<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the fiscal year ended May 27, 1995 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 Avenue
Wilsonville, Oregon 97070
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 627-7111
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
___________________ ________________________
Common Shares, New York Stock Exchange
without par value Pacific Stock Exchange
Series A No Par Preferred New York Stock Exchange
Shares Purchase Rights Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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_______.
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-
affiliates of the Registrant was approximately $1,562,135,114 at July 31,
1995.
At July 31, 1995 there were 33,380,920 Common Shares of the
Registrant outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
___________________________________
Document Part of 10-K into which incorporated
________ ____________________________________
Registrant's Proxy Statement Part III
dated August 3, 1995
1995 Annual Report to Shareholders Parts I, II and IV
<PAGE>
PART I
Item 1. Business.
Tektronix is an Oregon corporation organized in 1946.
Its principal executive offices are located at 26600 S.W. Parkway
Avenue, Wilsonville, Oregon 97070, approximately 18 miles south
of Portland. Its telephone number is (503) 627-7111. References
herein to "Tektronix" or the "Company" are to Tektronix, Inc. and
its wholly-owned subsidiaries unless the context indicates
otherwise.
Tektronix' products cover a wide range of electronic
equipment. The Company's products may be grouped into three
classes of similar products as follows: (i) measurement business
products, (ii) color printing and imaging products and (iii)
video and networking products. Measurement business products
include digital and analog oscilloscopes, general purpose test
instruments, television waveform monitors, vectorscopes, signal
generators, logic analyzers, card-modular test instruments,
spectrum analyzers, cable testers, optical fiber testers,
cameras, probes and related products. Color printing and imaging
products include color printers and related products and
supplies. Video and networking products include studio
production equipment, signal processing and distribution
equipment, transmission systems, graphics terminals and related
products.
Products
________
The table below sets forth the contribution to total
net sales of the Company's product groupings for the last three
fiscal years (in thousands of dollars).
<TABLE>
<CAPTION>
Measurement Color Printing Video and
Business and Imaging Networking Other
Products Products Products (2) Products (3)
_______________ _______________ _______________ ______________
Amount Percent Amount Percent Amount Percent Amount Percent
______ _______ ______ _______ ______ _______ ______________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1993 (1) $708,657 54.2% $248,413 19.0% $250,866 19.2% $98,703 7.6%
1994 (1) $671,042 50.6% $313,475 23.7% $241,832 18.3% $98,632 7.4%
1995 (1) $731,197 49.7% $455,041 30.9% $276,813 18.8% $ 8,727 .6%
__________
<FN>
<F1>(1) During 1995 the Company acquired Microwave Logic, Inc. under a pooling
of interests, and the Company's financial results for 1993, 1994 and
1995 have been restated to include Microwave Logic's results for these
three fiscal years.
<F2>(2) This is a combination of the Video Systems and Network Displays products
groups which were reported as separate groups in 1994.
<F3>(3) The Other product grouping includes the historic net sales to third
parties by the non-strategic components and other business operations
that the Company divested in 1994 and 1995.
</FN>
</TABLE>
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Measurement Business Products
_____________________________
Because of their wide range of capabilities,
measurement business products are used in a variety of
applications, including research, design, testing, installation,
manufacturing and service in the computer, military, commercial
aerospace, telecommunications, television, process control and
automotive industries.
Tektronix pioneered the development of high precision
oscilloscopes over 45 years ago, and the oscilloscope is the
Company's primary measurement product. Oscilloscopes are used by
engineers and technicians when an electrical signal needs to be
viewed, measured, tested or calibrated. Oscilloscopes are used
extensively in the computer, communications, aerospace and other
industries for design, manufacturing and maintenance. In
addition to electrical signals, oscilloscopes can be adapted to
measure mechanical motion (vibration), sound, light, heat,
pressure, strain and velocity.
Oscilloscopes produce graphic representations of
electrical signals on a cathode ray tube or other display device.
Normally, the display shows the signal as a graph of its
amplitude over a certain period of time, which may range from
minutes to less than a billionth of a second. Oscilloscopes
provide a convenient way to visually monitor and interpret analog
electrical fluctuations, mechanical motion and sound.
The development of the microprocessor and associated
growth in microprocessor-based devices stimulated both the
existing analog markets and new digital markets. In addition,
the microprocessor made possible significant improvements in
oscilloscope design and performance. Most of the oscilloscopes
and other measurement products manufactured by Tektronix feature
digital storage and conversion functions, programmable
operations, the ability to work in conjunction with personal
computers and workstations and combinations of these
capabilities. In addition, trends toward smaller microelectronic
devices have opened new segments for specialized measurement
equipment probes and other related equipment, such as connectors,
adapters and cards, and cameras and plotters to record displayed
waveforms.
Recently, Tektronix redesigned a substantial portion of
its oscilloscope product line to provide a consistent
"architecture" across products and to enhance ease of use.
Because the Company manufactures oscilloscopes in a wide range of
configurations, bandwidths and other performance characteristics
and in sizes ranging from hand-held to large laboratory units,
this redesign provides customers with reduced learning time and
higher productivity. The redesign also reduces the time required
by the Company to develop new products because many essential
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user interface aspects have been standardized. Some elements of
this redesign also have been patented and provide the Company
with certain competitive advantages.
The Company also offers modular instruments delivered
on printed circuit cards that can be mixed and matched by
customers and plugged directly into the backplane of industry-
standard VXI-based card cages. These are controlled by personal
computers or workstations to form complete instrument systems
tailored to customers' particular requirements. A number of
measurement products are now available in the VXI standard, which
products are used primarily in manufacturing applications.
Tektronix has been instrumental in the development of VXI-based
hardware and software industry standards.
Measurement business products also include video and
audio test products. Video and audio test products include
vectorscopes, waveform monitors, signal generators, automated
test equipment, demodulators, aural modulation monitors and
synchronizers which are used primarily by the television industry
to test and display the quality of video and audio signals. The
resolution of images and the fidelity of sounds, as well as the
stability of the signals that carry them, are essential to
program quality. Tektronix' video and audio test products excel
at the many forms of test and measurement vital to creating and
maintaining signals of the highest quality.
Market changes are driving the development of new
categories of products from Tektronix. The proliferation of
electronic technology is requiring technicians and craftspeople
to use smart electronic tools for electronic problem detection in
areas such as automotive and electrical equipment repair and
maintenance. TekTools , Tektronix' line of hand-held, smart and
rugged products, are designed specifically for these markets.
Under the TekTools brand are a number of products such as a
family of Digital Multimeters and a new line of products, the
TekMeter family, that combine the functionality of a multimeter
and oscilloscope into one product, and a number of accessories.
An automotive version of the TekMeter has been developed for
automotive electronic troubleshooting and repair and is being
distributed to automotive service centers through third-party
distributors that specialize in distribution to the automotive
market. Currently, the TekTools product family includes products
priced from below $100 up to about $2,000.
While TekTools are battery powered portable products,
the Company also markets a line of lower priced benchtop basic
instruments such as frequency counters, multimeters, power
supplies and oscilloscopes under the Tek Bench trademark.
Applications include education, light manufacturing, electronic
troubleshooting and basic electronic design.
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Other measurement business products include logic
analyzers, spectrum analyzers and cable and fiber optic testers.
Logic analyzers are a principal tool for electronic
designers, engineers and technicians in testing and trouble-
shooting computers, computer peripheral devices and digital
electronic systems and instruments. Logic analyzers capture,
display and examine streams of data coded as binary digits
(bits), which are transmitted simultaneously over many channels.
The Company's Digital Analysis System (DAS), a broad application
logic analyzer, combines logic analysis and pattern generation by
using card modular plug-in units to permit a range of performance
in one system. The DAS is also used by software engineers in the
development and optimization of microprocessor-based designs.
Spectum analyzers are used in communications and other
industries to display and measure signal amplitude versus
frequency rather than amplitude versus time (the latter being
what an oscilloscope displays). It is an essential tool used to
design, check and adjust communications transmitting and
receiving equipment.
Products designed for the telecommunications industry
play an increasingly important role in the Company's measurement
business portfolio. Tektronix is a leading supplier of a broad
range of test solutions for emerging networks, designed for
ensuring integrity and optimizing performance of networks, and
verifying design and assuring quality of communications
equipment. Cable testers and fiber optic testers use time-
domain-reflectometry techniques to locate faults in metallic and
fiber optic cables. Essentially, these instruments send signals
from one end of a cable and then measure the reflection time of
the signals to determine the location of the fault. Cable
testers and fiber optic testers are widely used in the
telecommunication and cable television industries. The Company
also has developed a series of products for SDH or SONET
transmission testing in the telecommunications industry. The
Company's recent acquisition of Microwave Logic, Inc.,
strengthens the Company's offerings in this product area.
Other measurement business products include digitizers,
signal sources, curve tracers and modular lines of general
purpose test instruments.
Color Printing and Imaging Products
___________________________________
Tektronix' color printing and imaging products include
color printers and related products and supplies.
Color printers produce full color hard copies of images
produced by personal computers, workstations and terminals. Most
of the Company's printers are compatible with the Postscript
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industry standard page description language, which specifies how
an image is transferred to hard copy. By adopting the Postscript
standard, color printers can be used in conjunction with a wide
range of third-party graphics software. Tektronix produces color
printers using thermal wax, solid ink jet, liquid ink jet, dye
sublimation and laser technologies. The printers are controlled
by software designed and implemented by the Company. Tektronix
has developed proprietary technology that uses solid sticks of
ink, of the Company's own formulation, that are melted and then
jetted onto the paper. This technology produces vivid and stable
images, allows printing on plain rather than coated paper and can
be applied to a wide range of sizes and gauges of paper.
The use of color in computing and printing has been
stimulated by enhancements in the underlying microprocessor
technology of personal computers and workstations, by
increasingly larger system and peripheral storage capabilities,
and by enhancements in computer display capability. As personal
computers increasingly become capable of displaying images
(instead of just characters), there has been an accompanying
growth in demand for printers that can print such images in
color.
Tektronix has been manufacturing and selling color
printers for over ten years. Early users were graphics artists,
engineers and scientists. More recently workgroup office users
have also become significant users of the Company's color
printers.
In March of 1995, the Company introduced its Phaser
340, a new desktop color printer that provides a high print speed
on virtually any office paper. The Phaser 340 printer combines
laser-class speed and solid-ink simplicity intended to broaden
the appeal of color for the average business user and help move
color into the office printing environment.
While the market for color printers is currently
growing rapidly, it is still much smaller than the market for
monochrome printers. Moreover, it is characterized by intense
and increasing competition, resulting in a competitive pricing
environment. Because the market for color hard copy is still
small compared to the market for monochrome printers,
distribution of products from manufacturer to end user is less
efficient. The Company expects distribution channels to expand
as color hard copy becomes a more prominent feature in computer
applications.
Also included in color printing and imaging products
are supplies for use with the Company's color printers, including
inks, ribbons and paper. These supplies are a very significant
source of ongoing color printing and imaging revenue.
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Video and Networking Products
_____________________________
The increasing use of television to communicate a broad
array of information and entertainment has created markets for a
number of products that support the development of "content" for
distribution by television signals. As television distribution
systems become more powerful, there is greater potential for
increased usage via integration of computer applications with
television. Those trends, coupled with the increasing use of
cable and satellite to distribute content, are expanding the
market for Tektronix' video products. These trends may result in
increased demand for lower cost production products based on
industry standard platforms and for systems that support the
development and distribution of new forms of content.
Most video products are from The Grass Valley Group,
Inc. ("Grass Valley"), a wholly-owned subsidiary of the Company
based in California that manufactures products used by the
television industry for program production and distribution.
Grass Valley products include studio production equipment, signal
processing and distribution equipment and transmission systems.
Studio production equipment is used in the creative process of
television program production and assembly. Production equipment
products include production switchers, special effects devices
and editing controllers. Production switchers allow an operator
to select signals from various sources, such as cameras, video
tape recorders and network or remote transmissions, and to
combine these signals into the continuous program seen by the
viewing audience. Signal processing and distribution equipment
is used in the process of moving signals within a television
production facility or between facilities. Such equipment
includes routing switchers, amplifiers, timing systems and signal
conversion devices. Transmission systems are used in the process
of transporting signals between facilities. Transmission system
products include fiber optic video transmitter/receiver systems,
digital video coders/decoders, cross-connect switches and
interactive conferencing systems including distance learning
systems. Grass Valley's customers include the television
networks, local television stations, post-production houses
(which assemble commercials and television programs from recorded
footage), telephone and cable companies and corporate and
educational users. In 1995 Grass Valley sold its electronic
graphics systems business to Digital GraphiX, Inc. (formerly New
Microtime Inc.) but it continues to distribute these products
under a distribution agreement with Digital GraphiX.
In June 1995 the Company acquired Lightworks Editing
Systems Limited, a United Kingdom company, and Lightworks Editing
System, Inc., a California corporation ("Lightworks").
Lightworks designs, manufactures and distributes non-linear
editing systems used for film and video editing.
6
<PAGE>
Video products include the Company's new Profile
product which is a disk-based, multi-channel video storage and
playback system. In contrast to conventional tape storage
technology, the Profile system provides instant access to stored
video images and better reliability due to the durability of the
media.
The Company's major networking product line is its X
terminals, which are standards-based graphics terminals that also
provide multiple windowing and networking capability. The
Company's X terminals connect users with a host computer and
other devices, such as a printer, that make up a computing
system. Many X terminal applications involve a central "server"
(containing applications and data) connected to multiple
terminals, thereby allowing a number of users to access those
applications and data. The Company no longer manufactures its
older line of proprietary graphics terminals, but it still has a
service business for its installed base for such products. This
service business has continually declined as the installed base
of these proprietary graphics terminals declines.
X terminal products are based on standard architecture
originally developed by the Massachusetts Institute of
Technology. As a result, it is difficult for any manufacturer to
develop a proprietary advantage in either the underlying hardware
or in elements of the operating system. As a result, competition
in the X terminals market is intense. The Company's graphics
terminals have historically been used in technical applications
such as mechanical engineering design, drafting and mapping. As
a result, the Company has enjoyed a strong position in the
technical and scientific segments of the market. Recently, the
market has expanded and shifted to commercial applications from
scientific and engineering applications. In accordance with this
trend, recent additions to the Company's X terminal product line
focus on new commercial and business applications, as well as
engineering applications. Commercial customers now account for a
major portion of the Company's X terminal revenues.
Networking products include WinDD software that
provides Microsoft Windows access to the UNIX desktop.
Manufacturing
_____________
During 1994, the Company sold its integrated circuits
operation to Maxim Integrated Products, Inc. and transferred its
hybrid circuits operation to a joint venture with Maxim, and in
early 1995 completed the sale of approximately 65% of the stock
of its printed circuit board operation in the initial public
offering of Merix Corporation. As a result of these activities
and other recent component operation divestitures, the Company's
manufacturing operations are no longer highly integrated. The
Company has entered into supply agreements with each of the
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companies now operating the respective component operations and,
as a result, believes that the Company will be able to acquire
the required components as needed. Other companies also
manufacture special components for Tektronix.
Tektronix also purchases raw materials, components,
data processing equipment and computer peripheral devices for use
in its products and systems. Such purchased materials and
components are generally available to Tektronix as needed.
Although shortages of such items have been experienced from time
to time, Tektronix believes that such shortages will not have a
material adverse effect on the Company.
Tektronix owns substantially all of its manufacturing
facilities. Its primary manufacturing facilities are located in
or near the Portland, Oregon metropolitan area. Some of
Tektronix' products, components and accessories are assembled in
the Peoples Republic of China and in Hong Kong. Tektronix
recently completed a previously announced plan to transform its
Heerenveen plant from a manufacturing operation to a logistics
center. Grass Valley's products are manufactured near Grass
Valley, California. See Item 2, "Properties" for a more detailed
description of the Company's manufacturing facilities.
Certain Tektronix products are assembled for the Asian
market at plants in Tokyo and Gotemba, Japan by Sony/Tektronix
Corporation, a Japanese corporation equally owned by Tektronix
and Sony Corporation. Sony/Tektronix also designs and
manufactures small, lightweight portable oscilloscopes, benchtop
semiconductor testers and digitizers in Japan for sale worldwide.
Sales and Distribution
______________________
Tektronix maintains its own worldwide sales engineering
and field maintenance organization, staffed with technically
trained personnel. Sales in the United States, Canada, Brazil,
the United Kingdom, Germany, France, Italy, Spain, The
Netherlands, Belgium, Sweden, Denmark, Norway, Finland,
Switzerland, The Republic of Ireland, Australia, Austria, Hong
Kong, Taiwan, Singapore and Mexico are made primarily through
field offices of the Company and its subsidiaries located in
principal market areas. Sales of Tektronix products in the
Peoples Republic of China are made through liaison offices of a
Hong Kong subsidiary of the Company. Sales of joint venture
products in the Peoples Republic of China are made by three
companies which are joint ventures between Tektronix and three
different Peoples Republic of China corporations. Except for
Grass Valley products, sales in Japan are made by Sony/Tektronix
Corporation. Sales in India are made by Hinditron Tektronix
Instruments, Ltd., an Indian company which is 62% owned by
Tektronix. Many of the Company's products are sold in whole or
in part through independent distributors throughout the United
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States and in some other countries. Certain of the Company's
independent distributors also sell products manufactured by the
Company's competitors. In some countries, all sales are made
either directly by Tektronix or by independent representatives to
whom Tektronix provides direct technical and administrative
assistance. A number of the Tektronix field offices also perform
major maintenance and reconditioning operations.
Tektronix' principal customers are electronic and
computer equipment manufacturers, private industrial concerns
engaged in commercial or governmental projects, military and
nonmilitary agencies of the United States and of foreign
countries, public utilities, educational institutions, radio and
television stations and networks, graphics arts companies and
users of sophisticated office products. Certain products are
sold both to equipment users and to original equipment
manufacturers.
