the duties assigned to such Independent Accounting Firm hereunder or the Shareholder and Methode agree that the Independent Accounting Firm should be replaced, the parties shall select replacement Independent Accounting Firm in the same manner as specified in this Section 2.4 for the original Independent Accounting Firm.

2.4.2.Independent Accounting Firm Fees and Expenses. The fees, costs and expenses of the Seller’s Accountant in preparing the Closing Statement shall be shared equally by Methode and the Shareholder. The fees, costs and expenses of any Independent Accounting Firm in assisting with the resolution or in resolving any Disputed Adjustments shall be born by Methode if the Closing Net Book Value is unchanged as a result of such resolution and by the Shareholder if the Closing Net Book Value decreases as a result of such resolution.

2.5.Allocation of Purchase Price.  Attached as Schedule 2.5 is the parties good faith determination of the allocation of the Purchase Price among the Purchased Assets and Purchased Shares, by jurisdiction and by asset category, in accordance with Code Section 1060 and the Treasury regulations thereunder (and any similar provision of state, local or foreign law, as appropriate).  Within thirty (30) calendar days after the Final Closing Statement is determined and become final, Methode shall determine and deliver to the Shareholder, Methode’s good faith determination of the allocation of the Purchase Price (and all other capitalized costs) among the Purchased Assets and Purchased Shares, by jurisdiction and by asset category, after adjustment to reflect the final determination of the Closing Net Book Value in accordance with Section 2.3, which adjusted allocation shall be made in accordance with Code Section 1060 and the Treasury regulations thereunder (and any similar provision of state, local or foreign law, as appropriate), and which allocation shall be binding upon Methode and the Selling Parties.  Methode and the Selling Parties and their Affiliates shall report, act and file Tax Returns (including Internal Revenue Service Form 8594) in all respects and for all tax purposes consistent with such allocation.  Neither Methode nor the Selling Parties shall take any position (whether in tax

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audits, tax returns or otherwise) that is inconsistent with such allocation unless required to do so by applicable law.

3.ASSUMED LIABILITIES AND EXCLUDED LIABILITIES.

3.1.Assumed Liabilities. On the terms and subject to the conditions contained herein, at the Closing, the Buyers shall assume and agree to perform and discharge when and as due the liabilities and obligations set forth in Sections 3.1.1, 3.1.2 and 3.1.3 as the same may exist at the Closing Date, and no others (the “Assumed Liabilities”):

3.1.1.Accounts Payable and Ordinary Course Liabilities.  The current liabilities consisting of accounts payable and accrued expenses of the Sellers arising in the Ordinary Course of Business (including accounts payable of the Sellers payable to other Target Companies solely to the extent that such payables are included in the Acquired Assets as Receivables of the applicable Target Company payee) as they exist at the Closing Date, in each case to the extent reflected on the Final Closing Statement.

3.1.2.Executory Agreements.  Liabilities and obligations which exist at or accrue following the Closing Date under the Contracts described in Section 1.1.4 hereof, but excluding (i) Contracts required to be disclosed in Schedule 5.11, Schedule 5.12, Schedule 5.17 or Schedule 5.22 and not disclosed thereon, and (ii) Contracts described in Section 1.3 hereof.

3.1.3.Warranty Claims.  The warranty obligations of the Sellers pending as of or arising after the Closing Date under the Hetronic Warranties identified on Schedule 5.24 for finished goods or components or parts sold by the Sellers in the ordinary course on or prior to the Closing Date or for Inventory acquired by Buyers from any Seller hereunder and subsequently sold by Buyer (collectively, the “Assumed Warranty Claims”).

3.2.Excluded Liabilities.  Except as specifically provided in Section 3.1 hereof, neither Methode nor any Buyer shall assume, or in any way become liable for, any Liabilities of the Selling Parties of any kind or nature, whether accrued, absolute, contingent or otherwise, or whether due or to become due, or otherwise, whether known or unknown, arising out of events, transactions or facts which shall have occurred, arisen or existed on or prior to the Closing Date, which Liabilities, if ever in existence, shall continue to be Liabilities of the Selling Parties (the “Excluded Liabilities”).

4.CLOSING.

4.1.Closing.  The consummation of the purchase and sale of the Purchased Assets and Purchased Shares as contemplated by this Agreement (the “Closing”) shall take place on September 30, 2008, subject to the satisfaction or waiver of all of the conditions to the Selling Parties’ and Methode’s obligations to close set forth in Section 8, or on such other date as may be mutually agreed upon by Methode and the Shareholder (the “Closing Date”).  The Parties anticipate the Closing Date to occur on the date of execution and delivery of this Agreement.

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4.2.Closing Deliverables. At the Closing, (i) the Selling Parties will deliver to Methode the various agreements, certificates, opinions and documents referred to in Section 8.2, (ii) Methode will deliver to the Selling Parties the various agreements, certificates, opinions and documents referred to in Section 8.3, (iii) the Sellers will transfer, assign, convey and deliver to Methode instruments of assignment conveying all right, title and interest in the Purchased Assets, free and clear of all Liens, (iii) the Selling Parties will transfer, assign, convey and deliver to Methode instruments of assignment conveying all right, title and interest in the Purchased Shares, free and clear of all Liens, and (v) Methode will pay the Closing Payment as provided in Section 4.3.

4.3.Closing Payment. At the Closing, Methode shall deliver, or cause the Buyers to deliver, the sum of Fifty Three Million Six Hundred Thirty Eight Thousand Six Hundred Seventy Three United States Dollars ($53,638,673) (the “Closing Payment”) as follows:

(a)Methode shall deliver, or cause the Buyers to deliver, the sum of Five Million Dollars ($5,000,000) to JPMorgan Chase Bank, National Association (the “Escrow Agent”) to be held in the account designated as the “Indemnity Escrow Account” under the Escrow Agreement (the “Indemnity Escrow Account”).

(b)Methode shall deliver, or cause the Buyers to deliver, the sum of One Million Five Hundred Thousand Dollars ($1,500,000) to the Escrow Agent to be held in the account designated as the “Net Book Value Escrow Account” under the Escrow Agreement (the “Net Book Value Escrow Account”).

(c)after payment of the foregoing amount, Methode shall pay, or cause the Buyers to pay, any amounts identified in the Payoff Letters delivered pursuant to Section 8.2.5 (if any) as required to discharge all Liabilities owed to the Persons issuing such Payoff Letters, such amounts to be paid in accordance with the instructions set forth in such Payoff Letters;

(d)after payment of the foregoing amounts, Methode shall pay, or cause the Buyers to pay, to the Selling Parties the remainder of the Closing Payment in cash, payable by wire transfer in accordance with wire instructions provided by the Shareholder in writing at least five business days prior to the Closing Date (which wire instructions may designate a single account to which payment to all Selling Parties is to be made on an aggregate basis).

4.4.Location and Effective Time of Closing.  The Closing shall be held by exchange of documents by facsimile or by e-mail in portable document format (or other mutually acceptable format), provided that if the Parties elect for a physical Closing for all or a portion of the transaction, it shall be held at the offices of Hetronic International, 3000 NW 149th Street, Oklahoma City, Oklahoma 73134, USA, or such other location as may be agreed by the parties. The Closing shall be held at 1:00 p.m. (Oklahoma City time) on the Closing Date or such other time as may be agreed by the parties. Title to the Purchased Assets and Purchased Shares shall be deemed to have been transferred to the Buyers at 11:59 p.m. (Oklahoma City time) on the Closing Date.

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5.REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES.

As an inducement for Methode to enter into this Agreement, each of the Selling Parties, jointly and severally, represents and warrants to Methode as follows:

5.1.Organization and Good Standing.  Each Target Company is an organization of the nature identified in Schedule 5.1 and is duly organized, validly existing and in good standing under the laws of the jurisdiction identified in Schedule 5.1, and has all requisite power and authority to own or hold under lease its properties and assets and to carry on its business as now conducted.  Each Target Company is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which the nature of its activities or the ownership or leasing of property requires such qualification, and such jurisdictions are listed on Schedule 5.1.

5.2.Enforceability and Authorization.  Each Selling Party and Hetronic Asia has all necessary corporate power and authority to execute and deliver all agreements and documents to be executed and delivered by it pursuant to this Agreement, and to consummate the transactions contemplated thereby.  The execution, delivery and performance of the agreements and documents to be executed and delivered pursuant to this Agreement, and the consummation of the transactions contemplated thereby, have been duly approved and authorized by all necessary corporate, company or similar actions on behalf of each Selling Party and Hetronic Asia.  All agreements and documents to be executed and delivered by each Selling Party and Hetronic Asia pursuant to this Agreement will constitute, the valid and binding agreements of such Selling Party and Hetronic Asia, as applicable, enforceable in accordance with their respective terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

5.3.No Conflict; Consents.  Except as set forth on Schedule 5.3 hereto, neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will constitute a violation of, or be in conflict with, or result in a cancellation of or right to cancel, or constitute a default under, or create (or cause the acceleration of the maturity of) any debt, obligation or Liability affecting the Acquired Assets, Purchased Shares or Hetronic Asia, or result in the creation or imposition of any Lien upon the Acquired Assets or Purchased Shares under: (a) any term or provision of the Organizational Documentation of any Selling Party or Hetronic Asia; (b) any judgment, decree, order, regulation or rule of any court or other Governmental Authority; (c) any Law; or (d) any Contract to which any Selling Party or Hetronic Asia is a party or by which any Selling Party, Hetronic Asia or the Acquired Assets are bound. Neither the execution and delivery of this Agreement by the Selling Parties, nor of any other agreement or document to be executed and delivered by them pursuant hereto, nor the consummation by them of the transactions contemplated hereby or thereby will cause any change in the rights or obligations of any party under any Contract to which any Target Company is a party to or by which any Target Company or the Acquired Assets or the Purchased Shares are bound that have a material effect upon the Acquired Assets or the Purchased Shares.

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Except as set forth on Schedule 5.3 hereto, no consent of, or notice to, any Governmental Authority or any other Person is required to be obtained or given by any Selling Party or Hetronic Asia in connection with the execution, delivery or performance of this Agreement by any Selling Party or any other agreement or document to be executed, delivered or performed hereunder by any Selling Party, or to enable the Buyers and Hetronic Asia to continue to conduct the business of the Target Companies after the Closing in the manner in which they are currently conducted.

5.4.Capitalization and Ownership; Corporate Matters.

5.4.1.Ownership of Sellers.  The Shareholder is the record and beneficial owner of ninety seven percent (97%) of the outstanding membership interest of Hetronic Holding and Monika Heckl Trust, Nichole Heckl Trust and Torsten Rempe are each the record and beneficial owner of one percent (1%) of the outstanding membership interest of Hetronic Holding.  Except as set forth on Schedule 5.4.1, (i) Hetronic Holding is the record and beneficial owner of all of the issued and outstanding shares, capital stock, or other applicable equity or other proprietary interests of Hetronic Deutschland, Hetronic Europe, Hetronic Malta and Hetronic USA, and (ii) Hetronic USA is the record and beneficial owner of all of the issued and outstanding shares, capital stock, or other applicable equity or other proprietary interests of Hetronic West.

5.4.2.Capitalization and Ownership of Hetronic Asia.  The authorized capital stock of Hetronic Asia consists of Eight Million Two Hundred Fifty Thousand pesos (P8,250,000) in lawful money of the Philippines divided into Eighty-Two Thousand Five Hundred (82,500) shares with the par value of One Hundred Philippine pesos (P100) per share, of which Eighty-Two Thousand Five Hundred (82,500) shares are issued and outstanding and constitute the Hetronic Asia Shares.  Schedule 5.4.2 hereto sets forth each record and beneficial owner and holder of any shares of the issued and outstanding stock of Hetronic Asia, together with the number of shares held by each such holder.  There are no Contracts relating to the issuance, sale, or transfer of any equity securities or other securities of Hetronic Asia.  Without limitation to the foregoing, Hetronic Asia has no outstanding subscriptions, options, warrants, rights or other Contracts granting to any Person any interest in or right to acquire at any time, or upon the happening of any stated event, any stock, equity securities or other securities issued by or issuable by Hetronic Asia (including any securities convertible into or exchangeable for any of the foregoing), or any interest therein; or requiring Hetronic Asia to repurchase, reacquire, redeem or retire any stock, equity securities or other securities. There are no outstanding or authorized equity appreciation, phantom equity or similar rights with respect to Hetronic Asia.  There are no voting trusts, proxies or any other agreements or understandings with respect to the voting of the stock of Hetronic Asia. Each Hetronic Asia Shareholder has valid and marketable title to the Purchased Shares identified as owned by such Hetronic Asia Shareholder, free and clear of all Liens. No legend or other reference to any purported Liens appears upon any certificate representing Hetronic Asia Shares. All of the Hetronic Asia Shares have been duly authorized and validly issued and are fully paid and non-assessable. There are no contracts relating to the issuance, sale, or transfer of any equity securities or other securities of Hetronic Asia. None of the Hetronic Asia Shares are issued in violation of any Law. There are no subscriptions, options, warrants, rights or other agreements granting to any Person any interest in or right to acquire from any of the Hetronic Asia Shareholders at any time, or upon the happening of any stated event, any Hetronic Asia Shares or any interest therein.

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5.4.3.Hetronic Asia Company Matters.  True, correct and complete copies of the Organizational Documentation, minute books and stock records of Hetronic Asia have been furnished to Methode.  Hetronic Asia has no Subsidiaries and Hetronic Asia does not own, directly or indirectly, or have any Contract to acquire, any stocks, bonds or securities or any equity or other proprietary interest in any corporation, partnership, limited liability company, joint venture, business enterprise or other entity of any nature whatsoever. Schedule 5.4.3 sets forth: (i) a list of all accounts and deposit boxes maintained by Hetronic Asia at any bank or other financial institution and the names of the individuals authorized to effect transactions in such accounts and with access to such boxes; (ii) all agreements or commitments of Hetronic Asia guaranteeing the payment of money or the performance of other contracts by any other Person, and (iii) the names of all Persons holding general or special powers of attorney from Hetronic Asia, together with a summary of the terms thereof. Schedule 5.4.3 hereto sets forth the names and positions of each officer and director of Hetronic Asia.

5.5.Financial Statements.  Schedule 5.5 hereto contains true and complete copies of the following financial statements (collectively, the “Financial Statements”) (i) the unaudited consolidated balance sheets of the Target Companies and Hetronic Deutschland, together with the related statements of income at and for each of the three (3) consecutive fiscal years ended December 31, 2007; and (ii) the unaudited consolidated balance sheets of the Target Companies and Hetronic Deutschland, together with the related statements of income at and for the quarterly periods ended March 31, 2008 and June 30, 2008 (the “Interim Financial Statements”).

Except as disclosed on Schedule 5.5, the Financial Statements: (i) were prepared in accordance with the books of account and other financial records of the Target Companies and Hetronic Deutschland, (ii) are accurate, correct and complete in all material respects and fairly present the assets, Liabilities and financial condition of the Target Companies and Hetronic Deutschland as at the respective dates thereof, and the results of operations for the periods then ended, and (iii) have been prepared on a consistent basis with the past practices of the Target Companies and Hetronic Deutschland.

In addition, Schedule 5.5 hereto contains true and complete copies of the monthly management reports for each monthly period completed since the date of the last Interim Financial Statement and such management reports were prepared in accordance with the books of account and other financial records of the Target Companies.

