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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarter ended August 29, 1998, 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 (IRS Employer
incorporation or organization) Identification No.)
26600 SW PARKWAY
WILSONVILLE, OREGON 97070-1000
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (503) 627-7111
NOT APPLICABLE
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes ___X___ No ______
AT SEPTEMBER 26, 1998 THERE WERE 47,315,284 COMMON SHARES OF TEKTRONIX, INC.
OUTSTANDING.
(Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.)
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TEKTRONIX, INC. AND SUBSIDIARIES
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INDEX
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PAGE NO.
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets - 2
August 29, 1998 and May 30, 1998
Condensed Consolidated Statements of Operations - 3
for the Quarter ended August 29, 1998
and the Quarter ended August 30, 1997
Condensed Consolidated Statements of Cash Flows - 4
for the Quarter ended August 29, 1998
and the Quarter ended August 30, 1997
Notes to Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
Part II. Other Information 11
SIGNATURE 12
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<TABLE>
<CAPTION>
TEKTRONIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
Aug. 29, May 30,
(In thousands) 1998 1998
- -------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 51,632 $ 120,541
Accounts receivable - net 272,538 346,342
Inventories 237,533 214,347
Other current assets 82,613 67,432
----------- -----------
Total current assets 644,316 748,662
Property, plant and equipment - net 432,243 425,153
Deferred tax assets 29,253 25,102
Other long-term assets 151,812 177,893
----------- -----------
Total assets $ 1,257,624 $ 1,376,810
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 58,612 $ 5,442
Accounts payable 174,446 209,411
Accrued compensation 79,401 119,842
Deferred revenue 18,705 15,102
----------- -----------
Total current liabilities 331,164 349,797
Long-term debt 151,333 150,681
Other long-term liabilities 89,709 91,391
Shareholders' equity:
Common stock 144,712 223,527
Retained earnings 522,032 532,679
Accumulated other comprehensive income 18,674 28,735
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Total shareholders' equity 685,418 784,941
----------- -----------
Total liabilities and shareholders' equity $ 1,257,624 $ 1,376,810
=========== ===========
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
2
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<TABLE>
<CAPTION>
TEKTRONIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Quarter ended
Aug. 29, Aug. 30,
(In thousands except for per share amounts) 1998 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales $ 418,979 $ 481,274
Cost of sales 247,511 280,001
----------- -----------
Gross profit 171,468 201,273
Research and development expenses 51,172 46,215
Selling, general, and administrative
expenses 119,658 116,908
Equity in business ventures'
earnings (loss) (7,998) 167
----------- -----------
Operating income (loss) (7,360) 38,317
Other income - net 502 1,557
----------- -----------
Earnings (loss) before taxes (6,858) 39,874
Income tax expense (benefit) (2,195) 13,158
----------- -----------
Net earnings (loss) $ (4,663) $ 26,716
=========== ===========
Basic earnings (loss) per share $ (0.09) $ 0.53
Diluted earnings (loss) per share $ (0.09) $ 0.52
Dividends per share $ 0.12 $ 0.10
Average shares outstanding - basic 49,475 50,303
Average shares outstanding - diluted 49,475 51,442
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
3
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<TABLE>
<CAPTION>
TEKTRONIX, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Quarter ended
Aug. 29, Aug. 30,
(In thousands) 1998 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings (loss) $ (4,663) $ 26,716
Adjustments to reconcile net earnings to cash
provided by (used in) operating activities:
Depreciation expense 16,248 15,517
Gain on sale of investments (4,107) (6,667)
Changes in operating assets and liabilities:
Accounts receivable 73,177 27,732
Inventories (23,399) (13,630)
Other current assets 6,549 370
Accounts payable (34,129) (28,377)
Accrued compensation (40,399) (21,795)
Other-net (10,090) 10,428
----------- -----------
Net cash provided by (used in) operating activities (20,813) 10,294
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment (24,188) (27,829)
Proceeds from sale of fixed assets 44 4,164
Proceeds from sale of investments 6,204 7,316
----------- -----------
Net cash used in investing activities (17,940) (16,349)
CASH FLOWS FROM FINANCING ACTIVITIES
Net change in short-term debt 53,226 76
Issuance of long-term debt 823 --
Repayment of long-term debt (191) (656)
Issuance of common stock -- 5,233
Repurchase of common stock (78,815) (1,722)
Dividends (5,984) (5,021)
----------- -----------
Net cash used in financing activities (30,941) (2,090)
Effect of exchange rate changes 785 (1,060)
----------- -----------
Decrease in cash and cash equivalents (68,909) (9,205)
Cash and cash equivalents at beginning of year 120,541 142,726
----------- -----------
Cash and cash equivalents at end of quarter $ 51,632 $ 133,521
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS
Income taxes paid - net $ 8,596 $ 8,984
Interest paid 6,129 6,030
The accompanying notes are an integral part of these condensed consolidated
financial statements.
</TABLE>
4
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The condensed consolidated financial statements and notes have been prepared by
the Company without audit. Certain information and footnote disclosures normally
included in annual financial statements, prepared in accordance with generally
accepted accounting principles, have been condensed or omitted. Management
believes that the condensed statements include all necessary adjustments, which
are of a normal and recurring nature and are adequate to present financial
position, results of operations and cash flows for the interim periods. The
condensed information should be read in conjunction with the financial
statements and notes incorporated by reference in the Company's latest annual
report on Form 10-K. The Company's fiscal year is the 52 or 53 weeks ending the
last Saturday in May. Fiscal years 1999 and 1998 are 52 weeks.
All share and per share amounts have been restated to give effect to the
three-for-two stock split effective October 31, 1997.
COMPREHENSIVE INCOME
The Company has adopted Statement of Financial Accounting Standards ("SFAS") No.
130, "Reporting Comprehensive Income," as of the first quarter of fiscal year
1999. SFAS No. 130 establishes new rules for the reporting of comprehensive
income and its components, but has no impact on the Company's net earnings or
total shareholders' equity.
Comprehensive income (loss) and its components, net of tax, are as follows:
<TABLE>
<CAPTION>
Quarter ended
Aug. 29, Aug. 30,
(In thousands) 1998 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Net earnings (loss) $ (4,663) $ 26,716
Other comprehensive income (loss):
Currency translation adjustment, net of taxes
of $2,327 and $483 (3,491) (725)
Unrealized gain (loss) on available-for-sale securities,
net of taxes of $1,980 and $2,255 (4,106) (2,651)
Reclassification adjustment for realized gains included
in net income, net of taxes of $1,643 and $2,667 (2,464) (4,000)
----------- -----------
Total comprehensive income (loss) $ (14,724) $ 19,340
=========== ===========
</TABLE>
INVENTORIES
<TABLE>
<CAPTION>
Inventories consisted of:
Aug. 29, May 30,
(In thousands) 1998 1998
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Materials and work in process $ 88,320 $ 76,289
Finished goods 149,213 138,058
----------- -----------
Inventories $ 237,533 $ 214,347
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</TABLE>
5
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PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
Property, plant and equipment consisted of:
Quarter ended
Aug. 29, Aug. 30,
(In thousands) 1998 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
Land $ 5,990 $ 5,932
Buildings 228,515 217,036
Machinery and equipment 602,124 594,677
----------- -----------
836,629 817,645
Accumulated depreciation and amortization (404,386) (392,492)
----------- -----------
Property, plant and equipment - net $ 432,243 $ 425,153
=========== ===========
</TABLE>
INCOME TAXES
<TABLE>
<CAPTION>
The provision for income tax expense (benefit) consisted of:
Quarter ended
Aug. 29, Aug. 30,
(In thousands) 1998 1997
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
United States $ (7,779) $ 9,211
State (1,373) 1,887
Foreign 6,957 2,060
----------- -----------
Income tax expense (benefit) $ (2,195) $ 13,158
=========== ===========
</TABLE>
The provision for income taxes was calculated using an estimated annual
effective rate of 32% and 33%, for the quarters ended August 29, 1998, and
August 30, 1997, respectively.
FUTURE ACCOUNTING CHANGES
In June 1997, the Financial Accounting Standards Board issued SFAS No. 131,
"Disclosures about Segments of an Enterprise and Related Information." SFAS No.
131 establishes standards for disclosure about operating segments in annual
financial statements and selected information in interim financial reports. The
new disclosures will first be presented in the Company's annual report for the
fiscal year ending May 1999. Information presented for earlier years will be
restated for comparative purposes. Adoption of this statement may result in
additional disclosures but will have no impact on the Company's consolidated
financial position or results of operations.
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." The new statement will require recognition
of all derivatives as either assets or liabilities on the balance sheet at fair
value. The new statement is effective for fiscal year 2001, but early adoption
is permitted. Management has not yet completed an evaluation of the effects this
standard will have on the Company's consolidated financial statements.
6
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Item 2. Management's Discussion and Analysis of Financial
- ------- -------------------------------------------------
Condition and Results of Operations
-----------------------------------
RESULTS OF OPERATIONS
13 Weeks Ended August 29, 1998
vs.
13 Weeks Ended August 30, 1997
Sales for the first quarter of fiscal year 1999 were $419.0 million, down 13%
from first quarter 1998 sales of $481.3 million. Sales were down in all
geographies except Europe, which posted modest increases over 1998. Japan was
the hardest hit region across all three business units with a decrease in sales
of 54%, or $20.4 million from the first quarter of 1998. Orders were down
approximately 14% across all geographies with Asia, including Japan the hardest
hit. Sales and orders grew strongly in the first quarter of 1998, making the
decrease in 1999 more pronounced. The Company recognized a net loss of $0.09 per
share during the quarter. The Company's 27% interest in the loss reported by
Merix Corporation for the quarter amounted to $0.09 per share. Without this
impact, the Company would have realized break-even operations.
Measurement Business sales for the first quarter of 1999 were $206.5 million,
down 9% from sales of $227.7 million in the first quarter of 1998. Orders for
the quarter were $179.8 million, down 14% from $209.1 million in 1998. Most of
the decline was in general purpose equipment such as oscilloscopes and logic
analyzers. The decline reflected the effects of the Asian economic crisis,
including its effect on other regions of the world, and a decline in orders from
the semiconductor industry as capital spending has been reduced as a result of
weakening demand in that industry. Management believes that the decline is due
to market softness and that the Company is maintaining its market share.
Telecommunications test equipment sales increased compared to the first quarter
of 1998 because of the additional sales from CTE, the business acquired from
Siemens AG during the second quarter of 1998.
Color Printing and Imaging sales were flat at $155.4 million compared to $155.7
million in 1998. Orders were up approximately 5% during the quarter to $156.4
million. Sales and orders were strong in the U.S., but generally weak elsewhere
in the world, particularly in Asia, including Japan. The decline was a result of
cautionary capital spending, in part due to Asia, and a delay in orders
industry-wide in anticipation of new product introductions during the Company's
second quarter. Additionally, sales in last year's first quarter were very
strong with the introduction of the Phaser 560.
Video and Networking sales were $57.1 million, down 42% from sales of $97.9
million in 1998. Orders were also down 42% compared to the first quarter of
1998. The decline was realized across all geographies and nearly all product
lines. Sales to the broadcast industry were particularly weak as the industry
has delayed purchases in anticipation of the move from analog to digital
transmission. The broadcast industry is also experiencing market softness as
advertising revenues are flattening. This primarily affected sales of Grass
Valley products and the Profile line of video disk recorders. Profile products
are also experiencing increased price and product competition from new market
entrants. Sales in the network displays business decreased as compared to the
first quarter of 1998 due to the absence of large orders during the quarter and
a slower than expected transition to Windows-based terminals. The Company plans
to exit the network displays business. The Company believes that the current
line of Lightworks non-linear digital editors is near the end of its product
life cycle. Accordingly, the Company entered into a strategic
7
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alliance with Avid Technology, Inc. to market Avid's non-linear editing
equipment, and the Company will discontinue development of the Lightworks line.
Gross profit decreased $29.8 million or 15% from the first quarter of 1998,
primarily as a result of declining sales. Gross margin decreased from 41.8% to
40.9% of net sales because of lower than anticipated volumes in all three
businesses. Research and development expenses increased to $51.2 million for the
quarter from $46.2 million in the first quarter of 1998 as the Company prepares
for significant new product announcements in the second quarter. Sales, general
and administrative expenses were $119.7 million for the quarter, an increase of
$2.8 million over the first quarter of 1998. This represents a significant
increase as a percent of sales from 24.3% in 1998 to 28.6% for the current
quarter, as a result of decreased sales in 1999. The Company realized a loss of
$8.0 million from its equity investments in business ventures during the
quarter, primarily related to its 27% interest in Merix Corporation. This
compares to break-even earnings in business ventures in the first quarter of
1998. Income taxes decreased significantly from expense of $13.2 million for the
first quarter of 1998 to a benefit of $2.2 million for the current quarter as a
result of decreased earnings before taxes. The estimated annual effective rates
used to calculate income taxes were 32% in 1999 and 33% in 1998.
