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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: October 20, 1997
CTS CORPORATION
950 West Boulevard North
Elkhart, Indiana 46514
(219) 293-7511
INDIANA 1-4639 35-0225010
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(State of Incorporation) (Commission File No.) (IRS Id. No.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 16, 1997 (the "Effective Time), Dynamics Corporation of
America, a New York corporation ("Dynamics") merged with and into CTS First
Acquisition Corp. ("Sub"), a New York corporation and a wholly owned
subsidiary of CTS Corporation (the "Company") pursuant to an Amended and
Restated Agreement and Plan of Merger, dated as of May 9, 1997, as amended
and restated on July 17, 1997, as amended (the "Merger Agreement"), among
Sub, Dynamics and the Company. At the Effective Time of such merger (the
"Merger"), among other things, (i) each then-outstanding share of common
stock of Dynamics ("Dynamics Shares") (other than Electing Shares as defined
below) was converted into the right to receive 0.88 shares of common stock of
the Company ("CTS Shares"), (ii) holders of 3,297 Dynamics Shares who elected
to receive cash in the Merger prior to the October 15, 1997 election deadline
("Electing Shares") received $58.00 in cash per Dynamics Share, (iii) each
Dynamics Share owned by the Company, Sub, Dynamics or any wholly owned
subsidiary of Dynamics (including the 1,164,339 Dynamics Shares acquired by
Sub in a tender offer completed on June 16, 1997 for $56.25 per share (the
"Tender Offer") and the 50,825 Dynamics Shares acquired in open market
purchases after the Tender Offer) were canceled without payment of any
consideration therefor, and (iv) Sub's name was changed to Dynamics
Corporation of America.
Immediately following the Merger, the Company owns all of the outstanding
shares of the common stock of Dynamics Corporation of America, as successor
in the Merger to Dynamics. Pursuant to the Merger Agreement, the Board of
Directors of the Company continues to be composed of Joseph P. Walker,
Chairman, President and Chief Executive Officer of the Company, Patrick J.
Dorme, Vice President - Finance and Chief Financial Officer of Dynamics,
Andrew Lozyniak, Chairman and President of Dynamics and two independent
directors. Prior to the Merger, Dynamics owned 43.9% of the issued and
outstanding CTS Shares and 30.3% of the voting power of the CTS Shares.
Dynamics is a diversified manufacturer of commercial and industrial
products. Dynamics' eight plants are located in California, Connecticut, Ohio
and Pennsylvania. Its six business units manufacture electronic components,
mobile vans and transportable shelters for specialized electronic and medical
diagnostic equipment, portable electric housewares and commercial appliances,
air distribution equipment, specialized air-conditioning equipment and generator
sets. Subsequent to the Merger, the Company intends to continue the operations
of Dynamics.
In connection with the Tender Offer, the Company entered into a Credit
Agreement among the Company, NBD Bank, N.A., as Agent, and the institutions
from time to time parties thereto as lenders (the "Credit Agreement")
providing for credit facilities (the "Credit Facilities") of $125 million.
On June 16, 1997, the Company borrowed $50 million under the term loan
portion of the Credit Facilities to finance the purchase of Dynamics Shares
in the Tender Offer. The balance of the purchase price for Dynamics Shares
came from working capital of the Company.
ITEM 5. OTHER EVENTS.
On October 16, 1997, in connection with the Merger, the shareholders
of the Company approved certain amendments to the Company's Articles of
Incorporation. The Company's Articles of Incorporation, as amended and
restated, are filed herewith as Exhibit 3(a) and are incorporated herein by this
reference. On May 9, 1997 the Company's Board of Directors approved certain
amendments to the Company's By Laws to be effective on completion of the
Merger. The By Laws, as amended, are filed herewith as Exhibit 3(b) and are
incorporated herein by this reference.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(a) Financial Statements of Business Acquired.
The following audited consolidated financial statements of
Dynamics are incorporated herein by reference to the Annual Report on
Form 10-K for the year ended December 31, 1996 filed by Dynamics with
the Securities and Exchange Commission (the "Commission"):
Report of Independent Accountants
Consolidated Balance Sheets - December 31, 1996 and 1995
Consolidated Statements of Income - Years ended December 31,
1996, 1995 and 1994
Consolidated Statements of Cash Flows - Years ended December 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements
The following unaudited consolidated financial statements of
Dynamics are incorporated herein by reference to the Quarterly Report
on Form 10-Q for the quarterly period ended June 30, 1997 filed by
Dynamics with the Commission:
Condensed Consolidated Balance Sheets - June 30, 1997 and
December 31, 1996
Condensed Consolidated Statements of Income - Three and Six
Months ended June 30, 1997 and 1996
Condensed Consolidated Statements of Cash Flows - Six Months
ended June 30, 1997 and 1996
Notes to Condensed Consolidated Financial Statements - Unaudited
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(b) Pro Forma Financial Information.
The following pro forma financial data is incorporated herein by
reference to the Registration Statement on Form S-4 of the Company
(Registration No. 333-34861) filed with the Commission on September 3,
1997:
Unaudited Condensed Consolidated Pro Forma Balance Sheet at
June 29, 1997
Unaudited Condensed Consolidated Pro Forma Statement of
Operations for the Six Months Ended June 29, 1997
Unaudited Condensed Consolidated Pro Forma Statement of
Operations for the Year Ended December 31, 1996
Notes to Pro Forma Financial Data
(c) Exhibits:
EXHIBIT NUMBER
2 Amended and Restated Agreement and Plan of Merger dated as of May
9, 1997, as amended and restated on July 17, 1997, as amended,
among Dynamics Corporation of America, CTS Corporation and CTS
First Acquisition Corp. (the "Merger Agreement") (incorporated by
reference to Exhibit 99(c)(6) to CTS Corporation's and CTS First
Acquisition Corp.'s Amendment No. 3 to Schedule 13D, filed with
the Commission on July 18, 1997).
