<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]
- --------------------------------------------------------------------------------
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
TERADYNE, INC.
(Name of Registrant as Specified in Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
1) Title of each class of securities to which transaction applies:
2) Aggregate number of securities to which transaction applies:
3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act
Rule 0-11 (set forth the amount on which the filing fee is calculated and
state how it was determined):
4) Proposed maximum aggregate value of transaction:
5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.
1) Amount previously paid:
2) Form, Schedule or Registration Statement no.:
3) Filing Party:
4) Date Filed:
- --------------------------------------------------------------------------------
<PAGE> 2
TERADYNE, INC.
321 HARRISON AVENUE
BOSTON, MASSACHUSETTS 02118
------------------------------
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------------
TO THE SHAREHOLDERS:
The Annual Meeting of Shareholders of Teradyne, Inc., a Massachusetts
corporation (the "Corporation"), will be held on Thursday, May 25, 2000, at
10:00 A.M., at Fleet National Bank, 100 Federal Street (Second Floor), Boston,
Massachusetts, for the following purposes:
1. To elect four members to the Board of Directors to serve for a
three-year term as Class II Directors.
2. To ratify the selection of the firm of PricewaterhouseCoopers LLP as
auditors for the fiscal year ending December 31, 2000.
3. To approve an amendment to the Corporation's Restated Articles of
Organization, as amended, increasing from 250,000,000 to 1,000,000,000
the number of authorized shares of Common Stock, par value $.125 per
share, of the Corporation.
4. To transact such other business as may properly come before the meeting
and any adjournments thereof.
Shareholders entitled to notice of and to vote at the meeting shall be
determined as of the close of business on April 10, 2000, the record date fixed
by the Board of Directors for such purpose.
By Order of the Board of Directors,
RICHARD J. TESTA, Clerk
April 19, 2000
------------------------
SHAREHOLDERS ARE REQUESTED TO SIGN THE ENCLOSED PROXY CARD AND
RETURN IT IN THE ENCLOSED STAMPED ENVELOPE BY RETURN MAIL.
<PAGE> 3
TERADYNE, INC.
321 HARRISON AVENUE
BOSTON, MASSACHUSETTS 02118
------------------------------
PROXY STATEMENT
APRIL 19, 2000
Proxies in the form enclosed with this proxy statement ARE SOLICITED BY THE
BOARD OF DIRECTORS OF TERADYNE, INC. (the "Corporation") for use at the Annual
Meeting of Shareholders (the "Annual Meeting") to be held on May 25, 2000, at
10:00 A.M., at Fleet National Bank, 100 Federal Street (Second Floor), Boston,
Massachusetts.
Only shareholders of record as of the close of business on April 10, 2000
(the "Record Date"), will be entitled to vote at the Annual Meeting and any
adjournments thereof. As of the Record Date, 172,794,091 shares (excluding
treasury shares) of Common Stock of the Corporation were issued and outstanding.
Each share outstanding as of the Record Date will be entitled to one vote, and
shareholders may vote in person or by proxy. Execution of a proxy will not in
any way affect a shareholder's right to attend the Annual Meeting and vote in
person. Any shareholder delivering a proxy has the right to revoke it only by
written notice to the Clerk delivered at any time before it is exercised,
including at the Annual Meeting.
The persons named as attorneys in the proxies are officers and directors of
the Corporation. All properly executed proxies returned in time to be cast at
the Annual Meeting will be voted. With respect to the election of Directors, any
shareholder submitting a proxy has a right to withhold authority to vote for any
individual nominee by writing that nominee's name in the space provided on the
proxy. The proxies will be voted as stated below under "Election of Directors."
In addition to the election of Directors, the shareholders will consider and
vote upon proposals to increase the number of the Corporation's authorized
shares and to ratify the selection of auditors. Where a choice has been
specified on the proxy with respect to the foregoing matters, the shares
represented by the proxy will be voted in accordance with the specification and
will be voted FOR if no specification is indicated.
A majority in interest of the outstanding shares represented at the meeting
in person or by proxy shall constitute a quorum for the transaction of business.
Votes withheld from any nominee, abstentions and broker "non-votes" are counted
as present or represented for purposes of determining the presence or absence of
a quorum for the meeting. A "non-vote" occurs when a nominee holding shares for
a beneficial owner votes on one proposal, but does not vote on another proposal
because the nominee does not have discretionary voting power and has not
received instructions from the beneficial owner. Directors are elected by a
plurality of the votes cast by shareholders entitled to vote at the meeting. On
all other matters being submitted to shareholders, an affirmative vote of at
least a majority of the shares present, or represented, and entitled to vote at
the meeting is required for approval. An automated system administered by the
Corporation's transfer agent tabulates the votes. The vote on each matter
submitted to shareholders is tabulated separately. Abstentions are included in
the number of shares present or represented and voting on each separate matter.
Broker "non-votes" are not so included.
The Board of Directors knows of no other matter to be presented at the
Annual Meeting. If any other matter should be presented at the Annual Meeting
upon which a vote properly may be taken, shares represented by all proxies
received by the Board of Directors will be voted with respect thereto in
accordance with the judgment of the persons named as attorneys in the proxies
and in accordance with the SEC's proxy rules. See "Shareholder Proposals" below.
An Annual Report to Shareholders, containing financial statements for the
fiscal year ended December 31, 1999, has been mailed to all shareholders
entitled to vote at the Annual Meeting. This proxy statement and the
accompanying proxy were first mailed to shareholders on or about April 19, 2000.
<PAGE> 4
ELECTION OF DIRECTORS
The Corporation's Board of Directors is divided into three classes. Each
class serves three years, with the terms of office of the respective classes
expiring in successive years. The present term of office for the directors in
Class II expires at the Annual Meeting. The nominees for election as Class II
directors are Messrs. Carnesale, Chamillard, Hibbard and Vallee, each of whom,
except for Mr. Vallee, was elected at the Annual Meeting of Shareholders held
May 15, 1997. Mr. Vallee was appointed to the Board of Directors on February 24,
2000. If re-elected, the Class II nominees will hold office until the Annual
Meeting of Shareholders to be held in 2003, and until their successors shall
have been elected and shall have been qualified. Shares represented by all
proxies received by the Board of Directors and not so marked as to withhold
authority to vote for any individual nominee will be voted (unless one or more
nominees are unable or unwilling to serve) for the election of the Class II
nominees. The Board of Directors knows of no reason why any such nominee should
be unable or unwilling to serve, but if such should be the case, proxies will be
voted for the election of some other person or the Board of Directors will fix
the number of directors at a lesser number.
