ex_10bb.htm


    CTS
Corporation

    Form
10-K

    
      Fourth
Quarter 2008

    

    
      

      

    

    


    EXHIBIT
(10)(bb)

    
      


    

    
      


    

    
      Second
Amendment

    

    
      to
the CTS Corporation Pension Plan

    

    
      (Amended
and Restated Effective May 1, 2006 

      and dated
February 4, 2005)

    

    
      


       

       

      Whereas, CTS Corporation (the
"Company") maintains the CTS Corporation Pension Plan (the "Merged Plan") for
the benefit of its eligible employees;

    

    
       

      Whereas, the Merged Plan has
been amended and restated effective May 1, 2006 and most recently dated February
4, 2005;

    

    
       

      Whereas, under section 9.1 of
the Merged Plan, the Company reserves the right to amend, modify, suspend, or
terminate the Merged Plan at any time by resolution of the Board of Directors;
and

    

    
       

      Whereas, the Electromechanical
Division of the Company maintains the CTS Corporation Retirement Plan as adopted
by the Electromechanical Division (the "Electromechanical Division Plan") (as
amended and restated effective March 1, 2005 and most recently dated February 4,
2005);

    

    
       

      Whereas, the Company maintains
the CTS Corporation Retirement Plan, (the "Corporate Plan") (as amended and
restated effective March 1, 2005 and most recently dated February
4, 2005);

    

    
       

      Whereas, effective December
31, 2008, the Company will merge the Electromechanical Division Plan and the
Corporate Plan into the Merged Plan;

    

    
       

      Whereas, the assets and
liabilities of the Electromechanical Division Plan and the Corporate Plan will
be transferred to the Merged Plan on or about December
31,2008;

    

    
       

      Whereas, under section 9.1 of
the Merged Plan, the Company reserves the right to amend, modify, suspend, or
terminate the Merged Plan at any time by resolution of the Board of Directors;
and

    

    
       

      Whereas, the Company desires
to amend the Merged Plan to reflect the merger and make an amendment to bring
the Merged Plan into documentary compliance.

    

    
       

      Now,
therefore, the Merged
Plan is amended as follows, effective December 31, 2008, unless otherwise
provided:

    

    
       

      
        	
                 1.
      

              	
                Effective
      as of December 31, 2008, Appendix E to the Merged Plan shall be
      established and shall consist of the pre-merger Electromechanical Plan
      document (as amended and restated effective March 1, 2005 and most
      recently dated February 4, 2005) and shall represent a complete set of
      provisions applicable to employees and participants to which Appendix E
      applies.

              


      

    

    
       

      
        	
                2.  

              	
                Effective
      as of December 31,2008, Appendix F to the Merged Plan shall be
      established and shall consist of the pre-merger Corporate Plan
      document (as amended and restated effective March 1, 2005 and most
      recently dated February 4, 2005) and shall represent a complete set
      of provisions applicable to employees and participants to which Appendix
      F applies.

              


      

    

    
       

        
3.  Section
1.1 of the Merged Plan is amended in its entirety as follows:

    

    
      


       

      "1.1
Establishment of the Plan

       

    

    
      
        	
                (a)  

              	
                On
      August 13, 1957, CTS Corporation established a pension plan, and as may
      be amended from time to time, was known as the "CTS Corporation
      Salaried Employees' Pension Plan" (hereinafter referred to as the
      "Plan").

              


      

    

    
       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      
        	
                (b)  

              	
                The
      Company, through its Resistor Network Division, also maintains the CTS
      Corporation Retirement Plan as adopted by the Resistor Network Division
      (the "Resistor Network Division Plan"). The Company, through its Asheville
      Division, Electromechanical Group, further maintains the CTS
      Corporation Retirement Plan, as adopted by the Asheville Division,
      Electromechanical Group (the "Asheville Division Plan"). The Resistor
      Network Division Plan and the Asheville Division Plan was merged into
      the Plan as of December 31, 2002. The assets and liabilities of the
      Resistor Network Division Plan and the Asheville Division Plan were merged
      into this Plan at such time. The post-merger surviving plan was renamed
      the CTS Corporation Pension Plan (the "Plan," effective December 31,
      2002), and applies to certain salaried and hourly employees who satisfy
      the requirements for
participation.

              


      

    

    
       

      
        	
                 (c
      )   

              	
                The
      Company, through its Electromechanical Division, also maintains the CTS
      Corporation Retirement Plan as adopted by the Electromechanical Division
      (the "Electromechanical Division Plan"). The Company, further maintains
      the CTS Corporation Retirement Plan (the "Corporate Plan"). The
      Electromechanical Division Plan and the Corporate Plan will be merged
      into this Plan as of December
      31, 2008. The assets and liabilities of the Electromechanical
      Division Plan and the Corporate Plan will be merged into this Plan at
      such time. The post-merger Plan applies to certain salaried and hourly
      employees who satisfy the requirements for
      participation.