FINANCIAL CONDITION
The Company's financial condition continues to be strong. At August 29, 1998,
the Company had $51.6 million of cash and cash equivalents, and bank credit
facilities totaling $357.5 million, of which $225.8 million was unused. Unused
facilities include $75.8 million in lines of credit and $150.0 million under a
revolving credit agreement from United States and foreign banks.
The Company realized a decrease in working capital of $85.7 million from the end
of 1998. Current assets decreased $104.3 million during the quarter with
accounts receivable decreasing $73.8 million, cash decreased $68.9 million,
inventory increased $23.2 million, and other current assets increased $15.2
million. Cash in the amount of $78.6 million was used to repurchase
approximately 3.2 million common shares during the period. Capital expenditures
used $24.2 million of cash, and $20.8 million of cash was used in operations
during the quarter. Accounts receivable decreased and inventory increased as a
result of lower sales during the quarter. Other current assets increased
primarily from an increase in net current tax benefits due to payments related
to taxes on 1998 earnings and the benefit related to the current period net
loss. Current liabilities decreased $18.6 million during the quarter. Accounts
payable decreased $35.0 million and accrued compensation decreased $40.4 million
from payment of year-end accruals for incentives and commissions. Short-term
debt increased $53.2 million during the quarter as the Company utilized credit
facilities to finance a portion of the cash consumed.
Long-term assets decreased from sales of investments, declining market values of
the remaining investments held for sale, and the recognition of losses on
investments accounted for under the equity method. The remaining unrealized
holding gains in the Company's investment portfolio are $1.4 million, net of
deferred taxes.
Shareholders' equity decreased by $99.5 million because of the net loss of $4.7
million, dividends paid of $6.0 million, the repurchase of 3.2 million common
shares for $78.6 million, and a decrease in accumulated other comprehensive
income of $10.1 million from decreased unrealized holding gains and decreased
currency translation adjustment.
8
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OUTLOOK
The Company expects the current softness in orders and sales to continue for
several quarters. During the second quarter, the Company announced a business
restructuring plan aimed at significantly reducing expenses. The plan will
include workforce reductions of approximately 10% of the worldwide workforce and
the exiting of certain product lines. The Company expects to take a yet to be
determined charge against earnings during the second quarter to recognize the
cost of these actions.
The Company also announced authority to repurchase an additional 5 million
shares of common stock. This represents the total authorized at this time.
YEAR 2000
Many information technology hardware and software systems, as well as other
equipment using microprocessors, can accept only two digit entries in the date
code field. To operate using dates after December 31, 1999, the date code fields
will need to accept four digit entries to distinguish twenty-first century dates
from twentieth century dates. This is commonly referred to as the "Year 2000"
issue.
The Company has commenced a program to identify, remediate, test and develop
contingency plans for the Year 2000 issue (the Y2k Program). Significant issues
are expected to be identified by January of 1999. All phases are expected to be
completed prior to July of 1999. The Y2k Program includes a review of (1)
information and other technology systems used in the Company's internal
business; (2) the Company's hardware and software products delivered to
customers; and (3) third party vendors, manufacturers and suppliers. An
assessment has been made of the key internal systems, and the Company believes
that systems that are not already Year 2000 ready will be modified, upgraded or
replaced. The Company is currently assessing its products, and is working with
third party vendors, manufacturers and suppliers to identify and resolve Year
2000 issues. The Company does not believe that the historical or anticipated
costs of remediation have had, or will have, a material effect on the Company's
financial condition or results of operations. However, because of the existence
of numerous systems and related components within the Company and the
interdependency of these systems, it is possible that certain systems at the
Company, or systems at entities that provide services or goods for the Company,
may fail to operate in the Year 2000. The Company is continuing to evaluate the
risks to the Company of failure to be Year 2000 compliant and to develop a
contingency plan. Although it is not currently anticipated, the inability to
complete the Company's Y2k Program on a timely basis or the failure of a system
at the Company or at an entity that provides services or goods to the Company
may have a material impact on future operating results or financial condition.
FORWARD LOOKING STATEMENTS
Statements and information included in this Form 10-Q that relate to the
Company's goals, strategies and expectations as to future results and events are
based on the Company's current expectations. They constitute forward-looking
statements subject to a number of risk factors that could cause actual results
to differ materially from those currently expected or desired. As with many high
technology companies, risk factors that could cause the Company's actual results
or activities to differ materially from these forward looking statements
include, but are not limited to: worldwide economic and business conditions in
the electronics industry, including the continuing effect of the Asian economic
crisis on demand for the Company's products; competitive factors, including
pricing pressures, technological developments and new products offered by
competitors;
9
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changes in product and sales mix, and the related effects on gross margins; the
Company's ability to deliver a timely flow of competitive new products, and
market acceptance of these products; the availability of parts and supplies from
third party suppliers on a timely basis and at reasonable prices; inventory
risks due to changes in market demand or the Company's business strategies;
changes in effective tax rates; customer demand; currency fluctuations; the fact
that a substantial portion of the Company's sales are generated from orders
received during the quarter, making prediction of quarterly revenues and
earnings difficult; and other risk factors listed from time to time in the
Company's Securities and Exchange Commission reports and in press releases.
Additional risk factors specific to the Company's current plans and
expectations that could cause the Company's actual results or activities to
differ materially from those stated include: the significant operational issues
the Company faces in executing its strategy in Video and Networking; the
Company's ability to successfully implement its strategic direction and
restructuring actions, including reducing its expenditures; the effect of Year
2000 compliance issues; the timely introduction of new products scheduled during
the Company's fiscal year, which could be affected by engineering or other
development program slippages, the ability to ramp up production or to develop
effective sales channels; the customers' acceptance of, and demand for, those
products; and changes in the regulatory environment affecting the transition to
high-definition television within the time frame anticipated by the Company.
Forward-looking statements in this report speak only as of the date made.
The Company undertakes no obligation to publicly release the result of any
revisions to these forward looking statements which may be made to reflect
subsequent events or circumstances or to reflect the occurrence of unanticipated
events.
10
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PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security-Holders
- ------- ---------------------------------------------------
At the Company's annual meeting of shareholders on September 24, 1998,the
shareholders voted on the election of three directors to the Company's board of
directors. David N. Campbell, A.M. Gleason, and Merrill A. McPeak were elected
to serve a three-year term ending at the Year 2001 annual meeting of
shareholders. The voting for each director was as follows: 40,317,409 shares
voted for David N. Campbell, and 1,194,079 withheld; 40,786,924 voted for A.M.
Gleason, and 724,564 withheld; and 40,776,863 voted for Merrill A. McPeak, and
734,625 withheld. The term of office of the Company's other directors continued
after the 1997 annual meeting of shareholders, as follows: Pauline Lo Alker, A.
Gary Ames, and Paul C. Ely, Jr. until the 1999 annual meeting of shareholders;
and Gerry B. Cameron, Jerome J. Meyer, and William D. Walker until the 2000
annual meeting of shareholders.
At the meeting, the shareholders also voted to approve the Company's 1998 Stock
Option Plan (the "Stock Option Plan"). The number of shares voted for approval
of the Stock Option Plan was 28,964,499, the number voted against approval was
7,808,038, the number abstaining was 129,983 and there were 4,608,968 broker
non-votes. A copy of the Stock Option Plan is filed herewith as an exhibit.
At the meeting, the shareholders also voted to approve amendments to the
Company's Articles of Incorporation to increase the number of authorized shares
of common stock of the Company from 80,000,000 shares to 200,000,000 shares (the
"Amendments"). The number of shares voted for approval of the Amendments was
23,020,855, the number voted against approval was 18,373,131, the number
abstaining was 117,502 and there were no broker non- votes. A copy of the
Restated Articles of Incorporation as amended is filed herewith as an exhibit.
Item 6. Exhibits and Reports on Form 8-K
- ------- --------------------------------
(a) Exhibits
(3) (i) Restated Articles of Incorporation, as amended
(10)(i) 1998 Stock Option Plan
(27)(i) Financial Data Schedule.
(b) No reports on Form 8-K have been filed during the quarter for which
this report is filed.
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
October 9, 1998 TEKTRONIX, INC.
By CARL W. NEUN
--------------------------------------
Carl W. Neun
Senior Vice President and
Chief Financial Officer
12
RESTATED ARTICLES OF INCORPORATION
OF
TEKTRONIX, INC.
Pursuant to the provisions of the Oregon Business Corporation Act, the
undersigned corporation adopts the following restated articles of incorporation:
ARTICLE I
The name of the corporation is TEKTRONIX, INC. and its duration shall be
perpetual.
ARTICLE II
The purposes for which the corporation is organized are:
(a) To research, design, develop, manufacture, sell, lease, repair, service,
import and export, and otherwise deal enterprise calculated or resigned to
be profitable to this in cathode ray oscilloscopes and other electronic
instruments and devices;
(b) To engage in any industrial, commercial and agricultural corporation;
(c) To endorse, guarantee and secure the payment and satisfaction of bonds,
coupons, mortgages, deeds of trust, debentures, securities, notes,
obligations, evidences of indebtedness, capital shares, interest on
obligations and dividends on capital shares of other corporations; also to
assume the whole or any part of the liabilities existing or prospective of
any person, corporation, firm or association and to aid in any manner any
other person, firm or corporation with which it has business dealings or
whose stocks, bonds or other obligations are held or are in any manner
guaranteed by the corporation, and to do any other acts and things for the
preservation, protection, improvement or enhancement of the value of such
stocks, bonds or other obligations; and to use its name and credit for the
benefit of other corporations, firms, associations, partnerships, trust,
companies, or individuals, in any way which may seem to the corporation to
be proper or necessary in connection with the business of the corporation.
(d) In general, to engage in any lawful activity and to do any and all things,
to the same extent as a natural person might or could do, and to carry on
any business in connection therewith and to do all things not forbidden and
with all the powers conferred upon corporations by the Oregon Business
Corporation Act, as amended.
ARTICLE III
The aggregate number of shares which the corporation shall have authority
to issue is 20,000,000 Common Shares, without par value.
ARTICLE IV
No shareholder of the corporation shall have any pre-emptive or other first
right to acquire treasury shares or any new issue of shares of the corporation
either presently authorized or to be authorized.
ARTICLE V
Any directorship to be filled by reason of an increase in the number of
directors may be filled by the affirmative vote of a majority of the increased
number of directors fixed by the bylaws. Any such directorship not so filled
shall be filled by election at the next annual meeting of shareholders or at a
special meeting of shareholders called for that purpose.
ARTICLE VI
Any contract or other transaction between the corporation and one or more
of its directors, or between the corporation and another party in which one or
more of its directors are interested shall be valid notwithstanding the presence
or participation of such director or directors in a meeting of the board of
directors which acts upon or in reference to such contract or transaction, if
the fact of such interest shall be disclosed or known to the board of directors
and it shall authorize and approve such contract or transaction by a vote of a
majority of the directors present. Such interested director or directors may be
counted in determining whether a quorum is present at any such meeting, but
shall not be counted in calculating the majority necessary to carry such vote.
This Article VI shall not invalidate any contract or other transaction which
would otherwise be valid under applicable law.
ARTICLE VII
The corporation shall indemnify any director or officer of the corporation,
or any person who may have served at its request as a director or officer of
another corporation in which it owns shares of capital stock or of which it is a
creditor, against expenses actually and necessarily incurred by him in
connection with the defense of any action, suit or proceeding in which he is
made a party by reason of being or having been such director or officer, except
in relation to matters as to which he shall be adjudged in such action, suit or
proceeding to be liable for negligence or misconduct in the performance of duty.
Such indemnification shall not be deemed exclusive of any other rights to which
such director or officer may be entitled.
ARTICLE VIII
The address of the registered office of the corporation at the time of the
adoption of these restated articles of incorporation is 13955 S.W. Millikan Way
(Post Office Box 500), Beaverton, Oregon, and the name of its registered agent
at such address is James B. Castles.
ARTICLE IX
The stated capital of the corporation at the time of the adoption of these
stated articles of incorporation is $3,990,000.
ARTICLE X
These restated articles of incorporation supersede the heretofore existing
articles of incorporation and all amendments thereto.
DATED July 29, 1963. TEKTRONIX, INC.
By HOWARD VOLLUM
--------------------------------------
Its President
By JAMES B. CASTLES
--------------------------------------
Its Secretary
<PAGE>
STATE OF OREGON )
) ss.
County of Washington )
I, MICHAEL M. BRAND, a notary public, do hereby certify that on this 29th
day of July, 1963, personally appeared before me JAMES B. CASTLES, who, being
first duly sworn, declared that he is the secretary of TEKTRONIX, INC., an
Oregon corporation, that he signed the foregoing document as secretary of the
corporation, and that the statements therein contained are true.
MICHAEL M. BRAND
-----------------------------------------
Notary Public for Oregon
My Commission Expires December 5, 1966
<PAGE>
STATEMENT TO ACCOMPANY
RESTATED ARTICLES OF INCORPORATION
OF
TEKTRONIX, INC.
