from service or the named executive officer’s death. Payment of severance compensation under the change‑in‑controlchange-in-control severance agreement will be reduced to the extent of any corresponding payments under any other agreement.
Grant Thornton LLP has served as CTS’ independent auditor since 2005. Grant Thornton LLP representatives plan to attend the Annual Meeting, make a statement if they desire to do so, and will be available to respond to appropriate questions from shareholders. The following table presents fees for professional audit and other services provided by Grant Thornton LLP to CTS for the years ended December 31, 20192020 and December 31, 2018.2019.
| | Audit Fees | | | Audit Related Fees(1) | | | Tax Fees(2) | | | All Other Fees(3) | |
2020 | | $ | 1,053,000 | | | $ | 39,900 | | | $ | 71,295 | | | $ | 30,640 | |
2019 | | $ | 1,362,423 | | | $ | 37,800 | | | $ | 66,888 | | | $ | 30,370 | |
(1) | Pension Plan and 401(k) Plan audits and transaction due diligence. |
(2) | Tax compliance fees related to certain of CTS’ subsidiaries. |
(3) | Environmental agreed upon procedures and foreign social security contribution review. |
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| | Audit Fees | Audit‑Related Fees(1) | Tax Fees(2) | All Other Fees(3) |
| 2019 | $1,362,423 | $37,800 | $66,888 | $30,370 |
| 2018 | $1,511,655 | $37,800 | $20,190 | $24,966 |
(1) Pension Plan and 401(k) Plan audits and transaction due diligence.
(2) Tax compliance fees related to certain of CTS’ subsidiaries.
(3) Environmental agreed upon procedures and foreign social security contribution review, and other non-audit
procedures relating to the 2018 Equity and Incentive Compensation Plan.
The Audit Committee’s policy is to pre‑approvepre-approve all audit and non‑auditnon-audit services provided by the independent auditors. The Audit Committee annually reviews audit and non‑auditnon-audit services proposed to be rendered by Grant Thornton LLP during the fiscal year.
The Audit Committee has delegated authority to (1) the Audit Committee Chairman to grant pre‑approvalpre-approval of services by the independent auditors, provided that the Chairman reports on any such pre‑approvalpre-approval decisions at the next scheduled meeting of the Audit Committee, and (2) the Company to grant pre-approval of services by the independent auditors in an aggregate amount not to exceed $50,000 in one year, provided that the Company reports any such pre-approval decisions at the next scheduled meeting of the Audit Committee. All of the services rendered by Grant Thornton LLP were approved by the Audit Committee or were rendered pursuant to the de minimis exception established under the rules of the Securities and Exchange Commission.
PROPOSAL 4: APPROVAL OF AMENDMENTS TO THE CTS ARTICLES OF INCORPORATION PRINCIPALLY TO ALLOW SHAREHOLDERS TO AMEND CTS' BY-LAWS
We are seeking approval of Amended and Restated Articles of Incorporation. The principal amendment to the Amended and Restated Articles of Incorporation will provide shareholders the right to amend our By-Laws. The other amendments are purely ministerial changes or corrections. The proposed Amended and Restated Articles of Incorporation are attached as Exhibit A (the “Proposed Articles”). Indiana law provides that, unless otherwise specified by the articles of incorporation, only a corporation's board of directors may amend or repeal the by-laws. The CTS Articles of Incorporation are currently silent as to amendment of the By-laws, defaulting to the Indiana Law provision. The Proposed Articles add Article XII, which allows a majority of the holders of the outstanding shares of common stock of the Company to amend, alter, repeal, or add to the By-Laws, in addition to the Board's power to do so. In addition to the foregoing, we have made a few ministerial changes and corrections to update the Registered and Principal Office locations of the Company and to add or correct internal references.
Our Board is committed to good corporate governance and has carefully considered the advantages and disadvantages of adopting the Proposed Articles to allow shareholders to unilaterally amend the By-Laws. The By-Laws establish a number of fundamental corporate governance principles, including rules for meetings of directors and shareholders and the election and duties of directors and officers, among other provisions. In the past, the Board believed that the default position under Indiana law provided an effective means for the Board to ensure that any amendments to the By-Laws were prudent and designed to protect and maximize long-term value for shareholders. More recently, and in light of the fact that the many publicly traded companies provide shareholders with the right to amend the by-laws, the Nominating and Governance Committee considered the various positions for and against allowing shareholders to amend the By-Laws. After careful deliberation, and upon the recommendation of the Nominating and Governance Committee, the Board unanimously approved the Proposed Articles, subject to shareholder approval. The Board believes that the Proposed Articles will enhance CTS’ governance practices by giving shareholders a say in important governance principles.