              


      

    

    
       

      Effective
as of the 2008 merger, the Merged Plan document shall contain new Appendix E,
which shall be the prior Electromechanical Division Plan document and shall
represent a complete set of provisions applicable to employees and participants
to which Appendix E applies. Also effective as of the merger, the Merged Plan
document shall contain new Appendix F, which shall be the prior Corporate Plan
document and shall represent a complete set of provisions applicable to
employees and participants to which Appendix F applies.

    

    
       

      Notwithstanding
the foregoing, the Merged Plan contained in this document and Appendix A through
F is intended to be a "single plan" as such term is defined IRS regulation
section 1.414(l)-l(b)(l). All of the assets of the Merged Plan shall be
available to provide benefits under the Merged Plan. In the discretion of the
Administrator, separate accounting may be maintained for various divisions of
the Company participating in the Merged Plan for purposes of cost allocation,
but separate accounting shall not be maintained for purposes of providing
benefit under the Merged Plan."

    

    
       

       4.   Section
1.4 will be added to the Merged Plan as follows:

    

    
       

      "1.4
Appendices to the Plan

       

    

    
      
        	
                (a)  

              	
                Effective
      December 31, 2002, the Plan document shall contain Appendix C which shall
      consist of the prior plan document for the Resistor Network Division Plan
      (as amended and restated effective December 8, 1994 and most
      recently dated June 12, 2002). Appendix A shall represent a complete
      set of provisions for employees and participants to which the
      Appendix applies.

              


      

    

    
       

      
        	
                (b)  

              	
                Effective
      December 31, 2002, the Plan document shall contain Appendix D which
      shall consist of the prior plan document for the Asheville Division Plan
      (as amended and restated effective December 8, 1994 and most recently
      dated June 12, 2002). Appendix B shall represent a complete set of
      provisions for employees and participants to which the Appendix
      applies."

              


      

    

    
       

      
        	
                (c)  

              	
                Effective
      December 31, 2008 the Plan document shall contain Appendix E
      which shall consist of the prior plan document for the
      Electromechanical Division Plan (as amended and restated effective March
      1, 2005 and most recently dated February 5, 2005). Appendix E shall
      represent a complete set of provisions for employees and participants to
      which the Appendix applies.

              


      

    

    
       

      
        	
                (d)  

              	
                Effective
      December 31, 2008, the Plan document shall contain Appendix F
      which. shall consist of the prior plan document for the Corporate
      Plan (as amended and restated effective March 1, 2005 and most recently
      dated February 5, 2005). Appendix F shall represent a complete set of
      provisions for employees and participants to which the Appendix
      applies.

              


      

    

    
       

      5.   Section
1.1 of Appendix E to the Merged Plan shall be amended in its entirety as
follows:

    

    
       

      "1.1
Establishment of the Plan.

    

    
       

      Effective
July 1, 1950, the Electromechanical Division of CTS Corporation (the "Employer")
established the CTS Corporation Retirement Plan as adopted by the
Electromechanical Division (hereinafter referred to as the "Electromechanical
Division Plan") for the benefit of its hourly employees.

    

    
       

      The
Electromechanical Division Plan was amended and restated effective December 8,
1994 to reflect amendments required by GUST (the Uruguay Round Agreements Act,
Pub. L. 103-465; the Uniformed Services Employment and Reemployment Rights Act
of 1994, Pub. L. 103-353; the Small Business Job Protection Act of 1996, Pub. L.
104-188; the Taxpayer Relief Act of 1997, Pub. L. 105-34; the Internal Revenue
Service Restructuring and Reform Act of 1998, Pub. L. 105-206; the Community
Renewal Tax Relief Act of 2000, Pub. L. 106-554), and other changes deemed
necessary by the Employer. Certain amendments adopted herein with effective
dates of January 1,2002 and, thereafter, reflect provisions of the Economic
Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"). The amendments for
EGTRRA are intended as good faith compliance with the requirements of EGTRRA and
are to be construed in accordance with EGTRRA and guidance issued
thereunder.

    

    
       

      The
Company also maintains the CTS Corporation Pension Plan. Effective as of
December 31, 2008, the Electromechanical Division Plan shall be merged into the
CTS Corporation Pension Plan, and the assets and liabilities of the
Electromechanical Division Plan will be merged into the CTS Corporation Pension
Plan. The provisions of the post-merger Plan that apply to employees of the
Electromechanical Division of CTS Corporation are within this Plan document,
which shall be Appendix E to the post-merger Merged Plan effective 
December 31, 2008."

