KEY TRONIC CORP

Our Board of Directors, our Compensation Committee and our management all believe that the effective use of stock-based long-term incentive compensation is vital to our continued ability to recruit, hire and retain the individuals required to successfully execute our business plans and achieve strong performance in the future by providing a direct link between compensation and long-term shareholder value creation. The Key Tronic Corporation 2010 Incentive Plan, originally adopted on April 22, 2010 and approved by the Company’s shareholders on October 21, 2010, and subsequently amended and restated on April 24, 2014 and approved by the Company’s shareholders on October 23, 2014 (the “Prior Plan”) expired on October 23, 2024. The Board, upon the recommendation of the Compensation Committee, approved the Key Tronic Corporation 2024 Incentive Plan (the “2024 Plan”) on October 24, 2024, subject to the approval of our shareholders.

If approved by shareholders at the meeting, the 2024 Plan will become effective on the date of such approval (the “Effective Date”) and no additional grants will be made under the Prior Plan. If not approved by shareholders, the Prior Plan will otherwise remain in effect in accordance with its terms, including that the Prior Plan terminated with respect to any new awards effective as of October 23, 2024. In such event, the Company will no longer be able to grant equity awards to its key employees, officers, directors, and consultants, which our Board of Directors believes would negatively impact the retention of such individuals and negatively affect the ability of the Company to adequately recruit, incentivize, and retain talent.

Accordingly, the Board of Directors recommends that our shareholders approve the 2024 Plan, the material terms of which are as described below.