5.6.Books and Records.  The books of account and other financial records of the Target Companies, all of which have been made available to Methode, are complete and correct in all material respects and represent actual, bona fide transactions and have been maintained in accordance with sound and customary business and accounting practices including the maintenance of an adequate system of internal controls.

5.7.No Undisclosed Liabilities.  Hetronic Asia does not have any Liabilities of any nature whatsoever, whether arising out of contract, tort, statute or otherwise, which are not reflected, reserved against or given effect to in the Interim Financial Statements except: (a) Liabilities incurred in the Ordinary Course of Business since the dates of the last Interim Financial Statement, which are of the same nature as those set forth in the Interim Financial Statements, and which are not, individually or in the aggregate, material to Hetronic Asia, and

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(b) Liabilities which are specifically disclosed in Schedule 5.7.  To Sellers’ Knowledge, there is no basis for assertion against Hetronic Asia of any Liabilities not adequately reflected, reserved against or given effect to in the Interim Financial Statements or in Schedule 5.7, except for Liabilities described in clause (a) above.

5.8.Absence of Certain Changes.  Except as disclosed in Schedule 5.8 or the Financial Statements, since December 31, 2007, the business and operations of the Target Companies have been conducted in the ordinary course consistent with past practices and, without limiting the foregoing, there has not been:

(a)any material adverse change in the condition (financial or otherwise) of the properties, assets, Liabilities or results of operation of the Target Companies, or any event, occurrence, development, state of circumstances or facts that would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(b)any damage, destruction or loss (whether or not covered by insurance) affecting the properties, assets, Liabilities, financial condition, results of operations or business prospects of the Target Companies that has had or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect;

(c)any material labor dispute, other than routine individual grievances, or any activity or proceeding by a labor union or representative thereof to organize any employees of the Target Companies, or any material lockouts, strikes, slowdowns, work stoppages or threats thereof by or with respect to such employees;

(d)any material change in the customary methods of operations of the Target Companies, including practices and policies relating to manufacturing, purchasing, Inventories, marketing, selling and pricing;

(e)any declaration, setting aside, or payment of any dividend or other distribution, or any direct or indirect redemption, retirement, purchase or other acquisition of any shares, capital stock, or other applicable equity or other proprietary interests, or any issuance of shares, capital stock, or other applicable equity or other proprietary interests or the granting, issuance or exercise of any right, warrant, option or similar commitment relating to any issued and outstanding shares, capital stock, or other applicable equity or other proprietary interests, other than cash dividends or cash distributions in accordance with law;

(f)any increase in the compensation, benefits, commissions or perquisites payable or to become payable by any Target Company to any director, officer, employee, or agent of any Target Company, or any payment of or agreement to pay any bonus, profit sharing or other extraordinary compensation to any employee of any Target Company (other than any such increase or payment to Persons that were paid or that become payable in the Ordinary Course of Business);

(g)any establishment, adoption or amendment of (i) a severance or termination pay plan or agreement for any director, officer or employee of any Target Company, or any increase in benefits payable under any existing severance or

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termination pay policies or employment agreements, or (ii) any collective bargaining, bonus, profit-sharing, thrift, pension, retirement, deferred compensation, compensation, stock option, restricted stock or other benefit plan or arrangement covering any director, officer or employee of any Target Company;

(h)any material change in the accounting methods or practices or in any method of tax accounting followed by any Target Company or any change in depreciation or amortization policies or rates theretofore adopted;

(i)any material write-up or write-down of the value of any Inventories or revaluation any assets of any Target Company, other than in the Ordinary Course of Business;

(j)any cancellation or release of any Indebtedness owed to or Claims held by any Target Company;

(k)any sale, lease, abandonment or other disposition by any Target Company, other than in the Ordinary Course of Business, of any machinery, equipment or other operating properties, or any intangible assets owned, leased or licensed by any Target Company;

(l)any incurrence, assumption or guarantee by any Target Company of any Indebtedness;

(m)any transaction or commitment made, or any Contract entered into, by any Target Company pursuant to which any property or assets of any Target Company is subjected to a Lien;

(n)any making of any loan, advance or capital contribution to, or investment in any Person;

(o)any transaction or commitment made, or any Contract entered into, by any Target Company relating to any of its assets or business (including the acquisition or disposition of any assets) or any relinquishment by any Target Company of any Contract or other right, in either case, material to any Target Company, other than transactions and commitments in the Ordinary Course of Business and those contemplated by this Agreement;

(p)any transaction or commitment made, or any Contract entered into, by any Target Company pursuant to which any Intellectual Property is disclosed to or licensed to any Person, other than transactions and commitments in the Ordinary Course of Business;

(q)any transaction or commitment made, or any Contract entered into, by any Target Company with a director or officer of any Target Company, any member of the immediate family of any such Persons, or any Person controlled by any of the foregoing Persons; or

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(r)any agreement or commitment on the part of any Target Company to do any of the foregoing.

5.9.Tax Matters.

5.9.1.Filing of Tax Returns. All Tax Returns required to be filed by the Target Companies through the date hereof have been, and as to Tax Returns required to be filed through the Closing Date will be, timely filed with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed, in each case subject to such extensions that have been properly obtained by the Target Companies. All such Tax Returns are or will be true and correct and prepared in accordance with applicable Law and properly reflect, or will properly reflect, the Taxes of the Target Companies for the periods covered thereby. Copies of all income tax returns for or in respect of each Target Company for all years not barred by the statute of limitations have heretofore been delivered by the Target Companies to Methode.

5.9.2.Payment of Taxes. Except as set forth on Schedule 5.9, all Taxes due and payable by the Target Companies with respect to all periods prior to and through the date hereof have been, and through the Closing Date will be, duly and properly computed, reported, fully paid and discharged and there are no unpaid Taxes with respect to any period prior to and through the date hereof, and there will not be any unpaid Taxes with respect to any period through the Closing Date, which are or could become a Lien on any Acquired Assets or the Purchased Shares, except for current Taxes not yet due and payable.

5.9.3.Assessments or Investigations. None of the Target Companies has received any notice of assessment or proposed assessment by the IRS or any other Governmental Authority in connection with any Tax Returns and there are no pending tax examinations of or tax claims asserted against any Target Company or its properties.  No Target Company has waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency.  To Sellers’ Knowledge, there has been no intentional disregard of any Law in the preparation of any Tax Return applicable to any Target Company.  No claim has ever been made by a Governmental Authority in a jurisdiction where a Target Company does not pay Taxes or file Tax Returns that such Target Company is or may be subject to Taxes assessed by such jurisdiction.

5.9.4.Tax Liens. Except as disclosed in Schedule 5.9, there are no Tax Liens on any of the properties or assets of any Target Company, except for liens for current taxes not yet due and payable and, to Sellers’ Knowledge, there is no basis for any additional assessment of any Taxes with respect to any Target Company.  No Target Company has waived any Law fixing, or consented to the extension of, any period of time for assessment of any Taxes which waiver or consent is currently in effect.

5.9.5.Withholding. Each Target Company has withheld and paid all Taxes required to have been withheld and paid in connection with amounts paid or due and owing to any employee, creditor, independent contractor, or other third party and each Target Company has properly reflected the status of all employees and independent contractors in connection therewith as required by all applicable Laws.

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5.9.6.Other Tax Matters. No Target Company is a party to, or bound by, any tax sharing, tax indemnity, tax allocation or similar agreement or arrangement.  No Target Company has ever been a member of an affiliated group within the meaning of Section 1504 of the Code (or any similar group defined under a similar provision of any state, local or foreign Law (an “Affiliated Group”) filing a consolidated federal income Tax Return (other than the Affiliated Group of which Hetronic Holding is the includible common parent) or has ever incurred any Liability for the Taxes of any Person under Treas. Reg. Section 1.1502-6 (or any similar provision of any state, local, or foreign Law), as a transferee or successor, by contract, or otherwise. No Target Company has: (i) filed a consent under Code Sec. 341(f) concerning collapsible corporations; (ii) made any payments and is not obligated to make any payments that will not be deductible to any Target Company under Code Sec. 280G; or (iii) been a United States real property holding corporation within the meaning of Code Sec. 897(c)(2) during the applicable period specified in Code Sec. 897(c)(1)(A)(ii).

5.10.Title to Assets. The Target Companies are the owners of and have good and marketable title to the Acquired Assets, free and clear of Liens, except for: (i) the lien of current taxes not yet due and payable, and (ii) Liens disclosed and described in Schedule 5.10 hereto.  Except as disclosed in Schedule 5.10, the Acquired Assets are usable in the Ordinary Course of Business, are in reasonable condition and repair and conform in all material respects to all applicable Laws relating to their construction, use and operation. Except as disclosed in Schedule 5.10, the Acquired Assets include all assets, properties and rights necessary to conduct the business conducted by the Target Companies substantially in the manner conducted since January 1, 2007 and all assets, properties and rights owned by any of the Selling Parties or their Affiliates and used in the business conducted by the Target Companies since January 1, 2007; provided, however, that Hetronic Deutschland’s distribution and assembly operation is an essential component of the business conducted by the Target Companies, and none of such operations are being acquired because neither the shares or assets of Hetronic Deutschland are included in the Acquired Assets.

5.11.Real Estate and Leases. The Target Companies do not own, and have not ever owned, any real estate. No Target Company is a party to any oral lease or agreement under which any Target Company is lessee of, or holds or operates, any real estate (including buildings and improvements) (the “Leased Facilities”). Schedule 5.11 lists every written lease or agreement under which any Target Company is lessee of, or holds or operates, any Leased Facility (each a “Facility Lease”). True, correct and complete copies of all Facility Leases have been provided to Methode.  Each Facility Lease is in full force and effect and constitutes a legal, valid and binding obligation of the respective parties thereto.  No Target Company nor, to Sellers’ Knowledge, any other party thereto is in default in any material respect under a Facility Lease nor, to Sellers’ Knowledge, has any event occurred which with the passage of time or giving of notice or both would constitute such a default.  Except as set forth in Schedule 5.11, no modifications, alterations, improvements or installations to a Leased Facility have been made which would permit the landlord to require material expenditures by the tenant to place such Leased Facility in conformance with requirements arising under or upon expiration or termination of the Facility Lease therefor. Except as set forth in Schedule 5.11, the present maintenance, operation, use and occupancy of the Leased Facilities by the Target Companies does not violate any instrument of record or agreement affecting such Leased Facilities or any Law, including any zoning, subdivision, building, health, environmental, pollution, fire or similar

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Law and none of the Target Companies have received any notices from any Governmental Authority in respect to the Leased Facilities that have not been corrected (or are in the process of being corrected and disclosed in Schedule 5.11) and all water, gas, electrical, steam, compressed air, telecommunication, sanitary and storm sewage lines and systems and other similar systems serving the Leased Facilities are installed and operating and are sufficient to enable the Leased Facilities to continue to be used and operated in the manner currently being used and operated, and any so-called hook-up fees or other associated charges have been fully paid.  To Sellers’ Knowledge, there is no plan, study, or effort by any Governmental Authority or any non-governmental Person or agency which may adversely affect the present use of the Leased Facilities. No current use by any Target Company of the Leased Facilities or improvement located thereon is dependent on a nonconforming use or other approval from a Governmental Authority, the absence of which would significantly limit the use of any of the properties or assets in the operation of the Business. There are no pending condemnation proceedings with regard to all or any part of the Leased Facilities and, to Sellers’ Knowledge, no such proceedings are threatened or contemplated by any Governmental Authority.

5.12.Material Contracts.  Except as set forth in Schedule 5.12, no Target Company is a party to, or bound by, any Contracts:

(a)for the sale of products (including raw materials, commodities, supplies, or other personal property) or for the furnishing of services, the performance of which will extend over a period of more than one year, or that involves annual payments in excess of $100,000 or which cannot be canceled by such Target Company without penalty or further payment and without more than thirty (30) days prior notice;

(b)for the purchase of products or services involving payment of in excess of $100,000 per annum by a Target Company or which cannot be canceled by such Target Company without penalty or further payment and without more than thirty (30) days prior notice;

(c)for leasing personal property (including leases for office or computer equipment, furniture, fixtures, and vehicles) which require an annual payment in excess of $100,000 or the term of which at any time exceeded one (1) year;

(d)for the lease of real or personal property to any Person;

(e)constituting a partnership or joint venture;

(f)between such Target Company and any Governmental Authority;

(g)under which it has created, incurred, assumed, or guaranteed any Indebtedness, or under which it has imposed a Lien on any of its assets, tangible or intangible;

(h)prohibiting such Target Company from freely engaging in business (or in any line of business) anywhere in the world or containing any other restrictive covenant or containing any confidentiality or exclusivity clause or obligation; or requiring such Target Company to engage in affirmative action; or otherwise materially restricting the

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conduct of the business of such Target Company, except to the extent such Contract is executed in connection with the transactions contemplated hereby;

(i)for the employment of any individual on a full-time, part-time, consulting, or other basis providing annual compensation in excess of $20,000 or which is not cancelable without payment of severance and on fourteen (14) days’ notice or less, or any severance agreement;

(j)under which it has advanced or loaned any amount to any of its directors, officers, and employees or guaranteed any such loan;

(k)for the purchase or sale of capital stock membership interests or interests therein, or of securities convertible into or exchangeable for capital stock;

(l)providing for the services of dealers, distributors, sales representatives or similar representatives;

(m)relating to the ownership, use or licensing of any Intellectual Property (provided, however, that shrink-wrap licenses whereby such Target Company licenses generally-available off-the-shelf software may be disclosed on Schedule 5.12 by listing only the software name and number of licenses/seats purchased rather than by listing individual licenses), including any current or past grant of, or termination of any grant of, rights in the Target Company Intellectual Property, any development of Target Company Intellectual Property by a third party, or any transfer of rights in any Intellectual Property; or

(n)which are otherwise material to the Acquired Assets or Hetronic International or the business conducted by the Target Companies utilizing the Acquired Assets.

Except as provided in Schedule 5.12, each Contract to which any Target Company is a party: (i) is legal, valid and binding on the respective parties thereto and is in full force, and (ii) upon the consummation of the transactions contemplated by this Agreement shall continue in full force and effect without penalty or adverse consequence.  No Target Company nor, to Sellers’ Knowledge, any other party thereto, is in breach of, or default under the provisions of any such Contract (except where such default is excused as immaterial and does not give rise to any termination right or penalty under the terms of such Contract).  True, correct and complete copies of all written Contracts disclosed on Schedule 5.12 and accurate descriptions of all oral Contracts disclosed on Schedule 5.12 have been provided to Methode.

5.13.Receivables.  An aged list of all unpaid Receivables of the Target Companies outstanding as of the most recent practicable date is attached on Schedule 5.13 hereto.  Except as disclosed on Schedule 5.13, all Receivables of the Target Companies, net of any reserves for doubtful accounts, arose from sales in the Ordinary Course of Business, represent legal and valid obligations to the applicable Target Company and are good and collectible in the Ordinary Course of Business within the period specified on Schedule 5.13 and are not subject to any reduction or discount that has been agreed to by any Target Company or, to Sellers’ Knowledge, any dispute, counterclaim, Lien or set-off.