During the last fiscal year, United States Government
agencies accounted directly for approximately two percent of
Tektronix' consolidated sales as compared with approximately
three percent for the prior year. During the last five years,
direct sales to United States Government agencies ranged from two
to six percent. The balance of sales during each year was
distributed among several thousand other customers, with no other
single customer accounting for as much as three percent. The
Company believes that sales directly related to United States
Government expenditures (excluding sales to the United States
Government) were approximately three percent of Tektronix'
consolidated sales for the last fiscal year. Contracts involving
the United States Government are subject, as is customary, to
termination by the Government at its convenience.
Most Tektronix product sales are sold as standard
catalog items. Tektronix attempts to fill its orders as promptly
as possible. At May 27, 1995, Tektronix' unfilled product orders
amounted to approximately $165 million, as compared to
approximately $108 million at May 28, 1994. Tektronix expects
that substantially all unfilled product orders at May 27, 1995
will be filled during its current fiscal year. Orders received
by the Company are subject to cancellation by the customer.
International Sales
___________________
The following table sets forth the breakdown between
U.S. and international sales, based upon purchaser location, for
each of the last three fiscal years (in thousands of dollars):
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<TABLE>
<CAPTION>
U.S. Sales International Sales
___________________ ___________________
Amount Percent Amount Percent
______ _______ ______ _______
<S> <C> <C> <C> <C>
1993 $717,995 54.9% $588,644 45.1%
1994 $743,794 56.1% $581,187 43.9%
1995 $755,079 51.3% $716,699 48.7%
</TABLE>
See "Business Segments" in the Notes to Consolidated Financial
Statements at page 33 of the Company's 1995 Annual Report to
Shareholders, containing information on sales, operating income
and assets by geographic area based upon the location of the
seller, which is hereby incorporated by reference.
Tektronix products are sold worldwide. European sales
are made principally in Germany, France, the United Kingdom,
Switzerland, Italy, Spain, Sweden, The Netherlands and Austria.
Other international sales are principally in Japan, Korea, Canada
and Australia. International sales include both export sales
from the United States and sales by foreign subsidiaries.
Fluctuating exchange rates and other factors beyond the control
of Tektronix, such as the stability of international monetary
conditions, tariff and trade policies and domestic and foreign
tax and economic policies, affect the level and profitability of
international sales. The Company is unable to predict the effect
of these factors on its business. The Company hedges against
certain currency exposures in order to minimize their impact.
Research and Development
________________________
Tektronix operates in an industry characterized by
rapid technological change and research and development are
important elements in its business. Expenditures during fiscal
years ended May 29, 1993, May 28, 1994 and May 27, 1995 for
research and development amounted to approximately $158,345,000,
$154,263,000 and $164,307,000, respectively. Almost all of these
funds were Company-generated.
Research and development activities are conducted by
research and design groups and specialized product development
groups within the three operating divisions. These activities
include: (i) research on basic devices and techniques (ii) the
design and development of products and components and specialized
equipment and (iii) the development of processes needed for
production. Most of Tektronix' research and development is
devoted to enhancing and developing its own products.
Patents
_______
It is Tektronix' policy to seek patents in the United
States and appropriate foreign countries for its significant
patentable developments. However, electronic equipment as
complex as most Tektronix products is generally not patentable in
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its entirety. The Company believes that its business is not
dependent to any material extent upon any particular patent or
group of patents or upon any licensing arrangement.
Competition
___________
The electronics industry continues to become more
competitive, both in the United States and abroad. Primary
competitive factors are product performance, technology, customer
service, product availability and price. Tektronix believes that
its reputation in the marketplace is also a significant positive
competitive factor. With respect to many of its products, the
Company competes with companies that have substantially larger
resources.
Tektronix is the world's largest manufacturer of
oscilloscopes and no single competitor offers as complete a line.
Tektronix is the leading manufacturer of test and measurement
equipment for the television industry. Tektronix competes with a
number of companies in specialized areas of other test and
measurement products, and it competes with one large company that
sells a broad line of test and measurement products.
Tektronix is a leader in the market for workgroup color
printers and the leader in dye sublimation, liquid ink jet, solid
ink jet and thermal wax color printers.
Tektronix competes with a number of electronics firms
that manufacture specialized equipment for the television
industry, both with respect to its television test and
measurement products and the products of Grass Valley. Grass
Valley is the leading manufacturer of high-performance production
switchers, a leading manufacturer of high-performance
distribution/processing equipment and a significant factor in its
other markets.
Tektronix is the third leading supplier of X terminals.
Employees
_________
At May 27, 1995, Tektronix had 7,619 employees, of whom
1,467 were located in foreign countries. Tektronix' employees in
the United States and most foreign countries are not covered by
collective bargaining agreements. The Company believes that
relations with its employees are good.
Environment
___________
The Company's facilities are subject to numerous laws
and regulations concerning the discharge of materials into the
environment, or otherwise relating to protection of the
environment. Compliance with these laws has not had and is not
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expected to have a material effect upon the capital expenditures,
earnings or competitive position of the Company.
Executive Officers of the Company
_________________________________
The following are the executive officers of the
Company:
<TABLE>
<CAPTION>
Has Served As
An Executive
Officer of
Name Position Age Tektronix Since
____ ________ ___ _______________
<S> <C> <C> <C>
Jerome J. Meyer Chairman of the 57 1990
Board, Chief
Executive Officer
and President
William D. Walker Vice Chairman of 64 1992 (also
the Board, Director served in
1990 and
from 1969
to 1984)
John P. Karalis Senior Vice President, 57 1992
Corporate Development
and Secretary
Carl W. Neun Senior Vice President 51 1993
and Chief Financial
Officer
Lucie J. Fjeldstad Vice President and 51 1995
President, Video and
Networking Division
Gerald Perkel Vice President and 39 1995
President, Color
Printing and
Imaging Division
Daniel Terpack Vice President and 54 1993
President, Measurement
Business Division
Rudi Lamprecht Vice President and 46 1994
President, European
Operations
Timothy E. Vice President and 42 1991
Thorsteinson President, Pacific
Operations
</TABLE>
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<TABLE>
<CAPTION>
Has Served As
An Executive
Officer of
Name Position Age Tektronix Since
____ ________ ___ _______________
<S> <C> <C> <C>
John W. Vold Vice President and 65 1991
President, Americas
Operations
</TABLE>
The executive officers are elected by the board of
directors of the Company at its annual meeting. Executive
officers hold their positions until the next annual meeting or
until their successors are elected, or until such tenure is
terminated by death, resignation or removal in the manner
provided in the bylaws. There are no arrangements or
understandings between executive officers or any other person
pursuant to which the executive officers were elected and none of
the executive officers are related.
All of the executive officers named have been employed
by Tektronix in management positions for the last five years
except: Mr. Jerome J. Meyer who joined Tektronix in 1990 and
prior to that time served as President of the industrial business
of Honeywell, Inc. ("Honeywell") (from 1988 to 1990), President
and Chief Executive Officer of Honeywell Bull, Inc., now known as
Bull HN Information Systems, Inc. (from 1987 to 1988) and a Vice
President of Honeywell (from 1986 to 1987); Mr. John W. Vold who
joined Tektronix in 1991 and from 1987 to 1991 was Executive Vice
President of Bull HN Information Systems, Inc., and prior to that
time was Vice President of the Airborne Products Division of
Unisys Corporation; Mr. Timothy E. Thorsteinson who joined
Tektronix in 1991 and from 1990 to 1991 was Director of Quality
Performance of National Semiconductor Corporation ("National
Semiconductor") and prior to that time held a number of
management positions in human resources management at National
Semiconductor; Mr. John P. Karalis who joined Tektronix in 1992
and prior to that time was with the law firm of Brown and Bain
(from 1989 to 1992) and Vice President and General Counsel of
Apple Computer, Inc. (from 1987 to 1989); Mr. Carl W. Neun who
joined Tektronix in 1993 and prior to that time served as Senior
Vice President of Administration and Chief Financial Officer of
Conner Peripherals, Inc., (from 1987 to 1993); Ms. Lucie
Fjeldstad who joined Tektronix in 1995 and prior to that time was
President and CEO of Fjeldstad International (from 1993 to 1995)
and Vice President and General Manager, Multimedia of IBM
Corporation (from 1990 to 1993); Mr. Rudi Lamprecht who joined
Tektronix in 1993 and prior to that time was Sales Manager Europe
for the Computer Systems Organization of Hewlett-Packard Company;
and Mr. William D. Walker, who is not an employee of the Company
and has been a director of the Company since 1980.
13
<PAGE>
Item 2. Properties.
A brief description of the location and general
characteristics of the significant properties occupied by
Tektronix in August of 1995 is set forth below. Tektronix
believes that its operations are in compliance in all material
respects with requirements relating to environmental quality and
energy conservation.
Tektronix owns a 265-acre industrial park (the "Howard
Vollum Park") near Beaverton, Oregon. The Howard Vollum Park
includes 23 buildings arranged in a campus-like setting and
containing an aggregate of approximately 2.6 million gross square
feet of enclosed floor space. A substantial portion of the
Company's product manufacturing and administrative activities are
located at Howard Vollum Park. The Company's measurement
business products are manufactured primarily at Howard Vollum
Park. The Company leases certain excess space at the Howard
Vollum Park to other corporations.
The Company's Color Printing and Imaging Division,
Network Displays operation and corporate headquarters occupy
three buildings containing approximately 596,000 square feet on a
167-acre tract owned by the Company in Wilsonville, Oregon,
approximately 16 miles south of Howard Vollum Park. An
additional 192,000 square foot building on the Company's
Wilsonville property is leased to another corporation.
All of the buildings described above were constructed
after 1957 and are maintained in good condition. Warehouses,
production facilities and other critical operations are protected
by fire sprinkler installations. Most manufacturing, office and
engineering areas are air-conditioned. The Company believes that
its facilities described above are adequate for their intended
uses. Capacity utilization within the Company varies between
product area but, in general, the Company has the capacity to
increase production substantially without adding significant
plant capacity.
Tektronix owns a 240-acre site six miles east of
Vancouver, Washington (Vancouver is across the Columbia River
from Portland, Oregon). The Company has leased the
485,000-square foot manufacturing facility that is situated on
the site to another corporation. The property is surplus and the
Company is attempting to sell it.
Grass Valley's operating facilities are primarily
housed in ten buildings containing a total of approximately
190,000 square feet of floor space on a 320-acre site owned by
Grass Valley near Grass Valley, California, and three buildings
containing a total of approximately 151,000 square feet on Grass
Valley's 116-acre tract of land in the neighboring town of Nevada
City. The Company intends to consolidate these operations on the
Nevada City site, and the 320-acre Grass Valley site is currently
14
<PAGE>
offered for sale. Grass Valley leases approximately 53,000 square
feet for sales offices, primarily in the United States.
A 109,000 square foot plant owned by Tektronix is
located on 23 acres of land in Heerenveen, The Netherlands.
Tektronix also owns a seven-acre site in Hoddesdon,
England, with manufacturing buildings containing about 47,000
square feet which is leased to another corporation. Tektronix is
attempting to sell this facility.
A domestic field office in Chicago, Illinois,
consisting of approximately 60,000 square feet, is owned by
Tektronix. All other Tektronix U.S. field offices, aggregating
approximately 217,000 square feet, are leased.
Field offices near London (83,000 square feet) and
Sydney, Australia (23,000 square feet) are located in buildings
owned by the Company. Field offices in other foreign countries
occupy leased premises.
Item 3. Legal Proceedings.
During this year's fourth quarter the Company settled
the claims asserted against it by Mr. Jerome J. Lemelson as
described in Item 3. of the Company's 10-K Report for 1994.
There are no material pending legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
No matter was submitted to a vote of security holders
during the fourth quarter of the fiscal year covered by this
report.
PART II
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters.
The information required by this item is included on
page 38 of the Company's 1995 Annual Report to Shareholders and
is incorporated herein by reference.
Item 6. Selected Financial Data.
The information required by this item is included on
page 39 of the Company's 1995 Annual Report to Shareholders and
is incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
15
<PAGE>
The information required by this item is included on
pages 23 through 26 of the Company's 1995 Annual Report to
Shareholders and is incorporated herein by reference.
Item 8. Financial Statements and Supplementary Data.
The information required by this item is included on
pages 27 through 38 of the Company's 1995 Annual Report to
Shareholders and is incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
The information required by this item regarding
directors is included under "Board of Directors" and "Election of
Directors" on pages 3 to 7 of the Company's Proxy Statement dated
August 3, 1995.
The information required by this item regarding
officers is contained under "Executive Officers of the Company"
in Item 1 of Part I hereof.
The information required by Item 405 of Regulation S-K
is included under "Compliance with Section 16(a) of the Exchange
Act" on page 26 of the Company's Proxy Statement dated August 3,
1995.
Item 11. Executive Compensation.
The information required by this item is included under
"Directors' Compensation" and "Executive Compensation" on pages 7
to 13 of the Company's Proxy Statement dated August 3, 1995.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information required by this item is included under
"Ownership of Shares" and "Election of Directors" on page 2 and 4
to 7 of the Company's Proxy Statement dated August 3, 1995.
Item 13. Certain Relationships and Related Transactions.
None.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.
16
<PAGE>
(a) (1) Financial Statements.
____________________
The following documents are included in the
Company's 1995 Annual Report to Shareholders at the pages
indicated and are incorporated herein by reference:
<TABLE>
<CAPTION>
Page in 1995 Annual
Report to Shareholders
______________________
<S> <C>
Independent Auditors' Report 27
Consolidated Statements of Operations 28
Consolidated Balance Sheets 29
Consolidated Statements of Cash Flows 30
Consolidated Statements of Shareholders' 31
Equity
Notes to Consolidated Financial Statements 32 to 38
</TABLE>
(2) Financial Statement Schedules.
_____________________________
No financial statement schedules are required to
be filed with this report.
Separate financial statements for the registrant
have been omitted because the registrant is primarily an
operating company and the subsidiaries included in the
consolidated financial statements are substantially totally
held. All subsidiaries of the registrant are included in
the consolidated financial statements. Summarized financial
information for 50 percent or less owned persons in which
the registrant has an interest is included in the Notes to
Consolidated Financial Statements appearing in the Company's
Annual Report to Shareholders.
(3) Exhibits:
(3)(i) Restated Articles of Incorporation, as
amended. Incorporated by reference to
Exhibit (3) of Form 10-Q dated September
28, 1990, SEC File No. 1-4837.
(ii) Bylaws, as amended. Incorporated by
reference to Exhibit (3) of Form 10-Q
dated April 6, 1995, SEC File No. 1-4837.
(4)(i) Indenture dated as of November 16, 1987, as
amended by First Supplemental Indenture
dated as of July 13, 1993, covering the
registrant's 7-1/2% notes due August 1,
2003. Indenture incorporated by reference
to Exhibit 4(i) of Form 10-K dated August
22, 1990, SEC File No. 1-4837.
17
<PAGE>
(ii) Pursuant to Item 601(b)(4)(iii) of
Regulation S-K, the registrant agrees to
furnish to the Commission upon request
copies of agreements relating to other
indebtedness.
(10)(i) Restated Operating Performance Incentive
Plan, as amended. Incorporated by
reference to Exhibit (10)(i) of Form 10-Q
dated April 15, 1988, SEC File No. 1-4837.
(ii) 1982 Stock Option Plan, as amended.
Incorporated by reference to Exhibit
10(iii) of Form 10-K dated August 22, 1989,
SEC File No. 1-4837.
(iii) Stock Incentive Plan, as amended.
Incorporated by reference to Exhibit 10(ii)
of Form 10-Q dated April 9, 1993, SEC file
No. 1-4837.
(iv) Restated Annual Performance Improvement
Plan. Incorporated by reference to Exhibit
10(i) of Form 10-Q dated April 9, 1993, SEC
File No. 1-4837.
(v) Restated Deferred Compensation Plan.
Incorporated by reference to Exhibit 10(i)
of Form 10-Q dated December 20, 1984, SEC
File No. 1-4837.
(vi) Retirement Equalization Plan, as amended.
Incorporated by reference to Exhibit
10(vii) of Form 10-K dated August 18, 1993,
SEC File No. 1-4837.
(vii) Severance Agreement entered into between
the Company and its named officers.
Incorporated by reference to Exhibit
10(viii)of Form 10-K dated August 18, 1993,
SEC File No. 1-4837.
(viii) Indemnity Agreement entered into between
the Company and its named officers and
directors. Incorporated by reference to
Exhibit 10(ix) of Form 10-K dated August
18, 1993, SEC File No. 1-4837.
(ix) Executive Severance Agreement.
(x) Retention Incentive Agreement. Incorporated
by reference to Exhibit 10(x) of Form 10-K
dated August 11, 1994, SEC File No. 1-4837.
18
<PAGE>
(xi) Executive Compensation and Benefits
Agreement dated as of October 24, 1990.
Incorporated by reference to Exhibit
(10)(ii) of Form 10-Q dated December 21,
1990, SEC File No. 1-4837.
(xii) Executive Compensation and Benefits
Agreement dated as of March 29, 1993.
Incorporated by reference to Exhibit
10(xiv) of Form 10-K dated August 11,
1994, SEC File No. 1-4837.
(xiii) Executive Compensation and Benefits
Agreement dated as of November 1, 1993.
(xiv) Rights Agreement dated as of August 16,
1990. Incorporated by reference to Exhibit
1 of Form 8-K dated August 27, 1990, SEC
File No. 1-4837.
(xv) Non-Employee Directors' Deferred
Compensation Plan, as amended.
(xvi) Non-Employee Directors Stock Compensation
Plan
(xvii) Executive Severance Agreement, as amended.
Incorporated by reference to Exhibit 10(i)
of Form 10-Q dated October 7, 1994, SEC File
No. 1-4837.
(xviii) Amendment to Supplemental Executive
Retirement Agreement. Incorporated by
reference to Exhibit 10(ii) of Form 10-Q
dated October 7, 1994, SEC File No. 1-4837.
