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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 for the fiscal year ended December, 31, 1999 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from _____________ to
_____________.
Commission file number 1-4837
Tektronix, Inc. 401(k) Plan
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(Full title of Plan)
TEKTRONIX, INC.
14200 SW Karl Braun Drive
Beaverton, Oregon 97077
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(Name of issuer of the securities held pursuant to the
plan and the address of its principal executive office)
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REQUIRED INFORMATION
Tektronix, Inc.
Tektronix 401(k) Plan
December 31, 1999 and 1998
Index
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<CAPTION>
Page
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Independent Auditors' Report 1
Financial Statements
Statements of Net Assets Available for Benefits
at December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits
at December 31, 1999 and 1998 3
Notes to Financial Statements 4-10
Note: All other schedules have been omitted because the information
required is included in the financial statements or the notes thereto or
they are not applicable.
Signature 11
Exhibit 23 Independent Auditors' Consent
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INDEPENDENT AUDITORS' REPORT
Investment and Administrative Committee
Tektronix 401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of the Tektronix 401(k) Plan (the "Plan") as of December 31, 1999 and 1998, and
the related statements of changes in net assets available for benefits for the
years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1999
and 1998, and the changes in net assets available for benefits for the years
then ended in conformity with accounting principles generally accepted in the
United States of America.
DELOITTE & TOUCHE LLP
June 16, 2000
1
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TEKTRONIX 401(K) PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)
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<CAPTION>
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1999 1998
<S> <C> <C>
ASSETS:
Investment in Tektronix Master Retirement Trust (Note 3) $1,001,442 $895,254
Employer contributions receivable 892 599
Employee contributions receivable 1,020 717
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Total assets 1,003,354 896,570
LIABILITIES - Transfer payable (Note 9) 48,619 -
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NET ASSETS AVAILABLE FOR BENEFITS $954,735 $896,570
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</TABLE>
See notes to financial statements.
2
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TEKTRONIX 401(k) PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1999 AND 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
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1999 1998
<S> <C> <C>
NET INVESTMENT INCOME FROM TEKTRONIX
MASTER RETIREMENT TRUST (Note 3) $173,295 $108,122
CONTRIBUTIONS:
Employer 17,645 18,924
Employee 26,196 28,290
WITHDRAWALS (109,502) (53,358)
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NET INCREASE 107,634 101,978
TRANSFER OF VND ASSETS (Note 9) (48,619) -
TRANSFER OF AVSTAR ASSETS (850) -
NET ASSETS AVAILABLE FOR BENEFITS AT
BEGINNING OF YEAR 896,570 794,592
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NET ASSETS AVAILABLE FOR BENEFITS AT
END OF YEAR $954,735 $896,570
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</TABLE>
See notes to financial statements.
3
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TEKTRONIX 401(k) PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1999 AND 1998
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1. DESCRIPTION OF THE PLAN
The following brief description of the Tektronix 401(k) Plan (the "Plan") is
provided for general information purposes only. Participants should refer to the
Summary Plan Description for more complete information regarding amount and type
of benefits, vesting, and other provisions of the Plan.
GENERAL - The Plan is a defined contribution plan covering all regular employees
of a participating Tektronix, Inc. company. It is subject to the provisions of
the Employee Retirement Income Security Act of 1974 ("ERISA").
CONTRIBUTIONS - Participants can elect to have Tektronix, Inc. contribute from
1% to 15% of their eligible pay to the Plan. Tektronix, Inc. makes a basic
contribution of 2% of eligible pay for all participants each year to the
Tektronix Stock Fund plus a matching contribution of 100% of the first 4% of
elective contributions which is allocated according to the participant's
allocation election. All employees eligible to participate in the Plan receive
the basic 2% contribution regardless of their election to contribute to the
Plan. Contributions are subject to certain limitations.
PARTICIPANT ACCOUNTS - Each participant account is credited with contributions
and an allocation of the Plan's earnings. Contributions are allocated based on
the participant's election and earnings are allocated based on participant
account balances. The Plan allows for loans to active participants on such terms
as the Investment and Administrative Committee approves. Participants may borrow
from their accounts a minimum of $1,000 up to a maximum equal to the lesser of
$50,000, 50% of their account balance in all funds, or 100% of the cash account
balances in all funds excluding the Tektronix Stock Fund, whichever is less. The
loans are secured by the balance in the participant's account and bear interest
at rates that range from 7.0% to 10.8%, which are commensurate with local
prevailing rates as determined by the Plan Administrator. Principal and interest
is paid ratably through biweekly payroll deductions. Loan terms cannot exceed
five years.
VESTING AND BENEFITS - Participants are immediately 100% vested in all
contributions to the Plan and are eligible to receive benefits upon termination,
retirement, or disability. Benefits can be received by electing a lump-sum
settlement, installment payments, annuity contracts, or a combination thereof.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The Plan's financial statements are prepared on the
accrual basis of accounting.
