-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, GfzV6fd1H/dxoQpVQ8Y1uNLVibOuGhmvLjHJM2PX5ToYVnFyi+ueZtgpFfRW/DT8 qnD+bV7z4ad9YjgNTzvrYw== 0000908159-94-000021.txt : 19941010 0000908159-94-000021.hdr.sgml : 19941010 ACCESSION NUMBER: 0000908159-94-000021 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19940827 FILED AS OF DATE: 19941007 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEKTRONIX INC CENTRAL INDEX KEY: 0000096879 STANDARD INDUSTRIAL CLASSIFICATION: 3825 IRS NUMBER: 930343990 STATE OF INCORPORATION: OR FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-04837 FILM NUMBER: 94552204 BUSINESS ADDRESS: STREET 1: 2660 SW PKWY CITY: WILSONVILLE STATE: OR ZIP: 97070 BUSINESS PHONE: 5036277111 MAIL ADDRESS: STREET 1: P O BOX 100 CITY: WILSONVILLE STATE: OR ZIP: 97070-1000 10-Q 1 ====================================================================== SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q [ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the 13 weeks ended August 27, 1994, or, [ ] Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ________________ to _____________________ . Commission File Number 1-4837 TEKTRONIX, INC. (Exact name of registrant as specified in its charter) OREGON 93-0343990 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 26600 S.W. PARKWAY WILSONVILLE, OREGON 97070-1000 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (503) 627-7111 NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ___X___ No______ AT SEPTEMBER 28, 1994 THERE WERE 30,592,148 COMMON SHARES OF TEKTRONIX, INC. OUTSTANDING. (Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.) TEKTRONIX, INC. AND SUBSIDIARIES - -------------------------------- INDEX - ----- PAGE NO. -------- Financial Statements: Condensed Consolidated Balance Sheets - 2 May 28, 1994 and August 27, 1994 Consolidated Statements of Operations - 3 for the Thirteen Weeks Ended August 27, 1994 and the Thirteen Weeks Ended August 28, 1993 Condensed Consolidated Statements of Cash Flows - 4 for the Thirteen Weeks Ended August 27, 1994 and the Thirteen Weeks Ended August 28, 1993 Notes to Condensed Consolidated Financial Statements 5 Management's Discussion and Analysis of Financial 6 Condition and Results of Operations Part II. Other Information 9 Signatures 11 1
TEKTRONIX, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) August 27, May 28, (In thousands) 1994 1994 - ------------------------------------------------------------------------------- Assets Current assets: Cash and cash equivalents $ 33,857 $ 42,919 Accounts receivable - net 245,914 267,405 Inventories 187,960 171,267 Other current assets 54,441 59,054 ---------- ---------- Total current assets 522,172 540,645 Property, plant, and equipment 590,524 653,709 Accumulated depreciation and amortization (382,614) (430,387) --------- --------- Property, plant, and equipment - net 207,910 223,322 Property held for sale 44,649 39,776 Long term deferred tax assets 71,416 79,552 Other long-term assets 147,580 107,854 ---------- ---------- Total assets $ 993,727 $ 991,149 ========== ========== Liabilities and shareholders' equity Current liabilities: Short-term debt $ 23,438 $ 17,084 Accounts payable 151,255 161,757 Accrued compensation 58,707 78,877 Deferred revenue 18,691 18,124 ---------- ---------- Total current liabilities 252,091 275,842 Long-term debt 104,266 104,146 Other long-term liabilities 143,358 141,672 Shareholders' equity: Common stock 179,133 180,883 Retained earnings 247,265 235,795 Currency adjustment 56,203 52,811 Unrealized holding gains on certain marketable equity securities 11,411 -- ---------- ---------- Total shareholders' equity 494,012 469,489 ---------- ---------- Total liabilities and shareholders' equity $ 993,727 $ 991,149 ========== ==========
The accompanying notes are an integral part of these condensed consolidated financial statements. 2
TEKTRONIX, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) 13 weeks to 13 weeks to August 27, August 28, (In thousands except for per share amounts) 1994 1993 - ------------------------------------------------------------------------------- Net sales $ 312,728 $ 290,070 Operating costs and expenses: Cost of sales 161,249 154,201 Research and development 41,306 36,132 Selling, general, and administrative 86,746 83,932 ---------- ---------- Total operating costs and expenses 289,301 274,265 Equity in business ventures net losses (365) (1,117) ---------- ---------- Operating income 23,062 14,688 Other expense - net 1,453 3,393 ---------- ---------- Earnings before taxes 21,609 11,295 Income taxes 5,619 1,564 ---------- ---------- Net earnings $ 15,990 $ 9,731 Earnings per share 0.53 0.32 Dividends per share 0.15 0.15 Average shares outstanding 30,168 30,518
The accompanying notes are an integral part of these condensed consolidated financial statements. 3
