EXHIBIT 10(xi)
TEKTRONIX, INC.
STOCK DEFERRAL PLAN
2005 RESTATEMENT
JANUARY 1, 2005
TEKTRONIX, INC.
14200 SW KARL BRAUN DRIVE
BEAVERTON, OREGON 97077 COMPANY
(STOEL RIVES LLP LOGO)
ATTORNEYS AT LAW
STANDARD INSURANCE CENTER
900 SW FIFTH AVENUE, SUITE 2600
PORTLAND, OREGON 97204-1268
Phone (503) 224-3380 Fax (503) 220-2480
TDD (503) 221-1045
Internet: www.stoel.com
TABLE OF CONTENTS
PAGE
----
1. Effective Dates and Transition Provisions............................ 1
2. Purposes; Administration; Affiliates; Plan Year...................... 2
3. Eligibility.......................................................... 2
4. Compensation Deferral................................................ 3
5. Deferred Compensation Accounts; Vesting.............................. 5
6. Irrevocable Trust.................................................... 7
7. Time and Manner of Payment........................................... 7
8. Withdrawal Payments.................................................. 10
9. Death................................................................ 12
10. Termination; Amendment............................................... 13
11. Claims Procedures.................................................... 15
12. General Provisions................................................... 18
13. Effective Date....................................................... 19
i
INDEX OF TERMS
TERM SECTION PAGE
- ---- ------- ----
Account 5.1 5
Affiliate 2.3 2
Board Members Preamble 2
Bonus 4.1.4 4
Change in Control 10.3 14
Committee 2.2 2
Commission 4.1.4 4
Company Preamble 1
Director Fees 4.1.4 4
Employer 2.3 2
FICA 5.5 6
Participant 3.5 3
Plan Year 2 2
Salary 4.1.4 4
SERP Preamble 1, 2
Stock 2.1 3
Stock Deferral Plan Preamble 1
Trust 6.3 7
Vesting 5.4 6
ii
TEKTRONIX, INC.
STOCK DEFERRAL PLAN
2005 RESTATEMENT
JANUARY 1, 2005
TEKTRONIX, INC.
14200 SW KARL BRAUN DRIVE
BEAVERTON, OREGON 97077 COMPANY
The Company maintains this Plan for Members of the Board of Directors
of the Company ("Board Members") and a select group of management or highly
compensated employees.
The company also maintains under a separate document the Tektronix,
Inc. Deferred Compensation Plan, ("Deferred Compensation Plan") relating to
deferral of compensation generally and covering both Board Members and a select
group of management or highly compensated employees.
In 2005, the Company adopted an interim 2005 Restatement to restate
the Plan, as last amended on September 8, 2003, primarily to change the Deferral
Period for Board Members from a fiscal year to a calendar year. This Restatement
includes and supersedes the provisions of the interim 2005 Restatement. The
provisions of the interim 2005 Restatement shall have no separate effect on
operation.
The Company desires to amend the Plan to comply with section 409A of
the Internal Revenue Code ("Code") and to make other changes as provided below.
Amounts that are deferred or that become vested under the Plan after December
31, 2004 are subject to section 409A of the Code.
The Plan is amended and restated as follows:
1. EFFECTIVE DATES AND TRANSITION PROVISIONS
1.1 This 2005 Restatement amends the Plan as most recently amended on
September 8, 2003 and amends and supersedes an earlier 2005 Restatement and is
generally effective January 1, 2005 except as provided below.
1.2 The Deferral Period (as defined in the Plan as in effect before January
1, 2005) is changed as follows:
1.2.1 The Deferral Period for Board Members that ends August 31, 2005
shall remain effective and shall apply to Director Fees (as defined in the
Plan as in effect before January 1, 2005) for services through September
22, 2005. No deferral of director fees will be allowed for services
performed from September 23, 2005 to December 31, 2005.
1.2.2 Effective January 1, 2006, the applicable period for deferrals
by Board Members under 4.1 shall be the calendar year. Deferral elections
of Board Members for director fees for services in 2006 must be submitted
to the Committee in accordance with Committee procedures by December 31,
2005.
2. PURPOSES; ADMINISTRATION; AFFILIATES; PLAN YEAR
2.1 The Plan is designed to provide unfunded deferred compensation for
Board Members and a select group of highly compensated or management employees
and to qualify as such a plan under section 2520.104-23 and related provisions
of Department of Labor regulations under the Employee Retirement Income Security
Act of 1974, as amended. The Plan is intended to operate in conjunction with the
Deferred Compensation Plan to allow participants to elect to use common stock of
the Company ("Stock") as a measure for benefits and to receive payment in Stock.
2.2 The Plan shall be administered by an Administrative Committee
("Committee") appointed by the chief executive officer of the Company, or the
officer's delegate. The Committee shall interpret the Plan and make
determinations about participation and benefits. Any decision by the Committee
within its authority shall be final and binding on all parties. The Committee
shall have absolute discretion in carrying out its responsibilities in
accordance with the provisions of this Plan and applicable law. The Committee
may delegate all or part of its authority.