(13) Portions of the 1995 Annual Report to
Shareholders that are incorporated herein
by reference.
(21) Subsidiaries of the registrant.
(23) Independent Auditors' Consent.
(24) Powers of Attorney.
(27) Financial Data Schedule.
(b) No reports on Form 8-K have been filed during the last
quarter of the period covered by this Report.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
TEKTRONIX, INC.
By /s/ CARL W. NEUN
_____________________
Carl W. Neun
Senior Vice President and
Chief Financial Officer
Dated: August 9, 1995
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
_________ ________ ____
<S> <C> <C>
JEROME J. MEYER* Chairman, Chief August 9, 1995
Jerome J. Meyer Executive Officer,
and President
CARL W. NEUN Senior Vice President August 9, 1995
Carl W. Neun and Chief Financial
Officer, Principal
Financial and
Accounting Officer
A. GARY AMES* Director August 9, 1995
A. Gary Ames
PAUL C. ELY, JR.* Director August 9, 1995
Paul C. Ely, Jr.
A.M. GLEASON* Director August 9, 1995
A. M. Gleason
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Signature Capacity Date
_________ ________ ____
<S> <C> <C>
WAYLAND R. HICKS* Director August 9, 1995
Wayland R. Hicks
KEITH R. MCKENNON* Director August 9, 1995
Keith R. McKennon
MERRILL A. MCPEAK* Director August 9, 1995
Merrill A. McPeak
JEAN VOLLUM* Director August 9, 1995
Jean Vollum
WILLIAM D. WALKER* Director August 9, 1995
William D. Walker
*By JOHN P. KARALIS August 9, 1995
John P. Karalis
as attorney-in-fact
</TABLE>
21
<PAGE>
EXHIBIT LIST
(3)(i) Restated Articles of Incorporation, as
amended. Incorporated by reference to
Exhibit (3) of Form 10-Q dated September
28, 1990, SEC File No. 1-4837.
(ii) Bylaws, as amended. Incorporated by
reference to Exhibit (3) of Form 10-Q
dated April 6, 1995, SEC File No. 1-4837.
(4)(i) Indenture dated as of November 16, 1987, as
amended by First Supplemental Indenture
dated as of July 13, 1993, covering the
registrant's 7-1/2% notes due August 1,
2003. Indenture incorporated by reference
to Exhibit 4(i) of Form 10-K dated August
22, 1990, SEC File No. 1-4837.
(ii) Pursuant to Item 601(b)(4)(iii) of
Regulation S-K, the registrant agrees to
furnish to the Commission upon request
copies of agreements relating to other
indebtedness.
(10)(i) Restated Operating Performance Incentive
Plan, as amended. Incorporated by
reference to Exhibit (10)(i) of Form 10-Q
dated April 15, 1988, SEC File No. 1-4837.
(ii) 1982 Stock Option Plan, as amended.
Incorporated by reference to Exhibit
10(iii) of Form 10-K dated August 22, 1989,
SEC File No. 1-4837.
(iii) Stock Incentive Plan, as amended.
Incorporated by reference to Exhibit 10(ii)
of Form 10-Q dated April 9, 1993, SEC file
No. 1-4837.
(iv) Restated Annual Performance Improvement
Plan. Incorporated by reference to Exhibit
10(i) of Form 10-Q dated April 9, 1993, SEC
File No. 1-4837.
(v) Restated Deferred Compensation Plan.
Incorporated by reference to Exhibit 10(i)
of Form 10-Q dated December 20, 1984, SEC
File No. 1-4837.
<PAGE>
(vi) Retirement Equalization Plan, as amended.
Incorporated by reference to Exhibit
10(vii) of Form 10-K dated August 18, 1993,
SEC File No. 1-4837.
(vii) Severance Agreement entered into between
the Company and its named officers.
Incorporated by reference to Exhibit
10(viii)of Form 10-K dated August 18, 1993,
SEC File No. 1-4837.
(viii) Indemnity Agreement entered into between
the Company and its named officers and
directors. Incorporated by reference to
Exhibit 10(ix) of Form 10-K dated August
18, 1993, SEC File No. 1-4837.
(ix) Executive Severance Agreement.
(x) Retention Incentive Agreement. Incorporated
by reference to Exhibit 10(x) of Form 10-K
dated August 11, 1994, SEC File No. 1-4837.
(xi) Executive Compensation and Benefits
Agreement dated as of October 24, 1990.
Incorporated by reference to Exhibit
(10)(ii) of Form 10-Q dated December 21,
1990, SEC File No. 1-4837.
(xii) Executive Compensation and Benefits
Agreement dated as of March 29, 1993.
Incorporated by reference to Exhibit
10(xiv) of Form 10-K dated August 11,
1994, SEC File No. 1-4837.
(xiii) Executive Compensation and Benefits
Agreement dated as of November 1, 1993.
(xiv) Rights Agreement dated as of August 16,
1990. Incorporated by reference to Exhibit
1 of Form 8-K dated August 27, 1990, SEC
File No. 1-4837.
(xv) Non-Employee Directors' Deferred
Compensation Plan, as amended.
(xvi) Non-Employee Directors Stock Compensation
Plan
(xvii) Executive Severance Agreement, as amended.
Incorporated by reference to Exhibit 10(i)
of Form 10-Q dated October 7, 1994, SEC File
No. 1-4837.
(xviii) Amendment to Supplemental Executive
Retirement Agreement. Incorporated by
reference to Exhibit 10(ii) of Form 10-Q
dated October 7, 1994, SEC File No. 1-4837.
<PAGE>
(13) Portions of the 1995 Annual Report to
Shareholders that are incorporated herein
by reference.
(21) Subsidiaries of the registrant.
(23) Independent Auditors' Consent.
(24) Powers of Attorney.
(27) Financial Data Schedule.
<PAGE>
EXHIBIT-10(ix)
LIST OF NAMED EXECUTIVE OFFICERS
WITH WHOM TEKTRONIX HAS EXECUTIVE
SEVERANCE AGREEMENTS IN SUBSTANTIALLY
THE FORM ATTACHED
Carl W. Neun
Daniel Terpack
<PAGE>
EXHIBIT-10(ix)
EXECUTIVE SEVERANCE AGREEMENT
September 22, 1993
[NAME]
[ADDRESS] 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 [TITLE]. 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:
1
<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
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 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.
2
<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 but not limited to any change of
control, "golden parachute" or employment agreement, but
excluding for this purpose any stock option agreement or stock
bonus agreement or stock appreciation right agreement that may
provide for accelerated vesting or related benefits 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.
5.2 The vesting or accrual of stock options, restricted stock, stock
bonuses, or any other stock awards shall not continue following
termination. 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) shall be governed by such agreements and shall
not be affected by this Agreement.
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
3
<PAGE>
substantial performance is delivered to Executive by the Chairman
of the Board of Directors or the President 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.
8. RESIGNATION 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
4
<PAGE>
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.
TEKTRONIX, INC.
_______________________________
NAME
By: ______________________________
Title: __________________________
5
<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
Agreement until the expiration of the revocation
6
<PAGE>
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
7
<PAGE> EXHIBIT 10(xiii)
EXECUTIVE COMPENSATION
AND BENEFITS AGREEMENT
RUDI LAMPRECHT Executive
TEKTRONIX, INC.,
AN OREGON CORPORATION
PO BOX 1000
WILSONVILLE, OR 97075 Tektronix
1. Employment.
By preliminary agreement in the form of an "Employment
Agreement" dated September 7, 1993 and signed by Executive and Timothy
E. Thorsteinson, Vice President Total Quality/Human Resources, Tektronix
offered and Executive accepted employment with Tektronix, GmbH (or
Tektronix or such other wholly-owned subsidiary of Tektronix as deemed
appropriate by Tektronix, collectively referred to herein as "other Tektronix
employer") on a full-time basis as President of Tektronix' European
Operations ("Tektronix Europe"). The parties, now desiring to restate and
modify the terms and conditions of said Employment Agreement, do hereby
enter into this Executive Compensation and Benefits Agreement.
2. Effective Date.
Executive's employment hereunder commenced on November 1,
1993 (the "Effective Date"). Executive worked in Switzerland from
November 1, 1993 through the end of March, 1994 and commenced work in
Munich, Germany effective April 1, 1994.
3. Position; Duties.
3.1 Executive shall be employed by Tektronix, GmbH (or
other Tektronix employer as deemed appropriate by Tektronix from time to
time) as President of Tektronix Europe, reporting to the Chief Executive
Officer ("CEO") of Tektronix. Executive serves as a Vice President of
Tektronix and President of Tektronix Europe, subject to the customary
restrictions relating to the election, tenure, removal and replacement of
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corporate officers.
3.2 Executive will, during the term of this Agreement,
faithfully and diligently perform all such acts and duties, and furnish such
services, as the CEO of Tektronix or his designee shall reasonably direct.
Executive will devote such time, energy, and skill to the business of
Tektronix as shall reasonably be required for the performance of his duties.
Executive shall have such executive powers and authority as are customary
and reasonably required to enable him to discharge such duties in an efficient
manner.
4. Salary and Bonus.
4.1 Tektronix paid Executive base pay at an annual rate of
DM705,250 from April, 1994 through October, 1994. Executive's current
annual base pay rate, which commenced November 1, 1994, is DM749,625.
In the future, although Tektronix will consult with Executive on changes,
Executive's base pay shall be at an annual rate set, from time to time, by
Tektronix in its sole discretion.
4.2 Executive shall not receive results share pay under
Tektronix' Results Sharing Plan.
4.3 In lieu of participation in Tektronix' Annual Performance
Improvement Plan ("APIP") for Tektronix' fiscal year 1994 ("FY94"), for the
period beginning with the Effective Date of this Agreement and ending
October 31, 1994 (the "FY94 Incentive Period"), Executive has received an
incentive bonus of ten percent (10%) of Executive's annual base pay.
4.4 Executive will be a participant in APIP beginning with
Tektronix' fiscal year 1995 ("FY95"). Executive's APIP participation for FY95
and following fiscal years shall be in accordance with the terms of the
applicable APIP plan and the applicable performance targets established
thereunder. Executive's target payment amount for FY95 is fifteen percent
(15%) of Executive's annual base pay. Notwithstanding the foregoing, if
Executive's employment terminates for any reason prior to the earlier of July
31, 1995 or the date payment is issued under FY95 APIP, Executive's
participation in APIP will terminate and all rights to any award of any
amount whatsoever for such plan year or subsequent plan years will cease,
except to the extent that a payment in lieu of any APIP award is provided for
under the terms of paragraph 9.2(a) of this Agreement.
4.5 Base pay shall be paid in the manner and according to the
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local customs of Tektronix, GmbH (or other Tektronix employer as may
become Executive's employer). The APIP award payable in paragraph 4.4
shall be made at times as provided in the applicable plan. Base pay, APIP
awards and any other payments or benefits shall be subject to withholding as
required by applicable law.
5. Benefits.
Executive shall be entitled to such benefits and perquisites as
Tektronix, GmbH (or other Tektronix employer as may become Executive's
employer) provides its employees generally. Executive will also be given the
use of an automobile appropriate to Executive's position and commensurate
with the vehicle policy in effect at Tektronix, GmbH (which permits personal
use) or other Tektronix employer.
6. Retirement.
In addition to participation in any other Tektronix retirement
plan applicable to Executive because of his employment with a Tektronix
employer, Executive will participate in the Tektronix International Executive
Retirement Plan, which is a defined benefit, non-contributory plan. A
written description of the Tektronix International Executive Retirement Plan
has been provided separately to Executive. Executive's rights to retirement
benefits shall be as stated in any applicable Tektronix plan(s), provided that,
if Executive is continuously employed by Tektronix, GmbH or other
Tektronix employer until age 55, his aggregate retirement benefits under all
applicable Tektronix plans shall not be less than an amount equal to
DM14,800 per month at age 55, DM29,350 per month at age 60, or DM34,460
per month at age 65 or older. The actual amount of the retirement benefits
for any other age between age 55 and age 65, shall be determined by linear
interpolation based on Executive's age, rounded down to the nearest full year,
at the time of retirement. Tektronix will be entitled to a credit against
amounts owed to Executive under any Tektronix' retirement benefits
payment obligations equal to the amount of the maximum payments for
which Executive is eligible under all retirement plans in which he
participated as an employee of Hewlett-Packard ("HP").
For purposes of this Agreement, Executive shall be considered to
be retired if he meets the definition of retirement under the Tektronix
retirement plans in which he is a participant and elects to begin receiving
benefits.
7. Stock Option Grant.
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Executive has received a grant of non-statutory stock options to
purchase 30,000 shares of Tektronix common stock, under the Tektronix
Stock Incentive Plan ("Stock Incentive Plan"). A copy of the Stock Option
Agreement is attached hereto as Exhibit A.
8. HP Stock Options and Other Matters.
All obligations of Tektronix to Executive with respect to any
forfeited stock options or other matters relating to HP have been fully
satisfied.
9. Termination and Severance.
9.1 Either party may terminate this Agreement and the
employment relationship referenced in this Agreement at any time and for
any reason without liability to the other except as provided below, by giving
30 days prior written notice.
9.2 If Executive's employment is terminated by Tektronix
other than for cause, as defined in paragraph 9.3, below, subject to paragraph
9.6 below, Executive will receive severance pay as stated below upon
delivery of a fully executed Release of Claims in the form attached as Exhibit
B ("Release"):
(a) If terminated at any time during the second year of
employment (November 1, 1994 through October 31, 1995), Executive
will receive as severance pay an amount equal to one year of
Executive's then-current base pay and, if terminated prior to the earlier
of July 31, 1995 or the date payment is issued under FY95 APIP
("award date"), on the date payment is made under the FY95 APIP
plan, an amount equivalent to the award Executive would have earned
under the FY95 APIP plan had he continued in employment through
the award date, based on the actual performance for FY95 prorated for
the period of actual employment during FY95.
(b) If terminated at any time after October 31, 1995 Executive
will receive as severance pay an amount equal to one year of
Executive's then-current base pay.
9.3 Termination by Tektronix of Executive's employment for
"cause" shall mean termination upon: (1) the willful and continuous failure
by Executive, in the judgment of the CEO of Tektronix, to substantially
perform his reasonably assigned duties and objectives with Tektronix, GmbH
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(or other Tektronix employer as may become Executive's employer), after a
demand for substantial performance is delivered in writing to Executive by
the CEO which specifically identifies the manner in which it is claimed that
Executive has not substantially performed his duties and objectives, provided
that cause shall not be based upon Executive's failure to achieve sales targets
if Executive has made good faith efforts to meet those targets; (2) commission
by Executive of any act of fraud or dishonesty or any felonious act; or (3)
commission by Executive of any act of willful misconduct that, in the
judgment of the CEO, materially and adversely affects the financial condition
of Tektronix. In the event Executive fails to perform Executive's duties 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, Tektronix may
consider this failure to perform his assigned duties and objectives as "willful
and continuos" for purposes of sub-paragraph (1) of this paragraph 9.3. In
this event, Executive will have thirty (30) days after demand to resume his
duties on a full-time basis or termination thereafter will be for "cause" under
this paragraph 9.
9.4 If Executive's employment is terminated by Tektronix for
cause, as defined above, or if Executive terminates his employment for any
reason, he shall be entitled to compensation and benefits under this
Agreement only to the extent actually earned or vested (as recorded in
Tektronix' records and under the terms of applicable plans) as of the date of
termination and shall not be entitled to any severance benefits under this
Agreement or otherwise.
9.5 For purposes of this Agreement, Executive's employment
will not be deemed terminated if Executive is assigned additional or different
titles and/or tasks and responsibilities from those currently held or assigned
or is assigned to report to an officer other than the CEO of Tektronix,
provided that as a result of any changes Executive retains management
responsibility, consistent with Executive's areas of professional expertise, for
a significant functional activity and/or a significant business unit or
subsidiary.
9.6 Executive expressly agrees that the severance benefits
provided in this paragraph 9 are intended to be exclusive and in full
satisfaction of all legal, contractual or other obligations owed to Executive by
Tektronix or any of its affiliates, except as expressly set forth in the Release
of Claims. If Executive asserts or pursues any rights or obligations other
than by acceptance of the severance benefits provided in this paragraph 9
(including the execution and delivery of the Release of Claims attached as
Exhibit B), then neither Tektronix nor any of its affiliates shall have any
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obligation to Executive for any payments or other benefits under this
paragraph 9.
10. Housing Allowance and Relocation Benefits.
All obligations of Tektronix to Executive with respect to housing
allowance and relocation benefits have been fully satisfied.
11. Employment and Confidential Information Agreement.
Tektronix and Executive have executed an employment
agreement covering inventions and confidential information in the form
attached hereto as Exhibit C.
12. General Provisions.
12.1 The failure of either party to this Agreement to insist
upon the performance of any of the terms and conditions hereof, or the
waiver of any breach of any of the terms and conditions hereof, shall not be
construed as thereafter waiving any such terms and conditions, but the same
shall continue and remain in full force and effect as if no such waiver or
forbearance had occurred.
12.2 Any modification of this Agreement shall be effective
only if in writing and signed by each party or its duly authorized
representative.
12.3 If, for any reason, any provision of this Agreement shall
be held invalid in whole or in part, such invalidity shall not affect the
remainder of this Agreement.
12.4 This Agreement shall be considered made and performed
in the State of Oregon, United States of America, and shall be governed by
and construed in accordance with the laws of such State. Any dispute or
controversy arising under or in connection with this Agreement or the breach
thereof, shall be settled exclusively by arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association or
such comparable rules as may be agreed upon by the parties. Any such
arbitration shall be held in the major city nearest to Executive's principal
work location at the time the claim is made. If the claim is made after
Executive ceases to work for any Tektronix employer, arbitration shall be
held at the major city nearest to Executive's last principal work location for a
Tektronix employer. At the time of execution of this Agreement the parties
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agree that the current location for any such arbitration is Munich, Germany.
