Stock Ownership Guidelines

PURPOSE:

To define guidelines for minimum share ownership for directors and executives as well as the holding requirements to be applied prior to attaining the guideline number of shares.

To ensure that the interests of directors and executives are aligned with those of shareholders, CTS provides equity-based compensation as part of its overall compensation package. Adoption of these guidelines will require directors and executives to maintain a significant ownership stake over their tenure, without placing undue tax or cash flow burdens on them. These guidelines are a means to motivate directors and executives to perpetuate enduring shareholder value.

GUIDELINES:

1. The share ownership guidelines for directors and executives are as follows:
   
   

   Chairman & Chief Executive Officer	100,000 Share Units
   Executive Vice Presidents, Senior Vice President & Chief Financial Officer	40,000 Share Units
   Senior Vice Presidents, Vice President General Counsel & Secretary	30,000 Share Units
   Communications, Automotive and EMS General Managers	20,000 Share Units
   Other Corporate Officers, Resistor/Electrocomponents General Managers	15,000 Share Units
   Outside Directors	5,000 Share Units

   It is expected that each director and executive shall attain the applicable share ownership level within five years of his or her initial election/appointment.
    

2. In calculating compliance with the guidelines, each director and executive shall be credited with one Share Unit for each share of CTS stock beneficially owned by him or her, including shares held in the CTS 401(k) Plan and shares of restricted stock; and for each restricted stock unit; directors’ deferred common stock unit; and share subject to a stock option which he or she holds. Both vested and non-vested shares of restricted stock and restricted stock units shall be included in calculating total Share Units, but shares subject to non-vested stock options shall not be included. Until such time as a director or executive has attained the applicable share ownership level, he or she is expected to retain at least 75% of his or her total Share Units. Once the director or executive attains the applicable share ownership level, he or she is expected to retain at least 25% of the total Share Units with which he or she is credited as a result of equity awards made by the Company subsequent to the date on which the applicable share ownership level is attained. Reductions in Share Units as a result of stock swaps to facilitate the exercise of stock options, or dispositions to pay withholding taxes upon vesting or exercise, will not be counted as a disposition of Share Units, provided that the total Share Units held by the director or executive is increased as a result of the transaction.
    

3. The Compensation Committee of the Board of Directors shall have authority to administer these guidelines. Upon the request of a director or executive, the Compensation Committee may grant a waiver of these guidelines in consideration of the personal circumstances of the director or executive. The Compensation Committee or the Board of Directors, as applicable may, in its discretion, reduce future grants to any director or executive who does not comply with the restrictions on dispositions outlined above.

   The Compensation Committee shall review these guidelines from time to time and make recommendations to the Board of Directors for modifications as necessary or appropriate.