Document:

EX-4.3

SECOND AMENDMENT TO RIGHTS AGREEMENT

THIS SECOND AMENDMENT TO RIGHTS AGREEMENT (the “Amendment”) is made as of November 30, 2006,
between The Allied Defense Group, Inc., formerly known as Allied Research Corporation, a Delaware
corporation (the “Company”), and Mellon Investor Services, LLC, a New Jersey limited liability
company (the “Rights Agent”).

WHEREAS, the Company and the Rights Agent are parties to that certain Rights Agreement dated
as of June 6, 2001, as amended by that certain First Amendment To Rights Agreement dated as of June
15, 2006 (collectively the “Original Rights Agreement”);

WHEREAS, Section 26 of the Original Rights Agreement provides, in part, that for so long as
the Rights (as defined in the Agreement) are redeemable, the Agreement may be supplemented or
amended without the approval of holders of the Rights;

WHEREAS, the Rights are currently redeemable; and

WHEREAS, the Board of Directors of the Company has determined in good faith that the
amendments to the Agreement set forth herein are desirable and, pursuant to Section 26 of the
Agreement, has duly authorized such amendments to the Agreement.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Rights Agent hereby agree as follows:

1. DEFINITIONS. Except as otherwise set forth in this Amendment, each capitalized term used
in this Amendment shall have the meaning for such term set forth in the Original Rights Agreement.

2. DEFINITION OF AGREEMENT. From and after the date hereof, all references in the Original
Rights Agreement to the “Agreement” shall mean and refer to the Original Rights Agreement, as
modified by this Amendment.

3. DEFINITION OF ACQUIRING PERSON. Section 1(a) of the Original Rights Agreement is hereby
amended by deleting all references therein to “20%” and replacing them with “25%.”

4. COUNTERPARTS. This Amendment may be executed in one or more counterparts, each of which
shall constitute an original and all of which together shall constitute but one original;
provided, however, this Amendment shall not be effective unless and until signed by the Company and
the Rights Agent.

5. GOVERNING LAW. This Amendment shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by and construed in accordance with
the internal laws of Delaware applicable to contracts to be made and performed entirely within
Delaware; provided, however, that all provisions regarding the rights, duties and obligations of
the Rights Agent shall be governed by and construed in accordance with the laws of the State of New
York applicable to contracts made and to be performed entirely within such State.

6. SEVERABILITY. If any term, provision, covenant or restriction of this Amendment is held
by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Amendment shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.

7. EFFECTIVE DATE. This Amendment shall become effective as of the date first written
above.

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and
attested as of the date first written above.

THE ALLIED DEFENSE GROUP, INC.

By:

John J. Marcello,

President and Chief Executive Officer

MELLON INVESTOR SERVICES, LLC,

as Rights Agent

By:Exhibit 10a

    

      EXHIBIT
        10(a)

       

      EMPLOYMENT
        AGREEMENT

       

      This
        EMPLOYMENT AGREEMENT (“Agreement”)
        is
        entered into as of October 1, 2006 (the “Effective
        Date”)
        between CTS Corporation,
        an
        Indiana corporation (the “Company”),
        and
        Donald K. Schwanz (“Executive”).

       

      RECITALS:

       

      WHEREAS,
        the Company desires to employ Executive as the Chairman of the Board of
        Directors of the Company (the “Board”),
        President and Chief Executive Officer of the Company for a specified period,
        and
        Executive desires to accept employment as the Chairman of the Board, President
        and Chief Executive Officer of the Company during such period;

       

      WHEREAS,
        as of the Effective Date, the Company shall employ Executive on the terms
        and
        conditions set forth in this Agreement, and Executive shall be retained and
        employed by Company to perform such services under the terms and conditions
        of
        this Agreement;

       

      WHEREAS,
        the Company desires that Executive perform consulting services for a period
        of
        time following his employment and Executive desires to agree to perform such
        services under the terms and conditions of this Agreement.

       

      NOW,
        THEREFORE, in consideration of the mutual covenants contained herein and
        other
        good and valuable consideration, the receipt and sufficiency of which are
        hereby
        acknowledged, the parties hereto agree as follows:

       

      	1.  	
              Certain
                Definitions.
                Certain words or phrases with initial capital letters not otherwise
                defined herein shall have the meanings set forth in paragraph 11
                hereof.

            

       

      	2.  	
              Employment.
                The Company shall employ Executive, and Executive accepts employment
                with
                the Company as of the Effective Date, upon the terms and conditions
                set
                forth in this Agreement for the period beginning on the Effective
                Date and
                ending as provided in paragraph 5 hereof (the “Employment
                Period”).

            

       

      	3.  	
              Position
                and Duties.

            

       

      	(a)  	
              During
                the Employment Period, Executive shall serve as the Chairman of the
                Board,
                President and Chief Executive Officer of the Company, or such other
                position as the Board shall designate, subject to paragraph 3(e)
                below, and shall have the normal duties, responsibilities and authority
                of
                an executive serving in the position held, subject to the power of
                the
                Board to expand or limit such duties, responsibilities and authority,
                either generally or in specific
                instances.

            

       

      	(b)  	
              Executive
                shall be nominated to, and shall serve as a member of, the Board
                during
                the Employment Period, subject to election by the Company’s
                stockholders.

            

       

      	(c)  	
              Executive
                shall report to the Board.

            

       

      	(d)  	
              During
                the Employment Period, Executive shall devote Executive’s best efforts and
                Executive’s full business time and attention (except for permitted
                vacation periods and reasonable periods of illness or other incapacity)
                to
                the business and affairs of the Company, its subsidiaries and affiliates.
                Executive shall perform Executive’s duties and responsibilities to the
                best of Executive’s abilities in a diligent, trustworthy, businesslike and
                efficient manner.

            

       

      
        
           

          
          

        

        
          A-1

          
            

          

        

        
          
          

        

      

      

      	(e)  	
              As
                directed by the Board from time to time, Executive shall execute
                certain
                duties related to Chief Executive Officer successor planning. Nothing
                in
                this Agreement shall be construed to prohibit or otherwise limit
                the
                Company’s ability to appoint a successor Chairman of the Board, President
                or Chief Executive Officer (in each case, a “Successor
                CEO”)
                during the Employment Period, and Executive acknowledges that he
                may be
                replaced as Chairman of the Board, President and/or Chief Executive
                Officer of the Company at any time during the Employment Period or
                thereafter. If the Company appoints a Successor CEO, Executive
                acknowledges that he will thereafter no longer serve in the capacity
                of
                the position so replaced but will continue to perform specified reasonable
                transition services for the Company as may be determined by the Board;
                provided, however, that such transition services shall be consistent
                with
                those of a senior executive of the Company. A change in Executive’s title
                or offices or a diminution of Executive’s duties and responsibilities,
                position or status with the Company, which change or diminution is
                consistent with this paragraph 3(e), shall not constitute a
                termination, actual or constructive, of Executive’s employment and shall
                not constitute a basis for Good Reason
                hereunder.

            

       

      	(f)  	
              Executive
                shall perform Executive’s duties and responsibilities principally in the
                Elkhart, Indiana area.

            

       

      	(g)  	
              Upon
                termination of the Employment Period for any reason other than death,
                Executive agrees to resign from: (i) all offices of the Company to
                which he has been elected by the Board (or to which he has otherwise
                been
                appointed), (ii) from all directorships or offices of any entity that
                is a subsidiary of, or is otherwise related to or affiliated with,
                the
                Company, and (iii) from all administrative, fiduciary or other
                positions he may hold with respect to arrangements or plans for,
                of or
                relating to the Company.

            

       

      	4.  	
              Compensation
                and Benefits.

            

       

      	(a)  	
              Salary.
                The Company agrees to pay Executive a salary during the Employment
                Period
                in installments based on the Company’s practices as may be in effect from
                time to time. Executive’s initial salary shall be at the rate of $779,300
                per year (“Base
                Salary”).
                The Compensation Committee of the Board or the Board shall review
                Executive’s Base Salary from time to time and may, in its sole discretion,
                increase it.

            

       

      	(b)  	
              Annual
                Bonus.
                Executive will be eligible for an annual bonus based on the achievement
                of
                specified goals (as determined by the Compensation Committee of the
                Board
                or the Board) and Executive’s target opportunity under such annual bonus
                program will be no less than 75% of Executive’s annual Base
                Salary.

            

       

      	(c)  	
              Equity
                Awards.
                Executive will not receive equity award grants during the Employment
                Period unless otherwise determined by the Compensation Committee
                of the
                Board, in its sole discretion.

            

       

      	(d)  	
              Expense
                Reimbursement.
                The Company shall reimburse Executive for all reasonable business-related
                expenses incurred by Executive during the Employment Period in the
                course
                of performing Executive’s duties under this Agreement that are consistent
                with the Company’s policies in effect from time to time with respect to
                travel, entertainment and other business expenses, subject to the
                Company’s requirements applicable generally with respect to reporting and
                documentation of such expenses.