The following table sets forth the nominees to be elected at the Annual
Meeting and the other current directors, the year each nominee or director was
first appointed or elected a director, the principal occupation of each of the
nominees and directors during at least the past five years, and the ages of each
of the nominees and directors.
<TABLE>
<CAPTION>
NOMINEE'S OR DIRECTOR'S NAME PRINCIPAL OCCUPATION YEAR
AND YEAR NOMINEE OR DIRECTOR AND BUSINESS EXPERIENCE TERM WILL
FIRST BECAME DIRECTOR DURING THE PAST FIVE YEARS EXPIRE/CLASS
---------------------------- -------------------------- ------------
<S> <C> <C>
Alexander V. d'Arbeloff........... Chairman of the Board of Directors(1) 2002/I
1960
James W. Bagley................... Director(2) 2002/I
1996
Albert Carnesale.................. Director(3) 2000/II
1993
George W. Chamillard.............. Director, President and Chief 2000/II
1996 Executive Officer(4)
Daniel S. Gregory................. Director(5) 2002/I
1977
Dwight H. Hibbard................. Director(6) 2000/II
1983
John P. Mulroney.................. Director(7) 2001/III
1983
Vincent M. O'Reilly............... Director(8) 2002/I
1998
James A. Prestridge............... Director(9) 2000/II
1992
Owen W. Robbins................... Director(10) 2001/III
1992
Richard J. Testa.................. Director, Secretary and Clerk(11) 2001/III
1973
Roy A. Vallee..................... Director(12) 2000/II
2000
Patricia S. Wolpert............... Director(13) 2001/III
1996
</TABLE>
- ---------------
(1) Mr. d'Arbeloff, 72, has been Chairman of the Board of Directors of the
Corporation since 1977, was President of the Corporation from 1971 until
January 1996 and Chief Executive Officer of the
2
<PAGE> 5
Corporation from 1971 until May 1997 and has been a director of the
Corporation since 1960. Since July 1997, Mr. d'Arbeloff has served as
Chairman of the Board of Trustees of the Massachusetts Institute of
Technology. Mr. d'Arbeloff is also a director of PRI Automation, Inc.
(2) Mr. Bagley, 61, has served as Chairman of the Board of Directors of Lam
Research Corporation since October 1998 and as Chief Executive Officer
since August 1997. Mr. Bagley served as Chairman and Chief Executive
Officer of OnTrak Systems, Inc. from May 1996 until August 1997. From 1987
until May 1996, Mr. Bagley served in various capacities at Applied
Materials, Inc., including President and Chief Operating Officer from 1987
through 1994, Vice Chairman from October 1995 until May 1996 and Vice
Chairman and Chief Operating Officer from January 1994 until October 1995.
Mr. Bagley is also a director of KLA/Tencor Instruments, Kulicke and Soffa
Industries, Inc. and Micron Technology, Inc.
(3) Mr. Carnesale, 63, has served as Chancellor of the University of
California, Los Angeles since July 1997. He served as Provost of Harvard
University from October 1974 until June 1997 and was the Dean of the John
F. Kennedy School of Government from November 1991 through 1995 where he
also served as Professor of Public Policy from 1974 through 1995.
(4) Mr. Chamillard, 61, has served as Chief Executive Officer of the
Corporation since May 1997. Mr. Chamillard has served as President of the
Corporation and has been a director of the Corporation since January 1996.
Mr. Chamillard served as Chief Operating Officer of the Corporation from
1996 until May 1997 and as Executive Vice President of the Corporation from
January 1994 until January 1996. Prior to that time, Mr. Chamillard served
as a Vice President of the Corporation.
(5) Mr. Gregory, 71, has been a General Partner of various Greylock
partnerships since January 1965. From January 1991 until January 1992, Mr.
Gregory served as the Secretary of the Executive Office of Economic Affairs
for the Commonwealth of Massachusetts. From 1976 through 1990, Mr. Gregory
served as Chairman of Greylock Management Corporation.
(6) Mr. Hibbard, 76, served as Chairman of Cincinnati Bell Inc. from October
1993 until May 1996 and served as Chief Executive Officer and Chairman of
Cincinnati Bell Inc. from February 1984 until October 1993. Mr. Hibbard
retired from his position as Chairman of Cincinnati Bell Inc. effective in
May 1996.
(7) Mr. Mulroney, 64, served as Chief Operating Officer and President of Rohm
and Haas Company from March 1986 until December 1998. He is a director of
Aluminum Company of America.
(8) Mr. O'Reilly, 63, was a partner, Chief Operating Officer and Vice-Chairman
at Coopers & Lybrand L.L.P. until his retirement in September 1997. Since
October 1997, Mr. O'Reilly has served as a Distinguished Senior Lecturer at
the Carroll Graduate School of Management of Boston College. Mr. O'Reilly
is also a director of the Neiman Marcus Group, Inc. and Eaton Vance Corp.
(9) Mr. Prestridge, 68, has served as a director of the Corporation since 1992,
was Vice-Chairman of the Board of Directors of the Corporation from January
1996 until May 1997 and served as Executive Vice President of the
Corporation from 1992 until May 1997. From 1982 to 1992 he served as Vice
President of the Semiconductor Test Group of the Corporation. Mr.
Prestridge is not running for re-election to the Board of Directors.
(10) Mr. Robbins, 70, has served as a director of the Corporation since 1992,
was Vice Chairman of the Board of Directors of the Corporation from January
1996 until May 1997 and served as Executive Vice President and Chief
Financial Officer of the Corporation from March 1992 until May 1997. From
October 1977 to March 1992, he served as Vice President Finance and Chief
Financial Officer of the Corporation. Mr. Robbins is also a director of MKS
Instruments Inc.
(11) Mr. Testa, 60, has been a partner at the law firm of Testa, Hurwitz &
Thibeault, LLP since 1973. Testa, Hurwitz & Thibeault, LLP serves as
counsel to the Corporation.
(12) Mr. Vallee, 47, has been Chairman of the Board of Directors and Chief
Executive Officer of Avnet, Inc. since July 1998. From November 1992 until
July 1998, Mr. Vallee was Vice Chairman of the Board of Directors of Avnet
and served as President and Chief Operating Officer from March 1992 until
July 1998. Avnet, Inc. is a supplier of electronic components to the
Corporation.
