8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 26, 2009

TERADYNE, INC.

(Exact Name of Registrant as Specified in Charter)

Massachusetts	001-06462	04-2272148
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

600 Riverpark Drive, North Reading, MA	01864
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (978) 370-2700

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

On January 28, 2009, Teradyne, Inc. (“Teradyne”) issued a press release regarding its financial results for the fourth quarter and fiscal year ended December 31, 2008. Teradyne’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

Item 2.05 Costs Associated with Exit or Disposal Activities.

On January 28, 2009, Teradyne announced actions it has or will be taking as part of the Company’s ongoing efforts to lower expenses and the cost structure in light of the industry wide continued decline in orders for semiconductor production equipment. The actions include:

• A worldwide reduction in workforce of approximately 500 employees. Teradyne will begin notifying affected employees on January 29, 2009. The terminations are expected to be completed by the end of the first quarter of 2009, and to result in an estimated total severance charge of approximately $25 million that will be expensed in the first quarter of 2009, of which approximately $8 million will be paid in the first quarter of 2009, approximately $10 million will be paid in the second quarter of 2009 and approximately $7 million will be paid in the third quarter of 2009.

• A temporary 10% pay cut for all employees earning above a designated annual salary level. This temporary salary reduction shall take effect for US employees on February 1, 2009.

In addition to these actions, the Compensation Committee and the Board of Directors (“Board”) of Teradyne approved on January 26-27, 2009, a further temporary reduction in the annual base salaries of its executive officers including the Chief Executive Officer (CEO) commencing February 1, 2009. These reductions are in addition to earlier reductions which were implemented on October 1, 2008. On January 27, 2009, the Board also approved a further temporary reduction in the annual cash retainers for non-employee directors effective April 1, 2009. These reductions are in addition to earlier reductions which were implemented on January 1, 2009.

When compared to the 2008 executive officer annual base salaries, the effect of the two reductions is that the annual base salary of the CEO and President of Teradyne has been decreased by 15% from its 2008 level and the annual base salaries of the other executive officers have been decreased by 10% from their respective 2008 levels.

When compared to the 2008 annual cash retainers for non-employees directors, the effect of the two reductions is that the annual cash retainer for all non-employee directors, including the Chair, has been decreased by 15% from its 2008 level.

The reduced annual base salaries and annual cash retainer amounts are set forth in Exhibits 99.2 and 99.3, respectively, to this Current Report on Form 8-K. These reductions shall remain in place until otherwise determined by the Compensation Committee and/or Board of Directors, as appropriate.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers; Compensatory Arrangements of Certain Officers.

(e) Executive Compensation – Form of Agreement for Stock Option Awards

In connection with the grant of non-statutory stock options to executive officers under the 2006 Equity and Cash Compensation Incentive Plan (“2006 Plan”), the Compensation Committee and the Board of Directors of Teradyne approved on January 26-27, 2009, the agreement form for non-statutory stock option grants for executive officers, including the CEO (“Executive Officer Stock Option Grant Agreement”) pursuant to which stock option awards will be granted to the executive officers, including the CEO under the 2006 Plan.

Under the terms of the Executive Officer Stock Option Grant Agreement, stock option awards to executive officers, including the CEO, will vest over a four year period, with 25% of the total award vesting on the first and each of the three subsequent anniversaries of the grant date. The executive officers receiving stock option awards will not have any right in, to or with respect to any shares which may be issuable under the award until the issuance of shares upon exercise of the option.

The above description of the Executive Officer Stock Option Grant Agreement is not a complete description of all terms and conditions of the Executive Officer Stock Option Grant Agreement and is subject to and qualified in its entirety by the form of the Executive Officer Stock Option Grant Agreement filed as Exhibit 99.4 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release dated January 28, 2009.
99.2	Reduced annual base salaries of executive officers, effective February 1, 2009.
99.3	Reduced annual cash retainer amounts for non-employee directors, effective April 1, 2009.
99.4	Form of Executive Officer Stock Option Grant Agreement under the 2006 Equity and Cash Compensation Incentive Plan

