11-K 1 a11-k.txt FORM 11-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 11-K (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December, 31, 1999 or [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _____________ to _____________. Commission file number 1-4837 Tektronix, Inc. 401(k) Plan --------------------------- (Full title of Plan) TEKTRONIX, INC. 14200 SW Karl Braun Drive Beaverton, Oregon 97077 ----------------------- (Name of issuer of the securities held pursuant to the plan and the address of its principal executive office) REQUIRED INFORMATION Tektronix, Inc. Tektronix 401(k) Plan December 31, 1999 and 1998 Index
Page ---- Independent Auditors' Report 1 Financial Statements Statements of Net Assets Available for Benefits at December 31, 1999 and 1998 2 Statements of Changes in Net Assets Available for Benefits at December 31, 1999 and 1998 3 Notes to Financial Statements 4-10 Note: All other schedules have been omitted because the information required is included in the financial statements or the notes thereto or they are not applicable. Signature 11 Exhibit 23 Independent Auditors' Consent
INDEPENDENT AUDITORS' REPORT Investment and Administrative Committee Tektronix 401(k) Plan: We have audited the accompanying statements of net assets available for benefits of the Tektronix 401(k) Plan (the "Plan") as of December 31, 1999 and 1998, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan at December 31, 1999 and 1998, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP June 16, 2000 1 TEKTRONIX 401(K) PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1999 AND 1998 (IN THOUSANDS)
-------------------------------------------------------------------------------------------------- 1999 1998 ASSETS: Investment in Tektronix Master Retirement Trust (Note 3) $1,001,442 $895,254 Employer contributions receivable 892 599 Employee contributions receivable 1,020 717 --------- ------- Total assets 1,003,354 896,570 LIABILITIES - Transfer payable (Note 9) 48,619 - --------- ------- NET ASSETS AVAILABLE FOR BENEFITS $954,735 $896,570 --------- ------- --------- -------
See notes to financial statements. 2 TEKTRONIX 401(k) PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS DECEMBER 31, 1999 AND 1998 (IN THOUSANDS)
--------------------------------------------------------------------------------------------------- 1999 1998 NET INVESTMENT INCOME FROM TEKTRONIX MASTER RETIREMENT TRUST (Note 3) $173,295 $108,122 CONTRIBUTIONS: Employer 17,645 18,924 Employee 26,196 28,290 WITHDRAWALS (109,502) (53,358) -------- -------- NET INCREASE 107,634 101,978 TRANSFER OF VND ASSETS (Note 9) (48,619) - TRANSFER OF AVSTAR ASSETS (850) - NET ASSETS AVAILABLE FOR BENEFITS AT BEGINNING OF YEAR 896,570 794,592 -------- -------- NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR $954,735 $896,570 -------- -------- -------- --------
See notes to financial statements. 3 TEKTRONIX 401(k) PLAN NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 1999 AND 1998 -------------------------------------------------------------------------------- 1. DESCRIPTION OF THE PLAN The following brief description of the Tektronix 401(k) Plan (the "Plan") is provided for general information purposes only. Participants should refer to the Summary Plan Description for more complete information regarding amount and type of benefits, vesting, and other provisions of the Plan. GENERAL - The Plan is a defined contribution plan covering all regular employees of a participating Tektronix, Inc. company. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). CONTRIBUTIONS - Participants can elect to have Tektronix, Inc. contribute from 1% to 15% of their eligible pay to the Plan. Tektronix, Inc. makes a basic contribution of 2% of eligible pay for all participants each year to the Tektronix Stock Fund plus a matching contribution of 100% of the first 4% of elective contributions which is allocated according to the participant's allocation election. All employees eligible to participate in the Plan receive the basic 2% contribution regardless of their election to contribute to the Plan. Contributions are subject to certain limitations. PARTICIPANT ACCOUNTS - Each participant account is credited with contributions and an allocation of the Plan's earnings. Contributions are allocated based on the participant's election and earnings are allocated based on participant account balances. The Plan allows for loans to active participants on such terms as the Investment and Administrative Committee approves. Participants may borrow from their accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000, 50% of their account balance in all funds, or 100% of the cash account balances in all funds excluding the Tektronix Stock Fund, whichever is less. The loans are secured by the balance in the participant's account and bear interest at rates that range from 7.0% to 10.8%, which are commensurate with local prevailing rates as determined by the Plan Administrator. Principal and interest is paid ratably through biweekly payroll deductions. Loan terms cannot exceed five years. VESTING AND BENEFITS - Participants are immediately 100% vested in all contributions to the Plan and are eligible to receive benefits upon termination, retirement, or disability. Benefits can be received by electing a lump-sum settlement, installment payments, annuity contracts, or a combination thereof. 2. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING - The Plan's financial statements are prepared on the accrual basis of accounting. 4 USE OF ESTIMATES - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and changes therein, and disclosures of contingent assets and liabilities. Actual results could differ from those estimates. ADMINISTRATIVE EXPENSE - Certain expenses for administration and servicing of the Plan, including facilities, equipment and supplies, and payroll expenses of administrative and clerical personnel, are provided by Tektronix, Inc. without charge to the Plan. Tektronix, Inc. also pays certain professional fees related to the Plan. INCOME TAX STATUS - The Plan obtained its latest determination letter dated May 1999, in which the Internal Revenue Service stated that the Plan, as designed, was in compliance with the applicable requirements of the Internal Revenue Code ("IRC"). The Plan Administrator believes that the Plan is being operated in compliance with the applicable requirements of the IRC. WITHDRAWALS - Payments to participants are recorded when paid. RECLASSIFICATIONS - Certain prior year amounts have been reclassified to conform to the current year presentation. 3. INVESTMENT IN TEKTRONIX MASTER RETIREMENT TRUST All of the Plan's investment assets are held in a Master Trust (the "Trust") established by Tektronix, Inc. Use of the Trust permits the commingling of assets, for investment and administrative purposes, of two retirement plans of Tektronix, Inc. and its subsidiaries. The majority of the Trust assets are investments of both underlying plans, and the remaining Trust assets are investments of only one or the other plan. The net earnings on assets that are investments of both plans are allocated to the plans based on each plan's share of such net assets in the Trust. For assets that are not investments held by both plans, net earnings are allocated entirely to the plan to which the specific investment relates. The following plans participate in the Trust: Tektronix 401(k) Plan Tektronix Cash Balance Plan For investment purposes, the assets of the Trust are divided among nine different funds. The first six of these funds are the investment options in which Plan participants can choose to invest their contributions and the employer matching contributions. Employer basic contributions are automatically invested in the Tektronix Stock Fund which is a nonparticipant-directed fund. The Pension Fund is used to segregate the investments of the Tektronix Cash Balance Plan. The funds available in the Trust are as follows: 5 STABLE FUND invests in insurance company investment contracts and a money market mutual fund. BALANCED FUND invests in a balanced mix of common stocks and U.S. government and corporate debt obligations. STOCK INDEX FUND invests in common stocks of large U.S. companies. SMALL AND MEDIUM COMPANY STOCK FUND invests in the stocks of small and medium-sized companies. INTERNATIONAL STOCK FUND invests in stocks of companies that are located outside the United States. TEKTRONIX STOCK FUND II invests employee contributions and employer matching contributions in the common stock of Tektronix, Inc., the Plan Sponsor. TEKTRONIX STOCK FUND invests employer basic contributions in the common stock of Tektronix, Inc., the Plan sponsor. LOAN FUND accounts for participant loan balances. PENSION FUND invests in a diversified portfolio of assets. The Trust values marketable securities at the closing quoted market price on the valuation date. Commercial paper, temporary cash investments, and participant loans are valued at cost, which approximates fair value. The fair value of real estate investments have been estimated on the basis of future income expected from such investments discounted at interest rates commensurate with the risks involved or at appraised value. Insurance contracts are valued at contract value which approximates fair value (see Note 7). The fair value of limited partnership investments, for which no public market exists, is based upon the estimates made by the general partners of those partnerships. The general partners consider the financial condition and operating results of each limited partnership and such other factors deemed appropriate. Limited partnerships that invest in publicly-traded securities are valued at quoted market prices, less a discount applicable to the general partner's share of the unrealized gain or loss on the investment. At December 31, 1999 and 1998, the Plan's interest in the net assets of the master trust was approximately 64% and 65%, respectively. 6 The net assets of the Trust at December 31, 1999 and 1998 are summarized as follows (in thousands):
1999 1998 Accrued income receivable $ 3,368 $ 1,116 Noninterest-bearing cash 1,111 31 Interest-bearing cash 5,019 33,877 U.S. government securities 74,884 125,145 Corporate debt - preferred 52,907 43,430 Corporate debt - other 61,546 137,997 Preferred stock 4,277 2,351 Common stock - Tektronix, Inc. 103,671 87,721 Common stock - other 551,818 450,486 Partnerships and joint ventures 63,514 50,226 Real estate - income-producing 12 682 Real estate - non-income-producing 1,834 1,834 Participant loans 12,461 20,906 Common and collective trusts 85,729 223,705 Registered investments 357,145 114,107 Insurance contracts 178,365 156,400 Pending sales 83,367 6,819 Pending purchases (77,514) (82,204) ---------- ---------- Total $1,563,514 $1,374,629 ---------- ---------- ---------- ----------
