ex_10a.htm


    CTS
Corporation

    Form
10-Q

    
      Third
Quarter 2008

    

    
      

      

    

    


    EXHIBIT
(10)(a)

    


    


          September 25, 2008

    


    Mr. H.
Tyler Buchanan

    56179
Dana Drive

    Bristol,
IN 46507

    


    Re:  Retirement
Agreement

    


    Dear Mr.
Buchanan:

    


    This
Retirement Agreement (this “Agreement”) memorializes the agreement concerning
your retirement from your employment with CTS Corporation (hereinafter,
“CTS”).

    


    
      	
              1.

            	
              Retirement
      Date

            


    

    


    Your last
day worked at CTS will be December 31, 2008 (hereinafter, your “Retirement
Date”).

    


    2.           Payments and
Benefits

    


    You shall
receive the following payments and benefits in connection with your
retirement:

     

    
      	
              A.  

            	
              Upon
      the satisfaction of the conditions set forth in Section 4
      hereof, you will receive, on the first business day after the expiration
      of the seven-day (7) revocation period applicable to the Second Identical
      Release described in Section 4
      hereof, a single lump sum payment in the amount of $412,500, subject to
      applicable federal, state and local tax and other
    withholding.

            


    

    


    
      	
              B.  

            	
              With
      respect to any awards you have received under CTS’ 2008 Management
      Incentive Plan, CTS’ 2004 Omnibus Long-Term Incentive Plan or any other
      annual cash incentive or equity compensation plan, as well as your
      participation in any pension, savings, health and welfare or other
      employee benefit plans, the terms of such awards and plans shall govern
      any compensation payments, benefits, rights or entitlements you and/or any
      of your beneficiaries have or may have thereunder to the extent required
      by law.  If you have any unused, earned vacation, it will be
      paid to you.

            


    

    


    
      	
              C.  

            	
              You
      will be considered a “retiree” for the purpose of all CTS employee benefit
      plans.

            


    

    


    3.           Release

    


    In
exchange for the compensation described in this Agreement and other good and
valuable consideration, receipt of which is hereby acknowledged, you hereby
agree that you, your representatives, agents, estate, dependents, beneficiaries
and assigns release and forever discharge CTS and its affiliated corporations,
subsidiary corporations, parent corporation, successors, assigns, directors,
members, officers, employees and agents, both individually and in their official
capacities with CTS (hereinafter, the “Releasees”), from any and all actions or
causes of action, suits, claims, complaints, contracts, liabilities, agreements,
promises, debts or damages, whether existing or contingent, known or unknown,
which arise out of your employment or the termination of your employment with
CTS except for claims which relate to your enforcement of CTS' payments and
other obligations under this Agreement.  THIS RELEASE IS INTENDED BY YOU TO BE
ALL ENCOMPASSING AND TO ACT AS A FULL AND TOTAL RELEASE OF ANY CLAIMS THAT YOU
MAY HAVE OR HAVE HAD AGAINST THE RELEASEES. Without limiting the
generality of the foregoing, this release includes any claim of discrimination
on the basis of race, sex, marital status, sexual preference, national origin,
handicap or disability, age, veteran status, special disabled handicap status or
any other basis prohibited by law; any claim arising from any express or implied
employment contract or covenant of good faith and fair dealing; any claim
arising under the Family and Medical Leave Act of 1993; any tort claims; and any
personal gain with respect to any claim arising under the qui tam provisions of the
False Claims Act, 31 USC 3730.

     

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    


    You agree
and acknowledge that the payments and benefits set forth in this Agreement,
together with payments and benefits previously provided to you by CTS, are the
only payments and benefits you will receive in connection with your employment
or its termination.  Without limitation of the foregoing, you
expressly agree and acknowledge that you will not receive any type of bonus,
including but not limited to a retention bonus or payment, in connection with
your employment or its termination, other than any amount to which you may be
entitled under a plan described in Section 2(B)
above.

     

    You
represent that you understand the release contained herein (the “Release”) and
that you understand that rights and claims under the Age Discrimination in
Employment Act of 1967, as amended; Title VII of the Civil Rights Act of 1964,
as amended; the Americans with Disabilities Act; and similar state and local
anti-discrimination laws are among the rights and claims against the Releasees
that you are releasing hereby.

    


    You
further acknowledge and agree that you have been encouraged to seek the advice
of an attorney of your choice in regard to this Agreement and the Release
contained herein.  You represent that you have relied upon the advice
of your attorney in entering into this Agreement and, specifically, in agreeing
to the Release contained herein, or that you have voluntarily waived the right
to seek an attorney’s advice. You hereby understand and acknowledge the
significance and consequences of the Release contained herein.  You
represent that you fully understand the terms of the Release contained herein
and voluntarily accept the terms of the Release contained herein.  You
further acknowledge that you have had a sufficient amount of time to consider
the terms of this Agreement and of the Release contained herein and to seek
independent advice regarding the effect of this Agreement prior to its
execution.