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5.14.Inventories.  All Inventories of the Target Companies reflected on the balance sheet contained in the Interim Financial Statements or acquired since the dates thereof, net of reserves, consist of items of a quality and quantity usable and salable in the Ordinary Course of Business as first quality goods (subject to claims under the Assumed Warranties).  Each item of Inventory reflected on the Financial Statements and the books and records of the Target Companies is valued at cost, provided that each item of Inventory reflected on the Financial Statements and the books and records of Hetronic Malta is valued at the lower of cost or market.  Each Target Company has, and on the Closing Date will have, sufficient amounts of Inventory to conduct its business and such amounts are consistent with its past practices.

5.15.Litigation.  Except as disclosed in Schedule 5.15, there are no actions, suits, inquiries, proceedings, claims or investigations by or before any Governmental Authority pending or, to Sellers’ Knowledge, threatened against, or involving, the Acquired Assets, the Purchased Shares, the Target Companies, any of their properties, assets or businesses, or any officers or directors of the Target Companies, and, to Sellers’ Knowledge, there is no basis for any such action.  Except as set forth in Schedule 5.15, there are no judgments, consents, decrees, injunctions, or any other judicial or administrative mandates outstanding against any Target Company.

5.16.Insurance.  Schedule 5.16 contains a description of all insurance policies maintained by or on behalf of any Target Company on its properties, assets, business or personnel, in each case specifying (i) the insurer, (ii) the amount of coverage, (iii) the type of insurance, (iv) the policy number, and (v) any currently pending claims thereunder or any claims asserted thereunder or under similar policies since January 1, 2007.  All such policies are (and pending Closing will continue to be) in full force and effect, and no Target Company is in default in any material respect with respect to any provision contained in any insurance policies, and, to Sellers’ Knowledge, no event has occurred that, with notice or lapse of time, could constitute such a default or permit termination of the policy.  No Target Company has failed to give any notice or present any claim under any such policy in due and timely fashion.  To the extent that any Contract to which any Target Company is a party requires any Target Company to maintain a specified level of insurance coverage, such Target Company maintains such required insurance coverage in accordance with such Contract.

5.17.Employment and Labor Matters.

5.17.1.Employees. Schedule 5.17 hereof contains a list of the names of each employee of each Target Company employed at any time since January 1, 2008, together with their current employment status, annual salary, bonuses and perquisites and their total compensation during the fiscal year ended December 31, 2007.

5.17.2.Collective Bargaining Agreements. Except as disclosed on Schedule 5.17, no Target Company is a party to or otherwise bound by any contract, agreement or collective bargaining agreement with any labor union or organization or other commitment respecting employment or compensation of any of its officers, directors, agents or employees, and no employees of any Target Company are represented by any labor union, workers council or similar organization.

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5.17.3.Employee Claims.  There are no charges or complaints involving any federal, state or local civil rights enforcement agency, court or other Governmental Authority; complaints or citations under the Occupational Safety and Health Act or any state or local occupational safety act or regulation; unfair labor practice charges or complaints with any Governmental Authority with jurisdiction over labor- or employment-related claims (including the United States National Labor Relations Board); or other claims, charges, actions or controversies pending, or, to Sellers’ Knowledge, threatened or proposed, involving any Target Company and any employee, former employee or any labor union or other organization representing or claiming to represent such employees’ interests.

5.17.4.Compliance.  Each Target Company is and has heretofore been in compliance with all Laws respecting employment and employment practices, terms and conditions of employment and wages and hours, the sponsorship, maintenance, administration and operation of (or the participation of its employees in) employee benefit plans and arrangements and occupational safety and health programs, and no Target Company is engaged in any violation of any Law related to employment, including unfair labor practices or acts of employment discrimination.

5.18.Employee Benefits.

5.18.1.Identification. Schedule 5.18 contains a true and complete list of all Employee Plans, whether express or implied, applicable to any employees or former employees of any Target Company and true and correct copies of such Employee Plans have been furnished to Methode.  True and correct copies of all employee manuals or written statements of policy relating to the employment of employees of Target Companies, if any, have been furnished to Buyer. Without limitation to the foregoing, except as disclosed in Schedule 5.18, (i) no Target Company maintains or contributes to, nor has any Target Company at any time maintained or contributed to, a “defined benefit plan” within the meaning of Section 3(35) of ERISA, (ii) no Target Company maintains or has had an obligation to contribute to any multiemployer plan (within the meaning of Section 3(37) of ERISA), and (iii) no Target Company maintains any Welfare Plan.

5.18.2.Compliance. Each Employee Plan and each related trust, insurance contract or fund maintained by, or contributed to, by any Target Company has complied in form and operation with all filings, reporting, disclosure and other requirements of ERISA and, to the extent applicable, the Code. No Selling Party or Target Company has received any notice to correct any violation of any applicable Laws relating to any Employee Plans of any Target Company or the manner in which they are administered, with which it has not complied; and the provisions and operations of all such plans, programs and policies are in substantial compliance with applicable Laws. All required reports and descriptions (including Form 5500 annual reports, summary annual reports, PBGC-1’s, and summary plan descriptions) have been timely filed or distributed appropriately with respect to each Employee Plan.  Neither the Target Companies nor any of their members, managers, officers or directors has engaged in any transaction in violation of the prohibited transactions provisions set forth in Section 4975 of the Code or Section 406 of ERISA, which would be reasonably likely to result in liability to any such party.  The requirements of COBRA have been met with respect to each Welfare Plan.  All contributions (including employer contributions and employee salary reduction contributions) which are due

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have been paid to each Pension Plan. All premiums or other payments for all periods ending on or before the Closing Date have been paid with respect to each Welfare Plan.  No Target Company has incurred, or taken any actions that could cause it to occur, a “complete withdrawal” or “partial withdrawal”, as defined in Sections 4203(a) and 4205(a), respectively, of ERISA, from any multiemployer pension plan as to which any Target Company contributes, has contributed or has had an obligation to contribute.  No Selling Party or Target Company has received from the sponsor of a multiemployer pension plan any notice of, or any notice relating to, withdrawal liability under Part 1 of Subtitle E of Title IV of ERISA relating to such plan. There is no litigation or filed claims against any Target Company with respect to any Employee Plan other than routine claims for benefits.

5.18.3.Funding of Certain Plans. There is no Employee Plan that is a Welfare Plan, the benefits under which are not provided exclusively from the assets of the Target Companies or through insurance contracts. The financial and actuarial statements, if any, for each Employee Plan reflect in all material respects the financial condition and funding of the Employee Plans as of the date of such financial and actuarial statements, and no change has occurred with respect to the financial condition or funding of the Employee Plans since the date of such financial and actuarial statements.

5.18.4.Acceleration of Payments. The consummation of the transactions contemplated by this Agreement will not (i) entitle any current or former employee, director or officer of any Target Company to severance pay, unemployment compensation or any other payment, (ii) accelerate the time of payment or vesting, or increase the amount of compensation due any such employee, director or officer, or trigger the funding (through a grantor trust or otherwise) of compensation or benefits under, increase the amount payable or trigger any other material obligation pursuant to, any or any other agreement; or (iii) result in any breach or violation of, or a default under, any Employee Plan.

5.19.Intellectual Property.

5.19.1.Identification of Intellectual Property.  The Target Companies own or have the right to use, with the right to license or sublicense, all Intellectual Property necessary to conduct their business as now conducted.  Schedule 5.19 hereto lists and identifies correctly and completely (with patent numbers, registration numbers or application numbers, as applicable) the current interests of each Target Company in all registrations for or applications to register Intellectual Property, lists all invention disclosures submitted by any personnel of any Target Company (for which a patent application has not been filed), and lists and generally identifies the current interests of each Target Company in all other Target Company Intellectual Property. With respect to any licenses, sublicenses, franchise agreements or similar types of agreements concerning Target Company Intellectual Property, Schedule 5.19 includes the identity of all parties thereto, a description of the nature and subject matter thereof, the applicable royalty, the exclusivity or non-exclusivity thereof and the term thereof.

5.19.2.Title to Intellectual Property.  No other Person holds any right, Lien or other interest not specified in Schedule 5.19, or has any right to a royalty or payment of any kind from any Target Company, with respect to the Target Company Intellectual Property.  Except as indicated in Schedule 5.19, there has been no asserted claims or litigation challenging or

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threatening to challenge the right, title and interest of any Target Company to use the Target Company Intellectual Property, and to Sellers’ Knowledge, there is no bases for any such claims.  No Target Company Intellectual Property is subject to any outstanding judgment, injunction, order, decree, or agreement restricting the use thereof by any Target Company or restricting the licensing or transfer thereof by any Target Company.

5.19.3.No Infringement by Target Companies. The operation of the business of the Target Companies and the ownership, manufacture, purchase, sale, licensing and use of any of the Target Company Intellectual Property do not contravene, conflict with, violate or infringe upon any Intellectual Property of any third party and no Trade Secret has been misappropriated by any Target Company from any third party.  In addition, the use, licensing or sale by or to each Target Company of any of the Target Company Intellectual Property does not require the acquiescence, agreement or consent of any third party that has not been obtained. The operations and business of each Target Company do not violate any rights of others in any of the items set forth in Schedule 5.19 and no further rights or licenses with respect to Intellectual Property are required by any Target Company for the conduct of the business as now being conducted by it.

5.19.4.Infringement by Third Parties. To Sellers’ Knowledge, no right of any Target Company with respect to the Target Company Intellectual Property is being violated or infringed by others.  Except as described in Schedule 5.19, the Target Company Intellectual Property and the Target Companies’ products are not subject to any pending or, to Sellers’ Knowledge, any threatened challenge or claim of infringement, interference or unfair competition.

5.19.5.Registrations for Intellectual Property.  Except as set forth on Schedule 5.19, all patents, trademark registrations, applications for trademark registration, copyright registrations and applications for copyright registration with respect to any Target Company Intellectual Property Right: (i) are in compliance with all formal legal requirements and are not subject to any maintenance fees or taxes or actions, the deadline for which falls due prior to the Closing Date or within thirty days after the Closing Date; or (ii) are not subject to any pending or, to Sellers’ Knowledge, any threatened action in which a third party seeks to cancel, invalidate or oppose any right arising therefrom or has otherwise contested the validity, enforceability, or ownership thereof.

5.19.6.Trade Secrets. With respect to each Trade Secret owned by, licensed by or used by a Target Company (including all technical information, vendor lists, specifications and requirements and other Trade Secrets relating to the development processes, software and activities of each Target Company), the documentation maintained by each Target Company relating thereto is reasonably current, accurate, and sufficient in detail and content to identify and allow its full and proper use.  Each Target Company has exercised at least a reasonable degree of care in protecting the secrecy of all Trade Secrets owned by, licensed by or used by each Target Company and, to Sellers’ Knowledge, no Trade Secret used by any Target Company has been divulged to any third party without obligation to maintain the confidentiality thereof.

5.19.7.Employee Developments. Except as described in Schedule 5.19, all current employees of each Target Company involved in the development of Intellectual Property have executed written agreements assigning to such Target Company all right, title and interest

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in Intellectual Property developed by such employees as part of their employment activities (“Employee IP Agreements”).  True and correct copies of the Employee IP Agreements of current and, to the extent available, former employees have been provided to Methode prior to the Closing Date.  Except as described in Schedule 5.19, neither any Target Company nor, to Sellers’ Knowledge, any current or former employee of any Target Company is in breach of, or default under the provisions of any such agreement. Except as described in Schedule 5.19, no former employee of a Target Company who developed any material Target Company Intellectual Property has failed to assign to such Target Company all right, title and interest in such Target Company Intellectual Property.  To Sellers’ Knowledge, no current employee of any Target Company has entered into any written agreement with a third party which restricts or limits in any way the scope or type of work that such employee may perform for any Target Company.

5.19.8.No Contravention. The consummation of the transactions contemplated by this Agreement will not alter or impair any of the rights of any Buyer after the Closing to use the Target Company Intellectual Property in the manner used by the Target Companies prior to the Closing.

5.20.Legal Compliance.  Except as disclosed in Schedule 5.20, each Target Company has complied with and is in compliance with all Laws applicable to it (including Laws applicable to immigration, controls, wages and hours, civil rights, occupational health and safety, and competition), has complied with ethical business practices in the conduct of its business, and has not received any notice of claimed noncompliance with any Laws or ethical business practices. Without limitation to the foregoing, no Target Company has, nor, have any employees, officers, directors, consultants, advisors, agents, members or representatives of any Target Company or other Person acting on behalf of any Target Company, violated, or taken any action which would cause any Target Company to be in violation of, the Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”), or the USA Patriot Act, or any rules and regulations thereunder.  There is not now, and there has never been, any employment by any Target Company of, or beneficial ownership in any Target Company by, any governmental or political official of any country.

5.21.Approvals. Except as described in Schedule 5.21, each Target Company possesses or has applied for all governmental and other permits, licenses, consents, certificates, orders, authorizations and approvals (the “Approvals”) to own or hold under lease and operate its properties and assets and to carry on its business as now conducted and all such Approvals are identified in Schedule 5.21.  Each Approval is valid, binding and in full force and effect and each Target Company has complied with all requirements of, and is not in default under, any such Approval and has not received any notice that it is in violation of any of the terms or conditions of such Approval or any notice relating to the revocation or modification of any such Approvals. No loss or expiration of any Approval is threatened or pending other than expiration in accordance with the terms thereof.

5.22.Transactions with Affiliates.  Except as described in Schedule 5.22 and except for the sale of goods and services and licensing of Intellectual Property among the Target Companies in the Ordinary Course of Business and/or between the Target Companies and Hetronic Deutschland in the Ordinary Course of Business, none of the Target Companies, their Affiliates, nor any officer or director of any Target Company or its Affiliates, nor any member of the immediate family of any such Persons: (a) has any direct or indirect interest in (i) any

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property or asset which is owned or used by any Target Company in the conduct of its business, or (ii) any entity which does business with any Target Company; or (b) has any financial, business or contractual relationship or arrangement with any Target Company, has any outstanding loans to or from any Target Company, performs services or supplies goods to any Target Company, or has any other Liabilities due to or from any Target Company.

5.23.Environmental Matters.

5.23.1.Environmental Compliance.  Except as disclosed in Schedule 5.23, all facilities owned, leased, used or operated by any Target Company or any predecessor in interest have been, and continue to be, owned, leased, used or operated in compliance with all applicable Environmental Laws and all Environmental Permits. All past non-compliance with Environmental Laws or Environmental Permits has been resolved without any pending, on-going or future obligation, cost or Liability, and there is no requirement proposed for adoption or implementation under any Environmental Law or Environmental Permit.

5.23.2.Environmental Audits.  Schedule 5.23 identifies (i) all environmental audits, assessments, occupational health studies or similar studies or analyses undertaken by, or at the direction of, Governmental Authorities, any Target Company, or any predecessor in interest; (ii) the results of the most recent analyses of water (including groundwater analyses), soil, air or asbestos samples where non-compliance or contamination is indicated; (iii) the most recent inspection of each operating facility by the U.S. Environmental Protection Agency or other relevant Governmental Authority; (iv) written communications with Governmental Authorities relating to issues of noncompliance concerning Environmental Laws or Environmental Permits; and (v) any written claim or complaint concerning environmental matters of any Target Company, in each case relating to the real property owned, leased or occupied by any Target Company, or any Target Company’s operations, as applicable.

