Document:

Exhibit 10.bb

    CTS
      Corporation

    Form
      10-K 2005

    
      

      

    

    EXHIBIT
      (10)(bb)

     

     

    DIRECTOR
      AND NAMED EXECUTIVE OFFICER COMPENSATION 

     

    Director
      Compensation 

    

    Employee
      directors receive no additional compensation for serving on the Board of
      Directors or Board Committees. The non-employee director fees established by
      the
      Board for 2005 are as follows: annual board retainer — $25,000; annual retainer
      for each Audit Committee member — $5,000; annual retainer for each Compensation
      Committee member — $4,000: annual retainer for each Finance and Nominating and
      Governance Committee member — $3,000; annual retainer for each Leadership
      Continuity Committee member — $4,000; additional annual retainer for Audit
      Committee Chairman — $5,000; additional annual retainer for Compensation
      Committee Chairman — $4,000; additional annual retainer for Finance and
      Nominating and Governance Chairman — $3,000; additional annual retainer for
      Leadership Continuity Committee Chairman — $4,000; meeting fee for each Board or
      Committee Meeting — $1,500. All committee meetings, including special meetings
      called by the committee chairman, are compensated at the regular meeting fee
      rate. Special activity by the committee chairman, as well as any special
      activity by another committee member that is requested or approved by the
      committee chairman, is also compensated at the regular meeting fee rate.
      Non-employee directors are reimbursed by the corporation for reasonable travel
      expenses related to their performance of services and for director education
      programs. 

    

    In
      1990,
      CTS adopted the Stock Retirement Plan for Non-Employee Directors. Under that
      plan, a deferred stock unit account was established for each non-employee
      director. Through January 2004, 800 common stock units and additional units
      representing dividends on CTS common stock paid were credited annually to each
      non-employee director’s account. When a non-employee director retires from the
      Board, he or she receives one share of CTS common stock for each deferred stock
      unit credited to his or her account. On December 1, 2004, the Board of Directors
      amended the plan to preclude crediting any additional units to the deferred
      stock unit accounts. On December 1, 2004, each non-employee director received
      a
      grant of restricted stock units under the CTS Corporation 2004 Omnibus Long-term
      Incentive Plan equivalent to the number of deferred stock units which would
      have
      been credited to the director for 2004 service under the Stock Retirement Plan
      for Non-Employee Directors. Under the terms of this award, each non-employee
      director will receive one share of CTS common stock for each restricted stock
      unit upon retirement from the Board. 

    

    In
      2002,
      the Board established a $30,000 annual stock-based compensation target for
      each
      non-employee director. For 2006, the stock-based compensation target was
      achieved by awarding each non-employee director 2,500 restricted stock units
      under the CTS Corporation 2004 Omnibus Long-term Incentive Plan. The awards
      were
      granted on December 7, 2005 and became distributable on January 10, 2006 absent
      a deferral election by the non-employee director. Upon distribution, one share
      of CTS common stock for each restricted stock unit is transferred to the
      non-employee director. A prototype non-employee director restricted stock unit
      agreement is filed herewith. 

    

    Named
      Executive Officer Compensation

    

    CTS
      has
      an employment agreement with Donald K. Schwanz which has been previously filed
      with the Commission as an exhibit to the corporation’s Annual Report on Form
      10-K and an employment agreement with Vinod M. Khilnani which has been
      previously filed as an exhibit to the corporation’s Quarterly Report on Form
      10-Q for the quarter ended October 2, 2005. CTS does not have written employment
      agreements with the other named executive officers. Annual salary for each
      named
      executive officer is determined by the Compensation Committee of the Board
      of
      Directors. The annual salaries for named executive officers set in 2005 were
      as
      follows: Donald K. Schwanz — $749,280; Vinod M. Khilnani — $350,000; Donald R.
      Schroeder — $309,800; James L. Cummins — $238,300; Richard G. Cutter — $233,700.

    

    Each
      named executive officer participates in the CTS Corporation Management Incentive
      Plan which has been previously filed with the Commission as an exhibit to CTS’
Annual Report on Form 10-K. The plan provides cash bonuses determined by the
      Compensation Committee, based on achievement of annual performance goals
      established by the Committee. 

    

    The
      Compensation Committee has historically awarded stock-based compensation to
      named executive officers on an annual basis. In 2005, the Compensation Committee
      awarded the named executive officers restricted stock units and incentive stock
      options under the CTS Corporation 2005 Omnibus Long-term Incentive Plan.
      Restricted stock unit agreements are filed herewith. Prototype incentive stock
      option agreements have been previously filed with the Commission as an exhibit
      to the corporation’s Annual Report on Form 10-K.