3
<PAGE> 6
(13) Ms. Wolpert, 50, has served as Vice President, Business Operations,
Americas at International Business Machines Corporation since January 1999.
From January 1993 to December 1998, Ms. Wolpert served in various
capacities at International Business Machines Corporation, including
General Manager System Sales, Latin America; Executive Assistant of the
Chairman's Office; General Manager, Northeast Area; Vice President of
Operations, Northeast Area; and General Manager, Northern New England.
BOARD OF DIRECTORS' MEETINGS AND COMMITTEES
The Board of Directors of the Corporation met five times and took action by
unanimous written consent twice during the fiscal year ended December 31, 1999.
The Audit and Finance Committee, which oversees the accounting and financial
functions of the Corporation, including matters relating to the appointment and
activities of the Corporation's independent auditors, met three times during
1999. Messrs. Carnesale, Gregory, Mulroney, O'Reilly and Robbins are currently
members of the Audit and Finance Committee. The Management Compensation and
Development Committee (the "Compensation Committee"), which determines the cash
compensation of the Corporation's executive officers, met five times during
1999. Messrs. Bagley, Hibbard and Testa and Ms. Wolpert are currently members of
the Compensation Committee. The Stock Option Committee, which administers the
Corporation's stock option and certain other benefit plans, met four times
during 1999. Messrs. Bagley and Hibbard and Ms. Wolpert are currently members of
the Stock Option Committee. The Board Composition and Agenda Committee, which
acts, in part, as the Corporation's nominating committee, and is responsible for
recommending individuals to be nominated for election to the Board of Directors
and recommending the time, location and agenda of the meetings of the Board of
Directors, met once during 1999. Messrs. d'Arbeloff, Mulroney and Prestridge are
currently members of the Board Composition and Agenda Committee. Shareholders
wishing to suggest nominees for election to the Board of Directors should direct
such suggestions to the Clerk of the Corporation at the Corporation's principal
address in accordance with the nomination procedures set forth in the
Corporation's By-Laws. All directors attended at least 75% of the aggregate of
the total number of meetings of the Board of Directors and the total number of
meetings of all committees of the Board on which they served except that Mr.
Bagley attended 67% of the meetings of the Board of Directors.
DIRECTOR COMPENSATION
All non-employee directors are compensated at the rate of $20,000 per year
and $1,500 per day of meeting attended, plus reimbursement of reasonable
expenses. Directors who are employees of the Corporation receive no compensation
in their capacity as a director.
Each director who is not an employee or officer of the Corporation (a
"Non-Employee Director") is entitled to participate in the Corporation's 1996
Non-Employee Director Stock Option Plan, as amended (the "Director Plan"). In
August 1999, the Director Plan was amended to authorize the automatic grant of
(i) an option to purchase 22,500 shares of the Corporation's Common Stock to
each Non-Employee Director who becomes a member of the Corporation's Board of
Directors on or after August 26, 1999, (ii) an option to purchase 30,000 shares
of the Corporation's Common Stock to each person who was a Non-Employee Director
on December 14, 1998 and (iii) an option to purchase 11,250 shares of the
Corporation's Common Stock to each person who is a Non-Employee Director on the
first Monday of February in each year beginning on February 7, 2000 and
continuing throughout the term of the Director Plan. The Director Plan is
administered by the Stock Option Committee of the Board of Directors of the
Corporation. Options granted under the Director Plan vest at the rate of 25% per
year. The exercise price per share for all options granted under the Director
Plan is equal to the fair market value per share of the Corporation's Common
Stock on the date of grant and the term of each option is for a period of five
years from the date of grant.
As of December 31, 1999, options to purchase 551,250 shares of the
Corporation's Common Stock under the Director Plan were outstanding at a
weighted average exercise price of $18.81.
4
<PAGE> 7
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of April 10, 2000 information relating to
the beneficial ownership of the Corporation's Common Stock by each director,
each executive officer named in the Summary Compensation Table on page 7, and by
all directors and executive officers as a group.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF PERCENT OF
NAME OWNERSHIP(1)(2) CLASS
---- --------------- ----------
<S> <C> <C>
Alexander V. d'Arbeloff.................................... 2,541,148(3) 1.47%
James W. Bagley............................................ 179,439 *
Michael A. Bradley......................................... 148,745 *
Albert Carnesale........................................... 47,050 *
George W. Chamillard....................................... 416,580 *
Daniel S. Gregory.......................................... 123,642 *
Dwight H. Hibbard.......................................... 86,850(4) *
Jeffrey R. Hotchkiss....................................... 69,853 *
John P. Mulroney........................................... 64,910 *
Vincent M. O'Reilly........................................ 2,500 *
James A. Prestridge........................................ 203,874(5) *
Owen W. Robbins............................................ 305,738 *
Edward Rogas, Jr........................................... 187,501(6) *
David L. Sulman............................................ 186,271(7) *
Richard J. Testa........................................... 24,000 *
Roy A. Vallee.............................................. 0 *
Patricia S. Wolpert........................................ 26,250 *
All executive officers and directors as a group (21
people)(8)............................................... 4,753,311 2.73%
</TABLE>
- ---------------
* less than 1%
(1) Unless otherwise indicated, the named person possesses sole voting and
dispositive power with respect to the shares.
(2) Includes shares of Common Stock which have not been issued but which are
subject to options which either are presently exercisable or will become
exercisable within 60 days, as follows: Mr. d'Arbeloff, 273,000 shares; Mr.
Bagley, 41,250 shares; Mr. Bradley, 107,000 shares; Mr. Carnesale, 46,250
shares; Mr. Chamillard 241,000; Mr. Gregory, Mr. Hibbard and Mr. Mulroney,
46,250 shares; Mr. Hotchkiss, 29,000 shares; Mr. O'Reilly, 1,500 shares; Mr.
Prestridge, 165,000 shares; Mr. Robbins, 151,000 shares; Mr. Rogas, 122,000
shares; Mr. Sulman, 124,000 shares; Mr. Testa, no shares; Ms. Wolpert,
21,250 shares; all directors and executive officers as a group 1,546,800
shares.
(3) Includes 269,616 shares of Common Stock held by Mr. d'Arbeloff's wife and
22,400 shares of Common Stock held in trust for the benefit of Mr.
d'Arbeloff's children, as to all of which shares Mr. d'Arbeloff disclaims
beneficial ownership. Also includes 2,000 shares owned by The d'Arbeloff
Foundation, a private charitable foundation of which Mr. d'Arbeloff is the
founder and a co-trustee, as to all of which shares Mr. d'Arbeloff disclaims
beneficial ownership. In addition this amount includes 2,000 shares owned by
the d'Arbeloff Charitable Remainder Trust as to which shares Mr. d'Arbeloff
disclaims beneficial ownership.