2.3 The Plan shall apply to the Company and its Affiliates. An Affiliate is
a corporation or other entity that has been designated an Affiliate for this
purpose by the Committee. The designation of an Affiliate may include special
provisions that apply only to the Affiliate, its employees and members of its
board of directors. The term "Employer" refers to the Company and all designated
Affiliates.
2.4 The "Plan Year" shall be the calendar year.
3. ELIGIBILITY
3.1 Board Members, the Chief Executive Officer of the Company and Vice
Presidents are eligible for deferral of compensation as provided in 4.1.
3.2 The Committee may determine before a Plan Year or before employment
starts that an employee who otherwise holds an eligible position is not eligible
for the year. If an employee holds an eligible position but changes employment
status or is no longer approved by the Committee for participation during a
year, participation in compensation deferrals under 4.1 below shall continue for
the remainder of the Plan Year. Discontinuation of eligibility and credits shall
not constitute a termination of employment and shall not trigger a payment of
benefits. Service credit for vesting of any pre-2005 amounts shall continue
unless the participant terminates.
3.3 An eligible Board Member or employee must enroll to begin or continue
participation in this Plan. Such enrollment shall constitute acceptance of any
changes under this Restatement. An election described in 3.6 may serve as
enrollment.
2
3.4 An eligible Board Member or employee may participate in elective
deferrals and an eligible employee may participate in related 401(k) make-up
credits and pension make-up credits by filing a deferral election as provided in
4.1.
3.5 A person eligible to elect deferral or who has an Account under the
Plan shall be known as a participant.
4. COMPENSATION DEFERRAL
4.1 Eligible Board Members and eligible employees may elect for each Plan
Year (or part Plan Year under 4.2.3) to defer director fees, salary, or
commissions otherwise payable for the year or part year, and eligible employees
may elect to defer bonuses payable under the Tektronix Annual Performance
Incentive Plan, as follows:
4.1.1 The amount of director fees payable in cash, salary, bonus or
commissions deferred may be expressed as a whole percentage of such
director fees, salary, bonus or commissions for the year or as a specified
dollar amount. Deferral of director fees payable in Stock shall be
expressed as a whole percentage of such director fees or as a specified
number of shares of Stock. The percentage designated shall apply
automatically to any director fee or pay changes in the year. The maximum
deferral shall be 100 percent of director fees, 100 percent of commissions,
and 90 percent of salary, subject to automatic reduction to accommodate
withholding of amounts required by law and amounts elected before the
beginning of the year to provide benefits under any benefit plan of the
Company or an Affiliate.
4.1.2 A bonus deferral shall be governed by the election for the
Company's fiscal year for which the bonus is payable. The amount deferred
may be expressed as a whole percentage of bonus or as a specified dollar
amount. An election of a specified dollar amount shall be treated as an
election of the lower of 100 percent of the bonus or the specified dollar
amount. The maximum deferral shall be 100 percent of the bonus, subject to
automatic reduction to accommodate withholding of amounts required by law
and amounts elected before the beginning of the year to provide benefits
under any benefit plan of the Company or an Affiliate.
4.1.3 The minimum deferral amount for a participant for a Plan Year
shall be $5,000, taking into account all deferrals by the participant of
director fees, salary, commission and bonus for the Plan Year under the
Plan and the Deferred Compensation Plan. Bonus amounts are taken into
account in the Plan Year in which the bonus is payable. Elections for all
amounts under all Plans must be filed and irrevocable not later than as
provided under 4.2 for any amount otherwise payable in the year. The
Committee may determine at any time that a participant's elections will
fail to provide for the minimum deferral amount and are void. The Committee
shall disregard failure caused by a decline in the value of Stock during
the year. If elections are void, the amounts shall not be deferred and the
Committee may determine the timing of the compensation that fails to be
deferred, provided that the amounts shall be paid and included in income
before the end of the Plan Year. If the deferral fails to satisfy the
minimum solely because of the termination of services of the Board Member
or the termination of
3
employment or change of position or compensation of the employee, the
deferral elections shall not be void.
4.1.4 The following compensation is subject to deferral:
(a) "Bonus" means only performance based compensation under the
Tektronix Annual Performance Incentive Plan.
(b) "Director fees" means retainer, chair and director or special
committee meeting fees otherwise payable in Stock unless deferred
under the Plan or the Deferred Compensation Plan. Director fees do not
include expenses that are paid or reimbursed.
(c) "Salary" means base salary for the Plan Year and excludes
commission, bonus, option, equity, severance, allowances, or other
compensation, whether paid or reimbursed in cash or property.
(d) "Commission" means commission compensation.
4.1.5 The Committee may change the minimum and maximum deferrals and
may decrease a participant's deferrals, but no change or decrease may be
effective after an election becomes effective, except as provided in 4.1.1
and 4.1.2.
