CTS CORPORATION RESTRICTED STOCK UNIT AGREEMENT
CTS
Corporation
Form
10-Q
Second
Quarter 2006
CTS
CORPORATION
THIS
AGREEMENT is made as of the _____day of ________, ____ (the "Grant Date")
between CTS CORPORATION, an Indiana corporation (the "Company"), and
____________ (the "Grantee").
1. Grant.
Subject
to the terms set forth in this Agreement and in the Company's 2004 Omnibus
Long-Term Incentive Plan (the "Plan"), the Company hereby grants to the Grantee
________ Restricted Stock Units (the “Award”). Except as expressly provided
herein, capitalized terms used herein shall have the meaning ascribed to
such
terms under the Plan.
It
is
intended that this Agreement and its administration comply with the provisions
of Section 409A of the Code. Accordingly, notwithstanding any provision in
this Agreement or in the Plan to the contrary, this Agreement and the Plan
will
be interpreted, applied and, to the minimum extent necessary to comply with
Section 409A of the Code, amended, so that the Agreement does not fail to
meet,
and is operated in accordance with, the requirements of paragraphs (2), (3)
and
(4) of Section 409A(a) of the Code. As used herein, “Code” means the Internal
Revenue Code of 1986 as amended from time to time, and any interpretations
thereof issued by the U.S. Treasury Department on which the Company is permitted
to rely.
2. Vesting
and Settlement of Restricted Stock Units.
The
Award shall vest and become non-forfeitable in installments equal to twenty
percent (20%) multiplied by the initial number of Restricted Stock Units
specified in Section 1 of this Agreement on each of the following dates;
____________, __________, ____________ and ___________ (each such date, a
"Vesting Date"), provided that the Grantee remains in the continuous employ
of
the Company and is an employee of the Company on the Vesting Date.
Restricted
Stock Units shall be settled on the basis of one Share for each vested
Restricted Stock Unit. The Company shall distribute to the Grantee Shares
equal
to _________percent (___%) multiplied by the number of initial Restricted
Stock
Units specified in Section 1 above, on the following dates, or as soon
thereafter as is reasonably practicable; ____________, __________, ____________
and ___________ (each such date of distribution, a "Settlement Date"). The
Company’s obligations to the Grantee with respect to vested Restricted Stock
Units will be satisfied in full upon the distribution of one Share for each
Restricted Stock Unit. On the Settlement Date(s), the Company may, at its
election, either (i) credit the number of Shares to be distributed to the
Grantee as of that Settlement Date to a book-entry account in the name of
the
Grantee held by the Company’s transfer agent; or (ii) deliver to the Grantee a
certificate representing the number of Shares transferred to the Grantee
as of
that Settlement Date. In no event may any Settlement Date be accelerated
except
in accordance with Section 409A of the Code.
Notwithstanding
anything to the contrary in this Agreement, upon the first to occur of the
following events, all Restricted Stock Units granted hereunder shall vest
and
become nonforfeitable and Shares shall be distributed to the Grantee, estate,
guardian or designated beneficiary of the Grantee as the case may be, in
the
settlement of Restricted Stock Units as soon as reasonably practicable, and
such
date(s) of distribution shall be deemed to be the Settlement Date(s):
(a)
Xxxxxxx’s becoming disabled, as defined by Section 409A of the Code;
(b)
Xxxxxxx’s death;
(c)
To
the extent permitted by Section 409A of the Code, a change in ownership or
effective control of the Company; or in the ownership of a substantial portion
of the assets of the Company.
(d)
Xxxxxxx’s unforeseeable emergency, as defined and not in excess of the amount
permitted by Section 409A of the Code.
Unless
the Committee determines otherwise in its sole discretion, if the Grantee’s
employment with the Company terminates for any reason not specified above,
all
Restricted Stock Units granted hereunder which have not vested as of the
date of
such termination of employment shall be permanently forfeited on such
termination date.
3.
Tax
Withholding.
The
Company shall have the right to deduct from any compensation due the Grantee
from the Company any federal, state, local or foreign taxes required by law
to
be withheld in connection with the issuance of Shares or vesting of any
Restricted Stock Unit pursuant to this Agreement. To the extent that the
amounts
payable to the Grantee are insufficient for such withholding, it shall be
a
condition to the issuance of Shares or vesting of the Restricted Stock Units,
as
the case may be, that the Grantee shall pay such taxes or make provisions
that
are satisfactory to the Company for the payment thereof.
The
Company shall retain Shares otherwise deliverable on the Settlement Date
in an
amount sufficient to satisfy the amount of tax required to be withheld provided
that such amounts shall not exceed the statutorily required minimum withholding.