            

       

      	(e)  	
              Standard
                Executive Benefits Package.
                Executive shall be entitled during the Employment Period to participate,
                on the same basis as other executives of the Company, in the Company’s
                Standard
                Executive Benefits Package.
                The Company’s “Standard Executive Benefits Package” means those benefits
                (including insurance, vacation, perquisites and other benefits, but
                excluding, the granting 

            

       

      
        
           

          
          

        

        
          A-2

          
            

          

        

        
          
          

        

      

      of
        equity
        awards and, except as hereinafter provided in paragraph 7, any severance
        pay program or policy of the Company) for which substantially all of the
        executives of the Company are from time to time generally eligible, as
        determined from time to time by the Board.

       

      	(f)  	
              Retirement
                Benefits.
                Executive will participate in the CTS Corporation Pension Plan and
                the
                Individual Excess Benefit Retirement Plan adopted effective as of
                October 1, 2006, attached hereto as Exhibit A (the “SERP,”
                and collectively with the CTS Corporation Pension Plan, the “Plans”).
                No changes in the benefit formula or method of calculating same under
                the
                Plans after the Effective Date, which reduce benefits thereunder,
                will
                apply to Executive’s benefits under the Plans, except as otherwise agreed
                by Executive.

            

       

      	5.  	
              Employment
                Period.

            

       

      	(a)  	
              Except
                as hereinafter provided, the Employment Period shall continue until,
                and
                shall end upon the close of business on December 31,
                2007.

            

       

      	(b)  	
              Notwithstanding
                paragraph 5(a) above, the Employment Period shall end early upon the
                first to occur of any of the following
                events:

            

       

      	(i)  	
              Executive’s
                death;

            

       

      	(ii)  	
              the
                Company’s termination of Executive’s employment on account of
                Disability;

            

       

      	(iii)  	
              a
                Termination for Good Reason;

            

       

      	(iv)  	
              a
                Termination for Cause;

            

       

      	(v)  	
              a
                Termination without Cause; or

            

       

      	(vi)  	
              a
                Voluntary Termination.

            

       

      	6.  	
              Consulting
                Services.
                If the Employment Period ends pursuant to paragraph 5(a), 5(b)(iii),
                5(b)(v) or 5(b)(vi) above, beginning on the first day following the
                end of
                the Employment Period and continuing for eighteen months thereafter
                (the
                “Consulting
                Period”),
                Executive agrees that he shall be available to serve as a consultant
                on an
                as-needed basis not to exceed 45 hours per calendar quarter. Executive
                agrees that he will provide whatever consulting services are reasonably
                requested by the Company at such times and in such manner as the
                Company
                may direct in its sole discretion, provided that the Company shall
                not be
                obligated to request any such services. In exchange for Executive
                making
                himself available to provide such services in accordance with this
                paragraph 6, the Company shall pay to Executive, on the second
                Tuesday of the seventh calendar month following the Termination Date,
                a
                lump sum amount equal to $102,083.33 and
                following such payment date and during the remainder of the Consulting
                Period, Executive will be entitled to a monthly fee equal to $14,583.33
                payable on the second Tuesday of each consecutive calendar month.
                During
                the Consulting Period (a) Executive will be entitled to reimbursement
                for reasonable business expenses incurred in accordance with the
                procedures set forth in paragraph 4(d) hereof and (b) the
                obligations of Executive and the Company shall be governed by and
                determined in accordance with this paragraph and paragraphs 8 through
                23 of this Agreement.

            

       

      	7.  	
              Post-Employment
                Period Payments.

            

       

      	(a)  	
              At
                the end of the Employment Period for any reason, Executive shall
                cease to
                have any rights to salary, bonus, expense reimbursements (except
                as
                provided in paragraph 4(d) hereof) or other benefits and Executive
                (or his estate or beneficiaries) shall be entitled to (i) any Base
                Salary which has accrued but is unpaid, any reimbursable expenses
                pursuant
                to paragraph 4(d) hereof which 

            

       

      
        
           

          
          

        

        
          A-3

          
            

          

        

        
          
          

        

      

      have
        been
        incurred but are unpaid, and any unexpired vacation days which have accrued
        under the Company’s vacation policy but are unused, as of the end of the
        Employment Period, (ii) any plan benefits (including, without limitation,
        any payments pursuant to the Plans, settlement of any vested restricted stock
        units and any stock option exercise rights) which by their terms extend beyond
        the Termination Date (but only to the extent provided in any such benefit
        plan
        in which Executive has participated as an employee of the Company and excluding,
        except as hereinafter provided in paragraph 7, any severance pay program or
        policy of the Company) and (iii) any benefits to which Executive (or his
        estate or beneficiaries) is entitled under Part 6 of Subtitle B of Title
        I of
        the Employee Retirement Income Security Act of 1974, as amended (“COBRA”).
        In
        addition, Executive (or his estate or beneficiaries) shall be entitled to
        the
        additional benefits and amounts described in the succeeding
        subparagraphs of
        this
        paragraph 7, in the circumstances described in such
        subparagraphs.

       

      	(b)  	
              If
                the Employment Period ends pursuant to paragraph 5 hereof on account
                of a Termination for Cause or a Voluntary Termination, the Company
                shall
                make no further payments to Executive except as contemplated in
                subparagraph (a) above.

            

       

      	(c)  	
              If
                the Employment Period ends early pursuant to paragraph 5 on account
                of a Termination without Cause or Termination for Good
                Reason:

            

       

      	(i)  	
              The
                vesting of any outstanding non-vested restricted stock units granted
                to
                Executive under the Company’s equity plans that would have vested if
                Executive would have continued to be employed through December 31,
                2007 will be accelerated and such restricted stock units will be
                fully
                vested as of the Termination Date and payable in accordance with
                their
                existing terms;

            

       

      	(ii)  	
              Within
                five business days after the expiration of any revocation period
                relating
                to the Release Agreement described in paragraph 7(e)(iii) below,
                Executive shall be entitled to a lump sum payment in an amount equal
                to
                the amount of Base Salary Executive would have earned from the Termination
                Date until December 31, 2007;

            

       

      	(iii)  	
              Within
                five business days after the expiration of any revocation period
                relating
                to the Release Agreement described in paragraph 7(e)(iii) below,
                Executive shall be entitled to a lump sum payment in an amount equal
                to
                the product of $4,215 multiplied by the number of full calendar months
                between the calendar month in which the Termination Date occurs and
                December 31, 2007;

            

       

      	(iv)  	
              Executive
                shall be entitled to a lump sum payment equal to: (A) if the
                Termination Date occurs during fiscal year 2006, the amount of the
                bonuses
                that would have been earned by Executive under the Company’s annual bonus
                plans for fiscal years 2006 and 2007 as if Executive’s service had
                continued until the end of fiscal year 2007; provided that such bonuses
                will be calculated (1) with respect to Company performance, in the
                same manner as for other executive officers of the Company; and
                (2) assuming full achievement of individual goals; and (B) if
                the Termination Date occurs during fiscal year 2007, the amount of
                the
                bonus that would have been earned by Executive under the Company’s annual
                bonus plan for fiscal year 2007 as if Executive’s service had continued
                until the end of fiscal year 2007; provided that such bonus will
                be
                calculated (1) with respect to Company performance, in the same
                manner as for other executive officers of the Company; and
                (2) assuming full achievement of individual goals. Payments under
                this paragraph 7(c)(iv) relating to the bonus for fiscal year 2006
                shall be payable to Executive on March 14, 2007 and payments under
                this paragraph 7(c)(iv) relating to the bonus for fiscal year 2007
                shall be payable to Executive on March 14, 2008. Notwithstanding
                anything to the contrary contained in this paragraph 7(c)(iv),
                (1) if Executive is entitled to payment of any bonus amounts under
                this paragraph 7(c)(iv), he will not also be entitled to payment for
                the same fiscal year under the terms of the applicable annual bonus
                plan;
                

            

       

      
        
           

          
          

        

        
          A-4

          
            

          

        

        
          
          

        

      

      and
        (2) Executive’s target bonus opportunity for fiscal year 2007 will be equal
        to the target opportunity for fiscal year 2006.

       

      	(v)  	
              Within
                five business days after the expiration of any revocation period
                relating
                to the Release Agreement described in paragraph 7(e)(iii) below,
                Executive shall be entitled to a lump sum payment in an amount equal
                to
                the product of (A) two; times (B) the number of shares of
                restricted stock held by Executive as of the Termination Date under
                the
                Company’s 1988 Restricted Stock and Cash Bonus Plan that Executive will
                forfeit as a result of the Termination without Cause or Termination
                for
                Good Reason that would have vested if Executive would have continued
                to be
                employed through December 31, 2007; times (C) the fair market
                value of one share of the Company’s common stock (measured as the closing
                sales price of the Company’s common stock as reported on the New York
                Stock Exchange Composite Tape) on the Termination Date;
                and

            

       

      	(vi)  	
              In
                addition to the retirement and other benefits to which Executive
                is
                entitled under the Plans with respect to Executive’s employment through
                the Termination Date, Executive shall be entitled to a lump sum payment,
                payable on March 14,
                2008,
                in an amount equal to the excess of (A) the actuarial present value
                (calculated in accordance with the terms of the Plans) of the retirement
                income and other benefits that would be payable to Executive under
                the
                Plans if Executive was deemed to be employed through December 31,
                2007 over (B) the actuarial present value of the retirement income
                and other benefits Executive is entitled to receive (either immediately
                or
                on a deferred basis) under the Plans. 

