EXHIBIT 10(ii)
Tektronix, Inc.
Corporate Law Offices
P.O. Box 1000, MS 63-LAW
Wilsonville, Oregon 97070-1000
503 627-7111
503 685-4223 Fax
September 22, 1993
Mr. Roy D. Barker
420 SW Riverbend
West Linn, OR 97068
Dear Mr. Barker:
Tektronix, Inc., an Oregon corporation (the "Company"), considers
the establishment and maintenance of a sound and vital management to be
essential to protecting and enhancing the best interests of the Company
and its shareholders. In this connection, the Company recognizes that,
as is the case with many publicly held corporations, the possibility of
a change in control may exist and that such possibility, and the
uncertainty and questions which it may raise among management, may
result in the departure or distraction of management personnel to the
detriment of the Company and its shareholders. Accordingly, the Board
of Directors of the Company (the "Board") has determined that
appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the Company's
management to their assigned duties without distraction in circumstances
arising from the possibility of a change in control of the Company.
In order to induce you to remain in the employ of the Company,
this letter agreement, which has been approved by the Board, sets forth
the severance benefits which the Company agrees will be provided to you
in the event your employment with the Company is terminated subsequent
to a "change in control" of the Company under the circumstances
described below.
1. AGREEMENT TO PROVIDE SERVICES; RIGHT TO TERMINATE.
(i) Except as otherwise provided in paragraph (ii) below, the
Company or you may terminate your employment at any time, subject to the
Company's providing the benefits hereinafter specified in accordance
with the terms hereof.
(ii) In the event of a tender offer or exchange offer by a Person
(as hereinafter defined) for more than 25 percent of the combined voting
power of the Company's outstanding securities ordinarily having the
right to vote at elections of directors ("Voting Securities"), including
shares of Common Stock of the Company
(the "Company Shares"), you agree
that you will not leave the employ of the Company (other than as a
result of Disability or upon Retirement, as such terms are hereinafter
defined) and will render the services contemplated in the recitals to
this Agreement until such tender offer or exchange offer has been
abandoned or terminated or a change in control of the Company, as
defined in Section 3 hereof, has occurred. For purposes of this
Agreement, the term "Person" shall mean and include any individual,
corporation, partnership, group, association or other "person," as such
term is used in Section 14(d) of the Securities Exchange Act of 1934
(the "Exchange Act"), other than the Company or any employee benefit
plan(s) sponsored by the Company.
2. TERM OF AGREEMENT. This Agreement shall commence on the date
hereof and shall continue in effect until December 31, 1993; provided,
however, that commencing on January 1, 1994 and each January 1
thereafter, the term of this Agreement shall automatically be extended
for one additional year unless at least 90 days prior to such January 1
date, the Company or you shall have given notice that this Agreement
shall not be extended; and provided, further, that this Agreement shall
continue in effect for a period of twenty-four (24) months beyond the
term provided herein if a change in control of the Company, as defined
in Section 3 hereof, shall have occurred during such term.
Notwithstanding anything in this Section 2 to the contrary, this
Agreement shall terminate if you or the Company terminate your
employment prior to a change in control of the Company as defined in
Section 3 hereof. In addition, the Company may terminate this Agreement
during your employment if, prior to a change in control of the Company
as defined in Section 3 hereof, you cease to hold your current position
with the Company, except by reason of a promotion.
3. CHANGE IN CONTROL. For purposes of this Agreement, a "change in
control" of the Company shall mean a change in control of a nature that
would be required to be reported in response to Item 1(a) of the Current
Report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Exchange Act; provided that, without
limitation, such a change in control shall be deemed to have occurred
at such time as (a) any Person is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of 25 percent or more of the combined voting power of the Company's
Voting Securities or (b) individuals who constitute the Board on the
date hereof (the "Incumbent Board") cease for any reason to constitute
at least a majority thereof, provided that any person becoming a
director subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of at
least a majority of the directors comprising the Incumbent Board (either
by a specific vote or by approval of the proxy statement of the Company
in which such person is named as a nominee for director, without
objection to such nomination) shall be, for purposes of this clause (b),
considered as though such person were a member of the Incumbent Board.
Notwithstanding anything in the foregoing to the
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contrary, no change in
control shall be deemed to have occurred for purposes of this Agreement
by virtue of any transaction which results in you, or a group of Persons
which includes you, acquiring, directly or indirectly, 25 percent or
more of the combined voting power of the Company's Voting Securities.
4. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of the events
described in Section 3 hereof constituting a change in control of the
Company shall have occurred, you shall be entitled to the benefits
provided in paragraph (iii) of Section 5 hereof upon the termination of
your employment within twenty-four (24) months after such event, unless
such termination is (a) because of your death or Retirement, (b) by the
Company for Cause or Disability or (c) by you other than for Good Reason
(as all such capitalized terms are hereinafter defined).
(i) DISABILITY. Termination by the Company of your employment
based on "Disability" shall mean termination because of your absence
from your duties with the Company on a full-time basis for one hundred
eighty (180) consecutive days as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after Notice
of Termination (as hereinafter defined) is given to you following such
absence you shall have returned to the full-time performance of your
duties.
(ii) RETIREMENT. Termination by you or by the Company of your
employment based on "Retirement" shall mean termination on your normal
retirement date as set forth in the Company's Pension Plan (or any
successor or substitute plan or plans of the Company put into effect
prior to a change in control).
(iii) CAUSE. Termination by the Company of your employment
for "Cause" shall mean termination upon (a) the willful and continued
failure by you to perform substantially your reasonably assigned duties
with the Company consistent with those duties assigned to you prior to
the change in control (other than any such failure resulting from your
incapacity due to physical or mental illness) after a demand for
substantial performance is delivered to you by the Chairman of the Board
or President of the Company which specifically identifies the manner in
which such executive believes that you have not substantially performed
your duties, or (b) the willful engaging by you in illegal conduct which
is materially and demonstrably injurious to the Company. For purposes
of this paragraph (iii), no act, or failure to act, on your part shall
be considered "willful" unless done, or omitted to be done, by you in
knowing bad faith and without reasonable belief that your action or
omission was in, or not opposed to, the best interests of the Company.
Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or based upon the advice of counsel
for the Company shall be conclusively presumed to be done, or omitted
to be done, by you in good faith and in the best interests of the
corporation.
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Notwithstanding the foregoing, you shall not be deemed to
have been terminated for Cause unless and until there shall have been
delivered to you a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the
Board at a meeting of the Board called and held for the purpose (after
reasonable notice to you and an opportunity for you, together with your
counsel, to be heard before the Board), finding that in the good faith
opinion of the Board you were guilty of the conduct set forth above in
(a) or (b) of this paragraph (iii) and specifying the particulars
thereof in detail.
(iv) GOOD REASON. Termination by you of your employment for
"Good Reason" shall mean termination based on:
(A) a change in your status, title, position(s) or
responsibilities as an officer of the Company which, in your
reasonable judgment, does not represent a promotion from your status,
title, position(s) and responsibilities as in effect immediately
prior to the change in control, or the assignment to you of any
duties or responsibilities which, in your reasonable judgment, are
inconsistent with such status, title or position(s), or any removal
of you from or any failure to reappoint or reelect you to such
position(s), except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of your
death or by you other than for Good Reason;
(B) a reduction by the Company in your base salary as in
effect immediately prior to the change in control;
(C) the failure by the Company to continue in effect any
Plan (as hereinafter defined) in which you are participating at the
time of the change in control of the Company (or Plans providing you
with at least substantially similar benefits) other than as a result
of the normal expiration of any such Plan in accordance with its
terms as in effect at the time of the change in control, or the
taking of any action, or the failure to act, by the Company which
would adversely affect your continued participation in any of such
Plans on at least as favorable a basis to you as is the case on the
date of the change in control or which would materially reduce your
benefits in the future under any of such Plans or deprive you of any
material benefit enjoyed by you at the time of the change in control;
(D) the failure by the Company to provide and credit you
with the number of paid vacation days to which you are then entitled
in accordance with the Company's normal vacation policy as in effect
immediately prior to the change in control;
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(E) the Company's requiring you to be based anywhere other
than where your office is located immediately prior to the change in
control except for required travel on the Company's business to an
extent substantially consistent with the business travel obligations
which you undertook on behalf of the Company prior to the change in
control;
(F) the failure by the Company to obtain from any
Successor (as hereinafter defined) the assent to this Agreement
contemplated by Section 6 hereof; or
(G) any purported termination by the Company of your
employment which is not effected pursuant to a Notice of Termination
satisfying the requirements of paragraph (v) below (and, if
applicable, paragraph (iii) above); and for purposes of this
Agreement, no such purported termination shall be effective.
For purposes of this Agreement, "Plan" shall mean any compensation plan
such as an incentive, stock option or restricted stock plan or any
employee benefit plan such as a thrift, pension, profit sharing,
medical, disability, accident, life insurance plan or a relocation plan
or policy or any other plan, program or policy of the Company intended
to benefit employees.