4
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USE OF ESTIMATES - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect reported
amounts of assets and liabilities and changes therein, and disclosures of
contingent assets and liabilities. Actual results could differ from those
estimates.
ADMINISTRATIVE EXPENSE - Certain expenses for administration and servicing of
the Plan, including facilities, equipment and supplies, and payroll expenses of
administrative and clerical personnel, are provided by Tektronix, Inc. without
charge to the Plan. Tektronix, Inc. also pays certain professional fees related
to the Plan.
INCOME TAX STATUS - The Plan obtained its latest determination letter dated May
1999, in which the Internal Revenue Service stated that the Plan, as designed,
was in compliance with the applicable requirements of the Internal Revenue Code
("IRC"). The Plan Administrator believes that the Plan is being operated in
compliance with the applicable requirements of the IRC.
WITHDRAWALS - Payments to participants are recorded when paid.
RECLASSIFICATIONS - Certain prior year amounts have been reclassified to conform
to the current year presentation.
3. INVESTMENT IN TEKTRONIX MASTER RETIREMENT TRUST
All of the Plan's investment assets are held in a Master Trust (the "Trust")
established by Tektronix, Inc. Use of the Trust permits the commingling of
assets, for investment and administrative purposes, of two retirement plans of
Tektronix, Inc. and its subsidiaries. The majority of the Trust assets are
investments of both underlying plans, and the remaining Trust assets are
investments of only one or the other plan. The net earnings on assets that are
investments of both plans are allocated to the plans based on each plan's share
of such net assets in the Trust. For assets that are not investments held by
both plans, net earnings are allocated entirely to the plan to which the
specific investment relates. The following plans participate in the Trust:
Tektronix 401(k) Plan
Tektronix Cash Balance Plan
For investment purposes, the assets of the Trust are divided among nine
different funds. The first six of these funds are the investment options in
which Plan participants can choose to invest their contributions and the
employer matching contributions. Employer basic contributions are automatically
invested in the Tektronix Stock Fund which is a nonparticipant-directed fund.
The Pension Fund is used to segregate the investments of the Tektronix Cash
Balance Plan. The funds available in the Trust are as follows:
5
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STABLE FUND invests in insurance company investment contracts and a
money market mutual fund.
BALANCED FUND invests in a balanced mix of common stocks and U.S.
government and corporate debt obligations.
STOCK INDEX FUND invests in common stocks of large U.S. companies.
SMALL AND MEDIUM COMPANY STOCK FUND invests in the stocks of small and
medium-sized companies.
INTERNATIONAL STOCK FUND invests in stocks of companies that are
located outside the United States.
TEKTRONIX STOCK FUND II invests employee contributions and employer
matching contributions in the common stock of Tektronix, Inc., the Plan
Sponsor.
TEKTRONIX STOCK FUND invests employer basic contributions in the common
stock of Tektronix, Inc., the Plan sponsor.
LOAN FUND accounts for participant loan balances.
PENSION FUND invests in a diversified portfolio of assets.
The Trust values marketable securities at the closing quoted market price on the
valuation date. Commercial paper, temporary cash investments, and participant
loans are valued at cost, which approximates fair value. The fair value of real
estate investments have been estimated on the basis of future income expected
from such investments discounted at interest rates commensurate with the risks
involved or at appraised value. Insurance contracts are valued at contract value
which approximates fair value (see Note 7). The fair value of limited
partnership investments, for which no public market exists, is based upon the
estimates made by the general partners of those partnerships. The general
partners consider the financial condition and operating results of each limited
partnership and such other factors deemed appropriate. Limited partnerships that
invest in publicly-traded securities are valued at quoted market prices, less a
discount applicable to the general partner's share of the unrealized gain or
loss on the investment.
At December 31, 1999 and 1998, the Plan's interest in the net assets of the
master trust was approximately 64% and 65%, respectively.