Safe Harbor Statement

This Form 8-K contains statements regarding the work force reductions and total estimated severance charges which are “forward-looking statements” as defined under Section 21E of the Securities Exchange Act of 1934. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees but involve risks and uncertainties, both known and unknown, that could cause actual results to differ materially from those discussed in the forward-looking statements. There can be no assurance that management’s expectations or forward looking statements will be achieved. Important factors that could cause actual results to differ materially from those presently expected include: difficulties by management in successfully implementing the reduction plan, unanticipated delays in the implementation of the reduction plan, unanticipated costs and expenses relating to the implementation of the reduction plan, conditions affecting the markets in which Teradyne operates including the current slowdown and adverse changes in the global economy and other events, factors and risks previously and from time to time disclosed in our filings with the Securities and Exchange Commission, including, but not limited to the “Risk Factors” section of Teradyne’s annual report on Form 10-K for the year ended December 31, 2007 and Teradyne’s quarterly report on Form 10-Q for the period ended September 28, 2008. The “forward-looking statements” included herein are made only as of the date of publication and Teradyne undertakes no obligation to update the information set forth in this Current Report on Form 8-K.

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.

	TERADYNE, INC.
Dated: January 28, 2009	By:	/s/ Gregory R. Beecher
	Name:	Gregory R. Beecher
	Title:	V.P., Chief Financial Officer and Treasurer

Exhibit Index

Exhibit No.	Description
99.1	Press Release dated January 28, 2009.
99.2	Reduced annual base salaries of executive officers, effective February 1, 2009.
99.3	Reduced annual cash retainer amounts for non-employee directors, effective April 1, 2009.
99.4	Form of Executive Officer Stock Option Grant Agreement under the 2006 Equity and Cash Compensation Incentive Plan

EX-99.1

Exhibit 99.1

Teradyne Reports Fourth Quarter and Fiscal Year 2008 Results;

Announces Further Cost Reduction Actions

NORTH READING, Mass.—(BUSINESS WIRE)—Teradyne, Inc (NYSE: TER) reported sales of $195 million for the fourth quarter of 2008. On a non-GAAP basis, the company’s loss from continuing operations in the fourth quarter was $32.5 million, or $0.19 per diluted share, which excludes amortization of acquired intangible assets and special items. These results include $2.5 million of sales and $0.03 loss per diluted share as a result of the acquisition of Eagle Test Systems, Inc. (Eagle Test), which was completed on November 14, 2008. The preliminary GAAP loss from continuing operations for the fourth quarter was $55.3 million, or $0.33 per diluted share.

Bookings for the fourth quarter were $169 million, and included a full quarter of Eagle Test bookings of $8 million.

For fiscal year 2008, sales were $1.1 billion. Income from continuing operations for the year was $32.4 million, or $0.19 per diluted share on a non-GAAP basis. The preliminary GAAP loss from continuing operations was $65.3 million, or $0.38 per diluted share. Bookings for the year were $996 million.

Guidance for the first quarter of 2009 is for sales of $125 million to $145 million, with a loss per share between $0.38 and $0.31 on a non-GAAP basis. Non-GAAP guidance excludes special items, as well as acquired intangible asset amortization.

Teradyne also announced that in the first quarter it will be reducing its worldwide staff by about 14% and implementing a 10% broad-based temporary pay cut. These actions, along with other cost reductions, will reduce the company’s expenses by approximately $140 million on an annualized basis.

“In 2008, we brought a record number of new products to market, gained market share for the third year in a row and significantly reduced our operating costs,” said Mike Bradley, Teradyne president and CEO. “But worldwide economic conditions require that we reduce our fixed costs even further. We remain focused on our new product development and customer support priorities as we navigate through these very challenging times.

“Strategically, our market coverage has never been greater,” Bradley added. “We remain on schedule to compete in the High-Speed Memory (HSM) test market in 2009 with a highly differentiated offering in next-generation DRAM products. We entered FLASH memory with our Nextest Systems acquisition in early 2008, and their new Magnum II product met its customer penetration and share gain targets with new applications in MultiChip Package testing. Our most recent acquisition Eagle Test, while facing tough market headwinds, provides us with a very strong analog System-On-a-Chip (SOC) platform. Couple this with

our distribution and support muscle in Asia, and we’re well positioned to accelerate Eagle Test’s growth. In summary, our market expansion plans are on schedule, costs are being lowered significantly and we expect to continue our multi-year track record of gaining share in our core businesses.”

