CTS CORPORATION RESTRICTED STOCK UNIT AGREEMENT
CTS
Corporation
CTS
CORPORATION
THIS
AGREEMENT is made as of the 7th day of December, 2005 (the "Grant Date")
between
CTS CORPORATION, an Indiana corporation (the "Company"), and «Director»
(the
"Grantee").
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1.
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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 2,500 Restricted Stock Units. This grant is made
to the
Grantee in consideration for services to be performed by Grantee
for the
Company as a non-employee director in the 2006 calendar year. In
the
event, that the Grantee is not a non-employee director of the Company
as
of January 10, 2006, this grant shall be forfeited in its entirety.
Termination of services by the Grantee during the 2006 calendar
year shall
not affect this grant except as expressly provided herein. Except
as
expressly provided herein, capitalized terms used herein shall
have the
meaning ascribed to such terms under the Plan.
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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 and applied 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.
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2.
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Settlement
of Restricted Stock Units.
Each Restricted Stock Unit shall entitle the Grantee to one Share
which
shall be distributed to the Grantee (or to the estate, guardian
or
beneficiary of the Grantee, as the case may be) on the Settlement
Date(s)
as defined herein. The Settlement Date(s) shall be the date(s)
specified
by the Grantee in the Settlement Date Election Form attached hereto
as
Exhibit A. In the event that the Grantee does not complete and
return a
Settlement Date Election Form to the Company on or before December
31,
2005, January 10, 2006 shall be deemed to be the Settlement Date
for all
Restricted Stock Units awarded under this Agreement. Notwithstanding
anything to the contrary in this Agreement or the Settlement Date
Election
Form, upon the first to occur of the following events, Shares shall
be
distributed 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);
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(a)
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Grantee’s
separation from service as defined by Section 409A of the Code;
provided,
however that if Grantee is or becomes a specified employee as defined
by
Section 409A of the Code, such date shall be delayed by six
months;
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(b)
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Grantee’s
becoming disabled, as defined by Section 409A of the Code;
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(c)
Grantee’s
death;
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(d)
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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; or
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(e)
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Grantee’s
unforeseeable emergency, as defined and not in excess of the amount
permitted by Section 409A of the Code;
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The
Company’s obligations to the Grantee with respect to the Restricted Stock Units
will be satisfied in full upon the distribution of Shares corresponding to
such
Restricted Stock Units. On the Settlement Date(s), the Company may, at its
election, either (i) deliver to the Grantee a certificate representing the
number of Shares to be distributed to the Grantee as of that Settlement Date;
(ii) 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 (iii) credit the number of Shares to be distributed
to the Grantee as of that Settlement Date to a brokerage account designated
by
the Grantee. In no event may any Settlement Date be accelerated except in
accordance with Section 409A of the Code.
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3.
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Selection
of Settlement Dates.
The Grantee’s selection of a Settlement Date may have important tax
consequences. The Grantee is advised to consult an independent
tax
professional before making this selection.
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The
Grantee may elect to defer a Settlement Date which is a specific calendar
date
previously selected by the Grantee (the “Original Settlement Date”) on a form
provided by the Company and pursuant to procedures established by the Company
from time to time. Any such election may be made for less than all of the
Shares
due to be distributed on a Settlement Date, and different elections may be
made
with respect to Shares to be distributed on a Settlement Date. The Grantee’s
election to defer an Original Settlement Date must be made at least twelve
(12)
months in advance of the Original Settlement Date and must defer distribution
for a period of at least five (5) years after the Original Settlement Date.
No
election to defer an Original Settlement Date shall be effective for at least
twelve (12) months after such election has been made. If the Grantee has
selected separation from service as a Settlement Date that Settlement Date
may
not be deferred.
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4.
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Taxes.
The Grantee shall be solely responsible for the payment of any
taxes,
including without limitation, any income or employment taxes, which
are
due or may become due as a result of this grant or the distribution
of
Shares.
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5.
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Rights
Not Conferred.
The Grantee shall have none of the rights of a shareholder 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.
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6.
