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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K
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<C> <S>
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
MAY 27, 2000 OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM ------ TO ------
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COMMISSION FILE NUMBER 1-4837
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TEKTRONIX, INC.
(Exact name of Registrant as specified in its charter)
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<S> <C>
OREGON 93-0343990
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
14200 S.W. KARL BRAUN DRIVE 97077
BEAVERTON, OREGON (Zip Code)
(Address of principal executive offices)
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Registrant's telephone number, including area code:
(503) 627-7111
Securities registered pursuant to Section 12(b) of the Act:
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<CAPTION>
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
<S> <C>
Common Shares, New York Stock Exchange
without par value
Series A No Par Preferred New York Stock Exchange
Shares Purchase Rights
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Securities registered pursuant to Section 12(g) of the Act: NONE
------------------------
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $1,625,964,523 at July 31, 2000.
At July 31, 2000 there were 48,072,773 Common Shares of the Registrant
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
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<CAPTION>
DOCUMENT PART OF 10-K INTO WHICH INCORPORATED
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<S> <C>
Registrant's Proxy Statement Part III
dated August 18, 2000
2000 Annual Report to Shareholders Parts I, II and IV
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PART I
ITEM 1. BUSINESS.
GENERAL
Tektronix, Inc. is a technology company focused on providing test,
measurement, and monitoring solutions to the semiconductor, computer and
networking industries to enable them to design, build, deploy and manage
next-generation global communications networks and Internet technologies.
Revenue is derived principally through the development and marketing of a broad
range of products in several key product categories: INSTRUMENTATION, including
oscilloscopes, signal sources, accessories and other products; DIGITAL SYSTEMS,
including logic analyzers; COMMUNICATIONS, including protocol analyzers, network
monitoring products, transmission test products for optical networks, mobile
handset and infrastructure test equipment, and mobile call generation systems;
and VIDEO TEST, including waveform monitors, digital video compression testers
conforming to the Motion Picture Engineering Group (MPEG) standards, and picture
quality analysis and monitoring products. In addition, Tektronix derives revenue
through support services for its products.
Tektronix is an Oregon corporation organized in 1946. It is headquartered in
Beaverton, Oregon, and conducts operations worldwide through wholly owned
subsidiaries. See Item 1--"Business-Geographic Areas of Operations." References
herein to "Tektronix" or the "Company" are to Tektronix, Inc. and its
consolidated subsidiaries, unless the context indicates otherwise.
The Company's common stock is listed on the New York Stock Exchange under
the symbol TEK. See Item 5--"Market for Registrant's Common Equity and Related
Stockholder Matters--Market Information."
Tektronix historically operated in three major business divisions:
Measurement, Color Printing and Imaging, and Video and Networking. On
January 1, 2000, the Company sold substantially all of the assets of the Color
Printing and Imaging division to Xerox Corporation. On September 24, 1999, the
Company sold the Video and Networking division to Grass Valley Group, Inc. The
Color Printing and Imaging division products included color printers and related
supplies. Video and Networking division products included video distribution and
production, video storage, and newsroom automation products. As a result of
these divestitures, the Company now operates principally in one business
segment. See Item 7--"Management's Discussion and Analysis of Financial
Condition and Results of Operations." Financial information about the Company's
historical business segments is set forth in the Notes to Consolidated Financial
Statements, "Business Segments," on pages 40 and 41 of the 2000 Annual Report to
Shareholders.
PRODUCTS
Test and measurement products include a broad range of instruments designed
to allow an engineer or technician to view, measure, test or calibrate
electrical and optical circuits, mechanical motion, sound or radio waves.
Tektronix has provided high quality test and measurement equipment for more than
fifty years. Because of their wide range of capabilities, they are used in a
variety of applications, including research, design, testing, installation,
manufacturing and service in the semiconductor, computer, telecommunications,
video, communications network, aerospace, consumer electronics and education
industries. This includes products that allow the communications and video
industries to reliably, accurately, and repeatably test the communications and
video services ultimately provided to their customers.
INSTRUMENTATION
OSCILLOSCOPES. The oscilloscope is the primary debug tool for the design
engineer. Oscilloscopes are used when an electrical signal needs to be viewed,
measured, tested or verified. Oscilloscopes are
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useful across a wide range of industries in manufacturing, test and design
applications and can be adapted to measure mechanical motion such as vibration,
sound, light, heat, pressure, strain and velocity.
Tektronix oscilloscopes are available in a wide range of configurations
(handheld to desktop), bandwidths and other performance characteristics.
Tektronix has designed a substantial portion of its oscilloscope product line to
provide consistent "architecture." This consistency allows customers reduced
learning time and reduces the time required to develop new products. For example
the next generation Digital Phosphor Oscilloscope technology, introduced by
Tektronix in fiscal 1999, gives design engineers real-time insight into the
workings of a circuit. It provides a new tool for quickly finding faults in
complex electronic circuits, such as those in cell phones, pagers, high speed
modems and embedded digital electronics.
Today's engineers expect oscilloscopes to display and analyze a signal.
Engineers working in different industries expect the results of this analysis to
be given to them in their own industry-specific language. Tektronix addresses
these industry specific challenges through application-specific modules and
software that are now available on many of its products, allowing faster time to
market with industry specific solutions. As an example, in Fiscal 2000 Tektronix
worked with Intel and Rambus to develop a series of application specific modules
to address jitter and timing analysis. Tektronix also provides to communications
equipment manufacturers application modules to test equipment performance and
conformity with standards defined by the International Telecommunications Union.
Tektronix now also offers personal computer based instruments as a result of
its acquisition of Gage Applied, Inc. in April 2000.
SIGNAL SOURCES. Tektronix offers a complete line of advanced signal source
products that complement oscilloscopes, logic analyzers and other measurement
instruments. Tektronix Arbitrary Waveform Generators (AWGs) allow the user to
generate controlled "real world" signals, including simulated glitches, drift,
noise, and other anomalies that products encounter when they leave the lab or
manufacturing floor. Tektronix AWGs incorporate features designed specifically
for disk drive testing, automotive anti-lock brakes and engine control,
communications testing, biomedical simulations, and countless other
applications.