Potential Goodwill and Long-Lived Asset Impairment

Due to the deteriorating macro-economic environment and the decline in the price of the Teradyne’s common stock, Teradyne is performing a goodwill and long-lived asset impairment analysis as required under Statement of Financial Accounting Standards, No. 144 “Accounting for the Impairment of or Disposal of Long-Lived Assets” and No. 142 “Goodwill and Other Intangible Assets”. Teradyne currently anticipates having the analysis completed in mid to late February. It is probable that Teradyne’s goodwill or long-lived assets will be determined to be impaired in whole or in part and that a non-cash charge will be required, which could be material and would increase our reported preliminary GAAP net loss and loss per share for the fourth quarter and for 2008. The non-cash charge would not impact the non-GAAP financial results presented in this press release.

Webcast

A webcast to discuss fourth quarter and fiscal year 2008 results, along with management’s business outlook will be held at 10 a.m. EST, Thursday, January 29, 2009. Interested investors should access the webcast at www.teradyne.com and click on “Investors” at least five minutes before the call begins. The webcast replay will be available on www.teradyne.com. In addition, a conference call replay will be available approximately two hours after the call. The replay number in the U.S. & Canada is 800-642-1687. The replay number outside the U.S. & Canada is 706-645-9291. The pass code for both numbers is 80439246. The replay will be available via phone and web site through February 12, 2009.

Non-GAAP Results and Guidance

In addition to disclosing results that are determined in accordance with GAAP, Teradyne also discloses non-GAAP results of operations that exclude certain income items and charges. These results are provided as a complement to results provided in accordance with GAAP. Teradyne reports non-GAAP results in order to better assess and reflect operating performance. Management believes the non-GAAP measures help indicate Teradyne’s baseline performance before gains, losses or other charges that may not be indicative of our current core business or future outlook. Teradyne believes these non-GAAP measures will aid investors’ overall understanding of its results by providing a higher degree of transparency for certain expenses and providing a level of disclosure that will help investors understand how Teradyne plans and measures

its own business. Teradyne’s earnings per share guidance for the first quarter of 2009 is only provided on a non-GAAP basis due to the difficulty in forecasting and quantifying the amounts that would be required to be included in the comparable GAAP measure for all restructuring and other charges, net, as well as intangible asset amortization expense. Although Teradyne expects certain known charges in the first quarter, including approximately $25 million of estimated severance charges, other additional restructuring charges and intangible asset amortization expense are dependent on unknown factors and future events which make it difficult to forecast and quantify such amounts. A reconciliation of each available GAAP to non-GAAP financial measure discussed in this press release is contained in the attached exhibits and on the Teradyne website at www.teradyne.com by clicking on “Investors” and then selecting the “GAAP to Non-GAAP Reconciliation” link. The presentation of non-GAAP measures is not meant to be considered in isolation, as a substitute for, or superior to, financial measures or information provided in accordance with GAAP.

About Teradyne, Inc.

Teradyne (NYSE:TER) is a leading supplier of Automatic Test Equipment used to test complex electronics used in the consumer electronics, automotive, computing, telecommunications, and aerospace and defense industries. In 2008, Teradyne had sales of $1.1 billion and currently employs about 3,800 people worldwide. For more information, visit www.teradyne.com. Teradyne (R) is a registered trademark of Teradyne, Inc. in the U.S. and other countries. All product names are trademarks of Teradyne, Inc. (including its subsidiaries) or their respective owners.

Safe Harbor Statement

The forward-looking statements included in this release are made only as of the date of publication. Teradyne disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this press release.

This release contains forward-looking statements regarding future business prospects and market conditions. Such statements are based on the current assumptions and expectations of Teradyne’s management and are neither promises nor guarantees. You can generally identify these forward-looking statements based on the context of the statements and by the fact that they use words such as “will,” “anticipate,” “expect,” “project,” “intend,” “plan,” “believe,” “target” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. There can be no assurance that management’s estimates of our future results or other forward looking statements will be achieved. Important factors that could cause actual

results to differ materially from those presently expected include: conditions affecting the markets in which Teradyne operates including uncertainties related to the global economy in general; continued volatility and further deterioration in the financial markets, including uncertainties and disruptions in credit markets and the availability of credit; decreased product demand; delays in new product introductions; lack of customer acceptance of new products; the ability to realize synergies and cost savings from the integration of Eagle Test Systems with Teradyne’s existing operations; difficulties by management in successfully implementing the cost reduction plans; unanticipated delays in or costs and expenses relating to the implementation of the cost reduction plans; the impairment of goodwill and long-lived assets; and other events, factors and risks previously and from time to time disclosed in filings with the SEC, including, but not limited to, the “Risk Factors” section of Teradyne’s annual report on Form 10-K for the fiscal year ending December 31, 2007.

