SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
March 17, 1993
Tektronix, Inc.
an Oregon corporation
26600 SW Parkway
PO Box 1000, M/S 63-LAW
Wilsonville, Oregon 97070-1000 Tektronix
Carl W. Neun
3530 Lakeview Boulevard
Lake Oswego, Oregon 97035 Neun
TABLE OF CONTENTS
Page
Index of Terms ii
1. Administration .......................................... 1
2. Retirement Benefits ..................................... 1
3. Time and Manner of Payment .............................. 5
4. Preretirement Death Benefit ............................. 5
5. Disability Benefit ...................................... 5
6. Preretirement Termination of Employment ................. 6
7. Absence of Funding ...................................... 6
8. General Provisions ...................................... 6
9. Effective Date .......................................... 7
INDEX OF TERMS
Term Section Page
Actuarial Equivalent 2.6(d) 3
Affiliate 2.2(a) 2
Committee 1 1
Compensation 2.5 3
Effective Date 9 8
Final Average Compensation 2.5 3
Notice 8.4 7
Pension Plan Preamble 1
Retirement 2.1 1
Retirement Benefit 2.3 2
Retirement Equalization Plan Preamble 1
Retirement Plan Offsets 2.6 3
Retirement Plans Preamble 1
Split Dollar Offset 2.7 4
Split Dollar Policy 2.7 4
Termination of Employment 6.2 6
Year of Service 2.2 1
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
March 17, 1993
Tektronix, Inc.
an Oregon corporation
26600 SW Parkway
PO Box 1000, M/S 63-LAW
Wilsonville, Oregon 97070-1000 Tektronix
Carl W. Neun
3530 Lakeview Boulevard
Lake Oswego, Oregon 97035 Neun
Tektronix provides retirement benefits for its
employees through the Tektronix Pension Plan (the Pension Plan).
In addition, Tektronix provides supplemental benefits for
officers through the Tektronix, Inc. Retirement Equalization Plan
(the Retirement Equalization Plan) to make up for Pension Plan
benefits lost because of limits imposed by law. Tektronix and
Neun have entered into a Split Dollar Life Insurance Agreement
dated as of June 23, 1994.
Neun is Vice President and Chief Financial Officer of
Tektronix. Tektronix wishes to supplement benefits provided for
Neun under the Pension Plan and the Retirement Equalization Plan
(collectively, the Retirement Plans; individually, a Retirement
Plan).
1. Administration
This Agreement shall be administered by the
Organization and Compensation Committee of the Board of Directors
of Tektronix (the Committee). The Committee shall interpret the
Agreement and shall make determinations about eligibility and
benefits. During any period in which there shall be no such
committee, the Board of Directors shall administer this
Agreement.
2. Retirement Benefits
2.1 Neun shall be entitled to retirement benefits
under this Agreement upon Retirement. "Retirement" means a
termination of employment after age 55 and 5 Years of Service.
2.2 A "Year of Service" means a 12-month period in
which an employee is continuously employed by Tektronix or an
affiliate as follows:
(a) Continuous employment shall not be interrupted
by an authorized leave of absence, by disability under 5.1 or by
transfers among Tektronix and its Affiliates, so long as
continuity of service within the group is maintained.
"Affiliate" means a corporation that is a member of a controlled
group with Tektronix as defined in Section 1563(a) of the
Internal Revenue Code.
(b) All whole or fractional Years of Service shall
be counted. Fractional years shall be rounded to the nearest
whole month and aggregated.
2.3 Neun's RETIREMENT BENEFIT under this Agreement
(RB) shall be a monthly life annuity equal to Final Average
Compensation (FAC) multiplied by a percentage equal to 35 percent
plus twenty-sevenths multiplied by Years of Service (YS) in
excess of five, but no more than 55 percent, minus the Retirement
Plan Offsets (RPO) and the Split Dollar Offset (SDO) and divided
by twelve as follows:
RB = (FACxlesser of {35%+[20/7x(YS in excess of 5)]} or 55%)-(RPO+SDO)
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12
2.4 The retirement benefit formula under 2.3 provides
the following benefit at the ages and Years of Service shown:
(a) (b) (c)
Minimum Completed Percent of Pay
Age Years of Service Before Offsets
51 1 0%
52 2 0%
53 3 0%
54 4 0%
55 5 35.00%
56 6 37.86%
57 7 40.71%
58 8 43.57%
59 9 46.43%
60 10 49.29%
61 11 52.14%
62 & After 12 or more 55.00%
To receive each increment in column (c), Neun must both attain
the age indicated in column (a) and complete the Years of Service
indicated in column (b). Attainment of a higher age before
completion of a lesser number of Years of Service shall not
provide him with any greater amount in column (c) than the amount
indicated for such Years of Service.