Tektronix logic source products generate digital data, and are used to
create complex logic stimuli and introduce precisely controlled errors or
distortions to characterize, verify and improve performance of digital
integrated circuits or systems.
ACCESSORIES. Tektronix offers a broad range of accessories for its
instrumentation products, including probes, optical products, and application
software.
DIGITAL SYSTEMS
LOGIC ANALYZERS. Tektronix offers card-modular and stand alone logic
analyzers. Logic analyzers are important debug tools for the design engineer to
capture, display and examine streams of data coded as binary digits (bits),
including streams that occur simultaneously over many channels. The core of a
logic analyzer is its digital acquisition capability. Tektronix has provided a
series of breakthrough innovations in digital acquisition, beginning with
MagniVu in 1997, and continuing with usable deep memory in 1999. These
innovations have significantly reduced our customers time-to-market and have
redefined the logic analyzer market. Tektronix logic analyzers, the TLA 700
series, utilize Microsoft's Windows operating system and offer performance
leadership to develop next generation microprocessor systems and high speed
computer architectures.
The largest customers for digital systems products include computer and
communication systems developers. Communication systems developers include
producers of cell phones, network switches and routers, network access devices,
and information appliances. Other customers include digital
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systems developers across a wide range of industries, including industrial
control, automotive, military and aerospace, and many others.
COMMUNICATIONS
As the telecommunications industry evolves to digital video and
Internet-based data networks, operators must be able to perform complete
compliance testing for the many standards that govern telecommunications
transmission. The equipment created by communications and video equipment
manufacturers is used by the communications network operators to operate the
global networks that carry Internet, video and wired/wireless voice traffic.
Many Tektronix products, including cable and fiber optic test products, network
monitoring, and high quality streaming video products are used by these
manufacturers and operators. Equipment manufacturers recommend to the operators
test products that are appropriate for the installation and maintenance of the
communications and video equipment they produce.
PROTOCOL ANALYZERS. Protocol analyzers are instruments that monitor the
traffic on a network to determine that it conforms to the specific set of rules,
procedures, and conventions that are the expected "protocols" for that
particular network and layer. The Tektronix protocol analysis product line was
acquired from Siemens in 1997. These industry-leading products monitor and
simulate the exchange of data between telecommunications and information
technology facilities, measuring and testing standardized interfaces of network
components and instruments.
NETWORK MONITORING PRODUCTS. Tektronix network monitoring technologies and
related product lines were acquired in 1999 from Necsy SpA, located in Padova,
Italy. These products perform services designed to measure voice, data and fax
transmission quality for fixed and mobile networks. Other products include
systems to stress mobile networks from air interface to base station and perform
tests for software verification, load, roaming and system integration for all
components in the system.
TRANSMISSION TEST PRODUCTS FOR OPTICAL NETWORKS. Transmission test products
help operators verify network functionality from the physical to the protocol
layers. The fundamental measure of performance or quality in digital systems is
the probability of any transmitted bit being received in error. Analog
transmission test measures frequency response, noise, and cross talk. Tektronix
offers a full complement of communications test sets for optical DWDM (Dense
Wave Division Multiplexing) systems to ensure transmission quality. For
optical-layer testing, Tektronix provides optical spectrum analyzers, power
meters, optical time domain reflectometers (OTDRs), and wave length meters. For
example, a technician would use an OTDR to locate a fault in 20 miles of
underground fiber. By generating the signal and analyzing it through the fiber
it can locate the fault, display the location, and allow the technician to dig
up the cable at the correct point for repair. Link-layer test equipment includes
the ST2400 SDH/SONET Test Set and the CTS850 SDH/PDH and Jitter/Wander Test Set.
Tektronix also offers network operators with portable test solutions allowing
field maintenance and testing of 10 Gigabit per second (GB/s) optical networks.
MOBILE HANDSET & INFRASTRUCTURE TEST EQUIPMENT. RF Analyzers display and
measure signal amplitude versus frequency rather than amplitude versus time (as
is the case for oscilloscopes). These products are used to design, check and
adjust communications transmitting and receiving equipment, such as Personal
Communications Services (PCS) mobile phones and base stations. They allow
telecommunications equipment manufacturers, who produce tens of thousands of
units per month, to complete production tests quickly without sacrificing the
thoroughness and accuracy that ensure product quality. In addition to
manufacturing its own line of RF analyzers, Tektronix sells and supports the
wireless RF test products from Rohde & Schwarz and Advantest in the United
States, Canada and Mexico. One such product, the CMU200, is the only test set on
the market that can provide full coverage of frequency bands ranging to 2.7 GHz,
consistent with emerging standards such as Bluetooth and reassigned bands such
as 450 MHz.
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Tektronix' Mobile Call Generation System (MCGS) is widely used for final
testing in mobile network components manufacturing and system integration as
well as for testing mobile network components in network operators' plants. New
version 2.0 enables wireless network operators to quickly resolve roaming and
billing verification issues. Using the MCGS 2.0, wireless network operators can
simulate real traffic in a controlled environment at any time. The MCGS 2.0 also
offers international roaming verification. This allows wireless network
operators to verify that the network is compatible with roaming wireless
customers. By testing for the most commonly used international standards,
network operators can be sure service to the customer will not be lost due to
network incompatibility.
VIDEO TEST
Tektronix is the leading supplier of Test & Measurement equipment to
traditional TV broadcasters and content providers, continuing a long
relationship since the analog era. Tektronix has been awarded eight Emmy awards
for technical excellence.
Tektronix products assist customers in the transition from analog to
digital, including high definition formats. As a voting member of various
committees responsible for establishing standards for evolving technologies,
Tektronix plays an important role in this transition.
Historically, video signals were transmitted through the air from the
broadcaster's antenna to the consumer's TV set. As technology and standards
evolved, alternative transmission methods arose, including cable, satellite, and
now the Internet. With the emergence of these new technologies, compressing the
video signal prior to transmission has become essential to preserve bandwidth.