     

    You also
acknowledge and agree that it will be a condition precedent to your receipt of
the payment set forth in Section 2(A) that you
execute and deliver to CTS on or after December 31, 2008 but no later than
January 21, 2009, and not revoke within seven days thereafter, an additional and
identical copy of this Agreement reaffirming its terms. (“Second Identical
Release”)

     

    CTS
similarly releases you from any and all claims, suits, demands, actions, or
causes of action of any kind or nature whatsoever, whether the underlying facts
are known or
unknown, which CTS has or now claims, or might have or claim, pertaining to
facts and issues existing on the date of this Agreement and at all points in
time preceding that date.

    


    4.           Right to
Consider/Rescind

    


    In
accordance with the provisions of the Older Workers Benefit Protection Act
related to claims brought under the Age Discrimination in Employment Act, you
understand that you shall have the right to consider whether to accept this
Agreement for a period of twenty-one (21) days from the date on which you first
receive this Agreement, and that you shall have the right to consider whether to
accept the Second Identical Release for a period of twenty-one (21) days from
the date you first receive the Second Identical Release.  You are also
advised to consult with your attorney before signing this Agreement and the
Second Identical Release.  You further understand that you shall have
the right to rescind (that is, cancel) this Agreement within seven (7) days of
signing it to reinstate claims under the Age Discrimination in Employment Act
(hereinafter, the “Rescission Period"), and that you shall have the right to
rescind (that is, cancel) the Second Identical Release within seven (7) days of
signing it to reinstate claims arising during the period from the date of your
execution of this Agreement through December 31, 2008 under the Age
Discrimination in Employment Act.  To be eligible to receive payment
of the amount set forth in Section 2(A), you
must (A) deliver a fully executed copy of the Agreement to Mr. Richard G.
Cutter, CTS Corporation, 905 West Boulevard North, Elkhart, IN 46514, not later
than the expiration of the above referenced twenty-one (21) day period, (B) not
revoke this Agreement within the Rescission Period, (C) deliver a fully executed
copy of the  Second Identical Release to Mr. Richard G. Cutter, CTS
Corporation, 905 West Boulevard North, Elkhart, IN 46514, not later than January
21, 2009 and (D) not revoke the Second Identical Release within the seven-day
(7) period after you sign the  Second Identical Release.

    


    
      	
              5.

            	
              Proprietary
      Information.

            


    

    


    You agree
not to use, publish, or otherwise disclose, either directly or indirectly, to
any person or corporation any trade secret, confidential, or proprietary
information, data, documents or records, including but not limited to site
customer lists and product costing and pricing information, of CTS or any such
information of others which CTS is obligated to maintain in
confidence.  You further agree to abide by any and all proprietary
agreements signed by you during your employment with CTS and acknowledge that
such agreements remain in full force and effect according to the terms of this
agreement.  In the event of a breach of this Section 5 of the
Agreement or of any proprietary information agreement signed by you during your
employment with CTS, CTS shall be entitled to injunctions, both preliminary and
permanent, enjoining such breach. .

    


    
      	
              6.

            	
              Amicable Relationship
      and Non-Disparagement

            


    

    


    Each
party to this Agreement wishes to maintain an amicable relationship with the
other and agrees not to act inconsistently with the interests of the other
party.  

    Additionally,
each party agrees specifically not to disparage, defame or otherwise
intentionally harm the reputation of the other party.

     

    
 

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    
 

    
      	
              7.

            	
              Non-Competition;
      Non-Solicitation

            


    

    


    
      	
               
      

            	
              A.

            	
              For
      a period of eighteen months (18 mos.) following your Retirement Date, you
      will not:

            


    

    


    
      	
              (i)  

            	
              enter
      into or engage in any business that competes with CTS’ Business within the
      Restricted Territory (as defined in Sections 7(D)
      and 7(E)
      below, respectively);

            


    

    


    
      	
              (ii)  

            	
              solicit
      customers, business, patronage or orders for, or sell, any products and
      services in competition with, or for any business, wherever located, that
      competes with, CTS’ Business within the Restricted
    Territory;

            


    

    


    
      	
              (iii)  

            	
              divert,
      entice or otherwise take away any customers, business, patronage or orders
      of CTS within the Restricted Territory, or attempt to do so;
      or

            


    

    


    
      	
              (iv)  

            	
              promote
      or assist, financially or otherwise, any person, firm, association,
      partnership, corporation or other entity engaged in any business which
      competes with CTS’ Business within the Restricted
    Territory.

            


    

     

     

    
      	
               
      

            	
              B.