The components of the Trust's total investment return for the years ended December 31, 1999 and 1998 are as follows (in thousands):
1999 1998 Net appreciation in fair value of investments $268,560 $130,657 Interest 27,405 26,510 Dividends 8,244 14,272 Other - 272 -------- -------- Total investment income $304,209 $171,711 -------- -------- -------- --------
7 The following table presents the net appreciation (depreciation) in fair value of the Trust's investments, by investment type (in thousands):
1999 1998 U.S. government securities $ 2,802 $ 2,868 Corporate debt - preferred (1,160) 21 Corporate debt - other (16,965) 1,856 Preferred stock 1,298 (755) Common stock 193,204 63,155 Partnerships and joint ventures 8,686 3,502 Real estate - income-producing (40) 1,120 Common and collective trusts 11,142 48,189 Registered investments 69,233 9,114 Insurance contracts 360 1,587 ------- ------ Net appreciation in fair value of investments $268,560 $130,657 -------- -------- -------- --------
4. CONCENTRATION OF RISK The Trust's assets consist primarily of financial instruments including cash, government and agency securities, corporate debt, preferred stock, common stock, partnerships and joint ventures, real estate, loans, common and collective trusts, registered investments, and investment contracts. The financial instruments may subject the Plan to concentrations of risk as, from time to time, cash balances exceed amounts insured by the Federal Deposit Insurance Corporation, market value of securities are dependent on the ability of the issuer to honor its contractual commitments, and investments in common stock are subject to changes in market values of the stock. 5. BENEFIT PRIORITIES UPON TERMINATION Tektronix, Inc. intends the Plan to be permanent but, if the Plan were terminated, Plan assets would be allocated among participants in proportion to their account balances. 6. NONPARTICIPANT-DIRECTED INVESTMENTS Investments in Tektronix Master Retirement Trust, net investment income from Tektronix Master Retirement Trust, employer contributions, withdrawals, and transfer of VND assets relating to nonparticipant-directed investments held in the Tektronix Stock Fund (see Note 3) are as follows for the years ended December 31, 1999 and 1998 (in thousands): 8
1999 1998 Investment in Tektronix Master Retirement Trust $ 95,995 $ 77,544 Net investment income (loss) from Tektronix Master Retirement Trust 23,405 (21,017) Employer contributions 6,592 7,529 Withdrawals (8,794) (3,965) Transfer of VND assets (4,404) -
7. CONTRACTS WITH INSURANCE COMPANIES The Trust has entered into various guaranteed investment contracts with insurance companies. These contracts are included in the financial statements at contract value (which represents contributions made under the contracts, plus earnings, less withdrawals and related expenses) because the contracts are fully benefit responsive. For example, participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. Plan management has asserted that contract value approximates fair value for these contracts. There are no reserves against the contract values for credit risk of the issuers or otherwise. The average yields and crediting interest rates ranged from approximately 5.64% to 8.23% and 5.52% to 8.23% for the years ended December 31, 1999 and 1998, respectively. The crediting interest rates are based on formulas agreed upon with each issuer. 8. RECONCILIATION TO FORM 5500 The reconciliation of 1999 withdrawals and transfers per the Plan financial statements to withdrawals and transfers per the Form 5500 is as follows (amounts in thousands): Withdrawals per Plan statement of changes in net assets available for benefits $109,502 Transfer of Avstar assets per Plan statement of changes in net assets available for benefits 850 Benefits payable per Form 5500 4,702 -------- Withdrawals per Form 5500 $115,054 -------- -------- Transfer of VND assets per Plan statement of changes in net assets available for benefits $ 48,619 Transfer payable per Plan statement of net assets available for benefits (48,619) -------- Transfers per Form 5500 $ - -------- --------
9 9. SUBSEQUENT EVENT On September 24, 1999, the Video and Networking Division ("VND") of Tektronix, Inc. was sold to a third party. On January 1, 2000, the Color Printing and Imaging Division ("CPID") of Tektronix, Inc. was sold to a third party. As a result of these two transactions, the Plan assets associated with the former VND and CPID employees were transferred via a trust-to-trust transfer from the Plan to the trustees of the third party purchasers' plans. The VND transfer was recorded in the Plan's 1999 financial statements in the amount of $48,619,000. As the CPID transfer did not close until January 1, 2000, the transfer was not recorded in the Plan's 1999 financial statements. For both the CPID and VND transfers, the majority of the Plan assets were transferred during the first week of January 2000, with the remaining assets transferred during the first week of February 2000. The dollar amount of the CPID transfer was $123,021,000, which will be reflected in the Plan's 2000 financial statements. 10 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned thereunto duly authorized. TEKTRONIX, INC. 401(k) PLAN Date: June 23, 2000 By: /s/ Michael Linder ------------------------- Michael Linder, Secretary Tektronix 401(k) Plan Administrative Committee 11 Exhibit Index -------------
Exhibit Document Number -------- ------- Independent Auditors' Consent 23