            

       

      	(d)  	
              If
                the Employment Period ends early pursuant to paragraph 5 on account
                of Executive’s death or Disability:

            

       

      	(i)  	
              Executive
                or his estate or beneficiaries shall be entitled to a lump sum payment
                in
                an amount equal to the amount of Base Salary Executive would have
                earned
                from the Termination Date until December 31, 2007;
                and

            

       

      	(ii)  	
              Executive
                or his estate or beneficiaries shall be entitled to the payments
                provided
                in paragraph 7(c)(iv) in the same manner and subject to the same
                conditions as set forth in such
                paragraph.

            

       

      	(e)  	
              Notwithstanding
                the provisions of paragraph 7:

            

       

      	(i)  	
              If
                the Company determines in good faith that any payment to Executive
                or his
                estate or beneficiaries under this paragraph 7 does not qualify for
                the “short-term deferral exception” or otherwise would constitute a
                “deferral of compensation” under Section 409A of the Code and
                Executive is a “specified employee” (as such phrase is defined in
                Section 409A of the Code), Executive (or Executive’s estate or
                beneficiary) will receive payment of such amounts described in this
                paragraph 7 upon the earlier of (i) six (6) months
                following Executive’s “separation from service” with the Company (as such
                phrase is defined in Section 409A of the Code) determined with
                respect to the termination of the Employment Period or
                (ii) Executive’s death.

            

       

      	(ii)  	
              It
                is expressly understood that the Company’s payment obligations under
                paragraph 7 shall cease in the event Executive breaches any of his
                agreements in paragraph 8 hereof.

            

       

      	(iii)  	
              Except
                in the case of payments due to the death of the Executive, no payments
                shall be made under paragraph 7 if Executive declines to sign and
                return a Release Agreement or revokes such Release Agreement within
                the
                time provided therein.

            

       

      
        
           

          
          

        

        
          A-5

          
            

          

        

        
          
          

        

      

      

      	(f)  	
              The
                Company’s obligation to make the payments provided for in this Agreement
                and otherwise to perform the obligations hereunder shall not be subject
                to
                any set-off, counterclaim, recoupment, defense or other claim, right
                or
                action which the Company may have against Executive or others. In
                no event
                shall Executive be obligated to seek other employment or take any
                other
                action by way of mitigation of the amounts (including amounts for
                damages
                for breach) payable to Executive under any of the provisions of this
                Agreement and such amounts shall not be reduced whether or not the
                Executive obtains other employment.

            

       

      	8.  	
              Competitive
                Activity; Confidentiality; Nonsolicitation.

            

       

      	(a)  	
              Acknowledgements
                and Agreements.
                Executive hereby acknowledges and agrees that in the performance
                of
                Executive’s duties to the Company during the Employment Period and the
                Consulting Period, if any, Executive will be brought into frequent
                contact, either in person, by telephone or through the mails, with
                existing and potential customers of the Company throughout the United
                States. Executive also agrees that trade secrets and confidential
                information of the Company, more fully described in paragraph 8(j) of
                this Agreement, gained by Executive during Executive’s association with
                the Company, have been developed by the Company through substantial
                expenditures of time, effort and money and constitute valuable and
                unique
                property of the Company. Executive further understands and agrees
                that the
                foregoing makes it necessary for the protection of the business of
                the
                Company that Executive not compete with the Company during the Employment
                Period and the Consulting Period and not compete with the Company
                for a
                reasonable period thereafter, as further provided in the following
                subparagraphs.

            

       

      	(b)  	
              Covenants
                During the Employment Period and Consulting Period.
                During the Employment Period and the Consulting Period, Executive
                will not
                compete with the Company anywhere within the United States. In accordance
                with this restriction, but without limiting its terms, during the
                Employment Period and the Consulting Period, Executive will
                not:

            

       

      	(i)  	
              enter
                into or engage in any business which directly competes with the business
                of the Company;

            

       

      	(ii)  	
              solicit
                customers, business, patronage or orders for, or sell, any products
                and
                services in competition with, or for any business that directly competes
                with, the business of the Company;

            

       

      	(iii)  	
              divert,
                entice or otherwise take away any customers, business, patronage
                or orders
                of the Company 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
                directly competes with the business of the Company, provided, however,
                that this provision shall not be deemed to restrict passive investment
                in
                any business.

            

       

      	(c)  	
              Covenants
                Following Termination.
                For a period of two years following the termination of Executive’s service
                with the Company (the “Restricted
                Period”),
                if Executive has received or is receiving termination benefits under
                this
                Agreement, Executive will not:

            

       

      	(i)  	
              enter
                into or engage in any business which directly competes with the Company’s
                business within the Restricted Territory (as defined in
                paragraph 8(g));

            

       

      	(ii)  	
              solicit
                customers, business, patronage or orders for, or sell, any products
                and
                services in competition with, or for any business, wherever located,
                that
                directly competes with, the Company’s business within the Restricted
                Territory;

            

       

      
        
           

          
          

        

        
          A-6

          
            

          

        

        
          
          

        

      

      

      	(iii)  	
              divert,
                entice or otherwise take away any customers, business, patronage
                or orders
                of the Company 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
                directly competes with the Company’s business within the Restricted
                Territory, provided, however, that this provision shall not be deemed
                to
                restrict passive investment in any
                business.

            

       

      	(d)  	
              Indirect
                Competition.

            

       

      	(i)  	
              For
                the purposes of paragraphs 8(b) and 8(c), but without limitation
                thereof, Executive will be in violation thereof if during the Employment,
                Consulting or Restricted Period, Executive engages in any or all
                of the
                activities set forth therein directly as an individual on Executive’s 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, or as a stockholder of
                any
                corporation in which Executive or Executive’s spouse, child or parent
                owns, directly or indirectly, individually or in the aggregate, more
                than
                five percent (5%) of the outstanding
                stock.

            

       

      	(ii)  	
              Notwithstanding
                any restriction or limitation set forth in paragraph 8(b), 8(c) or
                8(d)(i), nothing in paragraph 8 shall prohibit Executive from, or
                penalize him for, consulting or serving as a director with any entity
                that
                is not in competition with the Company, or where any competition
                with the
                Company is not substantial and Executive obtains the Board’s approval,
                which approval may not be unreasonably
                withheld.

            

       

      	(e)  	
              The
                Company.
                For purposes of this paragraph 8, the Company shall include any and
                all direct and indirect subsidiary, parent, affiliated, or related
                companies of the Company.

            

       

      	(f)  	
              The
                Company’s Business.
                For the purposes of paragraphs 8(b), 8(c), 8(k) and 8(l), the
                Company’s business is defined to be the design and manufacture of
                electronic components and sensors and the provision of electronics
                manufacturing services in the automotive, computer, communications,
                medical and industrial markets, as further described in any and all
                manufacturing, marketing and sales manuals and materials of the Company
                in
                existence on the Termination Date, or of any other products or services
                substantially similar to any such described products and
                services.

            

       

      	(g)  	
              Restricted
                Territory.
                For the purposes of paragraph 8(c), 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 Company location(s) in, to, or for which Executive worked, to
                which
                Executive was assigned or had any responsibility (either direct or
                supervisory) at the time of termination of Executive’s service with the
                Company and at any time during the one year period prior to such
                termination; and

            

       

      	(ii)  	
              all
                of the specific customer accounts, whether within or outside of the
                geographic area described in (i) above, with which Executive had
                any
                contact or for which Executive had any responsibility (either direct
                or
                supervisory) at the time of termination of Executive’s service with the
                Company and at any time during the one year period prior to such
                termination.

            

       

      	(h)  	
              Extension.
                If it shall be judicially determined that Executive has violated
                any of
                Executive’s obligations under paragraph 8(c), then the period
                applicable to each obligation that Executive shall have been determined
                to
                have violated shall automatically be extended by a period of time
                equal in
                length to the period during which such violation(s)
                occurred.

            

       

      	(i)  	
              Non-Solicitation.
                Executive 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 the Company and/or of its parent, or
                its
                other subsidiary, affiliated or related companies to terminate their
                employment, representation or other association with the Company
                and/or
                its parent or its other subsidiary, affiliated or related
                companies.

            

       

      	(j)  	
              Further
                Covenants.

            

       

      	(i)  	
              Executive
                will keep in strict confidence, and will not, directly or indirectly,
                at
                any time during or after Executive’s service with the Company, disclose,
                furnish, disseminate, make available or, except in the course of
                performing Executive’s duties for the Company, use any trade secrets or
                confidential business and technical information of the Company or
                its
                customers or vendors, including without limitation as to when or
                how
                Executive may have acquired such information. Such confidential
                information shall include, without limitation, the Company’s unique
                selling, manufacturing and servicing methods and business techniques,
                training, service and business manuals, promotional materials, training
                courses and other training and instructional materials, vendor and
                product
                information, customer and prospective customer lists, other customer
                and
                prospective customer information and other business information.
                Executive
                specifically acknowledges that all such confidential information,
                whether
                reduced to writing, maintained on any form of electronic media, or
                maintained in Executive’s mind or memory and whether compiled by the
                Company, and/or Executive, derives independent economic value from
                not
                being readily known to or ascertainable by proper means by others
                who can
                obtain economic value from its disclosure or use, that reasonable
                efforts
                have been made by the Company to maintain the secrecy of such information,
                that such information is the sole property of the Company and that
                any
                retention and use of such information by Executive during Executive’s
                service with the Company (except in the course of performing Executive’s
                duties and obligations to the Company) or after the termination of
                Executive’s service with the Company shall constitute a misappropriation
                of the Company’s trade secrets.