5.23.3.Release, Storage or Disposal of Hazardous Materials.  Hazardous Materials have not been Released by any Target Company on any real property owned, leased or occupied by any Target Company or, during its period of ownership, lease or occupancy, on any property formerly owned, leased or occupied by, or on behalf of, any Target Company.  Each Target Company has reported promptly to appropriate authorities each unauthorized Release of any Hazardous Material at any facility leased, owned, used or operated by any Target Company, or any predecessor in interest, which was required to be reported by Target Companies under applicable Environmental Laws.  Except as disclosed in Schedule 5.23, no real property currently or formerly owned, leased or occupied by any Target Company, and no site or location used by any Target Company or any predecessor in interest has disposed, treated, or arranged for the storage, disposal or treatment of, any Hazardous Material or other waste (i) has been placed on the National Priorities List or its state equivalent; (ii) the U.S. Environmental Protection Agency or other relevant Governmental Authority has proposed, or is proposing, to place on the National Priorities List or state equivalent; (iii) is on notice of, or subject to a claim, administrative order or other demand either to take Remedial Action or to reimburse any Person who has taken Remedial Action in connection with that site; (iv) has filed (or has had filed with respect to it) notification of hazardous waste activities; or (v) is on any state Comprehensive Environmental Response Compensation Liability Information System List or equivalent list.

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5.23.4.Remedial Actions.  No Target Company is conducting, nor has undertaken or completed, any Remedial Action relating to any Release or threatened Release of Hazardous Materials at real property owned, leased or occupied by any Target Company or at any other site, location or operation, either voluntarily or pursuant to the order of any Governmental Authority or the requirements of any Environmental Law or Environmental Permit. Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will require any Remedial Action or notice to or consent of Governmental Authorities or any third party pursuant to any applicable Environmental Law or Environmental Permit.

5.23.5.Storage Tanks.  Except as set forth in Schedule 5.23, no Target Company has owned or operated, nor presently owns or operates, any underground or aboveground storage tanks.  To Sellers’ Knowledge, there are no underground or aboveground storage tanks or any surface impoundments, septic tanks, pits, lagoons or other areas in which Hazardous Materials are being or have been treated, stored or disposed on any real property owned, leased or occupied by any Target Company. To Sellers’ Knowledge, there are no wastes, drums or containers disposed of or buried on, in or under the ground located on the premises owned or operated by any Target Company.  No Target Company has disposed of or buried any wastes, drums or containers on, in or under the ground or any surface waters located on the premises owned or operated by any Target Company.  No Target Company nor any party acting on its behalf, has disposed of or buried, or arranged to dispose of or bury, any waste, drums or containers in or on the premises of a third party other than those pursuant to and in compliance with all applicable Environmental Laws.

5.23.6.Contaminants.  Except as set forth in Schedule 5.23, there are no polychlorinated biphenyls, asbestos or asbestos-containing materials or urea formaldehyde in or on premises owned or operated by any Target Company and the soil, surface water and ground water at, under or on each such premises are free from any material or substance which is or may be hazardous or toxic, or which could otherwise pose a risk to health, safety or the environment or which is regulated, prohibited or controlled pursuant to or the subject of any Environmental Laws.

5.23.7.Environmental Claims.  There are no Environmental Claims pending or threatened against any Target Company and, to Sellers’ Knowledge, there are no circumstances that can reasonably be expected to form the basis of any such Environmental Claim, including with respect to any off-site disposal location currently or formerly used by, or on behalf of, any Target Company or any of its predecessors or with respect to any facilities previously owned, leased or occupied by any Target Company.

5.24.Product Liability and Warranty Matters.  Except as disclosed in Schedule 5.24, there are no actions, suits, inquiries, proceedings, claims, or investigations by or before any Governmental Authority pending or, to Sellers’ Knowledge, threatened, against or involving any Target Company relating to any product alleged to have been manufactured or sold by any Target Company and alleged to have been defective or improperly designed or manufactured.  Schedule 5.24 lists all formal or informal policies, practices of Target Companies pursuant to which any Person has any right to return any product or products sold by any Target Company for credit or refund and any other express or implied warranties, indemnifications or guarantees with respect to such products (collectively, “Hetronic Warranties”).  Except as disclosed in

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Schedule 5.24, no customer of any Target Company has returned any products sold in the Business or applied for or requested any credit or refund with respect thereto except pursuant to said Hetronic Warranties.  Correct and complete copies of all written Hetronic Warranties disclosed on Schedule 5.24 and accurate descriptions of all oral or informal Hetronic Warranties disclosed on the Schedule 5.24 have been provided to Buyer.

5.25.Principal Customers and Suppliers.  Schedule 5.25 sets forth separate lists of the ten (10) largest customers of the Target Companies (collectively) in terms of sales during the years ended December 31, 2005, 2006 and 2007 (the “Named Customers”), and the ten (10) largest suppliers to the Target Companies (collectively) during the years ended December 31, 2005, 2006 and 2007 (the “Named Suppliers”), showing in each case the approximate total sales and purchases by or from each such customer or supplier during such period. There are no other customers or suppliers who accounted for more than 5% of sales or purchases, respectively, by the Target Companies during the periods shown.

Except as set forth on Schedule 5.25, since January 1, 2008, no Named Customer or Named Supplier has terminated its business relationship with the Target Companies or provided written notice of its intent to refrain from purchasing from or dealing with the Target Companies or, after the Closing, the Buyers.  To Sellers’ Knowledge, there has not otherwise been any material adverse change in the business relationship of any Target Company with any such Named Customer or Named Supplier.

5.26.Solvency.  No Target Company is, nor will any Target Company be rendered by the occurrence of the transactions contemplated by this Agreement, insolvent and, immediately after giving effect to the consummation of the transactions contemplated by this Agreement each Target Company will be able to pay its debts as they become due.  As used herein, the term: (i) “insolvent” means that the sum of the present fair salable value of its assets does not and will not exceed its debts and other probable liabilities, and (ii) “debts” includes any legal liability, whether matured or unmatured, liquidated or unliquidated, absolute, fixed or contingent, disputed or undisputed or secured or unsecured.

5.27.Material Adverse Affect. Since December 31, 2007, there has not been any material adverse change in the liabilities, properties, customer relationships, prospects, assets, results of operation or financial condition of any Target Company, taken as a whole, and no event has occurred or circumstance exists that may result in such a material adverse change.

5.28.Disclosure.  No representation or warranty of the Selling Parties made hereunder or in the schedules contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein not misleading.  Copies of all documents referred to herein or in the schedules have been delivered or made available to Methode, are true, correct and complete copies thereof, and include all amendments, supplements or modifications thereto or waivers thereunder.

6.REPRESENTATIONS AND WARRANTIES OF METHODE.

As an inducement for the Selling Parties to enter into this Agreement, Methode represents and warrants to the Selling Parties as follows:

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6.1.Organization.  Methode and each of the Buyers is an organization of the nature identified in Schedule 6.1 and is duly organized, validly existing and in good standing under the laws of the jurisdiction identified in Schedule 6.1.  Each Buyer has all requisite power and authority to acquire the Purchased Assets and the Purchased Shares as contemplated hereby.

6.2.Enforceability and Authorization.

6.2.1.Authorization by Methode.  Methode has all requisite corporate power and authority to execute and deliver this Agreement and all other agreements and documents to be executed and delivered by Methode pursuant this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement and all other agreements and documents to be executed and delivered by Methode pursuant hereto, and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on behalf of Methode.  This Agreement constitutes, and all other agreements and documents to be executed and delivered by Methode will constitute, the valid and binding agreements of Methode, enforceable against Methode in accordance with their respective terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

6.2.2.Authorization by the Buyers.  Each Buyer has or will have all requisite corporate power and authority to execute and deliver all agreements and documents to be executed and delivered by such Buyer pursuant this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery of all agreements and documents to be executed and delivered by each Buyer pursuant hereto, and the consummation of the transactions contemplated hereby and thereby have been or will be duly authorized by all necessary action on behalf of the Buyer.  This Agreement constitutes, and all other agreements and documents to be executed and delivered by each Buyer will constitute, the valid and binding agreements of such Buyer, enforceable against such Buyer in accordance with their respective terms, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, affecting creditors’ rights generally, and (ii) the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

6.3.No Conflict; Methode Consents.  Neither the execution and delivery of this Agreement by Methode, nor the execution and delivery by Methode and/or the Buyers of any other agreement or document to be executed and delivered by Methode and/or the Buyers pursuant to this Agreement, nor the consummation by Methode and/or the Buyers of the transactions contemplated hereby or thereby will constitute a violation of, or be in conflict with, or result in a cancellation of, or constitute a default under: (a) any term or provision of the certificate of incorporation or bylaws of Methode or such Buyer; (b) any judgment, decree, order, regulation or rule of any court or other Governmental Authority to which Methode or such Buyer is subject; (c) any applicable Law; (d) any Contract to which Methode or such Buyer is a party or is bound.

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Except as set forth on Schedule 6.3, no consent of, or notice to, or filing with any Governmental Authority or any other Person, is required to be obtained or given by Methode or any Buyer in connection with the execution, delivery or performance of this Agreement or any other agreement or document to be executed, delivered or performed hereunder by the Methode or the Buyers.

7.INTENTIONALLY OMITTED.

8.CONDITIONS TO CLOSING.

8.1.Mutual Conditions.  The respective obligations of each party to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment at or prior to Closing of each of the following conditions:

8.1.1.No Suit.  No suit, action or other proceeding or investigation shall to the knowledge of any party to this Agreement be threatened or pending before or by any Governmental Agency or by any third party restraining or prohibiting the consummation of the transactions contemplated by this Agreement.

8.2.Conditions to Methode’s Obligations.  The obligations of Methode to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment at or prior to Closing of each of the following conditions:

8.2.1.Intentionally Omitted.

8.2.2.Intentionally Omitted.

8.2.3.Required Consents and Approvals.  All material authorizations, consents, waivers, approvals or other action identified in Schedule 8.2.3, shall have been obtained.

8.2.4.No Material Adverse Effect.  There shall have occurred no Material Adverse Effect (whether or not covered by insurance).

8.2.5.Payoff Letters.  The Selling Parties shall have delivered to Methode payoff letters (the “Payoff Letters”) for all outstanding Indebtedness of the Sellers secured by any Lien and for all outstanding Indebtedness of Hetronic Asia (whether secured or unsecured), in each case in form and substance acceptable to Methode, in its sole discretion.  Except for such releases and UCC termination statements covered by such pay-off letters, the Target Companies shall have obtained all releases and authorization to file all UCC termination statements necessary to cause its properties and assets to be free and clear of all Liens as of the Closing Date.  Notwithstanding anything herein to the contrary, this condition shall only be satisfied if such Payoff Letters specify an aggregate payoff amount less than the Closing Payment minus the funds to be deposited in the Indemnity Escrow Account and Net Book Value Escrow Account.

8.2.6.Employment Agreements.  Torsten Rempe shall have entered into an Employment Agreement with a Buyer in the form attached hereto as Exhibit B, and such

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Employment Agreement shall not have been amended, cancelled, terminated or otherwise modified.

8.2.7.Ampcontrol Agreement.  Ampcontrol, Inc. shall have executed and delivered to Methode a Supply Agreement in the form attached hereto as Exhibit C (the “Ampcontrol Agreement”).

8.2.8.German Distribution Agreements.  Hetronic Deutschland shall have executed and delivered to Methode a Distribution and Assembling Partner Agreement and a License Agreement in the forms attached hereto as Exhibit D (together, the “German Distribution Agreements”).

8.2.9.Consulting Agreement. The Shareholder shall have executed and delivered to Methode a Consulting Agreement in the form attached hereto as Exhibit E (the “Consulting Agreement”).

8.2.10.Noncompetition Agreement.  Each Seller and the Shareholder shall have executed and delivered to Methode a Noncompetition and Confidentiality Agreement in favor of Methode and the Buyers in the form attached hereto as Exhibit F.

8.2.11.Foreign Counsel Opinion. Local counsel to Hetronic Asia shall have delivered to Methode an opinion of counsel, dated the Closing Date, in the form attached hereto as Exhibit G.

8.2.12.Escrow Agreement. The Selling Parties and the Escrow Agent shall have executed and delivered to Methode an Escrow Agreement in the form attached hereto as Exhibit H (the “Escrow Agreement”).

8.2.13.Lease Addendum. J & G-Estates, L.L.C., an Oklahoma limited liability company, and Hetronic International shall have executed and delivered to Methode a Lease Addendum in the form attached hereto as Exhibit I (the “Lease Addendum”).

8.2.14.Closing Documents.  The following documents shall have been delivered to Methode:

(a)Instruments of Assignment for Purchased Assets.  Bills of sale, deeds and other documents or instruments transferring, assigning and conveying to the applicable Buyer designated by Methode all right, title and interest in the Purchased Assets, free and clear of all Liens, duly executed by the Sellers, all of which documents shall be in form and substance acceptable to Methode, acting reasonably.

(b)Name Change Documentation. Such instruments and other documentation necessary to change the legal name of each Seller to remove the word “Hetronic” from such legal name, executed by such Persons and in such form ready for filing with the appropriate Governmental Authority in each such Person’s jurisdiction of organization (the “Name Change Filings”).

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(c)Good Standing Certificates.  Certificates of legal existence and good standing for each Target Company issued as of a recent date prior to the Closing Date by the Secretaries of State or other applicable Governmental Authority of each jurisdiction in which such Target Company is organized or qualified to do business.

(d)Secretaries’ Certificates.  A certificate of the Secretary of each Selling Party (other than the Shareholder) dated as of the Closing Date certifying (i) that the existence and good standing such Selling Party has not changed since the date of the certificates of legal existence and good standing delivered to Methode, (ii) the resolutions of the applicable management or supervisory board for such Selling Party authorizing the execution, delivery and performance of this Agreement and/or all other agreements, instruments, certificates and documents executed by such Person in connection herewith, and (iii) the incumbency of the officers of such Selling Party executing and delivering this Agreement and/or all other agreements, instruments, certificates and documents executed by such Selling Party in connection herewith.

8.2.15.Hetronic Asia Closing Deliveries.

(a)Stock Certificates and Instruments of Assignment for Purchased Shares. Hetronic Holding shall have delivered to Methode the original share certificates representing the Purchased Shares, duly endorsed in favor of the Buyer designated by Methode or accompanied by instruments of assignment or such other documentation necessary to convey to a Buyer designated by Methode all right, title and interest in the Purchased Shares.

(b)Secretary Certificate. The Secretary of Hetronic Asia shall have delivered a certificate dated as of the Closing Date certifying (i) that the existence and good standing Hetronic Asia has not changed since the date of the certificates of legal existence and good standing delivered to Methode, (ii) a copy of current Organizational Documentation, with all amendments, in force as of such date, and (iii) the incumbency of all directors and officers of Hetronic Asia.

(c)Intercompany Agreement Termination Documents. The Selling Parties and their Affiliates, as applicable, shall have executed and delivered to Methode such agreements as may be necessary to terminate the agreements between the Selling Parties and their Affiliates and Hetronic Asia, in each case without further liability to Hetronic Asia or the Selling Parties (the “Intercompany Agreement Termination Documents”).

