CTS
CORPORATION
BY LAWS
(As Amended and in Effect on
February 2, 2010)
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 two 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 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 two 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.
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 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 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. The Board may postpone and reschedule any
previously scheduled annual or special meeting of the shareholders.
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 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.
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. The classes and terms of the directors shall
not be governed by Indiana Code §23-1-33-6(c).
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 or by the Board of
Directors, whenever in the opinion of such person or body such meeting is
necessary.
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
. No shares of stock shall be voted at any annual or special
meeting of shareholders upon which any installment is due and unpaid or which
are owned by the Corporation.
Section
11
. The Chairman of the Board, or such other officer of the
Corporation designated by the Board, will call meetings of the shareholders to
order and will act as presiding officer thereof. Unless otherwise
determined by the Board prior to the meeting, the presiding officer of the
meeting of the shareholders will also determine the order of business and have
the authority in his or her sole discretion to regulate the conduct of any such
meeting, including without limitation by: imposing restrictions on the persons
(other than shareholders of the Corporation or their duly appointed proxies) who
may attend any such shareholders’ meeting, ascertaining whether any shareholder
or his proxy may be excluded from any meeting of the shareholders based upon any
determination by the presiding officer, in his sole discretion, that any such
person has unduly disrupted or is likely to disrupt the proceedings thereat, and
determining the circumstances in which any person may make a statement or ask
questions at any meeting of the shareholders.
At an
annual meeting of the shareholders, only such business will be conducted or
considered as is properly brought before the meeting in accordance with the
following procedures:
(a) To be
properly brought before an annual meeting, business must be (i) specified in the
notice of meeting (or any supplement thereto) given at the direction of the
Board in accordance with Section 9 of this Article, (ii) otherwise properly
brought before the meeting by the presiding officer or by or at the direction of
the Board, or (iii) otherwise properly requested to be brought before the
meeting by a shareholder of the Corporation in accordance with this Section
11.
(b) For
business to be properly requested by a shareholder to be brought before an
annual meeting, the shareholder must (i) be a shareholder of the Corporation of
record at the time of the giving of the notice for such annual meeting provided
for in these Bylaws, (ii) be entitled to vote at such meeting, and (iii) have
given timely notice thereof in writing to the Secretary.
(c) To be
timely, a shareholder’s notice must be delivered or mailed to and received at
the principal executive offices of the Corporation not less than 90 calendar
days nor more than 135 calendar days prior to the anniversary date of the
immediately preceding annual meeting; provided, however, that in the event of a
public announcement that the date of the annual meeting will be held on a date
that is not within 30 days before or after such anniversary date, to be timely,
notice by the shareholder must be so received not later than the close of
business on the 10th calendar day following the day on which such public
announcement of the date of the annual meeting is first made. The
public announcement of a postponement or adjournment of an annual meeting shall
not commence a new time period for the giving of a shareholder’s notice as
described above.