            	
              For
      the purposes of Section 7(A),
      but without limitation thereof, you will be in violation thereof if you
      engage in any or all of the activities set forth therein directly as an
      individual on your own account, or indirectly as a partner, joint
      venturer, employee, agent, salesperson, consultant, officer and/or
      director of any firm, association, partnership, corporation or other
      entity..

            


    

    


    
      	
               
      

            	
              C.

            	
              For
      purposes of this Section 7, CTS
      shall include any and all subsidiary, parent, affiliated, or related
      companies of CTS.

            


    

    


    
      	
               
      

            	
              D.

            	
              For
      the purposes of Section 7(A),
      7(E), 7(H) and 7(J), “CTS’
      Business” is defined to be the design and manufacture of actuators and
      sensors in the automotive, industrial and commercial,
    market.

            


    

    


    
      	
               
      

            	
              E.

            	
              For
      the purposes of Section 7(A),
      the “Restricted Territory” shall be defined as and limited
    to:

            


    

    


    
      	
              (i)  

            	
              the
      geographic area(s) within a one hundred (100) mile radius of any and all
      CTS location(s) in, to, or for which you worked, to which you were
      assigned or had any responsibility (either direct or supervisory) at the
      time of your retirement from CTS and at any time during the eighteen
      months (18 mos.) period prior to such retirement;
  and

            


    

    


    
      	
              (ii)  

            	
              all
      of the specific customer accounts who purchased sensors and/or actuators
      from CTS or have been quoted by CTS for the purchase of sensors and/or
      actuators, whether within or outside of the geographic area described in
      (i) above, with which you had any contact or for which you had any
      responsibility (either direct or supervisory) at the time of your
      retirement from CTS and at any time during the eighteen month (18 mos.)
      period prior to such retirement.

            


    

    


    


    
      	
               
      

            	
              F.

            	
              For
      a period of eighteen months (18 mos.) after your Retirement Date, you will
      not directly or indirectly at any time solicit or induce or attempt to
      solicit or induce any employee(s), sales representative(s), agent(s) or
      consultant(s) of CTS and/or of its parent, or its other subsidiary,
      affiliated or related companies, to terminate their employment,
      representation or other association with CTS and/or its parent or its
      other subsidiary, affiliated or related companies.  You
      acknowledge that this covenant is necessary to enable CTS to maintain a
      stable workforce and remain in
business.

            


    

    


    
      	
               
      

            	
              G.

            	
              For
      eighteen months (18 mos.) after your Retirement Date, you will communicate
      the contents of Sections 5 and
      7 of this
      Agreement to any person, firm, association, partnership, corporation or
      other entity (i) by which you intend to be employed, with whom you intend
      to be associated, or that you intend to represent, and (ii) that is
      engaged in a business that is competitive to CTS’
  Business.

            


    

    


    


    
      	
               
      

            	
              H.

            	
              You
      acknowledge that your obligations under this Section 7 are
      reasonable in the context of the nature of CTS’ Business and the
      competitive injuries likely to be sustained by CTS if you were to violate
      such obligations.  You further acknowledge that this Agreement
      is made in consideration of, and is adequately supported by, the agreement
      of CTS to perform its obligations under this Agreement and by other
      consideration, which you acknowledge constitutes good, valuable and
      sufficient consideration.

            


    

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
 

    
      	
              8.

            	
              Miscellaneous

            


    

    


    
      	
               
      

            	
              A.

            	
              This
      Agreement represents a complete understanding between the parties,
      supersedes any and all other agreements and understandings, whether oral
      or written, and may not be modified, altered or changed except upon
      written consent of the parties.

            


    

    


    
      	
               
      

            	
              B.

            	
              This
      Agreement shall be governed by, construed and enforced in accordance with
      the laws of the State of Indiana without regard to principles of conflicts
      of law.   The State and Federal Courts of Indiana shall
      have exclusive jurisdiction over any disputes or controversies that may
      arise out of or in relation to this Agreement. The parties hereby waive
      any other venue to which either party might be entitled by virtue of
      residence, domicile or otherwise.

            


    

    


    
      	
               
      

            	
              C.

            	
              The
      payment afforded you under Section 2(A) of
      this Agreement represents consideration to which you were not heretofore
      entitled.

            


    

    


    
      	
               
      

            	
              D.

            	
              The
      waiver by either party of a breach of any provision of this Agreement
      shall not operate or be construed to be a waiver of any subsequent breach
      thereof.

            


    

    


    
      	
               
      

            	
              E.

            	
              It
      is agreed and understood that neither the offer nor any negotiations or
      proceedings connected herewith nor the execution of this Agreement nor the
      payment of money shall constitute or be construed as an admission of any
      liability to, or the validity of, any claims
  whatsoever.

            


    

    


    
      	
                
      F.  

