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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant þ | |
Filed by a Party other than the Registrant o | |
Check the appropriate box: |
o Preliminary Proxy Statement | |
o Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) | |
þ Definitive Proxy Statement | |
o Definitive Additional Materials | |
o Soliciting Material Pursuant to §240.14a-12 |
Tektronix, Inc.
Payment of Filing Fee (Check the appropriate box):
þ No fee required. | |
o Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11. |
1) Title of each class of securities to which transaction applies: |
2) Aggregate number of securities to which transaction applies: |
3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
4) Proposed maximum aggregate value of transaction: |
5) Total fee paid: |
o Fee paid previously with preliminary materials. |
o Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
1) Amount Previously Paid: |
2) Form, Schedule or Registration Statement No.: |
3) Filing Party: |
4) Date Filed: |
SEC 1913 (02-02) | Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number. |
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Dear Shareholder:
You are cordially invited to attend the annual meeting of shareholders of Tektronix, Inc., which will be held on Thursday, September 22, 2005 at 10:00 a.m. CDT, at the Hotel Crescent Court, located at 400 Crescent Court, Dallas, Texas 75201.
The attached Notice of Annual Meeting of Shareholders and Proxy Statement describe the matters to be acted upon at the meeting. Included with the Proxy Statement is a copy of our 2005 Annual Report to Shareholders on SEC Form 10-K.
It is important that your shares be represented and voted at the meeting whether or not you plan to attend. Therefore, we urge you to vote your proxy electronically via the Internet or telephone, or sign and date the enclosed proxy and return it in the envelope provided.
We look forward to greeting as many of our shareholders as possible.
Sincerely, | ||||
Richard H. Wills | ||||
Chairman, President and Chief Executive Officer | ||||
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To the Shareholders of Tektronix, Inc.: |
The annual meeting of the shareholders of Tektronix, Inc., an Oregon corporation, will be held in accordance with the bylaws on Thursday, September 22, 2005 at 10:00 a.m. CDT, local time, at the Hotel Crescent Court, located at 400 Crescent Court, Dallas, Texas 75201, for the following purposes: |
1. | To elect nine directors; | |
2. | To ratify the selection of Deloitte & Touche LLP, an independent registered public accounting firm, as the Company’s independent auditors for fiscal year 2006; | |
3. | To approve the Tektronix 2005 Stock Incentive Plan; | |
4. | To approve the 2000 Employee Share Purchase Plan, as amended; and | |
5. | To transact such other business as may properly come before the meeting. |
The Board of Directors unanimously recommends that you vote in favor of each of these proposals. | |
Only shareholders of record at the close of business on Monday, July 18, 2005 will be entitled to notice of, and to vote at, the annual meeting. | |
You are cordially invited to attend the meeting in person. Whether or not you plan to attend the meeting, you are urged to vote your shares via the Internet or by telephone at any time. Please follow the instructions on the enclosed proxy card. To vote by mail, please mark, date and sign the proxy card and return it in the postage-paid envelope provided. |
BY ORDER OF THE BOARD OF DIRECTORS | |
James F. Dalton | |
Senior Vice President, General Counsel | |
and Secretary |
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Proposal 1. | Election of Directors |
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Nominating and | ||||||||||||
Corporate | Organization & | |||||||||||
Name | Audit | Governance | Compensation | |||||||||
Pauline Lo Alker | X | X | ||||||||||
A. Gary Ames | X | Chair | ||||||||||
Gerry B. Cameron | X | Chair | ||||||||||
David N. Campbell | X | X | ||||||||||
Frank C. Gill | X | X | ||||||||||
Merrill A. McPeak | Chair | X | ||||||||||
Robin L. Washington | X | |||||||||||
Richard H. Wills (no committee assignments) | ||||||||||||
Cyril J. Yansouni | X | X |