Any arbitration shall be conducted in the English language. Judgment upon
the award rendered by the Arbitrator may be entered in any court having
jurisdiction thereof.
12.5 This Agreement may be executed in two counterparts by
the parties hereto, whereupon it will become their binding agreement.
12.6 The following documents are included as part of this
Agreement:
Exhibit A: Stock Option Agreement
Exhibit B: Form of Release
Exhibit C: Tektronix Employment Agreement
12.7 Notices under this Agreement shall be given to Tektronix
(or other Tektronix employer) at the address set forth in this Agreement for
Tektronix and to Executive at the address of his then current Tektronix
employer. Notices shall be effective upon delivery to such address. Either
party may change its address for notices by giving notice of the change.
12.8 This Agreement, including the Exhibits listed in
paragraph 12.6, above, supersedes and replaces the Offer Letter and the
Employment Agreement referred to in paragraph 1, above, and any other
agreements, representations or warranties of any kind, and contains the entire
agreement between the parties with respect to any subjects addressed herein.
TEKTRONIX, INC.
By: ROBERT PHILLIPS 6-7-95
________________________________ ________________
Robert Phillips Date Signed
Vice President, Human Resources
RUDI LAMPRECHT 6-8-95
________________________________ ________________
Rudi Lamprecht Date Signed
Page 7
<PAGE>
Exhibit B
RELEASE OF CLAIMS
This Release of Claims ("Release") is made and executed by Rudi
Lamprecht in connection with the termination of my employment with Tektronix,
Inc. or other Tektronix-related company and in consideration of my receiving
valuable severance benefits as provided for in the Executive Compensation and
Benefits Agreement between me and Tektronix, Inc. (the "Agreement"). I
understand that my eligibility to receive these benefits is contingent upon my
fulfilling the obligations set forth in the Agreement and this Release. These
benefits are substantial consideration to which I am not otherwise entitled.
On behalf of myself and my spouse, if any, heirs, administrators and
assigns, I hereby release Tektronix, Inc., any other 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 related to my
employment with the Company or the termination of that employment, including but
not limited to , all 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 of the United States, Germany, or any
other country, including but not limited to the German Civil Code, the German
Labor Court Act, the German Law on Protection Against Unfair Dismissal, the
German Law on Notice Periods, Title VII of the Civil Rights Act of 1964, the
Post-Civil War Civil Rights Act (42 USC Secs. 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 Family and Medical Leave Act, The Vietnam Era Veterans'
Readjustment Assistance Act, the Fair Labor Standards Act, Executive
Order 11246, the Immigration Reform and Control Act, all as amended, and the
civil rights, employment and labor laws (statute or common law) of the state of
Oregon, the United States, Germany or any other country.
This Release shall not affect any rights I may have under any medical
insurance, disability, stock option grants or retirement plans maintained by the
Company, all of which continue in accordance with their terms.
I agree to hold the terms of this Agreement confidential. I may
disclose the terms to my spouse, if any, accountant, attorney and taxing
authorities only as may be necessary for my legal and financial affairs or as
required by law. Except for these disclosures, I will not reveal the terms
of the Release or the Agreement.
I acknowledge that I have been given at least twenty-one (21) days to
consider whether or not to execute this Release and accept benefits under the
Agreement; that I have been advised to consult with an attorney or financial
advisor of my choice and at my own expense; that the Agreement gives me benefits
which the Company otherwise would have no obligation to give me; and that I
voluntarily enter into the Release.
I understand that the Release is to be signed within 21 days from the
date I receive the signature copy of the Release or on my last day of
employment, whichever, is later; and that I may revoke the Release, provided
I do so within seven (7) days of signing it. I understand and agree that the
Company will have no obligation to pay me separation benefits under paragraph 9
of the Agreement until the expiration of the revocation period and provided I
have not revoked the Release.
I acknowledge that I have had time to consider the alternatives and
consequences of my election to receive separation benefits under the Agreement
and of signing the Release; that I am aware of my right to consult an attorney
or financial advisor (or both) at my own expense; and that, in consideration for
executing this Release and my election to receive separation benefits under the
Agreement, I have received additional benefits and compensation of value to
which I otherwise would not 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.
________________________ ___________
Rudi Lamprecht Date
<PAGE>
EXHIBIT 10(xv)
TEKTRONIX
NON-EMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN
1995 RESTATEMENT
July 1, 1995
Tektronix, Inc.
an Oregon corporation
PO Box 1000
Wilsonville, Oregon 97070 Tektronix
<PAGE>
TABLE OF CONTENTS
Page
1. Plan Administration 1
2. Deferral Election 1
3. Deferred Compensation Account; Trust 3
4. Time and Manner of Payment 4
5. Death 5
6. Termination; Amendment 5
7. Claims Procedure 6
8. General Provisions 6
9. Effective Date 7
i
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TEKTRONIX
NON-EMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN
1995 RESTATEMENT
July 1, 1995
Tektronix, Inc.
an Oregon corporation
PO Box 1000
Wilsonville, Oregon 97070 Tektronix
Members of the Tektronix Board of Directors who are not employees of
Tektronix or an affiliate (Non-Employee Directors) are paid annual retainers
and meeting fees, in cash, for service as directors of the company (Directors'
Fees). They also receive shares of Tektronix's common stock (Award Shares)
pursuant to the Tektronix, Inc. Non-Employee Directors Stock Compensation Plan
(Stock Plan). The unvested portion of the Award Shares is forfeited in the
event the Non-Employee Directors' service on the Tektronix Board of Directors
terminates prior to full vesting of the award, which is generally on the fifth
anniversary of the date of the award.
In order to provide greater incentives for qualified persons to serve
as Non-Employee Directors, Tektronix adopts this plan to allow the Non-Employee
Director to elect from time to time to defer receipt of Directors' Fees and of
Award Shares.
1. PLAN ADMINISTRATION
The Chief Executive Officer of Tektronix or delegate shall appoint one
or more employees of Tektronix as Administrator of the plan. The Administrator
shall interpret and administer the plan and for that purpose may make, amend or
revoke rules and regulations at any time.
2. DEFERRAL ELECTION
2.1 A Non-Employee Director may elect as provided below to defer the
receipt of Directors' Fees and Award Shares. An election shall be in writing
on a form provided by the Administrator and shall specify the time and manner
of payment of the deferred amounts in accordance with other provisions of this
plan.
2.2 An election to defer Directors' Fees shall be effective as follows:
<PAGE>
(a) Except as provided in (b) and 2.4, an election
received by the Administrator on or before December 20 of
any year shall be effective for Directors' Fees payable for
succeeding calendar years.
(b) An initial election shall be effective for all
Directors' Fees payable after it is received if that occurs
within 30 days after notice to a Director of whichever of the
following is applicable:
(1) Adoption of this Plan.
(2) Commencement of the Director's eligibility
to participate in this plan.
2.3 An election to defer Award Shares shall be effective as follows:
(a) Except as provided in (b), (c) and 2.5, an election received
by the Administrator before an annual meeting of shareholders of
Tektronix shall be effective for Award Shares with an award date on or
after such annual meeting and Award Shares as to which a Non-Employee
Director has elected to receive Award Shares in lieu of cash payment of
annual retainer fees payable for periods after such annual meeting.
(b) If a Non-Employee Director is elected or appointed to the
Tektronix Board of Directors, an election to defer shall be effective
for all of the Award Shares awarded as of the date the Director is
elected or appointed and any Award Shares the Director elects to receive
in lieu of cash payments of annual retainer fees payable for periods
after the date the Director is elected or appointed, if the election is
received by the Administrator within 30 days after the date the Director
is elected or appointed.
(c) An election to defer shall be effective for the portion of
the Award Shares becoming vested as of a date after the election is
received by the Administrator. For this purpose, Award Shares become
vested on the anniversary date, or other date, through which the Non-
Employee Director must continue in service on the Board of Directors
to reach an increment in the percent vested under the vesting schedule
in the Stock Plan.
2.4 An election to defer Directors' Fees shall continue in effect
through the year in which the Director terminates it in writing or changes
the amount deferred by submitting a new election. Such a notice or new
election received on or before December 20 of any year shall be effective
for succeeding calendar years and shall not affect fees deferred under the
prior election.
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2.5 An election to defer Award Shares shall continue in effect until
an annual meeting of Tektronix shareholders before which the Director
terminates it in writing. Such a notice of termination shall be effective
for Award Shares with an award date as of such annual meeting and any
subsequent awards, or elected in lieu of cash payment of annual retainer fees
payable for periods after such annual meeting, but shall not affect Award
Shares deferred under the prior election.
2.6 Tektronix may withhold from any deferral of Director's Fees or
from nondeferred fees payable at the same time any amounts required by
applicable law and regulations.
2.7 Deferral of Award Shares elected in lieu of cash payment of annual
retainer fees shall be controlled by elections to defer Award Shares and not by
elections to defer Director's Fees.
3. DEFERRED COMPENSATION ACCOUNT; TRUST
3.1 Tektronix shall credit to a Director's deferred compensation
account (the Account) each amount of Directors' Fees deferred by the Director
under this plan. The Account shall be credited as of the day a deferred fee
would otherwise have been paid to the Director.
3.2 Until full payment of a Director's Account has been made to the
Director or beneficiaries under this plan, Tektronix shall credit interest to
the Account as follows:
(a) The interest rate for each calendar quarter shall
be the yield to maturity of the most recent 10 year U.S.
Treasury Notes as of the close of the quarter.
(b) Interest on undistributed balances shall accrue
from the date deferrals are credited under 3.1 until the last
installment is paid.
(c) Interest shall be added to principal during the
deferral period as of the last day of each calendar quarter.
Installment payments shall be calculated by dividing the
adjusted principal by the number of installments to be paid.
Interest during the payment period shall be added to the
second and subsequent installments of principal.
3.3 Each Director's Account shall be maintained on the books of
Tektronix until full payment has been made to the Director or beneficiaries
under this plan. No funds shall be set aside or earmarked for the Account,
which shall be purely a bookkeeping device.
3.4 The Administrator of the Stock Plan shall transfer the
certificates for any Award Shares deferred under Section 2 to the trustee
of the Tektronix Executive Compensation Trust
3
<PAGE>
(the Trust), which shall be the owner of record of such Award Shares. No
stock powers for such certificates shall be executed by the deferring
Non-Employee Director or, if already executed, any such stock powers shall
be destroyed. Dividends on deferred Award Shares shall be paid to the
trustee of the Trust. The Investment Committee established under the Trust
shall invest the dividends in a money market fund or other financial assets
selected in its discretion.
4. TIME AND MANNER OF PAYMENT
4.1 Subject to 4.6 and 5.1 the Account shall be paid or payment
commenced in the next January after one of the following Payment Dates as
selected under 4.3:
(a) The date the Director's service on the Tektronix
Board ends.
(b) The date the Director reaches age 65 or a later
age specified by the Director in the selection under 4.3.
(c) The date that the criteria in both (a) and (b)
have been met.
4.2 Subject to 4.6 and 5.1 the Account shall be paid in one of the
following ways as selected under 4.3:
(a) In a single lump sum.
(b) In not more than five substantially equal annual
installments of principal plus interest.
4.3 The time and manner of payment under 4.1 and 4.2 shall be selected
by the Director as follows:
(a) The selection shall be made in the deferral
election.
(b) The selection shall be irrevocable for the
portion of the Account attributable to amounts deferred
under the election in which the selection is made.
(c) If the time or method of payment is different
under different elections, the Account shall be appropriately
divided for distribution.
4
<PAGE>
4.4 The trustee of the Trust shall transfer all the deferred
Award Shares to the Director in the next January after one of the Payment
Dates described in 4.1, as selected under 4.3. At the same time the trustee
shall pay the Director the amount of all dividends received on the deferred
Award Shares, adjusted for investment returns during the period held by the
Trust.
4.5 Tektronix may withhold from any payments any income tax or other
amounts as required by law.
4.6 If a Director has elected to defer payment of an amount, the
Administrator may in its discretion make or commence payments earlier than
the deferred date if, on application by the Director, the Administrator finds
that financial hardship exists because of illness, accident, disability
or other unexpected event creating a financial need.
5. DEATH
5.1 A Director's Account and deferred Award Shares shall be
distributable under 5.2 on the Director's death regardless of the provisions
of 4 above.
5.2 On death of a Director the Account shall be paid in a single
lump sum within 30 days after death. At the same time the trustee of the
Trust shall distribute the Director's deferred Award Shares plus the
dividends received on such Award Shares, adjusted for investment return
during the period held by the Trust. Such payment and distribution shall be
made to a beneficiary determined in the following order of priority:
(a) To the surviving beneficiaries designated by the
Director in writing to the Administrator.
(b) To the Director's surviving spouse.
(c) To the Director's estate.
6. TERMINATION; AMENDMENT
6.1 Tektronix may terminate this plan as to deferral of Directors'
Fees effective the first day of any year after notice to the Non-Employee
Directors. Tektronix may terminate this plan as to deferral of Award Shares
effective with any annual meeting of shareholders after notice to the
Non-Employee Directors. Upon termination of the plan, no further deferral
shall be permitted of Directors' Fees or Award Shares, whichever applies.
Amounts in an Account shall remain to the credit of the Account, shall continue
to be credited with interest and shall be paid out in accordance with 3 and 4
above. Award Shares in the Trust shall continue to be held, along with
dividends received on them, and distributed in accordance with 3 and 4 above.
5
<PAGE>
6.2 Tektronix may amend this plan effective the first day of any
calendar year after notice to the Non-Employee Directors.
6.3 If the Internal Revenue Service rules that any amounts deferred
under this plan will be subject to current income tax, all amounts to
which the ruling is applicable shall be paid within 30 days to the Directors.
7. CLAIMS PROCEDURE
7.1 Any person claiming a benefit, requesting an interpretation or
ruling under the plan, or requesting information under the plan shall present
the request in writing to the Administrator, who shall respond in writing as
soon as practicable.
7.2 If the claim or request is denied, the written notice of denial
shall state the following:
(a) The reasons for denial, with specific reference
to the plan provisions on which the denial is based.
(b) A description of any additional material or
information required and an explanation of why it is
necessary.
(c) An explanation of the plan's review procedure.
7.3 The initial notice of denial shall normally be given within 90
days after receipt of the claim. If special circumstances require an
extension of time, the claimant shall be so notified and the time limited
shall be 180 days.
7.4 Any person whose claim or request is denied or who has not received
a response within 30 days may request review by notice in writing to the
Administrator. The original decision shall be reviewed by the Administrator
which may, but shall not be required to, grant the claimant a hearing. On
review, whether or not there is a hearing, the claimant may have representation,
examine pertinent documents and submit issues and comments in writing.
7.5 The decision on review shall ordinarily be made within 60 days. If
an extension of time is required for a hearing or other special
circumstances, the claimant shall be so notified and the time limit shall be
120 days. The decision shall be in writing and shall state the reasons and the
relevant plan provisions. All decisions on review shall be final and bind all
parties concerned.
8. GENERAL PROVISIONS
6
<PAGE>
8.1 Subject to the rights of the Non-Employee Directors under the
Trust, all amounts of deferred compensation under this plan shall remain at
all times the unrestricted assets of Tektronix and the promise to pay the
deferred amounts shall at all times remain unfunded as to the Directors.
The rights of Directors and beneficiaries under the plan shall only be as
general creditors of Tektronix.
8.2 Any notice under this plan shall be in writing or by electronic
means and shall be received when actually delivered or, if mailed, when
deposited postpaid as first class mail. Mail should be directed to Tektronix
at the address stated in this plan, to a Director at the address stated in the
Director's election or to such other address as either party may specify by
notice to the other party.
8.3 The interests of a Director or beneficiary under this plan are
personal and no such interest may be assigned, seized by legal process or in
any way subjected to the claims of any creditor.
9. EFFECTIVE DATE
This Restatement of the plan shall be effective July 1, 1995.
Adopted June 21, 1995
7
<PAGE>
EXHIBIT 10(xvi)
TEKTRONIX, INC.
NON-EMPLOYEE DIRECTORS STOCK COMPENSATION PLAN
1. PURPOSE. The purpose of this Non-Employee Directors
Stock Compensation Plan (the "Plan") is to enable Tektronix, Inc.
(the "Company") to attract and retain highly qualified directors.
The Company considers it desirable that members of the board of
directors, who represent shareholders, be shareholders of the
Company. In order to supplement the personal efforts of the
directors towards this end, the Plan is intended to increase the
ownership interest of non-employee directors through awards of
Common Shares of the Company. The Company intends to increase the
community of interest of the shareholders at large and the
Company's directors and to make share ownership a dynamic
influence on the attitudes of the board.
2. ADMINISTRATION. The Plan shall be administered by the
Secretary of the Company or such other person designated by the
chief executive officer of the Company (the "Administrator") who
may delegate all or part of that authority and responsibility.
The Administrator shall interpret the Plan, arrange for the
purchase and delivery of shares, determine forfeitures and
otherwise assume general responsibility for administration of the
Plan. Any decision by the Administrator shall be final and
binding on all parties.
3. AWARDS.
3.1 Each non-employee director of the Company shall
participate in the Plan
as follows:
(a) Directors in office at the time of the
adoption of the Plan shall participate as of September
22, 1990. Directors elected or appointed after the
adoption of the Plan shall participate as of the later
of (i) the date of their election or appointment or
(ii) September 22, 1990. Employee directors who cease
to be employees of the Company but continue as
directors shall become participants as of the later of
(i) the date they cease to be employees or (ii)
September 22, 1990.
(b) A director's date of participation shall be
the award date. Each annual meeting of shareholders
after that date shall be an anniversary date.
