TEKTRONIX, INC.
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(EFFECTIVE SEPTEMBER 26, 1996)
TEKTRONIX, INC.
AN OREGON CORPORATION
PO BOX 500
BEAVERTON, OREGON 97077 TEKTRONIX
Tektronix desires to provide a supplemental retirement opportunity to a
select group of its senior management employees in recognition of their
contributions to, and to encourage their long-term retention by, Tektronix and
to ensure that they can retire from Tektronix with a level of retirement
benefits (including benefits provided by previous employers) consistent with
their peers in competing companies.
This Supplemental Executive Retirement Plan (the "Plan") is intended to
supplement the retirement income available to certain designated elected
officers and senior executives of Tektronix by (i) crediting to book-entry
accounts maintained for their benefit under this Plan (the "ACCOUNTS") a
one-time start-up credit and annual credits based on corporate performance, and
(ii) crediting earnings to their Accounts at the same intervals and in the same
manner as occurs under the Tektronix Deferred Compensation Plan (the "DC PLAN")
investment funds. Subject to the Plan's vesting and forfeiture provisions,
payment of a participant's Account balance will be made upon retirement at
age 62 or later or, in the event of an earlier termination of employment, at
age 62. Participants will be
permitted to defer receipt of payment by electing to receive payment in no more
than ten level annual installments beginning on the normal lump sum payment
date.
I. PLAN ADMINISTRATION.
This Plan will be administered by the Organization and Compensation
Committee (the "COMMITTEE") of the Board of Directors of Tektronix (the
"BOARD"). The Committee will have full discretionary authority to interpret
this Plan and make determinations regarding eligible executives' participation
in and rights under the Plan. Any decision by the Committee or its delegate
within its authority will be final and binding on all parties. The Committee
may delegate any or all of its duties with respect to this Plan, other than its
duties to review and approve executives' initial and continued eligibility and
to review denied claims or requests under Section 8.4, and/or the administration
of Accounts and benefit payments to Tektronix (acting through its Human
Resources Department) or a third party acting as agent of the Committee.
1. PARTICIPATION.
1.1 ELIGIBILITY CRITERIA. Eligibility for participation in this Plan
is limited to those elected officers and senior executives who, in the judgment
of the Chief Executive Officer of Tektronix (the "CEO") and the Committee, have
the greatest potential to impact significantly the long-term financial
performance of Tektronix. An executive who is a party to a separate
supplemental retirement agreement with Tektronix will not be eligible to
participate in this Plan.
1.2 ANNUAL NOMINATION. In order to become a participant or to
receive a performance-based credit for any particular Fiscal Year, an executive
must be nominated
for participation by the CEO, whose nomination must be approved by the Committee
before it becomes effective. An eligible executive will become a participant on
the date his or her initial nomination is approved by the Committee pursuant to
the preceding sentence. Receipt of performance-based credits under this Plan
for any particular Fiscal Year does not guarantee or infer assurance of
continued eligibility for any future Fiscal Year.
1.3 DURATION OF PARTICIPATION. After an executive first becomes a
participant, his or her continued eligibility to receive performance-based
credits under this Plan for future Fiscal Years will depend on his or her being
nominated and approved for the applicable Fiscal Year pursuant to Section 2.2
and the continued existence of the Plan. Once an executive has become a
participant pursuant to Section 2.2, he or she will continue as a participant
throughout the remainder of his or her employment with Tektronix; PROVIDED,
HOWEVER, that no performance-based credits will be added to a participant's
Account for any Fiscal Year unless he or she is nominated and approved for
continued eligibility for the applicable Fiscal Year pursuant to Section 2.2.
2. CREDITS AND ADJUSTMENTS TO ACCOUNTS.
2.1 START-UP CREDIT. Tektronix will credit to each participant's
Account an amount equal to fifty percent (50%) of his or her combined annual
base salary and target award amount under the Tektronix Annual Performance
Improvement Plan (the "APIP") at the rate in effect at the close of the fiscal
year he or she first becomes a participant pursuant to Section 2.2. Taking into
account retirement-type benefits from prior employers and upon the
recommendation of the CEO, the Committee may specify that a percentage other
than fifty percent (50%) will be applied in determining the start-up credit to
be credited to a participant's Account in connection with its approval of his or
her initial nomination pursuant to Section 2.2. This start-up credit will be
credited to the participant's Account as of the July 1 that next follows the
date an executive first becomes a participant pursuant to Section 2.2, in
addition to any performance-based credit added to the Account as of that date.
