EXHIBIT 99(C)(2)
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement") made and entered into as of
the 9th day of May, 1997, by and among CTS Corporation, an Indiana corporation
(the "Company"), and Xxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company, a wholly owned subsidiary of the Company
("Merger Sub") and Dynamics Corporation of America, a New York corporation
("DCA"), have entered into an Agreement and Plan of Merger (the "Merger
Agreement"), dated as of May __, 1997, pursuant to which, among other things,
DCA will be merged with and into Merger Sub as of the "Effective Time," as
defined in the Merger Agreement;
WHEREAS, the Executive is currently serving as Chairman, President
and Chief Executive Officer of the Company, and the Board of Directors of the
Company ("Board of Directors") desires to secure the continued employment of the
Executive in accordance herewith;
WHEREAS, the Company and the Executive have entered into an
employment agreement (the "Employment Agreement"), effective as of June 24,
1994, and a severance agreement (the "Severance Agreement"), effective as of
April 11, 1997;
WHEREAS, the Executive is willing to commit himself to be employed
by the Company on the terms and conditions herein set forth and in lieu of the
terms and conditions of the Employment Agreement; and
WHEREAS, the parties desire to enter into this Agreement as of the
Effective Time, setting forth the terms and conditions for the employment
relationship of the Executive with the Company;
NOW, THEREFORE, in consideration of the mutual premises and the
respective covenants and agreements of the parties herein contained, the parties
hereto agree as follows:
1. Operation of Agreement; Employment and Term.
(a) This Agreement shall be effective and binding immediately upon
its execution.
(b) Employment. The Company agrees to employ the Executive, and the
Executive agrees to be employed by the Company, in accordance with the terms and
provisions of this Agreement.
(c) Term. The term of this Agreement (the "Term") shall commence on
the date (the "Effective Date") on which the Effective Time occurs and shall
continue until the fifth (5th) anniversary of the Effective Date.
2. Duties and Powers of Executive.
(a) Position. For the period during which the Executive provides
services to the Company (the "Employment Period"), the Executive shall serve in
such office and have such authority, duties and responsibilities as specified in
Exhibit A hereto. During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive shall
devote substantially all of his attention and time during normal business hours
to the business and affairs of the Company and shall use his reasonable best
efforts to carry out his responsibilities faithfully and efficiently. It shall
not be considered a violation of the foregoing for the Executive to serve on
corporate, industry, civic or charitable boards or committees, as long as such
activities do not materially interfere with the performance of his
responsibilities with the Company in accordance with this Agreement.
(b) Board Membership. The Board of Directors shall propose the
Executive for reelection to such Board throughout the Term, and shall continue
the Executive as a member of the Board throughout the Term. The sole remedy for
breach of this provision shall be the remedy set forth in Section 5(c) of this
Agreement.
(c) Location. The Executive's services shall be performed primarily
at the Company's current office in Elkhart, Indiana, and in no event shall the
Executive be required to perform services at a location more than 25 miles from
the Company's current office, in each case, except for such reasonable travel
obligations as are substantially consistent with the Executive's present travel
obligations. Throughout the Employment Period, the Executive shall be provided
with appropriate office space and secretarial services commensurate with his
title and position.
3. Compensation.
The Executive shall receive the following compensation for his
services hereunder to the Company:
(a) Salary. During the Employment Period, the Executive's monthly
base salary ("Base Salary") shall be $41,667, payable in accordance with the
Company's general payroll practices as in effect from time to time and subject
to annual review by the Board of Directors for increase (but not decrease) each
year during the Employment Period.
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(b) Incentive Compensation. During the Employment Period, the
Executive shall be eligible to participate in the Company's short-term and
long-term incentive compensation plans, including equity-based compensation
plans, on a basis no less favorable than that of other senior executives of the
Company.
(c) Split-Dollar Policy. The Company shall (i) during the Employment
Period, continue to pay the annual premium, at the same annual rate and in the
same month as paid by the Company in 1997, on the individual "split dollar" life
insurance policy issued with respect to the Executive ("Policy"), and (ii)
notwithstanding the assignment of the Policy to the Company as collateral
heretofore executed by the Executive ("Collateral Assignment"), not take any
action to reduce the annual premium, borrow against the cash surrender value of
the Policy or endanger in any way any benefit available to the Executive and
shall not be entitled to be repaid to the extent of its interest in the Policy
until the earlier of the death of the insured under the Policy or the surrender
of the Policy by the Executive.