4.2 Deferral elections under the Plan shall be made in accordance with
procedures established by the Committee. The Committee will determine and notify
eligible employees how deferral elections will be calculated and charged to
reduce compensation. An election may not be revoked, even prospectively, with
respect to a Plan Year or bonus period after the applicable effective date.
Elections shall be effective as follows:
4.2.1 An election to defer director fees, salary or commission must be
filed with the Committee, and shall be effective and irrevocable, not later
than the start of the Plan Year for which it applies, subject to 4.2.3.
4.2.2 Subject to 4.2.3, an election to defer bonus must be filed with
the Committee, and shall be effective and irrevocable, not later than six
months before the end of the Company's fiscal year, or any earlier date
that is the end of the performance period for the bonus. The election shall
be ineffective if the participant fails to perform services continuously
during the following period:
(a) Starting the later of (i) the first day of the 12-month
performance period for the bonus, or (ii) the date on which the
performance criteria are established.
(b) Ending on the earlier of (i) the date the deferral election
is submitted and effective, or (ii) the date that is described in the
first sentence of 4.2.2.
4
4.2.3 The following shall apply to a Board Member or employee who
first becomes eligible after the start of a Plan Year or a fiscal year:
(a) The individual may elect to defer compensation for services
performed after the election by submitting the election within 30 days
after becoming eligible.
(b) All arrangements that are required to be aggregated under
applicable law shall be considered. An individual shall not be treated
as first becoming eligible under the Plan if the individual is already
eligible under another arrangement that is aggregated with the Plan to
determine the "plan" that covers the individual.
(c) The amount of bonus that is treated as compensation for
services performed after the election and subject to the deferral
election is a fraction of the bonus. The numerator of the fraction is
the number of days of the fiscal year after the date the election is
submitted. The denominator of the fraction is the number of days in
the fiscal year.
4.2.4 An election shall be effective only for one Plan Year, or part
Plan Year under 4.2.3. A new election shall be required for each year.
Separate elections shall be filed for director fees deferral, salary
deferral, commission deferral and bonus deferral. Deferral elections shall
be submitted in a format established by the Committee.
4.3 The participant's compensation for the year shall be reduced by the
amounts deferred, subject to 4.1.3.
5. DEFERRED COMPENSATION ACCOUNTS; VESTING
5.1 An Account shall be maintained for each participant on the books of the
Company or other Employer, as applicable in accordance with the adoption
statement of the Employer, until full payment has been made to the participant
or beneficiaries under Sections 7 and 8. The following shall apply, subject to
Section 6:
5.1.1 The Committee shall maintain such subaccounts under each Account
as may be necessary to give effect to the participant's elections
concerning time and form of payment, to vesting, to preservation of
pre-2005 terms for pre-2005 balances and to any other terms of the Plan
that may affect the balance of the Account.
5.1.2 Employer shall not be obligated to set aside or earmark any
Stock or funds for the Account, which shall be purely a bookkeeping device.
5.1.3 All amounts of deferred compensation under this plan shall
remain at all times the unrestricted assets of the Employer, and the
promise to pay the deferred amounts shall at all times remain unfunded as
to the participants.
5
5.2 The Accounts of participants shall be adjusted by the following:
5.2.1 For each participant, credit for deferrals under 4.1.
5.2.2 Adjustments to reflect any reorganization, Stock split or
combination, dividend or distribution on the Stock, or other event
affecting the Stock, as the Committee shall determine.
5.2.3 Amounts necessary to account for applicable withholding for
Federal Insurance Contributions Act (FICA) taxes imposed on the credits
under sections 3101, 3121(a) and 3121(v)(2) (as applicable) of the Code,
and for tax withholding imposed by section 3401 of the Code and tax
withholding imposed by state and local laws with respect to the FICA tax
amount, including related pyramiding taxes, in accordance with procedures
of the Committee and payroll practices and procedures of the Company.
5.3 Deferrals described in 5.2 shall be credited to the Account as of the
last day of the calendar quarter in which the deferred amount would have been
paid if not deferred. Adjustments shall be credited to the Account as of the
date the adjustment to Stock would have become effective for shareholders.
Phantom shares for cash dividends on Stock shall be credited to the Account as
of the payment date for the dividend.
5.3.1 If the amount deferred or the adjustment or dividend would have
been paid or recorded in Stock outside of the Plan, the credit to the
Account shall be the same number of phantom shares as the number of shares
of Stock.
5.3.2 If the amount deferred or the adjustment or dividend would have
been paid or recorded in cash outside of the Plan, the following shall
apply:
(a) For deferrals, the number of phantom shares shall have a
value equal to the deferral based on the unweighted arithmetic average
of the closing prices of Stock on the last trading day of each
calendar month that ends in the calendar quarter for which the amounts
are credited.
(b) For adjustments and dividends, the number of phantom shares
shall have a value equal to the adjustment amount or dividend based on
the closing price of the Stock on the date the amount is credited to
the Account.