TERADYNE, INC. REPORT FOR FOURTH FISCAL QUARTER OF 2008

CONDENSED CONSOLIDATED OPERATING STATEMENTS

(In thousands, except per share amounts)

	Quarter Ended:									Year Ended:
	December 31, 2008			September 28, 2008			December 31, 2007			December 31, 2008			December 31, 2007
Net Revenue (1)	$	194,767		$	297,255		$	260,416		$	1,107,042		$	1,102,280
Cost of Revenues (2)(3)(4)		116,856			169,325			141,846			608,850			588,847
Gross Profit		77,911			127,930			118,570			498,192			513,433
Operating Expenses:
Engineering and Development (1)(4)		52,189			52,969			50,420			216,461			204,344
Selling and Administrative (1)(4)		58,491			58,614			60,789			247,789			248,096
Acquired Intangible Asset Amortization		6,962			5,034			847			20,633			3,667
In-process Research and Development		500			—			—			1,600			16,700
Restructuring and Other, net (5)		9,675			28,589			(355	)		62,775			(659	)
Operating Expenses		127,817			145,206			111,701			549,258			472,148
(Loss)/Income from Operations		(49,906	)		(17,276	)		6,869			(51,066	)		41,285
Interest & Other, net (6)		(6,097	)		(3,111	)		8,088			(1,678	)		37,958
(Loss)/Income from Continuing Operations Before Income Taxes		(56,003	)		(20,387	)		14,957			(52,744	)		79,243
Income Tax Provision/(Benefit)		(693	)		3,070			(2,196	)		12,577			7,360
(Loss)/Income from Continuing Operations		(55,310	)		(23,457	)		17,153			(65,321	)		71,883
Income/(Loss) from Discontinued Operations Before Income Taxes		—			768			(449	)		768			6,346
Income Tax Provision		—			—			—			—			518
Income/(Loss) from Discontinued Operations		—			768			(449	)		768			5,828
Net (Loss)/Income	$	(55,310	)	$	(22,689	)	$	16,704			(64,553	)	$	77,711
(Loss)/Income per Common Share from Continuing Operations:
Basic	$	(0.33	)	$	(0.14	)	$	0.10		$	(0.38	)	$	0.39
Diluted	$	(0.33	)	$	(0.14	)	$	0.10		$	(0.38	)	$	0.39
Net (Loss)/Income per Common Share:
Basic	$	(0.33	)	$	(0.13	)	$	0.10		$	(0.38	)	$	0.42
Diluted	$	(0.33	)	$	(0.13	)	$	0.10		$	(0.38	)	$	0.42
Weighted Average Common Shares—Basic		169,197			168,769			173,498			170,593			184,020
Weighted Average Common Shares—Diluted		169,197			168,769			173,829			170,593			185,374
Net Orders	$	169,404		$	198,072		$	281,995		$	996,471		$	1,107,855

(1) For the quarter and the year ended December 31, 2008, Net Revenue excluded $3.0 million of Eagle Test revenue that would otherwise be recognized except for purchase accounting effects on acquired deferred revenue. For the quarter and the year ended December 31, 2008, Engineering and Development and Selling and Administrative included $1.5 million and $3.0 million, respectively, of Eagle Test expenses.

(2) For the year ended December 31, 2008, Cost of Revenues included a provision for excess inventory in the Semiconductor Test Division of $24.0 million.

(3) For the quarter and the year ended December 31, 2008, and for the quarter and the year ended December 31, 2007, Cost of Revenues included credits of $1.0 million, $2.4 million, $0.6 million and $1.1 million, respectively, related to previously written down inventory in the Semiconductor Test Division. For the quarter and year ended December 31, 2008, Cost of Revenues also included an added cost of $0.7 million and $5.0 million, respectively, for Eagle Test and Nextest inventory step-up as a result of purchase accounting.