(d) A
shareholder’s notice to the Secretary must set forth as to each matter the
shareholder proposes to bring before the annual meeting: (i) a description in
reasonable detail of the business desired to be brought before the annual
meeting and the reasons for conducting such business at the annual meeting; (ii)
the name and address, as they appear on the Corporation’s books, of the
shareholder proposing such business and the current name and business address,
if different, of each Shareholder Associated Person; (iii) the class and number
of shares or other securities of the Corporation that are owned beneficially and
of record by the shareholder proposing such business and any Shareholder
Associated Person, as well as the date on which such securities of the
Corporation were acquired and the investment intent of such acquisition, and
whether there exists any short interest (including any opportunity to profit or
share in any benefit from any decrease in the price of such stock or other
security) in the securities of the Corporation by any such persons; (iv) the
nominee holder for, and number of, any securities of the Corporation owned
beneficially but not of record by such shareholder or Shareholder Associated
Person; (v) whether and the extent to which such shareholder or Shareholder
Associated Person, directly or indirectly (through brokers, nominees or
otherwise), is subject to or during the last six months has engaged in any
hedging, derivative or other transaction or series of transactions or entered
into any other agreement, arrangement or understanding (including any short
interest, any borrowing or lending of securities or any proxy or voting
agreement), the effect or intent of which is to (1) manage risk or benefit of
changes in the price of securities of the corporation
for such shareholder or
Shareholder Associated Person or (
2
) increase or
decrease the voting power of such shareholder or Shareholder Associated Person
in the Corporation
disproportionately to
such person’s economic interest in the Corporation’s securities; (vi) any
substantial interest, direct or indirect (including, without limitation, any
existing or prospective commercial, business or contractual relationship with
the Corporation), by security holdings or otherwise, of such shareholder or
Shareholder Associated Person, in the Corporation, other than an interest
arising from the ownership of securities of the Corporation where such
shareholder or Shareholder Associated Person receives no extra or special
benefit not shared on a
pro
rata
basis by all other holders of the same class or series; (vii) a
description of all other arrangements or understandings between or among the
shareholder giving the notice, and any Shareholder Associated Person, as well as
the investment strategy or objective, if any, of such shareholder and each such
Shareholder Associated Person who is not an individual and a copy of the
prospectus, offering memorandum or similar document, if any, provided to
investors or potential investors in such shareholder and each such Shareholder
Associated Person; and (viii) to the extent known by the shareholder giving the
notice, the name and address of any other shareholder supporting the proposal on
the date of such notice. Notwithstanding the foregoing provisions of
this paragraph, a shareholder must also comply with all applicable requirements
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder with respect to the matters set forth in this
paragraph. For purposes of this paragraph and Article VII, “public
announcement” means disclosure in a press release reported by the Dow Jones New
Service, Associated Press, or comparable national news service or in a document
publicly filed by the Corporation with the Securities and Exchange Commission
pursuant to Sections 13, 14 or 15(d) of the Securities Exchange Act of 1934, as
amended, or furnished to shareholders. Nothing in this paragraph will
be deemed to affect any rights of shareholders to request inclusion or proposals
in the Corporation’s proxy statement in accordance with the provisions of Rule
14a-8 under the Securities Exchange Act of 1934, as amended.
(e) For
purposes of this Section 11, “Shareholder Associated Person” of any shareholder
means (i) any person acting in concert with such shareholder, (ii) any
beneficial owner of shares of stock of the Corporation as defined in Indiana
Code §23-1-20-3.5, and (iii) any person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such shareholder or such Shareholder Associated
Person.
At a
special meeting of shareholders, only such business may be conducted or
considered as is properly brought before the meeting in accordance with the
following procedures:
(a) To be
properly brought before a special meeting, business must be (i) specified in the
notice of the meeting (or any supplement thereto) given by or at the direction
of the Chairman of the Board, President or the Board in accordance with Section
9 of this Article or (ii) otherwise properly brought before the meeting by the
presiding officer or by or at the direction of the Board.
The
determination of whether any business sought to be brought before any annual or
special meeting of the shareholders is properly brought before such meeting in
accordance with this Section 11 will be made by the presiding officer of such
meeting. If the presiding officer determines that any business is not properly
brought before such meeting, he or she will so declare to the meeting and any
such business will not be conducted or considered.
ARTICLE
VII
.
Directors
Section
1
. The property and business affairs of the Corporation
shall be managed under the direction of the Board of Directors. The
classes and terms of the directors shall not be governed by Indiana Code
§23-1-33-6(c). 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. No decrease in the number of
directors constituting the Board will shorten the term of an incumbent
director.
Section
4
. Subject to the rights, if any, of the holders of any
series of Preferred Stock to elect additional directors under circumstances
specified in the Articles of Incorporation, only persons who are nominated in
accordance with the following procedures will be eligible for election at a
meeting of shareholders as directors of the Corporation:
(a)
Nominations of persons for election as directors of the Corporation may be made
only at an annual meeting of shareholders (i) by or at the direction of the
Board or (ii) by any shareholder who is a shareholder of record at the time of
giving of notice provided for in this Section 4, who is entitled to vote for the
election of directors at such meeting and who complies with the procedures set
forth in this Section 4. All nominations by shareholders must be made
pursuant to timely notice in proper written form to the Secretary.
