======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the 13 weeks ended August 27, 1994,
or,
[ ] Transition report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the transition period from
________________ to _____________________ .
Commission File Number 1-4837
TEKTRONIX, INC.
(Exact name of registrant as specified in its charter)
OREGON 93-0343990
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
26600 S.W. PARKWAY
WILSONVILLE, OREGON 97070-1000
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 627-7111
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes ___X___ No______
AT SEPTEMBER 28, 1994 THERE WERE 30,592,148 COMMON SHARES OF
TEKTRONIX,
INC. OUTSTANDING.
(Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.)
<PAGE>
TEKTRONIX, INC. AND SUBSIDIARIES
- --------------------------------
INDEX
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PAGE NO.
--------
Financial Statements:
Condensed Consolidated Balance Sheets - 2
May 28, 1994 and August 27, 1994
Consolidated Statements of Operations - 3
for the Thirteen Weeks Ended August 27, 1994
and the Thirteen Weeks Ended August 28, 1993
Condensed Consolidated Statements of Cash Flows - 4
for the Thirteen Weeks Ended August 27, 1994
and the Thirteen Weeks Ended August 28, 1993
Notes to Condensed Consolidated Financial Statements 5
Management's Discussion and Analysis of Financial 6
Condition and Results of Operations
Part II. Other Information 9
Signatures 11
1
<PAGE>
<TABLE>
<CAPTION>
TEKTRONIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
August 27, May 28,
(In thousands) 1994 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 33,857 $ 42,919
Accounts receivable - net 245,914 267,405
Inventories 187,960 171,267
Other current assets 54,441 59,054
---------- ----------
Total current assets 522,172 540,645
Property, plant, and equipment 590,524 653,709
Accumulated depreciation and amortization (382,614) (430,387)
--------- ---------
Property, plant, and equipment - net 207,910 223,322
Property held for sale 44,649 39,776
Long term deferred tax assets 71,416 79,552
Other long-term assets 147,580 107,854
---------- ----------
Total assets $ 993,727 $ 991,149
========== ==========
Liabilities and shareholders' equity
Current liabilities:
Short-term debt $ 23,438 $ 17,084
Accounts payable 151,255 161,757
Accrued compensation 58,707 78,877
Deferred revenue 18,691 18,124
---------- ----------
Total current liabilities 252,091 275,842
Long-term debt 104,266 104,146
Other long-term liabilities 143,358 141,672
Shareholders' equity:
Common stock 179,133 180,883
Retained earnings 247,265 235,795
Currency adjustment 56,203 52,811
Unrealized holding gains on certain
marketable equity securities 11,411 --
---------- ----------
Total shareholders' equity 494,012 469,489
---------- ----------
Total liabilities and shareholders' equity $ 993,727 $ 991,149
========== ==========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
2
<PAGE>
<TABLE>
<CAPTION>
TEKTRONIX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
13 weeks to 13 weeks to
August 27, August 28,
(In thousands except for per share amounts) 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 312,728 $ 290,070
Operating costs and expenses:
Cost of sales 161,249 154,201
Research and development 41,306 36,132
Selling, general, and administrative 86,746 83,932
---------- ----------
Total operating costs and expenses 289,301 274,265
Equity in business ventures net losses (365) (1,117)
---------- ----------
Operating income 23,062 14,688
Other expense - net 1,453 3,393
---------- ----------
Earnings before taxes 21,609 11,295
Income taxes 5,619 1,564
---------- ----------
Net earnings $ 15,990 $ 9,731
Earnings per share 0.53 0.32
Dividends per share 0.15 0.15
Average shares outstanding 30,168 30,518
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
3
<PAGE>
<TABLE>
<CAPTION>
TEKTRONIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
13 weeks to 13 weeks to
August 27, August 28,
(In thousands) 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Earnings $ 15,990 $ 9,731
Adjustments to reconcile earnings to cash
from operating activities:
Depreciation expense 10,212 13,926
Deferred taxes 8,140 19
Accounts receivable 24,301 32,813
Inventories (15,358) (17,301)
Accounts payable (15,145) (14,327)
Accrued compensation (20,842) (26,544)
Other assets (44,815) (4,217)
Other-net 4,348 9,734
---------- ----------
Net cash provided (used) by operating activities (33,169) 3,834
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant, and equipment (15,844) (16,305)
Proceeds from sale of assets 22,366 2,807
Proceeds from sale of investments 17,047 --
---------- ----------
Net cash provided (used) by investing activities 23,569 (13,498)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in short-term debt 6,302 (17,739)
Issuance of long-term debt -- 100,000
Repayment of long-term debt (43) (70,000)
Issuance of common stock -- 2,324
Repurchase of common stock (1,751) --
Dividends (4,520) (4,549)
---------- ----------
Net cash provided (used) by financing activities (12) 10,036