3.2 As of the award date a participant shall, subject
to Section 3.3, be awarded Common Shares of the Company as
follows:
(a) For award dates prior to the 1995 annual
meeting of shareholders of the Company (the "1995
Annual Meeting"), the number of shares awarded shall be
stock valued at $37,500 at the time of purchase as
described in Section 3.2(b). For award dates on or
after the 1995 Annual Meeting, the number of shares
awarded shall be stock equivalent in value to one-half
of the then current annual retainer for non-employee
directors of the Company (the "Annual Retainer"),
multiplied by five, valued at the time of purchase as
described in Section 3.2(b). In the event that the
Annual Retainer is increased each participant shall be
awarded in Common Shares one-half of such increase in
the Annual Retainer multiplied by the number of years
(including fraction of a year) remaining until the
participant's next award date under Section 3.4.
1
<PAGE>
(b) As soon as practicable after the award date
the Administrator shall deliver cash in the amount of
the award and applicable commissions to one or more
brokers or other third persons with instructions to
purchase Common Shares of the Company in the open
market. The Administrator may delay the purchase
depending on market conditions and securities laws
affecting open market purchases by a corporation of its
own shares.
(c) When several participants have the same award
date, all of the stock shall be purchased and then
divided equally among the participants so that each
participant receives the same number of shares
regardless of any changes in price that occur while
purchases are being carried out.
(d) When all of the stock has been purchased,
certificates in the names of the participants for their
respective shares shall be delivered to the
Administrator. Except with respect to shares deferred
pursuant to the Company's Non-employee Directors'
Deferred Compensation Plan or any amendment,
restatement or replacement thereof (the "Deferral
Plan"), each participant shall deposit with the
Administrator a blank stock power duly executed and
guaranteed in a form satisfactory to the Administrator
for each certificate for shares standing in the
participant's name.
(e) The Administrator shall hold the certificates
and stock powers until the shares are vested and
released from time to time as provided in Section 4.7,
except that the shares shall be delivered to a trustee
in accordance with instructions from the participants
pursuant to the Deferral Plan.
3.3 If, assuming that the participant were reelected,
a participant's term as a director would end because of age
before the fifth anniversary date after an award date, the amount
awarded shall be reduced by one-fifth for each anniversary date
that would fall after the date the term ends.
3.4 If a participant continues to be a non-employee
director after all of the shares from an award have vested, the
award cycle shall be repeated for such participant. The award
date for the next award shall be the date of the annual meeting
of shareholders coinciding with the last anniversary date for the
prior award. Each subsequent award shall be an amount of stock
equivalent in value (at the time of purchase in accordance with
Section 3.2(b)) to one-half of the Annual Retainer, multiplied by
five subject to Section 3.3. Such stock shall be acquired, vest
and otherwise be subject to all the provisions of the Plan.
3.5 Beginning with respect to the Annual Retainer
payable for services rendered after the 1995 Annual Meeting and
subject to compliance with Rule 16b-3 of the Securities and
Exchange Commission, each participant may elect to receive in
Common Shares, in lieu of cash payments, all of the remaining
Annual Retainer not automatically awarded in Common Shares
pursuant to Section 3.2(a) ("Election Shares"). Such an election
shall apply with respect to all of the remaining Annual Retainer
for services to be rendered in all years until the next award
date under Section 3.4. Such an election shall be made prior to
an award date, except that in order to implement this election
procedure in accordance with Rule 16b-3, each non-employee
director shall be given one opportunity to make such an election
with respect to Annual Retainers expected to be received for
services rendered until the next award date. Following such an
election, the Administrator shall purchase Election shares under
the procedures set forth in Section 3.2. The value of the
Election Shares purchased shall be equal to one-half of the
Annual Retainer multiplied by five subject to Section 3.3 (or the
number of years, including a fraction of a year, remaining until
the participant's next award date under Section 3.4). In the
event that the Annual Retainer is
2
<PAGE>
increased, each participant who has so elected shall receive
Common Shares equal in value to one-half of such increase in the
Annual Retainer multiplied by the number of years (including a
fraction of a year) remaining until the participant's next award
date under Section 3.4.
4. VESTING; DELIVERY OF SHARES; FORFEITURES.
4.1 Subject to Sections 4.2 through 4.6, awarded
shares shall vest as follows:
Percent Vested Cumulative Percent
Award Date 0% 0%
First Anniversary Date 20 20
Second Anniversary Date 20 40
Third Anniversary Date 20 60
Fourth Anniversary Date 20 80
Fifth Anniversary Date 20 100
4.2 If a participant receives a reduced award under
Section 3.3, the vesting percentages for such shares and any
related Election Shares shall be accelerated so that the entire
award shall vest evenly over the anniversary dates that fall on
or before the date the director's term ends. For example, if the
award were reduced to three-fifths of the amount of stock that
would otherwise be awarded one-third of the shares would vest on
each of the first three anniversary dates. If a participant
receives an award for an increase in the Annual Retainer pursuant
to Section 3.2(a), the vesting schedule for such shares and any
related Election Shares shall be revised so that shares
representing any fraction of a year shall vest on the first
anniversary date and the remaining award shall vest equally over
the subsequent anniversary dates that fall on or before the next
award date.
4.3 Subject to Sections 4.5 and 4.6, the following
shall apply with respect to awards to a participant whose award
date is not the date of an annual meeting of shareholders:
(a) The shares which would otherwise vest on the
first anniversary date shall instead vest on the date
six months immediately following the date certificates
for the shares are delivered to the Administrator under
Section 3.2(d), or one year after the date for the
award, whichever is later.
(b) Notwithstanding (a), if the participant's term
as a director ends because of age on the first
anniversary date, the shares which would otherwise vest
at a later date under (a) shall instead vest on the
first anniversary date.
4.4 If a participant ceases to be a non-employee
director on an anniversary date, that anniversary date shall be
included in determining the number of shares vested for that
participant.
4.5 If a participant dies while serving as a
non-employee director the participant's awarded shares scheduled
to vest on the next anniversary date shall instead vest as of the
date of death.
4.6 If a participant ceases, for any reason other than
death, to be a non-employee director on a date other than an
anniversary date, the participant's awarded shares scheduled to
vest on the immediately following anniversary date shall vest as
of the date the participant ceases to be a non-employee director
prorata based on the number of days the participant served as a
non-employee director that year.
3
<PAGE>
4.7 The certificate and stock power covering vested
shares (other than shares previously delivered to a trustee under
the Deferral Plan) shall be delivered to the participant or in
accordance with Section 6.2 as soon as practicable after the
shares vest.
4.8 If a participant ceases to be a non-employee
director, awarded shares remaining unvested shall be forfeited.
The Administrator, acting for the participant pursuant to the
blank stock power, shall transfer the unvested shares to the
Company. The participant or the participant's representative
shall execute any documents reasonably requested by the
Administrator to facilitate the transfer.
5. STATUS BEFORE FULL VESTING.
5.1 Each participant shall be a shareholder of record
with respect to all shares awarded, whether or not vested, and
shall be entitled to all of the rights of such a holder, except
that a participant's share certificates shall be held by the
Administrator (or a trustee pursuant to the Deferral Plan) until
delivered in accordance with Section 4.7.
5.2 Any dividend checks or communications to
shareholders received by the Administrator with respect to shares
held by the Administrator shall promptly be transmitted to the
participant. The participant shall furnish to the Administrator
or the Company a current mailing address for such purpose.
5.3 No participant may transfer any interest in
unvested shares to any person other than the Company and the
trustee pursuant to the Deferral Plan.
6. DEATH OF A PARTICIPANT.
6.1 Any vested shares held by the Administrator for a
participant who has died shall be delivered as soon as
practicable to the participant's beneficiary under Section 6.2.
6.2 Any vested shares to be delivered on death of a
participant under Section 6.1 shall go to a participant's
beneficiary in the following order of priority:
(a) to the surviving beneficiary designated by the
participant in writing to the Administrator;
(b) to the participant's surviving spouse; or
(c) to the participant's estate.
7. AMENDMENT OR TERMINATION; MISCELLANEOUS.
7.1 The Board of Directors of the Company may amend or
terminate the Plan at any time. No amendment or termination shall
adversely affect any then outstanding award.
7.2 Subject to the rights of amendment and termination
in Section 7.1, the Plan shall continue indefinitely and future
awards will be made in accordance with Sections 3.1 and 3.4.
7.3 Nothing in the Plan shall create any obligation on
the part of the board of directors of the Company to nominate any
director for reelection by the shareholders.
4
<PAGE>
EXHIBIT 13
MANAGEMENT REVIEW
RESULTS OF OPERATIONS
OVERVIEW Tektronix recorded net earnings of $81.3 million, or $2.63
per share, in its fiscal year ended May 27, 1995, an increase of 33.5%
over fiscal 1994 earnings of $60.9 million, or $1.98 per share. The
improved net earnings in 1995 were due primarily to higher sales. In
1993, the Company incurred pre-tax restructuring charges of $150.0
million which resulted in a net loss of $55.3 million, or $1.83 per
share. Excluding the restructuring charges, net earnings in 1993 would
have been $38.7 million, or $1.28 per share. All years have been
restated to account for the acquisition of Microwave Logic, Inc. under
the pooling of interests method of accounting.
NET SALES AND PRODUCT ORDERS Net sales and product orders for
1995 were the highest in the Company's history. Net sales in 1995 were
$1.472 billion, up 11.1% from $1.325 billion in 1994. Sales from
continuing businesses increased by 19.3% from $1.226 billion in 1994
to $1.463 billion in 1995. Other sales, which include the non-
strategic businesses disposed of at the end of 1994 and during 1995,
declined from $98.6 million to $8.7 million. Sales to customers in the
United States of $755.1 million were 1.5% above the level for the
prior year, and represented 51.3% of total sales. The majority of the
non-strategic business sales were in the United States, and if these
sales were excluded from both years, United States sales increased by
13.2% from $661.6 million to $749.2 million. The improved domestic
sales level was the result of new products and improvement in the U.S.
economic environment. International sales rose 23.3% from $581.2
million to $716.7 million, with improvement in all geographies.
Net sales in 1994 were up 1.4% from 1993's level. U.S. sales of
$743.8 million in 1994 were 3.6% above the level of the prior year.
International sales declined by 1.3%, from $588.6 million in 1993 to
$581.2 million in 1994, due to economic weakness in Europe and Japan
early in the year.
In fiscal 1995, the Company's net sales were divided into five
product classes. The product classes and the net sales for the last
three years were as follows:
<TABLE>
<CAPTION>
Net sales (in thousands) 1995 1994 1993
--------------------------------------------------------------------------
<S> <C> <C> <C>
Measurement Business $ 731,197 $ 671,042 $ 708,657
Color Printing and Imaging 455,041 313,475 248,413
Video Systems 185,077 152,369 162,938
Network Displays 91,736 89,463 87,928
Other 8,727 98,632 98,703
</TABLE>
Measurement Business, the Company's original and historically
largest business, includes oscilloscopes, logic analyzers, instruments
on a card, intelligent hand-held tools, spectrum analyzers and
communications, video and audio test instruments. Measurement sales
accounted for 49.7% of total sales, and grew 9.0% from the prior year,
with the acceptance of new products, particularly in the
[Bar chart depicting operating income as a percentage of net sales before
restructuring]
1992 5.4
1993 5.5
1994 6.6
1995 7.8
[Bar chart depicting net earnings in millions before restructuring]
1992 30.4
1993 38.7
1994 60.9
1995 81.3
23
<PAGE>
basic instrument, electronic tool and communications, video and audio test
lines. Sales in 1994 were down 5.3% from 1993, reflecting recessionary
economies in Europe and Japan and weakness in some major industrial
markets.
Color Printing and Imaging, the Company's fastest growing
business, produces the Phaser family of color printers and supplies
that utilize thermal wax transfer, laser, dye sublimation and ink jet
technologies. Sales of printers and supplies increased 45.2% from
1994, with the introduction of several new products during the year,
including the Phaser 340 color printer aimed at the office market, and
increased market penetration in Europe. Color Printing and Imaging
sales made up 30.9% of total sales. Sales in 1994 increased 26.2% over
1993 due to market acceptance of new products.
Video Systems provides the television and video industries with
products covering a range of applications from production and storage
to systemization and transmission. 1995 sales increased 21.5% from
1994 due to the introduction of new products and from generally
improving market conditions. Sales declined 6.5% in 1994 from 1993 due
primarily to the transition from analog to digital television
production products.
Network Displays offers a broad X terminals product line, including
both software and hardware, that support the X Windows environment in
networked systems. Sales in 1995 rose 2.5% due to increased X terminal
shipments, particularly in the fourth quarter, which was substantially
offset by the continuing decline in service revenue from the old ter-
minals business. Sales in 1994 were 1.7% higher than in 1993.
Product orders for 1995 were $1.387 billion, an increase of 26.5%
over 1994. 1995 product orders grew at a faster rate than sales for
each of the four businesses and, as a result, product order backlog in
1995, at $164.8 million, was sharply higher than 1994 backlog of
$108.0 million. Despite the higher product order backlog the Company's
future quarterly results continue to be dependent on new orders that
can be shipped in the same quarter.
Going forward into 1996, the Company will combine Video Systems
and Network Displays businesses into a single product class named
Video and Networking to maximize the synergies between these
businesses and to reflect changes in operating management and product
alignment. Net sales for the last three years in the new product class
structure were as follows:
<TABLE>
<CAPTION>
Net sales (in thousands) 1995 1994 1993
--------------------------------------------------------------------------
<S> <C> <C> <C>
Measurement Business $ 731,197 $ 671,042 $ 708,657
Color Printing and Imaging 455,041 313,475 248,413
Video and Networking 276,813 241,832 250,866
Other 8,727 98,632 98,703
</TABLE>
OPERATING COST AND EXPENSES Manufacturing cost of sales increased
as a percentage of net sales to 54.7% in 1995 from 54.0% in 1994. The
increase in cost of sales as a percentage of net sales was due
primarily to the use of alternative distribution channels, the impacts
of a stronger Japanese Yen on certain component costs and higher
performance based compensation. Cost of sales as a percentage of net
sales increased to 54.0% in 1994 from 51.8% in 1993, caused primarily
by a reduction in the historically higher margin on international
sales, increased sales through alternative distribution channels and
the impacts of a stronger Japanese Yen on certain component costs.
Research and development expenses represented 11.2% of sales compared
with 11.6% in 1994 and 12.1% in 1993. Selling, general and administrative
(SG&A) expenses of $391.8
[Pie chart depicting 1995 sales by product class]
Measurement Business 49.7%
Color Printing 30.9%
Video Systems 12.6%
Network Displays 6.2%
Other 0.6%
------
100.0%
[Pie chart depicting 1995 sales by product class, adjusted]
Measurement Business 49.7%
Color Printing 30.9%
Video & Networking 18.8%
Other 0.6%
------
100.0%
24
<PAGE>
million were 26.6% of sales compared to 27.7% in 1994 and 30.4% in 1993.
SG&A expenses have declined as a percentage of sales due to the continuing
increased use of alternative distribution channels and management of expenses,
partly offset by increased performance-based compensation.
Equity in business ventures' earnings increased to $4.3 million
compared with a loss of $1.6 million in the prior year, and a loss of
$1.9 million in 1993. The current year income is primarily from the
Company's equity in the earnings of Merix Corporation (formerly the
Company's Circuit Board Division) and Maxtek Components Corporation
(formerly the Company's Hybrid Circuit Operation). The prior years'
losses relate primarily to the Company's interest in Sony/Tektronix
Corporation, which showed break-even results in 1995.
Other income was $4.7 million in 1995 compared with income of $9.1
million in 1994 and expense of $10.4 million in 1993. Other income in
1995 and 1994 includes gains of $14.3 million and $13.3 million,
respectively, from the sale of stock held by the Company in TriQuint
Semiconductor, Inc., Planar Systems, Inc. and Credence Systems
Corporation. The Company continues to hold equity positions in these
companies that it intends to liquidate over time.
The Company recorded taxes on 1995 results at the annual effective
rate of 26%, compared with 32% in the prior year. During the first
quarter of 1995, the Company received approval from the Internal
Revenue Service to capitalize the costs of a major research and
development project. The resulting increase in taxable income enabled
the realization of additional deferred tax assets, previously subject
to valuation allowances, and thus a reduction in the rate at which
taxes were provided in 1995. The Company expects the annual effective
tax rate to increase to the range of 30% to 32% in 1996.
Net earnings of $81.3 million for 1995 were 33.5% higher than the
prior year due primarily to the increase in sales.
RESTRUCTURING CHARGES
During the fourth quarter of 1993, the Company incurred pre-tax
restructuring charges of $150 million, or $3.10 per share after taxes,
for the purpose of exiting non-strategic components operations to
further reduce the Company's vertical integration, consolidating
facilities, refocusing on core business products, discontinuing
certain older products and other steps to improve operating
efficiency. At May 27, 1995, the Company had substantially completed
the reduction of its vertical integration and the discontinuance of
older products. The remaining restructuring activities involve the
completion of the facilities consolidation and workforce reductions in
several different countries subject to various advance notification
and other statutory requirements. Restructuring reserves were reduced
to approximately $18 million. The Company intends to
25
<PAGE>
utilize the remaining reserves in 1996, the majority of which will
require cash outlays.
ACCOUNTING CHANGES
In 1995, the Company adopted Statements of Financial Accounting
Standards (SFAS) No. 115, 'Accounting for Certain Investments in Debt
and Equity Securities'. Under SFAS No. 115, certain investments in
marketable securities are classified as available-for-sale and
reported at fair value. The adjustment to fair value added $20.1
million to other long-term assets and the net unrealized gains, less
deferred taxes, are reported as a separate component of shareholders'
equity.
In the first quarter of 1993, the Company adopted SFAS No. 106
(Postretirement Benefits) and No. 109 (Income Taxes). The combined
result of adopting these pronouncements was a one-time net increase in
earnings of $3.3 million or $0.11 per share.
FINANCIAL CONDITION
The Company's financial condition is strong. Cash flows from operating
activities and borrowing capacity from existing lines of credit are
expected to be sufficient to meet current and anticipated future
needs. At May 27, 1995, the Company maintained bank credit facilities
totaling $349.8 million, of which $267.8 million was unused. The
unused facilities include $177.7 million in lines of credit and $90.1
million under a revolving credit agreement. Additional details,
including maturity dates of agreements and certain financial
covenants, are included under 'Short-term and Long-term Debt' in the
Notes to Consolidated Financial Statements.