5.4 A participant's Account shall be 100 percent vested at all times,
except pre-2005 amounts shall be vested and continue to vest in accordance with
provisions of the Plan in effect as of December 31, 2004.
5.5 Amounts, other than director fees, credited under 5.2 shall be treated
as wages for purposes of FICA taxes as follows:
5.5.1 Credits for elected deferrals shall be treated as wages when the
amounts deferred would otherwise have been paid.
6
5.5.2 Earnings credit shall not be treated as wages except for
earnings credit on unvested amounts shall be treated as wages when they
vest.
6. IRREVOCABLE TRUST
6.1 Employer may, but shall not be required to, establish an irrevocable
trust to cover the liabilities to participants in certain circumstances, and may
transfer cash or other property to such a trust. Employer may use the same trust
as may be established under the Deferred Compensation Plan.
6.2 If Employer creates a trust under 6.1 above, assets transferred to the
trust shall be invested at the absolute discretion of the Committee, the
trustee, or both on a shared basis, as provided in the trust. Neither the
Committee nor the trustee shall be required to invest in such funds in Stock or
any other security or investment vehicle. The Committee and the trustee may,
however, choose, in their discretion, to invest in Stock.
6.3 The trust under 6.1 shall be a grantor trust and all assets held in
trust shall be assets of Employer subject to the trust terms. All assets of the
trust shall at all times be subject to the claims of creditors of Employer in
circumstances described in the trust. Participants will not receive a vested
priority interest in the trust assets ahead of such creditors. Participants'
interests in the trust will be governed by the trust terms at all times.
6.4 The trust terms may provide that the assets of the trust may be used to
pay amounts with respect to the Deferred Compensation Plan and with respect to
certain Accounts or subaccounts under the Plan and not others, subject to claims
of creditors.
7. TIME AND MANNER OF PAYMENT
7.1 Annual Election of Payment Date. Subject to 7.3, 7.10 and 7.11, for all
deferred amounts for a year (and subsequent adjustments and credit on the
deferred amounts for that year), a participant shall elect a Payment Date that
is one of the following as selected under 7.6:
7.1.1 Upon Termination. The date the participant's service as a Board
Member or employment has terminated for any reason, including death and
disability. Special provisions under 9 apply to termination by death. A
participant is disabled if the Committee determines that any of the
following apply:
(a) The participant is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve
months.
(b) The participant is, by reason of any medically determinable
physical or mental impairment that can be expected to result in death
or can be expected to last for a continuous period of not less than
twelve months, receiving income replacement benefits for a period of
not less than three months under an accident and health plan covering
employees of the Employer.
7
(c) The Social Security Administration has determined the
participant to be totally disabled.
7.1.2 January After Termination. The January next following the date
in 7.1.1.
7.1.3 In-Service. The January selected by the participant that is not
less than two years after the year subject to the deferral election.
7.2 Default Payment Date. The Payment Date shall be the date in 7.1.1 if
either of the following apply:
7.2.1 The participant has not properly elected a Payment Date.
7.2.2 Payment of all amounts subject to an election under 7.1.3 has
not been completed by the date in 7.1.1.
7.2.3 The balance of the participant's Account is not more than 1000
phantom shares of Stock as of the date in 7.1.1.
7.3 Form of Payment. Payment shall be in shares of Stock equal to or based
on the number of whole phantom shares in the Participant's Account. Fractional
phantom shares shall be disregarded. Subject to 7.4, 7.5 and 7.11, a
participant's Account shall be paid in the following ways as selected under 7.6:
7.3.1 In a lump sum within 30 days after the Payment Date.
7.3.2 In not more than 15 annual installments elected by the
participant, starting as soon as practicable after the Payment Date, with
subsequent installments in January each year.
7.3.3 Regardless of the form of payment selected, payment shall be in
a lump sum if the balance of a participant's Account is not more than 1,000
phantom shares of Stock.
7.4 Special In-Service Payment Form. Payment under 7.1.3 shall be paid in
not more than five annual installments (including a single installment) elected
by the participant, starting as soon as practicable, but not more than 90 days,
after the Payment Date, subject to 7.2.2.
7.5 Default Form of Payment. Payment shall be in a lump sum if any of the
following apply:
7.5.1 A participant has not properly selected a form of payment.
7.5.2 Termination of a Board Member's service before age 55 and five
years of service.
7.5.3 Termination of employment before age 55 and five years of
service.
8
7.5.4 Payment is subject to 7.2.2 or 7.2.3.
7.6 Elections. In the deferral election under 4.1 for the year a
participant shall select a Payment Date under 7.1 and a form of payment under
7.3 or 7.4 for all deferred amounts and related earnings credits for the Plan
Year. The Committee may, in its discretion, establish rules and procedures to
allow a participant to elect more than one Payment Date and form of payment for
amounts deferred for a year and allocate the deferred amount between or among
Payment Dates. Subject to 7.10, the selection shall be irrevocable. If different
selections apply to different amounts for the year or different years, the
Account shall be appropriately divided to track earnings credits and payments
with respect to each selection.