Effect of exchange rate changes 550 (742)
---------- ----------
Decrease in cash and cash equivalents (9,062) (370)
Cash and cash equivalents at beginning of year 42,919 30,004
---------- ----------
Cash and cash equivalents at end of quarter $ 33,857 $ 29,634
========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:
Income taxes paid $ 577 $ 2,852
Interest paid 5,245 2,294
NON-CASH INVESTING ACTIVITIES
Fair value adjustment to securities available-for-sale 19,018 --
Income tax effect related to fair value adjustment 7,607 --
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
4
<PAGE>
TEKTRONIX, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The condensed consolidated financial statements and notes have
been prepared by the Company without audit. Certain information and
footnote disclosures normally included in annual financial
statements, prepared in accordance with generally accepted
accounting principles, have been condensed or omitted. Management
believes that the condensed statements include all necessary
adjustments (which are of a normal and recurring nature, except for
the adjustment to deferred tax assets described below under 'Income
Taxes') and are adequate to present financial position, results of
operations and cash flows for the interim periods. The condensed
information should be read in conjunction with the financial
statements and notes incorporated by reference in the Company's
latest annual report on Form 10-K.
INVENTORIES
<TABLE>
<CAPTION>
Inventories consisted of:
Aug. 27, May 28,
(In thousands) 1994 1994
- -------------------------------------------------------------------------------
<S> <C> <C>
Materials and work in process $ 98,336 $ 89,341
Finished goods 89,624 81,926
---------- ----------
Inventories $ 187,960 $ 171,267
========== ==========
</TABLE>
INVESTMENTS
At the beginning of the year, the Company adopted SFAS No. 115,
'Accounting for Certain Investments in Debt and Equity Securities'.
SFAS No. 115 supersedes SFAS No. 12 which generally required
investments in marketable equity securities to be carried at the
lower of aggregate market or amortized cost. Under SFAS No. 115,
the Company now classifies its minority equity investments in
certain marketable securities as available-for-sale and reports them
at fair value in the consolidated balance sheet. The aggregate fair
value of these investments at August 27, 1994 was $23.5 million. The
unrealized gain of $19.0 million, net of the related deferred income
tax effect of $7.6 million, is reported as a separate component of
shareholders' equity.
5
<PAGE>
SHORT-TERM AND LONG-TERM DEBT
In the first quarter of fiscal 1994, the Company issued $100.0
million of 7.5% Notes due August 1, 2003. Proceeds were used to
repay bridge financing of $70.0 million and to reduce short term
revolving credit debt.
INCOME TAXES
<TABLE>
<CAPTION>
The provision for income taxes consisted of:
13 weeks to 13 weeks to
August 27, August 28,
(In thousands) 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C>
United States $ 1,956 $ 445
State 489 615
Foreign 3,174 504
---------- ----------
Income taxes $ 5,619 $ 1,564
========= ==========
</TABLE>
The provision for income taxes was calculated at estimated
annual effective rates of 26% and 34% ,respectively, for the
quarters ended August 27, 1994 and August 28, 1993. The provision
for the quarter ended August 28, 1993 was reduced by a gain of $2.3
million on recalculation of deferred income tax benefits, primarily
as a result of the enactment of federal tax legislation increasing
the corporate income tax rate from 34% to 35%.
CONTINGENCIES
The Company has reported on certain claims asserted by Jerome
J. Lemelson in Item 3., Legal Proceedings, of its Annual Report on
Form 10-K for the fiscal year ended May 28, 1994. The Company
believes that ultimate resolution of these claims will not have a
material adverse effect on its financial position or results of
operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Financial Condition
The Company's financial condition is strong. Cash flow from
operating activities and borrowing capacity from existing lines of
credit are sufficient to meet current and anticipated future needs.
At the end of the first quarter (August 27, 1994), the Company
maintained bank credit facilities totaling $305.0 million, of which
$283.0 million was unused. The unused facilities include $133.0
million in lines of credit and $150.0 million under a revolving
credit agreement from United States and foreign banks.
6
<PAGE>
Current assets decreased by $18.5 million, due to reductions
in cash, accounts receivable and other current assets, partly offset
by an increase in inventories. The Company historically experiences
a lower weekly average sales rate in the first quarter compared to
the prior year's fourth quarter, while production rates are more
constant; consequently, accounts receivable decreased by $21.5
million and inventories increased by $16.7 million during the
quarter. Other current assets declined due to amortization of
prepaid taxes and other expenses.