(4)    Includes the following amounts related to stock-based compensation:	Quarter Ended:						Year Ended:
	December 31, 2008		September 28, 2008		December 31, 2007		December 31, 2008		December 31, 2007
Cost of Revenues	$	923	$	796	$	728	$	3,480	$	4,460
Engineering and Development		1,845		1,626		1,187		6,912		7,278
Selling and Administrative		3,018		2,665		1,914		11,303		11,736
	$	5,786	$	5,087	$	3,829	$	21,695	$	23,474

(5)    Restructuring and Other, net consists of:	Quarter Ended:							Year Ended:
	December 31, 2008		September 28, 2008		December 31, 2007			December 31, 2008		December 31, 2007
Employee Severance	$	8,853	$	2,620	$	519		$	24,096	$	6,516
Acquisition Financing Costs		822		—		—			822		—
Loss/(Gain) on Sale of Real Estate		—		22,565		—			20,883		(3,597	)
Facility Related		—		3,404		1,670			16,424		1,654
Long-Lived Asset Impairment		—		—		—			550		—
Insurance Gain from Taiwan fire		—		—		(2,544	)		—		(4,326	)
Gain on Sale of Product Lines		—		—		—			—		(906	)
	$	9,675	$	28,589	$	(355	)	$	62,775	$	(659	)

(6) For the quarter ended December 31, 2008, Interest and Other, net included a $7.2 million other-than-temporary impairment and realized losses of marketable securities. For the year ended December 31, 2008, Interest and Other, net included a $15.7 million other-than-temporary impairment and realized losses on marketable securities, $2.8 million gain on sale of an equity investment and $1.4 million gain on life insurance and $0.9 million foreign exchange loss.

CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)

	December 31, 2008		December 31, 2007
Assets
Cash and Cash Equivalents	$	322,705	$	562,371
Marketable Securities		—		75,593
Accounts Receivable		109,625		189,487
Inventories		168,451		80,313
Deferred Tax Assets		8,533		3,216
Prepayments and Other Current Assets		60,884		33,953
		670,198		944,933
Net Property, Plant and Equipment		298,449		352,707
Long-term Marketable Securities		51,613		104,978
Long-term Deferred Tax Assets		—		6,280
Retirement Plans Assets		—		46,396
Intangible and Other Assets		206,533		30,847
Goodwill		333,281		69,147
	$	1,560,074	$	1,555,288
Liabilities
Accounts Payable		61,164		57,426
Current Debt		122,500		—
Accrued Employees' Compensation and Withholdings		73,521		71,691
Deferred Revenue and Customer Advances		58,030		41,928
Other Accrued Liabilities		51,748		47,002
Income Taxes Payable		—		5,187
		366,963		223,234
Retirement Plans Liabilities		125,877		80,388
Deferred Tax Liabilities		275		—
Other Long-term Liabilities		27,565		22,492
		520,680		326,114
Shareholders' Equity		1,039,394		1,229,174
	$	1,560,074	$	1,555,288

GAAP to Non-GAAP Earnings Reconciliation

References by the Company to non-GAAP (loss)/income and non-GAAP (loss)/income per share refer to (loss)/income from continuing operations or (loss)/income per common share from continuing operations excluding in-process research and development, restructuring and other, net, certain inventory provision reversals and fair value inventory step-up related to Nextest and Eagle Test, certain interest and other, net, and acquired intangible asset amortization, as well as applicable adjustments to profit sharing and income taxes due to these exclusions. GAAP requires that these items be included in determining (loss)/income from continuing operations. Non-GAAP (loss)/income from continuing operations (which is the basis for non-GAAP (loss)/income per share) gives an indication of Teradyne's baseline performance before gains, losses or other charges that may not be indicative of our current core business or future outlook. The Company believes these non-GAAP measures will aid investors' overall understanding of the Company's results by providing a higher degree of transparency for certain expenses and providing a level of disclosure that will help investors understand how the Company plans and measures its own business. However, the presentation of non-GAAP measures is not meant to be considered in isolation or as a substitute for, or superior to, financial information provided in accordance with GAAP.