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• | A majority of the members of the Board of Directors shall be independent directors, as defined in the applicable rules of the New York Stock Exchange and as determined by the Board under criteria adopted by the Board. Currently, eight of the nine directors are independent, as defined by these rules. Generally, independence means that the director must be independent of management and free from any relationship that, in the opinion of the Board, would interfere with the exercise of independent judgment as a director. Directors who are employees of the Company or one of its subsidiaries are not independent. |
In addition to New York Stock Exchange rules, the Board has adopted the following criteria to determine the independence of Directors: |
No director will be deemed independent unless the Board affirmatively determines that the director has no material relationship with the Company, directly or as an officer, shareholder or partner of an organization that has a relationship with the Company. The Board will observe all additional criteria for independence established by the New York Stock Exchange or other governing laws and regulations. | |
The following will not be considered material relationships: | |
1. Charitable Organizations. The director or any member of his or her immediate family serves as an executive officer, trustee or director of a charitable or educational organization which receives contributions from the Company in a single fiscal year of less than $100,000 or one percent of that organization’s consolidated gross revenues, whichever is more; or | |
2. Commercial Relationships. |
(i) The director is an executive officer or employee, or an immediate family member of a director of the Company is an executive officer of another company that does business with the Company and the annual sales to, or purchases from, the Company are less than one percent of the annual revenues of the other company, or | |
(ii) The director or an immediate family member of a director of the Company is an executive officer of another company which is indebted to the Company, or to which the Company is indebted, and the total amount of either company’s indebtedness to the other is less than one percent of the total consolidated assets of the company he or she serves as an executive officer. |
Annually, the Board will review all commercial and charitable relationships of directors to determine whether directors meet the categorical independence tests described above. The Board may determine that a director who has a relationship that exceeds the limits described in paragraph 2(i) (to the extent that any such relationship would not constitute a bar to independence under the New York Stock Exchange listing standards) or paragraph 2(ii) is |
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nonetheless independent. The Company will explain in the next proxy statement the basis for any Board determination that a relationship is immaterial despite the fact that it does not meet the categorical standards set forth above. |
The Board has determined that all directors, except Mr. Wills (the Chief Executive Officer), are independent directors under the NYSE rules and these criteria. |
• | The Board of Directors has adopted a process for identifying and evaluating nominees for director, including suggested director candidates from shareholders, as follows: |
1. Board members identify the need to add a new Board member based on specific criteria or to fill a vacancy. | |
2. The Nominating and Corporate Governance Committee initiates a search, working with staff support and seeking input from Board members and others as necessary, and hiring a search firm, if desired. | |
3. The Nominating and Corporate Governance Committee considers director candidate suggestions from many sources, including shareholders. Shareholder nominations should be submitted to: Tektronix, Inc., Chairman of the Nominating and Corporate Governance Committee, c/o the Corporate Secretary, 14200 S.W. Karl Braun Drive, P.O. Box 500, MS 55-720, Beaverton, Oregon 97077-0001. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates based on whether or not the candidate was recommended by a shareholder. | |
4. Candidates who satisfy the criteria and otherwise qualify for membership on the Board will be submitted to the Nominating and Corporate Governance Committee for its consideration. The Committee will then determine which candidates should be contacted, and will determine the best means for initiating the contacts. If necessary, the Committee may initiate contacts through a search firm. Such further contacts and interviews with prospective candidates shall be as determined by the Committee. | |