TEKTRONIX, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) 13 weeks to 13 weeks to August 27, August 28, (In thousands) 1994 1993 - ------------------------------------------------------------------------------- CASH FLOWS FROM OPERATING ACTIVITIES: Earnings $ 15,990 $ 9,731 Adjustments to reconcile earnings to cash from operating activities: Depreciation expense 10,212 13,926 Deferred taxes 8,140 19 Accounts receivable 24,301 32,813 Inventories (15,358) (17,301) Accounts payable (15,145) (14,327) Accrued compensation (20,842) (26,544) Other assets (44,815) (4,217) Other-net 4,348 9,734 ---------- ---------- Net cash provided (used) by operating activities (33,169) 3,834 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of property, plant, and equipment (15,844) (16,305) Proceeds from sale of assets 22,366 2,807 Proceeds from sale of investments 17,047 -- ---------- ---------- Net cash provided (used) by investing activities 23,569 (13,498) CASH FLOWS FROM FINANCING ACTIVITIES: Net change in short-term debt 6,302 (17,739) Issuance of long-term debt -- 100,000 Repayment of long-term debt (43) (70,000) Issuance of common stock -- 2,324 Repurchase of common stock (1,751) -- Dividends (4,520) (4,549) ---------- ---------- Net cash provided (used) by financing activities (12) 10,036 Effect of exchange rate changes 550 (742) ---------- ---------- Decrease in cash and cash equivalents (9,062) (370) Cash and cash equivalents at beginning of year 42,919 30,004 ---------- ---------- Cash and cash equivalents at end of quarter $ 33,857 $ 29,634 ========== ========== SUPPLEMENTAL DISCLOSURES OF CASH FLOWS: Income taxes paid $ 577 $ 2,852 Interest paid 5,245 2,294 NON-CASH INVESTING ACTIVITIES Fair value adjustment to securities available-for-sale 19,018 -- Income tax effect related to fair value adjustment 7,607 --
The accompanying notes are an integral part of these condensed consolidated financial statements. 4 TEKTRONIX, INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS BASIS OF PRESENTATION The condensed consolidated financial statements and notes have been prepared by the Company without audit. Certain information and footnote disclosures normally included in annual financial statements, prepared in accordance with generally accepted accounting principles, have been condensed or omitted. Management believes that the condensed statements include all necessary adjustments (which are of a normal and recurring nature, except for the adjustment to deferred tax assets described below under 'Income Taxes') and are adequate to present financial position, results of operations and cash flows for the interim periods. The condensed information should be read in conjunction with the financial statements and notes incorporated by reference in the Company's latest annual report on Form 10-K. INVENTORIES
Inventories consisted of: Aug. 27, May 28, (In thousands) 1994 1994 - ------------------------------------------------------------------------------- Materials and work in process $ 98,336 $ 89,341 Finished goods 89,624 81,926 ---------- ---------- Inventories $ 187,960 $ 171,267 ========== ==========
INVESTMENTS At the beginning of the year, the Company adopted SFAS No. 115, 'Accounting for Certain Investments in Debt and Equity Securities'. SFAS No. 115 supersedes SFAS No. 12 which generally required investments in marketable equity securities to be carried at the lower of aggregate market or amortized cost. Under SFAS No. 115, the Company now classifies its minority equity investments in certain marketable securities as available-for-sale and reports them at fair value in the consolidated balance sheet. The aggregate fair value of these investments at August 27, 1994 was $23.5 million. The unrealized gain of $19.0 million, net of the related deferred income tax effect of $7.6 million, is reported as a separate component of shareholders' equity. 5 SHORT-TERM AND LONG-TERM DEBT In the first quarter of fiscal 1994, the Company issued $100.0 million of 7.5% Notes due August 1, 2003. Proceeds were used to repay bridge financing of $70.0 million and to reduce short term revolving credit debt. INCOME TAXES
The provision for income taxes consisted of: 13 weeks to 13 weeks to August 27, August 28, (In thousands) 1994 1993 - ------------------------------------------------------------------------------- United States $ 1,956 $ 445 State 489 615 Foreign 3,174 504 ---------- ---------- Income taxes $ 5,619 $ 1,564 ========= ==========
The provision for income taxes was calculated at estimated annual effective rates of 26% and 34% ,respectively, for the quarters ended August 27, 1994 and August 28, 1993. The provision for the quarter ended August 28, 1993 was reduced by a gain of $2.3 million on recalculation of deferred income tax benefits, primarily as a result of the enactment of federal tax legislation increasing the corporate income tax rate from 34% to 35%. CONTINGENCIES The Company has reported on certain claims asserted by Jerome J. Lemelson in Item 3., Legal Proceedings, of its Annual Report on Form 10-K for the fiscal year ended May 28, 1994. The Company believes that ultimate resolution of these claims will not have a material adverse effect on its financial position or results of operations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Financial Condition The Company's financial condition is strong. Cash flow from operating activities and borrowing capacity from existing lines of credit are sufficient to meet current and anticipated future needs. At the end of the first quarter (August 27, 1994), the Company maintained bank credit facilities totaling $305.0 million, of which $283.0 million was unused. The unused facilities include $133.0 million in lines of credit and $150.0 million under a revolving credit agreement from United States and foreign banks. 