Amendment #1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Form 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For Fiscal Year Ended December 31, 1994
OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number: 1-4639
CTS CORPORATION
(Exact name of registrant as specified in its charter)
Indiana 35-0225010
(State or other jurisdiction of (IRS Employer Identifi-
incorporation or organization) cation Number)
905 West Boulevard North, Elkhart, Indiana 46514
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 219-293-7511
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
Common stock, without par value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant has: (1) filed all
reports required to be filed by Section 13 or 15(d) of the Securit-
ies Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes X No
Indicate by check mark if disclosure of delinquent filers pursuant
to Item 405 of Regulation S-K is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K.
X
There were 5,193,854 shares of Common Stock, without par value,
outstanding on March 10, 1995.
The aggregate market value of the voting stock held by non-affi-
liates of CTS Corporation was approximately $80 million on March
10, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Date March 29, 1995 By /S/ Stanley J. Aris
Stanley J. Aris
Vice President Finance
and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
Date March 29, 1995 By /S/ Lawrence J. Ciancia
Lawrence J. Ciancia,
Director
Date March 29, 1995 By /S/ Patrick J. Dorme
Patrick J. Dorme,
Director
Date March 29, 1995 By /S/ Gerald H. Frieling, Jr.
Gerald H. Frieling, Jr.,
Director
Date March 29, 1995 By /S/ Andrew Lozyniak
Andrew Lozyniak,
Director
Date March 29, 1995 By /S/ Joseph P. Walker
Joseph P. Walker,
Director
Date March 29, 1995 By /S/ George T. Newhart
George T. Newhart,
Corporate Controller
and principal accounting
officer
Date March 29, 1995 By /S/ Jeannine M. Davis
Jeannine M. Davis,
Vice President, Secretary
and General Counsel
CONSOLIDATED STATEMENTS OF EARNINGS
(In thousands of dollars except per share amounts)
<TABLE>
<CAPTION>
Year Ended
December 31 December 31 December 31
1994 1993 1992
<S> <C> <C> <C>
Net sales $268,707 $236,979 $227,391
Cost of goods sold 211,848 189,635 186,290
Gross earnings 56,859 47,344 41,101
Selling, general and
administrative expenses 36,175 36,323 37,855
(Gain) on sale of property
and other related provisions--Note B (852)
Operating earnings 20,684 11,021 4,098
Other (expenses) income:
Interest expense (714) (980) (1,267)
Interest income 657 580 656
Other 860 (361) 334
Total other income (expenses) 803 (761) (277)
Earnings before income taxes
and cumulative effect
of changes in accounting
principles 21,487 10,260 3,821
Income taxes--Note H 7,520 3,690 1,920
Earnings before cumulative effect of changes
in accounting principles 13,967 6,570 1,901
Cumulative effect of accounting change -
postretirement benefits--Notes A and G (5,096)
Cumulative effect of accounting change -
income taxes--Notes A and H 482
Net earnings $ 13,967 $ 1,956 $ 1,901
Net earnings per share:
Before accounting changes $2.70 $1.27 $.37
Cumulative effect on prior years of
accounting changes (.89)
Net earnings per share $2.70 $.38 $.37
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
EMPLOYMENT CONTRACT
This AGREEMENT entered into this 24th day of June, 1994, by
and between CTS Corporation, an Indiana corporation ("Company"),
and JOSEPH P. WALKER, residing at 56179 Dana Drive, Bristol,
Indiana, 46507, ("Employee") to evidence employment of the Employee
by the Company under the following terms and provisions:
1. Employment Term. The Company agrees to employ Employee,
and Employee accepts employment as Chairman of the Board, President
and Chief Executive Officer of the Company for a term of three
years commencing on June 24, 1994.
2. Duties. The Employee shall exert his best efforts and
devote substantially all of his time and attention to the affairs
of the Company. The Employee shall be in charge of the operation
of the Company, and shall have full authority and responsibility,
subject to the direction, approval, and control of the Board of
Directors of the Company, for formulating policies and operating
the Company.
3. Salary. For all services rendered by the Employee, the
Company shall pay the Employee, as regular compensation, a salary
of three hundred nineteen thousand seven hundred twenty-five
dollars ($319,725) per year, payable in equal monthly installments
subject to applicable withholdings, commencing on July 1, 1994.