Pursuant to the requirements of ORS 57.385 of the Oregon Business
Corporation Act, the undersigned corporation submits the following statement:
FIRST: The name of the corporation is TEKTRONIX, INC.
SECOND: The restated articles of incorporation filed herewith were adopted
by the shareholders of the corporation on July 22, 1963.
THIRD: The number of shares of the corporation outstanding at the time of
such adoption and entitled to vote thereon was 3,990,000. The designation and
number of outstanding shares of each class entitled to vote thereon as a class
were as follows:
Class Number of Shares
----- ----------------
Class V Common Shares 3,330,008
Class N Common Shares 659,992
FOURTH: The number of shares voted for such restated articles of
incorporation was 3,741,215 and the number of shares voted against such restated
articles of incorporation was none. The number of shares of each class entitled
to vote thereon as a class voted for and against such restated articles of
incorporation, respectively, was:
Number of Shares Voted
----------------------
Class For Against
----- --- -------
Class V Common Shares 3,330,008 None
Class N Common Shares 659,992 None
DATED July 29, 1963.
TEKTRONIX, INC.
By HOWARD VOLLUM
--------------------------------------
Its President
By JAMES B. CASTLES
--------------------------------------
Its Secretary
STATE OF OREGON )
) ss.
County of Washington )
I, MICHAEL M. BRAND, a notary public, do hereby certify that on this
29th day of July, 1963, personally appeared before me JAMES B. CASTLES, who,
being first duly sworn, declared that he is the secretary of TEKTRONIX, INC., an
- -Oregon corporation, that he signed the foregoing document as secretary of the
corporation, and that the statements therein contained are true.
MICHAEL M. BRAND
-----------------------------------------
Notary Public for Oregon
My commission expires December 5, 1966
<PAGE>
ARTICLES OF AMENDMENT
OF
TEKTRONIX, INC.
Pursuant to ORS 57.370, these Articles of Amendment were adopted by
the undersigned corporation:
1. The name of the corporation is TEKTRONIX, INC.
2. The amendment changes Article VII of the Restated Articles of
Incorporation of the corporation. Article VII as amended reads as follows:
ARTICLE VII
A. The corporation shall, in accordance with this Article,
indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative,
other than an action by or in the right of the corporation, by reason
of the fact that he is or was a director or officer of the
corporation, or is or was serving at the request of the corporation as
a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests
of the corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the best
interests of the corporation, or, with respect to any criminal action
or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
B. The corporation shall, in accordance with this Article,
indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a
<PAGE>
judgment in its favor by reason of the fact that he is or was a
director or officer of the corporation, or is or was serving at the
request of the corporation as a director or officer of another
corporation, partnership, joint venture, trust or other enterprise
against expenses, including attorneys' fees, actually and reasonably
incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the
corporation and except that no indemnification shall be made in
respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the
extent that the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability
but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such
court shall deem proper.
C. To the extent that a director or officer of a corporation has
been successful on the merits or otherwise in defense of any action,
suit or proceeding referred to in paragraphs A and B of this Article
or in defense of any claim, issue or matter therein, he shall be
entitled to indemnification as of right against expenses, including
attorneys' fees, actually and reasonably incurred by him in connection
therewith. Any other indemnification under paragraphs A and B of this
Article, unless ordered by a court, shall be made by the corporation
upon a determination that indemnification of the director or officer
is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs A and B of this Article.
Such determination shall be made (i) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties
to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable a quorum of disinterested directors
so directs, by independent legal counsel, who may be regular counsel,
for the corporation, in a written opinion, or (iii) by the
shareholders.
D. Expenses incurred in connection with an action, suit or
proceeding may be paid or reimbursed by the corporation in advance of
the final disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of the director or officer to repay
such amount unless it shall ultimately be determined that he is
entitled to be indemnified by the corporation.
2
<PAGE>
E. The indemnification provided by this Article shall not be
deemed exclusive of any other rights to which those indemnified may be
entitled under any statute, bylaw, agreement, vote of shareholders or
directors or otherwise, both as to action in any official capacity and
as to action in another capacity while holding an office, and shall
continue as to a person who has ceased to be a director or officer and
shall inure to the benefit of the heirs, executors and administrators
of such person.
F. The corporation shall have power to purchase and maintain
insurance on behalf of any person who is or was a director or officer
of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise against any
liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such
liability under the provisions of this Article.
G. Any person other than a director or officer who is or was an
employee or agent of the corporation or is or was serving at the
request of the corporation as an employee or agent of another
corporation, partnership, joint venture, trust or other enterprise may
be indemnified to such extent as the board of directors in its
discretion at any time or from time to time may authorize.
3. The amendment was adopted by the shareholders of the corporation on
September 15, 1973.
4. At the time of adoption of the amendment, there were 8,174,824 of the
corporation's common shares, without par value, outstanding and entitled to vote
on the amendment.
5. 7,062,521 shares voted for the amendment and 52,098 shares voted against
the amendment.
IN WITNESS WHEREOF, we, the undersigned officers of
3
<PAGE>
TEKTRONIX, INC. declare under the penalties of perjury that we have examined the
foregoing Articles of Amendment and to the best of our knowledge and belief they
are true, correct and complete.
DATED: September 27, 1973.
EARL WANTLAND
----------------------------------------
President
JAMES B. CASTLES
----------------------------------------
Secretary
4
<PAGE>
ARTICLES OF AMENDMENT
OF
TEKTRONIX, INC.
Pursuant to ORS 57.360(1), these Articles of Amendment were adopted by
the undersigned corporation:
1. The name of the corporation is TEKTRONIX, INC.
2. The amendment changes Article III of the Restated Articles of
Incorporation of the corporation. Article III, as amended, reads as follows:
ARTICLE III
The aggregate number of shares which the corporation
shall have authority to issue is 40,000,000 Common Shares,
without par value.
3. The amendment was adopted by the shareholders of the corporation on
September 24, 1977.
4. At the time of adoption of the amendment, there were 17,749,450 of
the corporation's Common Shares, without par value, outstanding and entitled to
vote on the amendment.
5. Of the total outstanding shares entitled to vote, 15,565,242 shares
voted for the amendment and 46,178 shares voted against the amendment.
<PAGE>
6. The amendment does not provide for an exchange, reclassification or
cancellation of issued shares.
7. The amendment does not effect a change in the amount of stated
capital.
IN WITNESS WHEREOF, we, the undersigned officers of TEKTRONIX, INC.,
declare under the penalties of perjury that we have examined the foregoing
Articles of Amendment and to the best of our knowledge and belief they are true,
correct, and complete.
DATED: September 28, 1977.
TEKTRONIX, INC.
By EARL WANTLAND
--------------------------------------
President
By JAMES B. CASTLES
--------------------------------------
Secretary
2
<PAGE>
ARTICLES OF AMENDMENT
OF
TEKTRONIX, INC.
Pursuant to ORS 57.360(1), these Articles of Amendment were adopted by
the undersigned corporation:
1. The name of the corporation is TEKTRONIX, INC.
2. The amendment changes Article III of the Restated Articles of
Incorporation of the corporation. Article III, as amended, reads as follows:
ARTICLE III
1. The aggregate number of shares which the corporation shall have
authority to issue is sixty-one million (61,000,000) shares, divided into sixty
million (60,000,000) Common Shares, without par value, and one million
(1,000,000) shares of No Par Serial Preferred Shares, without par value.
2. The preferences, limitations and relative rights of the shares of
each class shall be as follows:
(i) No Par Serial Preferred Shares.
(a) Division Into Series. The corporation's board of directors is
hereby expressly granted authority to divide any or all shares of the
corporation's Preferred Shares into series designated " % No Par Serial
Preferred Shares" (inserting in each case the annual dividend rate, as
fixed and determined by the board of directors for each series) and to fix
and determine from time to time and to the extent permitted by law the
relative powers, rights and preferences of the shares of such series and
the qualifications, limitations, or restrictions thereof. Failure of the
board of directors to specify any rights and preferences in the resolution
establishing any series of the Preferred Shares shall be deemed a denial of
any such rights and preferences so omitted.
(b) Dividends. The holders of the Preferred Shares of each series
shall be entitled to receive, when and as declared by the board of
directors, dividends at the rate which shall have been fixed and determined
for such series, if any, and no more, in preference to or in such relation
to the dividends payable on any other class or classes or series of shares
as hereinafter set forth. Such dividends shall not be cumulative.
Computation of the amount of
<PAGE>
dividends accrued in respect of a fraction of a year shall be on the basis
of a 360- day year. In case dividends for any period are not paid in full,
all shares of Preferred Shares of all series shall participate ratably in
the payment of dividends for such period in proportion to the full amounts
of such dividends for such period to which they are respectively entitled.
Unpaid dividends shall not bear interest. No dividend shall be declared or
paid or set apart for payment in any fiscal year on the Common Shares or on
any other class of shares of the corporation ranking as to dividends
subordinate to the Preferred Shares, other than dividends payable in Common
Shares or in any other class of shares of the corporation ranking as to
dividends subordinate to the Preferred Shares, and no payment shall be made
to any sinking fund for the Preferred Shares or for any other class of
shares of the corporation ranking as to dividends on a parity with or
subordinate to the Preferred Shares, until all dividends for such fiscal
year at the rate which shall have been fixed and determined for all
outstanding shares of each series of Preferred Shares have been declared
and paid, or set apart for payment, in full.
(c) Voting. Except as otherwise expressly required by law or by
the Restated Articles of Incorporation, as amended, shares of Preferred
Shares shall not be entitled to vote on any matter submitted to the
shareholders. On any matter as to which voting of the Preferred Shares
shall be required by law or by the Restated Articles of Incorporation, as
amended, such shares shall be entitled to one vote per share and all series
thereof shall vote as one class.
(d) Liquidation. The holders of Preferred Shares of each series
shall be entitled to receive, before any payment or distribution of the
assets of the corporation, whether capital or surplus, shall be made to or
set apart for the holders of the Common Shares or any other series or class
of shares ranking junior to such series of Preferred Shares as to rights
upon liquidation, upon the liquidation, dissolution or winding up of the
affairs of the corporation, voluntary or involuntary, the amount fixed and
determined for such series, together with all dividends declared and unpaid
thereon to the date of final distribution, and no more. If, upon
liquidation, dissolution or winding up of the corporation, the assets of
the corporation distributable among the holders of the Preferred Shares
shall be insufficient to pay in full the preferential amount aforesaid,
then such assets shall be distributed among such holders ratably in
proportion to the full amounts which would be payable on such shares if all
amounts payable thereon were paid in full. Neither the merger nor
consolidation of the corporation into or with any other corporation nor the
merger or consolidation of any other corporation into or with the
corporation, nor a sale, transfer or lease of all or any
2
<PAGE>
part of the assets of the corporation shall be deemed to be a liquidation,
dissolution or winding up of the corporation within the meaning of this
paragraph (d).
(ii) Common Shares. Subject to all the rights and preferences of the
Preferred Shares, the Common Shares shall have the following rights and
limitations:
(a) Dividends. Whenever there shall have been paid or set aside
for payment to the holders of the outstanding shares of Preferred Shares
and to the holders of outstanding shares of any other class of shares
having preference over the Common Shares as to the payment of dividends the
full amount of dividends and of sinking fund or purchase fund or other
retirement payments, if any, to which such holders are respectively
entitled in preference to the Common Shares, then dividends may be paid on
the Common Shares and on any class or series of shares entitled to
participate therewith as to dividends, out of any assets legally available
for the payment of dividends, but only when and as declared by the board of
directors, provided that dividends payable in Common Shares or in any other
class of shares ranking as to dividends and assets subordinate to the
Preferred Shares may be paid without regard to the status of payments to
the holders of Preferred Shares or other classes of shares.
(b) Voting Rights. Holders of Common Shares shall be entitled to
one vote per share on any matter submitted to the shareholders.
(c) Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the corporation, after there shall have been
paid to or set aside for the holders of the shares of Preferred Shares and
any other class of shares having preference over the Common Shares in the
event of liquidation, the full preferential amounts to which they are
respectively entitled, the holders of the Common Shares and of any class or
series of shares entitled to participate therewith, in whole or in part, as
to the distribution of assets, shall be entitled to receive the remaining
assets of the corporation available for distribution.
3. The amendment was adopted by the shareholders of the corporation on
September 24, 1983.
4. At the time of adoption of the amendment, there were 19,105,818 of
the corporation's Common Shares, without par value, outstanding and entitled to
vote on the amendment.
3
<PAGE>
5. Of the total outstanding shares entitled to vote, 15,303,002 shares
voted for the amendment, 482,646 shares voted against the amendment and 503,192
shares abstained.
6. The amendment does not provide for an exchange, reclassification or
cancellation of issued shares.
7. The amendment does not effect a change in the amount of stated
capital.
IN WITNESS WHEREOF, we, the undersigned officers of TEKTRONIX, INC.,
declare under the penalties of perjury that we have examined the foregoing
Articles of Amendment and to the best of our knowledge and belief they are true,
correct, and complete.
