<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(4) Date Filed:
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<PAGE>
[LOGO]
August 20, 1997
Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of
Tektronix, Inc., which will be held on Thursday, September 25, 1997, at 10:00
a.m., at the Portland Hilton, 921 S.W. Sixth Avenue, Portland, Oregon.
The attached notice of meeting and proxy statement describe the matters to be
acted upon at the meeting.
It is important that your shares be represented and voted at the meeting whether
or not you plan to attend. Therefore, we urge you to complete the enclosed proxy
and return it in the envelope provided.
We look forward to greeting as many of our shareholders as possible.
Sincerely,
[SIGNATURE]
Jerome J. Meyer
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
AND PRESIDENT
<PAGE>
[LOGO]
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
ON SEPTEMBER 25, 1997
To the Shareholders of Tektronix, Inc.:
The annual meeting of the shareholders of Tektronix, Inc., an Oregon
corporation, will be held in accordance with the bylaws on Thursday, September
25, 1997, at 10:00 a.m., local time, at the Portland Hilton, 921 S.W. Sixth
Avenue, Portland, Oregon, for the following purposes:
1. Electing three directors; and
2. Transacting such other business as may properly come before the meeting.
Only shareholders of record at the close of business on Monday, August 4, 1997,
will be entitled to notice of, and to vote at, the annual meeting.
BY ORDER OF THE BOARD OF DIRECTORS
John P. Karalis, SECRETARY
Wilsonville, Oregon
August 20, 1997
<PAGE>
TEKTRONIX, INC.
PROXY STATEMENT
The annual meeting of shareholders of Tektronix, Inc. (the "Company" or
"Tektronix") will be held Thursday, September 25, 1997, at 10:00 a.m., at the
Portland Hilton, 921 S.W. Sixth Avenue, Portland, Oregon. The board of directors
of Tektronix has directed that this background material be supplied to help you
decide how to vote on the matters to come before the meeting. The enclosed proxy
is being solicited by the board. You are invited to use that proxy to vote. The
shares represented by the enclosed proxy will be voted if the proxy is properly
signed and received before the meeting begins. Solicitation of proxies on behalf
of the board of directors may be made by mail, personal interviews, telephone or
facsimile by Tektronix officers and employees. Tektronix has also retained
Morrow & Co., Inc. to assist in the solicitation of proxies from shareholders
(primarily brokers, banks and other institutional shareholders) for a fee
estimated at approximately $4,000 plus certain expenses. The costs of such
solicitation will be paid by the Company. The approximate date this proxy
statement and the accompanying proxy form are first being sent to shareholders
is August 20, 1997.
Any person giving a proxy in the form accompanying this proxy statement has
the power to revoke it at any time before its exercise. The proxy may be revoked
by filing with the Secretary of the Company an instrument of revocation or a
duly executed proxy bearing a later date. The proxy may also be revoked by
affirmatively electing to vote in person while in attendance at the meeting.
However, a shareholder who attends the meeting need not revoke the proxy and
vote in person unless he or she wishes to do so.
There were 33,616,112 Common Shares of the Company outstanding at the close
of business on August 4, 1997, the record date for the annual meeting. Each
Common Share is entitled to one vote.
Participants in the Tektronix 401(k) Plan ("401(k) Plan") have the right to
instruct the fiduciary of the plan (or a proxy) how to vote shares allocated to
their accounts. Participants in the plan will receive a separate voting
direction form on which they may indicate their voting instructions.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table shows ownership of the Common Shares of the Company on
June 30, 1997 by each person who, to the knowledge of the board of directors,
owned beneficially more than five percent of the Common Shares:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENT OF
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP CLASS
- ---------------------------------------- -------------------- ----------
<S> <C> <C>
PRIMECAP Management Company ............ 2,164,000(1)(2) 6.47%
225 South Lake Avenue
Pasadena, CA 91101-3005
Bankers Trust New York Corporation, .... 1,868,159(3) 5.59%
and, its wholly owned subsidiary,
Bankers Trust Company, and its
indirectly wholly owned subsidiary,
BT Australia Limited
280 Park Avenue
New York, NY 10017
</TABLE>
- ------------------------
(1) Shares held with sole investment and voting power.
(2) Based on information set forth in Form 13G dated July 12, 1995, filed with
the Securities and Exchange Commission ("SEC") and other information
provided by PRIMECAP Management Company.
(3) Based on information set forth in Form 13G dated February 13,1997, filed
with the SEC. These shares are held as follows: Bankers Trust Company has
sole voting power as to 261,053 shares, sole dispositive power as to 459,636
shares, and shared dispositive power as to 70 shares. BT Australia Limited
has sole voting and dispositive power as to 1,408,453 shares.
2
<PAGE>
BOARD OF DIRECTORS
The board of directors currently consists of nine members. The board is
divided pursuant to the bylaws into three classes. One class is elected each
year for a three-year term. The term of office of Class II directors expires at
the 1997 annual meeting; the term of office of Class III directors expires in
1998; and that of Class I directors expires in 1999 (and in all cases, the terms
of the directors will continue until their respective successors are duly
elected and have been qualified).
The board of directors met six times during the last fiscal year. Each
director attended at least 75% of the aggregate number of the meetings of the
board and committees on which he or she served.
Some important functions of the board are performed by committees of
directors. Committees are constituted by the board upon the recommendation of
the Chairman. The board has the power to change the responsibilities assigned to
any committee and to change the membership of any committee. A brief description
of the current board committees follows:
The EXECUTIVE COMMITTEE carries out, with certain exceptions, the functions
of the board of directors in the intervals between board meetings. The Executive
Committee met three times during the last fiscal year.
The AUDIT COMMITTEE recommends independent public accountants to be
appointed by the board of directors as auditors; reviews the Company's annual
consolidated financial statements; and consults from time to time with
management, the internal auditors and the Company's independent public
accountants to consider financial and accounting matters. The Audit Committee
met seven times during the last fiscal year.
The COMMITTEE ON DIRECTORS seeks qualified candidates to serve on the
Company's board of directors and recommends them for the board's consideration.
This committee assesses the board's capacity to fulfill requirements of the
board's policy with respect to director qualifications, resources and
experience, and performance and contribution. The Committee also reviews the
board's policy with respect to director qualifications, board membership
requirements, and directors' compensation and advises the board on any
recommendations for change. The Committee on Directors will consider the names
and qualifications of candidates for the board of directors submitted by
shareholders in accordance with the procedures described on pages 19-20 of this
proxy statement. The Committee on Directors met three times during the last
fiscal year.
The ORGANIZATION AND COMPENSATION COMMITTEE approves salaries and other
compensation of corporate executive officers and administers the Company's stock
incentive plans and executive compensation plans. This includes the granting of
stock options, stock bonuses, cash bonuses and incentive awards under these
plans. This committee met six times during the last fiscal year.
3
<PAGE>
ITEM 1.
ELECTION OF DIRECTORS
Action will be taken at the 1997 annual meeting to elect three Class II
directors to serve until theYear 2000 annual meeting of shareholders. Those
nominees, as well as the Class I and Class III directors who are continuing to
serve, are listed below, together with certain information about each of them.
The nominees for election at the 1997 annual meeting are Gerry B. Cameron,
Jerome J. Meyer and William D. Walker. Messrs. Meyer and Walker have served as
directors since 1990 and 1980, respectively. Mr. Cameron was elected to the
board by action of the board on March 19, 1997. Paul E. Bragdon, a director in
Class I, retired as a director effective June 26, 1997, as a result of the
Company's policy of mandatory retirement for directors at age 70. Keith R.
McKennon, a director in Class II, will not stand for reelection to the board,
due to other commitments.