    

    Mr.
      Schwanz receives a quarterly perquisite allowance of $4,300. Each other named
      executive officer receives a quarterly perquisite allowance of $4,000. Mr.
      Schroeder receives an additional $6,700 per month cost-of-living allowance
      related to his relocation to Southern California as a result of his appointment
      as President of CTS Electronics Manufacturing Solutions, a strategic business
      unit of the corporation, during his first thirty-six months in this position.
      

    

    Each
      named executive officer has executed a change-in-control severance agreement
      which provides severance benefits only upon a change-in-control of CTS.
      Prototype change-in-control severance agreements have been previously filed
      with
      the Commission as an exhibit to the corporation’s Annual Report on Form 10-K. On
      September 30, 2005, CTS issued a notice of non-renewal of these agreements.
      As a
      result, these agreements will expire on December 31, 2007.Exhibit 10h(iv)

    
      

    

    Exhibit
      10h (iv)

    
      

      RESTRICTED
        STOCK AGREEMENT

      (Under
        the Kaman Corporation

      2003
        Stock Incentive Plan)

      

      THIS
        AGREEMENT, made and entered into as of the ___ day of _______, 20___, by
        and
        between KAMAN CORPORATION, a Connecticut corporation, with its principal
        office
        in Bloomfield, Connecticut (the "Corporation"), and _________________, (the
        "Participant");

      

      W
        I T N E
        S S E T H :

      

      WHEREAS,
        it has been determined that the Participant, who currently serves as _________
        of the Corporation, is an Eligible Person under the Corporation's 2003 Stock
        Incentive Plan (the "Plan"); and

      

      WHEREAS,
        effective _________, the Corporation has granted a Restricted Stock Award
        to the
        Participant pursuant to the Plan and subject to the terms and conditions
        set
        forth in this Agreement;

      

      NOW
        THEREFORE, in consideration of the foregoing and of the mutual covenants
        and
        agreements herein contained, the parties agree as follows:

      

      1. Restricted
        Stock Award.

      

      (a) Subject
        to the terms and conditions of this Agreement, _________________ (_____)
        shares
        of the Common Stock of the Corporation (the "Restricted Shares") shall be
        transferred to the Participant as additional compensation for services rendered
        to the Corporation or one of its Subsidiaries. The Restricted Shares may
        be
        subject to forfeiture during a specified time period, as more particularly
        described in Sections 2 and 3 of this Agreement.

      

      (b)
        In
        order for the transfer of Restricted Shares to occur, each Participant must
        execute and deliver a copy of this Agreement to the Executive Vice President
        and
        Chief Financial Officer of the Corporation at the Corporation's offices in
        Bloomfield, Connecticut within sixty (60) days of the date of this Agreement.
        If
        the Restricted Shares are subject to forfeiture, such executed copy of this
        Agreement must be accompanied by the attached stock powers (in accordance
        with
        Section 3 (e) hereof). Promptly thereafter, certificates representing the
        Restricted Shares subject to forfeiture shall be issued and held for the
        Participant by the Executive Vice President and Chief Financial Officer of
        the
        Corporation (the “Custodian”) until the end of the applicable Installment
        Restriction Period described in Section 2. Restricted Shares not subject
        to
        forfeiture shall be promptly issued and delivered to the Participant.

      

      
        
          
          

        

        
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      (c) Effective
        upon the date of delivery to the Participant, or to the Custodian, as indicated
        in subsection (b) above, of certificates for the Restricted Shares registered
        in
        the Participant's name, the Participant will be a holder of record of the
        Restricted Shares and will have, subject to the terms and conditions of this
        Agreement, all rights of a shareholder with respect to such shares including
        the
        right to vote such shares at any meeting of shareholders of the Corporation
        at
        which such shares are entitled to vote and the right to receive all
        distributions of any kind paid with respect to such shares. With respect
        to an
        Employee, if distributions are paid in the form of Common Stock, any such
        shares
        will be delivered to and held by the Custodian, if subject to forfeiture,
        or the
        Participant if not subject to forfeiture, and will be considered “Restricted
        Shares.”

      

      2. Lapse
        of Restrictions.
        [This
        Section 2 shall only apply if the Restricted Shares are subject to forfeiture
        and otherwise shall be deleted but marked “Intentionally Omitted.”]

      

      (a) All
        restrictions set forth in Section 3 below will lapse in their entirety with
        respect to twenty percent (20%) of the Restricted Shares on each of the
        following dates:

      

      ___________,
        20__ 

      ___________,
        20__ 

      ___________,
        20__ 

      ___________,
        20__ 

      ___________,
        20__ 

      

      Each
        such
        period is called an "Installment Restriction Period." Installment Restriction
        Periods are collectively referred to as the "Restriction Period." Subject
        to the
        following provisions, Restricted Shares subject to an Installment Restriction
        Period shall, as of the end of that Installment Restriction Period, be free
        of
        further restrictions (“vested”).