(d) Other Benefits. During the Employment Period, the Executive
shall be eligible to participate in all other savings, retirement, welfare
(including without limitation medical, dental, hospitalization and life
insurance) and fringe benefit plans, practices, policies and programs on a basis
no less favorable to the Executive than in effect on the date hereof. During the
Employment Period, the Company shall make available to the Executive, at its
cost and expense, an automobile on a basis substantially similar to that in
effect on the date hereof.
4. Expenses. The Company shall reimburse the Executive for all reasonable
expenses, including those for travel and entertainment, properly incurred by him
in the performance of his duties hereunder in accordance with policies
established from time to time by the Board of Directors.
5. Termination of Employment.
(a) Death; Disability. The Employment Period shall terminate
automatically upon the Executive's death or Disability during such period, in
which case the Executive shall be entitled to the payments and benefits set
forth in Section 6(a) of this Agreement. For purposes of this Agreement,
"Disability" shall be deemed to occur if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of his duties with the Company for a
period of six (6) consecutive months, the Company shall have given the Executive
a Notice of Termination (as defined in paragraph (e) of this Section 5) for
Disability and, within thirty (30) days after such Notice of Termination is
given, the Executive shall not have returned to the full-time performance of his
duties.
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(b) By the Company for Cause. The Company may terminate the
Executive's employment hereunder for Cause, in which case the Executive shall be
entitled to the payments and benefits set forth in Section 6(b) of this
Agreement. For purposes of this Agreement, "Cause" shall mean (i) the willful
and continued failure by the Executive to substantially perform the Executive's
duties with the Company (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination for Good
Reason by the Executive pursuant to paragraph (f) of this Section 5) after a
written demand for substantial performance is delivered to the Executive by the
Board of Directors, which demand specifically identifies the manner in which
such Board believes that the Executive has not substantially performed the
Executive's duties, or (ii) the willful engaging by the Executive in conduct
which is demonstrably and materially injurious to the Company or its
subsidiaries, monetarily or otherwise. For purposes of clauses (i) and (ii) of
this definition, (x) no act, or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by the Executive not in
good faith and without reasonable belief that the Executive's act, or failure to
act, was in the best interest of the Company and (y) in the event of a dispute
concerning the application of this provision, no claim by the Company that Cause
exists shall be given effect unless the Company establishes to the Board of
Directors by clear and convincing evidence that Cause exists.
(c) By the Executive for Good Reason. The Executive may terminate
his employment during the Employment Period for Good Reason (unless Cause
exists), in which case the Executive shall be entitled to the payments and
benefits set forth in Section 6(a) of this Agreement. For purposes of this
Agreement, "Good Reason" shall mean (i) 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 Section 2(b) or 2(c) of this
Agreement) by the Company that has not been fully cured within ten (10) days
after written notice thereof has been given by the Executive to the Company, or
(ii) any reason, at the Executive's discretion, during the three-month period
following the occurrence of a "Change in Control," as defined in paragraph (d)
of this Section 5.
(d) Definition of Change in Control. A "Change in Control" shall be
deemed to have occurred if the event set forth in any one of the following
paragraphs shall have occurred:
(i) the attainment by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a "Person")
of aggregate beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 25% or more of the combined voting
power of the then outstanding Voting Stock of the Company (including, for
this purpose, any Voting Stock of
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the Company acquired prior to the Term); provided, however, that for
purposes of this Section 5(d), the following will not be deemed to result
in a Change in Control: (A) any acquisition directly from the Company that
is approved by the Incumbent Board (as defined below), (B) any acquisition
by the Company and any change in the percentage ownership of Voting Stock
of the Company that results from such acquisition, (C) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by
the Company or any subsidiary, (D) any acquisition by any Person pursuant
to a Business Combination that complies with clauses (I), (II) and (III)
of Section 5(d)(iii), (E) the beneficial ownership by DCA of Voting Stock
of the Company equal to less than 25% of the combined voting power then
outstanding Voting Stock of the Company ("Exempt DCA Percentage"), or (F)
the beneficial ownership by The Gabelli Group, Inc., GAMCO Investors, Inc.