5
<PAGE> 8
(4) Includes 400 shares of Common Stock held by Mr. Hibbard's wife.
(5) Includes 38,874 shares of Common Stock held in a living trust for the
benefit of Mr. Prestridge and his wife.
(6) Includes 18,920 shares of Common Stock held by Mr. Rogas' former wife, as to
all of which shares Mr. Rogas disclaims beneficial ownership.
(7) Includes 6,200 shares of Common Stock held by members of Mr. Sulman's
family.
(8) The group is comprised of the individuals named in the Summary Compensation
Table on page 7, the remaining executive officers of the Corporation, and
those persons who were directors of the Corporation on April 10, 2000.
Includes 1,546,800 shares which the directors and executive officers as a
group have the right to acquire by exercise of stock options granted under
the Corporation's stock plans. In addition, includes 387,051 shares held by
family members of executive officers and directors, as to which shares the
applicable officer or director disclaims beneficial ownership.
Listed below are certain persons who to the knowledge of the Corporation
own beneficially, as of the dates indicated below, more than five percent of the
Corporation's Common Stock outstanding at such date.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL HOLDER OF OWNERSHIP CLASS
-------------------- ----------------- ----------
<S> <C> <C>
Capital Group International, Inc.(1)..................... 11,992,240 7.0%
1100 Santa Monica Boulevard
Los Angeles, California 90025
Marsh & McLennan Companies, Inc.(2)...................... 10,598,133 6.2%
1166 Avenue of the Americas
New York, NY 10036
</TABLE>
- ---------------
(1) According to a Schedule 13G filed on February 14, 2000. As of February 14,
2000, Capital Group International, Inc. ("Capital Group") had sole
dispositive power with respect to all of the shares and sole voting power
with respect to 10,462,440 shares. Capital Group is the parent holding
company of a group of investment management companies that hold investment
power and, in some cases, voting power over the shares. Capital Group does
not have direct investment power or voting power over any of the shares,
however, Capital Group may be deemed to "beneficially own" such shares by
virtue of Rule 13d-3 under the Securities Exchange Act of 1934.
(2) According to a Schedule 13G Amendment filed on February 18, 2000. As of
February 18, 2000, Marsh & McLennan Companies, Inc. ("Marsh & McLennan") had
shared dispositive power with respect to all of the shares and shared voting
power with respect to 496,975 shares. Putnam Investment Management, Inc., a
wholly-owned subsidiary of Marsh & McLennan, was the beneficial owner of
8,824,402 or 5.2% of the outstanding shares of the Corporation; Putnam
Advisory Company, Inc., a wholly-owned subsidiary of Marsh & McLennan, was
the beneficial owner of 1,773,731 or 1.0% of the outstanding shares of the
Corporation.
6
<PAGE> 9
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of the forms and written representations received by the
Corporation pursuant to Section 16(a) of the Securities Exchange Act of 1934,
the Corporation believes that during the fiscal year January 1, 1999 through
December 31, 1999, the directors and executive officers complied with all
applicable Section 16 filing requirements, except that a Form 4 Report for
Dwight H. Hibbard for transactions in June 1999 was filed in December 1999.
EXECUTIVE COMPENSATION
The following Summary Compensation Table sets forth the compensation for
the three fiscal years most recently ended received by the Chief Executive
Officer of the Corporation and the four other most highly compensated executive
officers of the Corporation.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS(3)
SECURITIES
ANNUAL COMPENSATION UNDERLYING
NAME AND --------------------------- OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) SARS(#) COMPENSATION(4)
------------------ ---- --------- -------- ------------ ---------------
<S> <C> <C> <C> <C> <C>
George W. Chamillard........... 1999 $472,695 $742,221 105,000 $74,919
Director, President and 1998 411,036 376,726 310,000(5) 37,549
Chief Executive Officer 1997 353,742 531,449 160,000 22,184
Edward Rogas, Jr............... 1999 281,944 373,289 60,000 28,031
Senior Vice President 1998 271,500 197,100 190,000(6) 898
1997 245,916 295,157 100,000 --
David L. Sulman................ 1999 253,690 327,168 60,000 37,114
Senior Vice President 1998 213,528 164,881 160,000(7) 31,160
1997 179,718 200,315 80,000 17,633
Michael A. Bradley............. 1999 261,544 327,862 55,000 38,769
Chief Financial Officer 1998 242,616 179,081 170,000(8) 19,928
and Vice President 1997 216,474 257,860 90,000 13,606
Jeffrey R. Hotchkiss........... 1999 261,544 327,862 55,000 34,707
Vice President 1998 242,616 179,081 170,000(9) 19,928
1997 216,474 257,860 90,000 13,511
</TABLE>
- ---------------
(1) The amounts in the "Salary" column represent the annual base salary for each
of the named executive officers, which is paid monthly.
(2) The amounts in the "Bonus" column represent the Variable Compensation earned
in 1999 pursuant to the Corporation's Cash Compensation Plan and Cash Profit
Sharing Plan.
(3) The named executive officers did not, as of December 31, 1999, receive from
the Corporation any grants of restricted stock as compensation.
(4) The amounts in the "All Other Compensation" column represent the matching
contributions that the Corporation makes to the Savings Plan and
Supplemental Savings Plan.
(5) Includes 160,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.
7
<PAGE> 10
(6) Includes 100,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.
(7) Includes 80,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.
(8) Includes 90,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.
(9) Includes 90,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.
The following table provides information with respect to stock option
grants by the Corporation to the named executive officers in 1999. The
Corporation did not grant any stock appreciation rights in 1999.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZED VALUE
PERCENTAGE OF AT ASSUMED ANNUAL RATES
NUMBER OF TOTAL OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION OVER THE
UNDERLYING EMPLOYEES EXERCISE OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION -------------------------
NAME GRANTED(1) YEAR ($/SHARE) DATE 5% 10%
---- ---------- ------------- --------- ---------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C>
George W. Chamillard..... 105,000 1.86% $32.125 10/26/04 $931,927 $2,059,320
Edward Rogas, Jr......... 60,000 1.07 32.125 10/26/04 532,527 1,176,752
David L. Sulman.......... 60,000 1.07 32.125 10/26/04 532,527 1,176,752
Michael A. Bradley....... 55,000 0.98 32.125 10/26/04 488,149 1,078,689
Jeffrey R. Hotchkiss..... 55,000 0.98 32.125 10/26/04 488,149 1,078,689
</TABLE>
- ---------------
(1) Stock options were granted under the Corporation's 1991 Employee Stock
Option Plan at an exercise price equal to the fair market value of the
Corporation's Common Stock on the date of grant. The options have a term of
five years from the date of grant. The options become exercisable as
follows: 20% on the date of grant and, following the first year of grant,
20% on an annual basis.