      

      (b) As
        soon
        as reasonably practicable after the end of an Installment Restriction Period,
        the Custodian will deliver to the Participant the certificate or certificates
        for the vested shares subject to that Installment Restriction Period; provided,
        however, that the Custodian shall not issue such shares to the Participant
        until
        the Participant has either (i) paid, or (ii) made provisions satisfactory
        to the
        Committee for the payment of, all applicable tax withholding
        obligations.

      

      (c) If
        the
        Participant's employment with or other service to the Corporation or a
        Subsidiary terminates during the Restriction Period because of death or
        Disability, effective on the date of that event all restrictions set forth
        in
        Section 3 will lapse in their entirety with respect to all of the then
        Restricted Shares and certificates for the Restricted Shares will be delivered
        in accordance with Section 2(b).

      

      3. Restrictions.
        [This
        Section 3 shall only apply if the Restricted Shares are subject to forfeiture
        and otherwise shall be deleted but marked “Intentionally Omitted.”] To the
        extent that the Restricted Shares remain subject to restrictions set forth
        in
        this Section 3, such restrictions shall lapse in the event of a Change in
        Control, as defined and subject to the conditions set forth in the
        Plan.

       

      
        
          
          

        

        
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      (a) Except
        as
        provided in Sections 2(c) and 3(b), if the Participant's employment with
        or
        other service to the Corporation or a Subsidiary terminates during the
        Restriction Period, then effective upon the date of termination, all Restricted
        Shares which are not vested shall automatic-ally be forfeited to the
        Corporation. Employment or other service will not be deemed to have terminated
        for this purpose by reason of a leave of absence approved by the
        Committee.

      

      (b) If
        the
        Participant retires from active service with the Corporation or a Subsidiary
        under the terms of the Kaman Corporation Employees' Pension Plan during the
        Restriction Period, effective upon retirement the Restricted Shares which
        are
        not vested will automatically be forfeited to the Corporation; except that,
        the
        Committee may, in its sole discretion, allow all restrictions set forth in
        this
        Section 3 to lapse in their entirety with respect to the Restricted Shares
        which
        thereupon shall be vested. If the restrictions are allowed to lapse,
        certificates for the vested shares will be delivered in accordance with section
        2(b).

      

      (c) None
        of
        the Restricted Shares, nor the Participant's interest in any of the Restricted
        Shares, may be encumbered, sold, assigned, transferred, pledged or otherwise
        disposed of at any time during the Restriction Period. In the event of any
        such
        action, all then Restricted Shares shall automatically be forfeited to the
        Corporation effective upon the date of such event. The Participant will repay
        to
        the Corporation all dividends, if any, paid on or after the date of the event
        with respect to the forfeited shares.

      

      (d) If
        the
        Participant at any time forfeits Restricted Shares pursuant to this Agreement,
        the certificate or certificates for such Restricted Shares will be delivered
        by
        the Custodian to the Corporation. All of the Participant's rights to and
        interest in the Restricted Shares shall terminate upon forfeiture without
        payment of consideration.

      

      (e) The
        Participant shall sign and deliver to the Corporation the stock powers attached
        hereto relating to the Restricted Shares. If Restricted Shares are forfeited
        under this Agreement, the Corporation shall direct the Transfer Agent and
        Registrar of the Corporation's Common Stock to make appropriate entries upon
        their records showing the cancellation of the certificate or certificates
        for
        the Restricted Shares and to return the shares represented thereby to the
        Corporation. The stock power gives the Custodian the authority to take any
        action necessary to affect the transfer of shares to the Corporation. The
        stock
        power or powers will be returned to the Participant upon expiration of the
        applicable Installment Restriction Period.

      

      (f) The
        Committee shall make all determinations in connection with this Agreement,
        including determinations as to whether an event has occurred resulting in
        the
        forfeiture of or lapse of restrictions on Restricted Shares and all such
        determinations of the Committee shall be final and conclusive.

      

      
        
          
          

        

        
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      4. Appointment
        Of Agent.
        By
        executing this Agreement, the Participant, if the Restricted Shares are subject
        to forfeiture, irrevocably nominates, constitutes and appoints the Custodian
        as
        his agent and attorney-in-fact for purposes of surrendering or transferring
        the
        Restricted Shares to the Corporation upon any forfeiture required or authorized
        by this Agreement. This power is intended as a power coupled with an interest
        and shall survive the Participant's death. In addition, it is intended as
        a
        durable power and shall survive the Participant's Disability.