    

    
       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      6.   Section
1.1 of Appendix F to the Merged Plan shall be amended in its entirety as
follows:

    

    
       

      "1.1
Establishment of the Plan

    

    
       

      On August
16, 1950, CTS Corporation (the "Employer") established the CTS Corporation
Retirement Plan (the "Corporate Plan"), which Corporate Plan has been amended
and restated from time to time.

    

    
       

      The
Corporate Plan was amended and restated effective December 8, 1994 to reflect
amendments required by GUST (the Uruguay Round Agreements Act, Pub. L. 103-465;
the Uniformed Services Employment and Reemployment Rights Act of 1994, Pub. L.
103-353; the Small Business Job Protection Act of 1996, Pub. L. 104-188; the
Taxpayer Relief Act of 1997, Pub. L. 105-34; the Internal Revenue Service
Restructuring and Reform Act of 1998, Pub. L. 105-206; the Community Renewal Tax
Relief Act of 2000, Pub. L. 106-554), and other changes deemed necessary by the
Employer. Certain amendments adopted herein with effective dates of January
1,2002 and, thereafter, reflect provisions of the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). The amendments for EGTRRA are intended as
good faith compliance with the requirements of EGTRRA and are to be construed in
accordance with EGTRRA and guidance issued thereunder.

    

    
       

      The
Company also maintains the CTS Corporation Pension Plan. Effective as of
December 31, 2008, the Plan shall be merged into the CTS Corporation Pension
Plan, and the assets and liabilities of the Corporate Plan will be merged into
the CTS Corporation Pension Plan. The provisions of the post-merger Plan that
apply to employees covered by the Corporate Plan are within this Plan document,
which shall be Appendix F to the post-merger Merged Plan effective December 31,
2008."

    

    
       

      
        	
                7.

              	
                Section
      2. l(g) of each of Appendix C, Appendix D, Appendix E, and Appendix F of
      the Merged Plan shall be amended to add the following new subparagraph
      (iii), effective as of January
1,2004:

              


      

    

    
       

      "(iii) In
accordance with the Pension Funding Equity Act of 2004 ("PFEA") and with Code
Section 415(b)(2)(E)(ii) as in effect prior to the Pension Protection Act
of 2006, the interest rate of 5.5 percent shall be substituted for the
Applicable Interest Rate for Plan Years beginning in 2004 and 2005, in the case
of a payment form subject to the minimum present value requirements of Code
section 417(e)(3); provided however, that the transition rule of PFEA
Section 101 (d)(3) and IRS Notice 2004-78 shall be applied. For Plan Years
beginning on or after January 1, 2006, in the case of a payment form
subject to the minimum present value requirements of Code
section 417(e)(3), the interest rate used to the determine the equivalent
straight
life annuity shall be 5.5 percent or such higher interest rate as described
in Code section 415(b)(2)(E)(ii)."

    

    
       

      
        	
                8.

              	
                Section
      7.5(b) of the Merged Plan is amended to add the following as a new
      paragraph 4, effective as of January
  1, 2004:

              


      

    

    
       

      
        	
              	
                       
      "(4)

              	
                Applicable
      Interest Rate: Notwithstanding anything herein to the contrary, in
      accordance with the Pension Funding Equity Act of 2004 ('TFEA") and with
      Code Section 415(b)(2)(E)(ii) as in effect prior to the Pension Protection
      Act of 2006, the interest rate of 5.5 percent shall be substituted for the
      Applicable Interest Rate for Plan Years beginning in 2004 and 2005, in the
      case of a payment form subject to the minimum present value requirements
      of Code section 417(e)(3); provided however, that the transition rule of
      PFEA Section 101(d)(3) and IRS Notice 2004-78 shall be applied. For Plan
      Years beginning on or after January 1, 2006, in the case of a payment form
      subject to the minimum present value requirements of Code section
      417(e)(3), the interest rate used to the determine the equivalent straight
      life annuity shall be 5.5 percent or such higher interest rate as
      described in Code section
415(b)(2)(E)(ii)."

              


      

    


    
      


    

    
      **********

    

    
      


       

      In Witness Whereof, CTS
Corporation has caused this Amendment to be signed on its behalf and attested by
its duly authorized officers this 23rd day of December,
2008.

    

    
      


       

      
        
          	 	 	 	
                   CTS
      Corporation

                   

                	 
	
                  /s/
      Richard G. Cutter

                	 	 	
                  /s/
      James L. Cummins

                	 
	
                  Name:
      Richard G. Cutter

                	 	 	
                  Name:
      James L. Cummins

                	 
	
                  Its
      Secretary

                	 	 	
                  Its
      Sr. Vice President, Administration

                	 


        



    

    
                                                                                            
(Corporate Seal)


       

    


    
      
         


      

      
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