8.2.16.German Local Transfer Agreement. Hetronic Europe shall have executed and delivered to Methode a Local Transfer Agreement in the form attached hereto as Exhibit K (the “German Local Transfer Agreement”).

8.2.17.Hetronic Deutschland Intercompany Assignments. Hetronic Deutschland shall have executed and delivered to Methode the bills of sale and instruments of assignment in the form attached hereto as Exhibit L (the “Hetronic Deutschland Intercompany Assignments”) conveying to Hetronic International, on a date prior to the date of this Agreement, all rights in the Purchased Assets identified therein (consisting of Trademarks previously assigned by

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Hetronic Deutschland to Hetronic International where such assignment has not been previously recorded).

8.3.Conditions to the Selling Parties’ Obligations.  The obligations of the Selling Parties to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment at or prior to the Closing of each of the following conditions:

8.3.1.Intentionally Omitted.

8.3.2.Intentionally Omitted.

8.3.3.Notice of Buyers.  Methode shall have delivered to the Shareholder written notice identifying one or more Subsidiary of Methode (or Methode itself) as the Buyer(s) for the Purchased Assets and Purchased Shares and for each such Buyer, identifying which of the Purchased Assets (whether by the identity of the Seller owning such Purchased Assets or by location of such Purchased Assets or otherwise) or Purchased Shares such Buyer will acquire hereunder.

8.3.4.Approvals.  All material authorizations, consents, waivers or approvals or other action required in connection with the execution, delivery and performance of this Agreement by Methode and the Buyers, and the consummation by Methode and the Buyers of the transactions contemplated hereby shall have been obtained.

8.3.5.Ampcontrol Agreement.  A Buyer designated by Methode shall have executed and delivered to Ampcontrol, Inc. the Ampcontrol Agreement.

8.3.6.German Distribution Agreements.  A Buyer designated by Methode shall have executed and delivered to Hetronic Deutschland the German Distribution Agreements.

8.3.7.Consulting Agreement.  A Buyer designated by Methode shall have executed and delivered to the Shareholder the Consulting Agreement.

8.3.8.Escrow Agreement. Methode and the Escrow Agent shall have executed and delivered to Hetronic Holding the Escrow Agreement.

8.3.9.Lease Addendum. A Buyer designated by Methode shall have executed and delivered to Hetronic Holding the Lease Addendum.

8.3.10.Employment Agreements.  A Buyer designated by Methode shall have entered into, or offered to enter into, the Employment Agreement with Torsten Rempe, and such Employment Agreement shall not have been amended, cancelled, terminated or otherwise modified by such Buyer.

8.3.11.Closing Documents.  The following documents shall have been delivered to Hetronic Holding:

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(a)Instruments of Assumption. An instrument of assumption from each Buyer assuming the Assumed Liabilities assumed by such Buyer, duly executed by the applicable Buyer.

(b)Secretary’s Certificates.  A certificate of the Secretary of each Buyer dated as of the Closing Date certifying (i) that the existence and good standing such Buyer has not changed since the date of the certificates of legal existence and good standing delivered to Sellers, (ii) the resolutions of the applicable management or supervisory board for such Buyer authorizing the execution, delivery and performance of this Agreement and/or all other agreements, instruments, certificates and documents executed by such Person in connection herewith, and (iii) the incumbency of the officers of such Buyer executing and delivering this Agreement and/or all other agreements, instruments, certificates and documents executed by such Buyer in connection herewith.

(c)Good Standing Certificates.  Certificates of legal existence and good standing for each Buyer issued as of a recent date prior to the Closing Date by the Secretary of State or other applicable Governmental Authority of each jurisdiction in which such Buyer is organized.

8.3.12.German Local Transfer Agreement.  A Buyer designated by Methode shall have executed and delivered to Hetronic Europe the German Local Transfer Agreement.

8.3.13.Intercompany Agreement Termination Documents. Hetronic Asia shall have executed and delivered to Hetronic Holding the Intercompany Agreement Termination Documents.

8.4.Payment. The Closing Payment shall be paid in accordance with Section 4.3 at Closing.

9.TERMINATION.

9.1.Termination of Agreement Prior to Closing.  This Agreement and the transactions contemplated hereby may be terminated at any time prior to the Closing, as follows:

9.1.1.Mutual Consent.  By mutual written agreement of Methode and the Shareholder.

9.1.2.Breach.  By the Shareholder by reason of the breach by Methode in any material respect of any of its representations, warranties, covenants or agreements contained in this Agreement. By Methode by reason of the breach by any of the Selling Parties in any material respect of any of its or their representations, warranties, covenants or agreements contained in this Agreement. In the event of an alleged breach, the non-breaching party shall provide written notice of such breach to the breaching party (the “Breach Notice”), and the non-breaching party may only proceed to terminate this Agreement in the event the non-breaching party fails to cure such breach within fifteen (15) days of the receipt of the Breach Notice.

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9.1.3.Respective Conditions.  By Methode or by the Shareholder if the conditions precedent to their respective obligations contained in Sections 8.2 or 8.3 hereof have not been met in all material respects at the Closing through no fault of the terminating party or its Affiliates by October 1, 2008, or such later date as may be agreed to by Methode and the Shareholder (the “Drop Dead Date”).

9.1.4.Mutual Conditions.  By Methode or by the Shareholder if any of the conditions described in Section 8.1 shall not have been fulfilled through no fault of the terminating party (or its Affiliates) by the Drop Dead Date.

9.2.Effect of Termination Prior to Closing.  If this Agreement is terminated pursuant to Section 9.1 above, all rights and obligations of the parties hereunder shall terminate without any Liability on the part of any party, except for any Liability of any party then in breach of any representations, warranties, covenants or obligations hereunder.

10.INDEMNIFICATION.

10.1.Limited Indemnification Obligations of Methode.  Methode covenants and agrees with the Selling Parties that it shall reimburse and indemnify the Selling Parties (the “Seller Indemnified Parties”) for, and hold harmless the Seller Indemnified Parties from, any and all Claims incurred by any of the Seller Indemnified Parties that result from:

(a)any inaccuracy in or breach of any representations or warranties made by Methode in this Agreement or the schedules or any other written statement, list, certificate or other instrument furnished to the Selling Parties by or on behalf of Methode pursuant to this Agreement;

(b)any nonfulfillment of any covenant or agreement of Methode under this Agreement;

(c)any Claims made by a third party alleging facts which, if true, would entitle the Seller Indemnified Parties to indemnification pursuant to (a) or (b) above;

(d)any failure of Methode to comply with its obligations under this Section 10.1; or

(e)any fees or expenses (including reasonable attorneys’ fees) incurred by the Seller Indemnified Parties in enforcing their rights under this Section 10.1.

10.2.General Indemnification Obligations of Methode.  Methode covenants and agrees with the Selling Parties that it shall reimburse and indemnify the Seller Indemnified Parties for, and hold harmless the Seller Indemnified Parties from, any and all Claims incurred by any of the Seller Indemnified Parties that result from:

(a)any Assumed Liabilities;

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(b)any fees, expenses or other payments incurred or owed by Methode to any brokers or comparable third parties retained or employed by Methode or its Affiliates in connection with the transactions contemplated by this Agreement;

(c)any Liability arising from any claim for personal injury, property damage, or strict liability arising out of the sale by any Buyer of any Inventories included in the Acquired Assets (whether constituting finished goods as of the Closing or work in process as of the Closing and subsequently completed by the Buyers) and sold by a Buyer after the Closing Date (the “Inventory Products Liability Claims”);

(d)any fees, expenses or other payments incurred or owed by Methode or any of the Buyers to any brokers, finders or comparable third parties retained or employed by them or their Affiliates in connection with the transactions contemplated by this Agreement;

(e)any Claims made by a third party alleging facts which, if true, would entitle the Seller Indemnified Parties to indemnification pursuant to (a) through (d) above;

(f)any failure of Methode to comply with its obligations under this Section 10.2; or

(g)any fees or expenses (including reasonable attorneys’ fees) incurred by the Seller Indemnified Parties in enforcing their rights under this Section 10.2.

10.3.Limited Indemnification Obligations of the Selling Parties.  The Selling Parties, jointly and severally, covenant and agree with Methode that they shall reimburse and indemnify Methode and its Affiliates (including the Buyers and Hetronic Asia) and their respective directors, officers, employees, licensees and agents (the “Methode Indemnified Parties”) for, and hold harmless Methode Indemnified Parties from, any and all Claims incurred by any of Methode Indemnified Parties that result from:

(a)any inaccuracy in or breach of any representations or warranties made by the Selling Parties in this Agreement or the schedules or any other written statement, list, certificate or other instrument furnished to Methode by or on behalf of the Selling Parties pursuant to this Agreement;

(b)any nonfulfillment of any covenant or agreement of any of the Selling Parties under this Agreement;

(c)any Claims made by a third party alleging facts which, if true, would entitle the Methode Indemnified Parties to indemnification pursuant to (a) or (b) above;

(d)any failure of the Selling Parties to comply with their obligations under this Section 10.3; or

(e)any fees or expenses (including reasonable attorneys’ fees) incurred by Methode Indemnified Parties in enforcing its rights under this Section 10.3.

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10.4.General Indemnification Obligations of the Selling Parties.  The Selling Parties, jointly and severally, covenant and agree with Methode that they shall reimburse and indemnify the Methode Indemnified Parties for, and hold harmless Methode Indemnified Parties from, any and all Claims incurred by any of Methode Indemnified Parties that result from:

(a)any Taxes relating to or resulting from the conduct of the Target Companies’ business or the Acquired Assets on or prior to the Closing Date (including any Taxes of the Target Companies accruing due to events prior to the Closing Date for which any Methode Indemnified Party is held liable pursuant to Section 75 of the German Fiscal Code (Abgabenordnung) and including any Taxes of Hetronic Asia accruing due to events on or prior to the Closing Date other than Taxes of Hetronic Asia reflected on the Final Closing Statement);

(b)any payments or salaries, wages, bonuses, vacation, amounts payable under Employee Plans or otherwise due to employees or agents of any Target Company, to the extent due or payable on or prior to the Closing Date (or any amounts due to employees or agents of any Selling Party who are not transferred to Buyer, whether or not due or payable on or prior to the Closing Date), other than amounts payable to employees or agents of Hetronic Asia and reflected on the Final Closing Statement;

(c)any Remedial Action required by Environmental Law or other Environmental Claim to the extent resulting from the conduct of the Target Companies’ business or the Acquired Assets on or prior to the Closing Date;

(d)any litigation or legal compliance matters to the extent relating or due to the conduct of any Target Company’s business on or prior to the Closing Date, including any claims described in Schedule 5.15 and/or Schedule 5.20 hereto, other than any Assumed Warranty Claims and Inventory Products Liability Claims;

(e)any product liability or strict liability, arising from occurrences on or prior to the Closing Date (whether or not such claim is then asserted), other than any Assumed Warranty Claims and Inventory Products Liability Claims;

(f)Liabilities of Hetronic Asia, except for (i) Liabilities of Hetronic Asia that are reflected on the Final Closing Statement, (ii) Assumed Warranty Claims relating to Hetronic Asia or the business of Hetronic Asia, and (iii) Inventory Products Liability Claims relating to Hetronic Asia or the business of Hetronic Asia;

(g)any fees, expenses or other payments incurred or owed by the Selling Parties to any brokers, finders or comparable third parties retained or employed by them or their Affiliates in connection with the transactions contemplated by this Agreement;

(h)any Claims asserted by any shareholder of any Target Company or Selling Party (including the Hetronic Asia Shareholders) for any portion of the Purchase Price;

(i)any and all other Excluded Liabilities of the Sellers, except for Liabilities of the Sellers to Methode Indemnified Parties arising under Section 10.3 of this Agreement;

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(j)any Claims made by a third party alleging facts which, if true, would entitle the Methode Indemnified Parties to indemnification pursuant to (a) through (i) above;

(k)any failure of the Selling Parties to comply with their obligations under this Section 10.4; or

(l)any fees or expenses (including reasonable attorneys’ fees) incurred by Methode Indemnified Parties in enforcing its rights under this Section 10.4.

10.5.Nature and Survival of Representations and Warranties.  All statements made by or on behalf of a Selling Party herein or in the schedules, shall be deemed representations and warranties of the Selling Parties, regardless of any investigation made by or on behalf of Methode.  The representations and warranties contained in this Agreement and the schedules shall survive the Closing.  Neither the period of survival nor the Liability of the Selling Parties with respect to the Selling Parties’ representations and warranties shall be reduced by any investigation made at any time by or on behalf of Methode.  The representations and warranties made by the Selling Parties and by Methode under this Agreement shall expire (in the absence of a showing of willful and knowing misrepresentation or breach) twenty four (24) months after the Closing Date, except that the representations and warranties made in or pursuant to Section 5.2 (Enforceability and Authority), Section 5.4.2 (Capitalization and Ownership of Hetronic Asia), Section 5.10 (Title to Assets), Section 5.23 (Environmental Matters) and Section 6.2 (Enforceability and Authority), Section 5.9 (Tax Matters), Section 5.18 (Employee Benefits), Section 5.20 (Compliance) and Section 5.24 (Product Liability and Warranty Matters) shall survive until ninety (90) days after the expiration of the applicable statute of limitations.  If written notice of a Claim has been given to the party against whom indemnification is sought prior to the expiration of the applicable representation and warranty, then the relevant representation and warranty shall survive as to such claim, until such claim has been finally resolved.

10.6.Limitations on Indemnification Obligations.

10.6.1.Threshold.  Notwithstanding any other provision in this Agreement to the contrary, no indemnification for Claims may be sought by a party pursuant to Section 10.1 (Limited Indemnification Obligations of Methode) or Section 10.3 (Limited Indemnification Obligations of the Selling Parties) of this Agreement until the aggregate amount of all such Claims of the Methode Indemnified Parties, on one hand, or the Seller Indemnified Parties on the other hand, exceeds Three Hundred Thousand United States Dollars ($300,000) in the aggregate (the “Aggregate Threshold Amount”), at which time the party asserting such Claim shall be entitled to assert such Claims for any amount in excess of the Aggregate Threshold Amount; provided that the parties agree that no Claim shall be asserted pursuant to Section 10.1 (Limited Indemnification Obligations of Methode) or Section 10.3 (Limited Indemnification Obligations of the Selling Parties) of this Agreement unless such Claim exceeds Ten Thousand Dollars ($10,000) (the “Individual Threshold Amount”); and provided further that the limitations set forth in this Section 10.6.1 shall not apply to (i) Claims relating to indemnification based upon a breach of the representations and warranties set forth in Section 5.4.2 (Capitalization and Ownership of Hetronic Asia) or Section 5.10 (Title to Assets), (ii) Claims for payment of the

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Purchase Price, and (iii) Claims relating to intentional breaches of the covenants set forth in Section 11. For purposes of determining whether any materiality qualifier set forth in any representation or warranty or covenant is applicable, a Claim that exceeds the Individual Threshold Amount shall be considered material and a Claim that does not exceed the Individual Threshold Amount shall not be considered material. For purposes of the limitations set forth in this Section 10.6.1, groups of related Claims arising from the same circumstances shall be treated as a single Claim.