            

       

      	(ii)  	
              Executive
                agrees that upon termination of Executive’s service with the Company, for
                any reason, Executive shall return to the Company, in good condition,
                all
                property of the Company, including without limitation, the originals
                and
                all copies of any materials which contain, reflect, summarize, describe,
                analyze or refer or relate to any items of information listed in
                paragraph 8(j)(i) of this Agreement. In the event that such items are
                not so returned, the Company will have the right to charge Executive
                for
                all reasonable damages, costs, attorneys’ fees and other expenses incurred
                in searching for, taking, removing and/or recovering such
                property.

            

       

      
        
          
          

        

        
          A-7

          
            

          

        

        
          
          

        

      

       

       

      	(k)  	
              Discoveries
                and Inventions; Work Made for Hire.

            

       

      	(i)  	
              Executive
                hereby assigns and agrees to assign to the Company, its successors,
                assigns or nominees, all of Executive’s rights to any discoveries,
                inventions and improvements, whether patentable or not, made, conceived
                or
                suggested, either solely or jointly with others, by Executive while
                in the
                service of the Company, whether in the course of
                

            

       

      Executive’s
        service with the use of the Company’s time, material or facilities or that is in
        any way within or related to the existing or contemplated scope of the Company’s
        business. Any discovery, invention or improvement relating to any subject
        matter
        with which the Company was concerned during Executive’s service and made,
        conceived or suggested by Executive, either solely or jointly with others,
        within one year following termination of Executive’s service under this
        Agreement or any successor agreements shall
        be
        irrebuttably presumed to have been so made, conceived or suggested in the
        course
        of such service with the use of the Company’s time, materials or facilities.
        Upon request by the Company with respect to any such discoveries, inventions
        or
        improvements, Executive will execute and deliver to the Company, at any time
        during or after Executive’s service, all appropriate documents for use in
        applying for, obtaining and maintaining such domestic and foreign patents
        as the
        Company may desire, and all proper assignments therefor, when so requested,
        at
        the expense of the Company, but without further or additional
        consideration.

       

      	(ii)  	
              Executive
                acknowledges that, to the extent permitted by law, all work papers,
                reports, documentation, drawings, photographs, negatives, tapes and
                masters therefor, prototypes and other materials (hereinafter, “items”),
                including without limitation, any and all such items generated and
                maintained on any form of electronic media, generated by Executive
                during
                Executive’s service with the Company shall be considered a “work made for
                hire” and that ownership of any and all copyrights in any and all such
                items shall belong to the Company. The item will recognize the Company
                as
                the copyright owner, will contain all proper copyright notices, e.g.,
                “(creation date) [Company Name], All Rights Reserved,” and will be in
                condition to be registered or otherwise placed in compliance with
                registration or other statutory requirements throughout the
                world.

            

       

      	(l)  	
              Communication
                of Contents of Agreement.
                During Executive’s service with the Company and for two years thereafter,
                Executive will communicate the contents of this Agreement to any
                person,
                firm, association, partnership, corporation or other entity which
                Executive intends to be employed by, associated with, or represent
                and
                which is engaged in a business that is competitive to the business
                of the
                Company.

            

       

      	(m)  	
              Relief.
                Executive acknowledges and agrees that the remedy at law available
                to the
                Company for breach of any of Executive’s obligations under this Agreement
                would be inadequate. Executive therefore agrees that, in addition
                to any
                other rights or remedies that the Company may have at law or in equity,
                temporary and permanent injunctive relief may be granted in any proceeding
                which may be brought to enforce any provision contained in
                paragraphs 8(b), 8(c), 8(i), 8(j), 8(k) and 8(l) of this Agreement,
                without the necessity of proof of actual
                damage.

            

       

      	(n)  	
              Reasonableness.
                Executive acknowledges that Executive’s obligations under this
                paragraph 8 are reasonable in the context of the nature of the
                Company’s business and the competitive injuries likely to be sustained by
                the Company if Executive was to violate such obligations. Executive
                further acknowledges that this Agreement is made in consideration
                of, and
                is adequately supported by the agreement of the Company to perform
                its
                obligations under this Agreement and by other consideration, which
                Executive acknowledges constitutes good, valuable and sufficient
                consideration.

            

       

      	9.  	
              Non-disparagement.
                Executive shall not, directly or indirectly, make or cause to be
                made any
                statements to any third parties criticizing or disparaging the Company
                or
                comment on its character or business reputation. Executive further
                hereby
                agrees not: (a) to comment to others concerning the status, plans or
                prospects of the business of the Company, or (b) to engage in any act
                or omission that would be detrimental, financially or otherwise,
                to the
                Company, or that would subject the Company to public disrespect,
                scandal,
                or ridicule. For purposes of this paragraph 9, the “Company” shall
                mean the Company and its directors, officers, predecessors, parents,
                subsidiaries, divisions, and related or affiliated companies. The
                Company
                agrees that its directors and executive officers shall not, directly
                or
                indirectly, make or cause to be made any 

            

       

      

       

      
        
           

          
          

        

        
          A-8

          
            

          

        

        
          
          

        

      

      statements
        to any third parties criticizing or disparaging Executive or comment on his
        character or business reputation. The foregoing undertakings shall not apply
        to
        any statements or opinions that are made under oath in any investigation,
        civil
        or administrative proceeding or arbitration in which the individual has been
        compelled to testify by subpoena or other judicial process or which are
        privileged communications.

       

      	10.  	
              Continued
                Availability and Cooperation.

            

       

      	(a)  	
              Following
                the Termination Date, Executive shall cooperate fully with the Company
                and
                with the Company’s counsel in connection with any present and future
                actual or threatened litigation or administrative proceeding involving
                the
                Company that relates to events, occurrences or conduct occurring
                (or
                claimed to have occurred) during the period of Executive’s employment by
                the Company or during the period that Executive was providing consulting
                services to the Company. This cooperation by Executive shall include,
                but
                not be limited to:

            

       

      	(i)  	
              making
                himself reasonably available for interviews and discussions with
                the
                Company’s counsel as well as for depositions and trial
                testimony;

            

       

      	(ii)  	
              if
                depositions or trial testimony are to occur, making himself reasonably
                available and cooperating in the preparation therefor as and to the
                extent
                that the Company or the Company’s counsel reasonably
                requests;

            

       

      	(iii)  	
              refraining
                from impeding in any way the Company’s prosecution or defense of such
                litigation or administrative proceeding;
                and

            

       

      	(iv)  	
              cooperating
                with the Company’s reasonable requests in the development and presentation
                of the Company’s prosecution or defense of such litigation or
                administrative proceeding.

            

       

      If
        Executive’s assistance is necessary at any time after the Consulting Period,
        then the Company shall pay Executive a reasonable per diem for his services,
        such amount to be agreed to by Executive and the Company in advance of the
        performance of services.

       

      	(b)  	
              Except
                in connection with any investigation, civil or administrative proceeding
                or arbitration in which Executive has been named a defendant in his
                individual capacity, the Company shall reimburse Executive for reasonable
                travel, lodging, telephone and similar expenses incurred in connection
                with such cooperation, which the Company shall reasonably endeavor
                to
                schedule at times not conflicting with the reasonable requirements
                of
                Executive. Executive shall not unreasonably withhold his availability
                for
                such cooperation.

            

       

      	(c)  	
              Upon
                the Termination Date, Executive will update the Company as to the
                status
                of all pending matters for which he was responsible or otherwise
                involved.
                Executive further agrees to immediately forward to the Company’s Chief
                Financial Officer any business information related to the Company
                that
                inadvertently has been directed to him. The Company agrees that it
                will
                immediately forward to Executive any mail addressed to Executive
                at the
                Company’s offices which does not relate to the Company’s business or
                affairs.

            

       

      	(d)  	
              In
                addition, for a period of twelve (12) months beginning on the
                Termination Date, Executive agrees to cooperate with the Company
                from time
                to time to provide information or answer questions with respect to
                financial matters with which Executive is familiar as reasonably
                requested
                by the Company. Executive also agrees during such 12-month period
                to
                furnish the Company with such certificates as it may from time to
                time
                request regarding (i) the truthfulness, accuracy and completeness of
                the Company’s books and records with which Executive is familiar, and
                (ii) the adequacy of the Company’s disclosure controls and internal
                controls with which Executive is
                familiar.