(b) To be
timely, a shareholder’s notice must be delivered or mailed to and received at
the principal executive offices of the Corporation not less than 90 calendar
days nor more than 135 calendar days prior to the anniversary date of the
immediately preceding annual meeting of shareholders; provided, however, that in
the event of a public announcement that the annual meeting will be held on a
date that is not within 30 days before or after such anniversary date, notice by
the shareholder to be timely must be so received not later than the close of
business on the 10th calendar day following the day on which such public
announcement is first made. The public announcement of a postponement
or adjournment of an annual meeting shall not commence a new time period for the
giving of a shareholder’s notice as described above.
(c) To be
in proper written form, such shareholder’s notice must set forth or include: (i)
the name and address, as they appear on the Corporation’s books, of the
shareholder giving the notice and the current name and business address, if
different, of each Shareholder Associated Person and the nominee; (ii) a
representation that the shareholder giving the notice is a holder of record of
stock of the Corporation entitled to vote at such annual meeting and intends to
appear in person or by proxy at the annual meeting to nominate the person or
persons specified in the notice; (iii) the class and number of shares of stock
or other securities of the Corporation owned beneficially and of record by the
shareholder giving the notice, any Shareholder Associated Person, and the
nominee, as well as the date on which such securities of the Corporation were
acquired and the investment intent of such acquisition, and whether there exists
any short interest (including any opportunity to profit or share in any benefit
from any decrease in the price of such stock or other security) in the
securities of the Corporation by any such persons; (iv) the nominee holder for,
and number of, any securities of the Corporation owned beneficially but not of
record by such shareholder, nominee, or Shareholder Associated Person; (v)
whether and the extent to which such shareholder, nominee or Shareholder
Associated Person, directly or indirectly (through brokers, nominees or
otherwise), is subject to or during the last six months has engaged in any
hedging, derivative or other transaction or series of transactions or entered
into any other agreement, arrangement or understanding (including any short
interest, any borrowing or lending of securities or any proxy or voting
agreement), the effect or intent of which is to (1) manage risk or benefit of
changes in the price of securities of the corporation
for such shareholder,
nominee, or Shareholder Associated Person or (
2
) increase or
decrease the voting power of such shareholder, nominee, or Shareholder
Associated Person in the Corporation
disproportionately to
such person’s economic interest in the Corporation’s securities; (vi) any
substantial interest, direct or indirect (including, without limitation, any
existing or prospective commercial, business or contractual relationship with
the Corporation), by security holdings or otherwise, of such shareholder,
nominee, or Shareholder Associated Person, in the Corporation, other than an
interest arising from the ownership of securities of the Corporation where such
shareholder, nominee, or Shareholder Associated Person receives no extra or
special benefit not shared on a
pro rata
basis by all other
holders of the same class or series; (vii) a description of all other
arrangements or understandings between or among any of the shareholder giving
the notice, any Shareholder Associated Person, and each nominee, as well as the
investment strategy or objective, if any, of such shareholder and each such
Shareholder Associated Person who is not an individual and a copy of the
prospectus, offering memorandum or similar document, if any, provided to
investors or potential investors in such shareholder and each such Shareholder
Associated Person; (viii) to the extent known by the shareholder
giving the notice, the name and address of any other shareholder supporting the
nominee for election or reelection as a director on the date of such
shareholder’s notice; (ix) such other information regarding each nominee
proposed by the shareholder giving the notice as would be required to be
included in a proxy statement filed in accordance with the proxy rules of the
Securities and Exchange Commission had the nominee been nominated, or intended
to be nominated, by the Board; and (x) the signed consent of each nominee to
serve as a director of the Corporation if so elected and signed certification
that the nominee is not, and will not become a party to, any agreement,
arrangement or understanding with any person or entity other than the
Corporation in connection with service or action as a director that has not been
disclosed to the Corporation.