2.2 ANNUAL PERFORMANCE-BASED CREDITS. For each Fiscal Year,
Tektronix will add a performance-based credit to the Account of each participant
who is nominated and approved for continued eligibility to receive such a credit
for the applicable Fiscal Year pursuant to Section 2.2 (an "ELIGIBLE
PARTICIPANT").
(a) ANNUAL CREDIT AMOUNT. The annual amount of the
performance-based credit is ten percent (10%) of an Eligible Participant's
combined annual base salary and target APIP award amount at the rate in
effect at the close of the applicable Fiscal Year.
(b) ACTUAL ANNUAL AMOUNT. The actual annual credit amount to be
added to an Eligible Participant's Account will be determined by
multiplying the Annual Credit Amount (as defined in Section 3.2(a)) by
Tektronix' annual corporate APIP performance factor for the applicable
Fiscal Year. The actual annual credit for the initial year of
participation will be prorated for that portion of the fiscal year
following the date he or she first became a participant pursuant to Section
2.2.
(c) TIMING OF CREDITS. These performance-based credits will be
credited to Eligible Participants' Accounts as of the July 1 that next
follows the close of the Fiscal Year to which they relate.
2.3 ADJUSTMENTS TO ACCOUNTS. Until the earlier of the date
(i) a participant's Account is forfeited pursuant to Article 4 or Section
5.3(d), or (ii) full payment of the Account has been made to the participant or
his or her beneficiary(ies) under this Plan, Tektronix will adjust the balance
credited to the Account on a calendar quarterly basis, as follows:
(a) OVERALL METHODOLOGY. At the close of every calendar quarter
for which a participant's Account has a positive balance, earnings will be
credited in the same manner as occurs under the DC Plan.
(b) INSTALLMENT PAYMENTS. If an Account is being paid in
installments pursuant to Section 5.2, the unpaid Account balance will
continue to be adjusted in the above manner during the installment payment
period, with the last adjustment being that made as of the first day of the
calendar quarter in which the last installment is paid.
(c) TIMING OF ADJUSTMENTS. These adjustments to Eligible
Participants' Accounts will be made at the same intervals as occurs under
the DC Plan.
2.4 BOOK-ENTRY ACCOUNTS. Each participant's Account will be
maintained on the books of Tektronix until the earlier of the date (i) a
participant's Account is forfeited pursuant to Article 4 or Section 5.3(d), or
(ii) full payment of the Account has been made to the participant or his or her
beneficiary(ies) under this Plan. No funds will be set aside or earmarked for
the Account, which will be purely a bookkeeping device.
3. VESTING.
3.1 REQUIREMENTS FOR 100% VESTING. Subject to Article 7 and
Sections 4.2, 6.1 and 9.1, each participant's interest in his or her Account
will become one hundred percent (100%) vested and nonforfeitable on the later of
the date the participant (i) attains age 55 while employed by Tektronix or an
affiliate, (ii) completes five years of employment with Tektronix or its
affiliates, or (iii) first became a participant pursuant to Section 2.2.
3.2 FORFEITURE. A participant's entire interest in his or her
Account will be forfeited if (i) his or her employment with Tektronix terminates
before such interest has become vested pursuant to Section 4.1,
(ii) notwithstanding the provisions of Section 4.1, his or her employment with
Tektronix is involuntarily terminated for cause (as defined in his or her
executive severance agreement), or (iii) or the participant fails or refuses to
sign
a non-compete agreement which is reasonably acceptable to Tektronix upon or in
connection with his or her retirement or other termination of employment with
Tektronix.
4. TIME AND MANNER OF PAYMENT.
4.1 LUMP SUM PAYMENT. Subject to Articles 4 and 6 and Section 5.4,
unless a participant elects an installment payment method pursuant to
Section 5.2 no later than 30 days after the date he or she first became a
participant pursuant to Section 2.2, his or her Account will be paid in a lump
sum payment as soon as practicable after January 1 of the calendar year that
next follows the later of the date (i) the participant attains age 62 or
(ii) his or her employment with Tektronix and its affiliates terminates.