	Quarter Ended:															Twelve Months Ended:
(in millions, except per share data)	December 31, 2008					September 28, 2008					December 31, 2007					December 31, 2008					December 31, 2007
Net Revenues	$	194.8				$	297.3				$	260.4				$	1,107.0				$	1,102.3
Gross Margin—GAAP (1)	$	77.9		40.0	%	$	127.9		43.0	%	$	118.6		45.5	%	$	498.2		45.0	%	$	513.4		46.6	%
Inventory step-up reversal (2)		0.7					—					—					5.0					—
Inventory provision reversal (3)		(1.0	)				(0.5	)				(0.6	)				(2.4	)				(1.1	)
Gross Margin—non-GAAP	$	77.6		39.8	%	$	127.4		42.9	%	$	118.0		45.3	%	$	500.8		45.2	%	$	512.3		46.5	%
(Loss)/Income from Continuing Operations—GAAP	$	(55.3	)	-28.4	%	$	(23.5	)	-7.9	%	$	17.2		6.6	%	$	(65.3	)	-5.9	%	$	71.9		6.5	%
Restructuring and other, net (4)		9.7					28.6					(0.4	)				62.8					(0.7	)
Acquired intangible asset amortization		7.0					5.0					0.8					20.6					3.7
Inventory step-up reversal (2)		0.7					—					—					5.0					—
In-process research and development (5)		0.5					—					—					1.6					16.7
Inventory provision reversal (3)		(1.0	)				(0.5	)				(0.6	)				(2.4	)				(1.1	)
Interest and other, net (7)		5.9					5.5					—					11.4					(1.8	)
Income tax adjustment (8)		—					—					—					0.2					(0.3	)
Profit sharing adjustment (6)		—					—					—					(1.5	)				(1.6	)
(Loss)/Income from Continuing Operations—non-GAAP	$	(32.5	)	-16.7	%	$	15.1		5.1	%	$	17.0		6.5	%	$	32.4		2.9	%	$	86.8		7.9	%
GAAP (Loss)/Income per Common Share from Continuing Operations—Basic		(0.33	)				(0.14	)				0.10					(0.38	)				0.39
Non-GAAP (Loss)/Income per Common Share from Continuing Operations—Basic		(0.19	)				0.09					0.10					0.19					0.47
GAAP and Non-GAAP Weighted Average Common Shares—Basic		169.2					168.8					173.5					170.6					184.0
GAAP (Loss)/ Income per Common Share from Continuing Operations—Diluted		(0.33	)				(0.14	)				0.10					(0.38	)				0.39
Non-GAAP (Loss)/Income per Common Share from Continuing Operations—Diluted		(0.19	)				0.09					0.10					0.19					0.47
GAAP Weighted Average Common Shares—Diluted		169.2					168.8					173.8					170.6					185.4
Non-GAAP Weighted Average Common Shares—Diluted		169.2					170.3					173.8					172.8					185.4

(1) For the year ended December 31, 2008, Gross Margin includes a provision of $24.0 million for excess inventory in the Semiconductor Test Division.

(2) Reversal of Nextest and Eagle Test purchase accounting inventory step-up.

(3) Reversal of previously written down inventory for non-FLEX products in the Semiconductor Test Division.

(4)    Restructuring and other, net consists of (in millions):	Quarter Ended:							Twelve Months Ended:
	December 31, 2008		September 28, 2008		December 31, 2007			December 31, 2008		December 31, 2007
Employee severance	$	8.9	$	2.6	$	0.5		$	24.1	$	6.5
Acquisition costs		0.8		—		—			0.8		—
Loss/(Gain) on sale of real estate		—		22.6		—			20.9		(3.6	)
Facility related		—		3.4		1.6			16.4		1.6
Long-lived asset impairment		—		—		—			0.6		—
Insurance gain from Taiwan fire		—		—		(2.5	)		—		(4.3	)
Gain on sale of product lines		—		—		—			—		(0.9	)
	$	9.7	$	28.6	$	(0.4	)	$	62.8	$	(0.7	)

(5) For the quarter and the year ended December 31, 2008, in-process research and development included a charge related to the Eagle Test acquisition and charges related to the Nextest and Eagle Test acquisitions, respectively. For the year ended December 31, 2007, in-process research and development included a charge related to the acquisition of enabling test technology from MOSAID Technologies.

(6) Profit sharing adjustment for non-GAAP items.

(7) For the quarter ended December 31, 2008, Interest and Other, net included other-than-temporary impairment and realized losses of marketable securities and reversal of the charge for acquisition financing costs. For the year ended December 31, 2008, Interest and Other, net included other-than-temporary impairment and realized losses of marketable securities, reversal of the charge for acquisition financing costs, gain on sale of an equity investment and gain on life insurance. For the year ended December 31, 2007 Interest and Other, net included gain for the recognition of fair value of an asset related to an equity investment.

(8) Income tax adjustment for non-GAAP items.

For press releases and other information of interest to investors, please visit Teradyne's homepage on the World Wide Web at http://www.teradyne.com.