Net property, plant and equipment declined by $15.4 million as
depreciation and dispositions, including the divestiture of the
Circuit Board Division, exceeded new capital additions. Long-term
deferred tax assets decreased by $8.1 million primarily due to the
tax impact from recognition of unrealized holding gains on
investments under SFAS 115, 'Accounting for Certain Investments in
Debt and Equity Securities', discussed further below under other
long-term assets.
Other long-term assets increased by $39.7 million as a result
of the Company's investment in equity and notes of Merix Corporation
(formerly the Circuit Board Division) and the accounting for certain
investments in accordance with SFAS 115. Under SFAS 115,
investments in certain marketable securities are classified as
available for sale and reported at fair value. The adjustment to
fair value added $19.0 million to other long term assets and the
unrealized gains, less deferred taxes, are reported in unrealized
holding gains as a separate component of shareholders' equity. The
Company accounts for its investment in Merix Corporation on the
equity method with the earnings impact included in equity in
business ventures net losses in the consolidated statements of
operations.
Current liabilities declined by $23.8 million. Short-term debt
increased $6.4 million. Accounts payable decreased $10.5 million,
and accrued compensation decreased $20.1 million, due to the
timing of some trade payables and restructuring charges, the payment
of year-end accruals for incentives and commissions, reductions in
vacation accruals by summer time off, the payment of employee
severance charged against restructuring reserves and lower accrual
requirements because of the disposition of non-strategic
businesses.
Shareholders' equity increased by $24.5 million due primarily
to earnings net of dividends and the addition of unrealized holding
gains in accordance with SFAS 115.
Restructuring Charges
The Company continues its consolidation of facilities and
reduction of workforce, as described in the 1994 Annual Report to
shareholders, reducing restructuring reserves to approximately $48
million at the end of the quarter. The Company is also proceeding
with the discontinuance of older, low-volume products. The
initial public offering of Merix Corporation was completed at the
beginning of the quarter and, at the end of the quarter, the
Company sold its Avionics operations to Planar Systems, Inc.,
further reducing the non-strategic businesses it operates.
7
<PAGE>
Results of Operations
13 Weeks Ended August 27, 1994
vs.
13 Weeks Ended August 28, 1993
In the first quarter of fiscal 1995, net earnings were $16.0
million, or $0.53 per share compared with $9.7 million, or $0.32 per
share in the first quarter of fiscal 1994. The prior year's quarter
included a gain of $2.3 million or $0.07 per share from the
recalculation of deferred tax benefits.
Net Sales were $312.7 million, up 8% from the prior year.
Sales of Measurement Business, Color Printing and Imaging and Video
Systems were higher, while Network Displays' sales were down
slightly and Other sales, which include the non-strategic businesses
disposed of at the end of last year and during the current quarter,
dropped sharply.
Measurement Business sales of $154.1 million were up 8% from
the prior year due to acceptance of new products and improvements in
European and Asian markets. Color Printing and Imaging sales
increased 38% to $89.5 million, continuing the strong growth trend
in both domestic and international markets. Video Systems
sales grew 13% to $42.8 million from generally improving market
conditions and realization of licensing revenues. Network Displays
sales were flat, as strong growth in X terminal sales was offset
by the continued decline in product and service revenue from the
Company's old terminals business.
Sales to customers in the United States increased slightly from
$168.4 million to $169.5 million, representing 54% of total sales.
The majority of the non-strategic operations sales, represented by
the Other product class, were in the United States, and if these
sales are excluded from both years, United States sales increased
by 13%. International sales of $143.2 million were up 18% from
$121.7 million in the prior year, with strong growth in Japan and
the rest of the Pacific, and good improvement over last year's first
quarter in Europe.
Product orders of $294 million were 24% higher than the prior
year's first quarter, when international orders were particularly
weak.
Cost of sales decreased as a percentage of net sales from 53.2%
to 51.6%. The improvement was due to a better geographic mix of
sales, the reduction of low margin component sales, and improved
product mix in each of the businesses, partially offset by the
higher cost of components and increasing use of alternative
distribution channels. The Company continues to expect cost of
sales to trend higher as a percentage of sales as more products are
sold through alternative distribution channels and the historically
higher margin on international sales is reduced.
8
<PAGE>
Research and development (R&D) and selling, general and
administrative expenses were higher in dollar terms than the prior
year because of increased variable compensation due to the Company's
improved performance. The increase in R&D was also due to increased
spending on major product development efforts.
Other expenses declined due primarily to gains on sales of
stock in Credence Systems Corporation.