5. The Nominating and Corporate Governance Committee shall advise the Board of its progress, through committee reports and through informal communications, as necessary. | |
6. The Nominating and Corporate Governance Committee determines in its discretion whether to recommend a candidate to the Board for consideration as a director nominee. |
• | The Board has established criteria for nomination to the Board of Directors. The Board seeks diverse candidates who possess the background, skills and expertise to make a significant contribution to the Board, the Company and its shareholders. General criteria include: |
1. Directors should be of the highest ethical character. | |
2. Directors should have reputations, both personal and professional, that enhance the image and reputation of the Company. | |
3. Directors should be highly accomplished in their respective fields, with superior credentials and established recognition. | |
4. When selecting directors, the Board should generally seek active and former executive officers of public companies and leaders of organizations, including scientific, government, educational and other non-profit institutions. | |
5. Directors should have relevant expertise and experience, and be able to offer advice and guidance to the executive officers. | |
6. Directors should demonstrate sound business judgment. | |
7. Directors should work together and with management collaboratively and constructively. |
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• | Directors should not be board members of more than six public companies, and members of the Audit Committee should not serve on more than three public company audit committees. | |
• | A Lead Director will be appointed annually by the Board. The Lead Director shall be independent, and shall preside over executive sessions of the Board, acting as the liaison between the independent directors and the Chairman/ CEO. The Lead Director may also serve as the contact person to facilitate communications by the Company’s employees and shareholders directly with the non-management members of the Board. The Lead Director may also periodically help schedule or conduct separate meetings of the independent directors. The currently appointed Lead Director is Cyril J. Yansouni. | |
• | Directors must resign from the Board at the Board meeting preceding the annual shareholders meeting immediately following their 70th birthday. In 2001 the Board approved 12-year tenure limits for directors, excluding the Chief Executive Officer. For directors, the 12-year tenure limits commenced on May 17, 2001 and service prior to that date is not included. | |
• | The non-management directors meet on a regularly scheduled basis in executive session without the Chief Executive Officer and other management. The Lead Director presides at these meetings. | |
• | Members of Board committees are appointed by the Board, upon recommendation by the Nominating and Corporate Governance Committee. | |
• | The Audit Committee, Nominating and Corporate Governance Committee, and Organization and Compensation Committee consist entirely of independent directors. | |
• | The Board and each committee have the power to hire independent legal, financial or other advisors as they may deem necessary, without consulting with or obtaining the approval of any officer of the Company. | |
• | The Board and each committee annually assess their own performance. | |
• | The Board annually reviews the Company’s strategic long-range plan, business unit initiatives, capital projects and budget matters. | |
• | The Organization and Compensation Committee periodically reviews with the Chief Executive Officer and reports to the Board regarding succession planning and leadership development. | |
• | The Board evaluates the performance of the Chief Executive Officer and other senior management personnel at least annually. | |
• | Incentive compensation plans link pay directly and objectively to measured financial goals set in advance by the Organization and Compensation Committee. Executive officers are expected to acquire Company stock in accordance with established guidelines. See “Organization and Compensation Committee Report on Executive Compensation” for additional information. | |