2(a) Amendment dated as of October 15, 1997 to the Merger Agreement.
3(a) Articles of Incorporation, as amended and restated October 16,
1997.
3(b) By Laws, as amended and in effect on October 16, 1997.
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SIGNATURES
Pursuant to the requirements 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.
CTS CORPORATION
(Registrant)
Date: October 20, 1997 By: /s/ Stanley J. Aris
--------------------
Stanley J. Aris
Vice President - Finance and
Chief Financial Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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2 Amended and Restated Agreement and Plan of Merger dated
as of May 9, 1997, as amended and restated on July 17,
1997, as amended, among Dynamics Corporation of
America, CTS Corporation and CTS First Acquisition
Corp. (incorporated by reference to Exhibit 99(c)(6) to
CTS Corporation's and CTS First Acquisition Corp.'s
Amendment No. 3 to Schedule 13D filed with the
Commission on July 18, 1997).
2(a) Amendment dated October 15, 1997 to the Merger
Agreement, filed herewith.
3(a) Articles of Incorporation, as amended and restated
October 16, 1997, filed herewith.
3(b) By Laws, as amended and in effect October 16, 1997,
filed herewith.
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EXHIBIT 2(a)
FIRST AMENDMENT TO THE AMENDED AND RESTATED
AGREEMENT AND PLAN OF MERGER
FIRST AMENDMENT TO THE AMENDED AND RESTATWED AGREEMENT AND PLAN
OF MERGER, dated as of October 15, 1997 (the "Amendment"), among CTS
Corporation, an Indiana corporation ("Parent"), CTS First Acquisition
Corp., a New York corporation and a wholly owned subsidiary of Parent
("Sub"), and Dynamics Corporation of America, a New York corporation (the
"Company").
WHEREAS, Parent, Sub and the Company have entered into the
Amended and Restated Agreement and Plan of Merger, dated as of May 9, 1997
and amended and restated on July 17, 1997 (the "Merger Agreement"), which
sets forth the terms and conditions upon which the Company will merge with
and into Sub (the "Merger");
WHEREAS, Parent, Sub and the Company desire that after the
Effective Time of the Merger, the certificate of incorporation of Sub shall
be amended to change the name of Sub to Dynamics Corporation of America;
and
WHEREAS, Parent, Sub and the Company desire to amend the Merger
Agreement to make the change set forth below.
NOW, THEREFORE, in consideration of the agreement herein set
forth, the parties agree as follows:
1. DEFINITIONS. Capitalized terms used and not otherwise
defined herein shall have the respective meanings assigned to them in the
Merger Agreement.
2. AMENDMENT TO SECTION 2.05 OF THE MERGER AGREEMENT.
Subsection (a) of Section 2.05 is hereby amended and restated in its
entirety to read as follows:
"(a) The certificate of incorporation of Sub will be the
certificate of incorporation of the Surviving Corporation, amended to
change the name of the Surviving Corporation to `Dynamics Corporation
of America', until thereafter changed or amended as provided therein
or by Law."
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IN WITNESS WHEREOF, Parent, Sub and the Company have caused
this Amendment to be signed by their respective officers thereunto
duly authorized, all as of the date first written above.
CTS CORPORATION
By: /s/ Joseph P. Walker
--------------------------
Name: Joseph P. Walker
Title: Chairman of the Board,
President and Chief
Executive Officer
CTS FIRST ACQUISITION CORP.
By: /s/ Joseph P. Walker
---------------------------
Name: Joseph P. Walker
Title: President
DYNAMICS CORPORATION OF AMERICA
By: /s/ Andrew Lozyniak
----------------------------
Name: Andrew Lozyniak
Title: Chairman of the Board
And President
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EXHIBIT 3(a)
Amended and Restated
ARTICLES OF INCORPORATION
OF
CTS CORPORATION
ARTICLE I.
NAME
The name of the corporation is CTS Corporation (the "Corporation").
ARTICLE II.
PURPOSES
The purpose for which the Corporation is formed is to engage in any
lawful business or activity for which corporations may be organized under the
Indiana Business Corporation Law, as amended (the "IBCL").
ARTICLE III.
TERM OF EXISTENCE
The period during which the Corporation shall continue is perpetually.
ARTICLE IV.
PRINCIPAL OFFICE AND RESIDENT AGENT
The post-office address of the principal office of the Corporation is 905
West Blvd. North, Elkhart, Indiana; and the name and post-office address of its
Resident Agent in charge of such office is Jeannine M. Davis, 3819 Augusta Lane,
Elkhart, Indiana.
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ARTICLE V.
AMOUNT OF CAPITAL STOCK
The Corporation is authorized to issue two classes of capital stock,
designated Common Stock and Preferred Stock. The total number of shares of
capital stock that the Corporation is authorized to issue is 100,000,000 shares,
consisting of 75,000,000 shares of Common Stock, without par value, and
25,000,000 shares of Preferred Stock, without par value.
ARTICLE VI.
TERMS OF CAPITAL STOCK
(a) PREFERRED STOCK. The Preferred Stock may be issued in one or
more series. The Board of Directors of the Corporation is authorized to fix the
designations, powers, preferences, rights, qualifications, limitations or
restrictions of each such series by the adoption and filing in accordance with
the Indiana Business Corporation Law, before the issuance of any Preferred
Shares of such series, of an amendment or amendments to these Articles of
Incorporation determining the terms of such series (an "Article IV Amendment").