7.7 Installments. If installments are selected, the payout period shall be
specified in the deferral election. The installment size shall be fixed as of a
valuation date determined by the Committee preceding the first Payment Date and
each later December 31 as though equal installments were to be paid for the
remainder of the installment period, disregarding future earnings credits.
7.8 Termination. A participant terminates service as a Board Member or
employment when no longer serving as a Board Member of, or employed by, an
Employer. A transfer from one Employer to another or to an affiliate shall not
constitute a termination of service as a Board Member or termination of
employment.
7.9 Withholding. The Employer may withhold from any payments any income tax
or other amounts as required by law.
7.10 Special Rules for Changing Form of Payment. Payment of amounts that
were credited to a participant's Account as of December 31, 2004 (and subsequent
adjustments and related earnings credits) with respect to services performed
before January 1, 2005, and that were vested as of December 31, 2004, all
pursuant to the terms of the Plan in effect on October 3, 2004, shall be
governed by such terms and applicable elections in effect before January 1, 2005
and not by the terms of this Restatement except as provided in Section 8 below
and the following restatement of pre-2005 Plan terms:
7.10.1 A participant may change the form of a payment that is
scheduled to start after termination by filing a new election with the
Committee not less than 13 calendar months prior to the date of the
participant's termination of services as a Board Member or employment. If
termination occurs prior to the expiration of the 13-month period, the
election shall not be effective.
7.10.2 Subject to 7.10.1, the new election shall be effective with
respect to all amounts described above and shall supersede all prior
elections with respect to such amounts.
7.10.3 The election may change only the form of payment. The Payment
Date may not be changed.
7.11 Delay of Payment to Key Employees. Payment on account of termination
may not start or be made to a participant who is a "key employee" as defined in
section 416(i) of the
9
Code, without regard to section 416(i)(5) of the Code, before the date which is
six months after the date of termination. The Committee may determine that a
participant is a key employee in the event of doubt or to avoid impractical
efforts or expense to make an exact determination of key employees. A
participant shall have no claim, rights or remedy if the determination is not
correct. If the participant terminates service because of death or if the
participant dies within the six months, benefits shall start as soon as
practicable after death unless a later Payment Date applies.
7.11.1 If installment payments are delayed because of this 7.11, the
number of installments shall not change and the following shall apply:
(a) The first installment shall be paid upon expiration of six
months after termination.
(b) The next installment shall be paid the January 1 after the
first installment.
(c) The remainder of installments shall be paid annually starting
the following January 1.
7.11.2 The delay under this 7.11 shall not apply to amounts described
in 7.10 above. If the participant is entitled to payment with respect to
amounts described in 7.10 above, the Committee shall apply payment
provisions to the subaccount that records the amount described in 7.10
above separately from the other amounts under the Account to the extent
necessary to comply with this 7.11.
7.11.3 This 7.11 shall not apply with respect to payments that are not
on account of termination. Under 7.2.2, amounts subject to an election
under 7.1.3 that remain unpaid at termination ("Accelerated Amounts")
become payable at termination. If the participant is a key employee, the
Accelerated Amounts shall be paid as though the participant had terminated
six months after actual termination. However, Accelerated Amounts payable
during the six months pursuant to the election under 7.1.3 shall be paid in
accordance with the election.
7.12 Delay of Nondeductible Payments. Employer may delay any payment to the
extent that employer reasonably anticipates that employer's deduction with
respect to such payment would be limited or eliminated by application of section
162(m) of the Code. A delayed payment will be made at the earliest date the
Employer reasonably anticipates that the deduction of the payment will not be
limited or eliminated by application of section 162(m) of the Code.
8. WITHDRAWAL PAYMENTS
8.1 A participant may elect to be paid amounts, and the payments shall be
charged against the participant's Account (including all subaccounts under 7.6),
as follows:
10
8.1.1 Upon approval of the Committee, up to 100 percent of the amount
reasonably necessary to meet an unforeseeable emergency under 8.2, as
determined by the Committee (a "Hardship Withdrawal").
8.1.2 At the participant's option, 100 percent of the available
Account balance in a lump sum (a "Forfeiture Withdrawal"), subject to
forfeiture of 10 percent of the available balance. The amount paid to the
participant and the forfeiture shall be charged to the available balance. A
Forfeiture Withdrawal is available only with respect to amounts that were
credited to a participant's Account under the Plan as of December 31, 2004
(and subsequent related adjustments and earnings credits) with respect to
services performed before January 1, 2005, and that were vested as of
December 31, 2004, all pursuant to the terms of the Plan in effect on
October 3, 2004.
8.1.3 Withdrawals under 8.1.1 or 8.1.2 may be made before or after a
participant's Payment Date.
8.2 "Unforeseeable emergency" means a participant's severe financial
hardship to the extent that the hardship that cannot be met from other
reasonably available resources and is caused by one or more of the following:
8.2.1 Illness or accident of the participant, the participant's
spouse, or a dependent under section 152(a) of the Code.