(v) NOTICE OF TERMINATION. Any purported termination by the
Company or by you following a change in control shall be communicated
by written Notice of Termination to the other party hereto. For
purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
(vi) DATE OF TERMINATION. "Date of Termination" following a
change in control shall mean (a) if your employment is to be terminated
for Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the performance of your
duties on a full-time basis during such thirty (30) day period), (b) if
your employment is to be terminated by the Company for Cause, the date
on which a Notice of Termination is given, and (c) if your employment
is to be terminated by you or by the Company for any other reason, the
date specified in the Notice of Termination, which shall be a date no
earlier than ninety (90) days after the date on which a Notice of
Termination is given, unless an earlier date has been agreed to by the
party receiving the Notice of Termination either in advance of, or
after, receiving such Notice of Termination. Notwithstanding anything
in the foregoing to the contrary, if the party receiving the Notice of
Termination has not previously agreed to the termination, then within
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thirty (30) days after any Notice of Termination is given, the party
receiving such Notice of Termination may notify the other party that a
dispute exists concerning the termination, in which event the Date of
Termination shall be the date set either by mutual written agreement of
the parties or by the arbitrators in a proceeding as provided in
Section 13 hereof.
5. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(i) During any period following a change in control that you
fail to perform your duties as a result of incapacity due to physical
or mental illness, you shall continue to receive your full base salary
at the rate then in effect and any benefits or awards under any Plans
shall continue to accrue during such period, to the extent not
inconsistent with such Plans, until your employment is terminated
pursuant to and in accordance with paragraphs 4(i) and 4(vi) hereof.
Thereafter, your benefits shall be determined in accordance with the
Plans then in effect.
(ii) If your employment shall be terminated for Cause following
a change in control of the Company, the Company shall pay you your full
base salary through the Date of Termination at the rate in effect just
prior to the time a Notice of Termination is given plus any benefits or
awards (including both the cash and stock components) which pursuant to
the terms of any Plans have been earned or become payable, but which
have not yet been paid to you. Thereupon the Company shall have no
further obligations to you under this Agreement.
(iii) If, within twenty-four (24) months after a change in
control of the Company shall have occurred, as defined in Section 3
above, your employment by the Company shall be terminated (a) by the
Company other than for Cause, Disability or Retirement or (b) by you for
Good Reason based on an event occurring concurrent with or subsequent
to a change of control, then, by no later than the fifth day following
the Date of Termination (except as otherwise provided), you shall be
entitled, without regard to any contrary provisions of any Plan, to a
severance benefit (the "Severance Benefit") consisting of the Specified
Benefits (as defined below in this Section 5(iii)) unless you would
receive a greater after-tax benefit from the Capped Benefit (as defined
in the next sentence), in which case the Severance Benefit shall be the
Capped Benefit. The Capped Benefit is the Specified Benefits, reduced
by the amount necessary to prevent any portion of the Specified Benefits
from being "parachute payments" as defined in section 280G(b)(2) of the
Internal Revenue Code of 1986, as amended ("IRC"), or any successor
provision. For purposes of determining whether you would receive a
greater after-tax benefit from the Capped Benefit than from the
Specified Benefits, there shall be taken into account all payments and
benefits you will receive upon a change in control of the Company,
including accelerated vesting of options, stock bonuses and other awards
under the Company's stock option and stock incentive plans
(collectively, excluding the Severance Benefit, the "Change of Control
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Payments"). To determine whether your after-tax benefit from the Capped
Benefit would be greater than your after-tax benefit from the Specified
Benefits, there shall be subtracted from the sum of the before-tax
Severance Benefit and the Change of Control Payments (including the
monetary value of any non-cash benefits) any excise tax that would be
imposed under IRC Section 4999 and all federal, state and local taxes required
to be paid by you in respect of the receipt of such payments, assuming
that such payments would be taxed at the highest marginal rate
applicable to individuals in the year in which the Severance Benefit is
to be paid or such lower rate as you advise the Company in writing is
applicable to you. The Specified Benefits are as follows:
(A) the Company shall pay your full base salary through the Date
of Termination at the rate in effect just prior to the time a Notice
of Termination is given plus any benefits or awards (including both
cash and stock components) which pursuant to the terms of any Plans
have been earned or become payable, but which have not yet been paid
to you (including amounts which previously had been deferred at your
request);
(B) as severance pay and in lieu of any further salary for
periods subsequent to the Date of Termination, the Company shall pay
to you in a single payment an amount in cash equal to three times your