(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation (5% and 10%) of
the Corporation's Common Stock over the term of the options. These numbers
are calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect the Corporation's estimate of future stock
price increases. Actual gains, if any, on stock option exercises and Common
Stock holdings are dependent on the timing of such exercise and the future
performance of the Corporation's Common Stock. There can be no assurance
that the rates of appreciation assumed in this table can be achieved or that
the amounts reflected will be received by the individuals.
8
<PAGE> 11
The following table provides information on stock option exercises in
fiscal year 1999 by the named executive officers and the value of such officers'
unexercised options at December 31, 1999.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
SHARES
ACQUIRED NUMBER OF SECURITIES
UPON UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTION OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
EXERCISE DECEMBER 31, 1999 DECEMBER 31, 1999
DURING VALUE --------------------------- ---------------------------
NAME 1999 REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
George W. Chamillard... 200,000 $5,828,247 281,000 294,000 $14,944,620 $13,920,370
Edward Rogas, Jr....... 152,000 3,921,685 176,000 178,000 9,405,247 8,498,997
David L. Sulman........ 62,000 1,836,851 204,000 156,000 10,827,994 7,305,748
Michael A. Bradley..... 88,000 2,258,749 147,000 158,000 7,808,622 7,504,185
Jeffrey R. Hotchkiss... 90,800 2,501,099 79,000 158,000 3,959,498 7,501,185
</TABLE>
RETIREMENT BENEFITS
The Corporation established a Retirement Plan for the purpose of providing
a lifetime annual income upon retirement to substantially all employees,
including officers, of the Corporation and its United States subsidiaries.
Membership in the Retirement Plan begins after one year of employment with the
Corporation. The Retirement Plan provides for credit toward retirement income
for years of employment with the Corporation prior to January 1, 2000 based upon
a formula tied to average compensation from 1995 to 1999. For years of service
after December 31, 1999, credit towards retirement income is determined on a
yearly basis and is equal to the sum for each year of credited service under the
Retirement Plan of (1) .75% of the employee's compensation for the year which is
under the defined covered compensation for the year and (2) 1.5% of the amount
of the employee's compensation for the year that exceeds the covered
compensation for the year. The covered compensation under the Retirement Plan is
based on the average of the social security wage basis in effect during the
thirty-five years up to and including normal retirement age. However, federal
tax law limitations on the total amount of benefits which a participant may
receive under qualified retirement plans may limit some participants' benefits
under the Retirement Plan.
Under the Retirement Plan, for participants employed by the Corporation on
or after January 1, 1989, accumulated annual retirement income vests partially
after three years of service with the Corporation and becomes fully vested after
seven years of service or upon normal, early or disability retirement. Benefits
are payable in the form of an annuity either at normal retirement age, upon
early retirement or upon disability. The Retirement Plan also provides for
certain benefits to a surviving spouse.
In 1999, the Corporation offered all eligible domestic employees
participating in the Retirement Plan a choice; to either continue to be eligible
for and to continue to accrue benefits under the Retirement Plan or to have the
Retirement Plan benefits stop accruing and instead to become eligible for an
increased matching contribution by the Corporation into an employee savings
plan. The accrued Retirement Plan benefits of those employees who elected the
increased matching option were frozen on January 1, 2000.
The Corporation also maintains the Teradyne, Inc. Supplemental Executive
Retirement Plan (the "SERP"). Under the SERP, annual pensions for Messrs.
Chamillard, Rogas, Sulman, Bradley and Hotchkiss and other senior managers are
computed based on model compensation. See discussion of model compensation under
Management and Compensation Development Committee Report. The pension formula is
identical to that of the qualified plan, except an employee's annual pension is
based on the average of the
9
<PAGE> 12
employee's last five years of model compensation. The resulting benefit is
reduced by the benefit received from the qualified Retirement Plan.
The following table shows the estimated annual benefits payable to covered
participants in the United States upon retirement at age 65 under both the
Retirement Plan and the SERP. The amounts shown are computed on a single life
annuity basis and are not subject to deductions for Social Security benefits or
other amounts. Remuneration for purposes of the table is based upon an
employee's average model compensation for the five-year period preceding
retirement.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
FIVE YEAR AVERAGE --------------------------------------------------------------------------------
COMPENSATION 10 15 20 25 30 35 40
- ----------------- -- -- -- -- -- -- --
<C> <S> <C> <C> <C> <C> <C> <C> <C>
100,000 ...................... 12,500 18,700 25,000 31,300 37,500 43,800 50,000
200,000 ...................... 27,500 41,200 55,000 68,800 82,500 96,300 110,000
300,000 ...................... 42,500 63,700 85,000 106,300 127,500 148,800 170,000
400,000 ...................... 57,500 86,200 115,000 143,800 172,500 201,300 230,000
500,000 ...................... 72,500 108,700 145,000 181,300 217,500 253,800 290,000
600,000 ...................... 87,500 131,200 175,000 218,800 262,500 306,300 350,000
700,000 ...................... 102,500 153,700 205,000 256,300 307,500 358,800 410,000
800,000 ...................... 117,500 176,200 235,000 293,800 352,500 411,300 470,000
900,000 ...................... 132,500 198,700 265,000 331,300 397,500 463,800 530,000
1,000,000 ...................... 147,500 221,200 295,000 368,800 442,500 516,300 590,000
1,100,000 ...................... 162,500 243,700 325,000 406,300 487,500 568,800 650,000
1,200,000 ...................... 177,500 266,200 355,000 443,800 532,500 621,300 710,000
1,300,000 ...................... 192,500 288,700 385,000 481,300 577,500 673,800 770,000
</TABLE>
The executive officers named in the Summary Compensation Table have been
credited as of January 1, 2000 with the following years of service: Mr.