This general description of the Proposed Articles is qualified in its entirety by reference to the text of the Proposed Articles, which is set forth in its entirety in Exhibit A to this Proxy Statement and is marked to reflect the changes contemplated by this Proposal 4. If the Proposed Articles are approved by the shareholders, we will file the approved Amended and Restated Articles of Incorporation with the Indiana Secretary of State shortly following the 2020 Annual Meeting. The Amended and Restated Articles of Incorporation will become effective upon the acceptance of the filing by the Secretary of State of Indiana. If the Proposed Articles are not approved, the
CTS Amended and Restated Articles of Incorporation will remain unchanged and the Board will retain the exclusive authority to amend the By-Laws.
Your Board recommends a vote FOR the approval of the amendments to the CTS
Articles of Incorporation principally to allow
shareholders to amend CTS' By-Laws.
20192020 ANNUAL REPORT ON FORM 10‑K
10-KUpon receipt of the written request of a shareholder owning shares of CTS common stock on the Record Date addressed to the Corporate Secretary of CTS Corporation, 4925 Indiana Avenue, Lisle, Illinois 60532, CTS will provide to such shareholder, without charge, a copy of its 20192020 Annual Report on Form 10‑ K,10-K, including the financial statements and financial statement schedule. You may also call investor relations at (630) 577‑577 8800, email at shareholder.services@ctscorp.com, or obtain the report on CTS’ website at
http://www.ctscorp.com.
Important Notice Regarding the Availability of Proxy Materials for
the 20202021 Annual Meeting of Shareholders to be held on May 14, 2020.
13, 2021.This proxy statement,Proxy Statement, along with our Annual Report on Form 10‑K10-K for the fiscal year ended December 31, 2019,2020, are available free of charge on the Investor Relations section of our website at
http://www.ctscorp.com/investors. |
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| By Order of the Board of Directors, |
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| Luis F. Machado
Scott D’Angelo |
| Corporate Secretary |
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FREQUENTLY ASKED QUESTIONS ABOUT THE |
2020 ANNUAL MEETING OF SHAREHOLDERS AND VOTING |
FREQUENTLY ASKED QUESTIONS ABOUT THE
2021 ANNUAL MEETING OF SHAREHOLDERS AND VOTING
The following is important information in a question‑and‑question and answer format regarding the Annual Meeting and voting.
Q: | |
Q: | Upon what may I vote? |
A: | |
A: | (1) Election of director nominees to serve on the Board; |
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(2) | Approval, on an advisory basis, of the compensation of CTS’ named executive officers; and |
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(3) | Ratification of the appointment of Grant Thornton LLP as CTS’ independent auditor for 2020; and2021. |
Q: | |
(4) | Approval of amendments to the Articles of Incorporation principally to allow shareholders to amend CTS' By-Laws. |
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Q: | How does the Board recommend that I vote? |
A: | |
A: | The Board recommends that you vote: |
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(1) | FOR each of the director nominees identified in this proxy statement;ProxyStatement; |
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(2) | FOR advisory approval of CTS’ named executive officercompensation; and |
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(3) | FOR ratification of the appointment of Grant Thornton LLP as CTS’ independent auditorfor 2020; and2021. |
Q: | |
(4) | FOR approval of amendments to the CTS Articles of Incorporation principally to allow shareholders to amend CTS' By-Laws. |
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Q: | How will voting on any other business be conducted? |
A: | |
A: | We are not aware of any other business to be brought before the shareholders at the Annual Meeting. However, if any other business is properly presented for shareholder consideration, your signed proxy card gives authority to Kieran O’Sullivan, Chairman, President and Chief Executive Officer, and Luis F. Machado, Scott D’Angelo, Vice President, General Counsel and Corporate Secretary, to vote on those matters at their discretion. |
Q: | |
Q: | How many votes are needed for approval of each proposal presented in this proxy statement?Proxy Statement? |
A: | |