Contact:

Teradyne, Inc.

Andy Blanchard 978-370-2425

Vice President of Corporate Relations

EX-99.2

Exhibit 99.2

Teradyne, Inc.

Summary of Reduced Annual Base Salaries of Executive Officers

Effective February 1, 2009*

Executive Officer	2008 Annual Base Salary	Total Percentage Amount of Reductions	Annual Base Salary effective February 1, 2009*
Michael A. Bradley CEO & President	$625,000	15%	$531,250
Gregory R. Beecher V.P. & CFO	$360,000	10%	$324,000
Mark E. Jagiela President, Semiconductor Test Division	$348,571	10%	$313,714
Jeffrey R. Hotchkiss President, System Test Group	$300,000	10%	$270,000
Eileen Casal V.P. & General Counsel	$277,742	10%	$249,968

* Reflects a temporary reduction in effect as of this date.

EX-99.3

Exhibit 99.3

Teradyne, Inc.

Summary of Reduced Annual Cash Retainer Amounts for Non-Employee Directors

Effective April 1, 2009*

Director Position	2008 Annual Cash Retainer	Total Percentage Amount of Reductions	Annual Cash Retainer effective April 1, 2009*
Chair of the Board	$180,000	15%	$153,000
Non-Employee Director	$  65,000	15%	$  55,250

* Reflects a temporary reduction in effect as of this date.

EX-99.4

Exhibit 99.4

Form of Executive Officer Stock Option Agreement

TERADYNE, INC. 2006 EQUITY AND CASH COMPENSATION INCENTIVE PLAN

NOTICE OF STOCK OPTION GRANT AND TERMS

Name	Employee ID:
Division: Supervisor: Location:

In granting stock options, Teradyne seeks to provide employees with incentive to help drive the company’s future success and to share in the economic benefits of that success. We all look forward to your contributions to that effort.

In recognition of your contributions to Teradyne, you have been granted a stock option award consisting of the right to receive up to XX shares of Teradyne common stock upon exercise of this option in accordance with its terms (“Stock Option”). This Stock Option grant was approved effective                     ,      200x (the “Effective Date”). The Stock Option Grant Details are listed below.

This award is subject to the Stock Option Terms attached hereto and the terms of the Teradyne, Inc. 2006 Equity and Cash Compensation Incentive Plan (the “Plan”). Stock Options covered by this award will be exercisable over time as described in and subject to the vesting conditions of the attached Stock Option Terms.

The Plan prospectus, consisting of a “Participant Information” document that summarizes the Plan and the complete Plan, is available on “In-Site,” Teradyne’s internal Web site. To access the information, go to http://www.corp.teradyne.com/InSite/benefits/EquityCompensation-OptionsandRSUs.html and click the “Stock plan documents” link.

Please note that printed versions of the Plan prospectus documents are available to you, at no charge, upon request to James P. Dawson, Teradyne, Inc., 600 Riverpark Drive, North Reading, MA 01864, (978) 370-2112.

TERADYNE, INC.

Stock Option Grant Details:

Grant Date/Effective Date: [                    , 2009]

Number of Shares under Option: [                    ]

Per Share Option Price/FMV on Grant Date:[                    ]

Eileen Casal

V.P., General Counsel and Secretary

(2009 Stock Option)

Grant #XX

STOCK OPTION TERMS

This award is governed by and subject to Teradyne’s 2006 Equity and Cash Compensation Incentive Plan (the “Plan”), which, together with the following provisions, controls the meaning of terms and the rights of the recipient. Capitalized and defined terms used and not defined below will have the meaning set forth in the Plan. In the event of any inconsistencies or differences between the Plan and these terms, the Plan shall prevail.

1. Option Grant, Exercise and Vesting

(a) This Stock Option is intended to be a nonstatutory stock option.

(b) These options vest and become exercisable yearly on the anniversary of the Effective Date. None of this grant will be vested or exercisable on the Effective Date. 25% of the total grant will vest and become exercisable on the first and each of the three subsequent anniversaries of the Effective Date until the total grant is fully vested and exercisable on the fourth anniversary of the Effective Date. The committee appointed by Teradyne’s Board of Directors to administer the Plan (the “Committee”) shall have the right at any time to accelerate the date that any installment of this award becomes vested and exercisable, including but not limited to events such as disability, death, retirement or upon the acquisition of control of Teradyne by another entity.

