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Shareholders' Equity | 12 Months Ended
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Apr. 30, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Shareholders' Equity | Shareholders’ Equity Plan to Repurchase Common Stock In September 2015, the Board of Directors authorized the repurchase of up to $100.0 million of the Company's outstanding common stock through September 1, 2017. The Company has purchased and retired 1,997,298 shares for $62.3 million as of April 30, 2016. The program may be suspended or terminated at any time. Common Stock. The number of shares of common stock, par value $0.50 per share, authorized, issued and outstanding and in treasury, was as follows:
| April 30, 2016 |  | May 2, 2015
Authorized | 100,000,000 |  |  | 100,000,000 |
Issued and outstanding | 38,181,985 |  |  | 39,702,036 |
In treasury | 1,346,624 |  |  | 1,346,624 |
Dividends We paid dividends totaling $13.5 million, $13.8 million and $11.3 million during fiscal 2016, 2015 and 2014, respectively. 2014 Incentive Plan On July 15, 2014, our Board of Directors, on the recommendation of our Compensation Committee, adopted the Methode Electronics, Inc. 2014 Omnibus Incentive Plan (the “2014 Incentive Plan”). The 2014 Incentive Plan provides for discretionary grants of stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock units and performance units to key employees and directors. The 2014 Incentive Plan is intended to align the interests of our eligible directors and employees with the interests of our shareholders, recognize the contributions made by our directors and employees, provide additional incentives to our directors and employees to promote the success of our businesses, and improve our ability to attract and retain qualified employees and directors. The number of shares of our common stock that may be issued under the 2014 Incentive Plan is 3,000,000, less one share for every one share of common stock issued or issuable pursuant to awards made after May 3, 2014 under the 2007 Stock Plan or 2010 Stock Plan. Awards that may be settled only in cash will not reduce the number of shares available for issuance under the 2014 Incentive Plan. Shares issuable under the 2014 Incentive Plan may be authorized but unissued shares or treasury shares. If any award granted under the 2014 Incentive Plan (or, after May 3, 2014, an award under the 2007 Stock Plan or 2010 Stock Plan) expires, terminates, is forfeited or cancelled, is settled in cash in lieu of shares of common stock, or is exchanged for a non-stock award under certain circumstances, the shares subject to the award will again be available for issuance under the 2014 Incentive Plan. As of April 30, 2016, there were 1,225,500 shares available for award under the 2014 Incentive Plan. Restricted Stock Awards and Restricted Stock Units Awarded Under the 2014 Incentive Plan During fiscal 2016, our Compensation Committee awarded a maximum of 1,161,000 shares of common stock subject to performance-based restricted stock awards ("RSAs") to certain executives and non-executive members of management. The RSAs are earned based on EBITDA performance during the fiscal year ending May 2, 2020 (fiscal 2020). RSAs of 387,000 may be earned if threshold fiscal 2020 EBITDA of $198.9 million is achieved, 774,000 RSAs may be earned if target fiscal 2020 EBITDA of $221.0 million is achieved, and the full 1,161,000 RSAs may be earned if the maximum fiscal 2020 EBITDA of $243.1 million is achieved. RSAs earned for fiscal 2020 EBITDA performance between levels will be determined as described below. The vesting date is the last day of fiscal 2020. The vesting of the restricted stock awards will be based on the Company's EBITDA in fiscal 2020. The fiscal 2020 EBITDA is defined as the Company's earnings before net interest, taxes, fixed asset depreciation and intangible asset amortization ("EBITDA") adjusted to (i) exclude any EBITDA from acquisitions that close during the period from April 29, 2018 to the end of fiscal 2020, (ii) exclude the positive impact of EBITDA from acquisitions that close during the period from the award date to April 28, 2018 and that are not accretive in fiscal 2020, and (iii) include the final four quarter EBITDA from business unit divestitures that were approved