• | Directors are encouraged to make significant progress annually toward accumulating, within five years of becoming a director, Common Shares of the Company with a value equal to five times the director’s annual retainer. For the last fiscal year, all directors achieved this ownership goal, except for Mr. Yansouni, who became a director in August 2003, and Ms. Washington, who became a director in May 2005. | |
• | Directors are expected to regularly attend shareholder meetings. Last year, all members of the Board of Directors attended the annual meeting of shareholders. | |
• | New directors are oriented to the Company, including familiarizing the director with the Company’s strategic plans, significant facilities, significant financial, accounting and risk management issues, compliance programs, the Business Practices Guidelines, principal officers and internal and independent auditors. | |
• | Directors are expected to keep current with corporate governance issues through continuing education or other activities. At least once every three years directors will attend a director education program. Reasonable continuing education and travel expenses incurred by Directors will be reimbursed with the approval of the Chair of the Nominating and Corporate Governance Committee. |
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• | The Company has adopted a code of ethics, known as the Tektronix Business Practices Guidelines, as well as a code of ethics for financial managers (including the Chief Executive Officer, the principal financial officer, the principal accounting officer, and the Controller). Both are available for viewing on the Company’s Corporate Governance Web site at www.tektronix.com, and are available in print to any shareholder who requests them from the Corporate Secretary’s Office at Tektronix, Inc., 14200 S.W. Karl Braun Drive, P.O. Box 500, MS 55-720, Beaverton, Oregon 97077-0001. | |
• | Shareholders may contact any director, including the Lead Director, by writing to them c/o the Corporate Secretary’s Office at Tektronix, Inc., 14200 S.W. Karl Braun Drive, P.O. Box 500, MS 55-720, Beaverton, Oregon 97077-0001. | |
• | The Board of Directors has adopted procedures for the receipt, retention and treatment of concerns from Company employees and others regarding accounting, internal accounting controls or auditing matters. Employees may submit concerns anonymously pursuant to the Business Practices Guidelines, located on the Company’s Web site. Others may submit concerns in writing to the Chairman of the Audit Committee, c/o the Corporate Secretary, 14200 S.W. Karl Braun Drive, P.O. Box 500, MS 55-720, Beaverton, OR 97077-0001, or online at www.ethicspoint.com. |
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Amount and Nature of | Percent of | ||||||||
Name and Address of Beneficial Owner | Beneficial Ownership | Class | |||||||
PRIMECAP Management Company(1) | 11,363,325 | 12.62 | % | ||||||
225 So. Lake Avenue #400 | |||||||||
Pasadena, CA 91101 | |||||||||
Franklin Resources, Inc.,(2) | 7,671,011 | 8.60 | % | ||||||
Charles B. Johnson, Rupert H. Johnson, Jr., | |||||||||
Franklin Advisers, Inc. | |||||||||
One Franklin Parkway | |||||||||
San Mateo, CA 94403 | |||||||||
Barclays Global Investors, NA,(3) | 6,240,836 | 7.05 | % | ||||||
45 Fremont Street, 17th Floor | |||||||||
San Francisco, CA 94105 | |||||||||
Wellington Management Company, LLP(4) | 6,235,410 | 6.98 | % | ||||||
75 State St. | |||||||||
Boston, MA 02109 | |||||||||
Private Capital Management, L.P.,(5) | 4,485,721 | 5.40 | % | ||||||
Bruce S. Sherman and Gregg J. Powers | |||||||||
8889 Pelican Bay Blvd. | |||||||||
Naples, FL 34108 |
(1) | Based on information set forth on a Schedule 13G/ A dated January 11, 2005, filed with the SEC by PRIMECAP Management Company. These shares are held with sole voting power as to 1,785,875 shares and sole dispositive power as to 11,363,325 shares. |
(2) | Based on information set forth on a Schedule 13G/ A dated February 14, 2005, filed with the SEC by Franklin Resources, Inc. These shares are held as follows: Franklin Advisers, Inc. holds sole voting and dispositive power as to 6,986,654 shares; Franklin Templeton Portfolio Advisors, Inc. holds sole voting and dispositive power as to 677,859 shares; and Fiduciary Trust Company International holds sole voting and dispositive power as to 6,498 shares. |
(3) | Based on information provided by Barclays Global Investors, NA on behalf of Barclays Global Investors, NA and related entities. These shares are held with sole voting power as to 5,196,868 shares and sole dispositive power as to 1,043,968 shares. |