A: | Assuming that at least a majority of the shares of CTS common stock are represented at the Annual Meeting, either in person or by proxy: |
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(1) | The seven director nominees receiving the most votes will be elected. Only votes cast for a nominee will have an impactontheelectionofdirectors.Abstentions,broker non‑votes non-votesandinstructionsonyourproxytowithholdauthority tovoteforoneormoreofthenomineeswillhavenoimpactastheywillonlyresultinthosenomineesreceivingfewer votes; |
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(2) | Anaffirmativevoteofamajorityofvotescastisnecessarytoapprove,onanadvisorybasis,thecompensationofCTS’ namedexecutiveofficers,althoughsuchvotewillnotbebindingonCTS.Abstentionsandbroker non‑votes non-voteswillhave no impact on the outcome of thisproposal; and |
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(3) | The Audit Committee’s appointment of Grant Thornton LLP as CTS’ independent auditor for 20202021 will be ratified if a majority of the votes cast support the appointment. Your broker or other nominee will be able to vote your shares with respect to this proposal without your instructions because the proposal to ratify the appointment of Grant Thornton LLP is considered “routine.” Abstentions will have no impact on the outcome of this proposal; andproposal. |
Q: Who is entitled to vote?
A: | |
(4) | The amendments to the Articles of Incorporation will be approved if a majority of the votes are cast in support of the amendments. Abstentions and broker non-votes will have no impact on the outcome of this proposal. |
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Q: | Who is entitled to vote? |
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A: | Shareholders of record at the close of business on March 16, 2020,15, 2021, which is referred to in this proxy statementProxy Statement as the Record Date, are entitled to vote at the Annual Meeting. As of the close of business on the Record Date, there were 32,455,71132,348,360 shares of CTS common stock issued and outstanding. Every shareholder is entitled to one vote for each share of CTS common stock held on the Record Date. |
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A: | |
A: | Please follow the instructions on your Notice of Internet Availability of Proxy Materials to vote online or by telephone up until 11:59 p.m. Eastern Time on May 13, 2020.12, 2021. Of course, you may always vote in person at the meeting. You may revoke your proxy at any time before it is exercised by giving us written notice, sent to our principal executive offices, by submitting a duly executed proxy card to us bearing a later date, or by giving notice to us at the Annual Meeting. |
Q: | |
Q: | How can I vote shares of CTS common stock that I hold under the CTS Corporation Retirement Savings Plan? |
A: | |
A: | The CTS Corporation Retirement Savings Plan is CTS’ 401(k) plan. Vanguard Fiduciary Trust Company ("Vanguard"), the plan trustee, will vote the shares of CTS common stock in your account according to your instructions. You may use the proxy card provided or go online at www.proxyvote.com to instruct Vanguard. You must provide instructions or make changes to your instructions on how to vote shares of CTS common stock in your CTS Corporation Retirement Savings Plan on or before 11:59 p.m. Eastern Time on May 12, 2020.10, 2021. After that time, your instructions will be transmitted to the plan trustee and cannot be changed. If Vanguard does not receive your instructions to vote your shares of CTS common stock, they will not be voted. |
Q: | |
Q: | Who is entitled to attend the Annual Meeting? |
A: | |
A: | Attendance at the Annual Meeting will be limited to our shareholders as of the Record Date and to pre‑approvedpre-approved guests of CTS. All shareholder guests must be pre‑approvedpre-approved by CTS and will be limited to spouses, persons required for medical assistance and properly authorized representatives of our shareholders as of the Record Date. Additionally, if you are not the record holder of your shares, to attend the Annual Meeting you must first obtain a legal proxy form from your broker or other organization that holds your shares. Please contact your broker or organization for instructions regarding obtaining a legal proxy. If you do obtain a legal proxy and plan to attend the Annual Meeting, you will be required to present a valid form of identification. |
Below is a map reflecting the location of CTS’ Annual Meeting.