by the Company's Board of Directors and close during the period from the award date to the end of fiscal 2020. The threshold, target and maximum levels of fiscal 2020 EBITDA are $198.9 million, $221.0 million and $243.1 million, respectively. If the fiscal 2020 EBITDA achieved is less than threshold 2020 EBITDA, then no target shares will vest. If fiscal 2020 EBITDA achieved equals or exceeds threshold fiscal 2020 EBITDA, then the following formula will be used to calculate the percentage of the target shares that will vest (subject to a maximum of 100%): (i) 50%, plus (ii) 50% multiplied by a fraction equal to (fiscal 2020 EBITDA achieved less Threshold fiscal 2020 EBITDA) divided by (target fiscal 2020 EBITDA less Threshold fiscal 2020 EBITDA). The following formula will be used to calculate the percentage of the maximum additional shares that will vest (subject to a maximum of 100%): Vesting Percentage = (fiscal 2020 EBITDA achieved less Target fiscal 2020 EBITDA) divided by (maximum fiscal 2020 EBITDA less target fiscal 2020 EBITDA). At target level of performance, the expected compensation expense for the RSAs over the five-year period will be $24.8 million. During the fiscal year ended April 30, 2016, the Company recorded $2.8 million in compensation expense related to the RSAs. As of April 30 2016, the Company is recording the RSA compensation expense based on target performance. In future periods, if management makes a determination that exceeding the target is probable for fiscal 2020, a catch-up adjustment to compensation expense will be recorded in that period. In addition, if management makes a determination that exceeding the target is not probable for fiscal 2020, a reversal of expense will be recorded in that period. These amounts could be material to the financial statements. During fiscal 2016 our Compensation Committee awarded 576,000 shares of common stock subject to time-based restricted stock units (RSUs). The RSUs are subject to a five-year vesting period, with 30% vesting on April 28, 2018, 30% vesting on April 27, 2019 and 40% vesting on May 2, 2020. The total compensation expense over the five-year period will be $18.4 million. During the fiscal year ended April 30, 2016, the Company recorded $2.8 million in compensation expense related to the RSUs. We issued 24,000 shares and 13,500 shares in fiscal 2016 and fiscal 2015, respectively, to our independent directors all of which vested immediately upon grant under the 2014 Incentive Plan. During the fiscal year ended April 30, 2016 and May 2, 2015, the Company recorded $0.8 million and $1.0 million, respectively in compensation expense related to these shares. The following table summarizes the RSA and RSU activity for fiscal 2015 and fiscal 2016 under the 2014 Incentive Plan:
| RSA Shares |  | RSU Shares
Unvested and unissued at May 3, 2014 | — |  |  | — |
Awarded | 13,500 |  |  | — |
Vested | (13,500 | ) |  | — |
Forfeited and Cancelled | — |  |  | — |
Unvested and unissued at May 2, 2015 | — |  |  | — |
Awarded | 1,185,000 |  |  | 576,000 |
Vested | (24,000 | ) |  | — |
Forfeited and Cancelled | — |  |  | — |
Unvested and unissued at April 30, 2016 | 1,161,000 |  |  | 576,000 |
|  |  |  |  |  | Weighted Average Value |  | Probable Unearned Compensation Expense at April 30, 2016 |  | Target Unearned Compensation Expense at April 30, 2016
Grant Fiscal Year |  | Number of Shares Granted |  | Vesting Period |  |  |
2016 |  | 774,000 |  | (1) | Five-year RSA cliff, performance-based |  | $ | 31.98 |  |  | $ | 21.9 |  |  | $ | 21.9 |
2016 |  | 576,000 |  |  | Five-year RSU, 30% in fiscal 2018, 30% in fiscal 2019 and 40% in fiscal 2020 |  | $ | 32.02 |  |  | $ | 15.6 |  |  | $ | 15.6 |