Chamillard, 30 years; Mr. Rogas, 23 years; Mr. Sulman, 25 years; Mr. Bradley, 20
years and Mr. Hotchkiss, 28 years.
10
<PAGE> 13
MANAGEMENT COMPENSATION AND
DEVELOPMENT COMMITTEE REPORT AND
STOCK OPTION COMMITTEE REPORT
OVERVIEW AND PHILOSOPHY
The Corporation's executive compensation program is administered by the
Management Compensation and Development Committee of the Board of Directors (the
"Compensation Committee"), which is comprised entirely of outside directors. The
Compensation Committee is responsible for developing and making recommendations
to the Board of Directors with respect to the Corporation's compensation
policies other than with respect to stock option awards. In addition, the
Compensation Committee, pursuant to authority delegated by the Board of
Directors, determines on an annual basis the cash compensation to be paid to
each of the executive officers. The Stock Option Committee also is comprised
entirely of non-employee directors. The Stock Option Committee is responsible
for developing and making recommendations to the Board of Directors with respect
to the Corporation's compensation policies in connection with the awarding of
stock options. In addition, the Stock Option Committee, pursuant to authority
delegated by the Board of Directors, determines on an annual basis the stock
option awards to be granted to each of the executive officers.
The executive compensation policies are designed to provide competitive
levels of compensation that assist the Corporation in attracting and retaining
qualified executives. In setting cash compensation levels for executive
officers, the Compensation Committee takes into account such factors as: the
Corporation's past history and future expectations; the general and
industry-specific business environment; annual and long-term performance goals;
and corporate and group performance.
EXECUTIVE OFFICER COMPENSATION PROGRAM
The Corporation's executive officer compensation program consists of
compensation received pursuant to the Corporation's Cash Compensation Plan, Cash
Profit Sharing Plan, long-term compensation in the form of stock option, savings
and retirement plans and various other benefits generally available to employees
of the Corporation.
Under the Corporation's Cash Compensation Plan, the Compensation Committee
assigns to each senior employee of the Corporation, including all executive
officers, at the beginning of each year, a "model compensation" amount. The
model compensation amount is based on salary surveys of similarly sized
electronics companies, and on an as adjusted basis, larger sized companies, some
of which are represented in the S&P High Technology Composite Index appearing in
the Performance Graph on page herein.
Once model compensation for each participant has been determined, the
actual cash compensation paid to each employee under the Cash Compensation Plan
is comprised of two components: (1) a fixed monthly salary and (2) an annual
variable amount based upon overall corporate and group performance (referred to
herein as "Variable Compensation"). The fixed salary amount is set at a level
which is below the model compensation, and the variable portion is based upon
factors which, if achieved, would entitle the employee to reach or exceed model
compensation.
The amount of Variable Compensation each participant receives is a function
of four factors:
(A) The employee's base annual salary as of the end of the year;
(B) Overall corporate performance versus goal;
(C) Performance of the individual business group versus goal; and
11
<PAGE> 14
(D) The employee's "variable compensation factor," which is determined
by the Compensation Committee on the basis of responsibility and
experience level.
An employee's "variable compensation factor" is a percentage of his or her
base annual salary starting at 10% for new participants. At greater levels of
responsibility and experience, the variable compensation factor may increase to
more than 150% of base annual salary. An employee's model compensation is set
assuming a 50% payout of the variable compensation factor. Accordingly, in a
given year an employee may achieve more or less than his or her model
compensation depending on corporate and business group performance.
At year-end, the Compensation Committee evaluates the Corporation's overall
performance versus goal and each individual group's performance versus goal.
Given the dynamics of the business, the Corporation's Cash Compensation Plan
relies heavily on the Compensation Committee's subjective judgment of
performance.
Specifically for 1999, in determining Variable Compensation payouts, the
Compensation Committee took the following factors into consideration in
evaluating both overall corporate performance and the performance of the
Corporation's individual business groups: (1) the extent to which quantitative
and qualitative plans were met for the year, with an emphasis on profitability,
growth of sales, growth of bookings, and increase in market share; (2) the
extent to which each business group became a role model in the implementation of
"Total Quality Management"; (3) the extent to which the results for the year
verified each group's strategy and improved its strategic position; and (4) the
extent to which each group's 2000 mid-term plan and strategy contribute to the
Corporation's need for an aggressive and credible mid-term plan and adapt to
changes in the marketplace or environment. The Compensation Committee weighed
each of the four factors approximately equally in setting Variable Compensation
amounts. The factors are reviewed by the Compensation Committee based upon the
performance of the business group in which each executive officer serves rather
than upon the individual performance of the executive officer. In 1999, total
cash compensation for all executive officers from the Corporation's Cash
Compensation Plan ranged from 15% to 30% above model compensation.
The Corporation's stock option program is the Corporation's long-term
incentive plan for employees, including executive officers. The objectives of
the program are to align executive return with shareholder return and to create
and implement a program which will attract and retain talented employees and
executives. Stock options are awarded annually to employees, including the Chief
Executive Officer, based upon the employee's relative contribution and
responsibility within the Corporation. The factors taken into account by the
Stock Option Committee in determining each executive officer's relative
contribution and responsibility within the Corporation include: the executive
officer's level of model compensation, the executive officer's position, the
responsibilities currently being performed by the executive officer, and the
responsibilities expected to be performed by the executive officer. The
individual factors are reviewed subjectively by the Stock Option Committee when
determining stock option awards for each executive officer. The Corporation
conducts surveys of various companies, some of which appear in the Performance
Graph's S&P High Technology Composite Index, to verify that the relative
percentages of stock options granted to its employees, its Chief Executive
Officer and its other executive officers, are consistent with high technology
industry practice, are within the range of stock options granted by the surveyed
companies, and are competitive with the relative percentages of stock options
granted by the surveyed companies.
CHIEF EXECUTIVE OFFICER COMPENSATION
Mr. Chamillard's cash compensation for 1999 awarded under the Corporation's
Cash Compensation Plan was $1,140,183, which is approximately 30% more than Mr.
