UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
Current
Report
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported): February 8, 2010 (February 2,
2010)
CTS
CORPORATION
(Exact
Name of Company as Specified in Its Charter)
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Indiana
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1-4639
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35-0225010
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(State
or Other Jurisdiction of Incorporation)
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(Commission
File Numbers)
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(I.R.S.
Employer Identification Nos.)
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905
West Boulevard North
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Elkhart,
Indiana
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46514
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Company’s
Telephone Number, Including Area
Code: (574)
523-3800
(Former
Name or Former Address, if Changed Since Last Report)
Check the
appropriate box below if the form 8-K filing is intended to simultaneously
satisfy the filing obligation of the Company under any of the following
provisions:
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q
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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q
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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q
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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q
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
5.02. Departure of Directors or Certain Officers;
Election of Directors; Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
On February 2, 2010, the Compensation
Committee (the “Compensation
Committee”) of the Board of Directors of CTS Corporation (the “Company”)
established target awards and quantitative performance goals for fiscal years
2010 and 2011 for restricted stock unit awards made to the Company’s executive
officers, including the Company’s named executive officers, based on a long-term
incentive plan under the Company’s 2009 Omnibus Equity and Performance Incentive
Plan (the “Plan”).
Each of
the executive officers has an opportunity to earn between 0% and 200% of a
target number of restricted stock units established for his or her
position. The maximum number of restricted stock units that may be
actually received by any Covered Employee (as defined in the Plan) for his or
her award is 125,000. Actual payouts for the restricted stock unit
awards will be determined after a two-year performance period, and will depend
on the Company’s two-year sales growth and relative total stockholder return for
2010 and 2011.
For
purposes of these awards, two-year sales growth means the percentage increase or
decrease in the Company’s corporate sales between 2011 and
2009. Corporate sales will equal the Company’s net sales as stated in
the Company’s consolidated statement of earnings for the relevant fiscal year,
and for participants who are not Covered Employees (as defined in the Plan), may
be adjusted for unusual conditions, factors or events as determined by the
Compensation Committee; however, no adjustment will be made for any condition,
factor or event that was specifically included in the Company’s business
plans. Additionally, relative total stockholder return means the
total stockholder return of the Company between January 1, 2010 and December 31,
2011 relative to the total stockholder return for a benchmark peer group over
that same period. Total stockholder return will equal the
appreciation in price of a share of common stock, plus aggregate dividends (paid
in cash or other property), between January 1, 2010 and December 31,
2011. The benchmark peer group is subject to adjustment during the
performance period. No award will be made if performance is below a
minimum achievement threshold. If the threshold has been achieved for
a particular goal, awards will be interpolated between established steps or
levels for the portion of the award associated with that particular
goal. For purposes of these awards, two-year sales growth will be
weighted 40% and relative total stockholder return will be weighted 60% toward
achievement of the awards.
After
completion of the 2011 fiscal year, the Compensation Committee will certify the
extent to which the performance goals have been met, and will determine the
number of restricted stock units that have been earned based on this
performance. Awards are subject to negative discretion on the part of
the Compensation Committee based on other business factors, such as overall
Company performance and the individual’s contribution to Company
performance.
Restricted
stock units that are earned will be paid out in 2012 under the terms of the
Plan. The earned restricted stock units will be settled as soon as
practicable after the Compensation Committee’s performance determination. The earned restricted
stock units will convert on a one-for-one basis into the Company’s common stock
when they are settled.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Company has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
CTS
CORPORATION
/s/ Richard
G. Cutter, III
By:
Richard G. Cutter, III
Vice President, Secretary and
General Counsel
Date: February
8, 2010