Income taxes increased from $1.6 million to $5.6 million due to
higher earnings before taxes in the current quarter and a gain in
the prior year's first quarter of $2.3 million on recalculation of
deferred tax benefits. The Company's calculated effective annual
tax rate is 26% compared to 34% in the first quarter of the prior
year.
Net earnings of $16.0 million were 64% higher than the prior
year due to higher sales and gross margins and lower non-operating
expenses, partly offset by higher R&D and SG&A expenses and higher
taxes.
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
At the Company's annual meeting of shareholders on September
22, 1994, the shareholders voted on the election of four directors
to the Company's board of directors. Keith R. McKennon, Jerome J.
Meyer, and William D. Walker were elected to serve a three-year term
ending at the 1997 annual meeting of shareholders and A. Gary Ames
was elected to serve a two-year term ending at the 1996 annual
meeting of shareholders. The voting for each director was as
follows:
NAME FOR WITHHELD
Keith R. McKennon 26,115,794 251,176
Jerome J. Meyer 26,096,667 270,303
William D. Walker 26,093,984 272,986
A. Gary Ames 26,117,036 249,934
The term of office of the Company's other directors continued
after the 1994 annual meeting of shareholders, as follows: A. M.
Gleason, Wayland R. Hicks, Jean Vollum and Delbert W. Yocam until
the 1995 annual meeting of shareholders and Paul E. Bragdon and Paul
C. Ely, Jr., until the 1996 annual meeting of shareholders. Richard
W. Sonnenfeldt and Andrew V. Smith retired as directors on September
21, 1994.
9
<PAGE>
At the meeting, the shareholders also voted to approve
amendments to the Company's Stock Incentive Plan (the "Amendments").
The number of shares voted for approval of the Amendments was
16,527,650, the number voted against approval was 9,729,786, the
number abstaining was 109,534 and the number of broker non-votes was
2,305. A description of the Amendments, together with a copy of the
Stock Incentive Plan, as amended, is contained on pages 20 through
25 and at Appendix A, respectively, of the definitive proxy
statement filed herewith as an exhibit. The description of the
Amendments and the copy of the Stock Incentive Plan, as amended,
contained in the definitive proxy statement are incorporated herein
by this reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(10) (i) Executive Severance Agreement, as amended.
(ii) Amendment to Supplemental Executive Retirement
Agreement.
(27) Financial Data Schedule
(99) Definitive proxy statement dated August 3, 1994,
for the annual meeting of shareholders of Tektronix,
Inc., held September 22, 1994, including the Stock
Incentive Plan, as amended, previously filed on
August 15, 1994, SEC File No. 1-4837.
(b) No reports on Form 8-K have been filed during the quarter for
which this report is filed.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
October 7, 1994 TEKTRONIX, INC.
By___________________________
Carl W. Neun
Vice President and
Chief Financial Officer
11
<PAGE>
EXHIBIT INDEX
Exhibit Sequential
Number Document Description Page Number
_______ ____________________ ___________
(a) Exhibits
(10)(i) Executive Severance Agreement, as amended.
(ii) Amendment to Supplemental Executive
Retirement Agreement.
(27) Financial Data Schedule.
(99) Definitive proxy statement dated August 3,
1994, for the annual meeting of shareholders
of Tektronix, Inc., held September 22, 1994,
including the Stock Incentive Plan, as
amended, previously filed on August 15, 1994,
SEC File No. 1-4837.
(b) No reports on Form 8-K have been filed during the quarter
for which this report is filed.
<PAGE>
EXHIBIT 10(i)
AMENDMENT NO. 1
to
EXECUTIVE SEVERANCE AGREEMENT
October 6, 1993
Jerome J. Meyer
24790 SW Big Fir Road
West Linn, Oregon 97068 Executive
Tektronix, Inc.
an Oregon corporation
26600 SW Parkway
Wilsonville, Oregon 97070 Tektronix
The Executive Severance Agreement dated September 22, 1993 is
amended as follows to reflect the Split Dollar Insurance Agreement between
the parties dated as of October 6, 1993 (the Split Dollar Agreement).
1. Split Dollar Insurance Benefits.
A new Section 4 is added as follows, existing Section 4 through 12
are renumbered 5 through 13 respectively, and cross-references are adjusted
accordingly:
4. Split Dollar Insurance Adjustments. If Executive terminates
employment voluntarily or involuntarily for any reason other than death
before the Full Funding Date under 4.4 below, the following shall apply:
4.1 Tektronix shall not, before the Full Funding
Date, exercise its rights under the Split Dollar Agreement
or the related Collateral Assignment to withdraw the cash
surrender value of the Split Dollar Policy on termination of
the Split Dollar Agreement because of Executive's termination
of employment before the Full Funding Date.