            

       

      
        
           

          
          

        

        
          A-9

          
            

          

        

        
          
          

        

      

      

       

      	11.  	
              Definitions.

            

       

      	(a)  	
              “Cause”
                means that, prior to the termination of Executive’s service with the
                Company, Executive shall have:

            

       

      	(i)  	
              a
                criminal conviction involving a felony or
                fraud;

            

       

      	(ii)  	
              engaged
                in conduct that brings the Company or any of its subsidiaries or
                affiliates into substantial public disgrace or
                disrepute;

            

       

      	(iii)  	
              committed
                gross negligence or gross misconduct causing material and demonstrable
                harm to the business of the Company or any of its subsidiaries or
                affiliates;

            

       

      	(iv)  	
              repudiated
                this Agreement in writing ;

            

       

      	(v)  	
              failed
                to follow the reasonable directives of the Board, which directives
                are
                consistent with this Agreement, and such failure is not cured within
                30
                business days after written notice thereof to Executive from the
                Company;

            

       

      	(vi)  	
              breached
                any of the agreements in paragraph 8
                hereof;

            

       

      	(vii)  	
              breached
                a material employment or other policy of the Company causing material
                and
                demonstrable harm to the business of the Company or any of its
                subsidiaries or affiliates, which is not cured within 30 business
                days
                after written notice thereof to Executive from the Board;
                or

            

       

      	(viii)  	
              committed
                any other breach of this Agreement causing material and demonstrable
                harm
                to the business of the Company or any of its subsidiaries or affiliates,
                which is not cured within 30 days after written notice thereof to
                Executive from the Board.

            

       

      	(b)  	
              “Code”
                means the Internal Revenue Code of 1986, as
                amended.

            

       

      	(c)  	
              “Disability”
                shall be deemed to occur if, as a result of Executive’s incapacity due to
                physical or mental illness, Executive shall have been absent from
                the
                full-time performance of his duties with the Company for a period
                of six
                consecutive months, the Company shall have given the Executive a
                notice of
                termination for Disability and, within 30 days after such notice
                is given,
                Executive shall not have returned to the full-time performance of
                his
                duties.

            

       

      	(d)  	
              “Good
                Reason”
                means, unless Cause exists, the occurrence, without the written consent
                of
                the Executive, of an event constituting a material breach of this
                Agreement (including, without limitation, a breach of paragraph 3(a),
                3(b), 3(c), 3(e) or 3(f) of this Agreement) by the Company that has
                not
                been fully cured within ten days after written notice thereof has
                been
                given to the Company.

            

       

      	(e)  	
              “Release
                Agreement”
                means the agreement attached hereto as Exhibit
                B.

            

       

      	(f)  	
              “Termination
                Date”
                means the date the Employment Period
                ends.

            

       

      	(g)  	
              “Termination
                for Cause”
                means the Company’s termination of Executive’s employment for
                Cause.

            

       

      	(h)  	
              “Termination
                without Cause”
                means the Company’s termination of Executive’s employment other than a
                Termination for Cause.

            

       

      
        
           

          
          

        

        
          A-10

          
            

          

        

        
          
          

        

      

      

      	(i)  	
              “Termination
                for Good Reason”
                means Executive’s termination of employment for Good
                Reason.

            

       

      	(j)  	
              “Voluntary
                Termination”
                means Executive’s termination of Executive’s employment for any reason
                other than Good Reason or due to the completion of the term specified
                in
                paragraph 5(a) hereof.

            

       

      	12.  	
              Executive
                Representations.
                Executive represents and warrants to the Company that (a) the
                execution, delivery and performance of this Agreement by Executive
                does
                not and will not conflict with, breach, violate or cause a default
                under
                any contract, agreement, instrument, order, judgment or decree to
                which
                Executive is a party or by which Executive is bound, (b) Executive is
                not a party to or bound by any employment agreement, noncompete agreement
                or confidentiality agreement with any other person or entity and
                (c) upon the execution and delivery of this Agreement by the Company,
                this Agreement shall be the valid and binding obligation of Executive,
                enforceable in accordance with its terms.

            

       

      	13.  	
              Survival.
                Subject to any limits on applicability contained therein,
                paragraphs 8, 9 and 10 hereof shall survive and continue in full
                force in accordance with their terms notwithstanding any termination
                of
                the Employment Period or the Consulting
                Period.

            

       

      	14.  	
              Withholding
                of Taxes.
                The Company may withhold from any amounts payable under this Agreement
                all
                federal, state, city or other taxes as the Company is required to
                withhold
                pursuant to any applicable law, regulation or
                ruling.

            

       

      	15.  	
              Notices.
                Any notice provided for in this Agreement shall be in writing and
                shall be
                either personally delivered, sent by reputable overnight carrier
                or mailed
                by first class mail, return receipt requested, to the recipient at
                the
                address below indicated:

            

       

      Notices
        to Executive:

       

      Mr.
        Donald K. Schwanz

      51297
        Grand Oaks Court

      Granger,
        IN 46530

       

      Notices
        to the Company:

       

      CTS
        Corporation

      905
        West
        Boulevard North

      Elkhart,
        IN 46514

      Attn:
        James L. Cummins

       

      or
        such
        other address or to the attention of such other person as the recipient party
        shall have specified by prior written notice to the sending party. Any notice
        under this Agreement will be deemed to have been given when so delivered,
        sent
        or mailed.

       

      	16.  	
              Severability.
                Whenever possible, each provision of this Agreement shall be interpreted
                in such manner as to be effective and valid under applicable law,
                but if
                any provision of this Agreement is held to be invalid, illegal or
                unenforceable in any respect under any applicable law or rule in
                any
                jurisdiction, such invalidity, illegality or unenforceability shall
                not
                affect any other provision or any other jurisdiction, but this Agreement
                shall be reformed, construed and enforced in such jurisdiction as
                if such
                invalid, illegal or unenforceable provision had never been contained
                herein.

            

       

      	17.  	
              Complete
                Agreement.
                This Agreement embodies the complete agreement and understanding
                between
                the parties with respect to the subject matter hereof (except to
                the
                extent of the various plans and agreements referenced herein) and
                effective as of the Effective Date supersedes and preempts any prior
                understandings, agreements or representations by or between the parties,
                written or oral, which may have related to the subject matter hereof
                in
                any way, including, without limitation, the Employment Agreement
                by and
                

            

       

      
        
           

          
          

        

        
          A-11

          
            

          

        

        
          
          

        

      

      between
        the Company and Executive, dated as of September 7, 2001. Notwithstanding
        any provision of this Agreement to the contrary, and without limiting any
        of
        Executive’s other contractual rights, the Severance Agreement between Executive
        and the Company dated September 19, 2002, shall continue in full force and
        effect, subject , however, to any amendment to such Severance Agreement that
        Executive and the Company mutually agree to that is intended to reflect the
        requirements of Section 409A of the Code.

       

      	18.  	
              Counterparts.
                This Agreement may be executed in separate counterparts, each of
                which
                shall be deemed to be an original and both of which taken together
                shall
                constitute one and the same agreement.

            

       

      	19.  	
              Successors
                and Assigns.
                This Agreement shall bind and inure to the benefit of and be enforceable
                by Executive, the Company and their respective heirs, executors,
                personal
                representatives, successors and assigns, except that neither party
                may
                assign any rights or delegate any obligations hereunder without the
                prior
                written consent of the other party. Executive hereby consents to
                the
                assignment by the Company of all of its rights and obligations hereunder
                to any successor to the Company by merger or consolidation or purchase
                of
                all or substantially all of the Company’s assets, provided such transferee
                or successor assumes the liabilities of the Company
                hereunder.

            

       

      	20.  	
              Choice
                of Law.
                This Agreement shall be governed by the internal law, and not the
                laws of
                conflicts, of the State of Indiana. Any dispute litigated hereunder
                shall
                be litigated in federal district court in the Northern District of
                Indiana
                or, if jurisdiction cannot be obtained in such court, in the Indiana
                state
                court.

            

       

      	21.  	
              Dispute
                Resolution.
                The parties agree that any disputes, controversies, or claims of
                whatever
                nature arising out of or relating to this Agreement or breach thereof
                shall be resolved through binding arbitration before a mutually agreeable
                arbitrator or arbitrators, in accordance with the applicable rules
                of the
                American Arbitration Association; provided,
                however,
                that the parties agree that in the event of any alleged breach by
                Executive of any of his obligations under paragraphs 8 and 9 of the
                Agreement, the arbitration requirements of this paragraph 21 shall
                not apply, and that instead, the Company may elect, in its sole
                discretion, to seek relief in a court of general jurisdiction in
                the State
                of Indiana, and the parties hereby consent to the exclusive jurisdiction
                of such court.

            

       

      	22.  	
              Amendment
                and Waiver.
                The provisions of this Agreement may be amended or waived only with
                the
                prior written consent of the Company and Executive, and no course
                of
                conduct or failure or delay in enforcing the provisions of this Agreement
                shall affect the validity, binding effect or enforceability of this
                Agreement.

            

       

      	23.  	
              Section
                409A of the Code.
                To
                the extent applicable, it is intended that the compensation arrangements
                under this Agreement be in full compliance with Section 409A of the
                Code. To the extent any provision in this Agreement is or will be
                in
                violation of Section 409A, the Agreement shall be amended in such
                manner as the parties may agree such that the Agreement is or remains
                in
                compliance with Section 409A and the intent of the parties is
                maintained to the maximum extent possible. In
                particular, to the extent that Executive becomes entitled to a payment
                or
                benefit under this Agreement that would constitute a “deferral of
                compensation” under Section 409A of the Code and the date that the
                payment would be made or benefit provided does not constitute a permitted
                distribution date under Section 409A(a)(2) of the Code, then
                notwithstanding anything to the contrary in this Agreement, such
                payment
                or benefit will be made or provided, to the extent necessary to comply
                with the provisions of Section 409A of the Code, to Executive on the
                earlier of (a) Executive’s “separation from service” with the Company
                (determined in accordance with Section 409A); provided,
                however,
                that if the Company determines in good faith that the “short-term deferral
                exception” or any other exception under Section 409A does not apply,
                and if Executive is a “specified employee” (within the meaning of
                Section 409A), Executive’s date of payment shall be the date that is
                six months after the date of Executive’s separation of service with the
                Company, or (b) Executive’s death. Reference to Section 409A of
                the Code includes any proposed, temporary or final regulations, or
                any
                other guidance, promulgated with respect to such Section by the U.S.
                Department of the Treasury or the Internal Revenue
                Service.