      

      5. No
        Employment Rights.
        No
        provision of this Agreement shall:

      

      (a) confer
        or
        be deemed to confer upon the Participant any right to continue in the employ
        of
        the Corporation or any Subsidiary or in any way affect the right of the
        Corporation or any Subsidiary to dismiss or otherwise terminate the
        Participant's employment at any time for any reason with or without cause,
        or

      

      (b) be
        construed to impose upon the Corporation or any Subsidiary any liability
        for any
        forfeiture of Restricted Shares which may result under this Agreement if
        the
        Participant's employment is so terminated, or

      

      (c) affect
        the Corporation's right to terminate or modify any contractual relationship
        with
        a Participant, who is not an employee of the Corporation or a
        Subsidiary.

      

      6. No
        Liability For Business Acts Or Omissions. 

      

      (a) The
        Participant recognizes and agrees that the Board or the officers, agents
        or
        employees of the Corporation, including the Custodian, in their conduct of
        the
        business and affairs of the Corporation, may cause the Corporation to act,
        or to
        omit to act, in a manner that may, directly or indirectly, prevent the
        Restricted Shares from vesting under this Agreement. No provision of this
        Agreement shall be interpreted or construed to impose any liability upon
        the
        Corporation, the Board or any officer, agent or employee of the Corporation,
        including the Custodian, for any forfeiture of Restricted Shares that may
        result, directly or indirectly, from any such action or omission.

      

      (b) In
        the
        event of recapitalization, stock split, stock dividend, divisive reorganization
        or other change in capitalization affecting the Corporation's shares of Common
        Stock, an appropriate adjustment will be made in respect of the Restricted
        Shares. Any new or additional or different shares or securities issued as
        the
        result of such an adjustment with respect to vested shares will be delivered
        to
        the Participant. Any new or additional or different shares or securities
        issued
        as the result of such an adjustment with respect to Restricted Shares that
        are
        not vested will be delivered to and held by the Custodian and will be deemed
        included within the term "Restricted Shares."

      

      7. Capitalized
        Terms.
        All
        capitalized terms not defined herein shall have the meaning ascribed to them
        in
        the Plan.

      

      
        
          
          

        

        
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      8. Interpretation.
        This
        Agreement shall at all times be interpreted, administered and applied in
        a
        manner consistent with the provisions of the Plan. In the event of any
        inconsistency between the terms of this Agreement and the terms of the Plan,
        the
        terms of the Plan shall control and the Plan is incorporated herein by
        reference.

      

      9. Amendment;
        Modification; Waiver.
        No
        provision of this Agreement may be amended, modified or waived unless such
        amendment, modification or waiver shall be authorized by the Committee and
        shall
        be agreed to in writing by the Participant.

      

      10. Complete
        Agreement.
        This
        Agreement contains the entire Agreement of the parties relating to the subject
        matter of this Agreement and supersedes any prior agreements or understandings
        with respect thereto.

      

      11. Agreement
        Binding.
        This
        Agreement shall be binding upon and inure to the benefit of the Corporation,
        its
        successors and assigns and the Participant, his or her heirs, devisees and
        legal
        representatives.

      

      12. Legal
        Representative.
        In the
        event of the Participant's death or a judicial determination of his or her
        incompetence, reference in this Agreement to the Participant shall be deemed
        to
        refer to his or her legal representative, heirs or devisees, as the case
        may
        be.

      

      13. Business
        Day.
        If any
        event provided for in this Agreement is scheduled to take place on a day
        on
        which the Corporation's corporate offices are not open for business, such
        event
        shall take place on the next succeeding day on which the Corporation's corporate
        offices are open for business.

      

      14. Titles.
        The
        titles to sections or paragraphs of this Agreement are intended solely for
        convenience and no provision of this Agreement is to be construed by reference
        to the title of any section or paragraph.

      

      15. Notices.

      

      (a) Any
        notice to the Corporation pursuant to any provision of this Agreement will
        be
        deemed to have been delivered when delivered in person to the Corporation
        or
        when deposited in the United States mail, addressed to the Secretary of the
        Corporation at the Corporation's corporate offices, or such other address
        as the
        Corporation may from time to time designate in writing.

      

      (b)
        Any
        notice to the Participant pursuant to any provision of this Agreement will
        be
        deemed to have been delivered when delivered to the Participant in person
        or
        when deposited in the United States mail, addressed to
        the
        Participant at
        the
        address on the shareholder records of the Corporation or such other address
        as
        he or she may from time to time designate in writing.

      

      
        
          
          

        

        
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      IN
        WITNESS WHEREOF, the parties have caused this Agreement to be executed as
        of the
        date first written above.

      

      

        
          	
                  Participant 

                	 	 	
                  KAMAN
                    CORPORATION

                
	
                   

                   

                	 	
                   

                  By

                	
                   

                   

                
	
                  Dated:
                    

                	 	 	
                  Its

                

        

      

       

       

       

       

       

       

       

      
        
          
          

        

        
          6

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