6 Current assets decreased by $18.5 million, due to reductions in cash, accounts receivable and other current assets, partly offset by an increase in inventories. The Company historically experiences a lower weekly average sales rate in the first quarter compared to the prior year's fourth quarter, while production rates are more constant; consequently, accounts receivable decreased by $21.5 million and inventories increased by $16.7 million during the quarter. Other current assets declined due to amortization of prepaid taxes and other expenses. Net property, plant and equipment declined by $15.4 million as depreciation and dispositions, including the divestiture of the Circuit Board Division, exceeded new capital additions. Long-term deferred tax assets decreased by $8.1 million primarily due to the tax impact from recognition of unrealized holding gains on investments under SFAS 115, 'Accounting for Certain Investments in Debt and Equity Securities', discussed further below under other long-term assets. Other long-term assets increased by $39.7 million as a result of the Company's investment in equity and notes of Merix Corporation (formerly the Circuit Board Division) and the accounting for certain investments in accordance with SFAS 115. Under SFAS 115, investments in certain marketable securities are classified as available for sale and reported at fair value. The adjustment to fair value added $19.0 million to other long term assets and the unrealized gains, less deferred taxes, are reported in unrealized holding gains as a separate component of shareholders' equity. The Company accounts for its investment in Merix Corporation on the equity method with the earnings impact included in equity in business ventures net losses in the consolidated statements of operations. Current liabilities declined by $23.8 million. Short-term debt increased $6.4 million. Accounts payable decreased $10.5 million, and accrued compensation decreased $20.1 million, due to the timing of some trade payables and restructuring charges, the payment of year-end accruals for incentives and commissions, reductions in vacation accruals by summer time off, the payment of employee severance charged against restructuring reserves and lower accrual requirements because of the disposition of non-strategic businesses. Shareholders' equity increased by $24.5 million due primarily to earnings net of dividends and the addition of unrealized holding gains in accordance with SFAS 115. Restructuring Charges The Company continues its consolidation of facilities and reduction of workforce, as described in the 1994 Annual Report to shareholders, reducing restructuring reserves to approximately $48 million at the end of the quarter. The Company is also proceeding with the discontinuance of older, low-volume products. The initial public offering of Merix Corporation was completed at the beginning of the quarter and, at the end of the quarter, the Company sold its Avionics operations to Planar Systems, Inc., further reducing the non-strategic businesses it operates. 7 Results of Operations 13 Weeks Ended August 27, 1994 vs. 13 Weeks Ended August 28, 1993 In the first quarter of fiscal 1995, net earnings were $16.0 million, or $0.53 per share compared with $9.7 million, or $0.32 per share in the first quarter of fiscal 1994. The prior year's quarter included a gain of $2.3 million or $0.07 per share from the recalculation of deferred tax benefits. Net Sales were $312.7 million, up 8% from the prior year. Sales of Measurement Business, Color Printing and Imaging and Video Systems were higher, while Network Displays' sales were down slightly and Other sales, which include the non-strategic businesses disposed of at the end of last year and during the current quarter, dropped sharply. Measurement Business sales of $154.1 million were up 8% from the prior year due to acceptance of new products and improvements in European and Asian markets. Color Printing and Imaging sales increased 38% to $89.5 million, continuing the strong growth trend in both domestic and international markets. Video Systems sales grew 13% to $42.8 million from generally improving market conditions and realization of licensing revenues. Network Displays sales were flat, as strong growth in X terminal sales was offset by the continued decline in product and service revenue from the Company's old terminals business. Sales to customers in the United States increased slightly from $168.4 million to $169.5 million, representing 54% of total sales. The majority of the non-strategic operations sales, represented by the Other product class, were in the United States, and if these sales are excluded from both years, United States sales increased by 13%. International sales of $143.2 million were up 18% from $121.7 million in the prior year, with strong growth