Exhibit 10.ee


    CTS
      Corporation

    Form
      10-K 2005

    
      

      

    

         

    EXHIBIT
      (10)(ee)

    


     

    


    CTS
      CORPORATION 2001 STOCK OPTION PLAN:

    EMPLOYEE
      STOCK OPTION AGREEMENT, AS AMENDED

    


    


    THIS
      EMPLOYEE STOCK OPTION AGREEMENT (hereafter, “Agreement”) made this 1st day of
      October, 2001, (herein-after, "Option Date") by and between CTS Corporation,
      an
      Indiana corporation (hereinafter, "CTS"), and Donald
      K.
      Schwanz, an employee of CTS or a subsidiary or division of CTS (hereinafter,
      "Employee").

    


    WHEREAS,
      CTS desires to create an additional incentive for the Employee to continue
      his
      or her services with CTS and to stimulate his or her interest in the growth
      and
      profitability of CTS, and

    


    WHEREAS,
      CTS desires to increase the Employee's personal participation in the success
      of
      CTS through the acquisition of an equity interest in CTS;

    


    W
      I T N E
      S S E T H

    


    Section
      1: Option Grant

    


    CTS
      hereby grants to the Employee the right and option to purchase all or any part
      of an aggregate of 100,000 shares of CTS Common Stock, without par value, on
      the
      terms and conditions set forth below (hereinafter the ྿Option࿀).

    


    Section
      2: Purchase Price

    


    The
      purchase price per share for CTS Common Stock subject to this Option shall
      be
      $14.02, the reported closing price per share on the New York Stock Exchange
      on
      the date this Option is granted.

    


    Section
      3: Option Exercise Period

    


    Except
      as
      provided in Section 6, this Option is not exercisable until one year after
      the
      Option Date. This Option is exercisable in installments as follows; on October
      1, 2005, 33,333 shares (“Installment 1”); on December 31, 2005, 33,333 shares
      (“Installment 2”), on December 31, 2005, 33,334 shares (“Installment 3”). In the
      event that Employee exercises Installment 2 prior to October 1, 2006 or
      Installment 3 prior to October 1, 2007, unless an installment would have
      otherwise become exercisable pursuant to the occurrence of an event described
      in
      Section 6, Employee agrees that he shall not sell, contract to sell, grant
      any
      option to purchase, transfer the economic risk of ownership in, make any short
      sale of, pledge or otherwise transfer or dispose of any shares obtained upon
      exercise, until the shares have been released from the foregoing Resale
      Restrictions (hereinafter referred to as the “Resale Restrictions”). Shares
      obtained upon the exercise of Installment 2 shall be released from the Resale
      Restrictions on October 1, 2006 and shares obtained upon the exercise of
      Installment 3 shall be released on October 1, 2007. The Employee understands
      and
      agrees that CTS may cause the legend set forth below or a legend substantially
      equivalent thereto, to be placed upon any certificate(s) evidencing ownership
      of
      shares that are subject to Resale Restrictions:

    


    THE
      SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
      ON
      TRANSFER AS SET FORTH IN THE OPTION AGREEMENT BETWEEN THE ISSUER AND THE HOLDER
      OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF
      THE
      ISSUER. 

    


    This
      Option and all rights hereunder shall expire on September 30, 2011.

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    Section
      4: Payment

    


    Payment
      for this Option must be made at the time of exercise and may be made in cash
      or
      in previously acquired CTS Common Stock, which has been held for at least six
      months, or a combination thereof. If payment is made in whole or part by
      previously acquired CTS Common Stock, then the value per share of such stock
      is
      the reported closing price per share of CTS Common Stock on the New York Stock
      Exchange on the date the Option is exercised or, if not reported on such date,
      the next preceding date for which such a closing price is reported. Payment
      may
      be made by surrender of shares or by attestation by submission of the prescribed
      Attestation Form. Subsequent to the use of previously owned shares of CTS Common
      Stock as consideration for the exercise of all or a part of this Option, the
      shares so utilized may not be used again in payment for the exercise of this
      Option or any other option for CTS stock for a period of one year.

