THE CORPORATE LIBRARY

Related Party Transactions and Outside Related Director Information

Methode Electronics, Inc. (METH)

8/11/2005 Proxy Information

No related party transactions or special relationships reported for this company. Director relationships marked "Outside Related" at this firm will most often be former executives of the company. Additional information regarding these relationships will be added during our regular updates.

8/13/2004 Proxy Information

James W. McGinley and Robert R. McGinley, the sons of William J. McGinley, Methode’s founder, were both members of our board of directors until their resignation in October 2003. James W. McGinley and Robert R. McGinley, together with their sister, Margaret J. McGinley, are special fiduciaries, co-trustees and beneficiaries of Marital Trust No. 1 and Marital Trust No. 2, each created under the William J. McGinley Trust (the “Trusts”). Set forth below is a brief description of certain recent transactions between Methode, members of the McGinley family and the Trusts.

The Merger Agreement

As of July 18, 2003, Methode entered into an agreement with the Trusts, the Jane R. McGinley Trust, James W. McGinley, Robert R. McGinley and Margaret J. McGinley. Pursuant to this agreement, the McGinley family, the Trusts and the Jane R. McGinley Trust sold 750,000 shares of their Class B common stock to Methode for $22.75 per share and agreed to vote their remaining 181,760 shares of Class B common stock in favor of a merger in which all outstanding shares of Methode’s Class B common stock would receive $23.55 per share and the Class A common stock would be converted into new Methode common stock (the “Merger”). The Merger occurred on January 8, 2004. Pursuant to the terms of the Merger, the Trusts, the Jane R. McGinley Trust and the McGinley family members were paid $23.55 per share for their 181,760 remaining shares of Class B common stock. Pursuant to the terms of the agreement, Roy M. Van Cleave ceased to be a director upon the completion of the Merger.

The Planned Tender Offer by Methode

Methode previously entered into an agreement dated August 19, 2002, and amended December 26, 2002, with the Trusts, Jane R. McGinley, Margaret J. McGinley, James W. McGinley, and Robert R. McGinley to commence a tender offer to purchase all of the outstanding Class B common stock at a price of $20 per share in cash by the terms and conditions provided for in the agreement.

Pursuant to the agreement, Methode’s obligation to commence the tender offer was subject to the prior approval of the offer by a majority of the Class A common stockholders present at a special meeting (excluding Class A common stock held by the Trusts and the McGinley family members). The Trusts, Jane R. McGinley, Margaret J. McGinley, James W. McGinley, and Robert R. McGinley agreed to tender their shares within ten business days of commencement and not to withdraw, on the condition that less than 100,000 shares of Class B common stock were outstanding after the planned Methode tender offer. Under the agreement, the Trusts, the Jane R. McGinley Trust, Margaret J. McGinley, James W. McGinley, and Robert R. McGinley were obligated to tender all of their Class B common stock in the offer. This represented an aggregate of 931,760 shares of Class B common stock, or 85.7% of the outstanding Class B common stock.

On June 12, 2003, Methode mailed to its stockholders the definitive proxy statement in connection with the special meeting scheduled for July 10, 2003 for eligible Class A common stockholders to vote on the making of the planned tender offer. On July 8, 2003, Dura Automotive Systems, Inc. commenced an unsolicited tender offer for all of the outstanding shares of Class B common stock at $23.00 per share. On July 10, 2003, Methode adjourned the special meeting until July 24, 2003. On July 14, 2003, the Trusts and the McGinley family members gave notice of termination of the agreement. On July 23, 2003, Methode cancelled its special meeting of stockholders scheduled to reconvene on July 24, 2003.

The Horizon Loan

The Trusts also own Horizon Farms, Inc. (“Horizon”), a horse farm and breeding operation. As co-trustees and beneficiaries of the Trusts, James W. McGinley and Robert R. McGinley have an interest in Horizon. In addition, James W. McGinley and Robert R. McGinley are officers and directors of Horizon.

In early 2001, Methode was completing its request for the revenue ruling in connection with the Stratos Lightwave, Inc. (“Stratos”) spin-off. At the request of the IRS, William J. McGinley provided an undertaking to the IRS that he had no present intention to sell any of his Class A or Class B common stock (the majority of which shares were held by the Trusts). William J. McGinley passed away in late January 2001. Consequently, the IRS required that William J. McGinley’s Estate, as the owner of such Class A common stock and Class B common stock, provide a similar undertaking to that provided by William J. McGinley.

After William J. McGinley’s death, loans held by William J. McGinley for which the Estate was responsible became due because of his death. The Estate informed Methode that it would be unable to provide the requested representation to the IRS because if the banks attempted to quickly foreclose on the loans, the Estate might be forced to sell various assets, including its Methode Class A common stock and Class B common stock. In discussions with Methode, the Estate indicated that if it received a term loan from Methode which allowed it to pay off the loans, it would be able to provide the representation to the IRS required in connection with the Stratos spin-off.

With the approval of our board of directors, in April 2001, Methode loaned $6 million to Horizon. Upon receipt of the Horizon loan, the Estate executed the required IRS representation. The Horizon loan was payable on June 30, 2003 and bore interest at a rate of 5.25% per annum. The largest aggregate amount outstanding on this loan during the 2004 fiscal year was $6,726,602, which included principal and interest.

On June 30, 2003, Horizon paid off the Horizon loan in full.

Split-Dollar Insurance Agreement

Other non-operating income for Methode for fiscal 2001 included $6.6 million from insurance proceeds of approximately $10 million related to the death in January 2001 of William J. McGinley, Methode’s founder and the father of James W. McGinley and Robert R. McGinley. Methode was a party to a Split-Dollar Insurance Agreement dated August 9, 1996, with the William J. McGinley and Jane R. McGinley Irrevocable Trust (the “Irrevocable Trust”). James W. McGinley, Robert R. McGinley and their sister, Margaret J. McGinley, and other McGinley family members, are beneficiaries of the Irrevocable Trust. Pursuant to the Split-Dollar Insurance Agreement, Methode agreed to pay premiums on five life insurance policies owned by the Irrevocable Trust on the lives of William J. McGinley and Jane R. McGinley, the wife of William J. McGinley and the mother of James W. McGinley and Robert R. McGinley. Methode had collateral assignments on the policies that entitled it to receive reimbursement from the insurance proceeds at the greater of the cumulative premiums paid or the cash surrender value of the policies.

As a result of the death of Jane R. McGinley in February 2003, insurance proceeds of approximately $10.5 million were paid under four of the split-dollar last survivor life insurance policies. In April 2003, approximately $3.5 million was paid to the Irrevocable Trust under one such policy and approximately $1.0 million was paid to Methode, representing the cash surrender value of the policy.

With respect to the three remaining policies, the proceeds paid to the Irrevocable Trust equaled approximately $4.7 million and the amount paid to Methode equaled approximately $1.3 million, representing the premiums paid on those policies by Methode.

Methode and the Irrevocable Trust were involved in a dispute regarding whether the amount paid to Methode should be reduced by $86,908, which represents the amount of premiums included in the McGinleys’ income and deducted by Methode for federal tax purposes. This dispute was resolved in April 2004 with the payment by Methode of $43,454 to the Irrevocable Trust.