4. Adjustment of Salary. The Board of Directors of CTS may
at any time or from time to time change the regular compensation
provided for in the preceding paragraph or otherwise change the
benefits receivable by the Employee under this Employment Contract
and the performance of Employee shall be reviewed annually on or
about the anniversary date of this contract for the purpose of
considering whether an adjustment should be made in Employee's
regular compensation. In the event that such regular compensation
shall be increased, then, from and after the date of such increase,
such regular compensation shall be deemed to be the amount as so
increased.
5. Vacation. Employee shall be entitled to four (4) weeks
vacation during each year of the term of this Agreement or any
extension thereof and, if unused, Employee's vacation time may be
accrued as provided in CTS Policy and Procedure Personnel - 16,
Vacations for Exempt Salaried Employees.
6. General Employee Benefits and Responsibilities. Except
as provided in paragraph 8(b) below, this Agreement is not intended
to and shall not be deemed to be in lieu of any rights, benefits
and privileges to which Employee may be entitled as an Employee of
the Company, it being understood that the Employee shall have the
same rights and privileges as other salaried employees and other
executive officers of the Company, except to the extent that such
rights or privileges conflict with benefits provided to Employee
under this Agreement. The rights, benefits and privileges of
salaried employees and executive officers include, but are not
limited to, the CTS Corporation Salaried Employees' Pension Plan,
the CTS Corporation 1988 Restricted Stock and Cash Bonus Plan, the
CTS Corporation Management Incentive Plan, the CTS Corporation
Retirement Savings Plan, the CTS Corporation 1986 Stock Option
Plan, the Medical Expense Benefit Plan, the Term Life Insurance and
Accidental Death and Dismemberment Insurance, the CTS Dental Plan,
the CTS Long Term Disability Plan, the CTS Reimbursement of
Relocation Expense Policy, and the CTS Executive Officer Automobile
Policy, and Employee shall be entitled to participate in such plans
and programs, to the extent and upon the terms provided for each
such plan or program. Employee shall also be entitled to split
dollar life insurance in amounts and on terms agreed to between the
Employee and the Compensation Committee of the Board of Directors.
Such insurance shall be in lieu of all except the first $50,000 of
the Term Life Insurance otherwise available to salaried employees
and executive officers. Employee further agrees to be bound by the
Company's standard agreement with its employees regarding
Confidential Information and disclosure and assignment of
inventions.
7. Termination for Cause. Notwithstanding any other
provisions of this Agreement, the Company by action of its Board of
Directors (the Employee not voting) may at any time, without prior
notice, discharge the Employee for either of the following causes:
(a) Any illegal, dishonest, or malfeasant conduct which
involves the Company's funds or other assets; or
(b) The willful failure of Employee to carry out the
provisions of this Agreement.
Termination pursuant to this paragraph shall result in Employee's
immediate forfeiture of all rights and privileges under this
Agreement, excluding accrued salary, if any, which shall be
immediately due and payable.
8. Termination for Any Other Reasons. Except as terminated
pursuant to paragraph 7, this Agreement may only be terminated
prior to expiration under the following terms and conditions:
(a) Termination by Employee. The Employee may
terminate this Agreement by giving the Company
ninety (90) days' written notice of his intent to
terminate his employment. If the Employee
terminates his employment pursuant to this
Agreement excluding accrued salary, which shall be
immediately due and payable, the Employee's vested
benefits (if any) in any employee benefit plan, and
his right to convert health and life insurance
policies; provided, however, that if the Employee
terminates this Agreement because of a breach of
this agreement by the Company, then he shall be
entitled to the rights and benefits described
under paragraph (b) below.
(b) Termination by the Company. The Company may
terminate this Agreement by giving the Employee
ninety (90) days' written notice of his
termination. If the Company terminates the
Employee's employment pursuant to this
subparagraph, the Company shall pay to the
Employee, in full satisfaction of the Company's
obligations to Employee under this Agreement, a sum
equal to the product of his monthly salary at the
time of termination, multiplied by the number of
months remaining under this Agreement, but in no
event shall Employee be paid less than 100% of his
then annual salary, the same to be paid to Employee
in equal monthly installments over the remaining
months of this Agreement, plus a portion of the
bonus payable under the CTS Corporation Management
Incentive Plan, for the year in which the
Employee's employment is terminated, the same to be
paid at the same time and in the same manner as
other participants in the CTS Corporation
Management Incentive Plan. The bonus which would
have been so payable to the Employee for the full
year shall then be multiplied by a fraction
containing the number of days in the year of
termination which precede the termination date in
the numerator and the number 365 in the denominator
to determine the bonus payable to the Employee.