2.5 "Final Average Compensation" (FAC) means Neun's
average Compensation during the five consecutive years
immediately preceding termination of Neun's employment.
"Compensation" means Neun's base salary, payments under the
Results Share or any successor program, and payments under the
Annual Performance Improvement Plan or any successor program.
The Company's Board of Directors shall have discretion to include
additional items of cash compensation. In determining FAC the
following shall apply:
(a) Years separated by a period for which Neun is
not credited with Service shall be treated as consecutive.
(b) A year for this purpose shall be the 12
calendar months ending before the Retirement date.
(c) During periods of reduced compensation because
of such things as leave of absence or disability under 5.1,
compensation shall be credited at the rate being paid at the
start of the period.
2.6 "Retirement Plan Offsets" (RPO) means the sum of
Neun's benefits under the Retirement Plans, in the form of an
annual annuity for life, determined as follows:
(a) The RPO shall be calculated at the time Neun
starts to receive benefits under this Agreement.
(b) If Neun has not started to receive benefits
under a Retirement Plan, Neun's benefits under such Retirement
Plan shall be determined as though Neun had retired and started
to receive benefits under such Retirement Plan on the date Neun
starts to receive benefits under this Agreement.
(c) If Neun has already started to receive
benefits under a Retirement Plan, benefits under such Retirement
Plan shall be based on Neun's accrued benefit at the time
benefits started under such Retirement Plan.
(d) The annual life annuity to be offset shall be
the combined Actuarial Equivalents of Neun's accrued benefits
under the Pension Plan and the Retirement Equalization Plan.
"Actuarial Equivalent" shall be determined on the basis of the
procedures and actuarial assumptions of the Pension Plan.
(e) If Neun's benefit under a Retirement Plan
commences at the same time and in the same form as the retirement
benefit under this Agreement, the offset shall be the amount of
such benefit, without adjustment under (d).
2.7 "Split Dollar Offset" means the amount accumulated
or provided under the life insurance policy maintained under the
Split Dollar Life Insurance Agreement dated June 23, 1994 between
Neun and Tektronix (the "Split Dollar Policy"). The Split Dollar
Offset shall be applied as follows:
(a) If Neun dies before Retirement and a benefit
is provided to the surviving spouse under Section 4, such benefit
will be calculated without the Split Dollar Offset. The
resulting annuity for the surviving spouse shall then be offset
by an annuity amount that is equal in value to the proceeds
payable to Neun's beneficiaries upon his death under the Split
Dollar Policy, determined as follows:
(1) If the spouse receives a life annuity
payment of such proceeds under rates for conversion to a life
annuity provided in the Split Dollar Policy, the calculation of
an equal value annuity shall be based on the Split Dollar Policy
conversion rates.
(2) If (1) does not apply, the equal value
annuity shall be an Actuarial Equivalent benefit based on the
factors referenced in 2.6(d).
(b) Upon Neun's Retirement, the Split Dollar
Offset shall be applied to the retirement benefit as provided
below:
(1) The offset shall be applied at the time
of Retirement, except as follows. The offset shall be deferred
for the period in which Tektronix continues to make payments to
Neun under Section 5 of Neun's Executive Severance Agreement with
Tektronix dated September 22, 1993 as amended by Amendment No. 1
dated June 23, 1994 to that Agreement.
(2) The retirement benefit shall be offset by
an annuity amount that is equal in value to the remaining cash
surrender value of the Split Dollar Policy less the amount
recoverable by Tektronix under the collateral assignment of such
policy. If Neun has received any distribution, loan or other
payment from the Split Dollar Policy prior to the date of the
offset, the amount of such payment plus interest determined under
the factors reference in 2.6(d) shall be included in the
offsetting cash surrender value. If Neun fails to make any
scheduled premium payment under the Split Dollar Policy,
including any payment that would have been scheduled after the
Policy is surrendered or lapses due to action or inaction of
Neun, the offsetting cash surrender value shall be increased as
though the payment had been made. An equal value annuity shall
be determined as follows:
(i) If Neun receives a life annuity
payment from the Split Dollar Policy commencing at the time of
offset under rates for conversion to a life annuity provided in
the Split Dollar Policy, the calculation of an equal value
annuity shall be based on the Split Dollar conversion rates.