DATED: September 27, 1983.
TEKTRONIX, INC.
By EARL WANTLAND
--------------------------------------
President
By R. ALLAN LEEDY, JR.
--------------------------------------
Secretary
4
<PAGE>
ARTICLES OF AMENDMENT
OF
TEKTRONIX, INC.
Pursuant to ORS 57.360(1), these Articles of Amendment were adopted by
the undersigned corporation:
1. The name of the corporation is TEKTRONIX, INC.
2. The amendment adds a new Article XI to the Restated Articles of
incorporation, as amended, of the corporation. Article XI reads as follows:
ARTICLE XI
1. Whether or not a vote of shareholders is otherwise required, the
affirmative vote of the holders of not less than 80 percent of the outstanding
number of "Voting Shares" (as hereinafter defined) of the corporation shall be
required for the approval or authorization of any "Business Transaction" (as
hereinafter defined) with a "Related Person" (as hereinafter defined) or any
Business Transaction in which a Related Party has an interest (except
proportionately as a shareholder of the corporation); provided, however, that
the 80 percent voting requirement shall not be applicable if either:
(i) The "Continuing Directors" (as hereinafter defined) of the
corporation by at least a majority vote (a) have expressly approved in advance
the acquisition of the outstanding number of Voting Shares that caused such
Related Person to become a Related Person, or (b) have expressly approved such
Business Transaction; or
(ii) The cash or fair market value (as determined by at least a
majority of the Continuing Directors) of the property, securities or other
consideration to be received per share by holders of Voting Shares of the
corporation (other than the Related Person) in the Business Transaction is not
less than the "Highest Purchase Price" (as hereinafter defined) paid by the
Related Person involved in the Business Transaction in acquiring any of its
holdings of the corporation's Voting Shares.
<PAGE>
2. For purposes of this Article XI:
(i) The term "Business Transaction" shall include, without
limitation, (a) any merger, consolidation or plan of exchange of the
corporation, or any entity controlled by or under common control with the
corporation, or any entity controlled by or under common control with the
corporation, with or into any Related Person, or any entity controlled by or
under common control with such Related Person, (b) any merger, consolidation or
plan of exchange of a Related Person, or any entity controlled by or under
common control with such Related Person, with or into the corporation or any
entity controlled by or under common control with the corporation, (c) any sale,
lease, exchange, transfer or other disposition (in one transaction or a series
of transactions), including without limitation a mortgage or any other security
device, of all or any "Substantial Part" (as hereinafter defined) of the
property and assets of the corporation, to a Related Person, or any entity
controlled by or under common control with such Related Person, (d) any
purchase, lease, exchange, transfer or other acquisition (in one transaction or
a series of transactions), including without limitation a mortgage or any other
security device, of all or any Substantial Part of the property and assets of a
Related Person or any entity controlled by or under common control with such
Related Person, by the corporation, or any entity controlled by or under common
control with the corporation, (e) any recapitalization of the corporation that
would have the effect of increasing the voting power of a Related Person, (f)
the issuance, sale, exchange or other disposition of any securities of the
corporation, or of any entity controlled by or under common control with the
corporation, to a Related Person by the corporation or by any entity controlled
by or under common control with the corporation, (g) any liquidation, spinoff,
splitoff, splitup or dissolution of the corporation proposed by or on behalf of
a Related Person, and (h) any agreement, contract or other arrangement providing
for any of the transactions described in this definition of Business
Transaction.
(ii) The term "Related Person" shall mean and include (a) any
individual, corporation, association, trust, partnership or other person or
entity (a "Person") which, together with its "Affiliates" (as hereinafter
defined) and "Associates" (as hereinafter defined), "Beneficially Owns" (as
defined in Rule 13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934 as in effect at July 12, 1984) in the aggregate 20 percent
or more of the outstanding Voting Shares of the corporation, and (b) any
Affiliate or Associate (other than the corporation or a wholly owned subsidiary
of the corporation) of any such Person. Two or more Persons acting in concert
for the purpose of acquiring, holding
2
<PAGE>
or disposing of Voting Shares of the corporation shall be deemed a "Person."
(iii) Without limitation, any share of Voting Shares of the
corporation that any Related Person has the right to acquire at any time
(notwithstanding that Rule 13d-3 deems such shares to be beneficially owned only
if such right may be exercised within 60 days) pursuant to any agreement,
contract, arrangement or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise, shall be deemed to be Beneficially Owned by
such Related Person and to be outstanding for purposes of subparagraph (ii)
above.
(iv) For the purposes of subparagraph (ii) of paragraph 1 of
Article XI, the term "other consideration to be received" shall include, without
limitation, Common Shares or other capital stock of the corporation retained by
its existing stockholders, other than any Related Person or other Person who is
a party to such Business Transaction, in the event of a Business Transaction in
which the corporation is the survivor.
(v) The term "Voting Shares" shall mean all of the outstanding
shares of capital stock of the corporation entitled to vote generally in the
election of directors, considered as one class, and each reference to a
proportion of shares of Voting Shares shall refer to such proportion of the
votes entitled to be cast by such shares.
(vi) The term "Continuing Director" shall mean a director who was
a member of the Board of Directors of the corporation on July 12, 1984; provided
that any person becoming a director subsequent to July 12, 1984 whose election,
or nomination for election by the corporation's shareholders, was approved by a
vote of at least a majority of the Continuing Directors shall be considered as
though he or she were a director on July 12, 1984.
(vii) The term "Highest Purchase Price" with respect to a class
or series of Voting Shares shall mean the highest amount of consideration paid
by the Related Person for a Voting Share of such class or series at any time
regardless of whether the share was acquired before or after the Related Person
became a Related Person; provided, however, that the Highest Purchase Price
shall be appropriately adjusted to reflect the occurrence of any
reclassification, recapitalization, stock split, reverse stock split or other
readjustment in the number of outstanding Voting Shares of the corporation, or
the declaration of a share dividend thereon. The Highest Purchase Price shall
include any brokerage commissions, transfer taxes and soliciting dealers' fees
paid by
3
<PAGE>
a Related Person with respect to the Voting Shares of the corporation acquired
by such Related Person.
(viii) A Related Person shall be deemed to have acquired a Voting
Share of the corporation at the time when such Related Person became the
Beneficial Owner thereof. With respect to the shares owned by Affiliates,
Associates or other Persons whose ownership is attributed to a Related Person
under the foregoing definition of Related Person, if the price paid by such
Related Person for such shares is not determinable by a majority of the
Continuing Directors, the price so paid shall be deemed to be the higher of (a)
the price paid upon the acquisition thereof by the Affiliate, Associate or other
Person or (b) the market price of the shares in question at the time when such
Related Person became the Beneficial Owner thereof.
(ix) The term "Substantial Part" shall mean 10 percent or more of
the fair market value of the total assets of the Person in question, as
reflected on the most recent balance sheet of such Person existing at the time
the shareholders of the corporation would be required to approve or authorize
the Business Transaction involving the assets constituting any such Substantial
Part.
(x) The term "Affiliate," used to indicate a relationship with a
specified Person, shall mean a Person that directly, or indirectly through one
or more intermediaries, controls, or is controlled by, or is under common
control with, the Person specified.
(xi) The term "Associate," used to indicate a relationship with a
specified Person, shall mean (a) any entity of which such specified Person is an
officer or partner or is, directly or indirectly, the beneficial owner of 10
percent or more of any class of equity securities, (b) any trust or other estate
in which such specified Person has a substantial beneficial interest or as to
which such specified Person serves as trustee or in a similar fiduciary
capacity, (c) any relative or spouse of such specified Person, or any relative
of such spouse, who has the same home as such specified Person or who is a
director or officer of the corporation or any of its subsidiaries, and (d) any
Person who is a director or officer of such specified entity or any of its
parents or subsidiaries (other than the corporation or an entity controlled by
or under control with the corporation).
3. For the purposes of this Article XI, a majority of the Continuing
Directors shall have the power to make a good faith determination, on the basis
of information known to them, of: (i) the number of Voting Shares that any
Person Beneficially Owns, (ii) whether a Person is an Affiliate or
4
<PAGE>
Associate of another, (iii) whether a Person has an agreement, contract,
arrangement or understanding with another as to the matters referred to in
subparagraph (2)(i)(h) or (2)(iii) hereof, (iv) the Highest Purchase Price paid
by a Related Person, (v) whether the assets subject to any Business Transaction
constitute a Substantial Part, (vi) whether any Business Transaction is one in
which a Related Person has an interest (except proportionately as a shareholder
of the corporation), and (vii) such other matters with respect to which a
determination is required under this Article XI.
4. The provisions set forth in this Article XI may not be amended,
altered, changed or repealed in any respect unless such action is approved by
the affirmative vote of the holders of not less than 80 percent of the
outstanding shares of Voting Shares of the corporation.
3. The amendment was adopted by the shareholders of the corporation on
September 22, 1984
4. At the time of adoption of the amendment, there were 19,317,225 of the
corporation's Common shares, without par value, and no Preferred Shares, without
par value, outstanding and entitled to vote on the amendment.
5. Of the total outstanding shares entitled to vote, 10,723,263 shares
voted for the amendment, 5,914,313 shares voted against the amendment and
438,579 shares abstained.
6. The amendment does not provide for an exchange, reclassification or
cancellation of issued shares.
5
<PAGE>
7. The amendment does not effect a change in the amount of stated capital.
Dated: September 25, 1984.
TEKTRONIX, INC.
By EARL WANTLAND
--------------------------------------
Earl Wantland
President
By R. ALLAN LEEDY, JR.
--------------------------------------
R. Allan Leedy, Jr.
Secretary
IN WITNESS WHEREOF, I, the undersigned officer of TEKTRONIX, INC.,
declare under the penalties of perjury that I have examined the foregoing
Articles of Amendment and to the best of my knowledge and belief they are true,
correct, and complete.
DATED: September 25, 1984.
R. ALLAN LEEDY, JR.
-----------------------------------------
R. Allan Leedy, Jr.
Secretary
6
<PAGE>
ARTICLES OF AMENDMENT
OF
TEKTRONIX, INC.
Pursuant to ORS 57.360(1), these Articles of Amendment were adopted by
the undersigned corporation:
1. The name of the corporation is TEKTRONIX, INC.
2. The amendment revises Article VII to the Restated Articles of
Incorporation, as amended, of the corporation, to read as follows:
ARTICLE VII
A. The corporation shall indemnify to the fullest
extent then permitted by law any person who is made, or
threatened to be made, a party to any threatened, pending or
completed action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise
(including an action, suit or proceeding by or in the right
of the corporation) by reason of the fact that the person is
or was a director or officer of the corporation or is or was
serving at the request of the corporation as a director or
officer of another corporation, partnership, joint venture,
trust or other enterprise against all expenses (including
attorneys' fees), judgments, amounts paid in settlement and
fines actually and reasonably incurred in connection
therewith.
B. Expenses incurred in connection with an action, suit
or proceeding may be paid or reimbursed by the corporation
in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of
the director or officer to repay such amounts if it shall
ultimately be determined that such person is not entitled to
be indemnified by the corporation.
<PAGE>
C. The indemnification provided hereby shall not be
deemed exclusive of any other rights to which those
indemnified may be entitled under any statute, bylaw,
agreement, vote of shareholders or directors or otherwise,
both as to action in any official capacity and as to action
in another capacity while holding an office, and shall
continue as to a person who has ceased to be a director or
officer and shall inure to the benefit of the heirs,
executors and administrators of such person.
D. The corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or
fiduciary with respect to any employee benefit plans of the
corporation or is or was serving at the request of the
corporation as a director, officer, employee or agent, or as
a fiduciary of an employee benefit plan, of another
corporation, partnership, joint venture, trust or other
enterprise against any liability asserted against and
incurred by the person in any such capacity, or arising out
of the person's status as such, whether or not the
corporation would have the power to indemnify the person
against such liability under the provisions of this Article
or the Oregon Business Corporation Act.
E. Any person other than a director or officer who is
or was an employee or agent of the corporation, or fiduciary
within the meaning of the Employee Retirement Income
Security Act of 1974 with respect to any employee benefit
plans of the corporation, or is or was serving at the
request of the corporation as an employee or agent of
another corporation, partnership, joint venture, trust or
other enterprise may be indemnified to such extent as the
board of directors in its discretion at any time or from
time to time may authorize.
3. The amendment was adopted by the shareholders of the
corporation on September 27, 1986.
2
<PAGE>
4. At the time of adoption of the amendment, there were
19,321,446 of the corporation's Common Shares, without par value, and
no Preferred Shares, without par value, outstanding and entitled to
vote on the amendment.
5. Of the total outstanding shares entitled to vote, 16,151,294
shares voted for the amendment, 815,939 shares voted against the
amendment and 410,188 shares abstained.
6. The amendment does not provide for an exchange,
reclassification or cancellation of issued shares.
7. The amendment does not effect a change in the amount of stated
capital.
DATED: October 1, 1986
TEKTRONIX, INC.
