ex_10b.htm


    CTS
      Corporation

    Form
      10-Q

    
      Third
        Quarter 2007

    

    
      

      

    

    


    EXHIBIT
      (10)(b)

    


     

    AMENDMENT
      TO

     

    EMPLOYMENT
      AGREEMENT

     

    This
      Agreement (“Agreement”) is entered into this 12th
      day of September,
      2007, by and between CTS Corporation, an Indiana corporation (the
“Company”), and Donald K. Schwanz (“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:

     

    
      	
               

            	
              (d)

            	
              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.

            


    

     

    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:

     

    
      	
               

            	
              (i)

            	
              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

            


    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    4.  Section
      7(e) of the Employment Agreement is amended in its entirety to read as
      follows:

     

    
      	
               

            	
              (e)

            	
              Notwithstanding
                the provisions of paragraph 7:

            


    

     

    
      	
               

            	
              (i)

            	
              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.

            


    

     

    
      	
               

            	
              (ii)

            	
              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.

            


    

     

    
      	
               

            	
              (iii)

            	
              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.

            


    

     

    5.  Section
      23 of the Employment Agreement is amended in its entirety to read as
      follows:

     

    
      	
               

            	
              23.

            	
              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.

            


    

     

    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	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ James
              L.
              Cummins	 
	 	 	James
              L. Cummins	 
	 	 	Senior
              Vice President
              Administration	 
	 	 	 	 


    

     

    
      	 	 	 
	 	 	 	 
	
               

            	
              By:
                

            	/s/ Donald
              K. Schwanz	 
	 	 	Donald
              K. Schwanz	 
	 	 	Executive	 
	 	 	 	 




     

    


     


    
      
        
        

      

      
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