(ii) If (i) does not apply, the equal
value annuity shall be an Actuarial Equivalent benefit based on
the factors referenced in 2.6(d).
(c) If the amount of the Split Dollar Offset under
(a) or (b) exceeds the amount of the benefit that is subject to
the offset, no benefit shall be paid pursuant to this Agreement
and the amounts provided to Neun or his beneficiary under the
Split Dollar Policy shall not be affected.
3. Time and Manner of Payment
3.1 Retirement benefits under this Agreement shall
start as of the first day of the month after Retirement. If the
Split Dollar Offset is delayed pursuant to 2.7(b)(1), the
retirement benefit shall start at a level determined without the
Split Dollar Offset and shall be reduced by the amount of such
offset at the time payments to Neun cease under Section 5 of the
Executive Severance Agreement.
3.2 Neun may elect the form of retirement benefit as
follows:
(a) Regardless of the form, the value of the
benefit shall be the Actuarial Equivalent of the retirement
benefit described in 2.3.
(b) The available forms of benefit shall be the
following:
(1) A monthly annuity for Neun's life; or
(2) If Neun is married at the benefit starting
date, a contingent annuity for Neun's life with fifty percent
payments continuing to the surviving spouse after Neun's death.
4. Preretirement Death Benefit
4.1 A benefit shall be paid to the surviving spouse if
Neun dies when the following conditions are met:
(a) Neun is employed by Tektronix or an Affiliate
and is eligible for Retirement.
(b) Neun was legally married to the surviving
spouse at death and was throughout the 12 months before death.
4.2 The spouse's death benefit shall be as follows:
(a) The amount shall be an annuity equal to the
amount that would have been payable under this Agreement as the
spouse's survivor annuity if Neun had commenced benefits under
this Agreement in the form of a 50 percent joint and survivor
annuity with his spouse the day before death and then died.
(b) The benefit shall be a single life annuity for
the life of the spouse starting with the month following the date
of Neun's death.
5. Disability Benefit
5.1 If disabled as defined in the Pension Plan, Neun
shall be treated as employed and continue to accrue Years of
Service under this Agreement so long as Benefit Service is
accrued under the Pension Plan, subject to 5.2.
5.2 If Neun, while disabled, retires or dies, benefits
shall be determined under 2, or 4, above, as appropriate.
6. Preretirement Termination of Employment
6.1 Subject to 5, Neun shall receive no benefit under
this Agreement if a termination of his employment occurs before
he meets the conditions for Retirement described in 2.1.
6.2 "Termination of employment" means interruption of
continuous service as defined in 2.2. If service is interrupted
and Neun resumes service, all service before and after the
interruption shall be aggregated.
7. Absence of Funding
This Agreement and any benefits payable under it shall
be unfunded and shall be payable only from the general assets of
Tektronix. Neun and his spouse shall have no interest in any
assets of Tektronix and shall have no rights greater than the
rights of any unsecured general creditor of Tektronix.
8. General Provisions
8.1 No interest of Neun or his spouse under this
Agreement may be directly or indirectly assigned, transferred,
seized by legal process or subjected to the claims of creditors
in any way (an "Assignment"). Any attempted or purported
Assignment of any such interest shall be void and ineffective.
8.2 Nothing in this Agreement shall give Neun the
right to continue employment. This Agreement shall not prevent
discharge of Neun at any time for any reason.
8.3 This Agreement shall be construed according to the
laws of Oregon.
8.4 Any notice under this Agreement shall be in
writing and shall be effective when actually delivered or, if
mailed, when deposited postpaid as first-class mail. Mail shall
be directed to the address shown on this Agreement or such other
address as a party may specify by notice to the other party.
8.5 Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by
arbitration in Portland, Oregon in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and
judgment upon the award rendered by the Arbitrator may be entered
in any Court having jurisdiction thereof.
8.6 Tektronix may decide that because of the mental or
physical condition of a person entitled to payments, or because
of other relevant factors, it is in the person's best interest to
make payments to others for the benefit of the person entitled to
payment. In that event, Tektronix may in its discretion direct
that payments be made to one or more of the following:
(a) To a parent or spouse or a child of legal
age.
(b) To a legal guardian.
(c) To one furnishing maintenance, support, or
hospitalization.
9. Effective Date
This Agreement shall be effective as of March 17, 1993.
TEKTRONIX Tektronix, Inc.
By JEROME J. MEYER
_________________
Jerome J. Meyer
Executed: November 3, 1995
NEUN CARL W. NEUN
____________
Carl W. Neun
Executed: November 3, 1995