This adds to the complexity of transmitting a viable video signal. Tektronix
product solutions offer customers the ability to monitor and manage the quality
of their video signal transmission, and to manage the balance between
infrastructure cost and the quality of transmitted signals. Tektronix also
offers solutions to quality problems inherent in these new technologies. For
example, during fiscal 2000 Tektronix announced a new technique for detecting
and correcting audio and visual delay errors. Using digital watermarking
technology, this solution corrects these errors automatically, in real time, at
the point of distribution. This is the first automated solution for this
pervasive problem.
WAVEFORM MONITORS. Waveform monitors display the details of a video signal.
They are specialized oscilloscopes that are designed specifically for video
signals. Some waveform monitors also have vectorscope capabilities that allow
the user to understand information about the color in the video signal. There
are waveform monitors for analog video signals, serial digital video signals and
high definition video signals. These instruments are used primarily by customers
who create and manipulate video content in production and post-production
facilities.
MPEG DIGITAL VIDEO COMPRESSION TESTERS. MPEG testers allow detailed
analysis of MPEG-2 errors in digital video products. Tektronix' new MTS300 MPEG
Test System is built for engineers who design or evaluate digital video products
such as encoders, decoders and multiplexers. This product follows the
Emmy-Registered Trademark- award-winning heritage of the MTS215, adding a new,
high-performance architecture. The new architecture offers greater performance
characteristics such as data rates to 140 Mb/s and a rugged chassis.
PICTURE QUALITY ANALYSIS & MONITORING. Digital video test products also
include picture quality analysis and monitoring products. The PQA200, used by
companies that manufacture equipment, rates the quality of video content. The
PQM300 is an "operational" piece of test equipment used by companies that
transmit and transport video content, offering real time, in-service rating of
the quality of the picture based on blockiness, gaussian noise and freeze frame.
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VIDEOTELE.COM
VideoTele.com (VTC), provides high quality streaming video products to
networking, telecommunications and broadcast service providers. This business
was transferred to a separate, wholly owned subsidiary of Tektronix on
February 26, 2000.
MANUFACTURING
Tektronix' primary manufacturing facilities are located in Beaverton,
Oregon. Additional software and product development occurs in Chelmsford,
Massachusetts, and Bangalore, India. Some products, components and accessories
are assembled in the People's Republic of China. Protocol analysis products are
manufactured at a plant in Berlin, Germany. Some telecommunications test
products are manufactured in Italy. PC-based instruments are manufactured in
Montreal, Canada. See Item 2--"Properties," for additional information regarding
the Company's manufacturing facilities.
Certain Tektronix products are manufactured for the Japanese market at a
plant in Gotemba, Japan by Sony/Tektronix Corporation, a Japanese corporation
equally owned by Tektronix and Sony Corporation. Sony/Tektronix also designs and
manufactures arbitrary waveform and function generators and benchtop
semiconductor testers for sale worldwide by Tektronix.
Raw materials, additional components, data processing equipment and computer
peripheral devices for use in products and systems are purchased from a variety
of third-party suppliers. Although supply shortages are experienced from time to
time, the Company currently believes that it will be able to acquire the
required materials and components as needed. Because some of these components
are unique, disruptions in supply can have an adverse effect on the Company's
manufacturing operations.
SALES AND DISTRIBUTION
Tektronix maintains its own worldwide sales and field maintenance
organization, staffed with technically trained personnel. Sales in the United
States, Canada, Brazil, the United Kingdom, Germany, France, Italy, Poland,
Spain, Belgium, Sweden, Denmark, Norway, Finland, Switzerland, Australia,
Austria, Hong Kong, Taiwan, Korea, Singapore, China, India, Argentina and Mexico
are made through the Company, its subsidiaries and their field offices, or
independent distributors and resellers located in principal market areas.
Certain of the Company's independent distributors also sell products
manufactured by the Company's competitors. Except for VTC products, sales in
Japan are made by Sony/Tektronix Corporation.
Tektronix' principal customers are electronic and computer equipment
component manufacturers and service providers, semiconductor manufacturers,
communications and networking companies, private industrial concerns engaged in
commercial or governmental projects, military and nonmilitary agencies of the
United States and of foreign countries, public utilities, educational
institutions and radio and television stations and networks. Certain products
are sold to both equipment users and original equipment manufacturers.
Most Tektronix product sales are sold as standard catalog items. Tektronix
attempts to fill its orders as promptly as possible.
At May 27, 2000, Tektronix' unfilled Measurement product orders amounted to
approximately $169.9 million, as compared to approximately $91.1 million for
unfilled Measurement product orders at May 29, 1999. Tektronix expects that
substantially all unfilled product orders at May 27, 2000 will be filled during
its current fiscal year. Orders received by the Company are subject to
cancellation by the customer.
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GEOGRAPHIC AREAS OF OPERATIONS
Tektronix conducts operations worldwide on a geographic regional basis, with
those regions known as the United States, Americas, Europe, Pacific (excluding
Japan) and Japan. The Americas region is based in Beaverton, Oregon and covers
Canada and Latin America. The European region, which is based in Bracknell,
England, covers the European countries and also some countries in the
Middle-East and Africa. The Pacific and Japan regions cover the Pacific Rim,
Australia, New Zealand and Japan, and are based in Hong Kong. International
sales include both export sales from United States subsidiaries and sales by
non-U.S. subsidiaries. See "Business Segments" in the Notes to Consolidated
Financial Statements on pages 40 and 41 of the Company's 2000 Annual Report to
Shareholders, containing information on sales based upon the location of the
purchaser and long-lived assets by geographic area.
Fluctuating foreign currency exchange rates and other factors beyond the
control of Tektronix, such as the stability of international monetary
conditions, tariff and trade policies and domestic and foreign tax and economic
policies, affect the level and profitability of international sales. The Company
does not believe it is materially exposed to foreign currency exchange rate
fluctuation, although the Company is unable to predict the effect of these
factors on its business. The Company hedges certain foreign currency exchange
rate exposures in order to minimize their impact.
RESEARCH AND DEVELOPMENT
Tektronix operates in an industry characterized by rapid technological
change, and research and development are important elements in its business.
Expenditures for research and development during fiscal years ended May 27,
2000, May 29, 1999, and May 30, 1998 amounted to approximately $136.5 million
(of which $117.3 million was for Measurement products), $144.7 million (of which
$108.0 million was for Measurement products), and $143.0 million (of which
$105.6 million was for Measurement products), respectively. Substantially all of
these funds were Company generated.