     

    Section
      5: Nontransferability of Option

    


    This
      Option may not be assigned or transferred by the Employee other than by will
      or
      by the laws of descent and distribu-tion, and is exercisable, during the
      Employee's lifetime, only by him or her. Any attempt by the Employee to assign
      or transfer this Option will be null, void and without effect.

    


    Section
      6: Separation from Employment or Change of Control

    


    In
      the
      event of the termination of employment of the Employee with CTS due to
      Employee’s qualified retirement (as used herein, a qualified retirement means
      that Employee’s date of termination occurs after completing at least five years
      of service and attaining age 62), he may exercise the Option only to the extent
      permitted by the Option terms on the date of retirement, any time before the
      Option expires. All shares subject to this Option which are not exercisable
      as
      of the Employee’s date of termination will be canceled.

    


    In
      the
      event of the termination of employment of the Employee with CTS for any reason
      other than qualified retirement, he may exercise the Option only to the extent
      permitted by the Option terms on the date of termination, and only within the
      three month period immediately following Employee’s date of termination. All
      shares subject to this Option which are not exercisable as of the Employee’s
      date of termination will be canceled.

    


    Upon
      a
      Change of Control of CTS Corporation, as defined herein, all unexercised and
      unexpired installments of this Option, vested and unvested, will immediately
      become exercisable in full and may be exercised anytime before the Option
      expires. As used herein, Change of Control means the occurrence of any of the
      following events: (i) the attainment by any individual, entity or group (within
      the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act ) (a "Person")
      of aggregate beneficial ownership (within the meaning of Rule 13d-2 of the
      Exchange Act) of 25% or more of the combined voting power of the then
      outstanding securities (the "Voting Stock") of CTS entitled to vote generally
      in
      the election of directors; provided, however, that for purposes of this
      Subsection (i), the following will not be deemed to result in a Change in
      Control: (A) any acquisition directly from CTS that is approved by the Incumbent
      Board (defined below), (B) any acquisition by CTS and any change in the
      percentage ownership of Voting Stock of CTS that results from such acquisition,
      (C) any acquisition by any employee benefit plan or related trust sponsored
      or
      maintained by CTS or any subsidiary of CTS, or (D) any acquisition by any Person
      pursuant to a Business Combination (defined below) that complies with clauses
      (I), (II) and (III) of Subsection (iii) below; or (ii) individuals who, as
      of
      the effective date of the Plan constitute the Board of Directors of CTS (the
      "Incumbent Board") cease for any reason to constitute at least two-thirds of
      the
      Board of Directors of CTS; provided, however, that any individual becoming
      a
      director subsequent to the effective date of the Plan whose election, or
      nomination for election by CTS' shareholders, was approved by a vote of at
      least
      two-thirds of the directors then comprising the Incumbent Board (either by
      a
      specific vote or by approval of the proxy statement of CTS in which such person
      is named as a nominee for director, without objection to such nomination) will
      be deemed to have been a member of the Incumbent Board, but excluding, for
      this
      purpose, any such individual becoming a director as a result of an actual or
      threatened election contest (within the meaning of Rule 14a-11 of the Exchange
      Act) with respect to the election or removal of directors or other actual or
      threatened solicitation of proxies or consents by or on behalf of a Person
      other
      than the Board of Directors of CTS; or (iii) consummation of (A) a
      reorganization, merger or consolidation, or (B) a sale or other disposition
      of
      all or substantially all of the assets of CTS (such reorganization, merger,
      consolidation or sale each , a "Business Combination"), unless, in each case,
      immediately following such Business Combination, (I) all or substantially all
      of
      the individuals and entities who were the beneficial owners of Voting Stock
      of
      CTS immediately prior to such Business Combination beneficially own, directly
      or
      indirectly, more than two-thirds of the then outstanding shares of common stock
      and the combined voting power of the then outstanding Voting Stock of CTS
      entitled to vote generally in the election of directors of the entity resulting
      from such Business Combination (including, without limitation, an entity which
      as a result of such transaction owns CTS, or all or substantially all of CTS'
      assets either directly or through one or more subsidiaries) in substantially
      the
      same proportions relative to each other as their ownership immediately prior
      to
      such Business Combination of the Voting Stock of CTS, (II) no individual, entity
      or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
      Act) (other than CTS, such entity resulting from such Business Combination,
      or
      any employee benefit plan or related trust sponsored or maintained by CTS,
      any
      subsidiary of CTS or such entity resulting from such Business Combination)
      beneficially owns, directly or indirectly, 15% or more of the then outstanding
      shares of Voting Stock of the entity resulting from such Business Combination,
      and (III) at least two-thirds of the members of the Board of Directors of the
      entity resulting from such Business Combination were members of the Incumbent
      Board at the time of the execution of the initial agreement or of the action
      of
      the CTS Board of Directors providing for such Business Combination; or (iv)
      approval by the shareholders of CTS of a complete liquidation or dissolution
      of
      CTS, except pursuant to a Business Combination that complies with clauses (I),
      (II) and (III) of Subsection (iii) hereof.

