Exhibit 10.aa


    
      CTS
        Corporation

      Form
        10-K 2005

      
        

        

      

      EXHIBIT
        (10)(aa)

      


      


      


      CTS
        CORPORATION

      RESTRICTED
        STOCK UNIT AGREEMENT

       

       

      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").

      


      


      
        	
                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 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.


              


      

       

      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.

       

      
        	
                2.

              	
                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); 

              


      

      


      
        	 	
                (a)
                  

              	
                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;

              


      

      


      
        	 	
                (b)
                  

              	
                Grantee’s
                  becoming disabled, as defined by Section 409A of the Code;
                  

              


      

      


      (c)    
Grantee’s
        death; 

      


      
        	 	
                (d)
                  

              	
                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


              


      

      


      
        	 	
                (e)

              	
                Grantee’s
                  unforeseeable emergency, as defined and not in excess of the amount
                  permitted by Section 409A of the Code;


              


      

      


      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. 

      


      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      
        	
                3.
                  

              	
                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.


              


      

      


      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. 

      


      
        	
                4.

              	
                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. 

              


      

      


      
        	
                5.

              	
                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.


              


      

      


      
        	
                6.

              	
                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.


              


      

      


      
        	
                7.

              	
                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.

              


      

      


      
        	
                8.

              	
                Governing
                  Law.
                  This Agreement shall be construed in accordance with and governed
                  by the
                  laws of the State of Indiana.

              


      

       

      
        	
                9.

              	
                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.
                  

              


      

       

      
        	
                10.

              	
                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.

              


      

      


      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      
        	
                11.
                  

              	
                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.

              


      

      


      
        	
                12.

              	
                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.

              


      

      


      
        	
                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.

      


      


      


      


      __________________________________________
        

      «Director» 

      


      


      


      CTS
        CORPORATION

      


      


      
        	 	 	 
	 	CTS
                Corporation
	 
 	 
 	 
 
	 	By:  	/s/ Richard
                G. Cutter III
	 	
                
Richard
                G. Cutter III
	 	Vice
                President, General Counsel and
                Secretary




      


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      


      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: 

      


      
        	
                1.
                  

              	
                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: 

              


      

      


      _____
        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. 

      


      
        	
                2.
                  

              	
                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: 

              


      

      


      _____
        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”).


      
        
           

          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      
 

      
        	
                3.
                  

              	
                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:


              


      

      


      _____
        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