Directors are elected by a plurality of the votes cast by the shares
entitled to vote if a quorum is present at the annual meeting. Abstentions and
broker non-votes are counted for purposes of determining whether a quorum exists
at the annual meeting but are not counted and have no effect on the
determination of whether a plurality exists with respect to a given nominee.
CLASS II (TERM ENDING YEAR 2000)
*GERRY B. CAMERON, 59, is Chairman of U.S. Bancorp, a position he has held
since 1994. He was Chief Executive Officer of U.S. Bancorp from January 1994
until its merger with First Bank System on August 1, 1997. He is also Chairman
of the Board of U.S. National Bank of Oregon. Mr. Cameron's banking career began
in 1956 with U.S. National Bank of Oregon. He managed the Commercial Banking
Group and the Northwest Group before being appointed chairman and chief
executive officer of Old National Bank in Spokane, WA in 1987. In 1988, Mr.
Cameron was named president and chief operating officer of U.S. Bank of
Washington, which was formed when U.S. Bancorp acquired Old National Bank and
Peoples Bank. He is a director of the Federal Reserve Bank in San Francisco, The
American Banker's Association, Regence Blue Cross Blue Shield of Oregon, The
Regence Group, and the Oregon Business Council. He is a member of the Company's
Audit Committee and the Committee on Directors.
*JEROME J. MEYER, 59, is Chairman of the Board of Directors, Chief Executive
Officer and President of the Company. Mr. Meyer has been a director since 1990,
and became President and Chief Executive Officer of the Company in November
1990. Mr. Meyer was Corporate Vice President of Honeywell Inc. (an electronics
manufacturer) from August 1986 until April 1987, and President and Chief
Executive Officer of Honeywell Bull Inc., now known as Bull HN Information
Systems, Inc., from April 1987 until July 1988. He returned to Honeywell Inc. in
July 1988 and served as President of their industrial business until joining
Tektronix in November 1990. Mr. Meyer serves on the Executive Committee and
Committee on Directors. He is a director of AMP Incorporated, Esterline
Technologies, Inc. and Enron Corporation.
*WILLIAM D. WALKER, 66, is Vice Chairman of the Company, a position he has
held since 1991. He has been Chairman of the Board of Planar Systems, Inc. (a
flat-panel display manufacturer) since 1988, and has served as a director of the
Company since 1984. Mr. Walker served as President and Chief Operating Officer
of the Company from April 1990 until November 1990. From 1984 to 1987, Mr.
Walker was Chairman of the Board and Chief Executive Officer of Electro
Scientific Industries, Inc. (a laser systems manufacturer). Mr. Walker was
Executive Vice President of the Company from 1979 to 1984 and has served as a
director since 1980. He is a member of the Audit Committee and the Executive
Committee.
- ------------------------
* Nominee for election at 1997 annual meeting.
4
<PAGE>
CLASS III (TERM ENDING 1998)
A.M. GLEASON, 67, is President of the Port of Portland Commission, a
position he has held since 1995. Mr. Gleason was Vice Chairman of PacifiCorp
from February 1994 until his retirement in May 1995. Mr. Gleason became
President of PacifiCorp in 1985, and he was President and Chief Executive
Officer of PacifiCorp from January 1989 until February 1994. He has served as a
director since 1988 and is chairman of the Executive Committee and the
Organization and Compensation Committee. He is a director of Fred Meyer, Inc.
and Comdial Corporation.
WAYLAND R. HICKS, 54, was President and Chief Executive Officer of Indigo
N.V. (a printing products manufacturer) from February 1996 to March 1997. Mr.
Hicks was Chief Executive Officer and Vice Chairman of Nextel Communications,
Inc. (a wireless communications company) from September 1994 to October 1995.
Mr. Hicks was Executive Vice President of Xerox Corporation (a document
processing company) from 1987 to September 1994. He has served as a director
since 1992 and is Chairman of the Committee on Directors and a member of the
Organization and Compensation Committee. He is a director of Maytag Corporation
and Sensormatic Electronics Corporation.
MERRILL A. MCPEAK, 61, was Chief of Staff, United States Air Force, from
October 1990 to October 1994 when he retired. From July 1988 to October 1990,
General McPeak served as Commander in Chief, Pacific Air Forces. He is currently
a consultant. General McPeak has served as a director since March 1995 and he is
Chairman of the Audit Committee and a member of the Organization and
Compensation Committee. He is President of McPeak and Associates and is a
director of ECC International Corp., Thrustmaster, Inc., Trans World Airlines,
Inc. and Praegitzer Industries, Inc.
CLASS I (TERM ENDING 1999)
PAULINE LO ALKER, 54, is President and Chief Executive Officer of Network
Peripherals Inc. (high performance networking solutions), a position she has
held since January 1991. Mrs. Alker has served as a director since January 1996
and is a member of the Audit Committee and the Committee on Directors. She is a
director of Network Peripherals Inc. and Integrated Silicon Solutions, Inc.
A. GARY AMES, 52, is President and Chief Executive Officer of U S WEST
International (communications), a position he has held since July 1995. Mr. Ames
was President and Chief Executive Officer of U S WEST Communications from
January 1990 to July 1995. From April 1987 to January 1990, Mr. Ames was
President and Chief Executive Officer of Mountain Bell. Mr. Ames has served as a
director since 1994 and is a member of the Audit Committee and the Committee on
Directors. He is a director of Albertson's, Inc. and Telewest PLC.
PAUL C. ELY, JR., 65, is a general partner of Alpha Partners (a venture
capital firm), a position he has held since July 1989. He served as Chairman of
the Board of The Ask Group, Inc. (a software database company) from February
1994 to March 1995. Mr. Ely was Chairman and Chief Executive Officer of
Convergent Technologies (a computer manufacturer) from 1985 to 1989, and in 1989
he also served as Executive Vice President of Unisys Corporation (a computer
manufacturer). Mr. Ely has been a director since 1992 and he is Vice-Chairman of
the Organization and Compensation Committee and a member of the Executive
Committee. He is a director of Parker-Hannifin Corporation and The Sabre Group.
5
<PAGE>
The following table sets forth the beneficial ownership of Common Shares of
the Company by the directors, certain executive officers and by all executive
officers and directors as a group as of June 30, 1997:
<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES(1)(2)(3) PERCENT
- ---------------------------------------- ------------------ -------
<S> <C> <C>
Pauline Lo Alker........................ 1,392 *
A. Gary Ames............................ 2,351 *
Gerry B. Cameron........................ 1,000 *
Paul C. Ely, Jr......................... 4,499(4) *
A. M. Gleason........................... 4,975 *
Wayland R. Hicks........................ 2,046 *
Keith R. McKennon....................... 3,635 *
Merrill A. McPeak....................... 2,178 *
Jerome J. Meyer......................... 312,409(5) *
William D. Walker....................... 59,954(6) *
Carl W. Neun............................ 131,346(7) *
Gerald K. Perkel........................ 57,989(8) *
Lucie J. Fjeldstad...................... 102,856(9) *
Daniel Terpack.......................... 68,731(10) *
All directors and executive officers as
a group (18 individuals).............. 924,389(11) 2.71%
</TABLE>
- ------------------------
* Less than one percent.
(1) Unless otherwise indicated, each individual has sole voting and investment
power with respect to these shares.
(2) Includes shares issued under the Company's Stock Compensation Plan for
Non-Employee Directors, including unvested shares issued as follows: Mrs.
Alker, 1,114 shares; Mr. Ames, 858 shares; Mr. Ely, 451 shares; and Messrs.
Gleason and McKennon, 852 shares each. Individuals have sole voting power
with respect to these shares.