and Gabelli Funds, Inc. (collectively, "Gabelli") of Voting Stock of the
Company equal to less than 25% of the combined voting power of the then
outstanding Voting Stock of the Company ("Exempt Gabelli Percentage"); and
provided further that, for purposes of computing the Exempt DCA Percentage
and the Exempt Gabelli Percentage, the denominator, but not the numerator,
will include all outstanding shares of stock of the Company that, by
operation of law, are not entitled to vote; or
(ii) individuals who, as of the date hereof, constitute the Board of
Directors (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors; provided, however, that any
individual becoming a Director subsequent to the date hereof whose
election, or nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of the Directors then comprising
the Incumbent Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for
director, without objection to such nomination) will be deemed to have
been a member of the Incumbent Board, but excluding, for this purpose, any
such individual becoming a Director as a result of an actual or threatened
election contest (within the meaning of Rule 14a-11 of the Exchange Act)
with respect to the election or removal of Directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors (collectively, an "Election Contest");
(iii) consummation of (A) a reorganization, merger or consolidation
of the Company, (B) a sale or other disposition of all or substantially
all of the assets of the Company, or (C) a sale or other disposition of
all or substantially all of the assets ("Automotive Group Assets") of the
Company used in its Automotive Strategic Business Unit (such
reorganization, merger, consolidation or sale
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each, a "Business Combination"), unless, in each case, immediately
following such Business Combination, (I) all or substantially all of the
individuals and entities who were the beneficial owners of Voting Stock of
the Company immediately prior to such Business Combination beneficially
own, directly or indirectly, more than a majority of the then outstanding
shares of common stock and the combined voting power of the then
outstanding Voting Stock of the Company entitled to vote generally in the
election of Directors of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result of
such transaction owns the Company, all or substantially all of the
Company's assets either directly or through one or more subsidiaries or
the Automotive Group Assets), (II) no Person (other than the Company, such
entity resulting from such Business Combination, or any employee benefit
plan (or related trust) sponsored or maintained by the Company, any
Subsidiary or such entity resulting from such Business Combination, or DCA
or Gabelli to the extent of the Exempt DCA Percentage or Exempt Gabelli
Percentage, respectively) beneficially owns, directly or indirectly, 15%
or more of the then outstanding shares of Voting Stock of the entity
resulting from such Business Combination, and (III) at least a majority of
the members of the Board of Directors of the entity resulting from such
Business Combination were members of the Incumbent Board at the time of
the execution of the initial agreement or of the action of the Board of
Directors providing for such Business Combination; provided, however, that
if the Business Combination is initiated by the Company and the Chief
Executive Officer of the Company immediately prior to such Business
Combination constitutes the Chief Executive Officer of the entity
resulting from the Business Combination immediately following the Business
Combination and throughout the twelve-month period thereafter, this
Section 5(d)(iii) will be applied without regard to clauses (I) and (II);
(iv) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company, except pursuant to a Business
Combination that complies with clauses (I), (II) and (III) of Section
5(d)(iii);
(v) if and so long as DCA beneficially owns 15% or more of the
combined voting power of the outstanding Voting Stock of the Company, (A)
the attainment by any Person of beneficial ownership of 20% or more of the
combined voting power of the then outstanding Voting Stock of DCA ("DCA
Voting Stock") (other than as the result of an acquisition of DCA Voting
Stock by (x) DCA (and any change in the percentage ownership of DCA Voting
Stock that results from such acquisition), (y) any employee benefit plan
(or related trust) sponsored or maintained by DCA or any subsidiary of
DCA, or (z) the Company or any Subsidiary that
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is approved by the Incumbent Board), or (B) individuals who, as of the
date hereof, constitute the Board of Directors of DCA (the "Incumbent DCA
Board") cease for any reason to constitute at least a majority of the
Board of Directors of DCA; provided, however, that any individual becoming
a Director subsequent to the date hereof whose election, or nomination for
election by DCA's shareholders, was approved by a vote of at least a
majority of the Directors of DCA then comprising the Incumbent DCA Board
(either by a specific vote or by approval of the proxy statement of DCA in
which such person is named as a nominee for director, without objection to
such nomination) will be deemed to have been a member of the Incumbent DCA
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
Election Contest; or
(vi) in addition to any of the other events or circumstances set
forth in this Section 5(d), a "Change in Control" will be deemed to have
occurred for all purposes thereof in the event of a Board Shift. For this
purpose, (A) a "Board Shift" will be deemed to have occurred if 50% or
more of the members of the Board of Directors, or of any entity resulting
from a Business Combination, are persons who (I) are employees of any
beneficial owner of 20% or more of the Voting Stock (a "20+% Holder") or
(II) were nominated for election, or voted for, by any such 20+% Holder
unless such nomination or vote was approved by a majority of the Unrelated
Directors, and (B) "Unrelated Directors" means Xxxxxx X. Xxxxxxxx, Xx.,
Xxxxxxxx X. Xxxxxxx and Xxxxxx X. Xxxxxx or any successors thereto
nominated with the approval of such of the foregoing (or their successors
nominated as aforesaid) as may remain members of the Board of Directors,
or of any entity resulting from a Business Combination, at the time of
such nomination.