By LARRY N. CHORUBY
--------------------------------------
Larry N. Choruby
Senior Vice President
By R. ALLAN LEEDY, JR.
--------------------------------------
R. Allan Leedy, Jr.
Secretary
IN WITNESS WHEREOF, I, the undersigned officer of TEKTRONIX, INC.,
declare under the penalties of perjury that I have examined the foregoing
Articles of Amendment and to the best of my knowledge and belief they are true,
correct, and complete.
DATED: October 1, 1986
R. ALLAN LEEDY, JR.
-----------------------------------------
R. Allan Leedy, Jr.
Secretary
3
<PAGE>
ARTICLES OF AMENDMENT
OF
TEKTRONIX, INC.
Pursuant to the Oregon Business Corporation Act, these Articles of
Amendment were adopted by the undersigned corporation:
1. The name of the corporation is TEKTRONIX, INC.
2. On September 26, 1987, the following two amendments to the Restated
Articles of Incorporation, as amended, of the corporation were approved by
shareholders:
Article III is amended to read as follows:
ARTICLE III
1. The aggregate number of shares which the corporation shall have
authority to issue is eighty-one million (81,000,000) shares, divided into
eighty million (80,000,000) Common Shares, without par value, and one million
(1,000,000) shares of No Par Serial Preferred Shares, without par value.
2. The preferences, limitations and relative rights of the shares of
each class shall be as follows:
(i) No Par Serial Preferred Shares.
(a) Division Into Series. The corporation's board of directors is
hereby expressly granted authority to divide any or all shares of the
corporation's Preferred Shares into series designated " % No Par Serial
Preferred Shares" (inserting in each case the annual dividend rate, as
fixed and determined by the board of directors for each series) and to fix
and determine from time to time and to the extent permitted by law the
relative powers, rights and preferences of the shares of such series and
the qualifications, limitations, or restrictions thereof. Failure of the
board of directors to specify any rights and preferences in the resolution
establishing any series of the Preferred Shares shall be deemed a denial of
any such rights and preferences so omitted.
<PAGE>
(b) Dividends. The holders of the Preferred Shares of each series
shall be entitled to receive, when and as declared by the board of
directors, dividends at the rate which shall have been fixed and determined
for such series, if any, and no more, in preference to or in such relation
to the dividends payable on any other class or classes or series of shares
as hereinafter set forth. Such dividends shall not be cumulative.
Computation of the amount of dividends accrued in respect of a fraction of
a year shall be on the basis of a 360-day year. In case dividends for any
period are not paid in full, all shares of Preferred Shares of all series
shall participate ratably in the payment of dividends for such period in
proportion to the full amounts of such dividends for such period to which
they are respectively entitled. Unpaid dividends shall not bear interest.
No dividend shall be declared or paid or set apart for payment in any
fiscal year on the Common Shares or on any other class of shares of the
corporation ranking as to dividends subordinate to the Preferred Shares,
other than dividends payable in Common Shares or in any other class of
shares of the corporation ranking as to dividends subordinate to the
Preferred Shares, and no payment shall be made to any sinking fund for the
Preferred Shares or for any other class of shares of the corporation
ranking as to dividends on a parity with or subordinate to the Preferred
Shares, until all dividends for such fiscal year at the rate which shall
have been fixed and determined for all outstanding shares of each series of
Preferred Shares have been declared and paid, or set apart for payment, in
full.
(c) Voting. Except as otherwise expressly required by law or by
the Restated Articles of Incorporation, as amended, shares of Preferred
Shares shall not be entitled to vote on any matter submitted to the
shareholders. On any matter as to which voting of the Preferred Shares
shall be required by law or by the Restated Articles of Incorporation, as
amended, such shares shall be entitled to one vote per share and all series
thereof shall vote as one class.
(d) Liquidation. The holders of Preferred Shares of each series
shall be entitled to receive, before any payment or distribution of the
assets of the corporation, whether capital or surplus, shall be made to or
set apart for the holders of the Common Shares or any other series or class
of shares ranking junior to such series of Preferred Shares as to rights
upon liquidation, upon the liquidation, dissolution or winding up of the
affairs of the corporation, voluntary or involuntary, the amount fixed and
determined for such series, together with all dividends declared and unpaid
thereon to the date of final distribution, and no more. If, upon
liquidation, dissolution or winding up of the corporation, the assets of
the corporation distributable among the holders of the Preferred Shares
shall be insufficient to pay in full
2
<PAGE>
the preferential amount aforesaid, then such assets shall be distributed
among such holders ratably in proportion to the full amounts which would be
payable on such shares if all amounts payable thereon were paid in full.
Neither the merger nor consolidation of the corporation into or with any
other corporation nor the merger or consolidation of any other corporation
into or with the corporation, nor a sale, transfer or lease of all or any
part of the assets of the corporation shall be deemed to be a liquidation,
dissolution or winding up of the corporation within the meaning of this
paragraph (d).
(ii) Common Shares. Subject to all the rights and preferences of the
Preferred Shares, the Common Shares shall have the following rights and
limitations:
(a) Dividends. Whenever there shall have been paid or set aside
for payment to the holders of the outstanding shares of Preferred Shares
and to the holders of outstanding shares of any other class of shares
having preference over the Common Shares as to the payment of dividends the
full amount of dividends and of sinking fund or purchase fund or other
retirement payments, if any, to which such holders are respectively
entitled in preference to the Common Shares, then dividends may be paid on
the Common Shares and on any class or series of shares entitled to
participate therewith as to dividends, out of any assets legally available
for the payment of dividends, but only when and as declared by the board of
directors, provided that dividends payable in Common Shares or in any other
class of shares ranking as to dividends and assets subordinate to the
Preferred Shares may be paid without regard to the status of payments to
the holders of Preferred Shares or other classes of shares.
(b) Voting Rights. Holders of Common Shares shall be entitled to
one vote per share on any matter submitted to the shareholders.
(c) Liquidation Rights. In the event of any liquidation,
dissolution or winding up of the corporation, after there shall have been
paid to or set aside for the holders of the shares of Preferred Shares and
any other class of shares having preference over the Common Shares in the
event of liquidation, the full preferential amounts to which they are
respectively entitled, the holders of the Common Shares and of any class or
series of shares entitled to participate therewith, in whole or in part, as
to the distribution of assets, shall be entitled to receive the remaining
assets of the corporation available for distribution.
3
<PAGE>
A new Article XII is added as follows:
ARTICLE XII
No director of the corporation shall be personally liable to the
corporation or its shareholders for monetary damages for conduct as a
director; provided that this Article XII shall not eliminate the liability
of a director for any act or omission for which such elimination of
liability is not permitted under the Oregon Business Corporation Act. No
amendment to the Oregon Business Corporation Act that further limits the
acts or omissions for which elimination of liability is permitted shall
affect the liability of a director for any act or omission which occurs
prior to the effective date of such amendment.
3. At the time of adoption of the amendments, there were 31,038,485 of
the corporation's Common Shares, without par value, and no Preferred Shares,
without par value, outstanding and entitled to vote on the amendments.
4. Of the total outstanding shares entitled to vote, 23,131,032 shares
voted for the amendment to Article III, 3,211,576 shares voted against the
amendment to Article III and 52,019 shares abstained with respect to the
amendment to Article III. Of the total outstanding shares entitled to vote,
23,683,623 shares voted for the amendment adding Article XII, 2,329,937 shares
voted against the amendment adding Article XII and 381,067 shares abstained with
respect to the amendment adding Article XII.
Dated: October 7, 1987.
TEKTRONIX, INC.
By R. ALLAN LEEDY, JR.
--------------------------------------
R. Allan Leedy, Jr.
Secretary
4
<PAGE>
Submit the Original STATE OF OREGON
And One True Copy CORPORATION DIVISION
No Fee Required 158 12th Street NE
Salem, OR 97310
Survivor's
Registry Number: ARTICLES OF MERGER
For Parent and 90% Owned Subsidiary
04354015 Without Shareholder Approval
- -------------
(If known)
PLEASE TYPE OR PRINT LEGIBLY IN BLACK INK
1. Name of parent corporation: Tektronix, Inc.
-----------------------------------------------
2. Name of subsidiary corporation: CAE Systems, Inc.
-------------------------------------------
3. Name of surviving corporation: Tektronix, Inc.
--------------------------------------------
4. A copy of the plan of merger setting forth the manner and basis of
converting shares of the subsidiary into shares, obligations, or other
securities of the parent corporation or any other corporation or into cash
or other property is attached.
5. Check the appropriate box and fill in any requested information:
[ ] A copy of the plan of merger or a summary was mailed to each
shareholder of record of the subsidiary corporation on or before
____________, 19__.
[X] The mailing of a copy of the plan or a summary was waived by all
outstanding shares.
Vice President
Execution: R. ALLAN LEEDY, JR. R. Allan Leedy, Jr. Secretary and General
---------------------------------------------------------------------
Signature Printed Name Title Counsel
Person to contact about this filing: Thomas J. Spence 643-8124
-------------------------------------------
Name Daytime Phone Number
Submit the original and a true copy to the Corporation Division, 158 12th Street
NE, Salem, Oregon 97310. There is no fee required. If you have questions, please
call (503) 378-4166.
<PAGE>
PLAN OF MERGER
THIS PLAN OF MERGER, dated as of September 16, 1987, made and entered
into by and between Tektronix, Inc., an Oregon corporation ("Tektronix"), and
CAE Systems, Inc., a California corporation ("CAE");
WHEREAS, CAE is a California corporation and has authorized capital
stock consisting of 100 shares of Common Stock, of which 100 shares are issued
and outstanding, all of which are owned by Tektronix, Inc., an Oregon
corporation; and
WHEREAS, Tektronix is an Oregon corporation owning 100 percent of the
outstanding shares of CAE; and
WHEREAS, the respective Boards of Directors of Tektronix and CAE deem
it advisable and to the advantage of the said corporations that CAE be merged
with and into Tektronix pursuant to this Plan of Merger (the "Merger") whereby
Tektronix will be the surviving corporation;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, CAE will be merged into Tektronix on
the following terms and conditions:
1. Upon the Effective Date of the Merger, as hereinafter defined, CAE
shall be merged into Tektronix in the manner and with the effect provided by the
general corporation laws of the States of California and Oregon. The separate
existence of CAE shall cease as soon as the Merger shall become effective, and
<PAGE>
thereupon Tektronix and CAE shall become a single corporation (hereinafter
sometimes referred to as the "Surviving Corporation"), with the result that
Tektronix shall survive such Merger and shall succeed, without transfer, to all
the rights and property of CAE, and shall be subject to all the debts and
liabilities of CAE, in the same manner as if the Surviving Corporation had
itself incurred them, and shall continue to exist under, and be governed by, the
laws of the State of Oregon. The Merger shall become effective upon the filing
of the necessary documents with the Secretary of State of the State of Oregon
and the Secretary of State of the State of California, which date is herein
referred to as the "Effective Date."
2. The street address of the principal office of the Surviving
Corporation will be 14150 S.W. Karl Braun Drive, Beaverton Oregon 97005. The
post office address will be P.O. Box 500, Beaverton, Oregon 97077.
3. (a) Upon the Effective Date, Tektronix, Inc. will surrender for
cancellation all of the shares of Common Stock of CAE owned by it. No other
shares of CAE are outstanding.
(b) Each share of Common Stock of Tektronix issued and outstanding
immediately prior to the Effective Date shall remain outstanding without change
by virtue of the Merger.
4. Notwithstanding any of the provisions of this Plan of Merger, the
respective Boards of Directors of Tektronix and CAE, at any time before or after
approval by the shareholders of either or both corporations, and prior to the
Effective Date of the Merger herein contemplated, and for any reason they may
deem
<PAGE>
sufficient and proper, shall have the power and authority to abandon and refrain
from making effective the contemplated merger as set forth herein; in which case
this Plan of Merger shall thereby be canceled and become null and void.
TEKTRONIX, INC.
Date: October 27, 1987 By: EARL WANTLAND
---------------- -------------------------------------
Title: President and CEO
----------------------------------
Date: October 22, 1987 By: R. ALLAN LEEDY, JR.
---------------- -------------------------------------
Title: Vice President, Secretary
----------------------------------
and General Counsel
CAE SYSTEMS, INC.
Date: September 28, 1987 By: RICHARD
------------------ -------------------------------------
Title: President
----------------------------------
Date: September 28, 1987 By: THOMAS J. SPENCE
------------------ -------------------------------------
Title: Secretary
----------------------------------
<PAGE>
ARTICLES OF AMENDMENT
OF
TEKTRONIX, INC.
Pursuant to the Oregon Business Corporation Act, these Articles of
Amendment were adopted by the undersigned corporation:
1. The name of the corporation is Tektronix, Inc.
2. On September 23, 1989, the following amendment to the Restated
Articles of Incorporation, as amended, of the corporation was approved by
shareholders:
Article III is amended to read as follows:
ARTICLE III
1. The aggregate number of shares which the corporation shall have
authority to issue is eighty-one million (81,000,000) shares, divided into
eighty million (80,000,000) Common Shares, without par value, and one million
(1,000,000) No Par Serial Preferred Shares, without par value.