4.2 INSTALLMENT PAYMENTS. Subject to Articles 4 and 6 and
Section 5.4, PROVIDED that an executive elects, no later than 30 days after the
date he or she first becomes a participant pursuant to Section 2.2, to have his
or her Account paid in an installment payment method permitted under this
Section 5.2, the Account will be paid in not more than ten substantially equal
annual installments commencing as soon as practicable after January 1 of the
calendar year that next follows the later of the date (i) the participant
attains age 62 or (ii) his or her employment with Tektronix and its affiliates
terminates.
4.3 OTHER RULES REGARDING PAYMENT OF ACCOUNTS.
(a) IRREVOCABILITY. A participant's election of an installment
payment method pursuant to Section 5.2 will be irrevocable, and if no such
election is made within 30 days after the date he or she first becomes a
participant pursuant to Section 2.2, the lump sum payment method will
apply.
(b) TAX WITHHOLDING. Tektronix may withhold from any payment
under this Plan any federal, state or local taxes or other amounts as
required by law.
(c) LEGAL INCOMPETENCY. If any individual to whom a benefit is
payable under this Plan is a minor or legally incompetent, the Committee
will determine whether payment will be made directly to the individual, any
person acting as his or her custodian or legal guardian under the Oregon
Uniform Transfers to Minors Act, his or her legal representative or a near
relative, or directly for his or her support, maintenance or education.
(d) UNDISTRIBUTABLE ACCOUNTS. Each Participant, or (in the
event of death) his or her beneficiary(ies), must keep the Committee
advised of his or her current address. If the Committee has not located
the participant or beneficiary(ies) to whom an Account is payable under
this Plan within 35 months after the Account first became payable, the
payee's interest in the Account will be forfeited as of the end of the 35th
month. If a participant whose Account was forfeited under this Section
5.3(d), or (in the event of death) his or her beneficiary(ies), files a
claim for payment of the Account after its forfeiture, and if the Committee
determines that the claim is valid, the balance forfeited will be paid in a
lump sum payment as soon as practicable.
(e) PAYMENT IN CASH. All payments under this Plan will be made
in cash or its equivalent.
4.4 FINANCIAL HARDSHIP. Notwithstanding any contrary Plan provision,
if a participant incurs a "financial hardship", the Committee (in its sole
discretion) may determine that all or part of his or her Account will be paid to
him or her immediately; PROVIDED, HOWEVER, that the amount paid pursuant to this
Section 5.4 will be limited to the amount reasonably necessary to alleviate the
participant's hardship. For this purpose, "FINANCIAL HARDSHIP" means a severe
financial emergency which is caused by a sudden and unexpected accident, illness
or other event beyond the control of the participant which, without an
accelerated distribution from the Plan, would result in a severe financial
burden to the Participant or a member of his or her immediate family. A
financial hardship does not exist to the extent that the hardship may be
relieved by (i) reimbursement or compensation by insurance, (ii) liquidation of
the participant's other assets (to the extent such liquidation would not itself
cause severe financial hardship), or (iii) any loan available to the participant
(to the extent the payments on such loan would not themselves cause severe
financial hardship).
5. DEATH OR DISABILITY.
5.1 GENERAL RULE AND VESTING. A participant's Account will be
payable under this Article on the participant's death or disability
notwithstanding any contrary provision of Article 5. A participant's interest
in his or her Account will become one hundred percent (100%) vested and
nonforfeitable on the date he or she becomes disabled or dies.
5.2 DEATH. Upon the death of a participant, his or her Account will
be paid in a lump sum payment as soon as practicable to his or her
beneficiary(ies), as determined in the following order of priority:
(a) To the surviving beneficiary(ies) designated by the
participant in writing to the Committee.
(b) To the surviving beneficiary(ies) designated by the
participant in writing in connection with the Tektronix life insurance
program.
(c) To the participant's surviving spouse.
(d) To the participant's estate.