4.2 Except as provided below, Tektronix shall pay executive
$77,987.22 as of each August 9 after the date of termination
up to the Full Funding Date. The last payment shall be made as of
the Full Funding Date. The amount for the last payment shall be
pro-rated on a daily basis to the Full Funding Date.
4.3 Tektronix shall take no action that would interfere
with Executive's payment of scheduled employee premiums
under the Split Dollar Policy up to the Full Funding Date.
Executive shall have no obligation to pay such premiums.
Tektronix's obligation to pay under 4.2 above is not conditioned
upon Executive's payment of such premiums.
4.4 "Full Funding Date" means date that the earliest
of the following occurs:
<PAGE>
(a) Executive dies.
(b) Executive reaches age 64.
(c) The policy lapses or Executive sur
renders the policy to withdraw cash value or
receive benefits, or both.
2. Conforming Amendment.
Section 5.1 (to be renumbered 6.1) is revised by inserting "except
for benefits under Section 4" so the last phrase of the first sentence of
Section 5.1 will read as follows:
* * *, the benefits provided in this Agreement shall not be
payable to Executive except for benefits under Section 4.
3. Effective Date.
This Amendment shall be effective as of October 6, 1993.
Executive
/s/ Jerome J. Meyer
Jerome J. Meyer
Tektronix TEKTRONIX, INC.
By /s/ Andrew V. Smith
Andrew V. Smith
Chairman, Organization and
Compensation Committee
<PAGE>
Executive Severance Agreement
September 22, 1993
Jerome J. Meyer
24790 SW Big Fir Road
West Linn, Oregon 97068 Executive
Tektronix, Inc.,
an Oregon corporation
P.O. Box 1000
Wilsonville, Oregon Tektronix
Tektronix considers the establishment and maintenance of a sound and vital
management to be essential to protecting and enhancing the best interests of
Tektronix and its shareholders. In order to induce Executive to remain
employed by Tektronix in the face of uncertainties about the long-term
strategies of Tektronix and their potential impact on the scope and nature
of Executive's position with Tektronix, this Agreement, which has been
approved by the Organization and Compensation Committee of the Board of
Directors of Tektronix, sets forth the severance benefits that Tektronix
will provide to Executive in the event Executive's employment by Tektronix
is terminated under the circumstances described in this Agreement.
1. EMPLOYMENT RELATIONSHIP. Executive is currently employed by Tektronix
as Chairman and Chief Executive Officer. Executive and Tektronix acknowledge
that either party may terminate this employment relationship at any time and
for any reason, subject to the obligation of Tektronix to provide the benefits
specified in this Agreement in accordance with the terms hereof.
2. RELEASE OF CLAIMS. In consideration for the severance benefits outlined
in this Agreement, Executive agrees to execute a Release of Claims in the
form attached as Exhibit A ("Release of Claims"). Executive promises to
execute and deliver the Release of Claims to Tektronix within the later of
forty-five (45) days from the date Executive receives the Release of Claims
or on the last day of Executive's active employment.
3. COMPENSATION UPON TERMINATION. In the event that Executive's employment
is terminated at any time by Tektronix other than for Cause (as defined in
Section 6.1 of this Agreement), death, or Disability (as defined in Section
6.2 of this Agreement), subject to Executive's execution of a Release of
Claims, Executive shall be entitled to the following benefits:
<PAGE>
3.1 As severance pay and in lieu of any further pay for periods
subsequent to the date of termination, Tektronix shall pay
Executive, in a single payment within the later of forty-five
(45) days after termination of employment or eight days after
execution of the Release of Claims, an amount in cash equal to
two times Executive's annual base pay at the rate in effect
immediately prior to the date of termination, or, if greater,
an amount in cash equal to two times Executive's average annual
base pay for the three years ending with Executive's last pay
change preceding termination.
3.2 Executive is entitled to extend coverage under any group health
plan in which Executive and Executive's dependents are enrolled
at the time of termination of employment under the COBRA
continuation laws for the 18-month statutory period, or so long
as Executive remains eligible under COBRA.
Tektronix will pay Executive a lump sum payment in an amount
equivalent to the reasonably estimated cost Executive may incur
to extend for a period of eighteen (18) months under the COBRA
continuation laws Executive's group health and dental plan
coverage in effect at the time of termination. Executive may
use this payment, as well as any payment made under 3.1, for such
COBRA continuation coverage or for any other purpose.