Research and development activities are conducted by research and design
groups and specialized product development groups. These activities include:
(i) research on basic devices and techniques (ii) the design and development of
products and components and specialized equipment and (iii) the development of
processes needed for production. Most of Tektronix' research and development is
devoted to enhancing and developing its own products.
PATENTS AND INTELLECTUAL PROPERTY
The Company holds approximately 750 patents, which cover a wide range of
products and technologies and have various expiration dates. It is Tektronix'
policy to seek patents in the United States and appropriate foreign countries
for its significant patentable developments. However, electronic equipment as
complex as most of Tektronix' products generally are not patentable in their
entirety. The Company also seeks to protect significant trademarks and software
through trademark and copyright registration. As with any company whose business
involves intellectual property, Tektronix is subject to claims of infringement.
There are no material pending claims.
COMPETITION
The electronics industry continues to become more competitive, both in the
United States and abroad. Primary competitive factors are customer service,
product performance, technology, product availability and price. Tektronix
believes that its reputation in the marketplace is a significant positive
competitive factor. With respect to many of its products, the Company competes
with companies that have substantially larger resources.
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Tektronix is the world's largest manufacturer of oscilloscopes and no single
competitor offers as complete a product line. The Company is the leader in sales
of test and measurement equipment for the television industry. It is also one of
the leaders in sales of logic analyzers and in the rapidly growing
telecommunications market. In general, Tektronix competes with a number of
companies in specialized areas of other test and measurement products and one
large broad line measurement products supplier, Agilent Technologies (formerly
the measurement business of Hewlett Packard).
Tektronix competes with a number of large, worldwide electronics firms that
manufacture specialized equipment for the television industry with respect to
its television test and measurement products.
EMPLOYEES
At May 27, 2000, Tektronix had 4,276 employees, of whom 1,479 were located
in foreign countries. Tektronix' employees in the United States and most foreign
countries are not covered by collective bargaining agreements. The Company
believes that relations with its employees are good.
ENVIRONMENT
The Company's facilities are subject to numerous laws and regulations
concerning the discharge of materials into the environment, or otherwise
relating to protection of the environment. The Company operates a licensed
hazardous waste management facility at its Beaverton campus. Although future
regulatory actions cannot be predicted with certainty, compliance with
environmental laws has not had and is not expected to have a material effect
upon the capital expenditures, earnings or competitive position of the Company.
EXECUTIVE OFFICERS OF THE COMPANY
The following are the executive officers of the Company:
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HAS SERVED AS AN
EXECUTIVE OFFICER OF
NAME POSITION AGE TEKTRONIX SINCE
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Jerome J. Meyer...... Chairman of the Board 62 1990
Richard H. Wills..... Chief Executive Officer 45 1997
and President
Colin L. Slade....... Vice President and 46 2000
Chief Financial Officer
James F. Dalton...... Vice President, General 41 1998
Counsel and Secretary
David E. Coreson..... Vice President, Central 54 2000
Operations
Lee M. Ellison....... Vice President, Global Sales 45 2000
and International
Operations
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The executive officers are elected by the board of directors of the Company
at its annual meeting, except for interim elections to fill vacancies. Executive
officers hold their positions until the next annual meeting, or until their
successors are elected, or until such tenure is terminated by death, resignation
or removal in the manner provided in the bylaws. There are no arrangements or
understandings between executive officers or any other person pursuant to which
the executive officers were elected, and none of the executive officers are
related.
All of the named executive officers have been employed by Tektronix in
management positions for the last five years, except for Mr. Ellison.
Mr. Ellison began at Tektronix in June 2000. Mr. Ellison has a
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20-year sales background in the telecommunications industry. The last 15 of
those years were with Glenayre Technologies, a leading supplier of wireless
network infrastructure and devices and enhanced services platforms. While at
Glenayre, he held positions as Senior Vice President of Corporate Business
Development and Senior Vice President of Sales and Marketing and General Manager
of Global Operations (where he managed 18 international offices). Prior to
Glenayre, he held positions of national sales manager and director of major
accounts for telecom-related companies.
FORWARD-LOOKING STATEMENTS
Statements and information included in this report that relate to future
results and events (including new products) are based on the Company's current
expectations. Words such as "may," "could," "expects," "believes," "forecasts,"
"plans," "estimates," "intends" and "anticipates" constitute forward-looking
statements subject to a number of risk factors, assumptions and uncertainties
that could cause actual results to differ materially from those currently
expected or desired. These risks are related to, but are not limited to, timely
delivery of competitive products, competition, supplier risks, worldwide
economic and market conditions, the transition to a smaller company,
comparability of results, intellectual property risks, environmental risks,
financial market risk and other risk factors listed here and from time-to-time
in the Company's filings with the Securities and Exchange Commission and press
releases.
TIMELY DELIVERY OF COMPETITIVE PRODUCTS
Tektronix sells its products to customers that participate in rapidly
changing high technology markets, which are characterized by short product life
cycles. The Company's ability to deliver a timely flow of competitive new
products and market acceptance of those products, as well as the ability to
increase production or to develop and maintain effective sales channels, is
essential to growing the business. Because Tektronix sells test and measurement
products that enable its customers to develop new technologies, the Company must
accurately predict the ever-evolving needs of those customers and deliver
appropriate products and technologies at competitive prices to meet customer
demands. The Company's ability to deliver such products could be affected by
engineering or other development program slippage as well as the availability of
parts and supplies from third party providers on a timely basis and at
reasonable prices. Failure to deliver competitive products in a timely manner
and at a reasonable price could have an adverse effect on the results of
operations, financial condition or cash flows of the Company.
COMPETITION
Tektronix participates in the highly competitive test, measurement and
monitoring industry, competing directly with Agilent Technologies, Inc.,
TTC/Wavetek, Wandel and Goltermann, Inc., LeCroy Corporation and others for
customers. Competition in the Company's business is based primarily on product
performance, technology, customer service, product availability and price. Some
of the Company's competitors may have greater resources to apply to each of
these factors and in some cases have built significant reputations with the
customer base in each market in which Tektronix competes. The Company faces
pricing pressures that have had and may continue to have an adverse impact on
the Company's earnings. If the Company is unable to compete effectively on these
and other factors, it could have a material adverse effect on the Company's
results of operations, financial condition or cash flows.