Q: | |
Q: | Who solicits proxies on behalf of the Board and how much will this proxy solicitation cost? |
A: | |
A: | Broadridge, Inc. distributes proxy materials on CTS’ behalf and is compensated by CTS for mailing and distribution expenses. Proxiesexpenses.Proxies may also be solicited by executive officers of CTS, for which no additional compensation is paid. |
Q: | |
Q: | How can I receive paper or email copies of the proxy materials? |
A: | |
A: | Shareholders wishing to receive paper or email copies of the proxy materials for the Annual Meeting and for future annual meetings of shareholders may request to receive proxy materials in printed form by mail, or electronically by email, by directing written or oral requests to CTS Corporation, Corporate Secretary, 4925 Indiana Avenue, Lisle, Illinois 60532, by calling (630) 577‑577- 8800 and leaving |
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| a message for our Corporate Secretary, by sending an email to shareholder.services@ctscorp.com by May 1, 2020,2021, or by following the directions on your proxycard. |
Q: | |
Q: | How may a shareholder nominate a candidate for election to the Board? |
A: | |
A: | Director nominees for the 20212022 Annual Meeting of Shareholders may be nominated by shareholders by sending a written notice to the corporate office to the attention of the Corporate Secretary for CTS. Pursuant to the CTS Corporation Bylaws, all nominations must be received no earlier than January 1,December 29, 2021, and no later than February 5, 2021.12, 2022. The notice of nomination is required to contain certain representations and information about the nominee, which are described in CTS’ Bylaws. Copies of the Bylaws may be obtained free of charge from CTS’ Corporate Secretary, or from CTS’ website at http://www.ctscorp.com/wp-content/uploads/BL.pdf. |
Q: | |
Q: | When are shareholder proposals for the 20212022 Annual Meeting of Shareholders due? |
A: | |
A: | CTS’ advance notice Bylaw provisions require that in order to be presented at the 20212022 Annual Meeting of Shareholders, any shareholder proposal, including the nomination of a candidate for director, must be in writing and mailed to the corporate office to the attention of the Corporate Secretary for CTS, and must be received no earlier than January 1,December 29, 2021 and no later than February 5, 2021.12, 2022. Certain information is required to be included with shareholder proposals, which is described in CTS’ Bylaws. Copies of the Bylaws may be obtained free of charge from CTS’ Corporate Secretary, or from CTS’ website at http://www.ctscorp.com/wp-content/uploads/BL.pdf. To be included in our proxy materials relating to the 20212022 Annual Meeting of Shareholders proposals must be received by us on or before December 3, 2020,2, 2021 (or, if the date of the 20212022 Annual Meeting of Shareholders is more than 30 days before or after the date of the 20202021 Annual Meeting of Shareholders, a reasonable time before we begin to print and send our proxy materials). |
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PROPOSALS UPON WHICH YOU MAY VOTE |
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PROPOSAL 1 | | ELECTION OF DIRECTORS; |
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PROPOSAL 2 | | APPROVAL, ON AN ADVISORY BASIS, OF THE COMPENSATION OF CTS’ NAMED EXECUTIVE OFFICERS; AND |
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PROPOSAL 3 | | RATIFICATION OF THE APPOINTMENT OF GRANT THORNTON LLP AS CTS’ INDEPENDENT AUDITOR FOR 2020; AND2021. |
PROPOSAL 4 | APPROVAL OF AMENDMENTS TO THE CTS ARTICLES OF INCORPORATION PRINCIPALLY TO ALLOW SHAREHOLDERS TO AMEND CTS' BY-LAWS | |
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Your Board recommends a vote FOR the director nominees, FOR advisory approval of CTS’ named executive officer compensation, andFOR the ratification of the appointment of Grant Thornton LLP, and FOR the Amendments to the CTS Articles of Incorporation.
LLP. |
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EXHIBIT A
Amended and Restated
ARTICLES OF INCORPORATION
OF
CTS CORPORATION
ARTICLE I.
Name
The name
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY D44348-P49843 ! ! ! 3. Ratification of the corporation is CTS Corporation (the "Corporation").
ARTICLE II.
Purposes
The purposeappointment of Grant Thornton LLP as CTS' independent auditor 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.