2. Holders of Common Shares are entitled to one vote per share on any
matter submitted to the shareholders. On dissolution of the corporation, after
any preferential amount with respect to the No Par Serial Preferred Shares has
been paid or set aside, the holders of Common Shares and the holders of any
series of No Par Serial Preferred shares entitled to participate in the
distribution of assets are entitled to receive the net assets of the
corporation.
3. The corporation's board of directors is authorized, subject to
limitations prescribed by the Oregon Business Corporation Act, as amended from
time to time (the "Act"), and by the provisions of this Article, to provide for
the issuance of No Par Serial Preferred Shares in series, to establish from time
to time the number of shares to be included in each series and to determine the
designations, relative rights, preferences and limitations of the shares of each
series. The authority of the board of directors with respect to each series
includes determination of the following:
(1) The number of shares in and the distinguishing designation of
that series;
<PAGE>
(2) Whether shares of that series shall have full, special,
conditional, limited or no voting rights, except to the extent otherwise
provided by the Act;
(3) Whether shares of that series shall be convertible and the
terms and conditions of the conversion, including provision for adjustment of
the conversion rate in circumstances determined by the board of directors;
(4) Whether shares of that series shall be redeemable and the
terms and conditions of redemption, including the date or dates upon or after
which they shall be redeemable and the amount per share payable in case of
redemption, which amount may vary under different conditions or at different
redemption dates;
(5) The dividend rate, if any, on shares of that series, the
manner of calculating any dividends and the preferences of any dividends;
(6) The rights of shares of that series in the event of voluntary
or involuntary dissolution of the corporation and the rights of priority of that
series relative to the Common Shares and any other series of No Par Serial
Preferred Shares on the distribution of assets on dissolution; and
(7) Any other rights, preferences and limitations of that series
that are permitted by law to vary.
3. At the time of adoption of the amendment, there were 28,945,784 of
the corporation's Common Shares, without par value, and no Preferred Shares,
without par value, outstanding and entitled to vote on the amendment.
4. Of the total outstanding shares entitled to vote, 10,629,278 shares
voted for the amendment and 10,364,301 shares voted against the amendment.
Dated: September 29, 1989.
TEKTRONIX, INC.
By R. ALLAN LEEDY, JR.
--------------------------------------
R. Allan Leedy, Jr.
Secretary
2
<PAGE>
ARTICLES OF AMENDMENT
OF
TEKTRONIX, INC.
Pursuant to the Oregon Business Corporation Act, these Articles of
Amendment were adopted by the undersigned corporation:
1. The name of the corporation is Tektronix, Inc.
2. On August 16, 1990, the following amendment to the Restated
Articles of Incorporation, as amended, of the corporation was duly adopted by
the Board of Directors pursuant to ORS 60.134:
Article XIII is added to read as follows:
ARTICLE XIII
This Article XIII sets forth the designation, preferences, limitations
and relative rights of a series of No Par Preferred Shares of the corporation as
determined by the board of directors of the corporation pursuant to its
authority under Oregon Revised Statutes 60.134 and Section 3 of Article III of
these Restated Articles of Incorporation.
1. Designation and Amount. The shares of such series shall be designated as
"Series A No Par Preferred Shares" and the number of shares constituting such
series shall be 80,000.
2. Dividends and Distributions.
(i) The holders of shares of Series A No Par Preferred Shares shall be
entitled to receive, when and as declared by the board of directors, out of
funds legally available for the purpose, dividends in an amount per share equal
to 1,000 (the "Adjustment Number") multiplied by the aggregate per share amount
of all cash dividends, and the Adjustment Number multiplied by the aggregate per
share amount (payable in kind) of all non-cash dividends or other distributions
other than a dividend payable in Common Shares or a subdivision of the
outstanding Common Shares (by reclassification or otherwise), declared on the
Common Shares, without par value, of the corporation (the "Common Shares") after
the first issuance of any share or fraction of a share of Series A No Par
Preferred Shares.
<PAGE>
(ii) The corporation shall declare a dividend or distribution on the
Series A No Par Preferred Shares as provided in subparagraph 2(1) at the same
time that it declares a dividend or distribution on the Common Shares (other
than a dividend payable in Common Shares).
(iii) Dividends shall not be cumulative. Unpaid dividends shall not
bear interest. Dividends paid on the Series A No Par Preferred Shares in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding.
3. Voting Rights. The holders of Series A No Par Preferred Shares shall
have the following voting rights:
(i) Each Series A No Par Preferred Share shall entitle the holder
thereof to the number of votes equal to the Adjustment Number then in effect on
all matters submitted to a vote of the shareholders of the corporation.
(ii) Except as otherwise provided herein or by law, the holders of
Series A No Par Preferred Shares and the holders of Common Shares shall vote
together as one class on all matters submitted to a vote of shareholders of the
corporation.
4. Certain Restrictions.
(i) Whenever dividends or distributions payable on the Series A No Par
Preferred Shares as provided in Section 2 have not been declared or paid for any
fiscal year, until all such dividends and distributions for such fiscal year on
Series A No Par Preferred Shares outstanding shall have been declared and paid
in full, the corporation shall not in such fiscal year
(a) declare or pay dividends on or make any other distributions
on any shares of stock ranking junior or on a parity (either as to
dividends or upon liquidation, dissolution or winding up) to the Series A
No Par Preferred Shares except dividends paid ratably on the Series A No
Par Preferred Shares and all such parity stock on which dividends are
payable in proportion to the total amounts to which the holders of all such
shares are then entitled and dividends or distributions payable in Common
Shares;
(b) purchase or otherwise acquire for consideration any Series A
No Par Preferred Shares or any shares of stock ranking on a parity with the
Series A No Par Preferred Shares, except in accordance with a purchase
offer made in writing or by publication (as determined by the board of
directors) to all holders of such shares upon
2
<PAGE>
such terms as the board of directors, after consideration of the
respective dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(ii) The corporation shall not permit any subsidiary of the
corporation to purchase or otherwise acquire for consideration any shares of
stock of the corporation unless the corporation could, under subparagraph 4(i),
purchase or otherwise acquire such shares at such time and in such manner.
5. Restriction on Issuance of Shares; Reacquired Shares. The corporation
shall not issue any Series A No Par Preferred Shares except upon exercise of
rights (the "Rights") issued pursuant to the Rights Agreement dated as of August
16, 1990, between the corporation and First Chicago Trust Company of New York
(the "Rights Agreement"), a copy of which is on file with the secretary of the
corporation at its principal executive office and shall be made available to
shareholders of record without charge upon written request. Any Series A No Par
Preferred Shares purchased or otherwise acquired by the corporation in any
manner whatsoever may be restored to the status of authorized but unissued
shares after the acquisition thereof. All such shares shall upon any such
restoration become authorized but unissued shares of Preferred Shares and may be
reissued as part of a new series of Preferred Shares to be created by the board
of directors, subject to the conditions and restrictions on issuance set forth
herein.
6. Liquidation, Dissolution or Winding Up.
(i) Upon any liquidation (voluntary or otherwise), dissolution or
winding up of the corporation, no distribution shall be made to the holders of
shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A No Par Preferred Shares unless, prior
thereto, the holders of shares of Series A No Par Preferred Shares shall have
received the Adjustment Number multiplied by the per share amount to be
distributed to holders of Common Shares, plus an amount equal to declared and
unpaid dividends and distributions thereon to the date of such payment (the
"Series A Liquidation Preference"). Following the payment of the full amount of
the Series A Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series A No Par Preferred Shares.
(ii) In the event that there are not sufficient assets available to
permit payment in full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred Shares, if any, which
rank senior to or on a parity with the Series A No Par Preferred Shares, then
assets shall be distributed first to holders of any series of
3
<PAGE>
Preferred Shares ranking senior to the Series A No Par Preferred Shares to the
extent of their liquidation preferences and such remaining assets shall be
distributed ratably to the holders of Series A No Par Preferred Shares and such
parity shares in proportion to their respective liquidation preferences.
7. Consolidation, Merger, etc. In case the corporation shall enter into any
consolidation, merger, combination or other transaction in which the Common
Shares are exchanged for or changed into other stock or securities, cash and/or
any other property, then in any such case the Series A No Par Preferred Shares
shall at the same time be similarly exchanged or changed in an amount per share
equal to the Adjustment Number multiplied by the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each Common Share is changed or exchanged.
8. Anti-Dilution Adjustments to Adjustment Number. In the event the
corporation shall at any time after September 7, 1990 (the "Rights Declaration
Date") (i) declare any dividend on Common Shares payable in shares of Common
Shares, (ii) subdivide the outstanding Common Shares, or (iii) combine the
outstanding Common Shares into a smaller number of shares, then in each such
case the Adjustment Number for all purposes of this Article XIII shall be
adjusted by multiplying the Adjustment Number then in effect by a fraction, the
numerator of which is the number of Common Shares outstanding immediately after
such event and the denominator of which is the number of Common Shares that were
outstanding immediately prior to such event. In the event the corporation shall
at any time after the Rights Declaration Date, fix a record date for the
issuance of rights, options or warrants to all holders of Common Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Common Shares or securities convertible into
Common Shares at a price per Common Shares (or having a conversion price per
share, if a security convertible into Common Shares) less than the then Current
Per Share Market Price of the Common Shares (as defined in Section 11(d) of the
Rights Agreement) on such record date, then in each such case the Adjustment
Number for all purposes of this Article XIII shall be adjusted by multiplying
the Adjustment Number then in effect by a fraction, the numerator of which shall
be the number of Common Shares outstanding on such record date plus the number
of additional Common Shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially convertible) and
the denominator of which shall be the number of Common Shares outstanding on
such record date plus the number of shares of Common Stock which the aggregate
offering price of the total number of Common Shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such
4
<PAGE>
Current Per Share Market Price (as defined in Section 11(d) of the Rights
Agreement). In case such subscription price may be paid in a consideration part
or all of which shall be in a form other than cash, the value of such
consideration shall be as determined in good faith by the board of directors.
Common Shares owned by or held for the account of the corporation shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed. In the event
that such rights, options or warrants are not so issued, the Adjustment Number
shall be readjusted as if such record date had not been fixed; and to the extent
such rights, options or warrants are issued but not exercised prior to their
expiration, the Adjustment Number shall be readjusted to be the number which
would have resulted from the adjustment provided for in this paragraph 8 if only
the rights, options or warrants that were exercised had been issued.
9. No Redemption. The Series A No Par Preferred Shares shall not be
redeemable at the option of the corporation or any holder thereof.
Notwithstanding the foregoing sentence, the corporation may acquire Series A No
Par Preferred Shares in any other manner permitted by law.
10. Amendment. Subsequent to the Distribution Date (as defined in the
Rights Agreement) these articles of incorporation shall not be further amended
in any manner which would materially alter or change the preferences,
limitations and relative rights of the Series A No Par Preferred Shares so as to
affect them adversely without the affirmative vote of the holders of a majority
of the outstanding Series A No Par Preferred Shares, voting separately as a
class.
11. Fractional Shares. Series A No Par Preferred Shares may be issued in
fractions of a share in integral multiples of one one-thousandth of a share,
which shall entitle the holder, in proportion to such holders' fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A
No Par Preferred Shares.
Dated: August 30, 1990.
TEKTRONIX, INC.
By R. ALLAN LEEDY, JR.
--------------------------------------
R. Allan Leedy, Jr.
Vice President, Secretary
and General Counsel
5
<PAGE>
ARTICLES OF MERGER
OF THE GRASS VALLEY GROUP, INC.
WITH AND INTO
TEKTRONIX, INC.
The following Articles of Merger are filed pursuant to ORS 60.494 by
Tektronix, Inc., an Oregon corporation, the surviving corporation in a merger of
The Grass Valley Group, Inc., a California corporation and a wholly owned
subsidiary of Tektronix, Inc., with and into Tektronix, Inc. (the "Subsidiary
Merger"), pursuant to ORS 60.501 and ORS 60.491.
1. The name of the parent corporation is Tektronix, Inc. ("Parent"), an
Oregon corporation.
2. The name of the subsidiary corporation is The Grass Valley Group, Inc.
("Sub"), a California corporation. Parent owns 100 percent of the 1,000
outstanding shares of Sub's common stock.
3. The plan of merger is attached hereto as Exhibit A and is incorporated
herein by reference.
4. Shareholder approval of the Subsidiary Merger was not required, pursuant
to ORS 60.491.
5. The effective date and time of the Subsidiary Merger shall be January
20, 1996, at 11:59 p.m.
6. The person to contact about this filing is:
Peter J. Bragdon
Telephone: (503) 294-9517
Dated: January 11, 1996
TEKTRONIX, INC.
By: CARL W. NEUN
-------------------------------------
Carl W. Neun,
Senior Vice President
and Chief Financial Officer
<PAGE>
EXHIBIT A
PLAN OF MERGER
OF
THE GRASS VALLEY GROUP, INC.