3.3 Except as provided in Section 5.2, Executive shall be entitled to
a portion of the benefits under any incentive plans in effect at
the time of termination (including the Results Sharing Plan and
the Annual Performance Improvement Plan), prorated for the portion
of the plan year during which Executive was a participant. For
purposes of this Agreement, Executive's participation in the Annual
Performance Improvement Plan will be considered to have ended on
Executive's last day of active employment. Prorated awards shall
not be due and payable by Tektronix to Executive until the date
that all awards are paid after the close of the incentive period.
Unless the applicable plan provides for a greater payment for a
participant whose employment terminates prior to the end of an
incentive period (in which case the applicable plan payment shall
be made), the proration shall be calculated pursuant to this
Section 3.3. The payment, if any, that would have been made under
Executive's award had Executive been made a participant for the
full incentive period shall be calculated at the end of the
incentive period. Such amount shall be divided by the total number
of days in the incentive period and the result multiplied by the
actual number of days Executive participated in the plan.
<PAGE>
3.4 Tektronix will pay up to $12,500 to a third party outplacement firm
selected by Executive to provide career counseling assistance to
Executive for a period of one (1) year following Executive's
termination date.
3.5 Tektronix will permit Executive to continue to participate in its
Executive Financial Counseling Program through the remainder of the
term of Executive's current participation (which shall in no case
be longer than one (1) year after the effective date of Executive's
termination).
4. SUBSEQUENT EMPLOYMENT. The amount of any payment provided for in this
Agreement shall not be reduced, offset or subject to recovery by
Tektronix by reason of any compensation earned by Executive as the
result of employment by another employer after termination.
5. OTHER AGREEMENTS.
5.1 In the event that severance benefits are payable to Executive under
any other agreement with Tektronix in effect at the time of
termination (including any change of control, "golden parachute"
or employment agreement, but excluding any stock option agreement
or stock bonus agreement or stock appreciation right agreement that
may provide for accelerated vesting or related benefits upon
termination or upon the occurrence of a change in control), the
benefits provided in this Agreement shall not be payable to
Executive. Executive may, however, elect to receive all of the
benefits provided for in this Agreement in lieu of all of the
benefits provided in all such other agreements. Any such election
shall be made with respect to the agreements as a whole, and
Executive cannot select some benefits from one agreement and other
benefits from this Agreement. No such election shall, however,
operate to deprive Executive of the benefit of any term or
provision relating to acceleration or lapse of forfeiture
restrictions in any stock option or stock bonus agreement between
Tektronix and Executive, even if such term or provision is referred
to or required by an employment or compensation agreement or other
agreement of the kind covered by the first sentence of this section.
5.2 The vesting or accrual of stock options, restricted stock, stock
bonuses, or any other stock awards shall not continue following
termination except as may be expressly provided by their terms.
Any agreements between Executive and Tektronix that relate to stock
awards (including but not limited to stock options, long term
incentive program, stock bonuses and restricted stock, and the
provisions of any employment agreement or compensation agreement
relating to special acceleration of options or lapse of forfeiture
restrictions on bonus shares) shall be governed by such agreements
and shall not be affected by this Agreement.
<PAGE>
6. DEFINITIONS.
6.1 CAUSE. Termination by Tektronix of Executive's employment for
"Cause" shall mean termination upon (a) the willful and continued
failure by Executive to perform substantially Executive's
reasonably assigned duties with Tektronix (other than any such
failure resulting from Executive's incapacity due to physical or
mental illness) after a demand for substantial performance is
delivered to Executive by the Chairman of the Organization and
Compensation Committee of the Board of Directors of Tektronix which
specifically identifies the manner in which such executive believes
that Executive has not substantially performed Executive's duties,
or (b) the willful engaging by Executive in illegal conduct which
is materially and demonstrably injurious to Tektronix. For purposes
of this Section 6.1, no act, or failure to act, on Executive's part
shall be considered "willful" unless done, or omitted to be done,
by Executive in knowing bad faith and without reasonable belief that
Executive's action or omission was in, or not opposed to, the best
interests of Tektronix. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board
of Directors or based upon the advice of counsel for Tektronix shall
be conclusively presumed to be done, or omitted to be done, by
Executive in good faith and in the best interests of Tektronix.
6.2 DISABILITY. Termination by Tektronix of Executive's employment
based on "Disability" shall mean termination because of Executive's
absence from Executive's duties with Tektronix on a full-time basis
for one hundred eighty (180) consecutive days as a result of
Executive's incapacity due to physical or mental illness, unless
within thirty (30) days after notice of termination by Tektronix
following such absence Executive shall have returned to the full-
time performance of Executive's duties.