Current assets increased by $107.3 million due primarily to higher
accounts receivable and inventories. Accounts receivable were up $43.6
million because of higher sales in the fourth quarter of 1995 compared
with the same quarter of 1994. Inventories rose by $68.3 million in
response to higher order rates, the introduction of several new
products and the buildup of certain components purchased on
allocation.
Net property, plant and equipment increased by $27.0 million due
to capital expenditures related to facilities consolidation and
implementation of information systems.
Other long-term assets increased by $86.6 million as a result of
the Company's investment in equity and notes of Merix Corporation and
the accounting for certain investments in accordance with SFAS No.
115. The Company accounts for its investment in Merix Corporation on
the equity basis with the earnings impact included in business
ventures' earnings (loss) in the consolidated statements of
operations. The Company also recorded several long-term notes
receivable on sales of real estate and licensing of technologies in
1995.
Current liabilities increased by $103.1 million primarily because
of the increase in short-term debt of $66.7 million to fund capital
expenditures and inventory additions, the increase in accrued
compensation of $26.2 million due to higher performance based
compensation, and the current maturity of certain long-term
liabilities.
Shareholders' equity increased by $131.1 million or 27.8% due to
earnings less dividends, the exercise of stock options, favorable
currency adjustments due to the depreciating United States dollar and
the addition of unrealized holding gains in accordance with SFAS No. 115.
[Bar chart depicting facilities in use in millions of square feet]
1992 6.1
1993 5.6
1994 5.0
1995 4.3
26
<PAGE>
MANAGEMENT'S LETTER
The consolidated financial statements of Tektronix, Inc. and
subsidiaries have been prepared by management and have been audited by
Tektronix' independent auditors, Deloitte & Touche LLP. Management is
responsible for the consolidated financial statements, which have been
prepared in conformity with generally accepted accounting principles
and include amounts based on management's judgment.
Management is also responsible for maintaining internal control,
including systems designed to provide reasonable assurance that assets
are safeguarded and that transactions are executed and recorded in
accordance with established policies and procedures.
Tektronix' controls and systems were developed by Tektronix
management and have the full support and endorsement of the Board of
Directors. Compliance is mandatory.
The Board of Directors is responsible for the Company's financial
and accounting policies, practices and reports. Its Audit Committee,
composed entirely of outside directors, meets regularly with the
independent auditors, representatives of management, and the internal
auditors to review accounting, reporting, auditing and internal
control matters. Both the independent auditors and the internal
auditors have free access to the Audit Committee, with and without
management representatives in attendance.
PAUL E. BRAGDON
PAUL E. BRAGDON
Chairman of Tektronix Audit Committee
CARL W. NEUN
CARL W. NEUN
Senior Vice President and
Chief Financial Officer of Tektronix, Inc.
INDEPENDENT AUDITORS' REPORT
To the Directors and Shareholders of Tektronix, Inc.:
We have audited the accompanying consolidated balance sheets of
Tektronix, Inc. and subsidiaries as of May 27, 1995 and May 28, 1994,
and the related consolidated statements of operations, shareholders'
equity, and cash flows for the years ended May 27, 1995, May 28, 1994,
and May 29, 1993. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits. The consolidated
financial statements give retroactive effect to the merger of
Tektronix, Inc., and Microwave Logic, Inc., which has been accounted
for as a pooling of interests as described in the Notes to
Consolidated Financial Statements.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such consolidated financial statements present
fairly, in all material respects, the financial position of Tektronix,
Inc. and subsidiaries at May 27, 1995 and May 28, 1994, and the
results of their operations and their cash flows for the years ended
May 27, 1995, May 28, 1994, and May 29, 1993, in conformity with
generally accepted accounting principles.
As discussed in the notes to the consolidated financial statements,
the Company adopted, in the year ended May 29, 1993, Statement of
Financial Accounting Standards No. 106, 'Employers' Accounting for
Postretirement Benefits Other Than Pensions', Statement of Financial
Accounting Standards No. 109, 'Accounting for Income Taxes', and in the
year ended May 27, 1995, Statement of Financial Accounting Standards
No. 115, 'Accounting for Certain Investments in Debt and Equity
Securities'.
DELOITTE & TOUCHE LLP
Portland, Oregon
June 21, 1995
27
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF OPERATIONS in thousands, except per share amounts
<CAPTION>
FOR THE YEAR ENDED MAY 27,1995 MAY 28,1994 MAY 29,1993
<S> <C> <C> <C>
Net sales $ 1,471,778 $ 1,324,981 $ 1,306,639
Operating costs and expenses:
Cost of sales 804,726 714,957 677,058
Research and development expenses 164,307 154,263 158,345
Selling, general and administrative expenses 391,797 367,008 397,794
Restructuring charges -- -- 150,000
----------------------------------------------
Total operating costs and expenses 1,360,830 1,236,228 1,383,197
Equity in business ventures' earnings (loss) 4,268 (1,601) (1,932)
----------------------------------------------
Operating income (loss) 115,216 87,152 (78,490)
Interest expense 10,083 10,139 10,414
Other income (expense) 4,744 9,080 (10,351)
----------------------------------------------
Earnings (loss) before taxes 109,877 86,093 (99,255)
Income taxes 28,568 25,204 (40,596)
----------------------------------------------
Earnings (loss) before cumulative effects
of accounting changes 81,309 60,889 (58,659)
Cumulative effects of accounting changes:
Income taxes -- -- 38,100
Postretirement benefits, net of tax -- -- (34,775)
----------------------------------------------
Net earnings (loss) $ 81,309 $ 60,889 $ (55,334)
==============================================
Earnings (loss) per share before cumulative effects
of accounting changes $ 2.63 $ 1.98 $ (1.94)
Earnings (loss) per share 2.63 1.98 (1.83)
Dividends per share 0.60 0.60 0.60
Average shares outstanding 30,934 30,689 30,304
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
28
<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS in thousands
<CAPTION>
MAY 27, 1995 MAY 28, 1994
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 31,742 $ 43,044
Accounts receivable -- net 311,865 268,258
Inventories 241,124 172,836
Other current assets 65,858 59,124
-----------------------------
Total current assets 650,589 543,262
Property, plant and equipment:
Land 7,234 11,738
Buildings 170,583 197,131
Machinery and equipment 444,938 446,990
-----------------------------
622,755 655,859
Accumulated depreciation and amortization (370,845) (430,944)
-----------------------------
Property, plant and equipment -- net 251,910 224,915
Property held for sale 35,912 39,776
Deferred tax assets 76,418 79,552
Other long-term assets 194,901 108,334
-----------------------------
Total assets $ 1,209,730 $ 995,839
=============================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 84,623 $ 17,875
Accounts payable 170,861 162,551
Accrued compensation 105,267 79,110
Deferred revenue 19,988 18,124
-----------------------------
Total current liabilities 380,739 277,660
Long-term debt 104,984 104,915
Other long-term liabilities 121,295 141,672
Commitments and contingencies -- --
Shareholders' equity:
Preferred stock, no par value (authorized 1,000 shares;
none issued) -- --
Common stock, no par value (authorized 80,000 shares;
issued and outstanding 31,439 in 1995, and
30,553 in 1994) 215,310 183,253
Retained earnings 298,402 235,528
Currency adjustment 76,948 52,811
Unrealized holding gains -- net 12,052 --
-----------------------------
Total shareholders' equity 602,712 471,592
-----------------------------
Total liabilities and shareholders' equity $ 1,209,730 $ 995,839
=============================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
29
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS in thousands
<CAPTION>
FOR THE YEAR ENDED MAY 27,1995 MAY 28,1994 MAY 29,1993
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ 81,309 $ 60,889 $ (55,334)
Adjustments to reconcile net earnings (loss) to cash from
operating activities:
Depreciation expense 40,669 55,182 63,243
Restructuring charges -- -- 150,000
Deferred taxes (966) 9,905 (60,938)
Accounting change for income taxes -- -- (38,100)
Accounting change for postretirement benefits -- -- 34,775
Equity (gains) losses, net of dividends received (4,268) 1,601 34,546
(Gains) losses on sale of assets (9,923) (14,402) 1,354
Accounts receivable (32,982) (23,445) (27,606)
Inventories (62,212) (903) 11,082
Accounts payable (4,367) 12,089 (62)
Accrued compensation 24,430 (26,971) (10,771)
Income taxes payable -- -- (24,548)
Other liabilities (22,866) (17,636) 4,618
Other assets (56,246) (12,379) (15,446)
Other -- net (8,934) 5,942 (511)
----------------------------------------------
Net cash provided (used) by operating activities (56,356) 49,872 66,302
----------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant and equipment (102,023) (71,255) (58,593)
Proceeds from sale of assets 42,210 51,978 9,794
Proceeds from sale of investments 23,920 26,285 --
----------------------------------------------
Net cash provided (used) by investing activities (35,893) 7,008 (48,799)
----------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in short-term debt 65,324 (44,821) 13,716
Issuance of long-term debt 1,396 105,331 70,593
Repayment of long-term debt (602) (77,929) (82,974)
Issuance of common stock 40,439 23,732 13,202
Repurchase of common stock (8,382) (33,831) --
Dividends (18,435) (18,129) (17,970)
----------------------------------------------
Net cash provided (used) by financing activities 79,740 (45,647) (3,433)
----------------------------------------------
Effect of exchange rate changes 1,207 1,771 (2,622)
----------------------------------------------
Increase (decrease) in cash and cash equivalents (11,302) 13,004 11,448
Cash and cash equivalents at beginning of year 43,044 30,040 18,592
----------------------------------------------
Cash and cash equivalents at end of year $ 31,742 $ 43,044 $ 30,040
==============================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS:
Income taxes paid $ 9,559 $ 6,379 $ 33,424
Interest paid 13,637 10,809 12,982
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
30
<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY in thousands
<CAPTION>
UNREALIZED
C O M M O N S T O C K RETAINED CURRENCY HOLDING
SHARES AMOUNT EARNINGS ADJUSTMENT GAINS TOTAL
<S> <C> <C> <C> <C> <C> <C>
BALANCE MAY, 30, 1992 29,893 $ 177,658 $ 266,072 $ 47,587 $ -- $ 491,317
Shares issued to employees 873 15,694 15,694
Net loss (55,334) (55,334)
Dividends--$0.60 per share (17,970) (17,970)
Currency adjustment 3,152 3,152
-------------------------------------------------------------------------------------
BALANCE MAY 29, 1993 30,766 193,352 192,768 50,739 -- 436,859
Shares issued to employees 1,125 23,732 23,732
Shares repurchased (1,338) (33,831) (33,831)
Net earnings 60,889 60,889
Dividends--$0.60 per share (18,129) (18,129)
Currency adjustment 2,072 2,072
-------------------------------------------------------------------------------------
BALANCE MAY 28, 1994 30,553 183,253 235,528 52,811 -- 471,592
Shares issued to employees 1,179 40,439 40,439
Shares repurchased (293) (8,382) (8,382)
Net earnings 81,309 81,309
Dividends--$0.60 per share (18,435) (18,435)
Unrealized holding gains--net 12,052 12,052
Currency adjustment 24,137 24,137
-------------------------------------------------------------------------------------
BALANCE MAY 27, 1995 31,439 $ 215,310 $ 298,402 $ 76,948 $ 12,052 $ 602,712
=====================================================================================
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
31
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION The consolidated financial statements
include the accounts of Tektronix, Inc. and its wholly and majority owned
subsidiaries (the Company). Investments in companies of 20 percent or
more and business ventures are accounted for on the equity basis. All
material intercompany transactions and balances have been eliminated.
FOREIGN CURRENCY TRANSLATION For most non-U.S. subsidiaries,
assets and liabilities are translated into U.S. dollars at current
exchange rates, and net earnings are translated at average exchange
rates for the year. Gains and losses resulting from the translation
of net assets are reported as a separate component of shareholders'
equity. For non-U.S. subsidiaries in highly inflationary countries,
net monetary assets are translated at current exchange rates and net
nonmonetary assets are translated at historical rates, with the
translation gains and losses included in net earnings. Gains
and losses from foreign currency transactions are included in net
earnings currently.
CASH AND CASH EQUIVALENTS Cash and cash equivalents include cash
deposits in banks and highly liquid investments with original maturities
of three months or less at the time of purchase.
INVESTMENTS In 1995, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, 'Accounting for Certain Investments
in Debt and Equity Securities'. Under SFAS No. 115, the Company now
classifies its investments in marketable securities as available-for-sale
and reports them at fair value in the consolidated balance sheet under
other long-term assets. The unrealized holding gains and losses, net
of the related deferred income taxes, are reported as a separate
component of shareholders' equity.
DERIVATIVES Gains and losses on forward foreign exchange contracts
used to hedge existing assets and liabilities are recognized in income
each period and generally offset losses and gains on the assets and
liabilities being hedged. Gains and losses related to qualifying
hedges of firm commitments or anticipated transactions are deferred
and included in the basis of the transaction when it is completed.
INVENTORIES Inventories are stated at the lower of cost or market.
Cost is determined on the first-in, first-out (FIFO) basis.
PROPERTY, PLANT AND EQUIPMENT Land, buildings and machinery and
equipment are carried at cost less accumulated depreciation.
Depreciation is based on the estimated useful lives of depreciable
assets, ranging from 10 to 48 years for buildings and 3 to 7 years for
machinery and equipment, and is generally provided using the straight-
line method.
Property held for sale is stated at the lower of cost or estimated
net realizable value and includes certain property, plant and equipment
no longer used in the Company's operations.
INTANGIBLE ASSETS Intangible assets are included in other long-
term assets at cost less accumulated amortization, which is provided
on a straight-line basis over a minimal time frame, generally not in
excess of ten years.
REVENUE RECOGNITION Revenue from product sales is recognized at
the time of shipment. Service revenue is recognized over the
contractual period or as services are provided.
RESEARCH AND DEVELOPMENT EXPENSES Expenditures for research,
development and engineering of products and manufacturing processes
are expensed as incurred.
INCOME TAXES In 1993, the Company adopted SFAS No. 109, 'Accounting
for Income Taxes'. Accordingly, deferred income taxes reflect the
impact of temporary differences between the assets and liabilities
recognized for financial reporting purposes and amounts recognized for
tax purposes. Deferred taxes are based on tax laws as currently
enacted.
Tektronix, Inc. and its U.S. subsidiaries file a consolidated federal
income tax return. Each U.S. subsidiary records its own tax provision and
makes payment to the parent company for taxes due or receives payment for
tax benefits utilized.
RECLASSIFICATION Certain items have been reclassified to conform
with the current year's presentation with no effect on previously
reported earnings.
PER SHARE AMOUNTS The per share amounts are based on the weighted
average number of shares outstanding during the year.
FISCAL YEAR The Company's fiscal year is the 52 or 53 weeks
ending the last Saturday in May. 1995, 1994 and 1993 were 52-week
fiscal years.
ACQUISITIONS
On March 31, 1995, the Company acquired all of the outstanding shares
of Microwave Logic, Inc. (MLI) in exchange for 283,000 shares of the
Company's common stock. MLI is a manufacturer of broadband
communication test equipment. The acquisition was accounted for as a
pooling of interests and, accordingly, the consolidated financial
statements have been restated to include the results and financial
position of MLI for all years presented.
In June, 1995, the Company completed its acquisition of all of the
outstanding shares of Lightworks Editing Systems Limited and
Lightworks Editing System, Inc. (Lightworks), which designs and
develops non-linear editing systems. The Company has issued 1,644,000
common shares to complete the acquisition. In fiscal year 1996, the
acquisition will be accounted for as a pooling of interests and the
financial statements will be restated to include the results and
financial position of Lightworks for all prior years.
Pro forma (unaudited) restated sales, net earnings and earnings
per share, assuming the Lightworks acquisition had occurred at the
beginning of 1993, are as follows:
<TABLE>
<CAPTION>
(In thousands, except per share amounts) 1995 1994 1993
-----------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales $1,497,962 $1,342,496 $1,318,389
Net earnings 81,584 61,493 (55,651)
Earnings per share 2.50 1.90 (1.74)
</TABLE>
32
<PAGE>
RESTRUCTURING CHARGES
In 1993, the Company provided for pre-tax restructuring charges of
$150.0 million for the purpose of exiting non-strategic components
operations to further reduce the Company's vertical integration,
consolidating facilities, refocusing on core business products,
discontinuing certain older products and other steps to improve
operating efficiency.
BUSINESS SEGMENTS
The Company and its affiliates operate predominately in a single
industry segment: the design, manufacture, sale and service of
electronic measurement, design and display instruments and systems
used in science, industry and education. Geographically, the Company
operates primarily in the industrialized world. Net sales, earnings
(loss) before taxes and total assets in the United States, Europe and
other geographical areas were:
<TABLE>
<CAPTION>
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales:
United States sales to customers $ 755,079 $ 743,794 $ 717,995
United States export sales to customers 224,657 187,783 196,921
United States transfers to affiliates 434,959 313,004 290,432
----------------------------------------------
United States sales 1,414,695 1,244,581 1,205,348
----------------------------------------------
European sales to customers 377,798 305,563 320,542
European transfers to affiliates 3,783 4,031 9,282
----------------------------------------------
European sales 381,581 309,594 329,824
----------------------------------------------
Other area sales to customers 114,244 87,841 71,181
Other area transfers to affiliates 15,184 9,427 10,754
----------------------------------------------
Other area sales 129,428 97,268 81,935
Eliminations (453,926) (326,462) (310,468)
----------------------------------------------
Net sales $ 1,471,778 $ 1,324,981 $ 1,306,639
==============================================
Earnings (loss) before taxes:
United States $ 123,515 $ 97,576 $ (98,562)
Europe (6,618) 3,698 317
Other areas 6,678 1,992 1,767
Corporate and eliminations (13,698) (17,173) (2,777)
----------------------------------------------
Earnings (loss) before taxes $ 109,877 $ 86,093 $ (99,255)
==============================================
Total assets:
United States $ 842,863 $ 704,258 $ 711,328
Europe 217,808 175,532 172,217
Other areas 47,530 34,170 28,016
Corporate and eliminations 101,529 81,879 76,761
----------------------------------------------
Total assets $ 1,209,730 $ 995,839 $ 988,322
==============================================
</TABLE>
Transfers of products and services are made at arms-length prices
between geographic areas. The profit on transfers between geographic
areas is not recognized until sales are made to unaffiliated
customers. Area earnings (loss) before taxes includes all directly
incurred and allocable costs, except identified corporate expenses.