In the current business environment, the Company must also compete with
these and other companies to attract and retain talented employees who will be
key to the ongoing success of the Company. Risks relating to this competition
could include higher than anticipated compensation expense, additional stock
option issuances, new product delays and other related delays in the execution
of the Company's strategic plan.
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SUPPLIER RISKS
The Company's manufacturing operations are dependent on the ability of
suppliers to deliver quality components, subassemblies and completed products in
time to meet critical manufacturing and distribution schedules. The Company
periodically experiences constrained supply of certain component parts in some
product lines as a result of strong demand in the industry for those parts. Such
constraints, if persistent, may adversely affect operating results until
alternate sourcing can be developed. Volatility in the prices of these component
parts, an inability to secure enough components at reasonable prices to build
new products in a timely manner in the quantities and configurations demanded
or, conversely, a temporary oversupply of these parts, could adversely affect
the Company's future operating results.
WORLDWIDE ECONOMIC AND MARKET CONDITIONS
Tektronix currently maintains operations in the U.S., Europe, the Pacific,
the Americas and Japan. During the last fiscal year, nearly one-half of the
Company's revenues were from international sales. In addition, some of the
Company's manufacturing operations and key suppliers are located in foreign
countries. As a result, the business is subject to the worldwide economic and
market conditions risks generally associated with doing business abroad, such as
fluctuating exchange rates, the stability of international monetary conditions,
tariff and trade policies, domestic and foreign tax policies, foreign
governmental regulations, political unrest, disruptions or delays in shipments
and changes in other economic conditions. These factors, among others, could
influence the Company's ability to sell in international markets, as well as its
ability to manufacture products or procure supplies. A significant downturn in
the global economy could adversely affect the Company's results of operations,
financial position or cash flows.
TRANSITION TO A SMALLER COMPANY
Tektronix is in the process of transitioning from a portfolio of businesses
to a company focused solely on the test, measurement and monitoring market.
During fiscal year 2000, Tektronix divested itself of two of its three
previously existing business divisions, Video and Networking and Color Printing
and Imaging. Risks associated with these divestitures and the overall transition
include the retention of some potential liabilities and other exposures related
to a larger more diversified business, and the ability to successfully implement
the strategic direction and restructuring actions announced in fiscal 1999 and
2000, including consolidating duplicative functions and re-sizing the existing
cost structure to that of a smaller company. Failure to successfully resolve
issues related to this transition in a timely manner could adversely affect the
Company's future results of operations, financial condition or cash flows.
COMPARABILITY OF RESULTS
During 1999, the Company was subject to the effects of the Asian economic
crisis and its impact on the entire global economy, which resulted in
lower-than-expected sales, orders, margins and growth for the Company in that
year. During 2000, the global economy has improved resulting in favorable
comparisons to 1999. Although management expects continued strong growth through
fiscal year 2001, it does not expect growth of the magnitude experienced in 2000
on an on-going basis. These and other factors inherent to the Company's
business, including the effects of estimates, assumptions and allocations used
in the preparation of stand-alone Measurement financial statements on the
comparability of reported figures and the reliability of ratios and trends
calculated based upon these results make it difficult to predict operating
results for future quarters.
INTELLECTUAL PROPERTY RISKS
As a technology-based company, Tektronix' success depends on developing and
protecting its intellectual property. Tektronix relies generally on patent,
copyright, trademark and trade secret laws in
9
<PAGE>
the United States and abroad. Electronic equipment as complex as most of the
Company's products, however, is generally not patentable in its entirety.
Tektronix also licenses intellectual property from third parties and relies on
those parties to maintain and protect their technology. The Company cannot be
certain that actions the Company takes to establish and protect proprietary
rights will be adequate. If the Company is unable to adequately protect its
technology, or if the Company is unable to continue to obtain or maintain
licenses for protected technology from third parties, it could have a material
adverse affect on the Company's results of operations and financial condition.
From time to time in the usual course of business, the Company receives notices
from third parties regarding intellectual property infringement or takes action
against others with regard to intellectual property rights. Even where the
Company is successful in defending or pursuing such claims, the Company may
incur significant costs. In the event of a successful claim against the Company,
Tektronix could lose its rights to needed technology or be required to pay
license fees for the infringed rights, either of which could have an adverse
impact on the Company's business.
ENVIRONMENTAL RISKS
Tektronix is subject to a variety of federal, state, local and foreign
environmental regulations relating to the use, storage, discharge and disposal
of its hazardous chemicals used during the Company's manufacturing process. The
Company operates a licensed hazardous waste management facility at its Beaverton
campus. If Tektronix fails to comply with any present and future regulations,
the Company could be subject to future liabilities or the suspension of
production. In addition, such regulations could restrict the Company's ability
to expand its facilities or could require Tektronix to acquire costly equipment,
or to incur other significant expenses to comply with environmental regulations.
FINANCIAL MARKET RISK
The Company is exposed to financial market risks, including interest rate,
equity price, and foreign currency exchange rate risks.
The Company is exposed to interest rate risk primarily through its
short-term investments and long-term borrowings, which are used to finance
operations. The Company does not hedge its interest rate exposure. The Company
invests primarily in short-term, investment grade securities of various issuers,
types and maturities. These investments are held by high-quality financial
institutions, government and government agencies and corporations, thereby
reducing credit risk. As of May 27, 2000, and May 29, 1999, the weighted average
maturity of the portfolio was less than two months. The Company enters into debt
obligations to support general corporate purposes, including acquisitions,
working capital requirements and capital expenditures. At May 27, 2000 and
May 29, 1999, the Company's debt obligations had fixed interest rates. In
management's opinion, a 10% change in interest rates would not be material to
the Company's results of operations, financial condition or cash flows.
The Company is exposed to equity price risk primarily through its marketable
equity securities portfolio, including investments in Merix and other companies.