(d) At
the request of the Board, any person nominated by the Board for election as a
director must furnish to the Secretary that information required to be set forth
in a shareholder’s notice of nomination which pertains to the
nominee.
(e) The
presiding officer of any annual meeting will, if the facts warrant, determine
that a nomination was not made in accordance with the procedures prescribed by
this Section 4, and if he or she should so determine, he or she will so declare
to the meeting and the defective nomination will be disregarded.
(f)
Notwithstanding the foregoing provisions of this Section 4, a shareholder must
also comply with all applicable requirements of the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder with respect to the
matters set forth in this Section 4.
(g) For
purposes of this Section 4, “Shareholder Associated Person” of any shareholder
means (i) any person acting in concert with such shareholder, (ii) any
beneficial owner of shares of stock of the Corporation as defined in Indiana
Code §23-1-20-3.5, and (iii) any person that directly, or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such shareholder or such Shareholder Associated
Person.
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.
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 meeting 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
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 (a) delivery of an affidavit or
affirmation, and (b) 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.
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.
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), 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 (a) 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 (b) any suit brought by the Corporation to recover
an advancement of expenses pursuant to the terms of an undertaking, 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.
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: (a) 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 (b) 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.
ARTICLE
XXI
Authorized Procedures
Pursuant to Indiana Code §23-1-22-4
Section
1
. In adopting any rights, options or warrants under Indiana
Code §23-1-26-5 relating to any transaction or proposed transaction that would,
when consummated, result in a “change of control,” the Board of Directors may
include provisions requiring, for a period not to exceed three years after the
later of (a) the time that, for whatever reason, “continuing directors” no
longer constitute a majority of the directors of the Corporation, or (b) the
time that any person becomes an “interested shareholder,” the approval of the
continuing directors of the Corporation for certain actions relating to the
rights, options or warrants, including without limitation, the redemption or
exchange of the rights, options or warrants, or the amendment of the
contracts, warrants or instruments that evidence the rights, options or
warrants.
Section
2
. As used in this Article, “change of control” shall have the
meaning contained in Indiana Code §23-1-22-4.
Section
3
. As used in this Article, “interested shareholder” shall
have the meaning contained in Indiana Code §23-1-43-10, or, if the Board so
elects, shall mean any person or entity who or which, together with all
affiliates and associates of such person or entity, is the beneficial owner of
15% or more of the then-outstanding shares of common stock of the Corporation.
The Board of Directors of the Corporation may, at the time of adoption of the
rights, options or warrants, provide for exceptions to the definition of
“interested shareholder” in any rights, options or warrants adopted pursuant to
this Article XXI, including without limitation that specified persons or
entities will not be deemed to be interested shareholders or that specified
transactions will not be deemed to cause a person to become an interested
shareholder.
Section
4
. As used in this Article, “continuing director” shall mean
any director (a) who is not (i) an interested shareholder, (ii) an affiliate or
associate of an interested shareholder or (iii) a representative or nominee of
an interested shareholder, or any affiliate or associate thereof, and (b) who
either (i) is a member of the Board of Directors of the Corporation as of the
date of the issuance of the rights, options or warrants or (ii) subsequently
becomes a member of the Board of Directors of the Corporation and whose election
or nomination for election to the Board of Directors of the Corporation is
approved or recommended by a vote of a majority of the Board of Directors of the
Corporation, which majority includes a majority of the continuing directors then
on the Board of Directors of the Corporation, but excluding for this clause
(b)(ii) any member whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of Rule 14a-11 of the
Securities Exchange Act of 1934, as amended) with respect to the election or
removal of members of the Board of Directors of the Corporation or other actual
or threatened solicitation of proxies or consents by or on behalf of a person or
entity other than the Board of Directors of the
Corporation.