Chamillard's 1999 model compensation of $877,233. Mr. Chamillard's 1999 cash
compensation awarded pursuant to the Corporation's Cash Compensation Plan is a
53% increase over his 1998 cash compensation. Mr. Chamillard's fixed salary
amount was
12
<PAGE> 15
$472,695 for 1999 and was set by the Compensation Committee, in conjunction with
his model compensation amount, based upon salary surveys of chief executive
officers for similarly sized electronics companies. Mr. Chamillard's Variable
Compensation payout was $667,488 for 1999. Mr. Chamillard's Variable
Compensation payouts are determined based upon the same factors as the
Corporation's other executive officers who have general responsibilities within
the Corporation rather than responsibilities for one specific business group
within the Corporation. Each of such executive officer's Variable Compensation
payout is based 50% upon the performance of the Corporation as a whole and 50%
upon the average of the performances of each of the individual business groups
within the Corporation. Mr. Chamillard also received cash compensation in the
amount of $74,733 in 1999 pursuant to the Corporation's Cash Profit Sharing
Plan. Cash compensation awards under the plan, which are calculated on a uniform
basis as a percentage of the recipient's salary, are made to the employees of
the Corporation on an equal basis.
The stock options granted to Mr. Chamillard during fiscal 1999 are
consistent with the design of the overall program and are shown in the Summary
Compensation Table above. Mr. Chamillard's 105,000 shares, which represented
1.86% of the total option shares awarded to all employees during fiscal 1999,
placed him at the median of the external surveys. In assessing Mr. Chamillard's
individual performance for the year for purposes of his stock option awards, the
Stock Option Committee concluded that, on balance, Mr. Chamillard had achieved
overall positive results for the individual factors for which he was evaluated.
A general description of these factors is detailed above under the description
of the Corporation's stock option program.
MANAGEMENT COMPENSATION AND
DEVELOPMENT COMMITTEE
Dwight H. Hibbard (Chairman)
James W. Bagley
Richard J. Testa
Patricia S. Wolpert
STOCK OPTION COMMITTEE
Dwight H. Hibbard (Chairman)
James W. Bagley
Patricia S. Wolpert
COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION
Messrs. Bagley, Hibbard and Testa and Ms. Wolpert comprised the
Compensation Committee for fiscal year 1999. Richard J. Testa is a member of the
law firm Testa, Hurwitz & Thibeault, LLP in Boston, Massachusetts. Such law firm
served as counsel for the Corporation during the fiscal year 1999 and the
Corporation expects to retain the services of such firm for the fiscal year
2000.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
In general, under Section 162(m) of the Internal Revenue Code, as amended
(the "Code"), the Corporation cannot deduct, for federal income tax purposes,
compensation in excess of $1 million paid to certain executive officers. This
deduction limitation does not apply, however, to compensation that constitutes
"qualified performance-based compensation" within the meaning of Section 162(m)
of the Code and the regulations promulgated thereunder. The Corporation has
considered the limitations on deductions imposed by Section 162(m) of the Code,
and it is the Corporation's present intention that, for so long as it is
consistent with its overall compensation objective, substantially all tax
deductions attributable to executive compensation will not be subject to the
deduction limitations of Section 162(m) of the Code. The Corporation is not
planning to change the process for determining compensation under the
Corporation's Variable Compensation
13
<PAGE> 16
Plan, however, one of the requirements for exemption from Section 162(m),
because it is believed to be in the best interest of the Corporation to continue
to exercise discretion, in the same manner as in the past, in the determination
of Variable Compensation. Variable Compensation will not, therefore, be
deductible to the extent it causes the applicable employee remuneration of any
executive officer to exceed $1 million during any given taxable year.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On June 1, 1997, the Corporation entered into consulting agreements with
each of James A. Prestridge and Owen W. Robbins, pursuant to which Messrs.
Prestridge and Robbins agreed to provide advice and consulting services to the
Corporation. Pursuant to such consulting agreements, the Corporation agreed to
pay each of Messrs. Prestridge and Robbins $22,353.00 per month throughout the
term of his respective agreement. Each agreement is for a period of three years
and is terminable by either party upon sixty (60) days' prior written notice.
14
<PAGE> 17
PERFORMANCE GRAPH (1)(2)
The following graph compares the change in the Corporation's cumulative
total shareholder return in its Common Stock with the Standard & Poor's 500
Index and the Standard & Poor's High Technology Composite Index. The comparison
assumes $100.00 was invested on December 31, 1994 in the Corporation's Common
Stock and in each of the foregoing indices and assumes reinvestment of
dividends, if any.
<TABLE>
<CAPTION>
S&P HIGH TECHNOLOGY
TERADYNE, INC. S&P 500 INDEX COMPOSITE INDEX
-------------- ------------- -------------------
<S> <C> <C> <C>
1994 100.00 100.00 100.00
1995 148.33 137.45 144.16
1996 143.91 168.93 204.30
1997 188.92 225.21 257.62
1998 250.17 289.11 445.41
1999 779.31 349.92 780.13
</TABLE>
- ---------------
(1) This graph is not "soliciting material," is not deemed filed with the
Securities and Exchange Commission and is not to be incorporated by
reference in any filing of the Corporation under the Securities Act of 1933
or the Securities Exchange Act of 1934 whether made before or after the date
hereof and irrespective of any general incorporation language in any such
filing.
(2) The stock price performance shown on the graph is not necessarily indicative
of future price performance. Information used on the graph was obtained from
Hewitt Associates, a source believed to be reliable, but the Corporation is
not responsible for any errors or omissions in such information.
15
<PAGE> 18
RATIFICATION OF SELECTION OF AUDITORS
The Board of Directors has selected the firm of PricewaterhouseCoopers LLP,
independent certified public accountants, to serve as auditors for the fiscal
year ending December 31, 2000. PricewaterhouseCoopers LLP, or its predecessor
Coopers & Lybrand L.L.P., have served as the Corporation's auditors since 1968.
It is expected that a member of the firm will be present at the Annual Meeting
of Shareholders with the opportunity to make a statement if so desired and will
be available to respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THIS
SELECTION.
AMENDMENT OF THE CORPORATION'S ARTICLES OF ORGANIZATION
By a Board of Directors written consent dated March 24, 2000, the Board of
Directors recommended to the shareholders that the Corporation amend the
Corporation's Restated Articles of Organization, as amended (the "Articles of
Organization"), to increase the number of authorized shares of Common Stock, par
value $.125 per share, from 250,000,000 to 1,000,000,000 shares. Shares of the
Corporation's Common Stock, including the additional shares proposed for
authorization, do not have preemptive or similar rights.
As of the Record Date, there were approximately 172,794,091 shares issued
and outstanding and approximately 33,203,410 shares reserved for future issuance
pursuant to outstanding options granted under the Corporation's stock plans.