WITH AND INTO
TEKTRONIX, INC.
1. Parties.
a. The name of the subsidiary corporation is The Grass Valley Group,
Inc. ("Subsidiary"), a California corporation.
b. The name of the parent corporation owning all of the outstanding
shares of Subsidiary is Tektronix, Inc., an Oregon corporation.
2. Manner or Basis. The manner or basis of converting the shares of
Subsidiary into shares, obligations, securities, cash or other property is as
follows:
All of the 1,000 outstanding shares of Common Stock, no par value, of
Subsidiary are held by Tektronix, Inc. prior to the merger and shall
be cancelled in the merger.
<PAGE>
ARTICLES OF MERGER
OF MICROWAVE LOGIC, INC.
WITH AND INTO
TEKTRONIX, INC.
The following Articles of Merger are filed pursuant to ORS 60.494 by
Tektronix, Inc., an Oregon corporation, the surviving corporation in a merger of
Microwave Logic, Inc., a Delaware corporation and a wholly owned subsidiary of
Tektronix, Inc., with and into Tektronix, Inc. (the "Subsidiary Merger"),
pursuant to ORS 60.501 and ORS 60.491.
1. The name of the parent corporation is Tektronix, Inc. ("Parent"), an
Oregon corporation.
2. The name of the subsidiary corporation is Microwave Logic, Inc., a
Delaware corporation ("Subsidiary"). Parent owns 100% of the 100 outstanding
shares of Subsidiary's common stock.
3. The plan of merger is attached hereto as Exhibit A and is incorporated
herein by reference.
4. Shareholder approval of the Subsidiary Merger was not required, pursuant
to ORS 60.491.
5. The effective date of the Subsidiary Merger shall be May 25, 1996.
6. The person to contact about this filing is:
Margaret Hill Noto
Telephone: (503) 294-9348
Dated: May 16, 1996
TEKTRONIX, INC.
By: JOHN P. KARALIS
-------------------------------------
John P. Karalis
Senior Vice President and Secretary
<PAGE>
EXHIBIT A
PLAN OF MERGER
OF
MICROWAVE LOGIC, INC.
WITH AND INTO
TEKTRONIX, INC.
1. Parties.
a. The name of the subsidiary corporation is Microwave Logic, Inc.
(the "Subsidiary"), a Delaware corporation.
b. The name of the parent corporation owning all of the outstanding
shares of the Subsidiary is Tektronix, Inc., an Oregon corporation.
2. Manner or Basis. The manner or basis of converting the shares of the
Subsidiary into shares, obligations, securities, cash or other property is as
follows:
All of the 100 outstanding shares of Common Stock, no par value, of
the Subsidiary are held by Tektronix, Inc. prior to the merger and
shall be cancelled in the merger.
3. Surviving Corporation. Tektronix, Inc. shall be the surviving
corporation following the merger.
<PAGE>
ARTICLES OF MERGER
OF LIGHTWORKS EDITING SYSTEM, INC.
WITH AND INTO
TEKTRONIX, INC.
The following Articles of Merger are filed pursuant to ORS 60.494 by
Tektronix, Inc., an Oregon corporation, the surviving corporation in a merger of
Lightworks Editing System, Inc., a California corporation and a wholly owned
subsidiary of Tektronix, Inc., with and into Tektronix, Inc. (the "Subsidiary
Merger"), pursuant to ORS 60.501 and ORS 60.491.
1. The name of the parent corporation is Tektronix, Inc., an Oregon
corporation ("Parent").
2. The name of the subsidiary corporation is Lightworks Editing System,
Inc., a California corporation (the "Subsidiary"). Parent owns 100 percent of
the 1,000 outstanding shares of Subsidiary's common stock.
3. The plan of merger is attached hereto as Exhibit A and is incorporated
herein by reference.
4. Shareholder approval of the Subsidiary Merger was not required, pursuant
to ORS 60.491.
5. The effective date of the Subsidiary Merger shall be May 26, 1996.
6. The person to contact about this filing is:
Margaret Hill Noto
Telephone: (503) 294-9348
Dated: May 16, 1996
TEKTRONIX, INC.
By: JOHN P. KARALIS
-------------------------------------
John P. Karalis
Senior Vice President and Secretary
<PAGE>
EXHIBIT A
PLAN OF MERGER
OF
LIGHTWORKS EDITING SYSTEM, INC.
WITH AND INTO
TEKTRONIX, INC.
1. Parties.
a. The name of the subsidiary corporation is Lightworks Editing
System, Inc., a California corporation (the "Subsidiary").
b. The name of the parent corporation owning all of the outstanding
shares of the Subsidiary is Tektronix, Inc., an Oregon
corporation.
2. Manner or Basis of Conversion. The manner or basis of converting the
shares of the Subsidiary into shares, obligations, securities, cash or other
property is as follows:
All of the 1,000 outstanding shares of Common Stock of the Subsidiary
are held by Tektronix, Inc. prior to the merger and shall be cancelled
in the merger.
3. Surviving Corporation. Tektronix, Inc. shall be the surviving
corporation following the merger.
<PAGE>
ARTICLES OF AMENDMENT
OF
TEKTRONIX, INC.
Pursuant to the Oregon Business Corporation Act, these Articles of
Amendment were adopted by the undersigned corporation:
1. The name of the corporation is Tektronix, Inc.
2. On September 24, 1998, the following amendment to the Restated
Articles of Incorporation, as amended, of the corporation was approved by
shareholders: Article III, Section 1 is amended to read as follows:
"ARTICLE III
1. The aggregate number of shares which the corporation
shall have authority to issue is two hundred one million
(201,000,000) shares, divided into two hundred million
(200,000,000) Common Shares, without par value, and one
million (1,000,000) No Par Serial Preferred Shares, without
par value."
3. At the time of adoption of the amendment, there were 49,638,025
of the corporation's Common Shares, without par value, and no Preferred Shares,
without par value, outstanding and entitled to vote on the amendment.
<PAGE>
4. Of the total outstanding shares entitled to vote, 23,020,855
shares voted for the amendment and 18,373,131 shares voted against the
amendment.
Dated: October 7, 1998.
TEKTRONIX, INC.
By: JAMES F. DALTON
-------------------------------------
James F. Dalton
Secretary
TEKTRONIX, INC.
1998 STOCK OPTION PLAN
1. Purpose. The purpose of this Stock Option Plan (the "Plan") is to enable
Tektronix, Inc. (the "Company") to attract and retain as employees people of
initiative and ability and to provide additional incentives to employees.
2. Shares Subject to the Plan. Subject to adjustment as provided below and
in paragraph 8, the shares to be offered under the Plan shall consist of Common
Shares of the Company, and the total number of Common Shares that may be issued
under the Plan shall not exceed 4,000,000 Common Shares. The shares issued under
the Plan may be authorized and unissued shares or reacquired shares. If an
option granted under the Plan expires, terminates or is cancelled, the unissued
shares subject to such option shall again be available under the Plan.
3. Effective Date and Duration of Plan.
(a) Effective Date. The Plan was adopted by the Board of Directors on
June 17, 1998. The Plan shall become effective when approved by the
shareholders of the Company.
(b) Duration. The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued. The Board of
Directors may suspend or terminate the Plan at any time except with respect
to options then outstanding under the Plan. Termination shall not affect
any outstanding options issued under the Plan.
4. Administration.
(a) Board of Directors. The Plan shall be administered by the Board of
Directors of the Company, which shall determine and designate from time to
time the employees to whom options shall be granted, the amount of the
options and the other terms and conditions of the grants. Subject to the
provisions of the Plan, the Board of Directors may from time to time adopt
and amend rules and regulations relating to administration of the Plan,
accelerate any exercise date, extend any exercise period, amend any
provision applicable to options and make all other determinations in the
judgment of the Board of Directors as necessary or desirable for the
administration of the Plan. The interpretation and construction of the
provisions of the Plan and related agreements by the Board of Directors
shall be final and conclusive. The Board of Directors may correct any
defect or supply any omission or reconcile any inconsistency in the Plan or
in any related agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect, and it shall be the sole and final
judge of such expediency.
(b) Committee. The Board of Directors may delegate to a committee of
the Board of Directors (the "Committee") any or all authority for
administration of the Plan. If authority is delegated to a Committee, all
references to the Board of Directors in the Plan shall mean and relate to
the Committee except that only the Board of Directors may amend or
terminate the Plan as provided in paragraphs 3 and 11. The Board of
Directors may designate a committee of officers of the Company that shall
have all authority of the Committee to grant and amend options under the
Plan to employees who are not officers.
5. Types of Options; Eligibility; Limitations on Certain Awards. The Board
of Directors may, from time to time, take the following action, under the Plan:
(i) grant Incentive Stock Options, as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), as provided in paragraph 6(b);
(ii) grant options other than Incentive Stock Options ("Non-Statutory Stock
Options") as provided in paragraph 6(c); and (iii) grant foreign qualified
options as provided in paragraph 7. Any such
<PAGE>
awards may be made to employees, including employees who are officers or
directors, of the Company or its subsidiaries. The Board of Directors shall
select the employees to whom awards shall be made. The Board of Directors shall
specify the action taken with respect to each employee to whom an award is made
under the Plan. No employee may be granted options under the Plan for more than
an aggregate of 600,000 Common Shares in connection with the hiring of the
employee or 200,000 Common Shares in any fiscal year otherwise.
6. Option Grants.
(a) Grant. With respect to each option grant, the Board of Directors
shall determine the number of shares subject to the option, the option
price, the period of the option (which shall not exceed ten years from the
date of grant), the time or times at which the option may be exercised and
whether the option is an Incentive Stock Option or a Non-Statutory Stock
Option.
(b) Incentive Stock Options. Incentive Stock Options shall be subject
to the following terms and conditions:
(i) No employee may be granted Incentive Stock Options under the
Plan such that the aggregate fair market value, on the date of grant,
of the Common Shares with respect to which Incentive Stock Options are
exercisable for the first time by that employee during any calendar
year under the Plan and under any other incentive stock option plan
(within the meaning of Section 422 of the Code) of the Company or any
parent or subsidiary of the Company exceeds $100,000.
(ii) An Incentive Stock Option may be granted under the Plan to
an employee possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company or of any parent
or subsidiary of the Company only if the option price is at least 110
percent of the fair market value of the Common Shares subject to the
option on the date it is granted, as described in paragraph 6(b)(iv)
and the option term does not exceed five years from the date of grant.
(iii) The option price per share shall be determined by the Board
of Directors at the date of grant. Except as provided in paragraph
6(b)(ii), the option price shall not be less than 100 percent of the
fair market value of the Common Shares covered by the Incentive Stock
Option at the time the option is granted. The fair market value shall
be deemed to be the closing price of the Common Shares as reported in
the NYSE Composite Transactions in The Wall Street Journal on the day
preceding the date the option is granted, or if there has been no sale
on that date, on the last preceding date on which a sale occurred, or
such other reported value of the Common Shares as shall be specified
by the Board of Directors.
(iv) No Incentive Stock Option shall be granted on or after June
17, 2008.
(v) The Board of Directors may at any time without the consent of
the optionee convert an Incentive Stock Option to a Non-Statutory
Stock Option.
(vi) Subject to adjustment as provided in paragraph 8, the total
number of Common Shares that may be issued under the Plan upon
exercise of Incentive Stock Options shall not exceed 4,000,000 shares.
(c) Non-Statutory Stock Options. The option price for Non-Statutory
Stock Options shall be determined by, or in the manner specified by, the
Board of Directors at the time of grant. The option price may not be less
than 100 percent of the fair market value of the shares on the valuation
date selected by the Board of Directors. The Board of Directors may select
the valuation date from among the following dates: (i) the date of
commitment by the Company to grant the option; (ii) the date of approval of
the option grant by the Board of Directors or (iii) the effective date of
the option. The fair market value of shares covered by a Non-Statutory
Stock Option shall be deemed to be the closing
2
<PAGE>
price of the Common Shares as reported in the NYSE Composite Transactions
in The Wall Street Journal on the date preceding the valuation date, or if
there has been no sale on that date, on the last preceding date on which a
sale occurred, or such other reported value of the Common Shares, or
average closing prices for a period of not more than 10 trading days
preceding the valuation date, as shall be specified by the Board of
Directors.
(d) Exercise of Options. Except as provided in paragraph 6(f), no
option granted under the Plan may be exercised unless at the time of such
exercise the optionee is employed by the Company or any subsidiary of the
Company and shall have been so employed continuously since the date such
option was granted. Absence on leave or on account of illness or disability
under rules established by the Board of Directors shall not, however, be
deemed an interruption of employment for this purpose. Except as provided
in paragraphs 6(f), 8 and 9, options granted under the Plan may be
exercised from time to time over the period stated in each option in such
amounts and at such times as shall be prescribed by the Board of Directors,
provided that options shall not be exercised for fractional shares. Unless
otherwise determined by the Board of Directors, if the optionee does not
exercise an option in any one year with respect to the full number of
shares to which the optionee is entitled in that year, the optionee's
rights shall be cumulative and the optionee may purchase those shares in
any subsequent year during the term of the option.