annual base salary at the rate in effect just prior to the time a
Notice of Termination is given;
(C) the Company shall maintain in full force and effect, for the
continued benefit of you and your dependents for a period terminating
on the earliest of (a) two years after the Date of Termination or
(b) the commencement date of equivalent benefits from a new employer
all life, accidental death, medical and dental insurance plans or
programs in which you were entitled to participate immediately prior
to the Date of Termination, provided that your continued participation
is possible under the general terms and provisions of such Plans and
you continue to pay an amount equal to your regular contribution for
such participation, if any. If, at the end of two years after the
Termination Date you have not previously received or are not then
receiving equivalent benefits from a new employer, the Company shall
arrange, at its sole cost and expense, to enable you to convert you
and your dependents' coverage under such Plans to individual policies
or programs upon the same terms as employees of the Company may apply
for such conversions. In the event that your participation in any
such Plan is barred, the Company, at its sole cost and expense, shall
arrange to have issued for the benefit of you and your dependents
individual policies of insurance providing benefits substantially
similar (on an after-tax basis) to those which you otherwise would
have been entitled to receive under such Plans pursuant to this
paragraph (C) or, if such insurance is not avail-
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able at a reasonable
cost to the Company, the Company shall otherwise provide you and your
dependents equivalent benefits (on an after-tax basis). You shall not
be required to pay any premiums or other charges in an amount greater
than that which you would have paid in order to participate in such
Plans.
(D) the Company shall pay you for any vacation time earned but
not taken at the Date of Termination, at an hourly rate equal to your
annual base salary as in effect immediately prior to the time a Notice
of Termination is given divided by 2080;
(E) you shall be entitled to purchase from the Company at the
Company's cost less accumulated depreciation any Company-owned
automobile which had been designated for your use prior to the time a
Notice of Termination is given;
(F) the Company shall reimburse you for costs you incur at any
time during the first twelve (12) months following the Date of
Termination in a single move anywhere in the continental United
States; moving to include packing, shipping, insurance (valuation not
to exceed $150,000) and temporary storage (not to exceed six months)
for up to 20,000 pounds of household goods;
(G) the Company shall purchase your residence (which shall mean
a dwelling owned by you in which you resided at the time a Notice of
Termination is given) or shall assist you in the sale of your
residence as follows:
(i) The Company will purchase your residence subject
to the terms hereof. Within ninety (90) days following
the Date of Termination you may request determination of
a purchase price of your residence by written notice to
the Company. You and the Company shall each select a
qualified and recognized appraiser with appropriate pro-
fessional designation within ten (10) days of receipt of
the notice by the Company. If the higher of the two
appraisals rendered by the designated appraisers does not
exceed 105 percent of the lower of the two appraisals, the
purchase price of the residence shall equal the average of
the two appraisals. If the higher appraisal exceeds 105
percent of the lower appraisal, a third appraiser shall be
selected jointly by you and the Company, and the purchase
price of the residence shall equal the average of the two
closest
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appraisals. The Company shall give you written
notice of the purchase price upon its determination, and
shall immediately purchase your residence at the
determined purchase price if you submit a written request
for purchase to the Company within the sixty (60) day
period following the date of receipt of notice of the pur-
chase price. If you do not submit a written request for
purchase within the 60-day period, the Company's
obligation to purchase your residence will expire.
(ii) Upon receiving notice of the purchase price
determined under (i) above, you may attempt to sell your
residence yourself.
(iii) If you sell your residence to the Company
or sell it yourself within the 60-day period following the
date on which notice is received, the Company will
reimburse you for costs you incurred incident to the sale,
including: reimbursement of actual brokerage fees up to
a maximum of seven percent of the selling price; mortgage
prepayment penalty fees, if any; state and county transfer
taxes normally paid by the seller; owners' title insurance
charges normally paid by the seller; and revenue stamp and
appraisal fees, if any. Evidence of these expenses must
be submitted to the Company for approval and supported by
copies of all closing papers. The income tax consequences
of such reimbursements will be your responsibility. The
Company shall have no obligation to reimburse you for
costs incident to sale of your residence if you have
entered into an exclusive listing commitment with respect
to sale of the residence and the commitment extends beyond
the 60-day period following the date you receive notice of
the purchase price unless approval of the Company for such
longer commitment period has been obtained.
(iv) If you decide to rent or lease your residence
the Company shall not be obligated to purchase it nor to
reimburse you for costs incident to any subsequent sale.