6
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The net assets of the Trust at December 31, 1999 and 1998 are summarized as
follows (in thousands):
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<CAPTION>
1999 1998
<S> <C> <C>
Accrued income receivable $ 3,368 $ 1,116
Noninterest-bearing cash 1,111 31
Interest-bearing cash 5,019 33,877
U.S. government securities 74,884 125,145
Corporate debt - preferred 52,907 43,430
Corporate debt - other 61,546 137,997
Preferred stock 4,277 2,351
Common stock - Tektronix, Inc. 103,671 87,721
Common stock - other 551,818 450,486
Partnerships and joint ventures 63,514 50,226
Real estate - income-producing 12 682
Real estate - non-income-producing 1,834 1,834
Participant loans 12,461 20,906
Common and collective trusts 85,729 223,705
Registered investments 357,145 114,107
Insurance contracts 178,365 156,400
Pending sales 83,367 6,819
Pending purchases (77,514) (82,204)
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Total $1,563,514 $1,374,629
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</TABLE>
The components of the Trust's total investment return for the years ended
December 31, 1999 and 1998 are as follows (in thousands):
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Net appreciation in fair value of investments $268,560 $130,657
Interest 27,405 26,510
Dividends 8,244 14,272
Other - 272
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Total investment income $304,209 $171,711
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</TABLE>
7
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The following table presents the net appreciation (depreciation) in fair value
of the Trust's investments, by investment type (in thousands):
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
U.S. government securities $ 2,802 $ 2,868
Corporate debt - preferred (1,160) 21
Corporate debt - other (16,965) 1,856
Preferred stock 1,298 (755)
Common stock 193,204 63,155
Partnerships and joint ventures 8,686 3,502
Real estate - income-producing (40) 1,120
Common and collective trusts 11,142 48,189
Registered investments 69,233 9,114
Insurance contracts 360 1,587
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Net appreciation in fair value of investments $268,560 $130,657
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</TABLE>
4. CONCENTRATION OF RISK
The Trust's assets consist primarily of financial instruments including cash,
government and agency securities, corporate debt, preferred stock, common stock,
partnerships and joint ventures, real estate, loans, common and collective
trusts, registered investments, and investment contracts. The financial
instruments may subject the Plan to concentrations of risk as, from time to
time, cash balances exceed amounts insured by the Federal Deposit Insurance
Corporation, market value of securities are dependent on the ability of the
issuer to honor its contractual commitments, and investments in common stock are
subject to changes in market values of the stock.
5. BENEFIT PRIORITIES UPON TERMINATION
Tektronix, Inc. intends the Plan to be permanent but, if the Plan were
terminated, Plan assets would be allocated among participants in proportion to
their account balances.
6. NONPARTICIPANT-DIRECTED INVESTMENTS
Investments in Tektronix Master Retirement Trust, net investment income from
Tektronix Master Retirement Trust, employer contributions, withdrawals, and
transfer of VND assets relating to nonparticipant-directed investments held in
the Tektronix Stock Fund (see Note 3) are as follows for the years ended
December 31, 1999 and 1998 (in thousands):
8
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<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Investment in Tektronix Master Retirement Trust $ 95,995 $ 77,544
Net investment income (loss) from Tektronix Master
Retirement Trust 23,405 (21,017)
Employer contributions 6,592 7,529
Withdrawals (8,794) (3,965)
Transfer of VND assets (4,404) -
</TABLE>
7. CONTRACTS WITH INSURANCE COMPANIES
The Trust has entered into various guaranteed investment contracts with
insurance companies. These contracts are included in the financial statements at
contract value (which represents contributions made under the contracts, plus
earnings, less withdrawals and related expenses) because the contracts are fully
benefit responsive. For example, participants may ordinarily direct the
withdrawal or transfer of all or a portion of their investment at contract
value. Plan management has asserted that contract value approximates fair value
for these contracts. There are no reserves against the contract values for
credit risk of the issuers or otherwise. The average yields and crediting
interest rates ranged from approximately 5.64% to 8.23% and 5.52% to 8.23% for
the years ended December 31, 1999 and 1998, respectively. The crediting interest
rates are based on formulas agreed upon with each issuer.
8. RECONCILIATION TO FORM 5500
The reconciliation of 1999 withdrawals and transfers per the Plan financial
statements to withdrawals and transfers per the Form 5500 is as follows (amounts
in thousands):
<TABLE>
<S> <C>
Withdrawals per Plan statement of changes in net assets
available for benefits $109,502
Transfer of Avstar assets per Plan statement of changes
in net assets available for benefits 850
Benefits payable per Form 5500 4,702
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Withdrawals per Form 5500 $115,054
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Transfer of VND assets per Plan statement of changes in net
assets available for benefits $ 48,619
Transfer payable per Plan statement of net assets available
for benefits (48,619)
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Transfers per Form 5500 $ -
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</TABLE>
9
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9. SUBSEQUENT EVENT
On September 24, 1999, the Video and Networking Division ("VND") of Tektronix,
Inc. was sold to a third party. On January 1, 2000, the Color Printing and
Imaging Division ("CPID") of Tektronix, Inc. was sold to a third party. As a
result of these two transactions, the Plan assets associated with the former VND
and CPID employees were transferred via a trust-to-trust transfer from the Plan
to the trustees of the third party purchasers' plans. The VND transfer was
recorded in the Plan's 1999 financial statements in the amount of $48,619,000.
As the CPID transfer did not close until January 1, 2000, the transfer was not
recorded in the Plan's 1999 financial statements. For both the CPID and VND
transfers, the majority of the Plan assets were transferred during the first
week of January 2000, with the remaining assets transferred during the first
week of February 2000. The dollar amount of the CPID transfer was $123,021,000,
which will be reflected in the Plan's 2000 financial statements.
10
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned
thereunto duly authorized.
TEKTRONIX, INC. 401(k) PLAN
Date: June 23, 2000 By: /s/ Michael Linder
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Michael Linder, Secretary
Tektronix 401(k) Plan
Administrative Committee
11
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Exhibit Index
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<CAPTION>
Exhibit
Document Number
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Independent Auditors' Consent 23
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