(1) RSA shares based on fiscal 2020 EBITDA target levels 2010 Stock Plan The 2010 Stock Plan permits a total of 2,000,000 shares of our common stock to be awarded to participants in the form of nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, stock appreciation rights, and performance share units. The 2010 Stock Plan is designed to allow for "performance-based compensation" under Section 162(m) of the Internal Revenue Code of 1986, as amended ("Code"). As such, qualified awards payable pursuant to the 2010 Stock Plan should be deductible for federal income tax purposes under most circumstances. In the event of a change in control, the vesting of all outstanding option awards will be accelerated. With the approval of the 2014 Incentive Plan, no further awards shall be granted under the 2010 Stock Plan. Stock Options Awarded Under the 2010 Stock Plan In fiscal 2015, 2014 and 2013, our Compensation Committee awarded options to purchase 108,000 shares, 120,000 shares and 120,000 shares, respectively, of our common stock to our executive officers. There were no shares awarded in fiscal 2016 under the 2010 Stock Plan. The stock options have a ten-year term and will vest 33.3% each year over a three-year period. The exercise price is the closing price on the date granted. The following tables summarize the stock option activity and related information for the stock options granted under the 2010 Stock Plan for fiscal 2016, 2015 and 2014:
|  | Summary of Option Activity
|  | Shares |  | Wtd. Avg. Exercise Price
Outstanding April 27, 2013 |  | 360,000 |  |  | $9.53
Awarded |  | 120,000 |  |  | 17.27 |
Exercised |  | (59,999 | ) |  | 9.50 |
Cancelled |  | — |  |  | — |
Outstanding May 3, 2014 |  | 420,001 |  |  | $11.75
Awarded |  | 108,000 |  |  | 37.01 |
Exercised |  | (285,334 | ) |  | 10.47 |
Cancelled |  | — |  |  | — |
Outstanding May 2, 2015 |  | 242,667 |  |  | $24.50
Awarded |  | — |  |  | — |
Exercised |  | (18,668 | ) |  | 12.96 |
Cancelled |  | (26,667 | ) |  | 32.07 |
Outstanding April 30, 2016 |  | 197,332 |  |  | $24.55
Options Outstanding at April 30, 2016
Shares |  | Exercise Price |  | Avg. Remaining Life (Years)
5,333 |  |  | $10.70 |  | 5.3
30,666 |  |  | $8.64 |  | 6.3
73,333 |  |  | $17.27 |  | 7.3
88,000 |  |  | $37.01 |  | 8.3
197,332 |  |  | $24.55 |  |
Options Exercisable at April 30, 2016
Shares |  | Exercise Price |  | Avg. Remaining Life (Years)
5,333 |  |  | $10.70 |  | 5.3
30,666 |  |  | $8.64 |  | 6.3
33,333 |  |  | $17.27 |  | 7.3
16,000 |  |  | $37.01 |  | 8.3
85,332 |  |  | $17.46 |  |
The options outstanding had an intrinsic value of $1.7 million at April 30, 2016. The intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price on the last trading day of fiscal 2016 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all options holders exercised their options on April 30, 2016. We estimated the fair value of these stock options on the date of grant using the Black-Scholes option-pricing model with the following assumptions:
| 2010 Stock Plan
| Fiscal 2015 |  | Fiscal 2014 |
| Awards |  | Awards |
Average expected volatility | 51.00 | % |  | 65.33 | % |
Average risk-free interest rate | 1.00 | % |  | 0.65 | % |
Dividend yield | 1.66 | % |  | 2.81 | % |
Expected life of options (in years) | 4.12 |  |  | 7.61 |  |
Weighted-average grant-date fair value | $ | 14.99 |  |  | $ | 8.39 |  |
Expected volatility was based on the monthly changes in our historical common stock prices over the expected life of the award. The risk-free interest 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 Awarded Under the 2010 Stock Plan During fiscal 2012, our Compensation Committee awarded 100,000 shares of common stock subject to performance-based restricted stock awards ("RSAs") to certain non-executive members of management. The performance measure was the Company's internal enterprise value at the end of fiscal 2015. The internal enterprise value was equal the product of (i) fiscal 2015 EBITDA and (ii) 7.5 (the historic multiple of EBITDA), subject to an adjustment for cash, short-term investments, debt, preferred stock, certain equity issuances, certain acquisitions and the changes in the dividend rate. The restricted stock awards will vest, i.e., the restriction will lapse, one-third as of the end of fiscal 2015, one-third as of the end of fiscal 2016 and the final one-third as of the end of fiscal 2017, based on the enterprise value as of the end of fiscal 2015, to the extent the performance goals have been achieved and provided the employee remains employed. The remaining shares will be forfeited. The Company exceeded the targeted internal enterprise value measure for fiscal 2015. During fiscal 2011, the Compensation Committee awarded 640,000 shares of RSAs to certain executive officers. The performance measure was the Company's internal enterprise value at the end of fiscal 2015. The internal enterprise value was equal the product of (i) fiscal 