In addition to the salary and bonus to be paid to
Employee upon termination of this Agreement
pursuant to this subparagraph, Employee shall also
be entitled to all termination benefits for which
he would be eligible as a salaried employee of the
Company without regard to this Agreement, including
but not limited to the right to receive accrued
vacation and elect conversion privileges under the
Company insurance plans, and shall also be entitled
to the rights on termination set forth in any other
agreement with the Company and in any options to
purchase shares of the Company to which Employee is
a party at the time of termination.
9. Death or Disability of Employee. In the event of
Employee's permanent and total disability during
the term of this Agreement, this Agreement shall
terminate at the end of the calendar month during
which a determination is made of his permanent and
total disability. A conclusive determination of
his permanent and total disability shall occur when
he is placed on Permanent Inactive Disability
Status under the CTS Corporation Salaried
Employees' Pension Plan. Employee shall be
entitled to receive all disability benefits
then available under any of the Company's
benefit plans. In the event of Employee's
death during the term of this Agreement, this
Agreement shall terminate at the end of the
calendar month during which his death occurs.
Employee's beneficiaries and estate shall be
entitled to receive all death benefits then
available to executive officers of the Company
to the extent and upon the terms provided for
in any such benefit plans.
10. Arbitration. The parties to this Agreement shall
attempt to settle any dispute arising under this
Agreement by negotiation. If a satisfactory
settlement of any dispute is not reached within ten
(10) days between the parties, either party may
demand arbitration by serving on the other party by
registered mail a written demand for arbitration.
The written demand must specify the nature of the
dispute. The American Arbitration Association
shall be asked to submit an arbitration panel of
seven (7) members from whom the arbitrator shall be
chosen. After the list has been furnished, the
Employer shall strike three (3) names from the
list, and the Employee shall strike three (3) names
from the remaining four (4). The name remaining
after the others have been stricken shall be the
arbitrator. The expense of the arbitrator and/or
fee of the American Arbitration Association shall
be borne equally by both parties.
The function of the arbitrator shall be of a
judicial rather than a legislative nature. The
arbitrator shall not have the authority to add to,
ignore, or modify any of the terms of this
Agreement. The arbitrator shall not decide issues
that are not directly involved in the dispute
submitted to him, and no decision of the arbitrator
shall require payment of compensation different
from or in addition to the compensation set forth
in this Agreement. The arbitrator shall have no
authority to impose on either party hereto any
limitations or obligations not specifically
provided in this Agreement.
The decision of the arbitrator shall be final and
binding upon both parties.
11. Waiver. Failure to insist upon strict compliance
with any of the terms, covenants, or conditions
hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder
at any one or more times be deemed a waiver or
relinquishment of such right or power at any
other time or times.
12. Severability. The invalidity or unenforceability
of any provision hereof shall in no way affect the
validity or enforceability of any other provision.
13. Entire Agreement. This Agreement is the entire
agreement and understanding of the Company and
Employee. Oral changes will have no effect. It
may be altered only by a written agreement signed
by the party against whom enforcement of any
waiver, change, extension or discharge is sought.
14. Construction of Agreement. This Agreement and all
questions arising in connection herewith shall be
governed by the laws of the State of Indiana. This
Agreement shall be enforceable against the Company
and its successors, agents and assignees by
Employee or his personal representatives or estate,
and in enforcing this Agreement, Employee, his
personal representatives or estate shall be
entitled to receive reasonable attorneys' fees and
court costs from the Company if Employee is the
prevailing party. Similarly, if the Company
prevails in any action brought by either party to
enforce this Agreement, the Company shall be
entitled to receive reasonable attorneys' fees and
court costs from the Employee.
IN WITNESS WHEREOF, the parties have signed this Agreement
this 24th day of June, 1994.
CTS CORPORATION
By:
Andrew Lozyniak
Chairman of the Compensation
Committee
ATTEST:
Jeannine M. Davis, Secretary
Joseph P. Walker, Employee