            

       

      
        
           

          
          

        

        
          A-12

          
            

          

        

        
          
          

        

      

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

       

      CTS
        CORPORATION

       

      By:
        /s/
        James L. Cummins

      Name:
        James L. Cummins

      Title:
        Senior Vice President Administration

       

      /s/
        Donald K. Schwanz

      Executive
        - Donald K. Schwanz

      
        
           

          
          

        

        
          A-13

          
            

          

        

        
          
          

        

      

      EXHIBIT
        A

      CTS
        CORPORATION

       

      INDIVIDUAL
        EXCESS BENEFIT RETIREMENT PLAN

      As
        Adopted Effective as of October 1, 2006

       

          
        ARTICLE I  

       

      Purpose

       

      1.01  Purpose.
        It is
        the intention of CTS Corporation (the “Company”) to maintain appropriate levels
        of retirement benefits for employees of the Company or any of its subsidiaries
        who are entitled to benefits under the CTS Corporation Pension Plan (the
        “Pension Plan”). This Plan is intended to maintain the level of total retirement
        benefits which, but for the limitations on annual benefits and compensation
        which may be taken into account under the Internal Revenue Code of 1986,
        as
        amended, (the “Code”) would otherwise be payable under, or as a consequence of,
        the provisions of the Pension Plan and to provide a competitive level of
        retirement benefits to an individual who is a member of a select group of
        management or a highly compensated executive.

       

      1.02  Effective
        Date.
        This
        Plan is effective as of October 1, 2006 (the “Effective Date”). However, in
        calculating the amounts described in Sections 3.01(a) and 3.01(b) amounts
        which accrued (or would have accrued) but for the Code limitations referred
        to
        in Section 3.01 prior to the effective date shall be taken into account as
        if the Plan was in effect on the date that the Member’s service with the Company
        commenced. The benefit payable under this Plan shall be in substitution for
        and
        in lieu of any benefit earned by the Member under the CTS Corporation 2003
        Excess Benefit Retirement Plan (the “2003 Plan”), and the Member shall have no
        claim to any benefit under or determined under the provisions of the 2003
        Plan.

       

           
        ARTICLE II  

       

      Definitions

       

      2.01  Member.
        Donald K. Schwanz shall be referred to herein as the
“Member.”

       

      2.02  Beneficiary.
        The
        term “Beneficiary” shall mean the person or trust designated by the Member to
        receive (i) the Retirement Benefit described in Section 3.01 in the
        event that the Member dies after termination of employment with the Company,
        but
        prior to payment of the Benefit; or (ii) the Pre-Retirement Death Benefit
        described in Section 3.02. If the Member dies without designating a
        Beneficiary prior to receipt of all payments due under the terms of this
        Plan,
        payment shall be made to the Member’s surviving Spouse, if any, and in the
        absence of a surviving Spouse to the Member’s estate.

       

           
        ARTICLE III  

       

      Benefits

       

      3.01  Retirement
        Benefit.
        The
        Member shall be entitled to receive a Retirement Benefit as described herein.
        The amount of the Retirement Benefit which the Member is eligible to receive
        under this Plan upon separation from service with the Company shall be equal
        to
        the actuarial present value of the excess of (a) over (b):

       

      (a)  The
        benefit which the Member would be entitled to receive under the terms of
        the
        Pension Plan as in effect on October 31, 2006, if the Member retired with
        an immediate single life annuity beginning on the first day of the month
        coinciding with or next following the date the Member’s separation from service
        with the Company occurs; and

       

      
        
           

          
          

        

        
          A-14

          
            

          

        

        
          
          

        

      

       

      	(i)  	
              the
                definition of “Pay” used in determining the Member’s benefit under the
                Pension Plan included 50% of the Fair Market Value of Shares distributed
                to the Member on or before the date of the Member’s separation from
                service with the Company (prior to withholding) in settlement of
                Restricted Stock Units awarded to the Member under the CTS Corporation
                2004 Omnibus Long-Term Incentive Plan, with Fair Market Value determined
                as of the applicable settlement date or dates of such Restricted
                Stock
                Units;

            

       

      	(ii)  	
              the
                Member’s years of Credited Service used in determining the Member’s
                benefit under the Pension Plan were enhanced by multiplying the Credited
                Service earned by the Member under the Pension Plan after June 30,
                2002 by two;

            

       

      	(iii)  	
              the
                Member’s pension benefit was not reduced for each month the Member is
                under the Normal Retirement Age; and

            

       

      	(iv)  	
              such
                benefit were computed without giving effect to the limitations then
                currently imposed by Code Section 401(a)(17) and Code
                Section 415(b) and regulations thereunder and without regard to the
                benefit accrual determined under Section 6.13 of the Pension
                Plan.

            

       

      (b)  The
        benefit which the Member would be entitled to receive under the Pension Plan
        if
        the Member retired with an immediate single life annuity beginning on the
        first
        day of the month coincident with or next following the date the Member’s
        separation from service with the Company occurs.

       

      3.02  Pre-Retirement
        Death Benefit.
        In the
        event that the Member’s employment with the Company terminates by reason of his
        death and the Member is survived by a Spouse, the
        Beneficiary shall be entitled to receive a Pre-Retirement Death Benefit which
        shall be equal to the actuarial present value of the excess of (a) over
        (b):

       

      (a)  The
        Pre-Retirement Survivor Annuity benefit which the surviving Spouse of the
        Member
        would be entitled to receive under the terms of the Pension Plan as in effect
        on
        October 31, 2006, if

       

      	(i)  	
              the
                definition of “Pay” used in determining the Member’s benefit under the
                Pension Plan included 50% of the Fair Market Value of Shares distributed
                to the Member on or before the date of the Member’s separation from
                service with the Company (prior to withholding) in settlement of
                Restricted Stock Units awarded to the Member under the CTS Corporation
                2004 Omnibus Long-Term Incentive Plan, with Fair Market Value determined
                as of the applicable settlement date or dates of such Restricted
                Stock
                Units;

            

       

      	(ii)  	
              the
                Member’s years of Credited Service used in determining the Member’s
                benefit under the Pension Plan were enhanced by multiplying the Credited
                Service earned by the Member under the Pension Plan after June 30,
                2002 by two;

            

       

      	(iii)  	
              the
                Member survived to Normal Retirement Age, such that the Member’s benefit
                was not reduced for each month the Member is under the Normal Retirement
                Age on the date of death; and

            

       

      	(iv)  	
              the
                Member’s benefit were computed without giving effect to the limitations
                then currently imposed by Code Section 401(a)(17) and Code
                Section 415(b) and regulations thereunder and without regard to the
                benefit accrual determined under Section 6.13 of the Pension
                Plan.

            

       

      
        
           

          
          

        

        
          A-15

          
            

          

        

        
          
          

        

      

      

      (b)  The
        Pre-Retirement Survivor Annuity benefit which the surviving Spouse would
        be
        entitled to receive under the Pension Plan.

       

      3.03  Payment
        of the Retirement Benefit.
        Payment
        of the Retirement Benefit shall be accomplished by means of an unfunded payment
        to the Member directly from the Company. The Retirement Benefit shall be
        payable
        in the form of a single lump sum cash payment on the second Tuesday of the
        seventh calendar month next following the date on which the Member’s separation
        from service with the Company occurs. Actuarial present values shall be
        determined using the actuarial assumptions employed under the Pension Plan
        for
        lump sum cashouts for the Plan Year containing the date of the Member’s
        separation from service with the Company. In
        addition to and coincident with the Retirement Benefit payment, the Company
        shall pay an amount equal to the interest accrued on the Benefit for the
        period
        between the first of the month next following the date the Member’s employment
        with the Company terminated and the date of payment. The interest rate shall
        be
        equal to the lump sum interest rate assumption used to calculate the Retirement
        Benefit.

       

      Notwithstanding
        anything to the contrary in this Plan, in the event that the Member becomes
        disabled as defined by Section 409A of the Code prior to the Member’s
        separation from service with the Company, the Retirement Benefit shall be
        distributed to the Member as soon as practicable after the occurrence of
        such
        event, and in such event no interest shall be payable on the Retirement Benefit.
        In the event that the Member becomes disabled as defined by Section 409A of
        the Code or dies after separation from service with the Company, but prior
        to
        payment of the Retirement Benefit, the Retirement Benefit and interest thereon
        calculated as provided above to the date of payment, shall be distributed
        to the
        Member or Beneficiary, as the case may be, as soon as practicable.

       

      3.04  Payment
        of the Pre-retirement Death Benefit.
        Payment
        of the Pre-Retirement Death Benefit shall be accomplished by means of an
        unfunded payment directly from the Company to the Beneficiary. Such payment
        shall be made as soon as practicable after the Member’s death. Actuarial present
        values shall be determined using the actuarial assumptions employed under
        the
        Pension Plan for lump sum cashouts for the Plan Year containing the date
        of the
        Member’s separation from service with the Company.