The authority of the Board of Directors with respect to each such series will
include, without limiting the generality of the foregoing, the determination of
any or all of the following:
(i) the number of shares of any series and the designation to
distinguish the shares of such series from the shares of all other
series;
(ii) the voting powers, if any, and whether such voting powers
are full or limited in such series;
(iii) the redemption provisions, if any, applicable to such
series, including the redemption price or prices to be paid;
(iv) whether dividends, if any, will be cumulative or
noncumulative, the dividend rate of such series and the dates and
preferences of dividends on such series;
(v) the rights of such series upon the voluntary or involuntary
dissolution of, or upon any distribution of the assets of, the
Corporation;
(vi) the provisions, if any, pursuant to which the shares of
such series are convertible into, or exchangeable for, shares of any
other class or classes or of any other series of the same or any other
class or classes of stock, or any other security, of the Corporation
or any other corporation or other entity and the rates or other
determinants of conversion or exchange applicable thereto;
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(vii) the right, if any, to subscribe for or to purchase any
securities of the Corporation or any other corporation or other
entity;
(viii) the provisions, if any, of a sinking fund for such
series; and
(vix) any other relative, participating, optional or other
special powers, preferences or rights and qualifications, limitations
or restrictions thereof;
all as may be determined from time to time by the Board of Directors and
stated or expressed in the Article IV Amendment for such shares of
Preferred Stock (collectively, a "Preferred Stock Designation").
(b) PREEMPTIVE RIGHTS. Except as may be specified in a
Preferred Stock Designation, no holder of any share or shares of any class
of stock of the Corporation shall have any preemptive right to subscribe
for any shares of stock of any class of the Corporation now or hereafter
authorized or for any securities, warrants or options convertible into or
carrying any rights to purchase any shares of stock of any class of the
Corporation now or hereafter authorized, provided, however, that no
provision of these Articles of Incorporation shall be deemed to deny to the
Board of Directors the right, in its discretion, to grant to the holders of
shares of any class of stock at the time outstanding the right to purchase
or subscribe for shares of stock of any class or any other securities of
the Corporation now or hereafter authorized, at such prices and upon such
other terms and conditions as the Board of Directors, in its discretion,
may fix.
ARTICLE VII.
VOTING RIGHTS OF CAPITAL STOCK
Subject to the rights, if any, of the holders of any series of Preferred
Stock to vote under circumstances specified in a Preferred Stock designation,
the holders of the Common Stock, without par value, shall be entitled to vote at
all meetings of the shareholders and shall be entitled to cast one vote for each
share of stock held by them respectively and standing in their respective names
on the books of the Corporation.
ARTICLE VIII.
DATA RESPECTING DIRECTORS
SECTION 1. NUMBER. Subject to the rights, if any, of the holders of any
series of Preferred Stock to elect additional directors of the Board of
Directors under circumstances specified in a Preferred Stock Designation, the
number of the directors of the Corporation will not be less than three nor more
than fifteen and will be fixed from time to time in the manner provided in the
Bylaws of the Corporation.
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SECTION 2. QUALIFICATIONS. Directors need not be shareholders of the
Corporation. A majority of the Directors at any time shall be citizens of the
United States.
ARTICLE IX.
PROVISIONS FOR REGULATION OF BUSINESS
AND CONDUCT OF AFFAIRS OF CORPORATION
(a) ISSUANCE OF SHARES. The Board of Directors is hereby authorized to
direct the issuance by the Corporation of shares of Common Stock and Preferred
Stock at such times, in such amounts, to such persons, for such consideration
and upon such terms and conditions as it may, from time to time, determine,
subject only to the restrictions, limitations, conditions and requirements
imposed by the Indiana Business Corporation Law, other applicable laws and these
Articles of Incorporation.
(b) The Corporation shall have power to carry on and conduct its said
business, or any part thereof, and to have one or more officers in the State of
Indiana, and in the various other states, territories, colonies and dependencies
of the United States, in the District of Columbia, and in all or any foreign
countries;
(c) The Corporation reserves the right to take advantage of the provisions
of any amendment to The Indiana Business Corporation Law, or of any new law
applicable or relating to corporations formed, organized under, or which have
accepted the provisions of, the law now in force, which may hereafter be
enacted, and all rights granted to, and conferred on, the shareholders of the
Corporation, are granted and conferred, subject to this reservation;
(d) Annual or special meetings of the shareholders of the Corporation may
be held at the place, either within or without the State of Indiana, which may
be stated in the notice of said meeting;
(e) These Amended and Restated Articles of Incorporation shall amend and
supersede and take the place of all heretofore existing Articles of
Incorporation or Articles of Acceptance (and amendments thereto) of the
Corporation.
ARTICLE X.
LIABILITY
To the fullest extent permitted by applicable law as then in effect, no
director or officer shall be personally liable to the Corporation or any of its
shareholders for damages for breach of fiduciary duty as a director or officer,
except for liability (a) for breach of duty if such breach constitutes wilful
misconduct or recklessness or (b) for the payment of distributions to
shareholders in violation of Section 23-1-28-3 of the Indiana Business
Corporation Law. Any
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amendment or repeal of, or adoption of any provision inconsistent with, this
Article X will not adversely affect any right or protection existing hereunder,
or arising out of facts occurring, prior to such amendment, repeal or adoption
and no such amendment, repeal or adoption will affect the legality, validity or
enforceability of any contract entered into or right granted prior to the
effective date of such amendment, repeal or adoption.
ARTICLE XI.