The Company has not entered into any hedging programs to mitigate equity price
risk. In management's opinion, an adverse change of 20% in the value of theses
securities would not be material to the Company's results of operations,
financial condition or cash flows.
The Company is exposed to foreign currency exchange rate risk primarily
through transactions and commitments denominated in foreign currencies. The
Company utilizes natural hedges as well as derivative financial instruments,
primarily forward foreign currency exchange contracts, to mitigate this risk.
The Company's policy is to only enter into derivative transactions when the
Company has an identifiable exposure to risk, thus not creating additional
foreign currency exchange rate risk. In management's opinion, a hypothetical 10%
adverse change in foreign currency exchange rates would not have a significant
effect on the Company's results of operations, financial position or cash flows.
10
<PAGE>
OTHER RISK FACTORS
Other risk factors include but are not limited to changes in the mix of
products sold, regulatory and tax legislation, changes in effective tax rates,
inventory risks due to changes in market demand or the Company's business
strategies, potential litigation and claims arising in the normal course of
business, credit risk of customers, the fact that a substantial portion of the
Company's sales are generated from orders received during each quarter and other
risk factors.
ITEM 2. PROPERTIES.
The Company's headquarters and primary manufacturing facilities are located
at Beaverton, Oregon. All properties are maintained in good working order and,
except for those held for sale or lease, are substantially utilized and are
suitable for the conduct of its business. The Company believes that its
facilities are adequate for their intended uses.
The Beaverton facilities are located in a business park (the "Howard Vollum
Park"), which is owned by Tektronix. The Howard Vollum Park includes numerous
buildings arranged in a campus-like setting and containing an aggregate of
approximately 1.6 million gross square feet of enclosed floor space. The
buildings were constructed after 1957. Warehouses, production facilities and
other critical operations are protected by fire sprinkler installations. Most
manufacturing, office and engineering areas are air-conditioned. The Company
leases certain excess space at the Howard Vollum Park to other corporations.
A facility in Chelmsford, Massachusetts is leased for Tektronix' Broadband
Transmission Test operations. Gage Applied, Inc., which was acquired during the
fiscal year and which manufactures personal computer based instruments, is
located in a leased facility in Montreal, Canada. Manufacturing space is also
leased in Germany and Italy, relating to communications products.
The Company owns a facility in Nevada City, California that is leased to
Grass Valley Group Inc. (GVG). GVG purchased the Video and Networking division
from Tektronix in September 1999 and continues to operate from the leased
premises.
Facilities in Wilsonville, Oregon and in Penang, Malaysia were sold to Xerox
in January 2000 as a part of the sale of the Color Printing and Imaging
division.
Tektronix leases sales and service field offices throughout the world.
ITEM 3. LEGAL PROCEEDINGS.
There are no material pending legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The information required by this item is included on page 47 of the
Company's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 6. SELECTED FINANCIAL DATA.
The information required by this item is included on page 48 of the
Company's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
11
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information required by this item is included on pages 21 through 28 of
the Company's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this item is included on page 28 of the
Company's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The information required by this item is included on pages 30 through 47 of
the Company's 2000 Annual Report to Shareholders and is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information required by this item regarding directors is included under
"Board of Directors" and "Election of Directors" on pages 3 through 9 of the
Company's Proxy Statement dated August 18, 2000.
The information required by this item regarding executive officers is
contained under "Executive Officers of the Company" in Item 1 of Part I hereof.
The information required by Item 405 of Regulation S-K is included under
"Section 16(a) Beneficial Ownership Reporting Compliance" on page 21 of the
Company's Proxy Statement dated August 18, 2000.
ITEM 11. EXECUTIVE COMPENSATION.
The information required by this item is included under "Directors'
Compensation" and "Executive Compensation" on pages 9 through 14 of the
Company's Proxy Statement dated August 18, 2000.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information required by this item is included under "Security Ownership
of Certain Beneficial Owners" and "Election of Directors" on pages 1 and 2 and 7
through 9 of the Company's Proxy Statement dated August 18, 2000.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
12
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Financial Statements.
The following documents are included in the Company's 2000 Annual Report to
Shareholders at the pages indicated and are incorporated herein by reference:
<TABLE>
<CAPTION>
PAGE IN 2000 ANNUAL
REPORT TO SHAREHOLDERS
----------------------
<S> <C>
Independent Auditors' Report........................... 29
Consolidated Statements of Operations.................. 30
Consolidated Balance Sheets............................ 31
Consolidated Statements of Cash Flows.................. 32
Consolidated Statements of Shareholders' Equity........ 33
Notes to Consolidated Financial Statements............. 34 through 46
</TABLE>
(2) Financial Statement Schedules.
No financial statement schedules are required to be filed with this
report.
Separate financial statements for the registrant have been omitted because
the registrant is primarily an operating company and the subsidiaries included
in the consolidated financial statements are substantially totally held. All
subsidiaries of the registrant are included in the consolidated financial
statements. Summarized financial information for 50 percent or less owned
persons in which the registrant has an interest, and for which summarized
financial information must be provided, is included in the Notes to Consolidated
Financial Statements appearing in the Company's Annual Report to Shareholders.
(3) Exhibits:
<TABLE>
<S> <C> <C>
(3)(i) Restated Articles of Incorporation, as amended. Incorporated
by reference to Exhibit (3) of Form 10-Q dated October 9,
1998, SEC File No. 1-4837. Articles of Amendment of
Tektronix, Inc. establishing Series B No Par Preferred
Shares.
(ii) Bylaws, as amended. Incorporated by reference to Exhibit (3)
of Form 8-K dated June 21, 2000, SEC File No. 1-4837.
(4)(i) Indenture dated as of November 16, 1987, as amended by First
Supplemental Indenture dated as of July 13, 1993, covering
the registrant's 7 1/2% notes due August 1, 2003, and the
registrant's 7 5/8% notes due August 15, 2002. Indenture
incorporated by reference to Exhibit 4(i) of Form 10-K
dated August 22, 1990, SEC File No. 1-4837.
(ii) Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the
registrant agrees to furnish to the Commission upon
request copies of agreements relating to other
indebtedness.
(iii) Rights Agreement dated as of August 16, 1990. Incorporated
by reference to Exhibit 1 of Form 8-K dated August 27,
1990, SEC File No. 1-4837.