(3) Includes shares issued under the Company's Stock Compensation Plan for
Non-Employee Directors and deferred pursuant to the Non-Employee Directors'
Deferred Compensation Plan as follows: Mr. Hicks, 478 shares; General
McPeak, 2,178 shares; and Mr. Walker, 2,128 shares. Shares are held in
trust, and individuals have no voting nor investment power with respect to
these shares.
(4) Includes 2,999 shares held in trust for Mr. Ely.
(5) Includes (i) stock options for 141,000 shares that are currently
exercisable or become exercisable before August 29, 1997 under the Company's
Stock Incentive Plan; (ii) 43,000 performance shares and bonus shares that
are subject to forfeiture to the Company under certain conditions; and (iii)
1,585 shares held under the 401(k) Plan with respect to which Mr. Meyer has
voting but no investment power.
(6) Includes 11,486 shares held by Mr. Walker's wife, with respect to which Mr.
Walker disclaims beneficial ownership.
(7) Includes (i) stock options for 66,250 shares that are currently exercisable
or become exercisable before August 29, 1997 under the Company's Stock
Incentive Plan; (ii) 24,000 performance shares and bonus shares that are
subject to forfeiture to the Company under certain conditions; and (iii)
2,951 shares held in a family trust; and (iv) 1,158 shares held under the
401(k) Plan with respect to which Mr. Neun has voting but no investment
power.
6
<PAGE>
(8) Includes (i) stock options for 33,500 shares that are currently exercisable
or become exercisable before August 29, 1997 under the Company's Stock
Incentive Plan; (ii) 17,000 performance shares and bonus shares that are
subject to forfeiture to the Company under certain conditions; and (iii)
1,258 shares held under the 401(k) Plan with respect to which Mr. Perkel has
voting but no investment power.
(9) Includes (i) stock options for 68,250 shares that are currently exercisable
or become exercisable before August 29, 1997 under the Company's Stock
Incentive Plan; (ii) 25,000 performance shares and bonus shares that are
subject to forfeiture to the Company under certain conditions; and (iii) 339
shares held under the 401(k) Plan with respect to which Mrs. Fjeldstad has
voting but no investment power.
(10) Includes (i) stock options for 36,250 shares that are currently exercisable
or become exercisable before August 29, 1997 under the Company's Stock
Incentive Plan; (ii) 15,000 performance shares and bonus shares that are
subject to forfeiture to the Company under certain conditions; and (iii)
1,175 shares held under the 401(k) Plan with respect to which Mr. Terpack
has voting but no investment power.
(11) Includes (i) 8,911 unvested or deferred shares held by the Company for the
account of non-employee directors pursuant to the Stock Compensation Plan
for Non-Employee Directors; (ii) stock options for 442,500 shares that are
currently exercisable or become exercisable before August 29, 1997 under the
Company's stock option plans (including the Stock Incentive Plan); (iii)
171,600 shares that have been granted subject to forfeiture under certain
conditions pursuant to the Company's Stock Incentive Plan; (iv) 8,627 shares
held under the 401(k) Plan with respect to which officers and directors have
voting but no investment power; and (v) 11,986 shares owned by, or in trust
for, members of the families of officers and directors, of which such
officers and directors disclaim beneficial ownership.
DIRECTORS' COMPENSATION. Directors who are not employees of the Company
receive an annual retainer of $25,000 (plus an additional $3,000 for a committee
chairman, except for the chairman of the Executive Committee, and $8,000 for
members of the Executive Committee). Non-employee directors receive one-half of
the annual retainer in the form of Common Shares of the Company every five years
pursuant to the Non-Employee Directors' Stock Compensation Plan. Directors who
are not employees of the Company also receive $1,200 for each meeting of the
board of directors attended and $900 for each committee meeting attended, with
the exception of committee meetings held during the time normally scheduled for
a board meeting. Directors who are employees of the Company receive no separate
compensation as directors.
Under the Non-Employee Directors' Deferred Compensation Plan, directors who
are not employees may elect to have all or part of their annual cash retainers
and meeting fees credited to a deferred compensation cash account. Amounts
credited to the account will accrue interest based on the 10-year U.S. Treasury
Notes rate adjusted at the end of each calendar quarter. Such deferred amounts
will be paid in a single lump-sum payment or in up to five equal annual
installments to commence in January after the director ceases to serve on the
board or becomes age 65 or older, as specified. Non-employee directors may also
elect to defer receipt of stock under the Non-Employee Directors' Deferred
Compensation Plan.
7
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth certain compensation information for the
Chief Executive Officer and each of the next four most highly compensated
executive officers of the Company during the last fiscal year ("Named Officers")
for services rendered in all capacities for the last three fiscal years.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS
-------------------------------- ----------------------- PAYOUTS
OTHER RESTRICTED SECURITIES ----------
ANNUAL STOCK UNDERLYING LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS OPTIONS PAYOUTS COMPENSATION
POSITION YEAR ($)(1) ($)(2) ($)(3) ($)(4) (#)(5) ($) ($)(6)
- ------------------------------ ---- -------- -------- ------------ ---------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jerome J. Meyer .............. 1997 $684,423 $738,192 $ 16,200 $ 0 32,000 $ 0 $330,924(7)
Chairman, Chief Executive 1996 625,769 511,971 88,330 0 25,000 3,501,363(8) 331,435(7)
Officer and President 1995 551,923 672,171 28,800 0 0 1,220,174(9) 330,244(7)
Carl W. Neun ................. 1997 $396,827 $415,968 $ 9,600 $ 0 16,500 $ 0 $298,683(10)
Sr. Vice President, and 1996 368,269 209,311 59,869 0 18,000 2,134,086(8) 298,321(10)
Chief Financial Officer 1995 350,000 289,614 14,575(11) 0 0 583,561(9) 297,956(10)
Gerald K. Perkel ............. 1997 $264,424 $335,527 12) $ 10,500 $146,500(13) 12,500 $ 258,333 14) $ 66,639(15)
Vice President and 1996 220,000 156,984 4,500 0 12,000 0 8,477
President, Color Printing 1995 -- -- -- -- -- -- --
and Imaging Division
Lucie J. Fjeldstad ........... 1997 $371,347 $175,784 $ 20,000 $ 0 12,500 $ 738,069 14) $ 83,007(15)
Vice President and 1996 350,000 159,840 396,227(16) 0 12,000 0 5,827
President, Video and 1995 277,884 17) 10,167 0 296,000(18) 25,000 0 253,904(19)
Networking Division
Daniel Terpack ............... 1997 $318,193 $152,983 $ 9,000 $ 0 12,500 $ 369,063 14) $ 74,779(15)
Vice President and 1996 300,000 235,222 9,600 0 12,000 320,086 20) 8,750
President, Measurement 1995 244,615 255,258 49,472(21) 0 18,000 477,459(9) 7,596
Business Division
</TABLE>
- ------------------------------
(1) Includes compensation deferred at the election of the executive under the
Company's 401(k) Plan.
(2) Includes (i) amounts paid or deferred under the Annual Performance
Improvement Plan; (ii) amounts paid under the Company's Results Sharing
Plan; and (iii) for 1997 and 1996, special cash bonus amounts.
(3) Includes dividends paid on performance shares for the year in which the
shares became vested. Does not include certain personal benefits not
required to be disclosed.
(4) Stock bonus awards subject to performance conditions are reported at the
time of grant in the Long-Term Incentive Plans table below and in this
column as an LTIP Payout at the time of vesting.
(5) Options were granted in the year indicated. Additional information
regarding the options granted during fiscal year 1997 is set forth in the
table on page 10.
(6) Except as otherwise indicated, represents amounts contributed by the
Company under the Company's 401(k) Plan.