INDEMNIFICATION
Each person who was or is involved in any manner (including without
limitation as a party or a witness), or is threatened to be made so involved, in
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative and whether formal or informal, by
reason of the fact that such person is or was a director or officer of the
Corporation, or who is or was serving at the request of the Board of Directors
as a director, officer, partner, trustee, employee or agent of another
corporation or a partnership, joint venture, trust, employee benefit plan or
other entity, whether for profit or not for profit, whether or not the basis of
such proceeding is alleged action in an official capacity while serving as a
director, officer, employee or agent, will be indemnified by the Corporation to
the fullest extent to which it is empowered to do so by the Indiana Business
Corporation Law, or any other applicable laws, as the same exists or may
hereafter be amended (but, in the case of any such amendment, only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such
amendment) against all expense, liability and loss (including attorneys' fees
and expenses, judgments, settlements, penalties, fines, and excise taxes
assessed with respect to employee benefit plans) actually and reasonably
incurred or suffered by such person in connection therewith. The right of
indemnification provided in this Article XI (a) will not be exclusive of any
other rights to which any person seeking indemnification may otherwise be
entitled, including without limitation pursuant to any contract approved by a
majority of the Board of Directors (whether or not the directors approving such
contract are or are to be parties to such contract or similar contracts), and
(b) will be applicable to matters otherwise within its scope (with each
reference in the first sentence of this Article XI to "the Corporation" being
deemed for purposes of this sentence to include any domestic or foreign
predecessor entity of the Corporation in a merger or other transaction in which
the predecessor's existence ceased upon consummation of the transaction) whether
or not such matters arose or arise before or after the adoption of this Article
XI. Without limiting the generality or the effect of the foregoing, the
Corporation may adopt Bylaws, or enter into one or more agreements with any
person, which provide for indemnification greater or different than that
provided in this Article XI or the Indiana Business Corporation Law. Any
amendment or repeal of, or adoption of any provision inconsistent with, this
Article XI will not adversely affect any right or protection existing hereunder,
or arising out of facts occurring, prior to such amendment, repeal or adoption
and no such amendment, repeal or adoption will affect the legality, validity or
enforceability of any contract entered into or right granted prior to the
effective date of such amendment, repeal or adoption.
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Exhibit 3(b)
CTS CORPORATION
BY LAWS
(As Amended and in Effect on October 16, 1997)
ARTICLE I.
OFFICERS
The officers of CTS Corporation (the "Corporation") shall be a President,
one or more Vice Presidents, a Secretary, a Treasurer and a Controller. The
Board of Directors may also elect one or more Assistant Secretaries, Assistant
Treasurers and Assistant Controllers, and such other officers as may be
determined, from time to time, by the Board of Directors.
The President shall be a director of the Corporation. Any offices, other
than those of President and Secretary, may be held by the same person.
The officers of the Corporation shall be elected by the Board of Directors
at the annual meeting of the Board of Directors for the term of one year and
until their successors have been elected and qualified. Any vacancy occurring
among the above offices may be filled for the remainder of the term by the Board
of Directors at any regular or special meeting, and officers so elected shall
hold office until the next annual meeting of the Board of Directors and until
their successors have been elected and qualified.
ARTICLE II.
BOARD OF DIRECTORS ORGANIZATION
SECTION 1. The Board of Directors shall elect, from the members of the
Board of Directors who are not officers of the Corporation, an Audit Committee
consisting of not less than three members. The members of the Audit Committee
shall be elected at each annual meeting of the Board of Directors to serve,
while qualified, at the pleasure of the Board of Directors, or if longer, for
one year and until their successors have been elected and qualified.
The Audit Committee shall be responsible directly to the Board of Directors
and, in addition to such authority and duties specifically delegated by the
Board of Directors, shall have
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the authority to review the conduct and the report of the independent financial
audit of the Corporation and shall report to the Board of Directors the
findings, conclusions and recommendations of the Audit Committee regarding the
conduct and report of the independent financial audit.
Unless the Board of Directors designates a Chairman, a majority of the
members of the Audit Committee may designate one member of the Audit Committee
as Chairman of the Audit Committee to preside at all meetings of the Audit
Committee.
SECTION 2. The Board of Directors shall elect from members of the Board of
Directors, who are not officers of the Corporation, a Compensation Committee
consisting of not less than three members. The members of the Compensation
Committee shall be elected at each annual meeting of the Board of Directors to
serve, while qualified, at the pleasure of the Board of Directors, or if longer,
for one year and until their successors have been elected and qualified.
The Compensation Committee shall be responsible directly to the Board of
Directors and, in addition to such authority and duties specifically delegated
by the Board of Directors, shall have authority to review, and make
recommendations to the Board of Directors regarding the compensation, including
fringe benefits and stock options, for the officers of the Corporation.
Unless the Board of Directors designates a Chairman, a majority of the
members of the Compensation Committee may designate one member of the
Compensation Committee as Chairman of the Compensation Committee to preside at
all meetings of the Compensation Committee.
SECTION 3. The Board of Directors shall designate from members of the
Board of Directors, a Chairman of the Board, who shall preside at meetings of
shareholders and of the Board of Directors unless the Chairman shall designate
an officer or other director of the Corporation to do so. The Chairman of the
Board shall have such additional authority as granted by the Board of Directors
and shall perform such other duties as are assigned from time to time by the
Board of Directors.
ARTICLE III.
CORPORATE OFFICERS
SECTION 1. The President shall exercise specific authority and supervision
over, and shall be responsible for the direction of, the business and affairs of
the Corporation, subject to the direction of the Board of Directors. In
addition, the President may be designated the Chief Executive Officer and, if
so, shall have the additional authority and duties and responsibilities
specified in these Bylaws. The President shall also perform such other duties
as may be assigned from time to time, by the Board of Directors. The President
shall perform all the duties of the Chairman of the Board in the absence or
during any disability of the Chairman.
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SECTION 2. The Board of Directors shall designate the Chairman of the
Board or the President as the Chief Executive Officer of the Corporation. In
addition to other duties as an officer, the Chief Executive Officer shall
exercise general authority and supervision over, and shall be responsible for,
management of the business and affairs of the Corporation, subject to the
direction of the Board of Directors.
The Chief Executive Officer shall determine the organization of the
officers of the Corporation, shall designate to whom such officers shall report
and be responsible, and subject to the direction of the Board of Directors shall
determine their respective duties and responsibilities.