Prior to the amendment to the Articles of Organization, the Board of Directors
has authority to issue approximately 44,002,499 additional shares of Common
Stock without further stockholder approval. If the amendment to the Articles of
Organization is approved, the Board of Directors will have the authority to
issue approximately 794,002,499 additional shares of Common Stock without
further stockholder approval. Although the Corporation has not entered into any
agreements or understandings to issue any of the shares resulting from the
amendment of the Articles of Organization, the Board of Directors believes the
authorized number of shares of Common Stock should be increased to provide
sufficient shares for such corporate purposes as may be determined by the Board
of Directors to be necessary or desirable. These purposes may include, without
limitation: facilitating broader ownership of the Corporation's Common Stock by
effecting a stock split or issuing a stock dividend; acquiring other businesses
in exchange for shares of the Corporation's Common Stock; entering into
collaborative research and development arrangements with other companies in
which Common Stock or the right to acquire Common Stock are part of the
consideration; raising capital through the sale of Common Stock or securities
convertible into Common Stock; and attracting and retaining valuable employees
by the issuance of additional stock options, including additional shares
reserved for future option grants under the Corporation's existing stock plans.
The Board of Directors considers the authorization of additional shares of
Common Stock advisable to ensure prompt availability of shares for issuance
should the occasion arise. The issuance of additional shares of Common Stock
could have the effect of diluting earnings per share and book value per share,
which could adversely affect the Corporation's existing shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE AMENDMENT
TO THE CORPORATION'S ARTICLES OF ORGANIZATION.
16
<PAGE> 19
SHAREHOLDER PROPOSALS
Proposals of shareholders intended for inclusion in the Corporation's proxy
materials to be furnished to all shareholders entitled to vote at the next
annual meeting of shareholders of the Corporation pursuant to Securities and
Exchange Commission ("SEC") Rule 14a-8 must be received at the Corporation's
principal executive offices not later than December 21, 2000.
Under the Corporation's By-Laws, shareholders who wish to make a proposal
at the 2001 annual meeting of shareholders -- other than proposals that will be
included in the Corporation's proxy materials -- must notify the Corporation not
less than 50 days nor more than 90 days prior to the meeting; provided, however,
that in the event that less than 65 days' notice or prior public disclosure of
the date of the meeting is given or made to shareholders, to be timely, notice
by the shareholder must be so received not later than the close of business on
the fifteenth day following the day on which notice of the date of the meeting
was mailed or public disclosure was made, whichever occurs first. If a
shareholder who wishes to present a proposal fails to timely notify the
Corporation, the shareholder will not be entitled to present the proposal at the
meeting. If, however, notwithstanding the requirements of the Corporation's
By-Laws, the proposal is brought before the meeting, then under the SEC's proxy
rules, the proxies solicited by management of the Corporation with respect to
the 2001 annual meeting will confer discretionary voting authority with respect
to the shareholder's proposal on the persons selected by management to vote the
proxies. If a shareholder makes a timely notification, the proxies may still
exercise discretionary voting authority under circumstances consistent with the
SEC's proxy rules.
In order to minimize controversy as to the date on which a proposal was
received by the Corporation, it is suggested that proponents submit their
proposals by Certified Mail -- Return Receipt Requested.
EXPENSES AND SOLICITATION
The cost of solicitation of proxies will be borne by the Corporation, and
in addition to soliciting shareholders by mail through its regular employees,
the Corporation may request banks and brokers to solicit their customers who
have stock of the Corporation registered in the names of a nominee and, if so,
will reimburse such banks and brokers for their reasonable out-of-pocket costs.
Solicitation by officers and employees of the Corporation may also be made of
some shareholders in person or by mail, telephone or telegraph following the
original solicitation.
INCORPORATION BY REFERENCE
Certain audited financial statements for the Corporation's fiscal year
ended December 31, 1999 are contained in the Corporation's Annual Report to
Shareholders. Such financial statements are incorporated herein by reference.
17
<PAGE> 20
TRD90B DETACH HERE
PROXY
TERADYNE, INC.
PROXY FOR ANNUAL MEETING OF SHAREHOLDERS
MAY 25, 2000
SOLICITED BY THE BOARD OF DIRECTORS
The undersigned hereby appoints ALEXANDER V. D'ARBELOFF and RICHARD J.
TESTA, and each or both of them, proxies, with full power of substitution to
vote all shares of stock of the Corporation which the undersigned is entitled
to vote at the Annual Meeting of Shareholders of Teradyne, Inc. to be held on
Thursday, May 25, 2000, at 10:00 A.M., at Fleet National Bank, 100 Federal
Street (Second Floor), Boston, Massachusetts, and at any adjournments thereof,
upon matters set forth in the Notice of Annual Meeting of Shareholders and
Proxy Statement, dated on or about April 19, 2000, a copy of which has been
received by the undersigned. The proxies are further authorized to vote, in
their discretion, upon such other business as may properly come before the
meeting or any adjournments thereof.
- -------------- -------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE SIDE
- -------------- -------------
<PAGE> 21
TERADYNE, INC
C/O EQUISERVE
P.O.BOX 9398
BOSTON, MA 02205-9398
TRD90A DETACH HERE
[X] PLEASE MARK
VOTES AS IN
THIS EXAMPLE.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF CLASS II DIRECTORS AND
FOR THE PROPOSALS IN ITEMS 2 AND 3.
<TABLE>
<S> <C>
1. To elect four members to the Board of Directors to
serve for a three-year term as Class I Directors.
FOR AGAINST ABSTAIN
NOMINEES: (01) A. Carnesale, (02) G.W. Chamillard, 2. To ratify the selection of
(03) D.H. Hibbard and (04) R.A. Vallee PricewaterhouseCoopers LLP [ ] [ ] [ ]
FOR WITHHELD auditors for the fiscal
[ ] [ ] year ending December 31, 2000.
3. To approve an amendment to FOR AGAINST ABSTAIN
the Corporation's Restated
[ ] ________________________________________ Articles of Organization, [ ] [ ] [ ]
For all nominees except as noted above as amended. Increasing from
250,000,000 to 1,000,000,000
the number of authorized
shares of Common Stock, par
value $.125 per share, of
the Corporation.
MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]
(Please sign exactly as your name appears hereon, if
signing as attorney, executor, trustee or guardian,
please give your full title as such. If stock is
held jointly, each owner should sign. Please read
reverse side before signing.)
Signature:__________________________ Date: _________________ Signature: _________________________ Date: ________________
</TABLE>