in Japan and the rest of the Pacific, and good improvement over last year's first quarter in Europe. Product orders of $294 million were 24% higher than the prior year's first quarter, when international orders were particularly weak. Cost of sales decreased as a percentage of net sales from 53.2% to 51.6%. The improvement was due to a better geographic mix of sales, the reduction of low margin component sales, and improved product mix in each of the businesses, partially offset by the higher cost of components and increasing use of alternative distribution channels. The Company continues to expect cost of sales to trend higher as a percentage of sales as more products are sold through alternative distribution channels and the historically higher margin on international sales is reduced. 8 Research and development (R&D) and selling, general and administrative expenses were higher in dollar terms than the prior year because of increased variable compensation due to the Company's improved performance. The increase in R&D was also due to increased spending on major product development efforts. Other expenses declined due primarily to gains on sales of stock in Credence Systems Corporation. Income taxes increased from $1.6 million to $5.6 million due to higher earnings before taxes in the current quarter and a gain in the prior year's first quarter of $2.3 million on recalculation of deferred tax benefits. The Company's calculated effective annual tax rate is 26% compared to 34% in the first quarter of the prior year. Net earnings of $16.0 million were 64% higher than the prior year due to higher sales and gross margins and lower non-operating expenses, partly offset by higher R&D and SG&A expenses and higher taxes. PART II. OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS At the Company's annual meeting of shareholders on September 22, 1994, the shareholders voted on the election of four directors to the Company's board of directors. Keith R. McKennon, Jerome J. Meyer, and William D. Walker were elected to serve a three-year term ending at the 1997 annual meeting of shareholders and A. Gary Ames was elected to serve a two-year term ending at the 1996 annual meeting of shareholders. The voting for each director was as follows: NAME FOR WITHHELD Keith R. McKennon 26,115,794 251,176 Jerome J. Meyer 26,096,667 270,303 William D. Walker 26,093,984 272,986 A. Gary Ames 26,117,036 249,934 The term of office of the Company's other directors continued after the 1994 annual meeting of shareholders, as follows: A. M. Gleason, Wayland R. Hicks, Jean Vollum and Delbert W. Yocam until the 1995 annual meeting of shareholders and Paul E. Bragdon and Paul C. Ely, Jr., until the 1996 annual meeting of shareholders. Richard W. Sonnenfeldt and Andrew V. Smith retired as directors on September 21, 1994. 9 At the meeting, the shareholders also voted to approve amendments to the Company's Stock Incentive Plan (the "Amendments"). The number of shares voted for approval of the Amendments was 16,527,650, the number voted against approval was 9,729,786, the number abstaining was 109,534 and the number of broker non-votes was 2,305. A description of the Amendments, together with a copy of the Stock Incentive Plan, as amended, is contained on pages 20 through 25 and at Appendix A, respectively, of the definitive proxy statement filed herewith as an exhibit. The description of the Amendments and the copy of the Stock Incentive Plan, as amended, contained in the definitive proxy statement are incorporated herein by this reference. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits (10) (i) Executive Severance Agreement, as amended. (ii) Amendment to Supplemental Executive Retirement Agreement. (27) Financial Data Schedule (99) Definitive proxy statement dated August 3, 1994, for the annual meeting of shareholders of Tektronix, Inc., held September 22, 1994, including the Stock Incentive Plan, as amended, previously filed on August 15, 1994, SEC File No. 1-4837. (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. 10 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. October 7, 1994 TEKTRONIX, INC. By___________________________ Carl W. Neun Vice President and Chief Financial Officer 11 EXHIBIT INDEX Exhibit Sequential Number Document Description Page Number _______ ____________________ ___________ (a) Exhibits (10)(i) Executive Severance Agreement, as amended. (ii) Amendment to Supplemental Executive Retirement Agreement. (27) Financial Data Schedule. (99) Definitive proxy statement dated August 3, 1994, for the annual meeting of shareholders of Tektronix, Inc., held September 22, 1994, including the Stock Incentive Plan, as amended, previously filed on August 15, 1994, SEC File No. 1-4837. (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. EX-10.I 2 EXHIBIT 10(i) AMENDMENT NO. 1 to EXECUTIVE SEVERANCE AGREEMENT October 6, 1993 Jerome J. Meyer 24790 SW Big Fir Road West Linn, Oregon 97068 Executive Tektronix, Inc. an Oregon corporation 26600 SW Parkway Wilsonville, Oregon 97070 Tektronix The Executive Severance Agreement dated September 22, 1993 is amended as follows to reflect the Split Dollar Insurance Agreement between the parties dated as of October 6, 1993 (the Split Dollar Agreement). 