SECTION 3. Each Vice President shall perform such duties as may be
assigned from time to time by the President and shall report to and be
responsible to such officer as the President shall designate. Each Vice
President shall also have such additional authority and shall perform such other
duties assigned from time to time, by the Board of Directors.
The Board of Directors may designate a word or words to be placed before or
after the title of Vice President to indicate organizational or functional
authority or duty.
SECTION 4. The Secretary shall attend all meetings of the shareholders and
Board of Directors and all committees, and shall keep minutes of each meeting.
The Secretary shall give proper notice of all meetings of shareholders,
directors and committees, required in these Bylaws. The Secretary shall
maintain proper records of ownership and transfer of the stock of the
Corporation. The Secretary shall have the custody of, and affix, the seal of the
Corporation and perform such other duties as may be assigned from time to time
by the Board of Directors.
SECTION 5. The Vice President Finance/Chief Financial Officer, shall be
responsible for the financial affairs of the Corporation, shall submit to the
annual meeting of shareholders a statement of the financial condition of the
Corporation, and whenever required by the Board of Directors, shall give account
of all transactions and of the financial condition of the Corporation. The
Treasurer shall report to the Vice President Finance/Chief Financial Officer.
The Treasurer shall establish and maintain appropriate banking relations and
arrangements on behalf of the Corporation. The Treasurer shall receive and have
custody of, and shall disburse, all moneys of the Corporation, and in the name
of the Corporation, shall deposit all moneys in, and disburse all moneys from,
such bank, or banks, as the Board of Directors shall designate, from time to
time, as the depositories of the Corporation. The Treasurer shall perform such
other duties and render such services for, and on behalf of, the Corporation as
may be assigned from time to time by the Vice President Finance, Chief Financial
Officer.
SECTION 6. The Controller shall be the accounting officer of the
Corporation and shall formulate accounting procedures to record expenses,
losses, gains, assets and liabilities of the Corporation, to report and
interpret results of operations of the Corporation and to assure protection of
the assets of the Corporation. The Controller shall prepare and submit to the
Board of Directors and the Chief Executive Officer such periodic balance sheets,
profit and loss statements and other financial statements as may be required to
keep such persons currently
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informed of the operations and the financial condition of the Corporation. The
Controller shall perform such other duties assigned from time to time by the
Chief Executive Officer.
SECTION 7. The Assistant Secretary or Secretaries, Assistant Treasurer or
Treasurer or Treasurers, and the Assistant Controller or Controllers shall
perform the duties of the Secretary, of the Treasurer, and of the Controller,
respectively, in the absence of those officers and shall have such further
authority and perform such other duties as may be assigned.
ARTICLE IV.
DUTIES OF OFFICERS DELEGATED
In the absence or disability of any officer of the Corporation, the Board
of Directors may delegate the powers and duties of any such officer to any other
officer or director of the Corporation for such period of time as said Board of
Directors may determine.
ARTICLE V.
BONDS
The Board of Directors or the Chief Executive Officer may require any
officer, agent, or employee of the Corporation to furnish the Corporation a bond
for the faithful performance of duties and for the accounting of all moneys,
securities, records, or other property of the Corporation coming into the hands
of such agent or employee.
ARTICLE VI.
MEETINGS OF SHAREHOLDERS
SECTION 1. Meetings of the shareholders of the Corporation shall be held
at the place, either within or without the State of Indiana, stated in the
notice of said meeting.
SECTION 2. The annual meeting of shareholders of the Corporation shall be
held on the last Friday in April of each year or at such other time established
for such meeting by 80% of the directors.
SECTION 3. A complete list of the shareholders entitled to vote at any
shareholders' meeting, arranged in alphabetical order and containing the address
and number of shares of stock so held by each shareholder who is entitled to
vote at said meeting, shall be prepared by the Secretary and shall be subject to
the inspection by any shareholder at the time and place of an annual meeting and
at the principal office of the Corporation for five (5) days prior thereto.
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SECTION 4. At all shareholders' meetings a quorum shall consist of a
majority of all of the shares of stock outstanding and entitled by the Articles
of Incorporation to vote on the business to be transacted at said meeting, but a
meeting composed of less than a quorum may adjourn the meeting from day to day
thereafter or until some future time.
SECTION 5. At the annual meeting of the shareholders, there shall be
elected, by plurality vote, a Board of Directors, who shall hold office until
the next annual meeting of shareholders and until their successors have been
elected and qualified.
SECTION 6. At all shareholders' meetings, each shareholder shall be
entitled to one (1) vote in person or by proxy for each share of common stock
registered in the shareholder's name on the books of the Corporation as of the
record date which shall be as fixed by the Board of Directors and entitled, by
the Articles of Incorporation, to vote on the business to be transacted at said
meeting.
SECTION 7. The shareholders may be represented at any meeting thereof by
their duly appointed Attorney-in-Fact provided the proxy so appointing said
Attorney-in-Fact shall be filed with the Secretary prior to the meeting.
SECTION 8. Special meetings of the shareholders of the Corporation may be
called by the Chairman of the Board, by the President, by the Board of
Directors, or by the shareholders holding not less than one-fourth of all of the
shares of stock outstanding and entitled, by the Articles of Incorporation, to
vote on the business to be transacted at said special meeting whenever in the
opinion of such person or body such meeting is necessary.
Whenever a special meeting of the shareholders shall be called by the
shareholders, the call shall be delivered to the Secretary who shall issue the
notice of said special meeting which is required to be given.
SECTION 9. Written notice of each meeting of the shareholders shall be
given by the Secretary to each shareholder of record at least ten (10) days
prior to the time fixed for the holding of such meeting; said notice shall state
the place, day and hour and the purpose for which said meeting is called, and
said notice shall be addressed to the last known place of residence of each
shareholder as shown by the stock books of the Corporation. The ten (10) days
shall be computed from the date upon which said notice is deposited in the
mails.
