Teradyne, Inc. Supplemental Savings Plan

Employee Benefits Plan Agreement

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Teradyne, Inc

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Title: Teradyne, Inc. Supplemental Savings Plan
Governing Law: Massachusetts Date: 3/2/2009
Industry: Semiconductors Sector: Technology

Exhibit 10.18

Teradyne, Inc.

Supplemental Savings Plan

(Restated November 2008)

TABLE OF CONTENTS


PURPOSE AND EFFECTIVE DATE

ARTICLE 1 - DEFINITIONS		1-1
1.1	Account	1-1
1.2	Administrator	1-1
1.3	Beneficiary	1-1
1.4	Change in Control	1-1
1.5	Code	1-1
1.6	Compensation	1-1
1.7	Disability	1-1
1.8	Eligible Employee	1-2
1.9	Employer	1-2
1.10	ERISA	1-2
1.11	Grandfathered Account	1-2
1.12	Key Employee	1-2
1.13	Matchable Compensation	1-2
1.14	Matching Contribution	1-2
1.15	Participant	1-2
1.16	Plan	1-2
1.17	Plan Sponsor	1-2
1.18	Plan Year	1-2
1.19	Related Employer	1-3
1.20	Retirement	1-3
1.21	Savings Plan	1-3
1.22	Separation from Service	1-3
1.23	Unforeseeable Emergency	1-3
1.24	Valuation Date	1-3
1.25	VC Award	1-3
1.26	Vesting Service	1-3

ARTICLE 2 - PARTICIPATION		2-1
2.1	Participation	2-1
2.2	Termination of Participation	2-1

ARTICLE 3 - PARTICIPANT ELECTIONS		3-1
3.1	Deferral Agreement	3-1
3.2	Election to Defer Compensation	3-1
3.3	Election to Defer VC Award	3-1
3.4	Timing of Election to Defer	3-1
3.5	Election of Distribution Event	3-2
3.6	Transitional Rule	3-2


ARTICLE 4 - MATCHING CONTRIBUTIONS		4-1
4.1	General Rules	4-1
4.2	Rate of Matching Contributions	4-1

ARTICLE 5 - PARTICIPANT ACCOUNTS		5-1
5.1	Establishment of Account	5-1
5.2	Credits to Account	5-1
5.3	Investment Options	5-1
5.4	Adjustment of Accounts	5-1

ARTICLE 6 - RIGHT TO BENEFITS		6-1
6.1	Vesting	6-1
6.2	Death	6-1

ARTICLE 7 - DISTRIBUTION OF BENEFITS		7-1
7.1	Amount of Benefits	7-1
7.2	Method and Timing of Distributions from Account	7-1
7.3	Distributions and Withdrawals from Grandfathered Account	7-1
7.4	Cashouts of Amounts Not Exceeding $50,000	7-1
7.5	Permissible Delays in Payment	7-1
7.6	Key Employees	7-2
7.7	Unforeseeable Emergency	7-2

ARTICLE 8 - AMENDMENT AND TERMINATION		8-1
8.1	Amendment by Employer	8-1
8.2	Retroactive Amendments	8-1
8.3	Plan Termination	8-1
8.4	Distribution Upon Termination of the Plan	8-2
8.5	Change in Control	8-2

ARTICLE 9 - THE TRUST		9-1
9.1	Establishment of Trust	9-1
9.2	Investment of Trust Funds	9-1

ARTICLE 10 - PLAN ADMINISTRATION		10-1
10.1	Powers and Responsibilities of the Administrator	10-1
10.2	Claims and Review Procedures	10-1
10.3	Plan Administrative Costs	10-2