(7) Includes $322,924 representing nonrefundable costs incurred by the Company
in connection with a split dollar life insurance arrangement which provides
certain retirement and death benefits to Mr. Meyer. See "Employment
Arrangements" on page 13.
8
<PAGE>
(8) Includes the fair market value at the end of fiscal year 1996 of stock
awarded in fiscal year 1994 as long-term performance awards under the
Company's Stock Incentive Plan and cash payments made in connection with
such awards. The shares became vested and the cash payments were made based
on the Company's performance during the three fiscal years ending in 1996.
The per share fair market value of the shares was $22.375 at the beginning
of fiscal year 1994 and was $37.875 at the end of fiscal year 1996. Also
includes the fair market value of performance-based stock grants under Key
Executive Retention Agreements which vested on February 2, 1996 and upon
determination that certain goals with respect to repositioning the Company
and improving shareholder value had been achieved. The per share fair market
value of the shares was $27.50 on the March 16, 1994 award date and was
$45.35 on February 2, 1996.
(9) Represents the fair market value at the end of fiscal year 1995 of stock
awarded in fiscal year 1993 as long-term performance awards under the
Company's Stock Incentive Plan and cash payments made in connection with
such awards. The shares became vested and the cash payments were made based
on the Company's performance during the three fiscal years ending in 1995.
The per share fair market value of the shares was $20.125 at the beginning
of fiscal year 1993 and was $46.00 at the end of fiscal year 1995.
(10) Includes $290,456 representing nonrefundable costs incurred by the Company
in connection with a split dollar life insurance arrangement which provides
certain retirement and death benefits to Mr. Neun and reimbursement for
taxes paid in connection therewith. See "Employment Arrangements" on page
13.
(11) Includes moving and relocation paid by the Company in connection with Mr.
Neun's relocation to Oregon.
(12) Includes a stock bonus of 1,500 Common Shares awarded to Mr. Perkel, with a
fair market value of $89,100 at the time it was awarded.
(13) Represents the fair market value, as of the grant date, of 4,000 stock
bonus shares granted in fiscal year 1997. The shares are subject to two year
vesting from the date of the grant. As of the end of fiscal year 1997, Mr.
Perkel held 2,000 shares of restricted stock, not including LTIP awards,
with a total value of $114,750.
(14) Represents the fair market value at the end of fiscal year 1997 of stock
awarded in fiscal year 1995 as long-term performance awards under the
Company's Stock Incentive Plan and cash payments made in connection with
such awards. The shares became vested and the cash payments were made based
on the Company's performance during the three fiscal years ending in 1997.
(15) Includes $57,552 for Mr. Perkel, $77,434 for Mrs. Fjeldstad, and $66,342
for Mr. Terpack, representing payments to the Supplemental Executive
Retirement Plan. See "Retirement Plans" on page 16.
(16) Includes moving and relocation expenses paid by the Company and
reimbursement of a loss incurred by Mrs. Fjeldstad on the sale of her
residence in connection with her employment.
(17) Includes consulting fees paid to Mrs. Fjeldstad prior to her employment.
(18) Represents the fair market value on the grant date multiplied by the number
of shares granted. In 1995, 8,000 stock bonus shares were granted subject to
one-year vesting from the date of grant. As of the end of fiscal year 1997,
Mrs. Fjeldstad held no restricted shares, other than LTIP awards.
(19) Includes a cash hiring bonus paid to Mrs. Fjeldstad in connection with her
employment.
(20) Represents the fair market value at the end of fiscal year 1996 of stock
awarded in fiscal year 1994 as long-term performance awards under the
Company's Stock Incentive Plan and cash payments made in connection with
such awards. The shares became vested and the cash payments were made based
on the Company's performance during the three fiscal years ending in 1996.
The per share fair market value of the shares was $22.375 at the beginning
of fiscal year 1994 and was $37.875 at the end of fiscal year 1996.
(21) Includes moving and relocation expenses paid by the Company in connection
with Mr. Terpack's employment.
9
<PAGE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
The following table provides information on stock options awarded to Named
Officers under the Company's Stock Incentive Plan during the last fiscal year.
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS EXERCISE
UNDERLYING GRANTED TO OR BASE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT VALUE
NAME GRANTED(#)(1) FISCAL YEAR ($/SH) DATE ($)(2)
- ---------------------------- ------------- ----------------- --------- ---------- -------------
Jerome J. Meyer............. 32,000 4.4% $ 40.287 6/25/06 $ 359,040
Carl W. Neun................ 16,500 2.3% $ 40.287 6/25/06 $ 185,130
Gerald K. Perkel............ 12,500 1.7% $ 40.287 6/25/06 $ 140,250
Lucie J. Fjeldstad.......... 12,500 1.7% $ 40.287 6/25/06 $ 140,250
Daniel Terpack.............. 12,500 1.7% $ 40.287 6/25/06 $ 140,250
</TABLE>
- ------------------------
(1) Each of the options is a premium stock option granted at 110% of the fair
market value on the date of grant pursuant to the Company's Executive
Long-Term Incentive Compensation Program. Accordingly, the stock price must
increase 10% from the price at the date of grant before any value can be
realized by the optionee. Each option becomes exercisable to the extent of
50% of the shares on each of the first and second anniversaries of grant,
and the optionee may exercise the option provided that the optionee has been
continuously employed by the Company or one of its subsidiaries. Under the
terms of the Company's Stock Incentive Plan, each of the options is subject
to accelerated vesting in the event of a future change in control of the
Company or the occurrence of certain events indicating an imminent change in
control of the Company. Upon such acceleration, the optionee has the right
to cause the Company to repurchase the option for a cash amount generally
equal to the excess of the highest purchase price paid in connection with
the transactions indicating a change in control or potential change and the
option price. Under the Stock Incentive Plan vesting is also accelerated
upon the death or disability of the optionee.
(2) Although the Company believes that it is not possible to place a value on an
option, in accordance with the rules of the Securities and Exchange
Commission, the Company has used a modified Black-Scholes model of option
valuation to estimate grant date present value. The actual value realized,
if any, may vary significantly from the values estimated by this model. Any
future values realized will ultimately depend upon the excess of the stock
price over the exercise price on the date the option is exercised. The
assumptions used to estimate the grant date present value of this option
were volatility (33.162%), risk-free rate of return (5.93%), dividend yield
(1.64%), and time to exercise (5 years).
10
<PAGE>
AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table indicates (i) stock options exercised by the Named
Officers during the last fiscal year; (ii) the number of shares subject to
exercisable (vested) and unexercisable (unvested) stock options as of May 31,
1997; and (iii) the fiscal year-end value of "in-the-money" unexercised options.
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES UNDERLYING VALUE OF UNEXERCISED
NUMBER UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
OF SHARES AT FISCAL YEAR-END AT FISCAL YEAR-END(1)(2)
ACQUIRED VALUE -------------------------- ---------------------------
NAME ON EXERCISE REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ------------------------------ ----------- ------------ ----------- ------------- ------------ -------------
<S> <C> <C> <C> <C> <C> <C>
Jerome J. Meyer............... 50,000 $ 1,679,451 112,500 44,500 $ 3,227,188 $ 631,504
Carl W. Neun.................. 56,000 $ 1,343,027 49,000 25,500 $ 1,260,975 $ 342,927
Gerald K. Perkel.............. 3,000 $ 93,751 31,250 19,750 $ 469,481 $ 298,781
Lucie J. Fjeldstad............ 0 $ 0 56,000 43,500 $ 1,059,400 $ 763,625
Daniel Terpack................ 20,000 $ 520,822 24,000 18,500 $ 509,100 $ 254,250
</TABLE>
- ------------------------
(1) The value realized or the unrealized value of in-the-money options at
year-end represents the aggregate difference between the market value on the
date of exercise, or at May 31, 1997 in the case of the unrealized values,
and the applicable exercise prices.