SECTION 10. Notice of any shareholders' meeting may be waived in writing
by any shareholder if the waiver sets forth in reasonable detail the purpose or
purposes for which the meeting is called and the time and place thereof.
SECTION 11. No shares of stock shall be voted at any annual or special
meeting of shareholders upon which any installment is due and unpaid, which are
owned by the Corporation.
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ARTICLE VII.
DIRECTORS
SECTION 1. The property and business affairs of the Corporation shall be
managed under the direction of the Board of Directors. Directors shall be
elected by a plurality vote at the annual meeting or a special meeting of the
shareholders and shall hold office for a term of one year or until their
successors are elected and qualified. In case of the failure to hold the annual
meeting on the date fixed herein for the same to be held, the directors shall
hold over until the next annual meeting, unless prior to said meeting a special
meeting of the shareholders for the purpose of electing directors has been held.
Subject to the rights, if any, of any series of Preferred Stock to elect
additional directors under circumstances specified in the Articles of
Incorporation and to the minimum and maximum number of authorized directors
provided in the Articles of Incorporation, the authorized number of directors
will be as determined from time to time by the Board of Directors. If no
determination of the number of directors has been made by the Board of
Directors, the number of directors shall be seven.
SECTION 2. Any vacancy occurring in the Board of Directors caused by
resignation, death or other incapacity, shall be filled by majority vote of the
remaining members of the Board until the next annual meeting of shareholders;
provided, however, that if the vote of the remaining members of the Board of
Directors shall result in a tie, such vacancy shall be filled by the
shareholders at the next annual meeting of the shareholders or at a special
meeting of the shareholders called for that purpose.
SECTION 3. Any vacancy occurring in the Board of Directors, caused by an
increase in the number of directors, shall be filled by a majority vote of the
members of the Board until the next annual meeting of shareholders; provided,
however, that if the vote of the members of the Board of Directors shall result
in a tie, such vacancy shall be filled by the shareholders at the next annual
meeting of the shareholders or at a special meeting of the shareholders called
for that purpose.
SECTION 4. A person shall not be nominated, stand for election or be
elected as a director of the Corporation who (I) at the time of his election
shall be seventy (70) years of age or older, (ii) has retired from employment by
the Corporation and is sixty-five (65) years of age or older or (iii) has
retired from active business and professional vocations.
ARTICLE VIII.
MEETINGS OF DIRECTORS
SECTION 1. Following the annual meeting of shareholders, the annual
meeting of the Board of Directors shall be held without notice, each and every
year hereafter, at the time and place determined by the directors.
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SECTION 2. Regular meetings of the Board of Directors shall be held
without notice at 9:00 A.M. on the last Friday of February, June, August,
October and December at the offices of the Corporation, unless another time and
place is designated.
SECTION 3. Special meetings of the Board of Directors may be called by the
Chairman of the Board, by the President, or by three (3) members of the Board of
Directors on three (3) days' notice by mail, or an twenty-four (24) hours'
notice by telegraph, telephone, facsimile or other similar medium of
communication to each director, which notice shall be addressed to the last
known place of business or residence of each director, and said meetings may be
held either at the office of the Corporation or at such other place as may be
designated in the notice of said meeting.
Whenever a special meeting of the Board of Directors shall be called, in
accordance with the provision of this section, by members of the Board of
Directors, the call shall be in writing, signed by said directors and delivered
to the secretary who shall thereupon issue the notice calling said meeting.
SECTION 4. Not less than one-half at the whole Board of Directors, shall
constitute a quorum for the transaction of any business except the filling of
vacancies, but a smaller number may adjourn, from time to time, until a future
date or until a quorum is secured.
For the purpose only of filling a vacancy or vacancies in the Board of
Directors, a quorum shall consist of a majority of the whole Board of Directors,
less the vacancy or vacancies therein.
The act of a majority at the directors present at a duly called, at which a
quorum is present shall be the act of the Board of Directors.
ARTICLE IX.
Compensation of Directors and
MEMBERS OF COMMITTEES
The members of the Board of Directors and members of committees of the
Corporation, who are not salaried employees of the Corporation, shall receive
such compensation for their services to be rendered as members of the Board of
Directors, or of committees, as may, from time to time, be fixed by the Board of
Directors and the compensation so fixed shall continue to be payable until the
Board of Directors shall have thereafter fixed a different compensation, which
it may do at any annual, regular or special meeting.
ARTICLE X.
CERTIFICATES OF STOCK
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SECTION 1. Certificates of stock shall be issued to those legally entitled
thereto, as may be shown by the books of the Corporation, and shall be signed by
the President and attested by the Secretary.
SECTION 2. The Corporation may appoint one or more transfer agents and/or
registrars to issue, countersign, register, and transfer certificates
representing its capital stock and signatures of the Corporation's officers and
of the transfer agents on stock certificates may be facsimiles. Upon surrender
to the Corporation or the transfer agent of the Corporation of a certificate for
shares duly endorsed or accompanied by proper evidence of succession, assignment
or authority to transfer, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction on its books.
SECTION 3. The holder of any stock of the Corporation shall immediately
notify the Corporation of any loss, theft, destruction or mutilation of the
certificate for any such stock. A new certificate or certificates shall be
issued upon the surrender of the mutilated certificate or, in case of loss,
theft, or destruction, upon (I) delivery of an affidavit or affirmation, and
(ii) delivery of a bond in such sum and in such form and with such surety or
sureties as the Board of Directors (by general or specific resolutions) or the
President may approve, indemnifying the Corporation against any claim with
respect to the certificate or certificates alleged to have been lost, stolen or
destroyed. However, the Board may, in its discretion, refuse to issue new
certificate or certificates, save upon the order of some Court having
jurisdiction in such matters.
ARTICLE XI.