1. Split Dollar Insurance Benefits. A new Section 4 is added as follows, existing Section 4 through 12 are renumbered 5 through 13 respectively, and cross-references are adjusted accordingly: 4. Split Dollar Insurance Adjustments. If Executive terminates employment voluntarily or involuntarily for any reason other than death before the Full Funding Date under 4.4 below, the following shall apply: 4.1 Tektronix shall not, before the Full Funding Date, exercise its rights under the Split Dollar Agreement or the related Collateral Assignment to withdraw the cash surrender value of the Split Dollar Policy on termination of the Split Dollar Agreement because of Executive's termination of employment before the Full Funding Date. 4.2 Except as provided below, Tektronix shall pay executive $77,987.22 as of each August 9 after the date of termination up to the Full Funding Date. The last payment shall be made as of the Full Funding Date. The amount for the last payment shall be pro-rated on a daily basis to the Full Funding Date. 4.3 Tektronix shall take no action that would interfere with Executive's payment of scheduled employee premiums under the Split Dollar Policy up to the Full Funding Date. Executive shall have no obligation to pay such premiums. Tektronix's obligation to pay under 4.2 above is not conditioned upon Executive's payment of such premiums. 4.4 "Full Funding Date" means date that the earliest of the following occurs: (a) Executive dies. (b) Executive reaches age 64. (c) The policy lapses or Executive sur renders the policy to withdraw cash value or receive benefits, or both. 2. Conforming Amendment. Section 5.1 (to be renumbered 6.1) is revised by inserting "except for benefits under Section 4" so the last phrase of the first sentence of Section 5.1 will read as follows: * * *, the benefits provided in this Agreement shall not be payable to Executive except for benefits under Section 4. 3. Effective Date. This Amendment shall be effective as of October 6, 1993. Executive /s/ Jerome J. Meyer Jerome J. Meyer Tektronix TEKTRONIX, INC. By /s/ Andrew V. Smith Andrew V. Smith Chairman, Organization and Compensation Committee Executive Severance Agreement September 22, 1993 Jerome J. Meyer 24790 SW Big Fir Road West Linn, Oregon 97068 Executive Tektronix, Inc., an Oregon corporation P.O. Box 1000 Wilsonville, Oregon Tektronix Tektronix considers the establishment and maintenance of a sound and vital management to be essential to protecting and enhancing the best interests of Tektronix and its shareholders. In order to induce Executive to remain employed by Tektronix in the face of uncertainties about the long-term strategies of Tektronix and their potential impact on the scope and nature of Executive's position with Tektronix, this Agreement, which has been approved by the Organization and Compensation Committee of the Board of Directors of Tektronix, sets forth the severance benefits that Tektronix will provide to Executive in the event Executive's employment by Tektronix is terminated under the circumstances described in this Agreement. 1. EMPLOYMENT RELATIONSHIP. Executive is currently employed by Tektronix as Chairman and Chief Executive Officer. Executive and Tektronix acknowledge that either party may terminate this employment relationship at any time and for any reason, subject to the obligation of Tektronix to provide the benefits specified in this Agreement in accordance with the terms hereof. 2. RELEASE OF CLAIMS. In consideration for the severance benefits outlined in this Agreement, Executive agrees to execute a Release of Claims in the form attached as Exhibit A ("Release of Claims"). Executive promises to execute and deliver the Release of Claims to Tektronix within the later of forty-five (45) days from the date Executive receives the Release of Claims or on the last day of Executive's active employment. 3. COMPENSATION UPON TERMINATION. In the event that Executive's employment is terminated at any time by Tektronix other than for Cause (as defined in Section 6.1 of this Agreement), death, or Disability (as defined in Section 6.2 of this Agreement), subject to Executive's execution of a Release of Claims, Executive shall be entitled to the following benefits: 3.1 As severance pay and in lieu of any further pay for periods subsequent to the date of termination, Tektronix shall pay Executive, in a single payment within the later of forty-five (45) days after termination of employment or eight days after execution of the Release of Claims, an amount in cash equal to two times Executive's annual base pay at the rate in effect immediately prior to the date of termination, or, if greater, an amount in cash equal to two times Executive's average annual base pay for the three years ending with Executive's last pay change preceding termination. 