EXHIBIT 10.1
EMPLOYMENT CONTRACT
This AGREEMENT entered into this 24th day of June, 1994, by and between CTS
Corporation, an Indiana corporation ("Company"), and XXXXXX X. XXXXXX, residing
at 00000 Xxxx Xxxxx, Xxxxxxx, Xxxxxxx, 00000, ("Employee") to evidence
employment of the Employee by the Company under the following terms and
provisions:
1. EMPLOYMENT TERM. The Company agrees to employ Employee, and Employee
accepts employment as Chairman of the Board, President and Chief Executive
Officer of the Company for a term of three years commencing on June 24, 1994.
2. DUTIES. The Employee shall exert his best efforts and devote
substantially all of his time and attention to the affairs of the Company. The
Employee shall be in charge of the operation of the Company, and shall have full
authority and responsibility, subject to the direction, approval, and control of
the Board of Directors of the Company, for formulating policies and operating
the Company.
3. SALARY. For all services rendered by the Employee, the Company shall pay
the Employee, as regular compensation, a salary of three hundred nineteen
thousand seven hundred twenty-five dollars ($319,725) per year, payable in equal
monthly installments subject to applicable withholdings, commencing on July 1,
1994.
4. ADJUSTMENT OF SALARY. The Board of Directors of CTS may at any time or
from time to time change the regular compensation provided for in the preceding
paragraph or otherwise change the benefits receivable by the Employee under this
Employment Contract and the performance of Employee shall be reviewed annually
on or about the anniversary date of this contract for the purpose of considering
whether an adjustment should be made in Employee's regular compensation. In the
event that such regular compensation shall be increased, then, from and after
the date of such increase, such regular compensation shall be deemed to be the
amount as so increased.
5. VACATION. Employee shall be entitled to four (4) weeks vacation during
each year of the term of this Agreement or any extension thereof and, if unused,
Employee's vacation time may be accrued as provided in CTS Policy and Procedure
Personnel--16, Vacations for Exempt Salaried Employees.
6. GENERAL EMPLOYEE BENEFITS AND RESPONSIBILITIES. Except as provided in
paragraph 8(b) below, this Agreement is not intended to and shall not be deemed
to be in lieu of any rights, benefits and privileges to which Employee may be
entitled as an Employee of the Company, it being understood that the Employee
shall have the same rights and privileges as other salaried employees and other
executive officers of the Company, except to the extent that such rights or
privileges conflict with benefits provided to Employee under this Agreement. The
rights, benefits and privileges of salaried employees and executive officers
include, but are not limited to, the CTS Corporation Salaried Employees' Pension
Plan, the CTS Corporation 1988 Restricted Stock and Cash Bonus Plan, the CTS
Corporation Management Incentive Plan, the CTS Corporation Retirement Savings
Plan, the CTS Corporation 1986 Stock Option Plan, the Medical Expense Benefit
Plan, the Term Life Insurance and Accidental Death and Dismemberment Insurance,
the CTS Dental Plan, the CTS Long Term Disability Plan, the CTS Reimbursement of
Relocation Expense Policy, and the CTS Executive Officer Automobile Policy, and
Employee shall be entitled to participate in such plans and programs, to the
extent and upon the terms provided for each such plan or program. Employee shall
also be entitled to split dollar life insurance in amounts and on terms agreed
to between the Employee and the Compensation Committee of the Board of
Directors. Such insurance shall be in lieu of all except the first $50,000 of
the Term Life Insurance otherwise available to salaried employees and executive
officers. Employee further agrees to be bound by the Company's standard
agreement with its employees regarding Confidential Information and disclosure
and assignment of inventions.
1
7. TERMINATION FOR CAUSE. Notwithstanding any other provisions of this
Agreement, the Company by action of its Board of Directors (the Employee not
voting) may at any time, without prior notice, discharge the Employee for either
of the following causes:
(a) Any illegal, dishonest, or malfeasant conduct which involves the
Company's funds or other assets; or
(b) The willful failure of Employee to carry out the provisions of this
Agreement.
Termination pursuant to this paragraph shall result in Employee's immediate
forfeiture of all rights and privileges under this Agreement, excluding accrued
salary, if any, which shall be immediately due and payable.
8. TERMINATION FOR ANY OTHER REASONS. Except as terminated pursuant to
paragraph 7, this Agreement may only be terminated prior to expiration under the
following terms and conditions:
(a) TERMINATION BY EMPLOYEE. The Employee may terminate this Agreement
by giving the Company ninety (90) days' written notice of his intent to
terminate his employment. If the Employee terminates his employment pursuant
to this Agreement excluding accrued salary, which shall be immediately due
and payable, the Employee's vested benefits (if any) in any employee benefit
plan, and his right to convert health and life insurance policies; provided,
however, that if the Employee terminates this Agreement because of a breach
of this agreement by the Company, then he shall be entitled to the rights
and benefits described under paragraph (b) below.
(b) TERMINATION BY THE COMPANY. The Company may terminate this Agreement
by giving the Employee ninety (90) days' written notice of his termination.