8.2.2 Loss of the participant's property due to casualty, including
the need to rebuild a home following damage not covered by insurance.
8.2.3 Other similar extraordinary and unforeseeable circumstances
arising as a result of events beyond the control of the participant.
8.3 Other resources are reasonably available if assets can be liquidated
without liquidation itself creating severe financial hardship, if insurance or
other reimbursement or compensation is available, or if deferrals under 4.1 are
stopped.
8.4 Upon payment of a Hardship Withdrawal or Forfeiture Withdrawal,
elective deferrals under 4.1 shall cease and the participant shall not be
eligible under 4.1 until the year following the calendar year after the payment.
8.5 Subject to 8.1.2, Withdrawals under this Plan shall be charged ratably
to all of the participant's accounts under this Plan.
8.6 An application for payment shall be written, shall be signed by the
participant and shall include the following:
8.6.1 For Hardship Withdrawal, a statement of the facts causing the
financial hardship, any other facts as may be required by the Committee and
an acknowledgement of temporary future ineligibility.
11
8.6.2 For Forfeiture Withdrawal, an acknowledgment of the forfeiture
and temporary future ineligibility.
8.7 Subject to 8.5, the Committee shall establish guidelines and procedures
for implementing withdrawals. The payment date shall be fixed by the Committee.
The Committee may require a minimum advance notice and may limit the amount,
time and frequency of Withdrawals.
9. DEATH
9.1 Subject to separate provisions under 9.5 for amounts described in 7.10,
a participant's Account shall be payable under this Section on the participant's
death regardless of the provisions of Section 7, except with respect to amounts
described in 7.10.
9.2 On death the balance of the Account shall be fully vested and shall be
paid as follows:
9.2.1 If the participant had selected payment by installments and had
terminated services as a Board Member or employment before death, the
designated beneficiary shall receive payment in installments in accordance
with the selection.
9.2.2 By a lump sum as soon as practicable if 9.2.1 does not apply or
if either of the following apply:
(a) The recipient is not a designated beneficiary.
(b) The selection was under 7.4.
9.3 An amount payable on death of a participant shall be paid to the
surviving beneficiaries most recently designated by the participant in writing
to the Committee in accordance with Committee procedures.
9.3.1 The participant may designate beneficiaries or change designated
beneficiaries without consent of any person.
9.3.2 If the participant has no valid beneficiary designation in
effect at death, or all beneficiaries predecease the participant, the
amount payable shall be paid in the following order of priority:
(a) To the participant's surviving spouse.
(b) To the participant's surviving children in equal shares.
(c) To the participant's estate.
9.4 If a beneficiary is receiving installments and dies when a balance
remains, the balance shall be paid in a lump sum to the beneficiary's estate.
12
9.5 Amounts described in 7.10 shall be payable after a participant's death
in accordance with provisions applicable to such amounts prior to January 1,
2005 as follows:
9.5.1 If a participant terminates Board Member service or employment
before age 55 and five years of service because of death, benefits shall be
paid in a lump sum as soon as practicable.
9.5.2 If termination because of death occurs after age 55 and five
years of service, benefits shall be paid in accordance with the time and
form of benefits elected by the participant.
9.5.3 Amounts payable because of death shall be paid to the surviving
beneficiaries most recently designated by the participant in writing to the
Committee in accordance with Committee procedures. The participant may
designate beneficiaries or change designated beneficiaries without consent
of any person. If the participant has no valid beneficiary designation in
effect at death, or all beneficiaries predecease the participant, the
amount payable shall be paid to the participant's estate.
9.5.4 If a beneficiary is receiving installments and dies when a
balance remains, the balance shall be paid in a lump sum to the
beneficiary's estate.
10. TERMINATION; AMENDMENT
10.1 The Board of Directors of the Company may terminate this Plan and
provide for payment of amounts under all Accounts as follows:
10.1.1 No payments other than payments that would be payable if the
termination had not occurred will be made within twelve months of the
termination of the Plan.
10.1.2 All payments shall be made within twenty-four months of the
termination of the Plan.
10.1.3 Any amendments to the Plan in connection with termination shall
not reduce amounts credited to Accounts and earnings credits shall continue
pending full payment.
10.2 The Board of Directors may amend the Plan at any time and from time to
time, subject to the following:
10.2.1 If the amendment ceases deferred compensation credits,
deferrals under 4.1 shall continue until the end of the Plan Year unless
the Company terminates the Plan.
(a) Earnings credits shall continue until the final payment.
13
10.2.2 No amendment may reduce the amount credited to any Account as
of the date the notice of amendment is issued to participants, except as
provided in 10.2.7 below.
10.2.3 After a Change in Control, the following shall apply:
(a) No amendment may change the methodology used to calculate
adjustments or earnings credit in any way that would reduce the
balance or rate of earnings credit on amounts to be credited to a
participant's Account for a period prior to the Change in Control or
pursuant to an election that is effective prior to the Change in
Control.