(iv) Except as specifically provided above, the amount of any
payment provided for in this Section 5 shall not reduced, offset or
subject to recovery by the Company by reason of any compensation earned
by you as the result of employment by another employer after the Date
of Termination, or
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otherwise. Your entitlements under subparagraph
(5)(iii) are in addition to, and not in lieu of, any rights, benefits
or entitlements you may have under the terms or provisions of any Plan.
6. SUCCESSORS; BINDING AGREEMENT.
(i) Upon your written request, the Company will seek to have any
Successor (as hereinafter defined), by agreement in form and substance
satisfactory to you, assent to the fulfillment by the Company of its
obligations under this Agreement. Failure of the Company to obtain such
assent prior to or at the time a Person becomes a Successor shall
constitute Good Reason for termination by you of your employment and,
if a change in control of the Company has occurred, shall entitle you
immediately to the benefits provided in paragraph (iii) of Section 5
hereof upon delivery by you of a Notice of Termination which the
Company, by executing this Agreement, hereby assents to. For purposes
of this Agreement, "Successor" shall mean any Person that succeeds to,
or has the practical ability to control (either immediately or with the
passage of time), the Company's business directly, by merger or
consolidation, or indirectly, by purchase of the Company's Voting
Securities or otherwise.
(ii) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If you should die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms
of this Agreement to your devisee, legatee or other designee or, if
there be no such designee, to your estate.
7. EMPLOYEE'S COMMITMENT. You agree that subsequent to your period
of employment with the Company, you will not at any time communicate or
disclose to any unauthorized person, without the written consent of the
Company, any proprietary processes of the Company or any subsidiary or
other confidential information concerning their business, affairs,
products, suppliers or customers which, if disclosed, would have a
material adverse effect upon the business or operations of the Company
and its subsidiaries, taken as a whole; it being understood, however,
that the obligations of this Section 7 shall not apply to the extent
that the aforesaid matters (a) are disclosed in circumstances where you
are legally required to do so or (b) become generally known to and
available for use by the public otherwise than by your wrongful act or
omission.
8. FEES AND EXPENSES. The Company shall pay all legal fees and
related expenses incurred by you as a result of (i) your termination
following a change in control of the Company (including all such fees
and expenses, if any, incurred in
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contesting or disputing any such
termination) or (ii) your seeking to obtain or enforce any right or
benefit provided by this Agreement.
9. SURVIVAL. The respective obligations of, and benefits afforded
to, the Company and you as provided in Sections 5, 6(ii), 7, 8 and 13
of this Agreement shall survive termination of this Agreement.
10. NOTICE. For the purposes of this Agreement, notices and all
other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or mailed by
United States registered mail, return receipt requested, postage prepaid
and addressed, in the case of the Company, to the address set forth on
the first page of this Agreement or, in the case of the undersigned
employee, to the address set forth below his signature, provided that
all notices to the Company shall be directed to the attention of the
Chairman of the Board or President of the Company, with a copy to the
Secretary of the Company, or to such other address as either party may
have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon receipt.
11. MISCELLANEOUS. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or
discharge is agreed to in a writing signed by you and the Chairman of
the Board or President of the Company. No waiver by either party hereto
at any time of any breach by the other party hereto of, or of compliance
with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time.
No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party
which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Oregon.
12. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
13. ARBITRATION. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in Portland, Oregon by three arbitrators in accordance with
the rules of the American Arbitration Association then in effect.
Judgment may be entered on the arbitrators' award in any court having
jurisdiction; provided, however, that you shall be entitled to seek
specific performance of your right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising
under or
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in connection with this Agreement. The Company shall bear all
costs and expenses arising in connection with any arbitration proceeding
pursuant to this Section 13.
14. RELATED AGREEMENTS. To the extent that any provision of any
other agreement between the Company or any of its subsidiaries and you
shall limit, qualify or be inconsistent with any provision of this
Agreement, then for purposes of this Agreement, while the same shall
remain in force, the provision of this Agreement shall control and such
provision of such other agreement shall be deemed to have been
superseded, and to be of no force or effect, as if such other agreement
had been formally amended to the extent necessary to accomplish such
purpose.
15. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but all
of which together will constitute one and the same instrument.
If this letter correctly sets forth our agreement on the subject
matter hereof, kindly sign and return to the Company the enclosed copy
of this letter which will then constitute our agreement on this subject.
Agreed to this 22nd day Sincerely,
of September, 1993 Tektronix, Inc.
/s/ Roy D. Barker By: /s/ J.J. Meyer
Roy D. Barker Jerome J. Meyer
Chairman and Chief Executive Officer
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