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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 transfer of such Restricted Stock Units
or the
Shares related thereto by will or by the laws of descent or distribution
in the event of the Grantee’s death.
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7.
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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.
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8.
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Governing
Law.
This Agreement shall be construed in accordance with and governed
by the
laws of the State of Indiana.
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9.
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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.
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10.
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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.
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11.
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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.
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12.
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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.
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13.
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Binding
Effect.
This Agreement shall be binding upon the heirs, executors, administrators
and successors of the parties
hereto.
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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as
of the day and year first above written.
__________________________________________
«Director»
CTS
CORPORATION
| CTS Corporation | ||
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| By: | /s/ Xxxxxxx X. Xxxxxx III | |
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Xxxxxxx X. Xxxxxx III |
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| Vice President, General Counsel and Secretary | ||
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EXHIBIT
A
CTS
CORPORATION
RESTRICTED
STOCK UNIT AWARD
SETTLEMENT
DATE ELECTION FORM
THIS
FORM
MUST BE COMPLETED AND RETURNED TO THE COMPANY NO LATER THAN DECEMBER 31,
2005.
IF YOU FAIL TO RETURN THIS FORM TO THE COMPANY BY THAT DATE, YOUR AWARD WILL
BE
DISTRIBUTED ON JANUARY 10, 2006.
Name: «Director»
Address: «Address»,
«City»,
«State» «Zip»
Date
of
Award: «Date»
Instructions:
You
were
awarded Restricted Stock Units under the CTS Corporation 2004 Omnibus Long-Term
Incentive Plan (the “Plan”). Each Restricted Stock Unit entitles you to a share
of CTS Common Stock on the Settlement Date you select,
subject
to the terms of the Plan and your Restricted Stock Unit Agreement.
Your
Settlement Date may not be earlier than January 10, 2006. Please select one
of
the following three alternatives:
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1.
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You
may elect to receive a distribution of all Restricted Stock Units
granted
under this award upon your separation from service by initialing
the
following statement:
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_____
I
hereby elect to receive a distribution of all of the Shares to which I am
entitled under this award upon my separation from service as defined by Section
409A of the Code, provided however that if I am or become a specified employee
as defined by Section 409A of the Code, such date shall be delayed by six
months
(the “Settlement Date”).
Note:
You
may not make a subsequent deferral of this Settlement Date.
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2.
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You
may elect to receive a distribution of all Restricted Stock Units
granted
under this award on a specific calendar date by initialing and
completing
the following statement:
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_____
I
hereby elect to receive a distribution of all of the Shares to which I am
entitled under this award on _______________ ___, 20____ (the “Settlement
Date”).
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3.
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You
may elect to receive a distribution of Restricted Stock Units in
installments on a fixed schedule of calendar dates by initialing
and
completing the following statement:
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_____
I
hereby elect to have installments of the Shares to which I am entitled under
this Award distributed to me on the dates specified below:
No.
of
Shares _____ _______________
___, 20____ (“Settlement Date”)
No.
of
Shares _____ _______________
___, 20____ (“Settlement Date”)
No.
of
Shares _____ _______________
___, 20____ (“Settlement Date”)
No.
of
Shares _____ _______________
___, 20____ (“Settlement Date”)
No.
of
Shares _____ _______________
___, 20____ (“Settlement Date”)
Acknowledgment:
I
hereby
acknowledge that, (i) I have been provided copies of the Plan and the Restricted
Stock Unit Agreement, (ii) this election shall be subject to the terms of
the
Plan and the Restricted Stock Unit Agreement, and (iii) I have been advised
to
consult an independent tax advisor regarding the effects of this election.
I
understand that (i) the Company’s obligation is merely that of an unfunded and
unsecured promise of the Company to deliver shares of CTS Common Stock in
the
future, (ii) no assets of the Company will be held as collateral security
for
this obligation, and (iii) my rights will be no greater than those of a general
unsecured creditor. I acknowledge that I will be responsible for the payment
of
any income and employment taxes due on this award.
______________________________ ___________________________
«Director» Date