TRANSFER OF STOCK
SECTION 1. The stock transfer books of the Corporation may from time to
time be closed by order of the Board of Directors for any lawful purpose and for
such period consistent with law, but not exceeding thirty (30) days at any one
time, as the Board of Directors may deem advisable. In lieu of closing the
stock transfer books as aforesaid, the Board of Directors may, in its
discretion, fix in advance a date not exceeding fifty (50) days or less than ten
(10) days next preceding the date of any meeting of shareholders or the date for
the payment of any dividend or the date for the allotment of rights or the date
when any change or conversion or exchange of capital stock shall go into effect,
as the record date for the determination of the shareholders entitled to notice
of and to vote at any such meeting or entitled to receive any such dividend or
to any such allotment of rights or to exercise the rights of any such change,
conversion or exchange of capital stock; and, in such case, only such
shareholders as shall be shareholders of record at the close of business on the
date so fixed shall be entitled to notice of and to vote at such meeting or to
receive such payment of dividend or to receive such allotment of rights or to
exercise such rights as the case may be, notwithstanding any transfer of stock
on the books of the Corporation after such record date fixed as aforesaid. In
the event the Board of Directors fails to fix in advance the record date for the
determination of the shareholders entitled to notice of and to vote at any
meeting, no share of stock transferred on the books of the corporation within
ten (10) days next preceding the date of a meeting shall be voted at such
meeting.
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SECTION 2. The Corporation shall be entitled to treat the holder of record
of any share or shares of stock as the legal owner thereof and accordingly shall
not be bound to recognize any equitable claim to or interest in such share or
shares on the part of any other person whether or not it shall have express or
other notice thereof, save as expressly provided in the laws of the State of
Indiana.
SECTION 3. The assignment of any certificate of stock shall constitute an
assignment to the assignee of the shares so assigned and of all dividends on the
shares assigned which are declared payable as of a record date subsequent to the
date the assignment is recorded on the stock record books of the Corporation.
ARTICLE XII.
FISCAL YEAR
The fiscal year of the Corporation shall correspond to the calendar year.
ARTICLE XIII.
CHECKS FOR MONEY
All checks, drafts or other orders for the payment of funds of the
Corporation shall be signed by either the Chairman of the Board, the President,
or the Treasurer, or by such other individual or individuals as may hereafter,
from time to time, be designated by the Board of Directors. No check, draft or
other order for the payment of funds of the Corporation shall be signed in
blank, either as to the amount of the check, draft or other order, or as to the
name of the payee.
ARTICLE XIV.
DIVIDENDS
The Board of Directors may declare and pay dividends out of the unreserved
and unrestricted earned surplus of the Corporation. Dividends may be declared at
any annual, regular or special meeting of the Board of Directors. Dividends may
be paid in cash, in property or in the shares of the capital stock of the
Corporation, as provided by the Articles of Incorporation and the laws of the
State of Indiana.
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ARTICLE XV.
NOTICES
SECTION 1. A notice required to be given under the provisions of these
Bylaws to any shareholder, director, officer and member of any committee shall
not be construed to mean personal notice but may be given in writing by
depositing the same in a post office or letter box in a postpaid sealed wrapper
addressed to such shareholder, director, officer and member of any committee at
such address as appears upon the books of the Corporation, and such notice shall
be deemed to be given at the time when the same shall be thus mailed.
SECTION 2. Any shareholder, director, officer and member of any committee
may waive, in writing, any notice required to be given by these Bylaws, either
before or after the time said notice should have been issued.
ARTICLE XVI.
COMPENSATION OF OFFICERS
The officers of the Corporation shall receive such compensation for their
services as may, from time to time, be fixed by the Board of Directors, and the
compensation so fixed shall continue to be payable until the Board of Directors
shall have fixed a different compensation, which it may do at any annual,
regular, or special meeting.
ARTICLE XVII.
CORPORATE SEAL
The seal of the Corporation shall be a plain circular disk having engraved
thereon, near the outer edge thereof, at least the words, "CTS Corporation" and
in the center thereof the word, "Seal".
ARTICLE XVIII.
INDEMNIFICATION
SECTION 1. GENERAL. Without limiting the generality or effect of Article
XI of the Articles of Incorporation, the Corporation shall, to the fullest
extent to which it is empowered to do so by the Indiana Business Corporation Law
(hereinafter the "IBCL"), or any other applicable laws, as the same exists or
may hereafter be amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide broader
indemnification rights than such law permitted the Corporation to provide prior
to such amendment), indemnify and hold harmless any person who was or is
involved in any manner (including without limitation as a party or a witness),
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or is threatened to be made so involved, in any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal (hereinafter a "proceeding"), by
reason of the fact that such person is or was a director or officer of the
Corporation, or who is or was serving at the request of the Board of Directors
as a director, officer, partner or trustee of another corporation or a
partnership, joint venture, trust, employee benefit plan or other entity,
whether for profit or not for profit, (any such person hereinafter an
"indemnitee"), whether or not the basis of such proceeding is alleged action in
an official capacity while serving as a director, or officer, against all
expense, liability and loss (including attorneys' fees and expenses, judgments,
settlements, penalties, fines, and excise taxes assessed with respect to
employee benefit plans) actually and reasonably incurred or suffered by such
person in connection therewith; provided, however, that, except as provided in
Section 3 of this Article XVIII with respect to proceedings to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee in
connection with a proceeding (or part thereof) initiated by such indemnitee only
if such proceeding (or part thereof) was authorized by the Board of Directors of
the Corporation.
SECTION 2. RIGHT TO ADVANCEMENT OF EXPENSES. The right to
indemnification conferred in Article XVIII shall include the right to be paid by
the Corporation the expenses (including, without limitation, attorneys' fees and
expenses) incurred in defending any such proceeding in advance of its final
disposition (hereinafter an "advancement of expenses"); provided, however, that,
if the IBCL so requires, an advancement of expenses incurred by an indemnitee in
his or her capacity as a director or officer (and not in any other capacity in
which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal (hereinafter a "final adjudication") that such
indemnitee is not entitled to be indemnified for such expenses under this
Section 2 or otherwise.