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Section
      7: Adjustment for Capital Change

    


    The
      number, kind and price of shares subject to this Option will be proportionately
      and appropriately adjusted by the Compensation Committee of CTS to reflect
      the
      effects of stock splits, stock dividends and any other change in the capital
      structure of CTS or to reflect any merger, consolidation or exchange or sale
      of
      assets or shares of CTS.

    


    Section
      8: Controlling Feature of Plan

    


    Inconsistencies,
      if any, between this Agreement and the CTS Corporation 2001 Stock Option Plan,
      will be resolved according to the terms of the Plan.

    


    Section
      9: Rights of Employee as Option Holder

    


    The
      Employee has no rights as a shareholder of CTS with respect to shares subject
      to
      this Option until such shares are issued upon exercise.

    


    Section
      10: Consideration for Option

    


    In
      consideration for the grant of this Option, Employee acknowledges and agrees
      as
      follows:

    


    Option
      gain and unexercised options will be forfeited if Employee engages in certain
      activities. If, at any time within one year after termination of Employee’s
      employment with CTS, Employee engages in any activity in competition with any
      activity of CTS, or contrary or harmful to the interests of CTS, including,
      but
      not limited to: (i) accepting employment with or serving as a consultant,
      advisor or in any other capacity to an employer that is in competition with
      or
      acting against the interests of CTS, including employing or recruiting any
      present, former or future employee of CTS; or (ii) disclosing or misusing any
      confidential information or material concerning CTS or relating to any of its
      businesses, then (A) this Option shall terminate effective on the date on which
      Employee enters into such activity, unless terminated sooner by operation of
      another term or condition of this Option, or the Plan, and (B) any option gain
      realized by Employee from any exercise of this Option, during the six month
      period prior to the termination of Employee’s employment with CTS or after
      Employee’s employment with CTS ends, shall be paid by Employee to
      CTS.

    


    By
      accepting this Agreement, Employee consents to a deduction from any amounts
      CTS
      may owe him or her from time to time (including amounts owed as wages or other
      compensation, fringe benefits, or vacation pay, as well as any other amounts
      owed to Employee by CTS), to the extent of the amount Employee owes CTS under
      this Section. Whether or not CTS elects to make any set-off in whole or in
      part,
      if CTS does not recover by means of set-off the full amount Employee owes,
      calculated as set forth above, Employee agrees to pay immediately the unpaid
      balance to CTS.

    


    Section
      11: Construction of this Agreement

    


    This
      Agreement is made pursuant to and will be construed, interpreted and governed
      by
      the laws of the State of Indiana without regard to the conflict of law
      provisions of any jurisdiction.

    


    Section
      12: Severability

    


    If
      any
      provision of this Agreement is held to be invalid, illegal or unenforceable,
      that will not affect or impair, in any way, the validity, legality or
      enforceability of the remainder of this Agreement.

    


    IN
      WITNESS WHEREOF, Employee has signed this Employee Stock Option Agreement,
      and
      CTS has caused this Employee Stock Option Agreement to be signed by a duly
      authorized officer of CTS, as of the date first written above.

     

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	/s/ Donald
              K. Schwanz
	 	
              
Donald
              K. Schwanz
	 	 




    
      	 	 	 
	 	CTS
              Corporation
	 
 	 
 	 
 
	 	By:  	/s/ Jeannine
              M. Davis
	 	
              

              Jeannine M. Davis
	 	
              Executive
                Vice President 

              Administration and
                Secretary