(e) Nontransferability. Each Incentive Stock Option and, unless
otherwise determined by the Board of Directors, each other option granted
under the Plan by its terms shall be nonassignable and nontransferable by
the optionee, either voluntarily or by operation of law, except by will or
by the laws of descent and distribution of the state or country of the
optionee's domicile at the time of death, and each option by its terms
shall be exercisable during the optionee's lifetime only by the optionee.
(f) Termination of Employment, Disability or Death.
(i) Unless otherwise determined by the Board of Directors, in the
event the employment of the optionee by the Company or a subsidiary
terminates for any reason other than because of death or disability or
when eligible for retirement as provided in paragraphs 6(f)(ii), (iii)
and (iv), the option may be exercised at any time prior to the
expiration date of the option or the expiration of three months after
the date of such termination of employment, whichever is the shorter
period, but only if and to the extent the optionee was entitled to
exercise the option at the date of such termination.
(ii) Unless otherwise determined by the Board of Directors, in
the event of the termination of an optionee's employment when eligible
for retirement on or after age 55 under the Tektronix Pension Plan
(other than because of death as provided in paragraph 6(f)(iv) or
because of disability as provided in paragraph 6(f)(iii)), the option
may be exercised at any time prior to the expiration date of the
option, the expiration of one year after the date of such termination,
or the expiration of three months after the optionee's death following
termination, whichever is the shortest period, but only if and to the
extent the optionee was entitled to exercise the option on the date of
termination. The Board of Directors may, in its sole discretion,
cancel any such options at any time prior to the exercise thereof
unless the following conditions are met:
(A) The optionee shall not render services for any
organization or engage directly or indirectly in any business
which, in the judgment of the Chief Executive Officer of the
Company, is or becomes competitive with the Company, or which is
or becomes otherwise prejudicial to or in conflict with the
interests of the Company. The judgment of the Chief Executive
Officer shall be based on the optionee's positions and
responsibilities while employed by the Company, the optionee's
post-employment responsibilities and position with the other
organization or business, the extent of past, current and
potential competition or conflict between the Company and the
other organization or business, the effect on the Company's
customers, suppliers and competitors of the optionee's assuming
the
3
<PAGE>
post-employment position, and such other considerations as are
deemed relevant given the applicable facts and circumstances. The
optionee shall be free, however, to purchase as an investment or
otherwise, stock or other securities of such organization or
business so long as they are listed upon a recognized securities
exchange or traded over-the-counter, and such investment does not
represent a substantial investment to the optionee or a greater
than 10 percent equity interest in the organization or business.
(B) The optionee shall not, without prior written
authorization from the Company, disclose to anyone outside the
Company, or use in other than the Company's business, any
confidential information or material, as defined in the Company's
employee confidentiality agreement, relating to the business of
the Company, acquired by the optionee either during or after
employment with the Company.
(C) The optionee, pursuant to the Company's employee
confidentiality agreement, shall disclose promptly and assign to
the Company all right, title, and interest in any invention or
idea, patentable or not, made or conceived by the optionee during
employment by the Company, relating in any manner to the actual
or anticipated business, research or development work of the
Company and shall do anything reasonably necessary as requested
by the Company to enable the Company to secure a patent where
appropriate in the United States and in foreign countries.
(iii) Unless otherwise determined by the Board of Directors, in
the event of the termination of employment because of disability as
defined in the applicable option agreement, the option shall become
exercisable in full and may be exercised by the optionee at any time
prior to the expiration date of the option or the expiration of one
year after the date of such termination, whichever is the shorter
period.
(iv) Unless otherwise determined by the Board of Directors, in
the event of the death of an optionee while in the employ of the
Company or a subsidiary, the option shall become exercisable in full
and may be exercised at any time prior to the expiration date of the
option or the expiration of one year after the date of such death,
whichever is the shorter period, but only by the person or persons to
whom such optionee's rights under the option shall pass by the
optionee's will or by the laws of descent and distribution of the
state or country of domicile at the time of death.
(v) The Board of Directors, at the time of grant or at any time
thereafter, may extend the three-month and one-year expiration periods
any length of time not later than the original expiration date of the
option, and may increase the portion of an option that is exercisable,
subject to such terms and conditions as the Board of Directors may
determine.
(vi) To the extent that the option of any deceased optionee or of
any optionee whose employment terminates is not exercised within the
applicable period, all further rights to purchase shares pursuant to
such option shall cease and terminate.
(g) Purchase of Shares. Unless the Board of Directors determines
otherwise, shares may be acquired pursuant to an option granted under the
Plan only upon receipt by the Company of notice in writing from the
optionee of the optionee's intention to exercise, specifying the number of
shares as to which the optionee desires to exercise the option and the date
on which the optionee desires to complete the transaction, and if required
in order to comply with the Securities Act of 1933, as amended, containing
a representation that it is the optionee's present intention to acquire the
shares for investment and not with a view to distribution. Unless the Board
of Directors determines otherwise, on or before the date specified for
completion of the purchase of shares pursuant to an option, the optionee
must have paid the Company the full purchase price of such shares in cash
(including, with the consent of the Board of Directors, cash that may be
the proceeds of a loan from
4
<PAGE>
the Company) or, with the consent of the Board of Directors, in whole or in
part, in Common Shares of the Company valued at fair market value. The fair
market value of Common Shares provided in payment of the purchase price
shall be the closing price of the Common Shares as reported in the NYSE
Composite Transactions in The Wall Street Journal, or such other reported
value of the Common Shares as shall be specified by the Board of Directors,
on the trading day preceding the date the option is exercised. No shares
shall be issued until full payment therefor has been made. With the consent
of the Board of Directors an optionee may request the Company to apply
automatically the shares to be received upon the exercise of a portion of a
stock option (even though stock certificates have not yet been issued) to
satisfy the purchase price for additional portions of the option. Each
optionee who has exercised an option shall immediately upon notification of
the amount due, if any, pay to the Company in cash amounts necessary to
satisfy any applicable federal, state and local tax withholding
requirements. If additional withholding is or becomes required beyond any
amount deposited before delivery of the certificates, the optionee shall
pay such amount to the Company on demand. If the optionee fails to pay the
amount demanded, the Company may withhold that amount from other amounts
payable by the Company to the optionee, including salary, subject to
applicable law. With the consent of the Board of Directors an optionee may
satisfy this obligation, in whole or in part, by having the Company
withhold from the shares to be issued upon the exercise that number of
shares that would satisfy the withholding amount due or by delivering to
the Company Common Shares to satisfy the withholding amount. Upon the
exercise of an option, the number of shares reserved for issuance under the
Plan shall be reduced by the number of shares issued upon exercise of the
option, less the number of shares surrendered in payment of the option
exercise or surrendered or withheld to satisfy withholding obligations.
7. Foreign Qualified Grants. Options may be granted under the Plan to such
officers and employees of the Company and its subsidiaries who are residing in
foreign jurisdictions as the Board of Directors may determine from time to time.
The Board of Directors may adopt such supplements to the Plan as may be
necessary to comply with the applicable laws of such foreign jurisdictions and
to afford participants favorable treatment under such laws; provided, however,
that no option be granted under any such supplement with terms which are
significantly more beneficial to the participants than the terms permitted by
the Plan.
8. Changes in Capital Structure. If the outstanding Common Shares of the
Company are hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
another corporation by reason of any reorganization, merger, consolidation, plan
of exchange, recapitalization, reclassification, stock split-up, combination of
shares or dividend payable in shares, appropriate adjustment shall be made by
the Board of Directors in the number and kind of shares available for awards
under the Plan. In addition, the Board of Directors shall make appropriate
adjustment in the number and kind of shares as to which outstanding options, or
portions thereof then unexercised, shall be exercisable, to the end that the
optionee's proportionate interest is maintained as before the occurrence of such
event. Notwithstanding the foregoing, the Board of Directors shall have no
obligation to effect any adjustment that would or might result in the issuance
of fractional shares, and any fractional shares resulting from any adjustment
may be disregarded or provided for in any manner determined by the Board of
Directors. Any such adjustments made by the Board of Directors shall be
conclusive. In the event of dissolution of the Company or a merger,
consolidation or plan of exchange affecting the Company in lieu of providing for
options as provided above in this paragraph 8, the Board of Directors may, in
its sole discretion, provide a 30-day period prior to such event during which
optionees shall have the right to exercise options in whole or in part without
any limitation on exercisability and upon the expiration of such 30-day period
all unexercised options shall immediately terminate.
5
<PAGE>
9. Special Acceleration in Certain Events.
(a) Special Acceleration. A special acceleration ("Special
Acceleration") of options outstanding under the Plan shall occur with the
effect set forth in paragraph 9(b) at any time when any one of the
following events has taken place:
(i) The shareholders of the Company approve one of the following
("Approved Transactions") and either (x) such Approved Transaction is
consummated or (y) the Board of Directors determines that consummation
of such Approved Transaction is likely and establishes an option
exercise period in connection with the consummation of the Approved
Transaction:
(1) Any consolidation, merger or plan of exchange involving
the Company ("Merger") in which the Company is not the continuing
or surviving corporation or pursuant to which Common Shares would
be converted into cash, securities or other property, other than
a Merger involving the Company in which the holders of Common
Shares immediately prior to the Merger have the same
proportionate ownership of Common Shares of the surviving
corporation after the Merger; or
(2) Any sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or
substantially all of the assets of the Company or the adoption of
any plan or proposal for the liquidation or dissolution of the
Company; or
(ii) A tender or exchange offer, other than one made by the
Company, is made for Common Shares (or securities convertible into
Common Shares) and such offer results in a portion of those securities
being purchased and the offeror after the consummation of the offer is
the beneficial owner (as determined pursuant to Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")),
directly or indirectly, of at least 20 percent of the outstanding
Common Shares (an "Offer"); or
(iii) During any period of 12 months or less, individuals who at
the beginning of such period constituted a majority of the Board of
Directors cease for any reason to constitute a majority thereof unless
the nomination or election of such new directors was approved by a
vote of at least two-thirds of the directors then still in office who
were directors at the beginning of such period.
The terms used in this paragraph 9 and not defined elsewhere in the
Plan shall have the same meanings as such terms have in the Exchange Act
and the rules and regulations adopted thereunder.
(b) Effect on Outstanding Options. Upon a Special Acceleration
pursuant to paragraph 9(a), all options then outstanding under the Plan
shall immediately become exercisable in full for the remainder of their
terms or until earlier terminated pursuant to paragraph 8, except that a
Special Acceleration shall have no effect on outstanding options if the
Board of Directors determines, after consulting with its independent public
accountants, that such acceleration could adversely affect the Company's
eligibility to be a party to a transaction accounted for as a
pooling-of-interests.
10. Corporate Mergers, Acquisitions, etc. The Board of Directors may also
grant options under the Plan having terms, conditions and provisions that vary
from those specified in the Plan provided that any such options are granted in
substitution for, or in connection with the assumption of, existing options
granted by another corporation and assumed or otherwise agreed to be provided
for by the Company pursuant to or by reason of a transaction involving a
corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to which the Company or a subsidiary is a party.
11. Amendment of Plan. The Board of Directors may at any time, and from
time to time, modify or amend the Plan in such respects as it shall deem
advisable because of changes in the law while the Plan is in effect or for any
other reason. Except as provided in paragraphs 6(f), 8, and 9, however, no
change in an option already granted shall be made without the written consent of
the holder of such option.
6
<PAGE>
12. Approvals. The obligations of the Company under the Plan are subject to
the approval of state and federal authorities or agencies with jurisdiction in
the matter. The Company will use its best efforts to take steps required by
state or federal law or applicable regulations, including rules and regulations
of the Securities and Exchange Commission and any stock exchange on which the
Company's shares may then be listed, in connection with the grants under the
Plan. The foregoing notwithstanding, the Company shall not be obligated to issue
or deliver Common Shares under the Plan if such issuance or delivery would
violate applicable state or federal securities laws.
13. Employment Rights. Nothing in the Plan or any award pursuant to the
Plan shall confer upon (i) any employee any right to be continued in the
employment of the Company or any subsidiary or shall interfere in any way with
the right of the Company or any subsidiary by whom such employee is employed to
terminate such employee's employment at any time, for any reason, with or
without cause, or to increase or decrease such employee's compensation or
benefits, or (ii) any person engaged by the Company any right to be retained or
employed by the Company or to the continuation, extension, renewal, or
modification of any compensation, contract, or arrangement with or by the
Company.
14. Rights as a Shareholder. The recipient of any grant under the Plan
shall have no rights as a shareholder with respect to any Common Shares until
the date of issue to the recipient of a stock certificate upon the exercise of
an option. Except as otherwise expressly provided in the Plan, no adjustment
shall be made for dividends or other rights for which the record date is prior
to the date such stock certificate is issued.
7
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