2015 EBITDA and (ii) 7.5 (the historic multiple of EBITDA), subject to an adjustment for cash, short-term investments, debt, preferred stock, certain equity issuances, certain acquisitions and the changes in the dividend rate. The Company exceeded the targeted internal enterprise value measure for fiscal 2015 and all awards were delivered in fiscal 2016. During fiscal 2011, our Compensation Committee awarded 320,000 shares of common stock subject to time-based restricted stock units ("RSUs") to certain executive officers. The restricted stock units vested 20% each year on the last day of our fiscal year and were 100% vested on the last day of fiscal 2015. The shares of common stock underlying the vested RSUs will not be delivered to the employee until after the employee terminates employment from the Company or upon change of control. Bonus in Lieu of Dividends - For the performance-based restricted stock awards, bonuses in lieu of dividends will not be paid until the restrictions lapse (i.e., not in first 5 years). At such time as the restrictions lapse, the executive will be paid a “dividend catch-up” bonus calculated based on the dividends declared during the restricted period and the number of shares earned. For the time-based restricted stock units, once the restricted stock units vest and until the shares are delivered, the executive will be paid a quarterly bonus in lieu of dividends calculated based on declared dividends and the total number of vested restricted stock units held. Tandem Cash Award - During fiscal 2011, the executives were also granted RSA tandem cash awards. These cash incentive awards were paid since performance under the RSAs described above exceeded target performance. The amount paid under the RSA tandem cash awards equaled the product of the closing price of our common stock as of May 1, 2015 of $43.59 and 40% of the awarded RSAs. The Company exceeded the targeted internal enterprise value measure for fiscal 2015. In fiscal 2015 and 2014 respectively, we recorded a compensation expense of $5.6 million and $3.9 million related to the tandem cash awards. Prior to those periods, we had not recorded any expense for the tandem cash awards. The following table summarizes the RSA and RSU activity for fiscal year 2016, 2015 and 2014 under the 2010 Stock Plan:
| RSA Shares |  | RSU Shares
Unvested and unissued at April 27, 2013 | 700,000 |  |  | 120,000 |
Awarded | — |  |  | — |
Vested | — |  |  | (60,000 | )
Forfeited and Cancelled | — |  |  | — |
Unvested and unissued at May 3, 2014 | 700,000 |  |  | 60,000 |
Awarded | — |  |  | — |
Vested | (633,333 | ) |  | (60,000 | )
Forfeited and Cancelled | — |  |  | — |
Unvested and unissued at May 2, 2015 | 66,667 |  |  | — |
Awarded | — |  |  | — |
Vested | (33,333 | ) |  | — |
Forfeited and Cancelled | — |  |  | — |
Unvested and unissued at April 30, 2016 | 33,334 |  |  | — |
2007 Stock Plan The 2007 Stock Plan permitted 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 canceled 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. With the approval of the 2014 Incentive Plan, no further awards shall be granted under the 2007 Stock Plan. Stock Options Awarded Under the 2007 Stock Plan In fiscal 2015, 2014 and 2013, respectively, our Compensation Committee awarded options to purchase 50,500 shares, 42,500 shares and 42,500 shares of our common stock to certain non-executive members of the management team that vest one-third per year on each anniversary of the date of the grant. There were no shares awarded for the 2007 Stock Plan in fiscal 2016. The stock options awarded under the 2007 Stock Plan have a ten-year term. The exercise price is the closing price on the date granted. The following tables summarize the stock option activity and related information for the stock options granted under the 2007 Stock Plan for fiscal year 2016, 2015 and 2014:
| Summary of Option Activity
| Shares |  | Wtd. Avg. Exercise Price
Outstanding at April 27, 2013 | 778,000 |  |  | $5.94
Awarded | 42,500 |  |  | 17.27 |
Exercised | (648,141 | ) |  | 5.60 |
Cancelled | — |  |  | — |
Outstanding at May 3, 2014 | 172,359 |  |  | $10.02
Awarded | 50,500 |  |  | 37.01 |
Exercised | (114,859 | ) |  | 8.55 |
Cancelled | — |  |  | — |
Outstanding at May 2, 2015 | 108,000 |  |  | $24.21
Awarded | — |  |  | — |