Registered Office and Agent;Principal Office
The street address of the Corporation’s registered office at the time of adoption of these Articles of Incorporation is 1657 Commerce Drive #9B, South Bend, Indiana 46628, and the name of its registered agent at such office at the time of adoption of these Articles of Incorporation is Corporate Creations Network Inc.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, Indiana4925 Indiana Avenue, Lisle, Illinois 60532, or such other place as shall be determined by resolution of the Board of Directors.
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.2021. The Board of Directors recommends you vote FOR proposals 2 and 3. 2. Approval, on an advisory basis, of the Corporation iscompensation of CTS' named executive officers. NOTE: In their discretion, the proxies are authorized to fix the designations, powers, preferences, rights, qualifications, limitations or restrictions of eachvote on such series by the adoption and filing in accordance with the Indiana Business Corporation Law,other business as may properly come before the issuance ofmeeting or any Preferred Shares of such series, of an amendment or amendmentsadjournment thereof. For All Withhold All For All Except For Against Abstain ! ! ! ! ! ! CTS CORPORATION To withhold authority to these Articles of Incorporation determiningvote for any individual nominee(s), mark "For All Except" and write the terms of such series (an "Article IVVI Amendment"). The authoritynumber(s) of the Boardnominee(s) on the line below. CTS CORPORATION ATTN: SCOTT D'ANGELO 4925 INDIANA AVENUE LISLE, IL 60532 01) D. M. Costello 02) G. Hunter 03) W. S. Johnson 04) Y.J. Li 05) K. O'Sullivan 06) R. A. Profusek 07) A. G. Zulueta 1. Election 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;
(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
(vixix) 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 IVVI Amendment for such shares of Preferred Stock (collectively, a "Preferred Stock Designation").
(a-1) SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
Section 1. There is established hereby a series of Serial Preferred Stock that shall be designated Series A Junior Participating Preferred Stock (hereinafter sometimes called this "Series" or the "Series A Junior Participating Preferred Shares") and that shall have the terms set forth in this paragraph (a‑1).
Section 2. The number of shares of this Series shall be 750,000.
Section 3. (a) The holders of record of Series A Junior Participating Preferred Shares shall be entitled to receive, when and as declared by the Directors in accordance with the terms hereof, out of funds legally available for the purpose, cumulative quarterly dividends payable in cash on the first day of January, April, July and October in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a Series A Junior Participating Preferred Share or fraction of a Series A Junior Participating Preferred Share in an amount per share (rounded to the nearest cent) equal to the greater of (i) $1.00 per share or (ii) subject to the provision for adjustment hereinafter set forth, 100 times the aggregate per share amount of all cash dividends, and 100 times the aggregate per share amount (payable in kind) of all non‑cash dividends or other distributions (other than a dividend payable in shares or Common Stock, or a subdivision of the outstanding Common Stock (by reclassification or otherwise)), declared on the Common Stock since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any Series A Junior Participating Preferred Share or fraction of a Series A Junior Participating Preferred Share. In the event the Company shall at any time declare or pay any dividend on
the Common Stock payable in Common Stock, or effect a subdivision or combination or consolidation of the outstanding shares of Common Stock (by reclassification or otherwise than by payment of a dividend in Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of Series A Junior Participating Preferred Shares were entitled immediately prior to such event under clause (ii) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(b) Dividends shall begin to accrue and be cumulative on outstanding Series A Junior Participating Preferred Shares from the Quarterly Dividend Payment Date next preceding the date of issue of such Series A Junior Participating Preferred Shares, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issues is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Shares entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. No dividends shall be paid upon or declared and set apart for any Series A Junior Participating Preferred Shares for any dividend period unless at the same time a dividend for the same dividend period, ratably in proportion to the respective annual dividend rates fixed therefor, shall be paid upon or declared and set apart for all Serial Preferred Stock of all series then outstanding and entitled to receive such dividend. The Directors may fix a record date for the determination of holders of Series A Junior Participating Preferred Shares entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 40 days prior to the date fixed for the payment thereof.
Section 4. The Series A Junior Participating Preferred Shares are not redeemable.