(2) "In-the-money" options are options whose exercise price was less than the
market price of Common Shares at May 31, 1997.
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
The following table provides information on long-term performance awards
granted to Named Officers under the Company's Stock Incentive Plan during the
last fiscal year.
<TABLE>
<CAPTION>
NUMBER OF PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
SHARES, UNITS OR OTHER NON-STOCK PRICE-BASED PLANS
OR OTHER PERIOD UNTIL -------------------------------------------
NAME RIGHTS(#)(1) MATURATION OR PAYOUT THRESHOLD(#) TARGET(#) MAXIMUM(#)
- ------------------------------------ ------------- -------------------- --------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Jerome J. Meyer..................... 15,000 6/96 - 5/99 3,000 15,000 26,250
Carl W. Neun........................ 8,000 6/96 - 5/99 1,600 8,000 14,000
Gerald K. Perkel.................... 6,000 6/96 - 5/99 1,200 6,000 10,500
Lucie J. Fjeldstad.................. 6,000 6/96 - 5/99 1,200 6,000 10,500
Daniel Terpack...................... 6,000 6/96 - 5/99 1,200 6,000 10,500
</TABLE>
- ------------------------
(1) Awards are Performance Share awards under the Company's Executive Long-Term
Incentive Compensation Program as described below under "Organization and
Compensation Committee Report on Executive Compensation." At the time of the
award, the target levels of shares were issued as restricted shares upon
which dividends are paid currently.
PENSION PLAN
Under the Company's Pension Plan, the Company is required to contribute
amounts sufficient to fund specified retirement benefits for covered employees.
Benefits are calculated on the basis of an employee's final average pay and
length of service. Final average pay generally means the average of the
employee's five highest consecutive annual base pay rates during the last ten
years of employment. Benefits are payable upon normal (age 65), early (age 55)
or late (after age 65) retirement or death. In general, an employee with 25
years of credited service or more who retires at age 65 will be entitled to
receive an
11
<PAGE>
annuity for life equal to 25 percent of the employee's final average pay.
Employees who are officers or directors of the Company participate in the
Pension Plan on the same basis as other employees. Employees outside the U.S.
are covered under different retirement plans varying from country to country.
The following table sets forth estimated annual benefits under the Pension Plan
and the Retirement Equalization Plan (described below) for employees of the
Company at retirement at various assumed years of service and levels of final
average pay based upon retirement at age 65 and the payment of a straight life
annuity to the employee. The years of credited service and final average pay for
Pension Plan purposes as of May 31, 1997 for the Named Officers are as follows:
Mr. Meyer--6.6 years and $584,000; Mr. Neun--4.2 years and $364,000; Mr.
Perkel--16.7 years and $203,000; Mrs. Fjeldstad--2.4 years and $356,667; and Mr.
Terpack--4.5 years and $269,400.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL RETIREMENT BENEFITS
CREDIT YEARS OF SERVICE
---------------------------------------------------------
FINAL AVERAGE PAY 5 10 15 20 25 OR MORE
- ----------------------------------- --------- --------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C>
$200,000........................... $ 10,000 $ 20,000 $ 30,000 $ 40,000 $ 50,000
250,000........................... 12,500 25,000 37,500 50,000 62,500
300,000........................... 15,000 30,000 45,000 60,000 75,000
350,000........................... 17,500 35,000 53,500 70,000 87,500
400,000........................... 20,000 40,000 60,000 80,000 100,000
500,000........................... 25,000 50,000 75,000 100,000 125,000
600,000........................... 30,000 60,000 90,000 120,000 150,000
700,000........................... 35,000 70,000 105,000 140,000 175,000
800,000........................... 40,000 80,000 120,000 160,000 200,000
</TABLE>
The Retirement Equalization Plan is a supplemental plan to the Company's
Pension Plan to provide covered officers and other covered executives with the
total amount of retirement income that they would otherwise receive under the
Pension Plan but for certain ceilings imposed by certain sections of the
Internal Revenue Code on retirement benefits.
SEVERANCE AND CHANGE OF CONTROL ARRANGEMENTS
Certain key employees of the Company, including Messrs. Meyer, Neun, Perkel,
Terpack and Mrs. Fjeldstad, have Executive Severance Agreements or similar
agreements with the Company pursuant to which the employee would receive
severance pay in the event that his or her employment is terminated by the
Company other than for cause, death or disability. Upon such termination, the
employee would receive a severance payment generally equal to his or her annual
base salary (except that Mr. Meyer would receive twice his annual base salary),
benefits under certain of the Company's incentive plans prorated for the portion
of the year during which the employee was a participant and certain outplacement
and insurance benefits. No benefits are payable under the Executive Severance
Agreement if the employee receives severance payments under any other agreement
with the Company. Mr. Meyer's Executive Severance Agreement has been amended to
obligate the Company to continue to make payments required under Mr. Meyer's
split dollar insurance arrangement until Mr. Meyer reaches age 64
notwithstanding any prior termination of employment. See "Employment
Arrangements" on page 13.
Certain key employees of the Company, including Messrs. Meyer, Neun, Perkel,
Terpack and Mrs. Fjeldstad, have employment agreements with the Company pursuant
to which, in the event of a tender or exchange offer for more than 25% of the
Company's outstanding stock, the employee has agreed to remain with the Company
until such offer has been terminated or abandoned or a change in control of the
Company has occurred. Except for this agreement by the employee to remain so
employed by the Company, either the Company or the employee may terminate the
employment at any time, subject to the
12
<PAGE>
Company's obligation to provide benefits specified in the agreement following a
change in control. The agreements continue in effect until December 31, 1997,
and are generally automatically renewed on an annual basis. Prior to a change in
control, the Company may terminate any of the agreements (other than the
agreement with Mr. Meyer) if there is a change in the employee's position other
than as a result of a promotion. In the event the employee is terminated within
24 months following a change in control, the employee is entitled to a cash
severance payment equal to three times his or her annual base salary based on
the salary in effect prior to termination and certain relocation and insurance
benefits. However, such amounts will not be payable if termination is due to
death, normal retirement or voluntary action of the employee other than for good
reason, or by the Company for cause or permanent disability.
EMPLOYMENT ARRANGEMENTS
In connection with his employment as Chairman, Chief Executive Officer and
President, which began in November 1990, the Company agreed to provide Jerome J.
Meyer with supplemental retirement benefits which, together with retirement
benefits from his previous employer and amounts payable under the Company's
Pension Plan and Retirement Equalization Plan, would result in an annual
retirement benefit upon retirement at age 62 equal to 50% of his final average
pay, which for this purpose is the average of the annual cash compensation
received by him during each of his final five years. Total annual retirement
benefits at reduced levels, but not less than $225,000 per year, are payable
upon earlier retirement. In 1993 the Company entered into a split dollar life
insurance arrangement designed to fund a substantial portion of this
supplemental retirement obligation. Amounts paid by the Company under this split
dollar arrangement are included in the Summary Compensation Table.
In connection with his employment as an executive officer, which began in
March 1993, the Company agreed to provide Carl W. Neun with supplemental
retirement benefits which, together with amounts payable under the Company's
Pension Plan and Retirement Equalization Plan, would result in an annual
retirement benefit equal to a percentage of his final average pay, which for
this purpose is the average of the annual cash compensation received by him
during each of his final five years. The percentage of final average pay payable
as a total annual retirement benefit ranges from 35% upon retirement at age 55
to 55% upon retirement at age 62. The Company funds a portion of Mr. Neun's
supplemental retirement benefits through a split dollar life insurance
arrangement similar to the arrangement entered into for Mr. Meyer. Amounts paid
by the Company under this split dollar arrangement are included in the Summary
Compensation Table.