ARTICLE 11 - MISCELLANEOUS		11-1
11.1	Unsecured General Creditor of the Employer	11-1
11.2	Employer’s Liability	11-1
11.3	Limitation of Rights	11-1
11.4	Anti-alienation of Benefits	11-1
11.5	Facility of Payment	11-1
11.6	Notices	11-2
11.7	Tax Withholding	11-2
11.8	Indemnification	11-2
11.9	Permitted Acceleration of Payment	11-2
11.10	Illegality of Particular Provision	11-3
11.11	Governing Law	11-3

iii

Exhibit 10.18

PURPOSE AND EFFECTIVE DATE

Teradyne, Inc. established the Teradyne, Inc. Supplemental Savings Plan (the “Plan”) effective as of December 1, 1994 for the benefit of a select group of its highly paid employees. The Plan was subsequently amended by the First Amendment, which was generally effective as of January 1, 2002. The Plan has been operated in compliance with Code Section 409A since January 1, 2005 with respect to amounts subject to Code Section 409A. The last amendment and restatement was intended to memorialize any changes in operation in the Plan as of January 1, 2005 as required by Code Section 409A. This amendment and restatement clarifies certain provisions and makes additional changes as required or permitted by Code Section 409A, including the extension of the transition election period as described in Section 3.6.

Teradyne, Inc. adopted this written amendment and restatement of the Plan on November 3, 2008 to apply to elective and non-elective amounts deferred on or after January 1, 2005 and for amounts deferred before January 1, 2005 that were not both earned and vested on December 31, 2004. The Plan as amended and restated is intended to conform with the requirements of Code Section 409A and shall be administered in a manner consistent therewith. All amounts deferred under the Plan that are subject to Code Section 409A shall be separately accounted for and administered within each Participant’s Account. All other changes are effective as otherwise provided herein.

Amounts attributable to a Participant’s vested account under the Plan on December 31, 2004 shall be separately accounted for in each Participant’s Grandfathered Account. Elections made with respect to amounts credited to a Participant’s Grandfathered Account and amounts payable from a Participant’s Grandfathered Account shall be subject to the provisions of the Plan as in effect on October 3, 2004 and the law as in effect prior to Code Section 409A.

The purpose of the Plan is to permit eligible employees to elect to defer receipt of compensation otherwise payable currently and to enable the employer to credit eligible employees with matching contributions.

The Plan is intended to be a “plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees” within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and shall be administered in a manner consistent therewith.

ARTICLE 1 – DEFINITIONS

Pronouns used in the Plan are in the masculine gender but include the feminine gender unless the context clearly indicates otherwise. Wherever used herein, the following terms have the meanings set forth below, unless a different meaning is clearly required by the context:

1.1

“Account” means an account established for the purpose of recording amounts credited on behalf of a Participant for periods after December 31, 2004 and unvested amounts credited for periods prior to January 1, 2005 that are subject to Code Section 409A plus any income, expenses, gains, losses or distributions included thereon. The Account shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant pursuant to the Plan. Vested amounts credited on behalf of the Participant under the Plan attributable to periods prior to January 1, 2005 that are not subject to Code Section 409A are accounted for separately in the Participant’s Grandfathered Account.

1.2

“Administrator” means the Plan Sponsor, or such other person or persons formally or informally designated by the Plan Sponsor to be responsible for the administration of the Plan.

1.3

“Beneficiary” means the persons, trusts, estates or other entities entitled under Section 6.2 to receive benefits under the Plan upon the death of a Participant.

1.4

“Change in Control” means the occurrence of an event involving the Employer that is described in Section 8.5.

1.5

“Code” means the Internal Revenue Code of 1986, as amended from time to time.

1.6

“Compensation” means the general definition of ‘Compensation’ in the Savings Plan before the beginning of each calendar year except that the limitation contained in Code Section 401(a)(17) shall be disregarded and a VC Award (as well as any profit sharing award) shall not be included. Only amounts in excess of the Compensation limit announced each year during the annual enrollment period by the Plan Sponsor shall be considered.

1.7

“Disability” means “disability” as defined under the Savings Plan on the date of the Participant’s Separation from Service.