7. SUCCESSORS; BINDING AGREEMENT.
7.1 This Agreement shall be binding on and inure to the benefit of
Tektronix and its successors and assigns.
7.2 This Agreement shall inure to the benefit of and be enforceable
by Executive and Executive's legal representatives, executors,
administrators and heirs.
<PAGE>
8. REGISNATION OF CORPORATE OFFICES. Executive will resign Executive's
office, if any, as a director, officer or trustee of Tektronix, its
subsidiaries or affiliates, effective as of the date of termination of
employment. Executive agrees to provide Tektronix such written
resignation(s) upon request.
9. GOVERNING LAW, ARBITRATION. This Agreement shall be construed in
accordance with and governed by the laws of the State of Oregon.
Any dispute or controversy arising under or in connection with this
Agreement or the breach thereof, 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.
10. FEES AND EXPENSES. In the event that Executive initiates arbitration
under the circumstances described in this Agreement to obtain or
enforce any right or benefit provided by this Agreement and the
arbitrator determines that Executive is the prevailing party, Executive
shall be permitted to recover Executive's reasonable attorneys' fees
and costs incurred in connection with such proceeding. In the event
that the arbitrator determines that Tektronix is the prevailing party,
each party shall bear its own attorneys' fees and costs incurred in
connection with such proceeding.
11. AMENDMENT. No provision of this Agreement may be modified unless
such modification is agreed to in a writing signed by Executive and
Tektronix.
12. PRIOR AGREEMENT. This Agreement supersedes and replaces the Executive
Severance Agreement between the parties dated October 23, 1992.
Tektronix, Inc.
\s\ Jerome J. Meyer
Jerome J. Meyer
By: \s\ Andrew V. Smith
Title: Chairman, Organization and
Compensation Committee
<PAGE>
Exhibit A
RELEASE OF CLAIMS
This Release of Claims (the "Release") is made and executed by ____________
_____________________ in connection with the termination of my employment
with Tektronix, Inc. ("Tektronix") and in consideration of my receiving
valuable severance pay and benefits as provided for in the Executive
Severance Agreement ("Agreement"). These benefits are substantial
consideration to which I am not otherwise entitled.
On behalf of myself and my spouse, heirs, administrators and assigns, I
hereby release Tektronix, its parent and related corporations, affiliates,
or joint venturers and all officers, directors, employees, agents, and
insurers of the aforementioned (collectively the "Company") from any and
all liability, damages or causes of action, whether known or unknown relating
to my employment with the Company or the termination of that employment,
including but not limited to any claims for additional compensation in any
form, or damages. This specifically includes, but is not limited to, all
claims for relief or remedy under any state or federal laws, including but
not limited to Title VII of the Civil Rights Act of 1964, the Post-Civil War
Civil Rights Acts (42 USC Section 1981-1988), the Civil Rights Act of 1991,
the Equal Pay Act, the Age Discrimination in Employment Act of 1967, the
Americans with Disabilities Act, the Older Workers Benefit Protection Act,
the Worker Adjustment and Retraining Notification Act, the Rehabilitation
Act of 1973, the Vietnam Era Veterans' Readjustment Assistance Act, the Fair
Labor Standards Act, Executive Order 11246, all as amended, and the civil
rights, employment and labor laws of the state of any state or the United
States.
This Release shall not affect any rights which I may have under any medical
insurance, disability, workers' compensation, unemployment compensation or
retirement plans maintained by the Company.
I acknowledge that I have been given at least 45 days to consider whether to
execute this Release of Claims and accept benefits under the Program; that I
have been advised of my right to consult with an attorney or financial
advisor of my choice and at my own expense; that the Agreement gives me
severance pay and benefits which the Company would otherwise have no
obligation to give me; and that I voluntarily enter into the Release of
Claims.
I understand that the Release of Claims is to be signed within 45 days from
the date I received it or on my last day of employment, whichever is later,
and that I may revoke the Release of Claims, provided I do so in writing
within seven (7) days of signing the Release. I understand and agree that
the Company will have no obligation to pay me any benefits under the
<PAGE>
Agreement until the expiration of the revocation period, provided I have
not revoked the Release of Claims. I understand that if I revoke the Release
of Claims my termination will nonetheless remain in full force and effect and
I will not be entitled to any benefits under the Agreement.
I acknowledge that I have had time to consider the alternatives and
consequences of my election to receive benefits under the Agreement and of
signing the Release; that I am aware of my right to consult an attorney or
financial advisor at my own expense; and that, in consideration for executing
this Release and my election to receive benefits under the Agreement, I have
received additional benefits and compensation of value to which I would not
otherwise be entitled.