ORGANIZATION AND COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
ORGANIZATION AND COMPENSATION COMMITTEE
The Organization and Compensation Committee of the board of directors (the
"Committee") consists of five outside directors. Pursuant to authority delegated
by the board of directors, the Committee approves compensation of executive
officers, including the Chief Executive Officer. The Committee is also
responsible for assisting in the development of and approving executive
compensation programs and administering the Company's stock incentive and
executive compensation plans.
13
<PAGE>
OVERALL POLICY
The board of directors and the Committee believe that the Company's total
executive compensation programs should be related to corporate performance and
improvement in shareholder value. The Company has developed a total compensation
strategy that ties a significant portion of executive compensation to
achievement of pre-established financial results and appreciation of the
Company's common stock price. The primary objectives of these executive
compensation programs are to:
- Attract and retain talented executives;
- Motivate executives to achieve long-term business strategies while
achieving near-term financial targets;
- Align executive performance with Tektronix' goals for delivering
shareholder value; and
- Provide incentive for consistently achieving Tektronix' goal for return on
equity or assets.
The Company has base pay, annual incentive and long-term incentive
compensation programs for its executives, as well as retirement and 401(k)
plans. These programs are designed both to support the Company's stated
compensation policy and to offer compensation that is competitive with
compensation offered by companies of similar size and complexity within the
electronics and similar industries. The Committee uses comparative information
from a group of companies in the electronics industry for establishing executive
compensation and Company performance goals. The Committee also relies on advice
from outside compensation and benefits consultants.
BASE SALARIES
Base salaries for executive officers are initially determined by evaluating
the responsibilities of the position and the experience of the individual, and
by reference to the competitive marketplace for corporate executives, including
a comparison to base salaries for comparable positions at other similarly sized
electronics companies. Median levels of base pay provided by comparator
companies form the primary reference in determining the salaries of executive
officers.
Annual salary adjustments are determined by evaluating the performance of
the Company and each executive officer, and also take into account any new
responsibilities as well as salaries for comparable positions at peer companies.
In the case of an executive officer with responsibility for a particular
business unit, such unit's financial results are also considered. The Committee,
when appropriate, also considers non-financial performance measures that focus
attention on improvement in management processes such as inventory turns, timely
new product introductions and development of key contributors.
ANNUAL PERFORMANCE IMPROVEMENT PLAN
Tektronix' executive officers are eligible to participate in the Company's
Annual Performance Improvement Plan, an annual cash incentive compensation plan.
For the last fiscal year, Company and, where appropriate, business unit
performance objectives were established at the beginning of the fiscal year.
Participants' performance measurements had established thresholds, targets and
maximums that determined the amount of cash payments under the plan. The
Company's performance objectives for the last fiscal year were specified levels
of net sales and of economic value added (excluding nonrecurring items at the
discretion of the Committee). Individual performance objectives for an executive
officer with responsibility for a particular business unit included financial
objectives for the unit. Incentive target performance is based on the Company's
annual operating plan approved by the board of directors. For the last fiscal
year, financial measures represented 100% of the basis for any incentive award
to an executive officer provided by the plan. To ensure that executive officers
would not receive incentive payments under the plan if employees generally did
not receive Results Sharing Plan payments under the plan described below, it was
a condition to payments being made under the plan that the annual threshold for
Results
14
<PAGE>
Sharing must be met. The Committee establishes target incentive opportunities
based on the responsibilities of the position, the ability of the position to
impact financial and corporate goals and a comparison of incentives provided to
comparable positions at other similarly sized electronics companies, with
incentives targeted to provide total annual cash compensation at the median
level provided by comparable companies.
RESULTS SHARING PLAN
Most regular employees of Tektronix participate in the Results Sharing Plan.
In general, benefits from the Results Sharing Plan are based on consolidated
operating income, to the extent that operating income before results sharing and
other incentives (excluding nonrecurring items at the discretion of the Chief
Financial Officer) exceeds a threshold amount that is determined in advance for
each year. Accordingly, the Results Sharing Plan requires employees to produce a
predetermined threshold of operating income for the shareholders before
receiving any benefits. For the last fiscal year, the threshold established was
$31 million of operating income for each fiscal quarter. Payments under this
plan are calculated as a percent of base pay, range upward from zero at the
threshold and are made quarterly.
EXECUTIVE LONG-TERM INCENTIVE COMPENSATION PROGRAM
In December 1992 the Committee adopted the Executive Long-Term Incentive
Compensation Program to provide an incentive and reward key, selected executives
for improving total shareholder value. The Committee expects that awards will be
made annually to selected executives under this program. This program was
adopted to align executive long-term interests with the interests of
shareholders and the performance of Company operations. The Executive Long-Term
Incentive Compensation Program is currently comprised of two elements: stock
options issued at a premium over fair market value and stock grants issued with
three-year performance vesting (performance shares). The options and performance
shares are issued pursuant to the Company's Stock Incentive Plan. Participant
awards (including awards to the Chief Executive Officer) reflect job
responsibilities and estimated long-term incentive values based in part on
compensation data from a comparative group of electronics companies. Awards
under this program are designed to provide compensation at target at the median
of awards for similar positions in the electronics industry based on similar
performance levels. At above target performance, compensation is in the high
range of values for similar positions based on high levels of performance. Of
the total estimated award value, one half is awarded in premium stock options
and the remaining half in performance shares.
PREMIUM STOCK OPTIONS are granted at an exercise price that is higher than
the fair market value on the date of the grant. The Committee determines
annually the amount, if any, of premium added to the stock's fair market value.
This determination, while not pursuant to a specific formula, includes factors
such as the Company's recent and expected performance, the volatility of the
Company's stock and the potential price appreciation determined by using an
option pricing model. Options awarded in June 1996 had a 10 percent premium over
fair market value; these options have a ten-year term and fully vest two years
from the grant date (50% at the completion of each of the two years of
employment). Prior to December 1992, the Company granted stock options to
executives at fair market value, and the Company continues to grant stock
options at fair market value to new executive officers as a further inducement
to join the Company. The Company grants stock options at fair market value to
key employees who are not executive officers.
PERFORMANCE SHARES are granted contingent upon the Company's performance
over a three-fiscal-year period and upon the executive officer remaining in the
same position with the Company during this period (except in the case of death
or disability or a change in position approved by the Committee). The
performance shares granted during the last fiscal year relate to Company
performance during the fiscal years ending in 1997, 1998 and 1999. The
performance measurements are average return on assets and relative total
shareholder return. In general, average return on assets is defined as the
three-year average consolidated net income divided by the three-year average
consolidated total assets. Relative total
15
<PAGE>
shareholder return is defined as total stock price appreciation plus dividends
paid during the three-year performance period divided by the initial stock
price. Tektronix compares its total shareholder return to a group of electronics
companies selected by the Committee. The shares will be earned based on the
Company's performance during the three-year period. Any performance shares that
are not earned will be forfeited to the Company. If the Company's average return
on assets and total shareholder return exceed certain levels, the executive
would earn performance shares up to 1.75 multiplied by the number of original
performance shares (or an equivalent amount in cash at the election of the
Company). The Company also grants stock bonuses contingent on continued
employment with the Company or performance objectives to new executive officers
as a further inducement to join the Company. From time to time the Company also
grants stock bonuses to executive officers contingent on specific performance
objectives relating to that executive officer's position.