(iv) Rights Agreement dated as of June 21, 2000, between
Tektronix, Inc. and ChaseMellon Shareholder Services,
L.L.C. Incorporated by reference to Exhibit (4) of
Form 8-K dated June 21, 2000, SEC File No. 1-4837.
</TABLE>
13
<PAGE>
<TABLE>
<S> <C> <C>
(10)+(i) 1982 Stock Option Plan, as amended. Incorporated by
reference to Exhibit 10(iii) of Form 10-K dated August 22,
1989, SEC File No. 1-4837.
+(ii) Stock Incentive Plan, as amended. Incorporated by reference
to Exhibit 10(ii) of Form 10-Q dated April 9, 1993, SEC
File No. 1-4837.
+(iii) Restated Annual Performance Improvement Plan. Incorporated
by reference to Exhibit 10(i) of Form 10-Q dated April 9,
1993, SEC File No. 1-4837.
+(iv) Restated Deferred Compensation Plan. Incorporated by
reference to Exhibit 10(i) of Form 10-Q dated December 20,
1984, SEC File No. 1-4837.
+(v) Retirement Equalization Plan, Restatement. Incorporated by
reference to Exhibit (10)(v) of Form 10-K dated August 20,
1996, SEC File No. 1-4837.
+(vi) Indemnity Agreement entered into between the Company and its
named officers and directors. Incorporated by reference to
Exhibit 10(ix) of Form 10-K dated August 18, 1996, SEC
File No. 1-4837.
+(vii) Executive Severance Agreement, as amended (Jerome J. Meyer)
dated as of October 6, 1993. Incorporated by reference to
Exhibit 10(i) of Form 10-Q dated October 7, 1994, SEC File
No. 1-4837.
+(viii) Form of Executive Severance Agreement entered into between
the Company and its named officers who are current
employees.
+(ix) Executive Compensation and Benefits Agreement (Jerome J.
Meyer) dated as of October 24, 1990. Incorporated by
reference to Exhibit 10(ii) of Form 10-Q dated December
21, 1990, SEC File No. 1-4837.
+(x) Amendment to Supplemental Executive Retirement Agreement
(Jerome J. Meyer). Incorporated by reference to
Exhibit 10(ii) of Form 10-Q dated October 7, 1994, SEC
File No. 1-4837.
+(xi) Amendment to Supplemental Executive Retirement Agreement
(Jerome J. Meyer) dated June 16, 1998. Incorporated by
reference to Exhibit (10)(x) of Form 10-K for the fiscal
year ended May 30, 1998, SEC File No. 1-4837.
+(xii) Executive Compensation and Benefits Agreement (Carl W. Neun)
dated as of March 29, 1993. Incorporated by reference to
Exhibit 10(xiv) of Form 10-K dated August 11, 1994, SEC
File No. 1-4837.
+(xiii) Amendment to Supplemental Executive Retirement Agreement
(Carl W. Neun) dated September 24, 1997. Incorporated by
reference to Exhibit 10(i) of Form 10-Q dated January 13,
1998, SEC File No. 1-4837.
(xiv) Non-Employee Directors' Deferred Compensation Plan, 1999
Restatement dated July 1, 1999. Incorporated by reference
to Exhibit 10(iii) of Form 10-Q dated October 8, 1999, SEC
File No. 1-4837.
+(xv) Non-Employee Directors Stock Compensation Plan, as amended
through Amendment No. 2. Incorporated by reference to
Exhibit 10(ii) of Form 10-Q dated October 8, 1999, SEC
File No. 1-4837.
+(xvi) Supplemental Executive Retirement Plan for named executive
officers dated September 26, 1996. Incorporated by
reference to Exhibit 10(xvi) of Form 10-K dated May 31,
1997, SEC File No. 1-4837.
+(xvii) Separation Agreement dated December 16, 1999 between Carl W.
Neun and the registrant.
</TABLE>
14
<PAGE>
<TABLE>
<S> <C> <C>
+(xviii) 1998 Stock Option Plan, as amended. Incorporated by
reference to Exhibit 10(i) of Form 10-Q dated October 8,
1999, SEC File No. 1-4837.
+(xix) Standstill Agreement among the Company and Relational
Investors, et al, dated July 6, 1999. Incorporated by
reference to Exhibit 5 of Schedule 13D filed July 6, 1999,
SEC File No. 5-10548.
(13) Portions of the 2000 Annual Report to Shareholders that are
incorporated herein by reference.
(21) Subsidiaries of the registrant.
(23) Independent Auditors' Consent.
(24) Powers of Attorney.
(27) Financial Data Schedule.
</TABLE>
------------------------
+ Compensatory Plan or Arrangement
(b) No reports on Form 8-K have been filed during the last quarter of
the period covered by this Report.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C> <C>
TEKTRONIX, INC.
By /s/ COLIN L. SLADE
-----------------------------------------
Colin L. Slade,
VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
Dated: August 11, 2000
</TABLE>
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>
/s/ RICHARD H. WILLS*
--------------------------------- Chief Executive Officer, President and August 11, 2000
Richard H. Wills Director
/s/ J.J. MEYER*
--------------------------------- Chairman of the Board August 11, 2000
Jerome J. Meyer
/s/ COLIN L. SLADE Vice President and Chief Financial
--------------------------------- Officer, Principal Financial and August 11, 2000
Colin L. Slade Accounting Officer
/s/ PAULINE LO ALKER*
--------------------------------- Director August 11, 2000
Pauline Lo Alker
/s/ A. GARY AMES*
--------------------------------- Director August 11, 2000
A. Gary Ames
/s/ GERRY B. CAMERON*
--------------------------------- Director August 11, 2000
Gerry B. Cameron
/s/ D. CAMPBELL*
--------------------------------- Director August 11, 2000
David N. Campbell
</TABLE>
16
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<C> <S> <C>
/s/ PAUL C. ELY, JR.*
--------------------------------- Director August 11, 2000
Paul C. Ely, Jr.