The rights to indemnification and to the advancement of expenses
conferred in Article XVIII shall be contract rights and such rights shall
continue as to an indemnitee who has ceased to be a director or officer and
shall inure to the benefit of the indemnitee's heirs, executors and
administrators. For purposes of Article XVIII, references to "the Corporation"
shall include any domestic or foreign predecessor entity of the Corporation in a
merger or other transaction in which the predecessor's existence ceased upon
consummation of the transaction.
SECTION 3. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under
Section 1 or Section 2 of this Article XVIII is not paid in full by the
Corporation within 60 calendar days after a written claim has been received by
the Corporation, except in the case of a claim for an advancement of expenses,
in which case the applicable period shall be 20 calendar days, the indemnitee
may at any time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim. If successful in whole or in part in any such suit,
or in a suit brought by the Corporation to recover an advancement of expenses
pursuant to the terms of an undertaking, the indemnitee shall be entitled to be
paid also the expense of prosecuting or defending such suit. In (i) any suit
brought by the indemnitee to enforce a right to indemnification hereunder (but
not in a suit brought by the indemnitee to enforce a right to an advancement of
expenses) it shall be a defense that, and (ii) any suit brought by the
Corporation to recover an advancement of expenses pursuant to the terms of an
undertaking,
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the Corporation shall be entitled to recover such expenses upon a final
adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the IBCL. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel or shareholders) to
have made a determination prior to the commencement of such suit that
indemnification of the indemnitee is proper in the circumstances because the
indemnitee has met the applicable standard of conduct set forth in the IBCL, nor
an actual determination by the Corporation (including its Board of Directors,
independent legal counsel or shareholders) that the indemnitee has not met such
applicable standard of conduct, shall create a presumption that the indemnitee
has not met the applicable standard of conduct or, in the case of such a suit
brought by the indemnitee, be a defense to such suit. In any suit brought by
the indemnitee to enforce a right to indemnification or to an advancement of
expenses hereunder, or brought by the Corporation to recover an advancement of
expenses pursuant to the terms of an undertaking, the burden of proving that the
indemnitee is not entitled to be indemnified, or to such advancement of
expenses, under this Article XVIII or otherwise shall be on the Corporation.
SECTION 4. NON-EXCLUSIVITY OF RIGHTS. The rights to indemnification
and to the advancement of expenses conferred in this Article XVIII shall not be
exclusive of any other right which any person may have or hereafter acquire
under any statute, the Corporation's Articles of Incorporation, Bylaws,
agreement, vote of shareholders or disinterested directors or otherwise.
SECTION 5. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the IBCL.
SECTION 6. VESTED RIGHT TO INDEMNIFICATION. The right of any
individual to indemnification under this Article XVIII shall vest at the time of
occurrence or performance of any event, act or omission giving rise to any
Proceeding and once vested, shall not later be impaired as a result of any
amendment, repeal, alteration or other modification of any or all of these
Bylaws. Notwithstanding the foregoing, the indemnification afforded under this
Article XVIII shall be applicable to all alleged prior acts or omissions of any
individual seeking indemnification hereunder, regardless of the fact that such
alleged acts or omissions may have occurred prior to the adoption of these
Bylaws, and to the extent such prior acts or omissions cannot be deemed to be
covered by these Bylaws, the right of any individual to indemnification shall be
governed by the indemnification provisions in effect at the time of such prior
acts or omissions.
SECTION 7. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE
CORPORATION. The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification and to the advancement
of expenses to any employee or agent of this corporation, or to any individual
who is or was serving at the request of the Board of Directors as an employee or
agent of another corporation or a partnership, joint venture, trust, employee
benefit plan or other entity, whether for profit or not for profit, to the
fullest extent of the provisions of these Bylaws with respect to the
indemnification and advancement of expenses of directors and officers of this
corporation.
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SECTION 8. BUSINESS EXPENSE. Any payments made to any indemnified
party under these Bylaws or under any other right to indemnification shall be
deemed to be an ordinary and necessary business expense of the Corporation, and
payment thereof shall not subject any person responsible for the payment, or the
Board, to any action for corporate waste or to any similar action.
SECTION 9. SEVERABILITY. If any provision or provisions of Article
XVIII is or are held to be invalid, illegal, or unenforceable for any reason
whatsoever: (i) the validity, legality, and enforceability of the remaining
provisions of such Article (including without limitation all portions of any
paragraph of such Article containing any such provision held to be invalid,
illegal, or unenforceable, that are not themselves invalid, illegal, or
unenforceable) will not in any way be affected or impaired thereby and (ii) to
the fullest extent possible, the provisions of such Article (including without
limitation all portions of any paragraph of such Article containing any such
provision held to be invalid, illegal, or unenforceable, that are not themselves
invalid, illegal, or unenforceable) will be construed so as to give effect to
the intent manifested by the provision held invalid, illegal, or illegal, or
unenforceable.
ARTICLE XIX.
AMENDMENTS
SECTION 1. These Bylaws may be amended, altered, repealed, or added to at
any annual or regular meeting of the directors, or at any special meeting
thereof.
SECTION 2. No amendment, alteration or addition to these Bylaws shall
become effective unless the same is adopted by the affirmative vote of a
majority of the members of the Board of Directors.
ARTICLE XX.
CONTROL SHARE ACQUISITIONS
As provided for in Section 5 thereof, Chapter 42 of the Indiana Business
Corporation Law, relating to control share acquisitions, shall not apply to
control share acquisitions of shares of the corporation made after March 3,
1987.
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