(b) No amendment may change the time or form of payment of
amounts credited to Accounts prior to the Change in Control or amounts
credited to Accounts for a year pursuant to elections effective prior
to the Change in Control.
10.2.4 No amendment may change the Plan in a way that would cause the
terms or operation of the Plan to fail to comply with the requirements of
section 409A, but the Company shall have no liability if the Plan fails to
comply with section 409A unless the violation is deliberate and with
knowledge of the violation.
10.2.5 Reserved.
10.2.6 Unless otherwise restricted by express terms of the Plan,
amendments may be effective as of any date provided in the amendment
document, including a retroactive effective date.
10.2.7 Notwithstanding any restriction in the Plan, the Company may
amend the Plan from time to time to comply with section 409A of the Code or
other legal requirements that would cause material adverse consequences to
participants if violated. If an amendment reduces amounts that have been
deferred, Employer shall increase the compensation of the participant to
restore the participant, as nearly as practicable, to the position as if
the reduced amount had not been deferred, without adjustment for earnings
or other time value of money, provided that the restoration would not cause
penalties under section 409A of the Code or other material penalties to
apply.
10.2.8 The Committee may amend the Plan to make technical,
administrative, or editorial changes to comply with applicable law or to
clarify the Plan provided that the amendment does not materially increase
the cost to Employer.
10.3 A "Change in Control" occurs when any of the following occur (terms
below that are not defined elsewhere in the Plan shall have the same meanings as
the terms have under the Securities Exchange Act of 1934, as amended and the
rules and regulations adopted thereunder):
10.3.1 The shareholders of the Company approve any of the following
transactions and either the transaction is consummated or the Board of
Directors of the Company determines that consummation is likely:
14
(a) Any consolidation, merger or plan of exchange involving the
Company ("Merger") in which the Company is not the continuing or
surviving corporation or pursuant to which Stock would be converted
into cash, securities or other property, other than a Merger involving
the Company in which the holders of Stock immediately prior to the
merger had the same proportionate ownership of Stock of the surviving
corporation after the Merger.
(b) Any sale, lease or exchange, or other transfer in one
transaction or a series of related transactions of all or
substantially all of the assets of the Company or the adoption of any
plan or proposal for the liquidation or dissolution of the Company.
10.3.2 A tender or exchange offer, other than one made by the Company,
is made for Stock (or securities convertible into Stock) and such offer
results in a proportion of those securities being purchased and the offeror
after the consummation of the offer is the beneficial owner (as determined
pursuant to section 13(d) of the Securities Exchange Act of 1934), directly
or indirectly, of at least 20 percent of the outstanding stock.
10.3.3 During any period of 12 months or less, individuals who at the
beginning of such period constituted a majority of the Board of Directors
of the Company ceases for any reason to constitute a majority thereof
unless the nomination or election of such new directors was approved by a
vote of at least two thirds of the directors then still in office who were
directors at the beginning of the period.
11. CLAIMS PROCEDURES
11.1 Claims shall be submitted in writing to the Committee. The Chair of
the Committee shall respond as soon as practicable but not later than 90 days
after receipt of the claim unless the Chair gives written notice to the claimant
before the end of the 90-day period that additional time is required. The notice
shall explain the special circumstances that require additional time and the
expected date of the response. The extension shall not be more than an
additional 90 days.
11.2 If the claim involves benefits on disability, the time for response
will be not later than 45 days after receipt of the claim, subject to extension
by as many as two additional 30-day periods if necessary due to matters beyond
the control of the Chair. If an extension is necessary, the Chair shall notify
the claimant in writing before each extension of the circumstances requiring
extension and the date by which the Chair expects to render a decision. The
notice of extension shall explain the standards on which entitlement to a
benefit is based, the unresolved issues that prevent a decision on the claim and
the additional information needed to resolve the issues. If the claimant needs
to provide additional information, the claimant shall be given 45 days. If an
extension is necessary to obtain information from the claimant, the extension
period may be further extended by the amount of time taken to provide the
specified information.
11.3 The claimant may have a representative to assist the claimant or to
conduct the claim and review any denial. The Chair may require that the claimant
notify the Chair in writing about authorization of a representative.
15
11.4 Determinations about claims shall be based on and in accordance with
Plan documents and shall be applied consistently with respect to similarly
situated participants and beneficiaries.
11.5 The following shall apply to review of denied claims:
(a) If a claim is denied, the Chair shall notify the claimant in
writing. The notice shall state the following:
(1) The specific reasons for the denial.
(2) Reference to the relevant Plan provisions.
(3) A description of additional material or information that
is needed and an explanation of why the material or information
is needed.
(4) A description of the Plan's review procedures and the
claimant's right to bring a civil action under section 502(a) of
the Employee Retirement Income Security Act of 1974 (ERISA) if
the claim is also denied after review.