/s/ FRANK C. GILL*
--------------------------------- Director August 11, 2000
Frank C. Gill
/s/ RALPH V. WHITWORTH*
--------------------------------- Director August 11, 2000
Ralph V. Whitworth
/s/ WILLIAM D. WALKER*
--------------------------------- Director August 11, 2000
William D. Walker
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ JAMES F. DALTON
----------------------------
James F. Dalton August 11, 2000
AS ATTORNEY-IN-FACT
</TABLE>
17
<PAGE>
EXHIBIT LIST
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
---------------- -----------
<S> <C> <C>
(3)(i) Restated Articles of Incorporation, as amended. Incorporated
by reference to Exhibit (3) of Form 10-Q dated October 9,
1998, SEC File No. 1-4837. Articles of Amendment of
Tektronix, Inc. establishing Series B No Par Preferred
Shares.
(ii) Bylaws, as amended. Incorporated by reference to
Exhibit (3) of Form 8-K dated June 21, 2000, SEC File
No. 1-4837.
(4)(i) Indenture dated as of November 16, 1987, as amended by First
Supplemental Indenture dated as of July 13, 1993, covering
the registrant's 7-1/2% notes due August 1, 2003, and the
registrant's 7-5/8% notes due August 15, 2002. Indenture
incorporated by reference to Exhibit 4(i) of Form 10-K
dated August 22, 1990, SEC File No. 1-4837.
(ii) Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the
registrant agrees to furnish to the Commission upon
request copies of agreements relating to other
indebtedness.
(iii) Rights Agreement dated as of August 16, 1990. Incorporated
by reference to Exhibit 1 of Form 8-K dated August 27,
1990, SEC File No. 1-4837.
(iv) Rights Agreement dated as of June 21, 2000, between
Tektronix, Inc. and ChaseMellon Shareholder Services,
L.L.C. Incorporated by reference to Exhibit (4) of
Form 8-K dated June 21, 2000, SEC File No. 1-4837.
(10)+(i) 1982 Stock Option Plan, as amended. Incorporated by
reference to Exhibit 10(iii) of Form 10-K dated
August 22, 1989, SEC File No. 1-4837.
+(ii) Stock Incentive Plan, as amended. Incorporated by reference
to Exhibit 10(ii) of Form 10-Q dated April 9, 1993, SEC
File No. 1-4837.
+(iii) Restated Annual Performance Improvement Plan. Incorporated
by reference to Exhibit 10(i) of Form 10-Q dated April 9,
1993, SEC File No. 1-4837.
+(iv) Restated Deferred Compensation Plan. Incorporated by
reference to Exhibit 10(i) of Form 10-Q dated
December 20, 1984, SEC File No. 1-4837.
+(v) Retirement Equalization Plan, Restatement. Incorporated by
reference to Exhibit (10)(v) of Form 10-K dated
August 20, 1996, SEC File No. 1-4837.
+(vi) Indemnity Agreement entered into between the Company and its
named officers and directors. Incorporated by reference to
Exhibit 10(ix) of Form 10-K dated August 18, 1996, SEC
File No. 1-4837.
+(vii) Executive Severance Agreement, as amended (Jerome J. Meyer)
dated as of October 6, 1993. Incorporated by reference to
Exhibit 10(i) of Form 10-Q dated October 7, 1994, SEC File
No. 1-4837.
+(viii) Form of Executive Severance Agreement entered into between
the Company and its named officers. Incorporated by
reference to Exhibit 10(ix) of Form 10-K dated August 9,
1995, SEC File No. 1-4837.
+(ix) Executive Compensation and Benefits Agreement (Jerome J.
Meyer) dated as of October 24, 1990. Incorporated by
reference to Exhibit 10(ii) of Form 10-Q dated
December 21, 1990, SEC File No. 1-4837.
+(x) Amendment to Supplemental Executive Retirement Agreement
(Jerome J. Meyer). Incorporated by reference to
Exhibit 10(ii) of Form 10-Q dated October 7, 1994, SEC
File No. 1-4837.
+(xi) Amendment to Supplemental Executive Retirement Agreement
(Jerome J. Meyer) dated June 16, 1998. Incorporated by
reference to Exhibit (10)(x) of Form 10-K for the fiscal
year ended May 30, 1998, SEC File No. 1-4837.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
---------------- -----------
<S> <C> <C>
+(xii) Executive Compensation and Benefits Agreement (Carl W. Neun)
dated as of March 29, 1993. Incorporated by reference to
Exhibit 10(xiv) of Form 10-K dated August 11, 1994, SEC
File No. 1-4837.
+(xiii) Amendment to Supplemental Executive Retirement Agreement
(Carl W. Neun) dated September 24, 1997. Incorporated by
reference to Exhibit 10(i) of Form 10-Q dated January 13,
1998, SEC File No. 1-4837.
(xiv) Non-Employee Directors' Deferred Compensation Plan, 1999
Restatement dated July 1, 1999. Incorporated by reference
to Exhibit 10(iii) of Form 10-Q dated October 8, 1999, SEC
File No. 1-4837.
+(xv) Non-Employee Directors Stock Compensation Plan, as amended
through Amendment No. 2. Incorporated by reference to
Exhibit 10(ii) of Form 10-Q dated October 8, 1999, SEC
File No. 1-4837.
+(xvi) Supplemental Executive Retirement Plan for named executive
officers dated September 26, 1996. Incorporated by
reference to Exhibit 10(xvi) of Form 10-K dated May 31,
1997, SEC File No. 1-4837.
+(xvii) Separation Agreement dated December 16, 1999 between
Carl W. Neun and the registrant.
+(xviii) 1998 Stock Option Plan, as amended. Incorporated by
reference to Exhibit 10(i) of Form 10-Q dated October 8,
1999, SEC File No. 1-4837.
+(xix) Standstill Agreement among the Company and Relational
Investors, et al, dated July 6, 1999. Incorporated by
reference to Exhibit 5 of Schedule 13D filed July 6, 1999,
SEC File No. 5-10548.
(13) Portions of the 2000 Annual Report to Shareholders that are
incorporated herein by reference.
(21) Subsidiaries of the registrant.
(23) Independent Auditors' Consent.
(24) Powers of Attorney.
(27) Financial Data Schedule.
</TABLE>
------------------------
+ Compensatory Plan or Arrangement