1-1

1.8

“Eligible Employee” means an employee of the Employer who is determined by the Employer to be a member of a select group of management or highly compensated employees within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA and who is designated by the Employer as an Eligible Employee for purposes of the Plan.

1.9

“Employer” means the Plan Sponsor and any other entity which is authorized by the Plan Sponsor to participate in and, in fact, does adopt the Plan. The term “Employer” shall in each instance that it appears in the Plan refer to any one of the foregoing entities and in no case shall refer to the entities collectively or to more than one such entity.

1.10

“ERISA” means the Employee Retirement Income Security Act of 1974, as from time to time amended.

1.11

“Grandfathered Account” means an account established for the purpose of recording earned and vested amounts credited on behalf of a Participant under the Plan for periods prior to January 1, 2005 and any income, expenses, gains, losses or distributions included thereon.

1.12

“Key Employee” means a ‘specified employee’ within the meaning of Treas. Reg. § 1.409A-1(i) who satisfies the conditions of Section 7.7.

1.13

“Matchable Compensation” means, for purposes of determining the Matching Contribution attributable to a VC Award deferral, the amount of the Participant’s VC Award deferral for the Plan Year. For purposes of determining the Matching Contribution attributable to a Compensation deferral, Matchable Compensation means the Participant’s Compensation in excess of the Code Section 401(a)(17) limit for the Plan Year (rather than the special Compensation limit announced for the Plan Year by the Plan Sponsor) plus the VC Award as reduced by the VC Award deferral.

1.14

“Matching Contribution” means a contribution credited by the Employer pursuant to Article 4.

1.15

“Participant” means any Eligible Employee who participates in the Plan in accordance with Article 2.

1.16

“Plan” means the Teradyne, Inc. Supplemental Savings Plan as set forth herein and as it may be amended from time to time.

1.17

“Plan Sponsor” means Teradyne, Inc.

1.18

“Plan Year” means the 12-consecutive month period beginning January 1 ^st and ending December 31 ^st .

1-2

1.19

“Related Employer” means the Employer and (a) any corporation that is a member of a controlled group of corporations as defined in Section 414(b) of the Code that includes the Employer, and (b) any trade or business that is under common control as defined in Section 414(c) of the Code that includes the Employer.

1.20

“Retirement” means a Participant’s Separation from Service that occurs on or after the date the Participant: (a) attains age sixty-five (65) and has at least five (5) years of Vesting Service or (b) attains age fifty-five (55) with at least ten (10) years of Vesting Service.

1.21

“Savings Plan” means the Teradyne, Inc. Savings Plan as in effect on January 1, 2005 and as it may thereafter be amended from time to time.

1.22

“Separation from Service” means the date that the Participant dies, retires or otherwise has a termination of employment with respect to all entities comprising the Related Employer, provided that such termination of employment is a “separation from service” under Treas. Reg. § 1.409A-1(h). A Separation from Service does not occur if the Participant is on military leave, sick leave or other bona fide leave of absence, if the period of leave does not exceed six months or such longer period during which the Participant’s right to reemployment is provided by statute or contract. If the period of leave exceeds six months and the Participant’s right to reemployment is not provided either by statute or contract, a Separation from Service will be deemed to have occurred on the first day following the six month period.

1.23

“Unforeseeable Emergency” means a severe financial hardship of the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, or the Participant’s dependent (as defined in Code Section 152(a)); loss of the Participant’s property due to casualty; or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant, which hardship meets the standards under Treas. Reg. § 1.409A-3(i)(3).

1.24

“Valuation Date” means each business day of the Plan Year and such other date(s) as designated by the Employer.

1.25

“VC Award” means the amount of incentive remuneration payable by the Employer to a Participant under the Teradyne, Inc. Variable Compensation Plan as modified and incorporated into the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan, each as amended from time to time.

1.26

“Vesting Service” has the meaning such term has under the Savings Plan.