RETIREMENT PLANS
The Company makes contributions for eligible employees (including executive
officers) under its Pension Plan (see "Pension Plan") and its 401(k) Plan. Under
the 401(k) Plan, eligible employees may elect to have up to 15% of their pay
contributed to the plan. The Company makes matching contributions equal to 60%
of the elective contributions that do not exceed 5% of the participant's
compensation, subject to tax limitations. The Company also makes fixed
contributions equal to 2% of the participant's compensation. All fixed and
matching contributions by the Company are invested entirely in Common Shares of
the Company.
Executive officers and other senior executives who are recommended by the
Chief Executive Officer and approved by the Committee participate in the
Company's Supplemental Executive Retirement Plan ("SERP"). The SERP is intended
to provide selected senior executives with a performance based supplemental
retirement plan in recognition of their contributions to the long-term success
of the Company. Upon initial eligibility, the Company will credit the
participant's account an amount equal to 50% of the participant's combined
annual base salary and target award amount under the Tektronix Annual
Performance Improvement Plan ("APIP") at the rate in effect at the close of the
first fiscal year in which the executive became a participant. Taking into
account retirement type benefits from prior employers and upon the
recommendation of the Chief Executive Officer, the Committee may specify that a
percentage other than 50% will be applied in determining the start-up credit.
This start-up credit is credited to the participant's account as of July 1 next
following the date the executive becomes a participant. For each year thereafter
that a participant is recommended by the Chief Executive Officer and approved by
the Committee, the Company will add a performance based credit to the account of
the participant equal to 10% of the participant's combined annual base salary
and target APIP award amount at the rate in effect at the close of the
applicable fiscal year. This is credited to the participant's account as of July
1 next following the close of the fiscal year. Subject to vesting upon death or
disability, the accounts fully vest the later of the participant's reaching age
55 while employed by the Company, or completing five years of employment with
the Company. Forfeiture occurs if employment is terminated for cause, or if the
participant does not enter into a non-competition agreement upon retirement or
other termination of employment with the Company. Payments are made under the
plan after the participant attains age 62 and is no longer employed by the
Company.
DEDUCTIBILITY OF COMPENSATION
Section 162(m) of the Internal Revenue Code of 1986, as adopted in 1993,
limits to $1,000,000 per person the amount that the Company may deduct for
compensation paid to any of its most highly compensated officers in any year
after fiscal 1994. The levels of salary and annual cash bonus generally paid by
the Company do not exceed this limit. The $1,000,000 cap on deductibility will
not apply to compensation that qualifies as "performance-based compensation".
Under the regulations, performance-based compensation includes compensation
received through the exercise of a non-statutory stock option
16
<PAGE>
that meets certain requirements. This option exercise compensation is equal to
the excess of the market price at the time of exercise over the option price
and, unless limited by Section 162(m), is generally deductible by the Company.
It is the Company's current policy generally to grant options that meet the
requirements of the proposed regulations. The Stock Incentive Plan was amended
in 1994 to permit compensation received on vesting of awards similar to the
performance share awards that have been made under the Company's Executive
Long-Term Incentive Compensation Program to qualify as "performance-based
compensation" under the proposed regulations. Qualifying compensation for
deductibility under Section 162(m) is one of many factors the Committee
considers in determining executive compensation arrangements. Deductibility will
be maintained when it does not conflict with compensation objectives.
COMPENSATION OF CHIEF EXECUTIVE OFFICER
In June 1996, the Committee set Jerome J. Meyer's salary at $680,000. With
respect to Mr. Meyer's salary increase, the Committee took into account a
comparison of base salaries, perquisites and incentives for chief executive
officers of peer companies, the Company's success in meeting its performance
objectives and increasing shareholder value and the assessment by the Committee
of Mr. Meyer's individual performance and contributions. The Committee believes
that Mr. Meyer's annual base salary falls within the competitive range of
salaries for similar positions at similar companies. Mr. Meyer's participation
under the Annual Performance Improvement Plan (APIP) for the last fiscal year
was tied to the Company achieving specified levels of net sales and of economic
value added (excluding non-recurring items at the discretion of the Committee).
The Committee believes that Mr. Meyer's targeted APIP level was within the
competitive range of bonus opportunities for similar positions at similar
companies. Mr. Meyer's APIP payment for the last fiscal year was $711,705. Mr.
Meyer received payments under the Results Sharing Plan equal to 3.87% of his
base pay in accordance with the terms of the plan applicable to all employees.
In June 1996, Mr. Meyer was granted stock options for 32,000 shares, and 15,000
Performance Shares, pursuant to the criteria described above with respect to the
Executive Long-Term Incentive Compensation Plan.
The Committee believes these awards are within the competitive range of
option grant and bonus share opportunities for similar positions at similar
companies.
Committee report submitted by:
A.M. Gleason, Chairman
A. Gary Ames
Paul E. Bragdon
Keith R. McKennon
Merrill A. McPeak
17
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The graph below compares the cumulative total shareholder return on the
Company's Common Shares with the Standard & Poor's 500 Stock Index and the
Standard & Poor's High Technology Composite Index. The graph assumes $100
invested on May 31, 1992 in Tektronix Common Shares and $100 invested at that
time in each of the S&P indexes. Although Tektronix does not have a dividend
reinvestment plan, the comparison assumes that all dividends are reinvested.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
PERFORMANCE INDEX
Fiscal Years S & P High Tech Composite Tektronix
<S> <C> <C> <C>
1992 $100.00 $100.00 $100.00
1993 111.54 115.17 118.95
1994 116.25 129.24 156.20
1995 139.95 186.15 257.31
1996 179.10 246.59 215.41
1997 231.63 358.51 329.37
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers, directors and persons who own more than 10% of the Common
Shares to file reports of ownership and changes in ownership with the Securities
and Exchange Commission ("SEC") and the New York Stock Exchange. Executive
officers, directors and beneficial owners of more than 10% of the Common Shares
are required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file. Based solely on a review of the copies of such forms
received by the Company and on written representations from certain reporting
persons that they have complied with the relevant filing requirements, the
Company believes that all filing requirements applicable to its executive
officers and directors were complied with during the last fiscal year.
18
<PAGE>
AUDITORS
The board of directors has selected Deloitte & Touche LLP as the Company's
independent auditors for the current fiscal year. Representatives of Deloitte &
Touche LLP will be present at the annual meeting, will have the opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions.
OTHER MATTERS
SHAREHOLDER PROPOSALS IN THE COMPANY'S PROXY STATEMENT. Shareholders
wishing to submit proposals for inclusion in the Company's proxy statement for
the 1998 annual meeting of shareholders must submit the proposals for receipt by
the Company not later than April 22, 1998.
SHAREHOLDER PROPOSALS NOT IN THE COMPANY'S PROXY STATEMENT. Shareholders
wishing to present proposals for action at this annual meeting or at another
shareholders' meeting must do so in accordance with the Company's bylaws. A
shareholder must give timely notice of the proposed business to the Secretary.
To be timely, a shareholder's notice must be in writing, delivered or mailed
(postage prepaid) to and received by the Secretary not less than 50 days nor
more than 75 days prior to the meeting, provided, however, that if less than 65
days' notice or prior public disclosure of the date of the meeting is given to
shareholders, notice by the shareholder, to be timely, must be received by the
Secretary not later than the close of business on the tenth day following the
earlier of the day on which such notice of the date of the meeting was mailed or
public disclosure was made. For each matter the shareholder proposes to bring
before the meeting, the notice to the Secretary must include: (a) a brief
description of the business desired to be brought before the meeting and the
reasons for conducting the business at the meeting, (b) the name and record
address of the shareholder proposing the business, (c) the number of Common
Shares of the Company which are beneficially owned by the shareholder and (d)
any material interest of the shareholder in the business to be brought before
the meeting. The chairman of the meeting may, if the facts warrant, determine
and declare that the business was not properly brought before the meeting in
accordance with the Company's bylaws.