3.2 Executive is entitled to extend coverage under any group health plan in which Executive and Executive's dependents are enrolled at the time of termination of employment under the COBRA continuation laws for the 18-month statutory period, or so long as Executive remains eligible under COBRA. Tektronix will pay Executive a lump sum payment in an amount equivalent to the reasonably estimated cost Executive may incur to extend for a period of eighteen (18) months under the COBRA continuation laws Executive's group health and dental plan coverage in effect at the time of termination. Executive may use this payment, as well as any payment made under 3.1, for such COBRA continuation coverage or for any other purpose. 3.3 Except as provided in Section 5.2, Executive shall be entitled to a portion of the benefits under any incentive plans in effect at the time of termination (including the Results Sharing Plan and the Annual Performance Improvement Plan), prorated for the portion of the plan year during which Executive was a participant. For purposes of this Agreement, Executive's participation in the Annual Performance Improvement Plan will be considered to have ended on Executive's last day of active employment. Prorated awards shall not be due and payable by Tektronix to Executive until the date that all awards are paid after the close of the incentive period. Unless the applicable plan provides for a greater payment for a participant whose employment terminates prior to the end of an incentive period (in which case the applicable plan payment shall be made), the proration shall be calculated pursuant to this Section 3.3. The payment, if any, that would have been made under Executive's award had Executive been made a participant for the full incentive period shall be calculated at the end of the incentive period. Such amount shall be divided by the total number of days in the incentive period and the result multiplied by the actual number of days Executive participated in the plan. 3.4 Tektronix will pay up to $12,500 to a third party outplacement firm selected by Executive to provide career counseling assistance to Executive for a period of one (1) year following Executive's termination date. 3.5 Tektronix will permit Executive to continue to participate in its Executive Financial Counseling Program through the remainder of the term of Executive's current participation (which shall in no case be longer than one (1) year after the effective date of Executive's termination). 4. SUBSEQUENT EMPLOYMENT. The amount of any payment provided for in this Agreement shall not be reduced, offset or subject to recovery by Tektronix by reason of any compensation earned by Executive as the result of employment by another employer after termination. 5. OTHER AGREEMENTS. 5.1 In the event that severance benefits are payable to Executive under any other agreement with Tektronix in effect at the time of termination (including any change of control, "golden parachute" or employment agreement, but excluding any stock option agreement or stock bonus agreement or stock appreciation right agreement that may provide for accelerated vesting or related benefits upon termination or upon the occurrence of a change in control), the benefits provided in this Agreement shall not be payable to Executive. Executive may, however, elect to receive all of the benefits provided for in this Agreement in lieu of all of the benefits provided in all such other agreements. Any such election shall be made with respect to the agreements as a whole, and Executive cannot select some benefits from one agreement and other benefits from this Agreement. No such election shall, however, operate to deprive Executive of the benefit of any term or provision relating to acceleration or lapse of forfeiture restrictions in any stock option or stock bonus agreement between Tektronix and Executive, even if such term or provision is referred to or required by an employment or compensation agreement or other agreement of the kind covered by the first sentence of this section. 5.2 The vesting or accrual of stock options, restricted stock, stock bonuses, or any other stock awards shall not continue following termination except as may be expressly provided by their terms. Any agreements between Executive and Tektronix that relate to stock awards (including but not limited to stock options, long term incentive program, stock bonuses and restricted stock, and the provisions of any employment agreement or compensation agreement relating to special acceleration of options or lapse of forfeiture restrictions on bonus shares) shall be governed by such agreements and shall not be affected by this Agreement. 6. DEFINITIONS. 6.1 CAUSE. Termination by Tektronix of Executive's employment for "Cause" shall mean termination upon (a) the willful and continued failure by Executive to perform substantially Executive's reasonably assigned duties with Tektronix (other than any such failure resulting from Executive's incapacity due to physical or mental illness) after a demand for substantial performance is delivered to Executive by the Chairman of the Organization and Compensation Committee of the Board of Directors of Tektronix which specifically identifies the manner in which such executive believes that Executive has not substantially performed Executive's duties, or (b) the willful engaging by Executive in illegal conduct which is materially and demonstrably injurious to Tektronix. For purposes of this Section 6.1, no act, or failure to act, on Executive's part shall be considered "willful" unless done, or omitted to be done, by Executive in knowing bad faith and without reasonable belief that Executive's action or omission was in, or not opposed to, the best interests of Tektronix. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors or based upon the advice of counsel for Tektronix shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of Tektronix. 6.2 DISABILITY. Termination by Tektronix of Executive's employment based on "Disability" shall mean termination because of Executive's absence from Executive's duties with Tektronix on a full-time basis for one hundred eighty (180) consecutive days as a result of Executive's incapacity due to physical or mental illness, unless within thirty (30) days after notice of termination by Tektronix following such absence Executive shall have returned to the full- time performance of Executive's duties. 7. SUCCESSORS; BINDING AGREEMENT. 7.1 This Agreement shall be binding on and inure to the benefit of Tektronix and its successors and assigns. 7.2 This Agreement shall inure to the benefit of and be enforceable by Executive and Executive's legal representatives, executors, administrators and heirs. 8. REGISNATION OF CORPORATE OFFICES. Executive will resign Executive's office, if any, as a director, officer or trustee of Tektronix, its subsidiaries or affiliates, effective as of the date of termination of employment. Executive agrees to provide Tektronix such written resignation(s) upon request. 9. GOVERNING LAW, ARBITRATION. This Agreement shall be construed in accordance with and governed by the laws of the State of Oregon. Any dispute or controversy arising under or in connection with this Agreement or the breach thereof, shall be settled exclusively by arbitration in Portland, Oregon in accordance with the Commercial Arbitration Rules of the American Arbitration Association, and judgment upon the award rendered by the Arbitrator may be entered in any Court having jurisdiction thereof. 10. FEES AND EXPENSES. In the event that Executive initiates arbitration under the circumstances described in this Agreement to obtain or enforce any right or benefit provided by this Agreement and the arbitrator determines that Executive is the prevailing party, Executive shall be permitted to recover Executive's reasonable attorneys' fees and costs incurred in connection with such proceeding. In the event that the arbitrator determines that Tektronix is the prevailing party, each party shall bear its own attorneys' fees and costs incurred in connection with such proceeding. 11. AMENDMENT. No provision of this Agreement may be modified unless such modification is agreed to in a writing signed by Executive and Tektronix. 12. PRIOR AGREEMENT. This Agreement supersedes and replaces the Executive Severance Agreement between the parties dated October 23, 1992. Tektronix, Inc. \s\ Jerome J. Meyer Jerome J. Meyer By: \s\ Andrew V. Smith Title: Chairman, Organization and Compensation Committee Exhibit A RELEASE OF CLAIMS This Release of Claims (the "Release") is made and executed by ____________ _____________________ in connection with the termination of my employment with Tektronix, Inc. ("Tektronix") and in consideration of my receiving valuable severance pay and benefits as provided for in the Executive Severance Agreement ("Agreement"). These benefits are substantial consideration to which I am not otherwise entitled. On behalf of myself and my spouse, heirs, administrators and assigns, I hereby release Tektronix, its parent and related corporations, affiliates, or joint venturers and all officers, directors, employees, agents, and insurers of the aforementioned (collectively the "Company") from any and all liability, damages or causes of action, whether known or unknown relating to my employment with the Company or the termination of that employment, including but not limited to any claims for additional compensation in any form, or damages. This specifically includes, but is not limited to, all claims for relief or remedy under any state or federal laws, including but not limited to Title VII of the Civil Rights Act of 1964, the Post-Civil War Civil Rights Acts (42 USC Section 1981-1988), the Civil Rights Act of 1991, the Equal Pay Act, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act, the Older Workers Benefit Protection Act, the Worker Adjustment and Retraining Notification Act, the Rehabilitation Act of 1973, the Vietnam Era Veterans' Readjustment Assistance Act, the Fair Labor Standards Act, Executive Order 11246, all as amended, and the civil rights, employment and labor laws of the state of any state or the United States. This Release shall not affect any rights which I may have under any medical insurance, disability, workers' compensation, unemployment compensation or retirement plans maintained by the Company. I acknowledge that I have been given at least 45 days to consider whether to execute this Release of Claims and accept benefits under the Program; that I have been advised of my right to consult with an attorney