(4) | Based on information set forth on a Schedule 13G dated February 14, 2005, filed with the SEC by Wellington Management Company, LLP. These shares are held with shared voting power as to 4,613,460 shares and shared dispositive power as to 6,235,410 shares. |
(5) | Based on information set forth on a Schedule 13G/ A dated February 14, 2005, filed with the SEC by Private Capital Management, L.P (PCM). Bruce S. Sherman is CEO of PCM. Gregg J. Powers is President of PCM. In these capacities, PCM, Messrs. Sherman and Powers exercise shared dispositive and shared voting power with regard to 4,485,721 shares. |
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Number of | Percent | |||||||
Name | Shares(1) | of Class | ||||||
Pauline Lo Alker | 57,617 | * | ||||||
A. Gary Ames | 81,413 | * | ||||||
Gerry B. Cameron | 68,129 | * | ||||||
David N. Campbell | 70,782 | * | ||||||
Frank C. Gill | 69,623 | * | ||||||
Merrill A. McPeak | 63,390 | * | ||||||
Robin L. Washington | 0 | * | ||||||
Cyril J. Yansouni | 22,124 | * | ||||||
Richard H. Wills | 697,123 | (2) | * | |||||
Colin L. Slade | 178,721 | (3) | * | |||||
Richard D. McBee | 137,925 | (4) | * | |||||
David S. Churchill | 194,614 | * | ||||||
James F. Dalton | 170,708 | (5) | * | |||||
All current directors and executive officers as a group (15 individuals) | 1,828,379 | 2.15 | % |
* | Less than one percent. |
(1) | Unless otherwise indicated, each individual has sole voting and investment power with respect to these shares. Includes Common Shares represented by stock options that are currently exercisable under the Company’s stock plans, for which the individual Non-Employee Director has no voting or investment power, as follows: Alker, Ames, Cameron, Campbell, Gill, and McPeak (45,000 shares each); and Yansouni (20,000 shares). |
Includes shares issued under the Company’s Stock Compensation Plan for Non-Employee Directors and deferred pursuant to the Non-Employee Directors’ Stock Deferral Plan as follows: Mrs. Alker (2,124 shares), Mr. Ames (1,194 shares), Mr. Cameron (14,129 shares), Mr. Campbell (20,591 shares), Mr. McPeak (16,390 shares), and Mr. Yansouni (2,124 shares). Shares are held in trust, and the directors have no voting or investment power with respect to these shares. |
Includes Common Shares represented by stock options that are currently exercisable or become exercisable within 60 days as follows: Mr. Wills (613,750 shares), Mr. Slade (141,750 shares), Mr. McBee (111,250 shares), Mr. Churchill (176,250 shares), Mr. Dalton (145,850 shares), and all officers and directors as a group (1,639,100 shares), for which the individual has no voting or investment power. |
Includes shares held under the Tektronix 401(k) plan and the Tektronix Stock Fund, an investment option of the Tektronix 401(k) plan, by Mr. Wills (4,989 shares), Mr. Slade (4,358 shares), Mr. McBee (8,563 shares), Mr. Churchill (9,194 shares), and Mr. Dalton (3,468 shares), as to which they have voting but no investment power. |
(2) | Includes 10,864 shares credited to a stock account under the Company’s Stock Deferral Plan, for which Mr. Wills has no voting or investment power, and 40,000 restricted shares that are subject to forfeiture to the Company under certain conditions and to which Mr. Wills has voting but no investment power. |
(3) | Includes 13,000 restricted shares that are subject to forfeiture to the Company under certain conditions and to which Mr. Slade has voting but no investment power. |
(4) | Includes 10,000 restricted shares that are subject to forfeiture to the Company under certain conditions and to which Mr. McBee has voting but no investment power. |
(5) | Includes 192 shares credited to a stock account under the Company’s Stock Deferral Plan, for which Mr. Dalton has no voting or investment power, and 10,000 restricted shares that are subject to forfeiture to the Company under certain conditions and to which Mr. Dalton has voting but no investment power. |
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Long-Term Compensation Awards | |||||||||||||||||||||||||||||
Annual Compensation | |||||||||||||||||||||||||||||
Restricted | Securities | ||||||||||||||||||||||||||||
Other Annual | Stock | Underlying | All Other | ||||||||||||||||||||||||||
Salary | Bonus | Compensation | Awards | Options | Compensation | ||||||||||||||||||||||||
Name and Principal Position | Year | ($) | ($)(1) | ($) | ($) | (#)(2) | ($)(3) | ||||||||||||||||||||||