(e) By the Company Other Than for Cause or by the Executive without
Good Reason. Notwithstanding any other provision of this Agreement, the Company
may terminate the Executive's employment other than for Cause, in which case the
Executive shall be entitled to the payments and benefits set forth in Section
6(a) of this Agreement, and the Executive may terminate his employment other
than for Good Reason (as defined in paragraph (c) of this Section 5), in which
case the Executive shall be entitled to the payments and benefits set forth in
Section 6(b) of this Agreement.
(f) Notice of Termination. Any termination by the Company or by the
Executive shall be communicated by Notice of Termination to the other party
hereto given in accordance with Section 10(b) of this Agreement. For purposes of
this Agreement, a "Notice of Termination" means a written notice which (i)
indicates the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in
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reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated, and
(iii) if the Date of Termination (as defined in paragraph (f) of this Section 5)
is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty (30) days after the giving of such
notice). The failure by the Executive or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason shall not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing the Executive's
rights hereunder. Further, a Notice of Termination for Cause is required to
include a copy of a resolution duly adopted by the affirmative vote of not less
than three-quarters (3/4) of the membership of the Board of Directors (excluding
the Executive if the Executive is then a member of such Board) at a meeting of
such Board which was called and held for the purpose of considering such
termination (after reasonable notice to the Executive and an opportunity for the
Executive, together with the Executive's counsel, to be heard before such Board)
finding that, in the good faith opinion of such Board, the Executive was guilty
of conduct set forth in clause (i) or (ii) of the definition of Cause herein,
and specifying the particulars thereof in detail.
(g) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Executive for Good Reason, the date
of receipt of the Notice of Termination or any later date specified therein, as
the case may be, (ii) if the Executive's employment is terminated by the
Company, the date on which the Company notifies the Executive of such
termination (except in the event of a termination for Cause), (iii) if the
Executive's employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that the Executive shall not have
returned to the full-time performance of his duties during such thirty (30) day
period), and (iv) if the Executive's employment is terminated by reason of
death, the date of death.
6. Obligations of the Company Upon Termination.
(a) Termination for Good Reason or Other Than for Cause. If the
Executive shall terminate his employment for Good Reason or the Company shall
terminate the Executive's employment for any reason other than Cause, including
Disability, or if such employment shall be terminated by reason of death, the
Executive shall be entitled to the following benefits:
(i) the Company shall pay to the Executive a lump sum amount in cash
equal to the sum of (A) the Executive's Base Salary through the Date of
Termination to the extent not theretofore paid, (B) any compensation
previously deferred by the Executive (together with any accrued interest
or earnings
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thereon) and any accrued vacation pay and (C) any other amounts due the
Executive as of the Date of Termination, in each case to the extent not
theretofore paid. (The amounts specified in clauses (A), (B) and (C) shall
be hereinafter referred to as the "Accrued Obligation"). The amounts
specified in this Section 6(a)(i) shall be paid within thirty (30) days
after the Date of Termination; and
(ii) in lieu of any severance benefit otherwise payable to the
Executive,
(A) if the Executive shall terminate his employment for Good Reason or the
Company shall terminate the Executive's employment for any reason other
than Disability or Cause, the Company shall pay the Executive a lump sum
amount, in cash, within five days following the Date of Termination, equal
to three and one-third (3 1/3) times the sum of (1) twelve (12) times Base
Salary, and (2) $355,300, which is equal to the largest aggregate amount
earned by the Executive as stock and cash bonuses for any of the five
fiscal years preceding that in which the Effective Date occurs; and
(B) if the termination of the Executive's employment is by reason of death
or Disability, or, if the Executive so elects, in lieu of the payments
described in paragraph (A) of this Section 6(ii), the Company shall
continue to pay the Executive (or, in the event of his death, his legal
representative) for the remainder of the Term (1) the Base Salary as in
effect immediately prior to the Date of Termination, in accordance with
the Company's general payroll practices, and (2) for each full
twelve-month period remaining in the Term, the highest annual aggregate
cash and stock bonuses earned by the Executive pursuant to any annual
bonus or incentive plan maintained by the Company in respect of any of the
five fiscal years of the Company ending immediately prior to the fiscal
year in which occurs the Date of Termination, payable in accordance with
the Company's practices with respect to the payment of bonuses.
(b) Termination for Other Reason. If the Executive's employment
shall be terminated by the Company for Cause or by the Executive other than for
Good Reason, death or Disability, the Company shall not have any further
obligations to the Executive under this Agreement other than the obligation to
pay to the Executive the Accrued Obligation and any postemployment benefits to
which the Executive is entitled under the terms of the Company's employee
benefit plans.
(c) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators sitting in Elkhart, Indiana, in
accordance with the
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rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.
(d) Legal Fees. The Company shall also pay to the Executive all
reasonable legal fees and expenses incurred by the Executive in disputing in
good faith any issue hereunder relating to the termination of the Executive's
employment, in seeking in good faith to obtain or enforce any benefit or right
provided by this Agreement or in connection with any tax audit or proceeding to
the extent attributable to the application of section 4999 of the Code to any
payment or benefit provided hereunder. Such payments shall be made within five
(5) business days after delivery of the Executive's written requests for payment
accompanied with such evidence of fees and expenses incurred as is reasonable.
(e) Gross-Up. If any of the payments or benefits received or to be
received by the Executive (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any Person (as
defined in Section 5(d) of this Agreement) whose actions result in a Change in
Control or any Person affiliated with the Company or such Person) (such payments
or benefits, excluding the Gross-Up Payment (as defined below), being
hereinafter referred to as the "Total Payments") will be subject to the excise
tax imposed under section 4999 of the Code ("Excise Tax"), the Company shall pay
to the Executive an additional amount (the "Gross-Up Payment") such that the net
amount retained by the Executive, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and employment taxes and Excise
Tax upon the Gross-Up Payment, shall be equal to the Total Payments.
For purposes of determining whether any of the Total Payments will
be subject to the Excise Tax and the amount of such Excise Tax, (i) all of the
Total Payments shall be treated as "parachute payments" (within the meaning of
section 280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax
Counsel") reasonably acceptable to the Executive and selected by the accounting
firm which was, immediately prior to the date hereof, the Company's independent
auditor, or in the event of a Change in Control, was, immediately prior to the
Change in Control, the Company's independent auditor (the "Auditor"), such
payments or benefits (in whole or in part) do not constitute parachute payments,
including by reason of section 280G(b)(4)(A) of the Code, (ii) all "excess
parachute payments" within the meaning of section 280G(b)(l) of the Code shall
be treated as subject to the Excise Tax unless, in the opinion of Tax Counsel,
such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered (within the meaning of section
280G(b)(4)(B) of the Code) in excess of the "Base Amount," as defined in section
280G(b)(3) of the Code, allocable to such reasonable compensation, or are
otherwise not subject to the Excise Tax, and (iii) the value of any noncash
benefits or
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any deferred payment or benefit shall be determined by the Auditor in accordance
with the principles of sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Executive shall be deemed to
pay federal income tax at the highest marginal rate of federal income taxation
in the calendar year in which the Gross-Up Payment is to be made and state and
local income taxes at the highest marginal rate of taxation in the state and
locality of the Executive's residence on the Date of Termination (or if there is
no Date of Termination, then the date on which the Gross-Up Payment is
calculated for purposes of this Section 6.2), net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes.
In the event that the Excise Tax is finally determined to be less
than the amount taken into account hereunder in calculating the Gross-Up
Payment, the Executive shall repay to the Company within five (5) business days
following the time that the amount of such reduction in the Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income and employment taxes imposed on the
Gross-Up Payment being repaid by the Executive, to the extent that such
repayment results in a reduction in the Excise Tax and a dollar-for-dollar
reduction in the Executive's taxable income and wages for purposes of federal,
state and local income and employment taxes, plus interest on the amount of such
repayment at 120% of the rate provided in section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken into
account hereunder in calculating the Gross-Up Payment (including by reason of
any payment the existence or amount of which cannot be determined at the time of
the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest, penalties or additions payable by the
Executive with respect to such excess) within five (5) business days following
the time that the amount of such excess is finally determined. The Executive,
the Company shall each reasonably cooperate with the other in connection with
any administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.
(f) Nonduplication of Benefits. Notwithstanding any of the
foregoing, the benefits payable under this Section 6 shall not be duplicative
of, and shall be reduced without further action by, any corresponding benefits
paid or provided to the Executive under the Severance Agreement.
7. Full Settlement; Mitigation.
The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform their obligations hereunder shall not be
subject to any set-off, counterclaim, recoupment, defense or other claim, right
or action which the
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Company may have against the Executive or others. In no event shall the
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 the 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. Confidential Information.
The Executive shall hold in a fiduciary capacity for the benefit of
the Company all secret, confidential information, knowledge or data relating to
the Company or any of its affiliated companies and their respective businesses
which shall have been obtained by the Executive during his employment by the
Company or any of its affiliated companies and that shall not have been or now
or hereafter have become public knowledge (other than by acts by the Executive
or representatives of the Executive in violation of this Agreement). The
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than the Company and those
designated by it.
9. Successors.
(a) Assignment by Executive. This Agreement is personal to the
Executive and, without the prior written consent of the Company, shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns.
(c) Assumption. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets thereof to expressly assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform this Agreement if no such succession
had taken place. As used in this Agreement, the Company shall mean the Company
as hereinbefore defined and any successor to its businesses and/or assets as
aforesaid that assumes and agrees to perform this Agreement by operation of law,
or otherwise.
10. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of Indiana, without reference to its principles of
conflict of laws. The captions of
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this Agreement are not part of the provisions hereof and shall have no force or
effect. This Agreement may not be amended, modified, repealed, waived, extended
or discharged except by an agreement in writing signed by the party against whom
enforcement of such amendment, modification, repeal, waiver, extension or
discharge is sought. No person, other than pursuant to a resolution of its Board
of Directors (or a committee thereof), as the case may be, shall have authority
on behalf of the Company to agree to amend, modify, repeal, waive, extend or
discharge any provision of this Agreement or take any other action in respect
thereto.
(b) Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return-receipt requested, postage prepaid,
addressed, in the case of the Company, to the Company's headquarters and, in the
case of the Executive, to the address on the signature page of this Agreement
or, in either case, to such other address as any party shall have subsequently
furnished to the other parties in writing. Notice and communications shall be
effective when actually received by the addressee.
(c) Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(d) Taxes. The Company may withhold from any amounts due and payable
under this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e) No Waiver. Any party's failure to insist upon strict compliance
with any provision hereof or the failure to assert any right such party may have
hereunder, including, without limitation, the right of the Executive to
terminate employment for Good Reason pursuant to Section 5(c) of this Agreement,
shall not be deemed to be a waiver of such provision or right or any other
provision or right of this Agreement.
(f) Entire Agreement; Survival. This Agreement entered into as of
the date hereof among the Company and the Executive contains the entire
agreement of the Executive and the Company or its predecessors or subsidiaries
with respect to the subject matter of the Agreement, and all promises,
representations, understandings, arrangements and prior agreements, other than
the Severance Agreement, are merged into, and superseded by, the Agreement. Any
provision hereof which by
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its terms applies in whole or part after a termination of the Executive's
employment hereunder shall survive such termination.
IN WITNESS WHEREOF, the Executive has executed this Agreement and,
pursuant to due authorization from its Board of Directors, the Company has
caused this Agreement to be executed, as of the day and year first above
written.
CTS CORPORATION
By:
-------------------------------------
Name: Xxxxxxx X. Xxxx
Title: Vice President Finance
and Chief Financial Officer
----------------------------------------
XXXXXX X. XXXXXX
Address: 00000 Xxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
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EXHIBIT A
Xxxxxx X. Xxxxxx
Xx. Xxxxxx will be the Chairman, President and Chief Executive
Officer of the Company and will have such duties, responsibilities and authority
as are customarily incident to the principal executive officer of a publicly
traded corporation. Xx. Xxxxxx will report solely to the Board of Directors. In
addition, Xx. Xxxxxx will be a member with the President of DCA of the Company's
Office of the Chairman. As such, Xx. Xxxxxx and the President of DCA will
consult on a regular basis as to strategic matters affecting the Company and
DCA. Xx. Xxxxxx will, however, have all powers and authorities of the Chairman,
President and Chief Executive Officer of the Company.
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