or financial advisor of my choice and at my own expense; that the Agreement gives me severance pay and benefits which the Company would otherwise have no obligation to give me; and that I voluntarily enter into the Release of Claims. I understand that the Release of Claims is to be signed within 45 days from the date I received it or on my last day of employment, whichever is later, and that I may revoke the Release of Claims, provided I do so in writing within seven (7) days of signing the Release. I understand and agree that the Company will have no obligation to pay me any benefits under the Agreement until the expiration of the revocation period, provided I have not revoked the Release of Claims. I understand that if I revoke the Release of Claims my termination will nonetheless remain in full force and effect and I will not be entitled to any benefits under the Agreement. I acknowledge that I have had time to consider the alternatives and consequences of my election to receive benefits under the Agreement and of signing the Release; that I am aware of my right to consult an attorney or financial advisor at my own expense; and that, in consideration for executing this Release and my election to receive benefits under the Agreement, I have received additional benefits and compensation of value to which I would not otherwise be entitled. I HAVE READ THE FOREGOING RELEASE. I UNDERSTAND THE EFFECT OF THIS RELEASE AND I VOLUNTARILY ENTER INTO IT AT THIS TIME. Every provision of this Release is intended to be severable. In the event any term or provision contained in this Release is determined to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall not affect the other terms and provisions of this Release which shall continue in full force and effect. Dated: __________________, 1993 ____________________________ Employee Name ____________________________ Employee Signature EX-10.II 3 EXHIBIT (10)(ii) AMENDMENT NO. 1 to SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT October 6, 1993 Jerome J. Meyer 24790 SW Big Fir Road West Linn, Oregon 97068 Executive Tektronix, Inc. an Oregon corporation 26600 SW Parkway Wilsonville, Oregon 97070 Tektronix The Supplemental Executive Retirement Agreement dated October 24, 1990 is amended as follows to reflect the Split Dollar Life Insurance Agreement between the parties dated as of October 6, 1993. 1. Split Dollar Offset. 1.1 In 3.1, (f) and (g) are revised to read as follows: (f) "Offsetting Benefits" are Prior Plan Benefit, Pension Plan Benefit,Retirement Equalization Plan Benefit, and Split Dollar Benefit. (g) "Prior Plan Benefit" is $32,427, which represents the annual benefit payable to Executive from his prior employer's retirement plans, including both tax-qualified plans and any nonqualified plan or arrangement providing a supplemental or excess retirement benefit to Executive. 1.2 A new 3.1 (j) is added as follows: (j) "Split Dollar Benefit" means the benefit payable to Executive through insurance under the Split Dollar Life Insurance Agreement dated as of October 6, 1993 between Executive and Tektronix adjusted as follows: (1) If a lump sum benefit is paid at death, it will be converted under 3.3 as though it were paid to Executive the day before death. (2) If Executive terminates before age 64 and defers the start of the Split Dollar Benefit, the offset will be correspondingly deferred until not later than age 64. (3) If the Split Dollar insurance lapses because a premium is not paid, the offset shall be increased as though the premium had been paid. 1.3 Paragraphs 3.2 and 3.3 are changed to read as follows: 3.2 Except for the offsetting Split Dollar Benefit, the Basic Benefit shall be calculated at the time of Executive's termination of employment, adjusting all values actuarially to the Normal Commencement Date. Accruals of Offsetting Benefits (other than the Split Dollar Benefit) after Normal Commencement Date shall be disregarded, but actual vesting to the date of calculation shall apply. 3.3 If an Offsetting Benefit is provided in a form or starting at a time other than a single life annuity for the life of Executive commencing at age 62, the following shall apply: (a) Subject to (b) below, the amount of the offset shall be adjusted to a single life annuity for Executive's life, payable at Normal Commencement Date, that is the actuarial equivalent of the Offsetting Benefit Executive is entitled to receive. (b) The Split Dollar Benefit offset shall be calculated as of the later of the following: (1) The Normal Commencement Date. (2) The earlier of age 64 or the date the Split Dollar Benefit starts. 2. Effective Date. This Amendment shall be effective as of October 6, 1993. Executive /s/ Jerome J. Meyer Jerome J. Meyer Tektronix TEKTRONIX, INC. By /s/ Andrew V. Smith Andrew V. Smith Chairman, Organization and Compensation Committee EX-27 4
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS MAY-27-1995 AUG-27-1994 33,857 0 245,914 0 187,960 522,172 950,524 (382,614) 993,727 252,091 104,266 179,133 0 0 314,879 993,727 0 312,728 0 161,249 41,306 0 0 21,609 5,619 15,990 0 0 0 15,990 0.53 0.53
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