The determination of the number of Shares retained for this purpose shall
be
based on the Fair Market Value of the Shares on the Settlement Date. In the
event that the retention of Shares to satisfy withholding taxes would
otherwise result
in
the delivery of a fractional Share, the Company will round down to the next
whole Share and apply the value of the fractional Share to the recipient's
tax
obligations or, in the alternative, the Company may make such other arrangements
to avoid the issuance of a fractional Share as may be permitted by law. No
Shares shall be transferred to the Grantee hereunder until such time as all
applicable withholding taxes have been satisfied. Under the Code, employment
tax
withholding shall be calculated based on the Fair Market Value of the Shares
on
the applicable Vesting Date and income tax withholding shall be calculated
based
on the Fair Market Value of the Shares on the Settlement Date. The Company
will
not retain Shares as described herein unless tax withholding applies under
the
laws of the local jurisdiction.
4. Rights
Not Conferred.
The
Grantee shall have none of the rights of a stockholder with respect to the
Restricted Stock Units, including the right to receive dividends or vote
stock,
until such time, if any, that Shares are distributed to the Grantee in
settlement thereof.
The
Grantee is further advised that until distribution, the Company’s obligation
will be merely that of an unfunded and unsecured promise of the Company to
deliver Shares in the future, and the rights of the Grantee will be no greater
than that of an unsecured general creditor. No assets of the Company will
be
held as collateral security for the obligations of the Company hereunder,
and
all assets of the Company will be subject to the claims of the Company’s
creditors.
5. Agreement
Not Assignable.
This
Agreement and the Restricted Stock Units awarded hereunder are not transferable
or assignable by the Grantee; provided that no provision herein shall prevent
the distribution of shares to the Grantee’s estate or designated beneficiary, in
the event of the Grantee’s death.
6. Adjustments.
If and
to the extent that the number of Shares shall be increased or reduced in
the
event of any merger, reorganization, consolidation, recapitalization, stock
dividend, stock split, reverse stock split, spin-off, combination, repurchase
or
exchange of Shares or other securities of the Company, or similar corporate
transaction, the number and kinds of shares subject to the Restricted Stock
Units awarded hereunder may be adjusted by the Committee, in its sole
discretion. In the event of any such transaction, the Committee may provide
in
substitution for the Restricted Stock Units granted hereunder such alternative
consideration as it may determine to be equitable.
7. Governing
Law.
This
Agreement shall be construed in accordance with and governed by the laws
of the
State of Indiana.
8. Amendments.
Any
amendment to the Plan shall be deemed to be an amendment to this Agreement
to
the extent that the amendment is applicable hereto; provided,
however,
that no
amendment to the Plan or the Agreement shall adversely affect the value or
number of the Grantee’s Restricted Stock Units without the Grantee’s written
consent, except to the extent necessary to comply with the provisions of
Section
409A of the Code.
9. Administration.
The
Committee shall have the power to interpret the Plan and this Agreement and
to
adopt such rules for the administration, interpretation, and application
of the
Plan as are consistent therewith and to interpret or revoke any such rules.
All
actions taken and all interpretations and determinations made by the Committee
shall be final and binding upon the Grantee, the Company and all other
interested persons. No member of the Committee shall be personally liable
for
any action, determination or interpretation made in good faith with respect
to
the Plan or this Agreement.
10.
Severability.
If any
provision of the Plan or this Agreement is, becomes, or is deemed to be invalid,
illegal or unenforceable in any jurisdiction or would disqualify the Plan
or
award hereunder under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws, or if
it
cannot be so construed or deemed amended without, in the determination of
the
Committee, materially altering the purpose or intent of the Plan or award,
such
provision shall be stricken as to such jurisdiction or award, and the remainder
of the Plan or Agreement shall be in full force and effect.
11. Construction.
The
Restricted Stock Units granted hereunder are being issued pursuant to Section
10
of the Plan (“Restricted Stock Award”) and are subject to the terms of the Plan.
A copy of the Plan has been given to the Grantee, and additional copies of
the
Plan are available upon request during normal business hours at the principal
executive offices of the Company. To the extent that any provision of this
Agreement violates or is inconsistent with an express provision of the Plan,
the
Plan provision shall govern and any inconsistent provision in this Agreement
shall be of no force or effect.
12.
Data
Protection.
By
signing below, the Grantee expressly consents to the transfer and use of
personal data by the Company and its agents in connection with the
administration of this Award.
13. Binding
Effect.
This
Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties hereto.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the day and year first above written.
_____________________________________
Grantee:
CTS
CORPORATION
By:
_______________________________