5.3 DISABILITY. A participant who is temporarily disabled while
employed or receiving long term disability benefits under a plan described in
Section 6.4 will be treated as employed and no payment will be made from his or
her Account. If disability benefits stop and disability continues, the Account
will be paid in accordance with Article 5 as if his or her employment with
Tektronix had terminated at that time.
5.4 "DISABLED" DEFINED. A participant will be deemed to be
"DISABLED" for purposes of this Article 6 if the Committee determines that he or
she is eligible to
receive long term disability benefits under an employee welfare benefit plan
maintained by Tektronix or would have been eligible if covered by the plan.
6. AMENDMENT; TERMINATION.
6.1 AMENDMENT. Tektronix may amend this Plan at any time so long as
the rights preserved on termination under Section 7.2(b) are not reduced. The
power to amend this Plan may be exercised by either the Board or the Committee.
6.2 TERMINATION. Tektronix may terminate this Plan at any time, as
follows:
(a) Termination will be effected by sending written notice of
the termination to all participants or (in the event of death)
beneficiary(ies). The termination date will not be earlier than the first
day of the month in which such notice is given.
(b) After the effective date of termination of this Plan, no
participant will be eligible for any benefit under Article 3, except for
the balance credited to his or her Account as of the July 1 that next
preceded the termination date, as adjusted pursuant to Section 3.3 through
the first day of the calendar quarter that next follows the termination
date.
(c) The power to terminate this Plan may be exercised by either
the Board or the Committee.
6.3 ADVERSE IRS RULING. If the Internal Revenue Service rules that
any vested Account balance under this Plan will be currently includible in a
participant's gross income prior to the date for payment determined under the
terms of the Plan (other than in
connection with a domestic relations order), all vested Accounts to which the
ruling applies will be paid within 30 days to the participants or (in the event
of death) beneficiary(ies) involved.
7. CLAIMS PROCEDURE.
7.1 INITIAL CLAIM. Any person claiming a benefit or requesting an
interpretation, ruling or information under this Plan will present the request
in writing to the Committee which will respond in writing as soon as is
practicable.
7.2 RESPONSE TO INITIAL CLAIM. If the claim or request is denied,
the written notice of denial will state the following:
(a) The reasons for denial, with specific reference to the terms
of the Plan provisions on which this denial is based.
(b) A description of any additional material or information
required and an explanation of why it is necessary.
(c) An explanation of the Plan's claims review procedures.
7.3 INITIAL NOTICE OF DENIAL. The initial notice of denial will
normally be given within 90 days of the review of the claim. If special
circumstances require an extension of time, the claimant will be so notified and
the time limit will be 180 days.
7.4 REVIEW OF DENIED CLAIMS. Any person whose claim or request is
denied or who has not received a response within 30 days may request review by
notice in writing to the Committee. The original decision will be reviewed by
the Committee, which may, but will not be required to, have the claimant appear
before them. On review,
whether or not there is a hearing, the claimant may have representation, examine
pertinent documents and submit issues and comments in writing.
7.5 DECISION ON REVIEW. The decision on review will normally be made
within 60 days. If an extension of time is required for a hearing or other
special circumstances, the claimant will be so notified and the time limit will
be 120 days. The decision will be in writing and will state the reasons and the
relevant plan provisions. All decisions on review will be final and bind all
parties concerned.
8. GENERAL PROVISIONS.
8.1 NONASSIGNABILITY. No interest under this Plan of any
participant, or (in the event of death) of his or her spouse, beneficiary or
contingent annuitant under the Basic Plan, may be assigned, transferred, seized
by legal process or subjected to the claims of creditors in any way.
8.2 NOTICES. Any notice under this Plan will be in writing and will
be effective when actually delivered or, if mailed, when deposited postpaid as
first class mail. Mail will be directed to Tektronix at the address stated in
this Plan, to the participant at the address shown on the Tektronix employment
records, or to such other address as a party will specify by notice to the other
parties or as the Committee may determine to be appropriate. Notices to the
Committee will be sent to Tektronix's address.
8.3 NOT CONTRACT OF EMPLOYMENT. Nothing in this Plan will give any
employee the right to continue employment. The Plan will not prevent discharge
of any employee at any time for any reason.