       

      3.05  Section 409A
        of the Code.
        To the
        extent applicable, it is intended that this Plan be in full compliance with
        Section 409A of the Code. To the extent any provision in this Plan is or
        will be in violation of Section 409A, the Plan shall be amended in such
        manner as the Committee and the Member may agree such that compliance with
        Section 409A and the purpose of the Plan are maintained to the maximum
        extent possible. Reference to Section 409A of the Code is to
        Section 409A of the Internal Revenue Code of 1986, as amended, and will
        also include any proposed, temporary or final regulations, or any other
        guidance, promulgated with respect to such Section by the U.S. Department
        of the
        Treasury or the Internal Revenue Service.

       

      ARTICLE
        IV  

       

      Authority
        of Committee

       

      4.01  Committee.
        The
        Plan shall be approved and administered by the Compensation Committee of
        the CTS
        Corporation Board of Directors (the “Committee”).

       

      4.02  Authority
        of Committee.
        The
        Committee shall have authority to control, delegate and manage the operation
        and
        administration of the Plan, including all rights and powers necessary or
        convenient to the carrying out of its functions hereunder, whether or not
        such
        rights and powers are specifically enumerated herein.

       

      Without
        limiting the foregoing, and in addition to the other powers set forth in
        this
        Article IV, the Committee shall have the following express
        authorities:

       

      (a)  To
        construe and interpret the Plan and determine the amount, manner and time
        of
        payment of any Benefits hereunder;

       

      
        
           

          
          

        

        
          A-16

          
            

          

        

        
          
          

        

      

      

      (b)  To
        prescribe procedures to be followed by the Member or Beneficiary filing any
        requests or applications in connection with Benefits hereunder;

       

      (c)  To
        prepare and distribute, in such manner as the Committee determines to be
        appropriate, information explaining the Plan;

       

      (d)  To
        receive from the Company and from the Member and Beneficiary such information
        as
        shall be necessary for the proper administration of the Plan;

       

      (e)  To
        furnish the Company, upon request, such annual and other reports with respect
        to
        the administration of the Plan as are reasonable and appropriate;

       

      (f)  To
        resolve all questions and make all factual determinations relating to any
        matter
        for which it has administrative responsibility; and

       

      (g)  To
        delegate to the CTS Corporation Benefit Plan Administration Committee such
        administrative powers and duties as it deems appropriate.

       

      4.03  Disqualification
        of Committee Member.
        No
        member of the Committee or delegate of the Committee shall vote upon any
        question or exercise any discretion under the Plan relating specifically
        to
        himself or his Beneficiary.

       

      4.04  Records
        and Reports.
        The
        Committee shall take all such action as it deems necessary or appropriate
        to
        comply with any laws or regulations now or hereafter in existence relating
        to
        the maintenance of records, notifications or registrations.

       

          
        ARTICLE V  

       

      Amendment
        or Termination

       

      The
        Company intends the Plan to be permanent, but, subject to Section 3.05,
        reserves the right, at any time, to modify, amend or terminate the Plan,
        provided, however, that no termination, amendment or modification of or to
        the
        Plan may be made without written approval of the Member. The Plan shall
        terminate automatically upon payment of all amounts due hereunder.

       

         
         ARTICLE VI  

       

      Miscellaneous

       

      6.01  No
        Guarantee of Employment.
        Neither
        the creation of this Plan nor anything contained herein shall be construed
        (a) to give the Member the right to remain in the employ of the Company or
        any of its subsidiaries, (b) to give the Member or Beneficiary any benefits
        not specifically provided by the Plan, or (c) to modify, in any manner, the
        right of the Company or any of its subsidiaries to modify, amend, or terminate
        any of its employee benefit plans.

       

      6.02  Rights
        of the Member and Beneficiary.
        Payment
        of Benefits to which any Member or Beneficiary is entitled shall be made
        only to
        such Member or Beneficiary. The expectation of such Benefits shall not be
        assignable by the Member or Beneficiary or by operation of law, or be subject
        to
        reduction for the debts or defaults of such Member or Beneficiary whether
        to the
        Company or to others, or be subject to execution or attachment. The preceding
        sentence shall not apply to portions of Benefits applied at the direction
        of the
        person eligible to receive such Benefits to the payment of premiums on life
        or
        health insurance provided under any Company program, or to the withholding
        of
        federal income taxes.

       

      
        
           

          
          

        

        
          A-17

          
            

          

        

        
          
          

        

      

      

      6.03  Claims
        Procedure.

       

      (a)  If
        the
        Member or Beneficiary does not receive the benefits which the Member or
        Beneficiary believes he or she is entitled to receive under the Plan, the
        Member
        or Beneficiary may file a claim for benefits with the Committee. All claims
        must
        be made in writing and be signed by the claimant. If the claimant does not
        furnish sufficient information to enable the Committee to process the claim,
        the
        Committee will indicate to the claimant any additional information which
        is
        required.

       

      (b)  Each
        claim will be approved or disapproved by the Committee within 90 days following
        the receipt of the information necessary to process the claim, or within
        180
        days if the Committee determines that special circumstances require an extension
        of the 90-day period and the claimant is notified of the extension within
        the-original 90-day period. In the event the Committee denies a claim for
        benefits in whole or in part, the Committee will notify the claimant in writing
        of the adverse determination. Such notice by the Committee will also set
        forth,
        in a manner calculated to be understood by the claimant, the specific reason
        or
        reasons for the adverse determination, reference to the specific Plan provisions
        on which the determination is based, a description of any additional material
        or
        information necessary to perfect the claim with an explanation of why such
        material or information is necessary and an explanation of the Plan’s claim
        review procedure as set forth in Section 6.03(c).

       

      (c)  A
        claimant may appeal an adverse benefit determination by requesting a review
        of
        the decision by the Committee or a person designated by the Committee. An
        appeal
        must be submitted in writing within 60 days after receiving notification
        of the
        adverse determination and must (i) request a review of the claim for
        benefits under the Plan, (ii) set forth all of the grounds upon which the
        claimant’s request for review is based and any facts in support thereof, and
        (iii) set forth any issues or comments which the claimant deems pertinent
        to the appeal. The claimant will be given the opportunity to submit written
        comments, documents, records and other information relating to the claim
        for
        benefits and will be provided, upon written request and free of charge,
        reasonable access to and copies of all documents, records and other information
        relevant to the claim for benefits, provided the Committee finds the requested
        documents or materials are relevant to the appeal. The Committee or the person
        designated by the Committee will make a full and fair review of each appeal
        and
        any materials submitted by the claimant relating to the claim, without regard
        to
        whether the information was submitted or considered in the initial
        determination. On the basis of its review, the Committee or person designated
        by
        the Committee will make an independent determination of the claimant’s
        eligibility for benefits under the Plan. The Committee or the person designated
        by the Committee will act upon each appeal within 60 days after receipt thereof
        unless special circumstances require an extension of the time for processing,
        in
        which case the Committee will notify the claimant within the initial 60-day
        period of such special circumstances and will render a decision as soon as
        possible but not later than 120 days after the appeal is received. The decision
        of the Committee or person designated by the Committee on any claim for benefits
        will be final and conclusive upon all parties thereto. In the event the
        Committee or person designated by the Committee denies an appeal in whole
        or in
        part, it will give written notice of the determination to the claimant. Such
        notice will set forth, in a manner calculated to be understood by the claimant,
        the specific reason or reasons for the adverse determination, reference to
        the
        specific Plan provisions on which the determination is based, a statement
        that
        the claimant is entitled to receive, upon request and free of charge, access
        to
        and copies of all documents, records and other information relevant to the
        claim
        and a statement of the claimant’s right to bring an action under
        section 502(a)
        of
        the
        Employee Retirement Income Security Act of 1974, as amended (“ERISA”), if
        applicable.

       

      6.04  Expenses
        and Indemnity.
        All
        expenses and fees incurred in connection with the administration of the Plan
        will be paid by the Company. To the fullest extent permitted by applicable
        law,
        the Company will indemnify and save harmless the Committee, the Board and
        any
        delegate of the Committee who is an employee of the Company and any officers
        and
        employees of the Company against any and all expenses, liabilities and claims,
        including legal fees to defend against such liabilities and claims, arising
        out
        of their discharge in good faith of responsibilities under or incident to
        the
        Plan, other than expenses and liabilities arising out of willful misconduct.
        Without limiting the generality of the foregoing, the Company will, promptly
        upon request, advance funds to persons entitled to indemnification hereunder
        to
        the extent necessary to defray legal and other expenses incurred in the defense
        of such liabilities and claims, as and when incurred. This indemnity will
        not
        preclude such further indemnities as may be available under insurance purchased
        by the Company or provided by the Company under any bylaw, agreement or
        otherwise.

       

      6.05  Withholding.
        There
        will be deducted from each payment made under the Plan all taxes which are
        required to be withheld by the Company in respect to such payment.

       

      6.06  Receipt
        or Release.
        Any
        payment to the Member or the Member’s Beneficiary in accordance with the
        provisions of the Plan will, to the extent thereof, be in full satisfaction
        of
        all claims against the Committee and the Company with respect to the amount
        paid. The Committee may require the Member or Beneficiary, as a condition
        precedent to such payment, to execute a receipt and release to such
        effect.