Assets are those that are specifically associated with the operations of
each geographic area.
Net sales to the United States government were not more than 5% of
consolidated net sales in any of the past three years, and no other
customer accounted for more than 2% of sales.
NON-U.S. AFFILIATES
The Company has operating subsidiaries located in Australia, Austria,
Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Hong Kong
(with a branch in China), India, Italy, Korea, Mexico, The Netherlands,
Norway, Singapore, Spain, Sweden, Switzerland, Taiwan, and the United
Kingdom (with a branch in Ireland). The assets, liabilities, net sales
and earnings of non-U.S. subsidiaries are included in the consolidated
financial statements in these amounts:
<TABLE>
<CAPTION>
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current assets $ 223,651 $ 147,090 $ 128,015
Property, plant and equipment -- net 28,214 42,976 50,924
Other long-term assets 18,420 2,339 2,888
Current liabilities 93,104 65,086 71,350
Other liabilities 33,991 14,456 14,628
----------------------------------------------
Net sales $ 492,042 $ 393,404 $ 391,723
Gross profit 130,598 112,574 127,384
Operating income 4,192 3,184 2,217
Earnings before taxes 60 5,690 2,084
Net earnings (loss) (908) 9,314 1,375
</TABLE>
The Company has a 50% investment in a business venture in Japan. During
1995, the Company purchased an additional interest in a business venture
in India and prospectively consolidates and reports that company's
results and financial position as a majority owned subsidiary. The
Company's share of the assets, liabilities, net sales and net earnings
(loss) of its unconsolidated affiliates, as well as the Company's arms-
length sales to, purchases from, and accounts receivable consisted of:
<TABLE>
<CAPTION>
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current assets $ 84,787 $ 67,147 $ 94,050
Property, plant and equipment -- net 28,080 24,640 22,022
Other long-term assets 14,123 10,269 8,219
Current liabilities 29,002 20,537 49,055
Other liabilities 10,148 7,549 6,285
----------------------------------------------
Net sales $ 115,339 $ 94,246 $ 82,682
Gross profit 40,548 33,808 27,605
Operating income (loss) (1,486) (4,080) (6,306)
Earnings (loss) before taxes 96 (2,971) (4,521)
Net earnings (loss) (124) (1,601) (1,932)
----------------------------------------------
Sales to $ 84,618 $ 67,535 $ 63,958
Purchases from 10,259 5,585 5,990
Accounts receivable 5,199 11,117 11,663
</TABLE>
There are no significant restrictions which prevent dividends to the
parent company from non-U.S. affiliates. The Company received dividends
from business ventures of $33.2 million in 1993. There were no dividends
received in 1995 and 1994.
ACCOUNTS RECEIVABLE
Accounts receivable have been reduced by an allowance for doubtful
accounts, which was $5.7 million in 1995 and $3.8 million in 1994. The
net charges to this reserve for uncollected credit sales have not been
material.
33
<PAGE>
INVENTORIES
Inventories consisted of:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Materials and work in process $ 139,617 $ 90,727
Finished goods 101,507 82,109
-----------------------------
Inventories $ 241,124 $ 172,836
=============================
</TABLE>
OTHER LONG-TERM ASSETS
Other long-term assets consisted of:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment in business ventures $ 115,350 $ 74,703
Marketable securities 29,392 5,129
Licensing agreements and other intangibles, net 22,653 17,649
Other 27,506 10,853
-----------------------------
Other long-term assets $ 194,901 $ 108,334
=============================
</TABLE>
The Company's portion of undistributed earnings in business ventures
in 1995 and 1994 was $18.7 million and $13.8 million, respectively.
The company has a 35% equity interest in Merix Corporation. At May 27,
1995, the carrying value of that interest was $16.6 million, with a
fair value, based upon quoted market price, of $51.0 million.
Upon adoption of SFAS No. 115 in 1995, the Company changed its
reporting of investments in marketable securities to fair value from
cost. During 1995, the Company recorded proceeds of $16.7 million and
gross realized gains of $14.3 million from the sale of these
securities. Realized gains were computed using the average cost of the
underlying securities. Net unrealized holding gains of $20.1 million,
less deferred income taxes of $8.0 million, are reported as a separate
component of shareholders' equity.
Licensing agreements and other intangibles have been reduced by
accumulated amortization of $12.3 million in 1995 and $15.3 million in
1994.
SHORT-TERM AND LONG-TERM DEBT
The Company's short-term debt consisted of:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Commercial paper $ 34,910 $ --
Revolving credit agreement 25,000 --
Lines of credit 23,113 16,754
-----------------------------
Short-term instruments 83,023 16,754
Current maturities of long-term debt 1,600 1,121
-----------------------------
Short-term debt $ 84,623 $ 17,875
=============================
</TABLE>
The Company has a $150.0 million revolving credit agreement with Morgan
Guaranty Trust Company of New York as agent that matures on December 1,
1998. The Company has an agreement with U.S. National Bank of Oregon
to issue up to $100.0 million in commercial paper, backed by the
revolving credit agreement. At May 27, 1995, the Company maintained
unused bank credit facilities of $267.8 million, including $177.7
million in lines of credit and $90.1 million in the revolving credit
agreement. At May 27, 1995, the interest rates averaged 6.4% on
commercial paper and 5.3% on utilized lines of credit, and was 6.6% on
the revolving credit agreement.
The Company's long-term debt consisted of:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
7.5% Notes due August 1, 2003 $ 100,000 $ 100,000
Other long-term agreements 6,584 6,036
-----------------------------
Long-term instruments 106,584 106,036
Current maturities (1,600) (1,121)
-----------------------------
Long-term debt $ 104,984 $ 104,915
=============================
</TABLE>
Certain of the Company's debt agreements require the maintenance of
specified interest rate coverage ratios and a minimum consolidated
tangible net worth. At May 27, 1995, the Company had unrestricted
retained earnings of $46.7 million after meeting those requirements.
Aggregate long-term debt payments will be $1.6 million in 1996,
$2.7 million in 1997, $1.6 million in 1998, $0.7 million in 1999, and
none in 2000.
OTHER LONG-TERM LIABILITIES
Other long-term liabilities consisted of:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Accrued pension $ 53,085 $ 43,881
Accrued postretirement benefits 49,233 54,480
Other 18,977 43,311
-----------------------------
Other long-term liabilities $ 121,295 $ 141,672
=============================
</TABLE>
OTHER INCOME (EXPENSE)
Other income (expense) consisted of:
<TABLE>
<CAPTION>
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gain on sale of marketable securities $ 14,314 $ 13,309 $ --
Charitable contributions (2,562) (2,824) (3,148)
Currency losses (2,231) (1,980) (2,825)
Other (4,777) 575 (4,378)
----------------------------------------------
Other income (expense) $ 4,744 $ 9,080 $ (10,351)
==============================================
</TABLE>
COMMITMENTS AND CONTINGENCIES
Rental expense was $28.0 million in 1995, $20.7 million in 1994, and
$19.9 million in 1993. The future minimum obligations under operating
leases and other commitments having an initial or remaining
noncancelable term in excess of one year as of May 27, 1995, are:
<TABLE>
<CAPTION>
(In thousands) Operating Leases Commitments
-----------------------------------------------------------
<S> <C> <C>
1996 $ 16,081 $ 20,209
1997 12,342 15,816
1998 6,531 3,767
1999 2,955 125
2000 1,314 --
Future Years 3,302 --
-------------------------
Total $ 42,525 $ 39,917
=========================
34
<PAGE>
The Company signed a supply agreement pursuant to the 1994 sale of its
Integrated Circuit Operation to Maxim Integrated Products, Inc. Under
the agreement, the Company has minimum purchase requirements through 1997.
The Company also has long-term or minimum purchase agreements with
various other suppliers.
In the normal course of business, the Company and its subsidiaries
are parties to various legal claims, actions and complaints, including
matters involving patent infringement and other intellectual property
claims. Although it is impossible to predict with certainty whether or
not the Company and its subsidiaries will ultimately be successful in
any of these legal matters or, if not, what the impact might be, the
Company believes that disposition of these matters will not have a
material adverse effect on the Company's financial position and
results of operations.
SHAREHOLDERS' EQUITY
STOCK OPTION AND INCENTIVE COMPENSATION PLANS The Company has stock
option plans for selected employees. There were 4,211,000 shares
reserved for issuance under these plans at May 27, 1995. Under the
terms of the plans, incentive stock options are granted at an option
price not less than the market value at the date of grant.
Nonqualified stock options may not be granted at less than 50% of the
market value at the date of grant. The exercise period for the options
is not to exceed 10 years.
Activity under the option plans was:
</TABLE>
<TABLE>
<CAPTION>
(Options in thousands) 1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at beginning of year 2,866 3,324 3,085
Granted 812 758 1,066
Exercised (1,102) (925) (451)
Canceled (217) (291) (376)
---------------------------------------------
Outstanding at end of year 2,359 2,866 3,324
=============================================
Options exercisable at end of year 869 1,312 1,348
Option prices per share:
Granted $ 29 - 46 $ 22 - 28 $ 18 - 27
Exercised 13 - 33 13 - 28 13 - 25
Canceled 17 - 37 13 - 42 13 - 38
----------------------------------------------
Exercisable at end of year $ 13 - 33 $ 13 - 33 $ 13 - 42
----------------------------------------------
</TABLE>
There were 1,045 employees holding options at May 27, 1995. The
Company also has cash and stock incentive compensation plans for
certain executives. The plans provide for compensation based on
financial performance over one- and three-year periods.
SHAREHOLDER RIGHTS AGREEMENT In August 1990, the Company's Board
of Directors approved a shareholder rights agreement and declared a
dividend of one right for each outstanding common share. Each right
entitles the holder to purchase one one-thousandth of a share of
Series A No Par Preferred Shares at an exercise price of $60, subject
to adjustment. Generally, the rights become exercisable 10 days after
a person or group acquires or commences a tender offer that would
result in beneficial ownership of 20% or more of the common shares. In
addition, the rights become exercisable if any party becomes the
beneficial owner of 10% or more of the outstanding common shares and
is determined by the Board of Directors to be an adverse party. Upon
the occurrence of certain additional events specified in the
shareholder rights agreement, each right would entitle its holder to
purchase common shares of the Company (or, in some cases, a potential
acquiring company) or other property having a value of twice the
right's exercise price. The rights, which are not currently
exercisable, expire in September, 2000, but may be redeemed by action
of the Board prior to that time, under certain circumstances, for
$0.01 per right.
BENEFIT PLANS
PENSION PLANS The Company has defined benefit retirement plans
covering most employees. Benefits upon retirement or termination are
based on length of service and final average compensation at
retirement.
The Company's funding policy is to contribute amounts determined
annually on an actuarial basis that provide for current and future
benefits in accordance with funding requirements of applicable laws
and regulations of the countries in which the plans are located.
Assets of funded benefit plans are held primarily in trust accounts.
The majority of the assets are invested in common stocks, bonds and
real estate, with the balance primarily in cash and short-term
investments.
The following tables set forth the funded status and the amounts
recognized in the financial statements for the Company's defined
benefit retirement plans:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
Assets exceed Accumulated Assets exceed Accumulated
accumulated benefits accumulated benefits
benefits exceed assets benefits exceed assets
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $ 53,416 $ 341,778 $ 22,333 $ 300,841
===============================================================
Accumulated benefit
obligation $ 58,531 $ 361,623 $ 26,498 $ 318,650
===============================================================
Projected benefit obligation $ 69,927 $ 404,264 $ 39,601 $ 359,050
Plan assets at fair value 66,249 319,411 35,384 304,510
---------------------------------------------------------------
Projected benefit obligation
in excess of plan assets 3,678 84,853 4,217 54,540
Unrecognized initial net
asset (obligation) 193 5,244 (806) 7,415
Unrecognized prior service cost (962) (9,792) (116) (11,466)
Unrecognized net loss (2,276) (30,098) (3,139) (7,129)
---------------------------------------------------------------
Accrued pension $ 633 $ 50,207 $ 156 $ 43,360
===============================================================
</TABLE>
35
<PAGE>
Assumptions used in the accounting for the defined benefit plans were:
<TABLE>
<CAPTION>
1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Overall weighted-average discount rates 8.1% 8.2% 8.0%
Overall rates of increase in compensation levels 4.8% 4.8% 4.7%
Expected long-term rate of return on plan assets 9.3% 9.4% 9.4%
</TABLE>
Net periodic pension expense includes the following components:
<TABLE>
<CAPTION>
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 8,983 $ 9,346 $ 8,844
Interest cost 33,693 30,458 29,801
Actual return on plan assets (36,587) (22,721) (25,108)
Net amortization and deferral 3,987 (9,072) (5,681)
----------------------------------------------
Net periodic pension expense 10,076 8,011 7,856
Other benefit plans 928 1,114 1,261
----------------------------------------------
Pension expense $ 11,004 $ 9,125 $ 9,117
==============================================
</TABLE>
A credit of $4.4 million arising from employee reductions and the
related impact on pension expense recognized in prior years, was
recognized during 1993. As a result, pension expense was reduced by
$1.0 million in 1993.
POSTRETIREMENT BENEFITS In 1993, the Company adopted SFAS No. 106,
'Accounting for Postretirement Benefits Other than Pensions', which
requires the recognition of the cost of postretirement health care and
life insurance benefits over the active service period of its
employees. The Company elected to recognize the transition obligation
of $57.1 million, which represented the previously unrecognized prior
service cost, immediately upon implementation. This resulted in a one-
time non-cash charge of $34.8 million, net of applicable income
taxes. In addition, the Company also recognized a curtailment gain of
$2.9 million in 1993 arising from employee reductions that resulted in
a decrease in the accumulated postretirement benefit obligation.
During 1995, the Company revised its postretirement welfare
programs to modify company-paid benefits for current and future
retirees. Beginning August 1, 1995, employees who retire on or after
that date will pay the full cost of their medical and life insurance
coverage. The subsidies currently provided to existing retirees will
be eliminated by 1997. Retirees who have accumulated insurance credits
may apply them toward the purchase of medical and life insurance
benefits. The revisions resulted in an unrecognized prior service cost
gain of $26.7 million that will be amortized over 10 years as a
reduction in postretirement benefit expense. In addition, as a result
of the revisions, the postretirement benefit expense for the year
decreased in total by $5.6 million, resulting in a net credit to
earnings before taxes for 1995 of $2.1 million.
The status of the Company's unfunded postretirement benefit
obligation was:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation (APBO):
Current retirees $ 10,981 $ 32,209
Active employees eligible to retire 3,776 9,620
Other active employees 2,894 11,475
-----------------------------
Total accumulated obligation 17,651 53,304
Unrecognized prior service cost gain 24,039 --
Unrecognized net gain 11,053 4,687
-----------------------------
Accrued postretirement benefits $ 52,743 $ 57,991
=============================
</TABLE>
The net postretirement benefit expense includes the following
components:
<TABLE>
<CAPTION>
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost $ 184 $ 1,008 $ 1,038
Interest cost 1,286 4,405 5,018
Net amortization (3,587) -- --
----------------------------------------------
Postretirement benefit expense (credit) $ (2,117) $ 5,413 $ 6,056
==============================================
</TABLE>
The discount rate and rate of salary increase used in determining the
APBO for both 1995 and 1994 were 8.3% and 4.8%, respectively. The health
care cost trend rates used in measuring the APBO at May 27, 1995, ranged
from 8.6% to 11.5%, depending on the specific plans, and are assumed to
decrease gradually until they reach 5.8% in the year 2003 and remain
level thereafter. The health care cost trend rates in 1994 ranged from
9.0% to 12.3%, and were also assumed to decline to 5.8% over a similar
period. The health care cost trend rate assumptions can have a
significant effect on the amounts reported. However, because of the
nature of the program revisions adopted in 1995, changing the assumptions
by one percent would not have a material impact on the APBO at May 27,
1995 and the postretirement expense for the year.
EMPLOYEE SAVINGS PLANS The Company has two employee savings plans
that qualify as deferred salary arrangements under Section 401(k) of
the Internal Revenue Code. Participating U.S. employees may defer up
to 15% of their pre-tax earnings subject to certain regulatory
limitations. Employee contributions are invested, at the employees'
direction, among a variety of investment alternatives. Depending on the
plan, the Company currently matches up to 3% of an employee's salary
either in Company stock or cash. In addition, the Company also makes a
contribution for certain employees equal to 2% of the employee's
annual base pay, even if the employee does not currently contribute to
a plan. The latter contribution is made regardless of the Company's
performance and is invested entirely in Company stock. Total cost for
these plans was approximately $11.1 million in 1995, $12.7 million in
1994, and $13.1 million in 1993.
DERIVATIVE FINANCIAL INSTRUMENTS
The Company, as a part of its management of assets and liabilities, enters
into derivative financial instruments to reduce financial market risks.
These instruments
36
<PAGE>
are used to hedge foreign currency and interest rate exposures of underlying
assets and liabilities. These instruments involve elements of market risk
which offset the market risk of the underlying assets and liabilities they
hedge. The Company does not hold or issue derivative financial instruments
for trading purposes.