(b) If a claim involves benefits upon disability, the claimant
shall be notified if any internal rule, guideline, protocol or other
similar criterion was relied upon in the decision to deny the claim
and that the claimant may have a copy of any such rule, guideline,
protocol or other criterion free of charge upon request.
11.6 A claimant may request review of a denied claim by written notice to
the Committee. The written request for review must be delivered within 60 days
after the notice of denial. If the claim involves benefits upon disability, the
request must be in writing and delivered within 180 days. The Committee shall
review the matter and may grant the claimant a hearing but is not required to.
The following apply in connection with the review:
(1) The claimant may submit written comments, documents,
records and other information.
(2) Upon request, the claimant shall be provided, without
charge, reasonable access to, and copies of, all documents,
records and other information relevant to the claim.
(3) If the claim involves a determination of disability,
upon the claimant's request, the claimant shall be provided with
the identity of medical or vocational experts who advised the
President, whether or not the advice was relied upon in deciding
to deny the claim.
(4) The review shall consider all aspects of the claim and
all comments, documents, records and other information the
claimant
16
submits, whether or not the claimant raised the issues or
submitted such information when the claim was originally
considered.
(b) If the claim involves benefits upon disability, the following
also apply:
(1) The review shall not afford deference to the initial
consideration of the claim and shall be conducted by Committee
members who are neither individuals who made the initial
determination nor the subordinates of any such individual.
(2) If the Committee members are reviewing a matter that is
based on a medical judgment, the members shall consult with a
health care professional who has appropriate training and
experience in the field involved in the medical judgment. That
health care professional will be a person who was not consulted
in connection with the claim denial and is not a subordinate of
the person who was consulted.
(c) The decision on review shall be made within 60 days after
receipt of the request for review in most cases. If there is a hearing
or other special reason for delay, the President shall notify the
claimant in writing within the initial 60-day period and the time
limit shall be 120 days. If the claim involves benefits upon
disability, the decision shall be made within 45 days, subject to
extension of an additional 45 days pursuant to notice in writing
within the initial 45-day period. The notice of any extension shall
explain the special circumstances that require additional time and the
expected date of the decision upon review. If an extension is
necessary to obtain information from the claimant, the extension
period may be further extended by the amount of time taken to provide
the information.
(d) The Committee's decision shall be provided in writing and
will be final and bind all parties. An adverse determination shall
state the following:
(1) The specific reasons for the determination.
(2) Reference to relevant Plan provisions.
(3) A reminder that the claimant is entitled to access to
and copies of all documents, records and information relevant to
the claim upon request and without charge.
(4) A reminder that the claimant may bring a civil action
under section 502(a) of ERISA.
(e) If the claim involves benefits upon disability, the following
also apply:
17
(1) If the determination is based on a medical, scientific
or technical judgment, the determination will include either an
explanation of the judgment that applies Plan terms to the
medical circumstances, or a statement that an explanation will be
provided free of charge upon request.
(2) Notice of an adverse determination shall include the
following statement:
"You and your Plan may have other voluntary alternative dispute
resolution options, such as mediation. One way to find out what
may be available is to contact your local U.S. Department of
Labor Office and your State insurance regulatory agency."
12. GENERAL PROVISIONS
12.1 If suit or action is instituted to enforce any rights under this Plan
after or in lieu of proceeding under applicable claims procedures, the
prevailing party may recover from the other party reasonable attorneys' fees at
trial and on any appeal.
12.2 Any notice or directions under the Plan shall be in accordance with
procedures established by the Committee.
12.3 The rights of a participant under the Plan are personal. Except for
the limited provisions of 9.3 and 12.5, no interest of a participant or any
beneficiary or representative of a participant may be directly or indirectly
transferred, encumbered, seized by legal process or in any other way subjected
to the claims of any creditor.
12.4 Except as otherwise provided in the terms of Employer's participation,
if an Employer merges, consolidates, or otherwise reorganizes or if its assets
or business are acquired by another company, the following shall apply.
12.4.1 The Plan shall continue with respect to those eligible
employees who continue in the employ of the successor company.
12.4.2 The transition of Employers shall not be considered a
termination of employment for purposes of this Plan.
12.4.3 A successor corporation may terminate this Plan as to its
employees on the effective date of the succession by notice to affected
employees within 30 days after the succession, subject to 10.
12.5 The Committee 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 the Committee may in
its discretion direct that payments be made to one or more of the following:
18
12.5.1 To a parent or spouse or a child of legal age.
12.5.2 To a legal guardian.
12.5.3 To one furnishing maintenance, support, or hospitalization.
12.6 This Plan is not a contract of employment with any participant.
Nothing in the Plan shall create any right of any participant with respect to
continued employment, terms of employment or discipline, or continued ability to
elect deferrals or have pension supplement credits.
13. EFFECTIVE DATE
This Restatement shall be generally effective January 1, 2005.
TEKTRONIX, INC.
By: /s/ RICHARD H. WILLS
------------------------------------
Richard H. Wills
Board Chairman, CEO & President
Executed: 6-23, 2006
19