I HAVE READ THE FOREGOING RELEASE. I UNDERSTAND THE EFFECT OF THIS
RELEASE AND I VOLUNTARILY ENTER INTO IT AT THIS TIME.
Every provision of this Release is intended to be severable. In the event
any term or provision contained in this Release is determined to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability
shall not affect the other terms and provisions of this Release which shall
continue in full force and effect.
Dated: __________________, 1993
____________________________
Employee Name
____________________________
Employee Signature
<PAGE>
EXHIBIT (10)(ii)
AMENDMENT NO. 1
to
SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
October 6, 1993
Jerome J. Meyer
24790 SW Big Fir Road
West Linn, Oregon 97068 Executive
Tektronix, Inc.
an Oregon corporation
26600 SW Parkway
Wilsonville, Oregon 97070 Tektronix
The Supplemental Executive Retirement Agreement dated October
24, 1990 is amended as follows to reflect the Split Dollar Life Insurance
Agreement between the parties dated as of October 6, 1993.
1. Split Dollar Offset.
1.1 In 3.1, (f) and (g) are revised to read as follows:
(f) "Offsetting Benefits" are Prior Plan
Benefit, Pension Plan Benefit,Retirement
Equalization Plan Benefit, and Split Dollar Benefit.
(g) "Prior Plan Benefit" is $32,427, which
represents the annual benefit payable to Executive
from his prior employer's retirement plans,
including both tax-qualified plans and any
nonqualified plan or arrangement providing a
supplemental or excess retirement benefit to
Executive.
1.2 A new 3.1 (j) is added as follows:
(j) "Split Dollar Benefit" means the benefit
payable to Executive through insurance under the
Split Dollar Life Insurance Agreement dated as of
October 6, 1993 between Executive and Tektronix
adjusted as follows:
(1) If a lump sum benefit is
paid at death, it will be converted
under 3.3 as though it were paid to
Executive the day before death.
<PAGE>
(2) If Executive terminates
before age 64 and defers the start of
the Split Dollar Benefit, the offset
will be correspondingly deferred until
not later than age 64.
(3) If the Split Dollar
insurance lapses because a premium is
not paid, the offset shall be increased
as though the premium had been paid.
1.3 Paragraphs 3.2 and 3.3 are changed to read as follows:
3.2 Except for the offsetting Split Dollar Benefit, the
Basic Benefit shall be calculated at the time of Executive's
termination of employment, adjusting all values actuarially to the
Normal Commencement Date. Accruals of Offsetting Benefits (other
than the Split Dollar Benefit) after Normal Commencement Date shall
be disregarded, but actual vesting to the date of calculation shall
apply.
3.3 If an Offsetting Benefit is provided in a form or
starting at a time other than a single life annuity for the life of
Executive commencing at age 62, the following shall apply:
(a) Subject to (b) below, the amount
of the offset shall be adjusted to a single
life annuity for Executive's life, payable at
Normal Commencement Date, that is the
actuarial equivalent of the Offsetting Benefit
Executive is entitled to receive.
(b) The Split Dollar Benefit offset shall be
calculated as of the later of the following:
(1) The Normal Commencement
Date.
(2) The earlier of age 64 or
the date the Split Dollar Benefit
starts.
2. Effective Date.
This Amendment shall be effective as of October 6, 1993.
Executive /s/ Jerome J. Meyer
Jerome J. Meyer
Tektronix TEKTRONIX, INC.
By /s/ Andrew V. Smith
Andrew V. Smith
Chairman, Organization and
Compensation Committee
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-27-1995
<PERIOD-END> AUG-27-1994
<CASH> 33,857
<SECURITIES> 0
<RECEIVABLES> 245,914
<ALLOWANCES> 0
<INVENTORY> 187,960
<CURRENT-ASSETS> 522,172
<PP&E> 950,524
<DEPRECIATION> (382,614)
<TOTAL-ASSETS> 993,727
<CURRENT-LIABILITIES> 252,091
<BONDS> 104,266
<COMMON> 179,133
0
0
<OTHER-SE> 314,879
<TOTAL-LIABILITY-AND-EQUITY> 993,727
<SALES> 0
<TOTAL-REVENUES> 312,728
<CGS> 0
<TOTAL-COSTS> 161,249
<OTHER-EXPENSES> 41,306
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 21,609
<INCOME-TAX> 5,619
<INCOME-CONTINUING> 15,990
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,990
<EPS-PRIMARY> 0.53
<EPS-DILUTED> 0.53
</TABLE>