The notional or contract amounts of the derivative financial
instruments do not represent amounts exchanged by the parties involved
and, thus, are not a measure of the Company's exposure. The Company is
potentially subject to risk in the event of nonperformance by
counterparties to its derivative financial instruments. However, the
Company has entered into these instruments with creditworthy financial
institutions and considers the risk of nonperformance to be remote.
The fair value of foreign exchange contracts approximates the notional
amount of the contracts at the reporting date.
FOREIGN EXCHANGE RISK MANAGEMENT The Company enters into forward
exchange contracts to hedge its foreign exchange risk. At the end of
1995 and 1994, the notional amount of the Company's outstanding
contracts was $54.9 million and $20.6 million, respectively.
Generally, these contracts have maturities that do not exceed one year
and require the Company to exchange foreign currencies for U.S.
dollars at maturity. The purpose of the Company's hedging activities
is to reduce the risk that the eventual cash flows are adversely
affected by changes in exchange rates. Deferred gains or losses
attributable to foreign currency instruments are not material.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments are
as follows:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
Carrying Carrying
amount Fair value amount Fair value
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Financial assets:
Cash & cash equivalents $ 31,742 $ 31,742 $ 43,044 $ 43,044
Accounts receivable: 311,865 311,865 268,258 268,258
Other long-term assets:
Marketable securities 29,392 29,392 5,129 26,574
Long-term receivables 30,749 30,609 5,420 5,420
Financial liabilities:
Short-term debt 84,623 84,623 17,875 17,875
Accounts payable 170,861 170,861 162,551 162,551
Long-term debt 104,984 104,651 104,915 104,915
</TABLE>
The fair values of cash and cash equivalents, accounts receivable,
short-term debt and accounts payable approximate cost because of the
immediate or short-term maturity of these financial instruments. The
fair value of marketable securities is based on quoted market prices
at the reporting date. The fair value of long-term receivables and
long-term debt is estimated based on quoted market prices for similar
instruments or by discounting expected cash flows at rates currently
available to the Company for instruments with similar risks and
maturities.
CONCENTRATIONS OF CREDIT RISK
Financial instruments that potentially subject the Company to
concentrations of credit risk consist principally of trade accounts
receivable. The risk is limited due to the large number of entities
comprising the Company's customer base and their dispersion across
many different industries and geographies. At May 27, 1995, the
Company had no significant concentrations of credit risk.
INCOME TAXES
The effective tax rate for 1995 was 26% compared to a U.S. statutory
rate of 35%. The lower effective tax rate was primarily due to the
ability of the Company to reduce its deferred tax valuation allowance
from prior years. The reduction in the valuation allowance was made
possible after permission was obtained from the Internal Revenue
Service to capitalize the costs of a major research and development
project. Capitalization of such costs increased the amount of deferred
tax assets utilized in 1995, thereby necessitating a lower valuation
allowance against deferred tax assets.
The components of earnings (loss) before taxes are contained in
the Business Segments footnote. The provision for income taxes
consisted of:
<TABLE>
<CAPTION>
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current
Federal $ 17,769 $ 9,077 $ 12,049
State 4,041 2,900 716
Non-U.S. 6,624 3,938 12,140
----------------------------------------------
28,434 15,915 24,905
Deferred
Federal 4,649 15,167 (49,969)
State 641 1,684 (8,569)
Non-U.S. (5,156) (7,562) (6,963)
----------------------------------------------
134 9,289 (65,501)
----------------------------------------------
Total provision $ 28,568 $ 25,204 $ (40,596)
==============================================
</TABLE>
The provisions differ from the amounts that would result by applying
the U.S. statutory rate to earnings (loss) before taxes. A
reconciliation of the difference is:
<TABLE>
<CAPTION>
(In thousands) 1995 1994 1993
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income taxes based on U.S. statutory rate $ 38,457 $ 30,133 $ (33,747)
Change in beginning of year valuation allowance (6,842) (5,981) --
Foreign sales corporations (3,196) (3,926) (328)
State income taxes, net of U.S. tax 3,043 2,980 (5,183)
Provision for audit adjustments 1,299 3,060 (7,793)
Other U.S. adjustments (1,137) 1,840 777
Foreign taxes on non-U.S. source income (2,542) (4,370) 5,678
Capital gains adjustments from sale of investments (514) (2,678) --
Prior year foreign tax credits -- 6,422 --
Benefit of tax rate change -- (2,276) --
----------------------------------------------
Income taxes $ 28,568 $ 25,204 $ (40,596)
==============================================
</TABLE>
37
<PAGE>
Net deferred tax assets and liabilities are included in the following
consolidated balance sheet accounts:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Other current assets $ 37,097 $ 41,031
Deferred tax assets 76,418 79,552
-----------------------------
Net deferred tax assets $ 113,515 $ 120,583
=============================
</TABLE>
The temporary differences and carryforwards that give rise to deferred
tax assets and liabilities were as follows:
<TABLE>
<CAPTION>
(In thousands) 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax assets:
Reserves and other liabilities $ 47,789 $ 39,396
AMT and foreign tax credit carryforwards 21,297 36,886
Accrued postretirement benefits 21,097 23,196
Accumulated depreciation 18,894 1,196
Accrued pension obligation 16,699 14,059
Net operating losses of non-U.S. affiliates 16,395 8,388
Restructuring costs and separation programs 3,395 31,551
-----------------------------
Gross deferred tax assets 145,566 154,672
Less valuation allowance (12,455) (19,297)
-----------------------------
Deferred tax assets 133,111 135,375
Deferred tax liabilities:
Unamortized LIFO reserve (11,562) (14,792)
Unrealized gains on marketable securities (8,034) --
-----------------------------
Deferred tax liabilities (19,596) (14,792)
-----------------------------
Net deferred tax assets $ 113,515 $ 120,583
=============================
</TABLE>
There are $9.8 million of unused foreign tax credits which, if not
used, will expire between 1997 and 1998. There are $11.5 million of
alternative minimum tax (AMT) credits that can be carried forward
indefinitely.
QUARTERLY FINANCIAL DATA (UNAUDITED)
In the opinion of management, this unaudited quarterly financial
summary includes all adjustments necessary to present fairly the
results for the periods represented (in thousands, except per share
amounts):
<TABLE>
<CAPTION>
13 weeks to Aug. 27, 1994 Nov. 26, 1994 Feb. 25, 1995 May 27, 1995
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 314,695 $ 350,307 $ 367,231 $ 439,545
Gross profit 152,634 160,708 163,881 189,829
Operating income 23,123 26,807 30,245 35,041
Earnings before taxes 21,560 24,632 29,289 34,396
Net earnings $ 15,938 $ 18,181 $ 21,721 $ 25,469
Earnings per share $ 0.52 $ 0.59 $ 0.70 $ 0.82
Dividends per share 0.15 0.15 0.15 0.15
Common stock prices: High $ 32.63 $ 40.00 $ 38.38 $ 47.00
Low 27.63 33.13 32.38 32.00
</TABLE>
<TABLE>
<CAPTION>
13 weeks to Aug. 28, 1993 Nov. 27,1993 Feb. 26,1994 May 28,1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 291,581 $ 318,872 $ 334,738 $ 379,790
Gross profit 136,777 146,252 152,880 174,115
Operating income 14,721 19,144 23,042 30,245
Earnings before taxes 11,246 17,347 23,612 33,888
Net earnings $ 9,682 $ 11,445 $ 15,656 $ 24,106
Earnings per share $ 0.31 $ 0.38 $ 0.51 $ 0.78
Dividends per share 0.15 0.15 0.15 0.15
Common stock prices: High $ 27.50 $ 25.50 $ 28.25 $ 33.38
Low 22.13 21.38 21.38 26.00
</TABLE>
The Company's common stock is traded on the New York and Pacific Stock
Exchanges. There were 4,538 shareholders of record at June 21, 1995.
The above quoted market prices are the composite prices reported by
The Wall Street Journal rounded to full cents per share.
Dividends are paid at the discretion of the Board of Directors
dependent upon their judgment of the Company's future earnings,
expenditures and financial condition.
[Line chart depicting 1994 and 1995 stock prices, by quarter]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1994 1994 1994 1994 1995 1995 1995 1995
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
High $27.50 $25.50 $28.25 $33.38 $32.63 $40.00 $38.38 $47.00
Low 22.13 21.38 21.38 26.00 27.63 33.13 32.38 32.00
</TABLE>
38
EXHIBIT 21
Exhibit 21
Subsidiaries of Tektronix, Inc.
Percentage of Voting
Name of Subsidiary and Securities Owned by
Jurisdiction in Which Organized Immediate Parent
__________________________________ ____________________
Tektronix Ges.m.b.H. (Austria) 100%
Tektronix GmbH (Germany) 100
Tektronix Canada Inc. (Canada) 100
Tektronix Australia Pty. Limited (Australia) 100
Grass Valley Group Pty. Limited (Australia) 100
Tektronix (France) 100
Tektronix N.V. (Belgium) 100
Tektronix, S.A. de C.V. (Mexico) 100
Tektronix A/S (Denmark) 100
Tektronix S.p.A. (Italy) 100
Tektronix Norge A/S (Norway) 100
Tektronix AB (Sweden) 100
Tektronix Oy (Finland) 100
Tektronix Industria e Comercio Ltda. (Brazil) 100
Tektronix Europe B.V. (The Netherlands) 100
The Grass Valley Group, Inc. (California) 100
GVG International, Ltd. (California) 100
GVG Japan, Ltd. (Japan) 100
Grass Valley International, Inc. (Guam) 100
Tektronix International A.G. (Switzerland) 100
Tektronix Holland N.V. 100
(The Netherlands)
<PAGE>
Page 2. Exhibit 21
Tektronix U.K. Limited 100
(England)
GVG Limited (United Kingdom) 100
Bouwerij Heerenveen N.V. 100
(The Netherlands)
Tektronix Espanola, S.A. (Spain) 100
Tektronix Development Company (Oregon) 100
Tektronix Foreign Sales Corporation (Guam) 100
Tektronix China, Limited (Hong Kong) 100
Tektronix Hong Kong Limited (Hong Kong) 100
Tektronix International, Inc. (Oregon) 100
Yangzhong Tektronix Electronic Instrument Co., Ltd. 70
(China)
Shanghai Tektronix Electronic Instrument Co., Ltd. 65
(China)
Chongqing Tektronix Electronic Instrument Co., Ltd. 60
(China)
Tektronix Taiwan, Ltd. (Taiwan) 100
Tektronix Properties, Inc. (Oregon) 100
Tektronix Federal Systems, Inc. (Oregon) 100
Tektronix Asia, Ltd. (Oregon) 100
Tektronix Singapore Pte Ltd (Singapore) 100
Tektronix Europe, Inc.(Oregon) 100
Tektronix Korea, Ltd. (Korea) 100
Hinditron Tektronix Instruments Limited (India) 62
Microwave Logic, Inc. (Massachusetts) 100
Lightworks Editing Systems Limited (United Kingdom) 100
Lightworks Editing System, Inc. (California) 100
<PAGE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration
Statement Nos. 33-59171, 33-58511, 33-33496, and 33-30648 of
Tektronix, Inc. on Form S-8 and Registration Statement Nos.
33-58635, 33-58513, 33-18658, and 33-59648 of Tektronix, Inc. on
Form S-3 of our report dated June 21, 1995 (which expresses an
unqualified opinion and includes an explanatory paragraph
relating to a change in method of accounting for other
postretirement benefits and income taxes in the year ended May
29, 1993 and a change in method of accounting for certain
investments in debt and equity securities in the year ended May
27, 1995), incorporated by reference in this Annual Report on
Form 10-K of Tektronix, Inc. for the year ended May 27, 1995.
DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
Portland, Oregon
August 9, 1995
<PAGE>
EXHIBIT 24
POWER OF ATTORNEY
The undersigned constitutes and appoints JEROME J. MEYER, CARL W.
NEUN and JOHN P. KARALIS and each of them, as the undersigned's
true and lawful attorneys and agents, with full power of
substitution and resubstitution for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to
sign the Tektronix, Inc. Annual Report on Form 10-K for the year
ended May 27, 1995 and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of them, full
power and authority to do any and all acts and things necessary or
advisable to be done, as fully and to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Dated: July 29, 1995
PAUL C. ELY, JR.
_________________________
Paul C. Ely, Jr.
<PAGE>
POWER OF ATTORNEY
The undersigned constitutes and appoints JEROME J. MEYER, CARL W.
NEUN and JOHN P. KARALIS and each of them, as the undersigned's
true and lawful attorneys and agents, with full power of
substitution and resubstitution for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to
sign the Tektronix, Inc. Annual Report on Form 10-K for the year
ended May 27, 1995 and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of them, full
power and authority to do any and all acts and things necessary or
advisable to be done, as fully and to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Dated: August 4, 1995
A.M. GLEASON
______________________
A.M. Gleason
<PAGE>
POWER OF ATTORNEY
The undersigned constitutes and appoints JEROME J. MEYER, CARL W.
NEUN and JOHN P. KARALIS and each of them, as the undersigned's
true and lawful attorneys and agents, with full power of
substitution and resubstitution for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to
sign the Tektronix, Inc. Annual Report on Form 10-K for the year
ended May 27, 1995 and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of them, full
power and authority to do any and all acts and things necessary or
advisable to be done, as fully and to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Dated: July 31, 1995
WAYLAND R. HICKS
___________________________
Wayland R. Hicks
<PAGE>
POWER OF ATTORNEY
The undersigned constitutes and appoints JEROME J. MEYER, CARL W.
NEUN and JOHN P. KARALIS and each of them, as the undersigned's
true and lawful attorneys and agents, with full power of
substitution and resubstitution for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to
sign the Tektronix, Inc. Annual Report on Form 10-K for the year
ended May 27, 1995 and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of them, full
power and authority to do any and all acts and things necessary or
advisable to be done, as fully and to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Dated: August 3, 1995
JEROME J. MEYER
__________________________
Jerome J. Meyer
<PAGE>
POWER OF ATTORNEY
The undersigned constitutes and appoints JEROME J. MEYER, CARL W.
NEUN and JOHN P. KARALIS and each of them, as the undersigned's
true and lawful attorneys and agents, with full power of
substitution and resubstitution for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to
sign the Tektronix, Inc. Annual Report on Form 10-K for the year
ended May 27, 1995 and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of them, full
power and authority to do any and all acts and things necessary or
advisable to be done, as fully and to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Dated: July 30, 1995
KEITH R. MCKENNON
__________________________
Keith R. McKennon
<PAGE>
POWER OF ATTORNEY
The undersigned constitutes and appoints JEROME J. MEYER, CARL W.
NEUN and JOHN P. KARALIS and each of them, as the undersigned's
true and lawful attorneys and agents, with full power of
substitution and resubstitution for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to
sign the Tektronix, Inc. Annual Report on Form 10-K for the year
ended May 27, 1995 and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of them, full
power and authority to do any and all acts and things necessary or
advisable to be done, as fully and to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Dated: August 4, 1995
A. GARY AMES
_______________________
A. Gary Ames
<PAGE>
POWER OF ATTORNEY
The undersigned constitutes and appoints JEROME J. MEYER, CARL W.
NEUN and JOHN P. KARALIS and each of them, as the undersigned's
true and lawful attorneys and agents, with full power of
substitution and resubstitution for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to
sign the Tektronix, Inc. Annual Report on Form 10-K for the year
ended May 27, 1995 and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of them, full
power and authority to do any and all acts and things necessary or
advisable to be done, as fully and to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Dated: July 29, 1995
WILLIAM D. WALKER
__________________________
William D. Walker
<PAGE>
POWER OF ATTORNEY
The undersigned constitutes and appoints JEROME J. MEYER, CARL W.
NEUN and JOHN P. KARALIS and each of them, as the undersigned's
true and lawful attorneys and agents, with full power of
substitution and resubstitution for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to
sign the Tektronix, Inc. Annual Report on Form 10-K for the year
ended May 27, 1995 and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of them, full
power and authority to do any and all acts and things necessary or
advisable to be done, as fully and to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Dated: August 1, 1995
JEAN VOLLUM
_____________________
Jean Vollum
<PAGE>
POWER OF ATTORNEY
The undersigned constitutes and appoints JEROME J. MEYER, CARL W.
NEUN and JOHN P. KARALIS and each of them, as the undersigned's
true and lawful attorneys and agents, with full power of
substitution and resubstitution for the undersigned and in the
undersigned's name, place and stead, in any and all capacities, to
sign the Tektronix, Inc. Annual Report on Form 10-K for the year
ended May 27, 1995 and any and all amendments thereto, and to file
the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys and agents, and each of them, full
power and authority to do any and all acts and things necessary or
advisable to be done, as fully and to all intents and purposes as
the undersigned might or could do in person, hereby ratifying and
confirming all that said attorneys and agents or either of them, or
their or his substitute or substitutes, may lawfully do or cause to
be done by virtue hereof.
Dated: July 27, 1995
MERRILL A. MCPEAK
___________________________
Merrill A. McPeak
<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>
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-27-1995
<PERIOD-END> MAY-27-1995
<CASH> 31,742
<SECURITIES> 0
<RECEIVABLES> 317,541
<ALLOWANCES> (5,676)
<INVENTORY> 241,124
<CURRENT-ASSETS> 650,589
<PP&E> 622,755
<DEPRECIATION> (370,845)
<TOTAL-ASSETS> 1,209,730
<CURRENT-LIABILITIES> 380,739
<BONDS> 104,984
<COMMON> 215,310
0
0
<OTHER-SE> 387,402
<TOTAL-LIABILITY-AND-EQUITY> 1,209,730
<SALES> 0
<TOTAL-REVENUES> 1,471,778
<CGS> 0
<TOTAL-COSTS> 804,726
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,083
<INCOME-PRETAX> 109,877
<INCOME-TAX> 28,568
<INCOME-CONTINUING> 81,309
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 81,309
<EPS-PRIMARY> 2.63
<EPS-DILUTED> 2.63
</TABLE>