If the Company terminates the Employee's employment pursuant to this
subparagraph, the Company shall pay to the Employee, in full satisfaction of
the Company's obligations to Employee under this Agreement, a sum equal to
the product of his monthly salary at the time of termination, multiplied by
the number of months remaining under this Agreement, but in no event shall
Employee be paid less than 100% of his then annual salary, the same to be
paid to Employee in equal monthly installments over the remaining months of
this Agreement, plus a portion of the bonus payable under the CTS
Corporation Management Incentive Plan, for the year in which the Employee's
employment is terminated, the same to be paid at the same time and in the
same manner as other participants in the CTS Corporation Management
Incentive Plan. The bonus which would have been so payable to the Employee
for the full year shall then be multiplied by a fraction containing the
number of days in the year of termination which precede the termination date
in the numerator and the number 365 in the denominator to determine the
bonus payable to the Employee.
In addition to the salary and bonus to be paid to Employee upon
termination of this Agreement pursuant to this subparagraph, Employee shall
also be entitled to all termination benefits for which he would be eligible
as a salaried employee of the Company without regard to this Agreement,
including but not limited to the right to receive accrued vacation and elect
conversion privileges under the Company insurance plans, and shall also be
entitled to the rights on termination set forth in any other agreement with
the Company and in any options to purchase shares of the Company to which
Employee is a party at the time of termination.
9. DEATH OR DISABILITY OF EMPLOYEE. In the event of Employee's permanent and
total disability during the term of this Agreement, this Agreement shall
terminate at the end of the calendar month during which a determination is made
of his permanent and total disability. A conclusive determination of his
permanent and total disability shall occur when he is placed on Permanent
Inactive Disability Status under the CTS Corporation Salaried Employees' Pension
Plan. Employee shall be entitled to receive all disability benefits then
available under any of the Company's benefit plans. In the event of Employee's
death during the term of this Agreement, this Agreement shall terminate at the
end of the calendar month during which his death occurs. Employee's
beneficiaries and estate shall be entitled to receive all death benefits then
available to executive officers of the Company to the extent and upon the terms
provided for in any such benefit plans.
2
10. ARBITRATION. The parties to this Agreement shall attempt to settle any
dispute arising under this Agreement by negotiation. If a satisfactory
settlement of any dispute is not reached within ten (10) days between the
parties, either party may demand arbitration by serving on the other party by
registered mail a written demand for arbitration. The written demand must
specify the nature of the dispute. The American Arbitration Association shall be
asked to submit an arbitration panel of seven (7) members from whom the
arbitrator shall be chosen. After the list has been furnished, the Employer
shall strike three (3) names from the list, and the Employee shall strike three
(3) names from the remaining four (4). The name remaining after the others have
been stricken shall be the arbitrator. The expense of the arbitrator and/or fee
of the American Arbitration Association shall be borne equally by both parties.
The function of the arbitrator shall be of a judicial rather than a
legislative nature. The arbitrator shall not have the authority to add to,
ignore, or modify any of the terms of this Agreement. The arbitrator shall not
decide issues that are not directly involved in the dispute submitted to him,
and no decision of the arbitrator shall require payment of compensation
different from or in addition to the compensation set forth in this Agreement.
The arbitrator shall have no authority to impose on either party hereto any
limitations or obligations not specifically provided in this Agreement.
The decision of the arbitrator shall be final and binding upon both parties.
11. WAIVER. Failure to insist upon strict compliance with any of the terms,
covenants, or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of
such right or power at any other time or times.
12. SEVERABILITY. The invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provision.
13. ENTIRE AGREEMENT. This Agreement is the entire agreement and
understanding of the Company and Employee. Oral changes will have no effect. It
may be altered only by a written agreement signed by the party against whom
enforcement of any waiver, change, extension or discharge is sought.
14. CONSTRUCTION OF AGREEMENT. This Agreement and all questions arising in
connection herewith shall be governed by the laws of the State of Indiana. This
Agreement shall be enforceable against the Company and its successors, agents
and assignees by Employee or his personal representatives or estate, and in
enforcing this Agreement, Employee, his personal representatives or estate shall
be entitled to receive reasonable attorneys' fees and court costs from the
Company if Employee is the prevailing party. Similarly, if the Company prevails
in any action brought by either party to enforce this Agreement, the Company
shall be entitled to receive reasonable attorneys' fees and court costs from the
Employee.
IN WITNESS WHEREOF, the parties have signed this Agreement this 24th day of
June, 1994.
CTS CORPORATION
By: /s/ XXXXXX XXXXXXXX
-----------------------------------------
Xxxxxx Xxxxxxxx
CHAIRMAN OF THE COMPENSATION COMMITTEE
ATTEST:
/s/ XXXXXXXX X. XXXXX
-------------------------
Xxxxxxxx X. Xxxxx, Secretary
/s/ XXXXXX X. XXXXXX
------------------------------------------------------------------
Xxxxxx X. Xxxxxx, Employee
3