            	
              By
      executing this Agreement you acknowledge, understand and agree that CTS is
      not obligated under this or any other agreement or applicable law to offer
      you employment or accept services for the performance of work from you,
      directly or indirectly, as an employee, contractor, or supplier, now or in
      the future.

            


    

    
      	
              G.  

            	
              Both
      parties regard the terms of this Agreement as confidential. Therefore, the
      terms shall not be disclosed by either party to any third party outside
      the retiree’s immediate family, legal counsel and financial planners
      without the prior authorization of CTS.  CTS likewise agrees not
      to disclose or cause any other person to disclose to third parties,
      including prospective employers, the terms of this Agreement, with the
      exception of CTS employees, contractors, outside counsel and accountants
      or others who have a legitimate business need to know this information or
      as otherwise legally required.

            


    

    


    
      	
              H.  

            	
              The
      parties intend this Agreement and the Second Identical Release to serve as
      a final expression of this contract and as a complete and exclusive
      statement of the terms hereof.  This Agreement supersedes any
      prior written or verbal contracts, agreements, or letters of intent or
      understanding between you and CTS executed prior to the execution date
      hereof to the extent any such agreement is inconsistent with the terms
      hereof.

            


    

    


    
      	
              I.  

            	
              The
      parties agree that in the event a court of competent jurisdiction
      determines that the character, duration or scope of any provision of this
      Agreement is unreasonable or unenforceable in any respect, then such
      provision shall be deemed limited to the extent the court deems reasonable
      or enforceable and the provision shall remain in effect as limited by the
      court.  In the event that such a court determines that any
      provision is wholly unenforceable, the provision shall be deemed severed
      from this Agreement and the other provisions shall remain in full force
      and effect.

            


    

     

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
 

    
      	
              9.

            	
              Representations and
      Warranties

            


    

    


    In
consideration of CTS' willingness to enter into this Agreement, you hereby make
the following representations and warranties to CTS:

    


    
      	
               
      

            	
              A.

            	
              You
      have been provided a reasonable time of at least twenty-one (21) days to
      consider whether or not to sign this
Agreement.

            


    

    


    
      	
              B.  

            	
              You
      are aware, by signing this Agreement, which includes a general release,
      you are giving up rights to initiate a lawsuit or other legal
      proceeding.

            


    

    


    
      	
              C.  

            	
              You
      understand and agree that by signing this Agreement, you are specifically
      waiving your rights to make any claims, or initiate any proceedings,
      against the Releasees under Title VII of the Civil Rights Act of 1964 as
      amended, the Age Discrimination in Employment Act, as amended, the
      Americans with Disabilities Act and similar state and local
      anti-discrimination laws.

            


    

    


    
      	
              D.  

            	
              There
      are no promises or representations except those contained in this
      Agreement which have been made to you in connection with this
      subject.

            


    

     

                             
E. You have
read and understand each and every provision of this Agreement.

    


    
      	
              F.  

            	
              You
      acknowledge and agree that the Release contained herein is an essential
      and material term of this
Agreement.

            


    

    


    


    Please
review this Agreement carefully.  If you are in agreement with its
provisions, please signify your acceptance by signing and dating both copies of
this letter in the space provided below and return one copy to me, in accordance
with Section 4
of this Agreement.

    


    


    


    
      
        	 	Very
      truly yours,	 
	 	 	 
	 	CTS
Corporation	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Richard
      G. Cutter, III	 
	 	 	Richard
      G. Cutter, III	 
	 	 	Vice
      President, Secretary and General Counsel	 
	 	 	 	 


      



    


    


    




     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

     

     

    EMPLOYEE ACKNOWLEDGMENT AND
ACCEPTANCE 

    OF
AGREEMENT

    


     

     

    I have
carefully read and reviewed the foregoing Agreement, acknowledge its contents,
and agree to be bound by its terms, including the release of claims set forth in
the Agreement.  I fully understand that this Agreement generally
releases all of my claims, both known and unknown, arising prior to the
execution hereof, against each and all of the Releasees.

    


    I have
been given sufficient time of at least twenty-one (21) days to decide whether to
sign this Agreement and, in the event that I have executed this Agreement
sooner, I have done so voluntarily.  I have consulted with my private
attorney concerning the terms and effect of the Agreement and concerning my
rights or have waived my right to do so.

    


    I
understand that I have seven (7) days from the date of my signature below to
revoke my acceptance of this Agreement, thereby canceling it.  If I do
not revoke my acceptance, this Agreement will become effective and enforceable
on the date that is seven (7) days from the date of my signature, as indicated
below.

     

     

     

     

     

    
      
        	 	 	 	 	 
	
                /s/
      H. Tyler Buchanan

              	 	 	
                 

              	 
	
                H.
      Tyler Buchanan

              	 	 	
                 

              	 
	
                Date
      of Execution of Agreement: September
      25, 2008