1-3

ARTICLE 2 – PARTICIPATION

2.1

Participation. Participation in the Plan is limited to Eligible Employees. The Employer shall notify an employee of his status as an Eligible Employee at such time and in such manner as the Employer shall determine. Each Eligible Employee shall become a Participant in the Plan by executing a deferral agreement in accordance with the provisions of Article 3. An Eligible Employee who has become a Participant remains eligible to participate until his participation terminates in accordance with Section 2.2

2.2

Termination of Participation. The Administrator may terminate a Participant’s participation in the Plan but any such termination at the discretion of the Administrator shall not take effect until the first day of the next Plan Year. Upon any termination of participation at the discretion of the Administrator, a Participant’s deferrals shall cease but the provisions of Article 7 shall continue to apply.

2-1

ARTICLE 3 – PARTICIPANT ELECTIONS

3.1.

Deferral Agreement. Each Eligible Employee may elect to defer amounts otherwise payable to him currently for the Plan Year by executing a deferral agreement in accordance with rules and procedures established by the Administrator and the provisions of this Article 3. The deferral agreement must separately specify for each discrete type of compensation (i.e., Compensation and VC Award) the whole number percentage that the Participant elects to defer and the timing of payment of the deferred amount.

A new deferral agreement must be timely executed for each Plan Year during which the Eligible Employee elects to defer compensation. An Eligible Employee who does not timely execute a deferral agreement shall be deemed to have elected zero deferrals for such Plan Year.

A deferral agreement may be changed or revoked at any time during the respective periods specified in Section 3.4. A deferral agreement becomes irrevocable at the close of the respective period and remains in effect throughout the applicable Plan Year even if the Eligible Employee transfers from one Employer to another Employer.

3.2

Election to Defer Compensation. An Eligible Employee may elect to defer Compensation (in 1% increments) from 1% to the maximum percentage established for the Plan Year by the Employer. The maximum percentage shall be communicated annually to Eligible Employees prior to the annual election period described in Section 3.4 for the relevant Plan Year, but in no event shall the maximum percentage under this Section 3.2 exceed 85% of the Eligible Employee’s base salary for the Plan Year.

3.3.

Election to Defer VC Award. An Eligible Employee may elect to defer (in 1% increments) from 1% to 85% of his VC Award for a Plan Year.

3.4

Timing of Election to Defer. Each Eligible Employee who desires to defer Compensation otherwise payable during a Plan Year must execute a deferral agreement within the period preceding the Plan Year specified by the Administrator. Each Eligible Employee who desires to defer a VC Award must execute a deferral agreement within the period preceding the Plan Year during which the VC Award is earned that is specified by the Administrator. Except that, only if the Administrator so decides, if the VC Award can be treated as performance based compensation” which is based upon services performed over a period of at least twelve consecutive months as set forth in Treas. Reg. § 1.409A-2(a)(8), such deferral agreement must be executed no later than the date established for this purpose by the Administrator which, in no event, shall be after the date which is six months before the end of the performance period in which the VC Award is earned.

3-1

Except as otherwise provided below, an employee who is first classified or designated as an Eligible Employee during a Plan Year may elect to defer Compensation and/or VC Award otherwise payable during the remainder of such Plan Year in accordance with the rules of this Section 3.4 by executing a deferral agreement within the thirty (30) day beginning on the date the employee is classified or designated as an Eligible Employee. If a VC Award is based on a specific performance period that begins before the Eligible Employee executes his deferral agreement, the election will be deemed to apply to that portion of the VC Award equal to the total amount of the VC Award for the performance period multiplied by the ratio of the number of days remaining in the performance period after the election to the total number of days in the performance period. The rules of this paragraph shall not apply if the Eligible Employee has ever participated or is participating in a “an account balance plan” within the meaning of Treas. Reg. §1.409A-1(c) sponsored by the Employer.