Exercised | (28,334 | ) |  | 10.99 |
Cancelled | — |  |  | — |
Outstanding at April 30, 2016 | 79,666 |  |  | $28.91
Options Outstanding at April 30, 2016
Shares |  | Exercise Price |  | Avg. Remaining Life (Years)
5,000 |  |  | $10.55 |  | 4.3
4,166 |  |  | $8.64 |  | 6.3
20,000 |  |  | $17.27 |  | 7.3
50,500 |  |  | $37.01 |  | 8.3
79,666 |  |  | $28.91 |  |
Options Exercisable at April 30, 2016
Shares |  | Exercise Price |  | Avg. Remaining Life (Years)
5,000 |  |  | $10.55 |  | 4.3
4,166 |  |  | $8.64 |  | 6.3
5,834 |  |  | $17.27 |  | 7.3
16,833 |  |  | $37.01 |  | 8.3
31,833 |  |  | $25.52 |  |
We estimated the fair value of these stock options on the date of grant using the Black-Scholes option-pricing model with the following assumptions:
| Fiscal 2015 Awards |  | Fiscal 2014 Awards |
Average expected volatility | 51.00 | % |  | 65.33 | % |
Average risk-free interest rate | 1.00 | % |  | 0.65 | % |
Dividend yield | 1.66 | % |  | 2.81 | % |
Expected life of options | 4.12 years |  |  | 7.61 years |  |
Weighted-average grant-date fair value | $ | 14.99 |  |  | $ | 8.39 |  |
The options outstanding had an intrinsic value of $0.4 million at April 30, 2016. Restricted Stock Awards Awarded Under the 2007 Stock Plan In April 2007, 225,000 shares of common stock subject to performance-based RSAs granted to our CEO in fiscal 2006 and 2007 were converted to RSUs. The RSUs were subject to the same vesting schedule and other major provisions of the RSAs they replaced, except the shares for stock underlying the RSUs will not be issued and delivered 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 Code. The RSUs are not entitled to voting rights or dividends, however a bonus in lieu of dividends is paid. The RSU’s were fully vested as of April 30, 2016. As of April 30, 2016, 17,328 shares have been delivered in connection with the RSUs with a remaining balance to be delivered of 207,672 shares. At the beginning of fiscal 2015, there were no RSAs outstanding under the 2007 Stock Plan. We issued 13,500 shares in fiscal 2015 and 27,000 shares in fiscal 2014 of restricted shares to our independent directors all of which vested immediately upon grant. The following table summarizes the RSA activity under the 2007 Stock Plan:
| Fiscal 2016 |  | Fiscal 2015 |  | Fiscal 2014
Unvested at beginning of fiscal year | — |  |  | — |  |  | — |
Awarded | — |  |  | 13,500 |  |  | 27,000 |
Vested | — |  |  | (13,500 | ) |  | (27,000 | )
Forfeited | — |  |  | — |  |  | — |
Unvested at end of period | — |  |  | — |  |  | — |
Stock-based Compensation We recognize pre-tax compensation expense for stock options, RSA's and RSU's under our 2014 Incentive Plan and our 2010 and 2007 Stock Plans in the selling and administrative section of our consolidated statement of operations. Our awards subject to graded vesting are recognized using the accelerated recognition method. As of April 30, 2016, we had $37.9 million of unrecognized equity-based compensation cost that we expect to recognize over a weighted average period of 4.0 years. The table below summarizes the expense related to the equity awards for fiscal 2016, 2015 and 2014.
| Compensation Expense
| Fiscal 2016 |  | Fiscal 2015 |  | Fiscal 2014
2014 Incentive Plan: |  |  |  |  |
RSAs | $3.6 |  | $0.5 |  | $0.0
RSUs | 2.8 |  |  | — |  |  | — |
Total 2014 Incentive Plan | $6.4 |  | $0.5 |  | $0.0
2010 Stock Plan: |  |  |  |  |
RSAs | $0.0 |  | $1.5 |  | $1.5
RSUs | 0.1 |  |  | 0.1 |  |  | 0.3 |
Stock options | 0.3 |  |  | 1.2 |  |  | 0.8 |
Total 2010 Stock Plan | $0.4 |  | $2.8 |  | $2.6
2007 Stock Plan: |  |  |  |  |
RSAs | $0.0 |  | $0.5 |  | $0.4
Stock options | 0.6 |  |  | 0.5 |  |  | 0.3 |
Total 2007 Stock Plan | $0.6 |  | $1.0 |  | $0.7
Total Compensation Expense | $7.4 |  | $4.3 |  | $3.3

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- Definition The entire disclosure for accounts comprising shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income, and compensation-related costs for equity-based compensation. Includes, but is not limited to, disclosure of policies, compensation plan details, equity-based arrangements to obtain goods and services, deferred compensation arrangements, and employee stock purchase plan details. + References No definition available. + Details
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