(c) After options become exercisable, they can be exercised at any time prior to and on the Option Expiration Date. This Stock Option expires at the close of business at the Company’s headquarters on the date that is seven years from the Effective Date (the “Option Expiration Date”). This Stock Option may expire earlier if your employment or other business relationship terminates, as described below.

(d) This stock option award will not vest further after termination of employment or other business relationship except in limited certain circumstances. If your employment or business relationship terminates for any reason except disability or death, then this stock option will not vest after your employment or other business relationship ends and this stock option will automatically expire at the close of business at the Company’s headquarters on the date ninety (90) days after your termination date, or if earlier, the Option Expiration Date. If your employment or other business relationship with the Company ends on account of disability, that portion of this award which would have vested under the applicable rule stated in (b) above shall continue to vest for a period of thirty (30) months following his or her termination of employment or business relationship on account of disability and the vested portion of this stock option may be exercised in accordance with Section 2 below until the earlier of the close of business at the Company’s headquarters on the date ninety (90) days after said thirty (30) month period or the Option Expiration Date . If your employment or other business relationship with the Company ends on account of your death, the remaining portion of this award that would have vested under the applicable rule stated in (b) above shall automatically become vested in full on the date of your death and the vested portion of this stock option may be exercised in accordance with Section 11(a) of the Plan until the earlier of the close of business at the Company’s headquarters on the date that is one year subsequent to your death or the Option Expiration Date.

Employment or another business relationship shall be considered as continuing uninterrupted during any bona fide leave of absence (such as those attributable to illness or military obligations) provided that the period of such leave does not exceed 90 days or, in the case of an employee, if longer, any period during which the employee’s right to reemployment is guaranteed by statute. A bona fide leave of absence with the written approval of the Committee shall not be considered an interruption of employment or other business relationship, provided that such written approval contractually obligates the Company to continue the employment or other business relationship of the recipient after the approved period of absence.

2. Procedure for Exercising Options

(a) Options are exercised by giving written notice to the Company specifying the number of shares as to which Option is being exercised and paying the Company the full option price for such shares. Payment can be made to the Company by a combination of cash, certified or bank check, or personal check (in each case in United States dollars), or by delivery of shares of Teradyne common stock that were not acquired in the 6 months prior to exercise of the option or through the delivery of an assignment to the Company of a sufficient amount of the proceeds from the sale of the common stock acquired upon exercise of the Option and authorization to the third party commercial provider to pay that amount to the Company, provided the such process is consistent with and permissible under applicable law.

(b) You shall not have any right in, to or with respect to the shares which may be issuable under this award upon exercise (including but not limited to the right to vote or to receive dividends) until the issuance of shares to you upon exercise of the option. All shares issuable upon exercise of this option will be transferred or issued to you (or your estate, in the event of your death) promptly upon exercise but in any event within 2  ¹/2 months following the calendar year in which they are exercised, or any earlier date required to avoid characterization as non-qualified deferred compensation under Section 409A of the Code).

(c) With regard to any option exercises, the Company will not be required to transfer or issue any shares until arrangements satisfactory to it have been made to address any income, withholding and employment tax requirements which might arise by reason of the option exercise. The Company will pay any transfer or issue tax and deliver a certificate for the shares purchased.

3. Assignment and Transferability

This stock option award may not be assigned or transferred other than as provided in Section 11(a) of the Plan.

4. Capital Changes and Business Succession

Section 3(c) of the Plan contains provisions for adjusting (or substituting) the number, vesting schedule, exercise, price and other terms of outstanding stock-based Awards granted under the Plan if a recapitalization, stock split, merger, or other specified event occurs, and the Committee determines that an adjustment (or substitution) is appropriate.

5. Employment or Business Relationship

Granting this award does not imply any right of continued employment or business relationship by the Company, and does not affect the right of the recipient or the Company to terminate employment or a business relationship at any time.

6. Stock Registration

Shares to be issued upon exercise of this option are currently registered under the Securities Act of 1933, as amended. If such registration is not in effect at the time of exercise, the recipient will be required to represent to the Company that he or she is acquiring such shares as an investment and not with a view to the sale of those shares.

7. Miscellaneous:

This Stock Option Award is governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts exclusive of reference of rules and principles of conflicts of law. This Stock Option Award and the Plan constitute the entire understanding between you and the Company regarding this option.