Section 5. (a) In the event of any voluntary or involuntary liquidation, dissolution or winding up of the affairs of the Company (hereinafter referred to as a "Liquidation"), no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon Liquidation) to the Series A Junior Participating Preferred Shares, unless, prior thereto, the holders of Series A Junior Participating Preferred Shares shall have received at least an amount per share equal to one hundred times the then applicable Purchase Price as defined in the Rights Agreement, as the same may be from time to time amended in accordance with its terms (which Purchase Price is $125.00 (one hundred twenty five dollars) as of August 28, 1998), subject to adjustment from time to time as provided in the Rights Agreement, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not earned or declared, to the date of such payment, provided that the holders of shares of Series A Junior Participating Preferred Shares shall be entitled to receive at least an aggregate amount per share, subject to the provision for adjustment hereinafter set forth, equal to 100 times the aggregate amount to be distributed per share to holders of Common Stock (the "Series A Junior Participating Preferred Shares Liquidation Preference").
(b) In the event, however, that the net assets of the Company are not sufficient to pay in full the amount of the Series A Junior Participating Preferred Shares Liquidation Preference and the liquidation preferences of all other series of Serial Preferred Stock, if any, which rank on a parity with the Series A Junior Participating Preferred Shares as to distribution of assets in Liquidation, all shares of this Series and of such other series of Serial Preferred Stock shall share ratably in the distribution of assets (or proceeds thereof) in Liquidation in proportion to the full amounts to which they are respectively entitled.
(c) In the event the Company shall at any time declare or pay any dividend on the Common Stock payable in consolidation of the outstanding Common Stock (by reclassification or otherwise than by payment of a dividend in Common Stock) into a greater or lesser number of shares of Common Stock, then in each such case the amount to which holders of Series A Junior Participating Preferred Shares were entitled immediately prior to such event pursuant to the proviso set forth in paragraph (a) above, shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.
(d) The merger or consolidation of the Company into or with any other corporation, or the merger of any other corporation into it, or the sale, lease or conveyance of all or substantially all the property or business of the Company, shall not be deemed to be a Liquidation for the purpose of this Section 5.
Section 6. The Series A Junior Participating Preferred Shares shall not be convertible into Common Stock.
(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(the “Bylaws”).
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)Section 1.Issuance of Shares.Nominees: The Board of Directors isrecommends you vote FOR the following: Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. VOTE BY INTERNET - www.proxyvote.com Use the Internet to transmit your voting instructions and for electronic delivery of information. Vote by 11:59 p.m. Eastern Time on May 12, 2021 for shares held directly and by 11:59 p.m. Eastern Time on May 10, 2021 for shares held by Vanguard Fiduciary Trust Company, Trustee of the CTS Corporation Retirement Savings Plan. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE - 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions. Vote by 11:59 p.m. Eastern Time on May 12, 2021 for shares held directly and by 11:59 p.m. Eastern Time on May 10, 2021 for shares held by Vanguard Fiduciary Trust Company, Trustee of the CTS Corporation Retirement Savings Plan. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717.
Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy Statement and Form 10-K are available at www.proxyvote.com. D44349-P49843 CTS CORPORATION THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS FOR THE ANNUAL MEETING OF SHAREHOLDERS ON MAY 13, 2021. The undersigned, having received the Notice of Annual Meeting and Proxy Statement, hereby authorized to directappoints Kieran O'Sullivan and Scott D'Angelo as proxies, each with 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)Section 2.Conduct of Business. The Corporation shall have power to carry onappoint his substitute, and conduct its said business, or any part thereof,hereby authorizes them to represent 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)Section 3.Amendments to Law. 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 conferredvote, as designated on the shareholders of the Corporation, are granted and conferred, subject to this reservation;.
(d)Section 4.Place of Shareholders Meetings. 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)Section 5.Amended and Restated Articles of Incorporation.These Amended and Restated Articles of Incorporation shall amend and supersede and take the place ofreverse, 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 willful 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 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.
ARTICLE XII.
Amendments
Section 1.Amendment of Bylaws. Except as otherwise expressly provided in these Articles of Incorporation or the Indiana Business Corporation Law, the Bylaws of the Corporation may be amended, altered, repealed, or added to at (a) any annual or regular meeting of the directors, or at any special meeting thereof; or (b) at any annual or special meeting of the shareholders by the affirmative vote of the holders of at least a majority of the then-outstanding shares of Common Stock of CTS Corporation held of record by the Corporation.
MemberC Chairman 