10.6.2.General Limitation on Amount.  The aggregate liability of Selling Parties to all Methode Indemnified Parties, on one hand, and the aggregate liability of Methode to all Seller Indemnified Parties, on the other hand, for any and all Claims shall be limited to the sum of Ten Million United States Dollars ($10,000,000) (the “Liability Cap”); provided, however that the Liability Cap shall not be applicable to (a) Claims for indemnification pursuant to Section 10.2 (the General Indemnification Obligations of Methode) or Section 10.4 (the General Indemnification Obligations for the Selling Parties), or (b) Claims for payment of the Purchase Price.

10.7.Method of Asserting Claims.  The party seeking indemnification (the “Indemnitee”) will give prompt written notice to the other party or parties (the “Indemnitor”) of any Claim which it discovers or of which it receives notice after the Closing and which might give rise to a claim by it for indemnification against Indemnitor under this Section 10, stating the nature, basis and (to the extent known) amount thereof; provided that failure to give prompt notice shall not jeopardize the right of any Indemnitee to indemnification unless such failure shall have materially prejudiced the ability of the Indemnitor to defend such Claim or to recover any payment under its applicable insurance coverage.

In case of any Claim or suit by a third party or by any Governmental Authority, or any legal, administrative or arbitration proceeding (a “Third Party Claim”) with respect to which Indemnitor may have liability under the indemnity agreement contained in this Section 10, Indemnitor shall be entitled to participate in such Third Party Claim and, to the extent desired by it, to assume the defense of such Third Party Claim, and after notice from Indemnitor to Indemnitee of the election so to assume the defense of such Third Party Claim, Indemnitor will not be liable to Indemnitee for any legal or other expenses subsequently incurred by Indemnitee in connection with the defense of such Third Party Claim, other than reasonable costs of investigation, unless Indemnitor does not actually assume the defense of such Third Party Claim following notice of such election, or unless separate representation is necessary to avoid a conflict of interest, in which case such representation shall be at the expense of the Indemnitor.  Indemnitee and Indemnitor will render to each other such assistance as may reasonably be required of each other in order to insure proper and adequate defense of any such Third Party Claim.  If the Indemnitor actually assumes the defense of the Indemnitee, the Indemnitee will not make any settlement of any Third Party Claim which might give rise to liability of Indemnitor under the indemnity agreements contained in this Section without the written consent of Indemnitor, which consent shall not be unreasonably withheld, and the Indemnitor shall not agree to make any settlement of any Third Party Claim which would not include the unconditional release of the Indemnitee without the Indemnitee’s written consent.

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10.8.Setoff; Payment of Claims.  Subject to reasonable prior written notice to the Shareholder, Methode is hereby authorized by each Selling Partyto cause any Claims it or any other Methode Indemnified Party may have against any of the Selling Parties and any other amount owed to it by the Selling Parties under this Agreement or otherwise to be paid by reduction or offset of such Claims or other amounts against any amounts payable by Methode (or any other Methode Indemnified Party) to any of the Selling Parties, pursuant to this Agreement, (including the Closing Payment) or in any other fashion.  The rights contained herein shall not be exclusive, but shall be in addition to any other rights and remedies available to Methode.  If any Claims by Methode or any other Methode Indemnified Party are pending against any of the Selling Parties at such time as any of the above payments would otherwise be made by Methode (or any other Methode Indemnified Party) to any Selling Party, then Methode (or any other Methode Indemnified Party) may withhold from such payments any amount that would become reasonably necessary to satisfy such Claim until such time as such Claim has been resolved; provided that Methode’s exercise of its right of set-off is made in good faith and upon prior written notice to the Selling Parties.  At such time as any amounts so withheld by Methode become payable to the Selling Parties, Methode shall pay such amounts.

10.9.Treatment of Claims.  Amounts paid to or on behalf of an Indemnitor or Indemnitee, as indemnification hereunder shall be treated as adjustments to the Purchase Price.  If any Governmental Authority asserts that an indemnification payment is not an adjustment to the Purchase Price, the Indemnitor will indemnify the Indemnitee against any Tax imposed on the receipt of such indemnification payment pursuant to this Section 10, including any Tax imposed on any payment pursuant to this Section 10.7.

10.10.Insurance Recoveries.  The amount of any losses for which an Indemnitee shall be entitled to indemnification under this Section 10 shall be net of the amount of any insurance recoveries actually received by or on behalf of the Indemnitee or its Affiliates from third parties with respect to such indemnifiable losses.  If an Indemnitee or its Affiliates receives an insurance recovery from a third party in respect of an indemnifiable loss under this Agreement after the full amount of such indemnifiable loss has been paid by an Indemnitor or after the Indemnitor has made a partial payment of such indemnifiable loss and the amount of such insurance recovery exceeds the remaining unpaid balance of such indemnifiable loss, then the Indemnitee shall promptly remit to the Indemnitor the excess (if any) of (i) the sum of the amount theretofore paid by such Indemnitor in respect of such indemnifiable loss plus the amount of the insurance recovery received from the third party in respect thereof, less (ii) the full amount of such indemnifiable loss.  Nothing in this Section 10.8 shall obligate an Indemnitee to seek to recover any amounts under its insurance policies prior to, or as a condition to, seeking indemnification under this Section 10.

11.POST-CLOSING AGREEMENTS.

11.1.Employees.  The Target Companies shall permit Methode and the Buyers to have access to and contact with their employees and provide such cooperation and assistance as Methode may reasonably request in connection with the Buyers’ efforts to hire or retain such employees at the Closing and to minimize any disruption or adverse impact upon the relationship between the Target Companies and such employees arising from the transactions contemplated

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by this Agreement. Methode shall cause the Buyers to offer, on the Closing Date, employment as employees-at-will to all employees of Sellers on terms and conditions (including seniority) comparable to (or better than) those as enjoyed by such employees on the date of this Agreement (except that the terms of employment of any employees executing written employment agreements with the Buyers shall be as set forth in such employment agreements and the terms of the consulting agreement with the Shareholder shall be as set forth in the Consulting Agreement), and the Sellers shall terminate the employment of such employees as of the Closing Date. It shall be a condition precedent of employment by such Buyer that applicants complete all the standard procedures, forms and requirements (including drug testing, execution of the standard form of Inventions and Confidentiality Agreement used by Methode and background checks) of Methode as a precondition to commencing employment with such Buyer.  Nothing in this Section 11.1, express or implied, shall confer upon any current or former employee of any Seller or other Person or legal representative thereof any rights or remedies, including any right to employment, continued employment for any specified period, or compensation or benefits of any nature or kind whatsoever under or by reason of this Agreement.

Notwithstanding the foregoing, the parties acknowledge that the employees of Hetronic Europe shall, without further action by the parties, become employees of the Buyer acquiring the Purchased Assets of Hetronic Europe and the parties agree to promptly deliver to each employee of Hetronic Europe a written notice of the transfer of his or her employment to the applicable Buyer in accordance with Section 613a German Civil Code and to take such actions as may be required under applicable Law to notify such employees of the transactions hereunder.  Such automatic transfer of employees under applicable Law shall not affect the agreements between Methode and the Selling Parties hereunder with respect to the allocation of responsibility between the parties with respect to Liabilities relating to such employees (including the provisions of Sections 3.2 and 10.4(b)).

11.2.Employee Benefit Plans.  Promptly after Closing, the Buyers shall use Reasonable Efforts to permit all employees of the Sellers hired by the Buyers pursuant to Section 11.1 (the “Hired Employees”) holding accounts established under the Savings Incentive Match Plan for Employees of Small Employers maintained by the Sellers (“SIMPLE IRA Plan”) to roll over their accounts from the SIMPLE IRA Plan into Methode’s existing 401(k) plan or retain such accounts independently.

11.3.Sales after Closing.  After Closing, all inquiries regarding products of the Buyers, whether received by the Selling Parties or Affiliates of the Selling Parties, shall be promptly referred to the applicable Buyer.

11.4.Confidentiality. The Selling Parties hereby acknowledge that all Trade Secrets included in the Acquired Assets shall be owned by the Buyers upon and following Closing and each Selling Party hereby further agrees that from and after the Closing, the Selling Parties will not directly or indirectly disclose to anyone (except as required by law or by a governmental or regulatory body, in which event such Selling Party shall use reasonable efforts to notify Methode in advance of such disclosure) such Trade Secrets, or use or exploit such Trade Secrets.

11.5.Names Following the Closing.  Immediately following the Closing, the Selling Parties shall take such further actions as requested by Methode to file and make effective the

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Name Change Filings and to otherwise allow each Buyer to make full use of the name “Hetronic” in any form or combination, and the Selling Parties shall not thereafter use such name or other names acquired by the Buyers hereunder or names confusingly similar thereto.

11.6.Taxes and Expenses.All sales, stamp and other transfer Taxes assessed by any Governmental Authority in connection with or arising from this Agreement shall be borne by the Selling Parties and  the Selling Parties shall indemnify, defend and hold the Buyers harmless from any such transfer Taxes.  All other costs and expenses shall be borne by the party incurring the particular cost or expense.

11.7.Post-Closing Tax Preparation. Cooperation on Books and Records. The Selling Parties shall duly prepare and timely file all Tax Returns (and pay all corresponding Taxes) relating to the Selling Parties with respect to Tax periods up to the Closing Date with the appropriate Governmental Authorities in all jurisdictions in which such Tax Returns are required to be filed, which Tax Returns shall be true and correct and prepared in accordance with applicable Law and will properly reflect the Taxes of the Selling Parties for the periods covered thereby.  In addition, upon Methode’s reasonable request, each of the Selling Parties shall (and shall cause their Affiliates to) cooperate and render, at its own expense, all assistance necessary to duly prepare and make available to the Governmental Authority all books and records for Tax purposes (including but not limited to a proper transfer pricing documentation) relating to the Selling Parties with respect to Tax periods up to the Closing Date if so required by any Governmental Authority.  In connection therewith, the Selling Parties shall provide to the Buyers (or permit the Buyers or any Governmental Authorities to utilize) all technical systems necessary to read such books and records kept in electronic or photo-optical form and make them accessible to any Governmental Authorities.

11.8.Instruments of Further Assurance.  Each of the Selling Parties agrees, upon the request of Methode or any Buyer, from time to time after the Closing to execute and deliver, and cause their Affiliates to execute and deliver, to Methode or any Buyer all such instruments and documents of further assurance or otherwise as shall be reasonable under the circumstances, and to do any and all such acts and things as may reasonably be required to transfer and convey to the Buyers all right, title and interest to the Purchased Assets and Purchased Shares and to otherwise carry out the obligations of the Selling Parties hereunder.

11.9.Pro-Ration of Expenses; Tax Refunds.  All real estate and personal property taxes, payroll taxes, worker’s compensation premium adjustments, utility payments, lease payments, insurance premiums, and other Taxes and other expenses and prepayments and relating to the ownership or use of the Acquired Assets (or conduct of the business of Hetronic Asia) and attributable to periods of time both before and after the Closing Date shall be prorated between the Selling Parties and the Buyers, as the case may be, as soon as a pro rata charge or credit is reasonably determinable and Selling Parties and the Buyers shall promptly reimburse the other for such pro rated amounts (except to the extent that such amounts are reflected in the Final Closing Statement). Without limitation to the foregoing, notwithstanding the effective dates set forth in the documents assigning any Contract (including leases) included within the Acquired Assets, the parties agree that all rent and other obligations arising under such Contracts shall be prorated as of the Closing Date. If Methode or Hetronic Asia receives a refund with respect to Taxes of Hetronic Asia relating to periods prior to the Closing Date or accruing due to events on

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or prior to or on the Closing Date (other than Taxes of Hetronic Asia reflected on the Final Closing Statement), Methode will pay the amount of such refund to Hetronic Holding within thirty (30) days of receipt.  If Hetronic Holding or any other Selling Party receives a refund with respect to Taxes of Hetronic Asia relating to periods after to the Closing Date or accruing due to events after the Closing Date (or with respect to Taxes of Hetronic Asia reflected on the Final Closing Statement), Hetronic Holding will pay the amount of such refund to Methode within thirty (30) days of receipt.

11.10.      Access to Records. The Buyers shall maintain the Acquired Records, and the Selling Parties shall maintain the Excluded Records, in each case for a period of three (3) years from and after the Closing Date, and each party shall, prior to permanently disposing of the records maintained by it pursuant to this Section 11.10, give at least sixty days written notice to the other parties of such disposal.  During such period as a party is required to maintain records pursuant to this Section 11.10, such party shall provide the other parties with reasonable access to such records and the right to make copies thereof; provided that to the extent that a party engages a third party to manage, maintain or store its records, the party seeking access to such records shall pay any access and/or copy fees charged by such third party.

11.11.      Access to Employees.  For a period of three years after the Closing, Methode shall permit Torsten Rempe to make himself (and such former employees of the Sellers to whom Torsten Rempe may in his discretion delegate such activities) available to the Sellers to a reasonable extent to provide such assistance as the Shareholder may reasonably request in winding up the Sellers’ affairs, provided that all requests for such assistance shall be directed to, and handled through, Torsten Rempe and further provided that such assistance does not materially interfere with the performance of their job responsibilities for the Buyers.  In addition, Methode shall not prohibit Simon Grima from continuing to hold the office of Managing Director of Hetronic Malta (as renamed) in order to execute such documents as the Sellers may require for so long as such activities do not materially interfere with his performance of his job responsibilities for the Buyers, provided that the Selling Parties acknowledge that Simon Grima’s continued activities as Managing Director of Hetronic Malta shall be at his discretion and Methode has no obligation to require him to continue to hold such office.  The Selling Parties acknowledge that other employees of the Sellers hired by the Buyers may be required to resign any offices held with the Sellers.

11.12.      Receivables. Buyers shall use Reasonable Efforts to collect all Receivables included in the Acquired Assets. In the event any of the Receivables included in the Acquired Assets remain uncollected twelve (12) months after the Closing Date, then Buyers shall provide the Sellers with a detailed list of such remaining uncollected Receivables included in the Acquired Assets and Buyers shall have the right to cause the Sellers to repurchase such uncollected Receivables identified in writing by Buyers for the nominal value of such uncollected Receivables (without any discount for collectability), provided that Sellers shall not be required to repurchase, in the aggregate, uncollected Receivables with a nominal value in excess of fifty percent of the nominal value of all remaining uncollected Receivables included in the Acquired Assets.  Upon repurchasing any Receivables as required under this Section 11.12, the Sellers shall have the right to pursue all available rights and remedies to collect such repurchased Receivables.

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11.13.      Enforcement of Existing NDAs.  The Selling Parties agree that in the event that any third party violates or threatens to violate the terms of any Existing NDA after the Closing, the Selling Parties shall, to the extent requested in writing by the Buyers, enforce the terms of such Existing NDA against such third party and seek such equitable relief as the Buyers may reasonably request; provided that the Buyers shall reimburse the Selling Parties for their reasonable out-of-pocket costs and attorneys fees incurred at the Buyer’s request.  In the event that the Selling Parties learn of any violation of threatened violation of the terms of any Existing NDA after the Closing, the Selling Parties will promptly provide written notice of the same to the Buyers.

11.14.      Philippine Registration of Foreign Investment.  The Selling Parties will provide such assistance as Methode may reasonably request to assist the efforts of the Buyers to register the prior investment by Hetronic Holding and/or the current investment by the Buyers in Hetronic Asia’s capital stock to enable the Buyer to request and comply with such requirements imposed by the Bangko Sentral ng Pilipinas.