       

      6.07  Payments
        on Behalf of Persons Under Incapacity.
        In the
        event that any amount or distribution becomes payable under the Plan to a
        person
        who, in the sole judgment of the Committee, is considered by reason of physical
        or mental condition to be unable to give a valid receipt therefor, the Committee
        may direct that such distribution or payment be made to any person found
        by the
        Committee, in its sole judgment, to have assumed the care of such person.
        Any
        distribution or payment made pursuant to such determination will, to the
        extent
        thereof, constitute a full release and discharge of the Committee and the
        Company with respect to the distribution or amount paid.

       

      6.08  Successors
        and Assigns.
        The
        Company may not assign its obligations under this Plan, whether by contract,
        merger, operation of law or otherwise, unless the Member consents to the
        assignment. The Member hereby consents to the assignment by the Company of
        all
        of its rights and obligations hereunder to any successor to the Company by
        merger or consolidation or purchase of all or substantially all of the Company’s
        assets, provided such transferee or successor assumes the liabilities of
        the
        Company hereunder. The provisions of this Section 6.08 will be binding upon
        each and every successor to the Company.

       

      6.09  No
        Requirement to Fund.
        No
        provisions in the Plan, either directly or indirectly, shall be construed
        to
        require the Company to reserve, or otherwise set aside, funds for the payment
        of
        benefits hereunder, and Members and Beneficiaries shall have the status of
        general unsecured creditors with respect to the obligation of the Company
        to
        make payments under the Plan. The Plan is intended to provide benefits for
        a
“management or highly compensated employee” within the meaning of ERISA and
        therefore to be exempt from the provisions of Parts 2, 3 and 4 of the Title
        I of ERISA.

       

      6.10  Controlling
        Law.
        To the
        extent not preempted by the laws of the United States of America, the laws
        of
        the State of Indiana shall be the controlling state law in all matters relating
        to the Plan and shall apply.

       

      
        
          
          

        

        
          A-18

          
            

          

        

        
          
          

        

      

      6.11  Severability.
        If any
        provisions of the Plan shall be held illegal or invalid for any reason, said
        illegality or invalidity shall not affect the remaining parts of the Plan;
        and
        the Plan shall be construed and enforced as if said illegal and invalid
        provisions had never been included herein.

       

      6.12  Provisions
        of Pension Plan Unchanged.
        Any
        benefit payable under the Pension Plan shall be paid solely in accordance
        with
        the terms and provisions of the Pension Plan; and nothing in the Plan shall
        operate or be construed in any way to modify, amend or affect the terms and
        provisions of the Pension Plan.

       

      6.13  Nature
        of Payments.
        Any
        benefits provided hereunder shall constitute nonqualified deferred compensation
        payments to the Member and shall not be taken into account in computing the
        amount of salary or compensation of the Member for the purposes of determining
        any pension, retirement, death or other benefits under (a) any pension,
        retirement, profit-sharing, bonus, life insurance or other employee benefit
        plan
        of the Company or any of its subsidiaries or (b) any agreement between the
        Company or any subsidiary and the Member except as such plan or agreement
        shall
        otherwise expressly provide.

       

            
         6.14  Gender
        and Number.
        Masculine gender shall include the feminine; and the singular shall include
        the
        plural, unless the context clearly indicated otherwise.

       

      6.15  Capitalized
        Terms.
        Capitalized terms used herein which are not defined shall have the meanings
        set
        forth in the Pension Plan.

       

      6.16  Beneficiary
        Designation.
        Designation of a Beneficiary by the Member must be made in writing on a form
        furnished by the Committee for this purpose. No Beneficiary designation shall
        be
        effective unless it is received by the Committee prior to the occurrence
        of an
        event which would establish in the Beneficiary a right to payment under this
        Plan.

       

      IN
        WITNESS WHEREOF, CTS Corporation has caused this CTS Corporation Individual
        Excess Benefit Retirement Plan to be executed by its proper officer duly
        authorized by its Board of Directors.

       

      CTS
        CORPORATION

       

      /s/
        James L. Cummins

      By James
        L.
        Cummins

      Title:
         Senior
        Vice President

      Administration

      

      

      
        
          
             

          

          
          

        

        
          A-19

          
            

          

        

        
          
          

          
            

          

        

      

      EXHIBIT
        B

       

      __________________
        [date]

       

      [employee’s
        home address]

       

       

      Re: Release
        Agreement

      Dear
        ______________:

       

      This
        Release Agreement summarizes the arrangements which have been discussed with
        you
        concerning your separation of employment from CTS Corporation (the “Company”) as
        set forth in the Employment Agreement entered into between you and the Company
        effective as of October 1, 2006 (“Employment Agreement”). This Agreement
        shall constitute the Release Agreement referenced in and defined under
        paragraph 11(e) of your Employment Agreement.

       

      	1.  	
              Termination
                of Employment

            

       

      Your
        last
        day of employment with the Company will be ______________ (hereinafter, your
        “Termination Date”).

       

      	2.  	
              Payments
                and Benefits

            

       

      You
        shall
        receive the payments and benefits set forth in Section 7 of your Employment
        Agreement, which is incorporated herein by reference, at the times and under
        the
        terms provided therein.

       

      	3.  	
              Release

            

       

      In
        exchange for the compensation described in Section 2 above 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/or its affiliates, successors,
        assigns, directors, members, officers, employees and/or agents, both
        individually and in their official capacities with CTS, 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 the Employment Agreement and except
        for
        claims under the Severance Agreement dated September 19, 2002 and your
        outstanding stock option agreements and restricted stock unit agreements.
        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 CTS, its affiliates,
        successors, assigns, directors, members, officers, employees, and/or agents,
        both individually and in their official capacities with CTS. 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. Notwithstanding the foregoing,
        this Section 3 shall not release or discharge CTS from its obligations to
        indemnify you, in accordance with the bylaws of the corporation or as provided
        under applicable law, and to cover you under its director and officer liability
        insurance policy with respect to the performance of your duties while an
        officer
        of the Corporation.

       

      You
        agree
        and acknowledge that the payments and benefits set forth in Section 2
        above, together with payments and benefits previously provided to you by
        CTS and
        the payments and benefits, if any, to which you are entitled under your
        Severance Agreement dated September 19, 2002, and your outstanding stock
        option agreements and restricted stock unit agreements, are the only payments
        and benefits you will receive 

       

      
        
           

          
          

        

        
          B-1

          
            

          

        

        
          
          

        

      

      in
        connection with your employment or its termination. Payment for consulting
        services as set forth under Section 6 of the Agreement shall not be
        construed to be payments and benefits in connection with your employment
        or its
        termination and this Agreement shall not be deemed to release your right
        to
        those payments.

       

      You
        represent that you understand the foregoing release, 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 Company 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. 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. 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 to seek independent advice
        regarding the effect of this Agreement prior to its execution.

       

      	4.  	
              Right
                to Consider/Rescind

            

       

      In
        accordance with the provisions of 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 your Termination Date
        (i.e. ______________). You are also advised to consult with your attorney
        before
        signing this Agreement. 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”). To begin receiving benefits pursuant to
        this Agreement you must deliver a fully executed copy of the Agreement to
        James L. Cummins, CTS Corporation, 905 West Boulevard North, Elkhart,
        IN 46514, upon expiration of the above referenced twenty-one (21) day
        period.

       

      	5.  	
              Release
                of Claims by the Company

            

       

      In
        consideration of your execution and performance under this Release Agreement,
        the Company hereby waives and releases you from all claims arising from your
        performance of duties within the proper scope of your employment with the
        Company.

       

      	6.  	
              Miscellaneous

            

       

      	A.  	
              This
                Agreement may not be modified, altered or changed except upon written
                consent of the parties.

            

       

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

            

       

      	C.  	
              The
                benefits afforded you under this Agreement (and the Severance Agreement
                dated September 19, 2002, to the extent applicable, and the benefits
                to which you are entitled under your outstanding stock option agreements
                and restricted stock unit agreements) are in lieu of any other
                compensation, benefit, bonus pay, separation pay, severance pay,
                or notice
                pay to which you might otherwise have been
                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.

            

       

      
        
           

          
          

        

        
          B-2

          
            

          

        

        
          
          

        

      

      

      	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.  	
              The
                parties intend this Agreement 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.

            

       

      	G.  	
              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.

            

       

      	7.  	
              Representations
                and Warranties

            

       

      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.

            

       

      	C.  	
              You
                understand and agree that by signing this Agreement, you are specifically
                waiving your rights to file a lawsuit against CTS 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.

       

      Very
        truly yours,

      

      CTS
        Corporation

       

                                                   
                                                  
        

       

       

      

      I
        have
        carefully read and reviewed the foregoing Release Agreement, acknowledge
        its
        contents, and agree to be bound by its terms, including the release of claims
        set forth in the Agreement. I have been given sufficient time of at least
        twenty-one (21) days to decide whether to sign this Release Agreement. I
        understand that I have seven (7) 

       

      
        
           

          
          

        

        
          B-3

          
            

          

        

        
          
          

        

      

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

       

      _______________________________

       

      _______________________________

      Date
        of
        Execution of Agreement

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