SHAREHOLDER NOMINATIONS FOR DIRECTORS. Shareholders wishing to directly
nominate candidates for the board of directors at an annual meeting must do so
in writing, in accordance with the Company's bylaws, delivered or mailed
(postage prepaid) to and received by the Secretary not less than 50 nor more
than 75 days prior to any meeting of shareholders called for the election of
directors, provided, however, that if less than 65 days' notice or prior public
disclosure of the date of the meeting is given to shareholders, the nomination
must be received by the Secretary not later than the close of business on the
tenth day following the earlier of the day on which the notice of the meeting
was mailed or such public disclosure was made. The notice shall set forth: (a)
the name and address of the shareholder who intends to make the nomination, (b)
the name, age, business address and, if known, residence address of each
nominee, (c) the principal occupation or employment of each nominee, (d) the
number of Common Shares of the Company which are beneficially owned by each
nominee and by the nominating shareholder, (e) any other information concerning
the nominee that must be disclosed of nominees in proxy solicitations pursuant
to Regulation 14A of the Securities Exchange Act of 1934, and (f) the executed
consent of each nominee to serve as a director of the Company if elected.
Shareholders wishing to make any director nominations at any special meeting of
shareholders held for the purpose of electing directors must do so, in
accordance with the bylaws, by delivering timely notice to the Secretary setting
forth the information described above for annual meeting nominations. To be
timely, the notice must be given (a) if given by any shareholder who made a
demand for the meeting, concurrently with the delivery of such demand, and (b)
otherwise, not later than the close of business on the 10th day following the
day on which the notice of the special meeting was mailed. Such notices of
nominations at annual or special meetings shall include a signed consent to
serve as a director of the Company if elected. The chairman of the meeting of
shareholders may, if the facts warrant, determine that a nomination was not made
in accordance with the proper procedures. If the
19
<PAGE>
chairman does so, the chairman shall so declare to the meeting and the defective
nomination shall be disregarded.
While the Notice of Annual Meeting of Shareholders provides for the
transaction of such other business as may properly come before the meeting, the
board of directors has no knowledge of any matters to be presented at the
meeting other than those referred to herein. However, the enclosed proxy gives
discretionary authority in the event that any other matters should be presented.
INFORMATION AVAILABLE TO SHAREHOLDERS
The Company's 1997 Annual Report is being mailed to shareholders with this
proxy statement. Copies of the 1997 Annual Report and the Form 10-K, including
financial statements and financial schedules, filed with the Securities and
Exchange Commission may be obtained without charge from the Secretary, P.O. Box
1000, Wilsonville, Oregon 97070-1000.
BY ORDER OF THE BOARD OF DIRECTORS
John P. Karalis, SECRETARY
August 20, 1997
20
<PAGE>
PROXY
TEKTRONIX, INC.
PORTLAND HILTON, 921 S.W. 6TH AVENUE, PORTLAND, OREGON 97204
ANNUAL MEETING OF SHAREHOLDERS, SEPTEMBER 25, 1997
PROXY - SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Tektronix, Inc. hereby appoints Jerome J.
Meyer, Carl W. Neun and John P. Karalis, and each of them, proxies with full
power of substitution, and authorizes them to represent and to vote on
behalf of the undersigned shareholder all common shares of Tektronix, Inc.
that the undersigned is entitled to vote at the annual meeting of
shareholders of Tektronix, Inc. to be held on September 25, 1997, and
any adjournment or adjournments thereof. A majority of the proxies or
substitutes present at the meeting may exercise all granted powers in
accordance with this proxy, with respect to the following:
(Continued, and to be marked, dated and signed on the other side)
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<S> <C>
Please mark
your votes as
indicated in /X/
this example ---
1. ELECTION OF DIRECTORS:
NOMINEES: Gerry G. Cameron, Jerome J. Meyer and William D. Walker
FOR all WITHHOLD
nominees listed AUTHORITY INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
(except as to vote for NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME
marked to all nominees IN THE LIST ABOVE.
the contrary) listed
/ / / /
--- ---
2. DISCRETIONARY MATTERS
The proxies are authorized to vote in their discretion upon any other
matters properly coming before the meeting or any adjournment or
adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN
ACCORDANCE WITH THE SPECIFIC INSTRUCTIONS OF THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES
LISTED FOR DIRECTOR AND IN THE PROXIES' DISCRETION AS
TO SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
Please sign exactly as your name appears. When shares are held jointly,
both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If
partnership, please sign in partnership name by authorized person.
Signature(s)________________________________________ Signature(s)________________________________________ Date___________________
FOLD AND DETACH HERE
Annual Meeting of Shareholders
TEKTRONIX, INC.
PORTLAND HILTON
921 S.W. 6TH AVENUE
PORTLAND, OR 97204
SEPTEMBER 25, 1997
10:00 A.M.
</TABLE>
<PAGE>
PROXY
TEKTRONIX, INC.
PORTLAND HILTON, 921 S.W. 6TH AVENUE, PORTLAND, OREGON 97204
ANNUAL MEETING OF SHAREHOLDERS, SEPTEMBER 25, 1997
PROXY - SOLICITED ON BEHALF OF THE 401(k) PLAN TRUSTEE
The undersigned participant in the Tektronix, Inc. 401(k) Plan hereby
appoints Jerome J. Meyer, Carl W. Neun and John P. Karalis, and each of them,
proxies designated by the Plan Trustee with full power of substitution, and
authorizes them to represent and to vote all common shares of Tektronix, Inc.
allocated to the participant's account under the Plan at the annual meeting
of shareholders of Tektronix, Inc. to be held on September 25, 1997, and
any adjournment or adjournments thereof. A majority of the proxies
or substitutes present at the meeting may exercise all granted powers in
accordance with this proxy, with respect to the following:
(Continued, and to be marked, dated and signed on the other side)
FOLD AND DETACH HERE
<PAGE>
<TABLE>
<S> <C>
Please mark
your votes as
indicated in /X/
this example ---
1. ELECTION OF DIRECTORS:
NOMINEES: Gerry G. Cameron, Jerome J. Meyer and William D. Walker
FOR all WITHHOLD
nominees listed AUTHORITY INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
(except as to vote for NOMINEE, STRIKE A LINE THROUGH THE NOMINEE'S NAME
marked to all nominees IN THE LIST ABOVE.
the contrary) listed
/ / / /
--- ---
2. DISCRETIONARY MATTERS
The proxies are authorized to vote in their discretion upon any other
matters properly coming before the meeting or any adjournment or
adjournments thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN
ACCORDANCE WITH THE SPECIFIC INSTRUCTIONS OF THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED "FOR" THE ELECTION OF THE NOMINEES
LISTED FOR DIRECTOR AND IN THE PROXIES' DISCRETION AS
TO SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE
THE MEETING.
Please sign exactly as your name appears. When shares are held jointly,
both should sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such. If a corporation, please
sign in full corporate name by president or other authorized officer. If
partnership, please sign in partnership name by authorized person.
Signature(s)________________________________________ Signature(s)________________________________________ Date___________________
FOLD AND DETACH HERE
Annual Meeting of Shareholders
TEKTRONIX, INC.
PORTLAND HILTON
921 S.W. 6TH AVENUE
PORTLAND, OR 97204
SEPTEMBER 25, 1997
10:00 A.M.
</TABLE>