12.GENERAL PROVISIONS.

12.1.        Entire Agreement.  This Agreement and the other agreements and documents referred to herein set forth the entire understanding of the parties with respect to the subject matter hereof.  Any previous agreements or understandings between the parties regarding the subject matter hereof are merged into and superseded by this Agreement.

12.2.        Amendment; Waiver.  This Agreement may be amended, supplemented or interpreted at any time only by written instrument duly executed by each of Methode and the Shareholder. Any of the terms or conditions of this Agreement may be waived at any time by the party or parties entitled to the benefit thereof but only by a written notice signed by the party or parties waiving such terms or conditions.

12.3.        Expenses.  Except as set forth in Section 2.4 of this Agreement, Methode and the Buyers, on one hand, and the Selling Parties, on the other hand, shall each pay its or their own expenses, including the expenses of its or their own legal counsel, investment bankers, brokers and accountants, incurred in connection with the preparation, execution and delivery of this Agreement and the other agreements and documents referred to herein and the consummation of the transactions contemplated hereby and thereby.

12.4.        Notices.  All notices, requests, demands and other communications required or permitted to be given hereunder shall be by hand-delivery, certified or registered mail, return receipt requested; telecopier, or air courier to the parties set forth below.  Such notices shall be deemed given:  at the time personally delivered, if delivered by hand or courier; on the fifth (5th) business day after being deposited in the mail, postage prepaid, if sent certified or registered mail; and when receipt is acknowledged by facsimile equipment if telecopied and if a copy is also promptly mailed by certified or registered mail.

If to Methode:	Methode Electronics, Inc.
	7401 West Wilson Avenue
	Chicago, Illinois 60706-4548

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	Attention: President and Chief Executive Officer
	Telecopier: 708-867-3288
Copy to:	Locke Lord Bissell & Liddell LLP
	111 South Wacker Drive
	Chicago, Illinois 60606
	Attention: James W. Ashley, Jr., Esq.
	Telecopier: 312-443-0336
If to any Selling Party:	Mr. Max Heckl
	12901 N. Frisco Road
	Yukon, Oklahoma 73099
	Telecopier: 214-853-5109
Copy to:	Kochman Donati & Charbonnet
	12012 Wickchester Lane, Suite 310
	Houston, Texas  77079
	Attention: Philip J. Kochman
	Telecopier: 713-871-2495

12.5.        Assignment.  Neither this Agreement nor any of the rights and obligations hereunder may be assigned by any party, whether or not by operation of law, without the prior written consent of the other parties hereto, provided that Methode may transfer or assign this Agreement to any Person succeeding to all or substantially all of the Acquired Assets or Purchased Shares by way of an asset sale, merger, reorganization or otherwise without the consent of any other parties, as long as such assignment becomes effective only after the disbursal of all funds held pursuant to the Escrow Agreement.  No assignment of this Agreement shall relieve the assigning party of its obligations under this Agreement or permit the assignee to assert rights broader or different than the assigning party would have been permitted to assert. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, legal representatives, successors and permitted assigns of the parties hereto.

12.6.        Severability.  If any term, provision, covenant or restriction in this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated as long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to either party.  Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions hereby be consummated as originally contemplated to the fullest extent possible.

12.7.        Counterparts; Facsimiles.  This Agreement and all documents referenced herein may be executed in any number of counterparts, each of which may be executed by less than all of the parties hereto, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one and the same instrument. Each

43

party is hereby authorized to rely upon and accept as an original any executed copy of this Agreement or other document referenced herein which is sent by facsimile, telegraphic or other electronic transmission.

12.8.        Construction.  Section and subsection headings contained in this Agreement are inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for any purpose, and shall not in any way define or affect the meaning, construction or scope of any of the provisions hereof. The terms “hereof,” “herein” and “hereunder” and terms of similar import are references to this Agreement as a whole and not to any particular provision of this Agreement.  Section, clause, schedule and exhibit references contained in this Agreement are references to sections, clauses, schedules and exhibits in or to this Agreement, unless otherwise specified. Common nouns and pronouns shall be deemed to refer to the masculine, feminine, neuter, singular and plural, as the identity of the person may in the context require.  The use of the words “include,” “including” or variations thereof in this Agreement shall be by way of example rather than by limitation. The parties hereto acknowledge that all parties participated equally in the drafting and negotiation of this Agreement and were represented by counsel of their own choosing in connection therewith.  Consequently, this Agreement shall be construed without referencing to any rule of law, which provides that ambiguities in a contract are to be resolved against the drafter thereof.  The official language of this Agreement is, and shall continue for all purposes to be, the English language.

12.9.        Public Announcements.  No notices to third parties or other publicity, including press releases, employee notifications, vendor notifications and customer notifications, concerning any of the transactions provided for herein shall be made by any party hereto unless planned and coordinated jointly among the parties hereto, with each party approving any press release in writing prior to release; provided that nothing herein shall restrict or delay either party from issuing any press release or other publicity to the extent required by Law.

12.10.      No Third Party Beneficiaries.  Except for the provisions of Section 10 relating to indemnified parties under this Agreement, (i) the provisions of this Agreement are solely for the benefit of the parties hereto and are not intended to confer upon any Person except the parties hereto any rights or remedies hereunder, and (ii) there are no third party beneficiaries of this Agreement and this Agreement shall not provide any third party with any remedy or Claim or other right in excess of those existing without reference to this Agreement.

12.11.      Waiver of Trial by Jury.  The parties hereby knowingly, voluntarily and intentionally waive any right they may have to a trial by jury in respect to any litigation arising out of, under or in connection with this Agreement, or any course of conduct, course of dealing, statements (whether verbal or written) or actions of any party to this Agreement.  This provision is a material inducement for Methode and the Selling Parties entering into this Agreement.

12.12.      Cumulative Remedies.  All rights and remedies of the parties to this Agreement are cumulative of each other and of every other right or remedy such parties may otherwise have at law or in equity, and the exercise of one or more rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of other rights or remedies.

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12.13.      Governing Law; Jurisdiction.  This Agreement shall be governed, construed and enforced in accordance with the internal laws of the State of Delaware, excluding any choice of law rules which may direct the application of the laws of another jurisdiction. The parties hereby covenant and agree that any and all actions arising out of or related to this Agreement shall be brought and maintained in the federal and state courts sitting in Harris County, Texas, and each party to this Agreement hereby irrevocably consents and submits to the exclusive jurisdiction of and the service of process from such courts for any and all such actions.

12.14.      Authority of the Shareholder to Bind the Selling Parties. Each the Selling Party acknowledges and agrees that the Shareholder shall have sole authority on behalf of each of and all of the Selling Parties to agree to, dispute or otherwise handle all matters relating to this Agreement, including matters relating to the Closing Statement, the Independent Accounting Firm, the assertion, waiver or defense of claims under Section 10, amendment of this Agreement pursuant to Section 12.2 and otherwise, in each case as the Shareholder deems appropriate in his sole and absolute discretion.  Each Selling Party hereby agrees that any determination by the Shareholder with respect to any matters relating to this Agreement shall be conclusive and binding upon such Selling Party.

12.15.      Schedules. Any disclosure in a schedule to this Agreement with respect to a Section of this Agreement shall be deemed to be disclosed for other Sections of this Agreement to the extent that such disclosure sets forth facts in sufficient detail so that the relevance of such disclosure would be reasonably apparent to a reader of such disclosure.  No reference to or disclosure of any item or other matter in any schedule of this Agreement shall be construed as an admission or indication that such item or other matter is material or that such item or other matter is required to be referred to or disclosed in this Agreement.

[SIGNATURES ON FOLLOWING PAGE]

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IN WITNESS WHEREOF, this Agreement has been duly executed by the parties to this Agreement on the day and year first above written.

HETRONIC HOLDING LLC		HETRONIC INTERNATIONAL, INC.
By:	/s/ Max Heckl	By:	/s/ Torsten Rempe
Name:	Max Heckl	Name:	Torsten Rempe
Title:	President	Title:	President
HETRONIC USA INC.		HETRONIC WEST, INC.
By:	/s/ Torsten Rempe	By:	/s/ Torsten Rempe
Name:	Torsten Rempe	Name:	Torsten Rempe
Title:	President	Title:	President
HETRONIC MALTA LIMITED		HETRONIC EUROPE GMBH
By:	/s/ Simon Grima	By:	/s/ Nicole Heckl
Name:	Simon Grima	Name:	Nicole Heckl
Title:	Managing Director	Title:	Managing Director
/s/ Max Heckl
Max Heckl
METHODE ELECTRONICS, INC.
By:	/s/ Donald Duda
Name:	Donald Duda
Title:	President and Chief Executive Officer

[Asset and Share Purchase Agreement Signature Page]

APPENDIX OF DEFINITIONS

The following definitions shall be applicable for purposes of the Agreement except as otherwise specifically provided to the contrary in the text of the Agreement.

“Affiliates” of a Person shall mean any Person controlling, controlled by or under common control with that Person.  “Control” for this purpose shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities or interests, by contract, or otherwise.

“Acquired Assets” shall mean the Purchased Assets and all of the assets and properties wherever situated, of Hetronic Asia.

“Acquired Liabilities” shall mean the Assumed Liabilities and all of the Liabilities of Hetronic Asia as of the Closing.

“CERCLA” shall mean the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended.

“Claim” shall mean any action, suit, claim, proceeding, investigation, hearings, audit, charge, complaint, demand, injunction, judgment, order, decree, ruling, loss, Tax, Lien, Liability, assessment, fine, penalty, amount paid in settlement, damage, cost or expense (including court costs, reasonable attorneys’ fees, expert fees, travel expenses, court costs and other expenditures).

“Code” shall mean the Internal Revenue Code of 1986, as amended.

“Contract” shall mean any oral or written contract, agreement, lease, indenture, commitment or understanding (including purchase orders, sales orders and supply contracts).

“Employee Plan” shall mean any pension, retirement, savings, accident, disability, medical, dental, health, life (including any individual life insurance policy to which any Target Company makes premium payments, whether or not such party is the owner, beneficiary or both of such policy), death benefit, group insurance, profit sharing, compensation, deferred compensation, stock purchase, stock option, stock ownership, stock appreciation rights, phantom stock, bonus, incentive, leave of absence, layoff, vacation pay or sick day, severance, separation, dependent care, legal services, cafeteria, or other employee benefit plan, trust, contract, agreement, practice, policy, commitment or arrangement of any kind, whether any of the foregoing is funded, insured or self-funded, for the benefit of a single individual or more than one individual, written or oral, (a) to which any Target Company is a party or by which any Target Company (or any of its rights, properties or assets) is bound, or (b) with respect to which any Target Company has made any payments, contributions or commitments, or may otherwise have any liability (whether or not any such party still maintains such plan, trust, arrangement, contract, agreement, policy or commitment), including, any Welfare Plan, any Pension Plan and any “employee benefit plan” within the meaning of Section 3(3) of ERISA.

“Environment” shall mean surface waters, groundwaters, surface water sediment, soil, subsurface strata, ambient air and other environmental medium.

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“Environmental Claims” shall mean any and all actions, suits, demands, demand letters, claims, Liens, notices of non-compliance or violation, notices of Liability or potential Liability, investigations, proceedings, consent orders or consent agreements relating in any way to any Environmental Law, Environmental Permit or any Hazardous Material or arising from any alleged injury to threat of injury to health, safety or the Environment.

“Environmental Law” shall mean any Law relating to pollution or protection of the Environment, health, safety or natural resources or to the use, handling, transportation, treatment, storage, disposal, Release or discharge of Hazardous Materials, including CERCLA.

“Environmental Permit” shall mean any permit, approval, identification number, license, or other authorization or application therefor required to operate any Target Company’s business under any applicable Environmental Law.

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

“Governmental Authority” shall mean any United States federal, state, municipal or local or any non-U.S. government, governmental, regulatory or administrative authority, state enterprise, department, agency, commission, board, bureau, or instrumentality (or political subdivision thereof) or any court, tribunal, or judicial or arbitral body.

“Hazardous Materials” shall mean any waste or other substance that is listed, defined, designated or classified as, or otherwise determined to be, hazardous, radioactive, dangerous or toxic or a pollutant or a contaminant or otherwise regulated under or pursuant to any Environmental Law, including any admixture or solution thereof, and specifically including petroleum and all derivatives thereof or synthetic substitutes therefore, radioactive materials, asbestos or asbestos-containing materials, and polychlorinated biphenyls.

“Indebtedness” of any Person shall mean all obligations (whether interest, principal, fees, penalties or otherwise) and Liabilities consisting of, without duplication: (a) indebtedness for borrowed money or for the deferred purchase price of property or services in respect of which such Person is liable, contingently or otherwise, as obligor or otherwise (other than trade payables and other current liabilities incurred in the Ordinary Course of Business) and any commitment by which such Person assures a creditor against loss, including contingent reimbursement obligations with respect to letters of credit; (b) obligations evidenced by debt securities bonds, debentures, notes or other similar instruments; (c) obligations under capitalized leases in respect of which such Person is liable, contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person assures a creditor against loss; (d) any unsatisfied obligation of such Person for “withdrawal liability” to a “multiemployer plan,” as such terms are defined under ERISA; (e) obligations with respect to letters of credit issued for such Person’s account, (f) secured by a Lien; or (viii) arising from any guaranty for any of the foregoing, including a guarantee in the form of an agreement to repurchase or reimburse.

“Intellectual Property” shall mean (a) all trademarks, service marks, certification marks, trade dress, logos, trade names, Internet domain names, and corporate names, together with all

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translations, adaptations, derivations, and combinations thereof and including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith, (b) all copyrightable works (whether or not published or registered), all copyrights, mask works, derivative works thereof, and all applications, registrations, and renewals in connection therewith, (c) all Trade Secrets; (d) all patents and patent applications, and all divisions, reissues, continuations, extensions, and continuations-in-part thereof, and all inventor’s certificates and utility models, (e) all computer software (including data and related documentation), (f) and all other forms of intellectual property or proprietary rights, and (g) all copies and tangible embodiments thereof (in whatever form or medium).

“Inventories” shall mean all inventories, including all raw materials, supplies, work-in-process, and finished goods, including any of the foregoing which have been purchased subject to any conditional sales or title retention agreement in favor of any other Person.

“IRS” shall mean the Internal Revenue Service.

“Key Employees” shall mean Simon Grima, Hans-Ullrich John and Torsten Rempe.

“Knowledge”  The phrase “to Sellers’ Knowledge” or similar phrases shall mean those facts and circumstances known to the Shareholder or any of the Key Employees, in each case after due inquiry by such persons to those employees of the Target Companies who in the ordinary course of their duties would be reasonably likely to have knowledge of the facts or circumstances in question.

“Law(s)” shall mean any federal, state, local or foreign statute, law, ordinance, regulation, rule, code, order, other requirement or rule of law, now or hereafter in effect and as amended, and any judicial or administrative interpretation thereof, including any judicial or administrative order, consent decree or judgment.

“Liability” shall mean any debt, obligation, assessment, fine, penalty, damage, cost, expense or other liability, whether direct or indirect, whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether matured or unmatured, whether liquidated or unliquidated, and whether due or to become due.

“Lien” shall mean any mortgage, lien, pledge, charge, security interest, encumbrance or other third party interest or claim of any nature whatsoever, including to the foregoing in the case of real property, any rights-of-way, building use restrictions, exceptions, variances, reservations, or limitations of any nature.