Richard H. Wills | 2005 | $ | 623,077 | $ | 972,000 | $ | 0 | $ | 774,250 | (4) | 100,000 | $ | 19,377 | (5) | |||||||||||||||
Chairman, President, | 2004 | 596,154 | 1,192,300 | 0 | 481,350 | (6) | 100,000 | 19,090 | (5) | ||||||||||||||||||||
and Chief Executive Officer | 2003 | 542,308 | 189,808 | 0 | 0 | 120,000 | 21,752 | (5) | |||||||||||||||||||||
Colin L. Slade | 2005 | $ | 339,231 | $ | 343,980 | $ | 0 | $ | 232,720 | (7) | 35,000 | $ | 10,985 | ||||||||||||||||
Sr. Vice President and | 2004 | 328,846 | 427,500 | 0 | 320,900 | (8) | 30,000 | 12,381 | |||||||||||||||||||||
Chief Financial Officer | 2003 | 312,385 | 65,601 | 0 | 0 | 60,000 | 10,290 | ||||||||||||||||||||||
Richard D. McBee | 2005 | $ | 298,846 | $ | 279,720 | $ | 0 | $ | 174,540 | (9) | 25,000 | $ | 12,681 | ||||||||||||||||
Sr. Vice President, | 2004 | 284,231 | 312,700 | 0 | 128,360 | (10) | 28,000 | 12,994 | |||||||||||||||||||||
Worldwide Sales, Service and Marketing | 2003 | 273,077 | 47,788 | 0 | 194,700 | (11) | 50,000 | 9,086 | |||||||||||||||||||||
David S. Churchill(12) | 2005 | $ | 308,462 | $ | 240,600 | $ | 28,564 | (13) | $ | 174,540 | (9) | 25,000 | $ | 12,808 | |||||||||||||||
Former Sr. Vice | 2004 | 289,231 | 289,200 | 0 | 128,360 | (10) | 28,000 | 12,254 | |||||||||||||||||||||
President, Communications | 2003 | 278,462 | 48,731 | 0 | 194,700 | (11) | 50,000 | 8,615 | |||||||||||||||||||||
and Video | |||||||||||||||||||||||||||||
James F. Dalton | 2005 | $ | 299,385 | $ | 233,520 | $ | 0 | $ | 174,540 | (9) | 25,000 | $ | 10,105 | ||||||||||||||||
Sr. Vice President, | 2004 | 278,846 | 278,800 | 0 | 128,360 | (10) | 28,000 | 7,373 | |||||||||||||||||||||
Corporate Development | 2003 | 263,846 | 46,173 | 0 | 0 | 50,000 | 5,175 |
(1) | Includes amounts paid or deferred under the Annual Performance Incentive Plan. | |
(2) | Options were granted in the year indicated. Additional information regarding the options granted during fiscal year 2005 is set forth in the “Stock Option Grants in Last Fiscal Year” table. | |
(3) | Except as otherwise indicated, represents amounts contributed by the Company under the Company’s 401(k) Plan. | |
(4) | Represents stock awarded on June 23, 2004 under which Mr. Wills has the right to receive, subject to vesting, 25,000 shares of common stock. The stock award vests 50% on June 23, 2008 and 50% on June 23, 2009. The value set forth above is based on the closing price on the date of grant, June 23, 2004, which was $30.97. As of May 28, 2005, he holds a total of 40,000 shares as to which restrictions have not lapsed, with an aggregate market value of $917,600. Dividends are paid on these restricted shares. | |
(5) | Includes $6,770 supplemental long-term disability plan premium payments for Mr. Wills ($6,790 for 2004 and 2003). | |
(6) | Represents stock awarded on January 20, 2004 under which Mr. Wills has the right to receive, subject to vesting, 15,000 shares of common stock. The stock award vests 50% on January 20, 2006 and 50% on January 20, 2007. The value set forth above is based on the closing price on the date of grant, January 20, 2004, which was $32.09. Dividends are paid on these restricted shares. | |
(7) | Represents stock awarded on January 18, 2005 under which Mr. Slade has the right to receive, subject to vesting, 8,000 shares of common stock. The stock award vests 50% on January 18, 2007 and 50% on January 18, 2008. The value set forth above is based on the closing price on the date of grant, January 18, 2005, which was $29.09. As of May 28, 2005, he holds a total of 13,000 shares as to which restrictions have not lapsed, with an aggregate market value of $298,220. Dividends are paid on these restricted shares. | |
(8) | Represents the fair market value of 10,000 restricted shares granted to Mr. Slade on January 20, 2004. The shares are subject to two year vesting from the date of grant. The value set forth above is based on |
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the closing price on the date of grant, January 20, 2004, which was $32.09. Dividends are paid on these restricted shares. | ||
(9) | Represents stock awarded on January 18, 2005 under which Messrs. McBee, Churchill, and Dalton each have or had the right to receive, subject to vesting, 6,000 shares of common stock. Each stock award vests 50% on January 18, 2007 and 50% on January 18, 2008. The value set forth above is based on the closing price on the date of grant, January 18, 2005, which was $29.09. As of May 28, 2005, