AMENDMENT TO EMPLOYMENT AGREEMENT
CTS
Corporation
Form
10-Q
Third
Quarter 2007
AMENDMENT
TO
This
Agreement (“Agreement”) is entered into this 12th
day of September,
2007, by and between CTS Corporation, an Indiana corporation (the
“Company”), and Xxxxxx X. Xxxxxxx (“Executive”).
RECITALS
WHEREAS,
the Company and Executive entered into that certain Employment Agreement as
of
October 1, 2006 (the “Employment Agreement”); and
WHEREAS,
the Company and Executive wish to amend the Employment Agreement to comply
with
Section 409A of the Internal Revenue Code, as amended.
NOW,
THEREFORE, in consideration of the foregoing and the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the parties hereto agree that the Employment
Agreement is amended as follows, effective as of the date first written
above:
AMENDMENT
1. Section
4(d) of the Employment Agreement is amended in its entirety to read as
follows:
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(d)
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Expense
Reimbursement. The Company shall reimburse Executive for
all reasonable business-related expenses incurred by Executive during
the
Employment Period and, to the extent provided under paragraph 6 and
paragraph 10(b), during the Consulting Period and during Executive’s
lifetime, respectively, in the course of performing Executive’s duties
under this Agreement that are consistent with the Company’s policies in
effect from time to time with respect to travel, entertainment and
other
business expenses, subject to the Company’s requirements applicable
generally with respect to reporting and documentation of such
expenses. Any such reimbursement shall be made not later than
December 31 of the calendar year following the calendar year in which
Executive incurs the expense. In no event may the amount of
expenses reimbursed by the Company in one calendar year affect the
amount
of expenses eligible for reimbursement in any other calendar
year.
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2. Section
7(c)(vi) of the Employment Agreement is amended by adding the following
provision thereto:
Such
present values will be determined as of January 1, 2008. The lump sum
payment (difference between A and B) shall be increased with interest, at the
interest rate specified in the SERP, for the period between January 1,
2008, and the date of payment.
3. Section
7(d)(i) of the Employment Agreement is amended in its entirety to read as
follows:
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(i)
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Executive
or his estate or beneficiaries shall be entitled to a lump sum payment
in
an amount equal to the amount of Base Salary Executive would have
earned
from the Termination Date until December 31, 2007, payable within 90
days of the date of Executive’s death or determination of Disability, as
the case may be; and
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4. Section
7(e) of the Employment Agreement is amended in its entirety to read as
follows:
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(e)
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Notwithstanding
the provisions of paragraph 7:
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(i)
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If
the Company determines in good faith that (A) any payment to Executive
or
his estate or beneficiaries under this paragraph 7 does not qualify
for
the “short-term deferral exception” or otherwise would constitute a
“deferral of compensation” under Section 409A of the Code, (B) Executive
is a “specified employee” (as such phrase is defined in Section 409A of
the Code) and (C) delay of such payment is required by Section 409A
of the
Code and is not already provided for in this paragraph 7, Executive
(or Executive’s estate or beneficiary) will receive payment of such
amounts upon the earlier of (X) the first day of the seventh month
following Executive’s “separation from service” with the Company (as such
phrase is defined in Section 409A of the Code) or (Y) Executive’s
death.
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(ii)
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It
is expressly understood that the Company’s payment obligations under
paragraph 7 shall terminate and Executive’s right to such payments shall
be forfeited in the event Executive breaches any of his agreements
in
paragraph 8 hereof.
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(iii)
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Notwithstanding
the foregoing, if the Release Agreement has not been executed and
all
periods for revocation expired within the applicable “short term deferral
period” prescribed by Section 409A of the Code, Executive will forfeit the
payments prescribed by paragraphs 7(c)(ii), 7(c)(iii) and 7(c)(v),
above.
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5. Section
23 of the Employment Agreement is amended in its entirety to read as
follows:
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23.
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Section
409A of the Code. To the extent applicable, it is intended
that the compensation arrangements under this Agreement be in full
compliance with Section 409A of the Code. This Agreement shall
be construed in a manner to give effect to such
intention. Reference to Section 409A of the Code includes any
proposed, temporary or final regulations, or any other guidance,
promulgated with respect to such Section by the U.S. Department of
the
Treasury or the Internal Revenue
Service.
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6. Exhibit
B
to the Employment Agreement (the “Release Agreement”) is amended and restated in
its entirety as attached hereto.
7. Except
as
provided herein, the Employment Agreement remains in full force and
effect.
IN
WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the
date first written above.
| CTS CORPORATION | |||
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By:
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/s/ Xxxxx X. Xxxxxxx | |
| Xxxxx X. Xxxxxxx | |||
| Senior Vice President Administration | |||
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By:
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/s/ Xxxxxx X. Xxxxxxx | |
| Xxxxxx X. Xxxxxxx | |||
| Executive | |||
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