“Material Adverse Effect” shall mean a material adverse effect upon or change in (i) the business, affairs, properties, assets, Liabilities, financial condition or results of operation of any Target Company, (ii) the continued conduct of the business of any Target Company, as presently conducted, or (iii) the ability of the Parties to consummate the transaction contemplated by this Agreement.

“Ordinary Course of Business” shall mean the ordinary course of business consistent with past custom and practice (including with respect to quantity and frequency).

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“Organizational Documentation” of a Person shall mean the certificate of incorporation, certificate of formation, articles of incorporation, by-laws, operating agreement or other organic document of such Person.

“Pension Plan” shall have the meaning defined in Section 3(2) of ERISA.

“Person” shall mean an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, a Governmental Authority (or department, agency or political subdivision thereof) or any other person or entity.

“Reasonable Efforts” shall mean the good faith effort that a Person ordinarily would use, apply or exercise to protect his own rights and business, provided that when used in connection with the obtaining of a consent, approval or other act of an unaffiliated third party or Governmental Authority, “reasonable efforts” shall not require the commencement of litigation against or acquisition of control of such third party or the assets or obligations requiring such consent, the acceleration of payment of any indebtedness or the payment of money.

“Receivables” shall mean all trade receivables, note receivables and other accounts receivable.

“Release” shall mean actual disposing, discharging, injecting, spilling, leaking, leaching, dumping, emitting, escaping, emptying, seeping, placing, and the like into or upon any land or water or air or otherwise into the Environment.

“Remedial Action” shall mean any investigation, assessment, monitoring, treatment, response, excavation, removal, remediation, or cleanup of Hazardous Materials in the Environment.

“Subsidiary” shall mean any Person with respect to which a specified Person (or Subsidiary thereof) owns a majority of the common stock or has the power to vote or direct the voting of sufficient securities to elect a majority of the directors (or individuals exercising similar functions).

“Taxes” shall mean all federal, state, local and foreign income, excise, property, sales, use, payroll, intangibles, franchise, gross receipts, license, employment, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, profits, withholding, social security, unemployment, disability, real property, personal property, transfer, registration, value added, alternative or add-on minimum and other taxes, fees, assessments or charge of whatever nature, and all penalties and interest related thereto, whether disputed or not, including tax withholdings or amounts paid to any Person or Liabilities for taxes as a result of being a member of a unitary, consolidated or similar group or as a result of being a party to any tax sharing, tax indemnity, tax allocation or similar agreement or arrangement.

“Tax Return” shall mean any return, declaration, report, claim for refund, or information return or statement relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

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“Target Company Intellectual Property” shall mean any and all Intellectual Property owned by, licensed by or used by any Target Company or Target Companies, including all Intellectual Property incorporated into the radio remote control products developed, manufactured, marketed or sold by the Target Companies, the corporate and trade name “Hetronic,” derivatives and all telephone numbers of the Target Companies, including those rights described in Schedule 5.19 hereto.

“Trade Secrets” shall mean all trade secrets and confidential business information including all inventions, compositions, manufacturing and production processes and techniques, business methods, processes and techniques (in each case whether or not patentable), discoveries, developments, ideas, concepts, research and development, databases, shoprights, designs, formulae, methods, processes, designs, drawings, blueprints, engineering computer information, specifications, and items of proprietary know-how, information or data; prospect lists, customer lists, supplier lists, projections, analyses and market studies, pricing and cost information, and business and marketing plans and proposals; and all other proprietary rights; provided that “Trade Secrets” do not include non-proprietary information, know-how or processes otherwise available to the industry or the public.

“Welfare Plan” shall have the meaning defined in Section 3(1) of ERISA.

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ASSET AND SHARE PURCHASE AGREEMENT

by and among

METHODE ELECTRONICS, INC.;

HETRONIC HOLDING LLC

and certain of its affiliates

and

Max Heckl

Dated as of September 30, 2008

TABLE OF CONTENTS

1.	PURCHASE AND SALE OF ASSETS AND SHARES		2
	1.1.	Agreement to Purchase and Sell Assets	2
	1.2.	Agreement to Purchase and Sell Shares	3
	1.3.	Excluded Assets	4
	1.4.	Documentation	5
2.	CONSIDERATION		5
	2.1.	Purchase Price	5
	2.2.	Reconciliation of Net Book Value	5
	2.3.	Settlement	6
	2.4.	Independent Accounting Firm	7
	2.5.	Allocation of Purchase Price	7
3.	ASSUMED LIABILITIES AND EXCLUDED LIABILITIES		8
	3.1.	Assumed Liabilities	8
	3.2.	Excluded Liabilities	8
4.	CLOSING		8
	4.1.	Closing	8
	4.2.	Closing Deliverables	9
	4.3.	Closing Payment	9
	4.4.	Location and Effective Time of Closing	9
5.	REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES		10
	5.1.	Organization and Good Standing	10
	5.2.	Enforceability and Authorization	10
	5.3.	No Conflict; Consents	10
	5.4.	Capitalization and Ownership; Corporate Matters	11
	5.5.	Financial Statements	12
	5.6.	Books and Records	12
	5.7.	No Undisclosed Liabilities	12
	5.8.	Absence of Certain Changes	13
	5.9.	Tax Matters	15
	5.10.	Title to Assets	16
	5.11.	Real Estate and Leases	16
	5.12.	Material Contracts	17
	5.13.	Receivables	18
	5.14.	Inventories	19
	5.15.	Litigation	19
	5.16.	Insurance	19
	5.17.	Employment and Labor Matters	19
	5.18.	Employee Benefits	20
	5.19.	Intellectual Property	21
	5.20.	Legal Compliance	23
	5.21.	Approvals	23
	5.22.	Transactions with Affiliates	23
	5.23.	Environmental Matters	24
	5.24.	Product Liability and Warranty Matters	25

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	5.25.	Principal Customers and Suppliers	26
	5.26.	Solvency	26
	5.27.	Material Adverse Affect	26
	5.28.	Disclosure	26
6.	REPRESENTATIONS AND WARRANTIES OF METHODE		26
	6.1.	Organization	27
	6.2.	Enforceability and Authorization	27
	6.3.	No Conflict; Methode Consents	27
7.	INTENTIONALLY OMITTED		28
8.	CONDITIONS TO CLOSING		28
	8.1.	Mutual Conditions	28
	8.2.	Conditions to Methode’s Obligations	28
	8.3.	Conditions to the Selling Parties’ Obligations	31
	8.4.	Payment	32
9.	TERMINATION		32
	9.1.	Termination of Agreement Prior to Closing	32
	9.2.	Effect of Termination Prior to Closing	33
10.	INDEMNIFICATION		33
	10.1.	Limited Indemnification Obligations of Methode	33
	10.2.	General Indemnification Obligations of Methode	33
	10.3.	Limited Indemnification Obligations of the Selling Parties	34
	10.4.	General Indemnification Obligations of the Selling Parties	35
	10.5.	Nature and Survival of Representations and Warranties	36
	10.6.	Limitations on Indemnification Obligations	36
	10.7.	Method of Asserting Claims	37
	10.8.	Setoff; Payment of Claims	38
	10.9.	Treatment of Claims	38
	10.10.	Insurance Recoveries	38
11.	POST-CLOSING AGREEMENTS		38
	11.1.	Employees	38
	11.2.	Employee Benefit Plans	39
	11.3.	Sales after Closing	39
	11.4.	Confidentiality	39
	11.5.	Names Following the Closing	39
	11.6.	Taxes and Expenses	40
	11.7.	Post-Closing Tax Preparation	40
	11.8.	Instruments of Further Assurance	40
	11.9.	Pro-Ration of Expenses; Tax Refunds	40
	11.10.	Access to Records	41
	11.11.	Access to Employees	41
	11.12.	Receivables	41
	11.13.	Enforcement of Existing NDAs	42
	11.14.	Philippine Registration of Foreign Investment	42
12.	GENERAL PROVISIONS		42
	12.1.	Entire Agreement	42
	12.2.	Amendment; Waiver	42

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12.3.	Expenses	42
12.4.	Notices	42
12.5.	Assignment	43
12.6.	Severability	43
12.7.	Counterparts; Facsimiles	43
12.8.	Construction	44
12.9.	Public Announcements	44
12.10.	No Third Party Beneficiaries	44
12.11.	Waiver of Trial by Jury	44
12.12.	Cumulative Remedies	44
12.13.	Governing Law; Jurisdiction	45
12.14.	Authority of the Shareholder to Bind the Selling Parties	45
12.15.	Schedules	45

EXHIBITS

Exhibit A	Form of Adjusted Net Book Value Calculation
Exhibit B	Form of Employment Agreement
Exhibit C	Form of Ampcontrol Agreement
Exhibit D	Forms of German Distribution Agreements
Exhibit E	Form of Consulting Agreement
Exhibit F	Form of Noncompetition and Confidentiality Agreement
Exhibit G	Forms of Opinion of Counsel to Hetronic Asia
Exhibit H	Form of Escrow Agreement
Exhibit I	Form of Lease Addendum
Exhibit J	Intentionally Omitted
Exhibit K	Form of German Local Transfer Agreement
Exhibit L	Form of Hetronic Deutschland Intercompany Assignments
SCHEDULES
Schedule 1.1.1	Machinery and Equipment
Schedule 1.1.4	Assigned Contracts
Schedule 1.3	Excluded Contracts and Assets
Schedule 2.5	Allocation of Purchase Price
Schedule 5.1	Organization and Good Standing
Schedule 5.3	No Conflict; Consents
Schedule 5.4.1	Ownership of Sellers
Schedule 5.4.2	Capitalization and Ownership of Hetronic Asia
Schedule 5.4.3	Hetronic Asia Company Matters
Schedule 5.5	Financial Statements
Schedule 5.7	No Undisclosed Liabilities
Schedule 5.8	Absence of Certain Changes

iii

Schedule 5.9	Tax Matters
Schedule 5.10	Title to Assets
Schedule 5.11	Real Estate and Leases
Schedule 5.12	Material Contracts
Schedule 5.13	Receivables
Schedule 5.15	Litigation
Schedule 5.16	Insurance
Schedule 5.17	Employment and Labor Matters
Schedule 5.18	Employee Benefits
Schedule 5.19	Intellectual Property
Schedule 5.20	Legal Compliance
Schedule 5.21	Approvals
Schedule 5.22	Transactions with Affiliates
Schedule 5.23	Environmental Matters
Schedule 5.24	Product Liability and Warranty Matters
Schedule 5.25	Principal Customers and Suppliers
Schedule 6.1	Organization and Good Standing
Schedule 6.3	No Conflict; Consents
Schedule 8.2.3	Required Consents and Approvals

iv

EXHIBIT A
FORM OF ADJUSTED NET BOOK VALUE CALCULATION

See attached.

EXHIBIT B
FORM OF EMPLOYMENT AGREEMENT

See attached.

EXHIBIT C
FORM OF AMPCONTROL AGREEMENT

See attached.

EXHIBIT D
FORMS OF GERMAN DISTRIBUTION AGREEMENTS

See attached.

EXHIBIT E
FORM OF CONSULTING AGREEMENT

See attached.

EXHIBIT F
FORM OF NONCOMPETITION AND CONFIDENTIALITY AGREEMENT

See attached.

EXHIBIT G
FORM OF OPINION OF COUNSEL TO HETRONIC ASIA

See attached.

EXHIBIT H
FORMS OF ESCROW AGREEMENTS

See attached.

EXHIBIT I
FORM OF LEASE ADDENDUM

See attached.

EXHIBIT J

Intentionally Omitted

EXHIBIT K
FORM OF GERMAN LOCAL TRANSFER AGREEMENT

See attached.

EXHIBIT L
FORM OF HETRONIC DEUTSCHLAND INTERCOMPANY ASSIGNMENTS

See attached.

SCHEDULES

See attached.

EX-21

Exhibit 21

SUBSIDIARIES OF METHODE ELECTRONICS, INC.

Subsidiary (1)	Jurisdiction of Incorporation
ABAS, Inc.	Delaware
Automotive Safety Technologies, Inc.	Delaware
Cableco Technologies, Inc.	Delaware
Duel Systems, Inc.	Delaware
Hetronic International, Inc.	Delaware
Hetronic USA, Inc.	Delaware
Hetronic Asia Holding, Inc.	The Philippines
Hetronic Malta, Inc.	Malta
KBA, Inc.	Delaware
Magna-Lastic Devices, Inc.	Delaware
Methode Automotive de Mexico S.A. de C.V.	Mexico
Methode Development Company	Delaware
Methode Electronics Aftermarket, Ltd.	Malta
Methode Electronics Asia Pte, Ltd.	Singapore
Methode Electronics Connectivity Technologies, Inc.	Delaware
Methode Electronics Europe, Limited	Scotland
Methode Electronics Far East Pte., Ltd.	Singapore
Methode Electronics India, Private Ltd.	India
Methode Electronics International GmbH	Germany
Methode Electronics Ireland Limited	Ireland
Methode Electronics Malta Holdings Ltd	Malta
Methode Electronics Malta Ltd.	Malta
Methode Electronics Mediterranean Company Ltd	Malta
Methode Electronics (Shanghai) Co. Ltd.	China
Methode Electronics U.K. Ltd.	United Kingdom
Methode Mexico, S.A. de C.V.	Mexico
Methode Technology de Mexico S.A. de C.V.	Mexico
Optokon Co., Ltd., S.R.O.	Czech Republic
TouchSensor Technolgies, L.L.C.	Delaware
Trace Laboratories	Delaware
Universal Resources de Mexico S.A. de C.V.	Mexico
Value Engineered Products, Inc.	Delaware

(1) All subsidiaries are 100% owned, except Optokon, which is 75% owned and Hetronic Asia Holding, which is 96.3% owned.

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statements (Forms S-8 No. 333-121090, No. 333-71042, No. 333-48356, and No. 333-49671 and Form S-3 No. 333-123806), as amended, and in the related Prospectus of Methode Electronics, Inc. of our reports dated July 1, 2009 with respect to the consolidated financial statements and schedule of Methode Electronics, Inc., and the effectiveness of internal control over financial reporting of Methode Electronics, Inc., included in this Annual Report (Form 10-K) for the year ended May 2, 2009.

	/s/Ernst & Young LLP
Chicago, Illinois
July 1, 2009

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Donald W. Duda certify that:

1.I have reviewed this annual report on Form 10-K of Methode Electronics, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	July 2, 2009.
		/s/ Donald W. Duda
		President and Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Douglas A. Koman certify that:

1.I have reviewed this annual report on Form 10-K of Methode Electronics, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	July 2, 2009.
		/s/ Douglas A. Koman
		Chief Financial Officer
		(Principal Financial Officer)

EX-32

Exhibit 32

METHODE ELECTRONICS, INC.

Certification of Periodic Financial Report
Pursuant to 18 U.S.C. Section 1350

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Methode Electronics, Inc. (the “Company”) certifies that the Annual Report on Form 10-K of the Company for the year ended May 2, 2009 fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and information contained in that Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 2, 2009	/s/ Donald W. Duda
	Donald W. Duda President and Chief Executive Officer
Dated: July 2, 2009	/s/ Douglas A. Koman
	Douglas A. Koman Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.