3.5

Election of Distribution Event. At the time an Eligible Employee completes a deferral agreement, the Eligible Employee must separately elect for each type of remuneration being electively deferred (i.e., for Compensation and for VC Award), a distribution event that will trigger payment of the related deferred remuneration which will be effective unless the provisions of Section 7.4 are triggered. Matching Contributions credited to a Participant’s Account during a Plan Year shall automatically be paid following the distribution event selected by the Participant for the related deferred remuneration because of which the Matching Contribution was credited.

The permissible distribution events are Separation from Service and a specified future date, which date will only be effective as a distribution event if it is after the Eligible Employee’s Matching Contributions are vested under Article 6. Payment will occur within 90 days following the distribution event. If not election is made in accordance with this Section 3.5 the Eligible Employee will be deemed to have elected a distribution upon Separation from Service.

All distributions will be made in a single lump sum.

3.6

Transitional Rule. The following transitional rule shall apply during calendar year 2008. It will be implemented in accordance with rules and procedures established by the Administrator.

With respect to calendar year 2008, a Participant may make new distribution elections with respect to amounts subject to Code Section 409A if the elections are made no later than December 31, 2008, except that the Participant cannot in 2008 change distribution elections with respect to amounts that would otherwise have become payable in 2008 or cause payments to be made in 2008. The new distribution elections may apply to amounts deferred before the date of the election and can be made without

3-2

regard to Code Sections 409A(3) and (4) and any inconsistent provisions in the Plan to the contrary. A Participant who fails to make a new distribution election in accordance with this Section 3.6 with respect to an amount for which a valid election under Code Section 409A has not otherwise been made hereunder will be deemed to have elected a lump sum distribution upon his Separation from Service.

3-3

ARTICLE 4 – MATCHING CONTRIBUTIONS

4.1

General Rules. For each Plan Year, the Employer shall credit Matching Contributions at the rate specified in Section 4.2 to the Account of each Participant who makes deferrals during the Plan Year and otherwise satisfies the requirements of this Section 4.1. Matching Contributions shall only be made on behalf of a Participant who is employed by the Employer on the last day of the Plan Year, provided, however, that a Participant whose Separation from Service occurs before the last day of the Plan Year because of death, Disability, layoff or Retirement shall be treated, for this purpose, as if employed on the last day of the Plan Year.

4.2

Rate of Matching Contributions Each Participant who (a) was actively employed by the Employer on October 29, 1999 and (b) elected to continue accruing benefits under the Retirement Plan for Employees of Teradyne, Inc. shall be eligible to be credited with (i) Matching Contributions equal to fifty percent (50%) of the Participant’s deferrals not exceeding six percent (6%) of the Participant’s Matchable Compensation and (ii) an additional Matching Contribution, in the discretion of the Employer, of up to an additional 50% of Participant deferrals not exceeding six percent (6%) of Matchable Compensation. Each other Participant shall be eligible to be credited with (i) Matching Contributions equal to one hundred percent (100%) of the Participant’s deferrals not exceeding five percent (5%) of the Participant’s Matchable Compensation and (ii) an additional Matching Contribution, in the discretion of the Employer, of up to an additional 50% of Participant deferrals not exceeding five percent (5%) of Matchable Compensation.

The amount of Matching Contributions credited to the Account of each eligible Participant shall be calculated separately with respect to his Compensation deferrals and separately with respect to his VC Award deferrals and shall equal the sum of the amounts so determined.

4-1

ARTICLE 5 – PARTICIPANT ACCOUNTS

5.1

Establishment of Account. For accounting and computational purposes only, the Administrator will establish and maintain an Account for each Participant which will reflect the credits made pursuant to Section 5.2 and the adjustments provided in Section 5.4. The Administrator will establish and maintain such other records and accounts, including Grandfathered Accounts, as it decides in its discretion to be reasonably required or appropriate to discharge its duties under the Plan.

5.2

Credits to Account. A Participant’s Account will be credited for each Plan Year with (a) the amount of Compensation and VC Award he elects to defer in accordance with the provisions of Article 3 at the time the amount subject to the deferral election would otherwise have been paid to him but for his electio

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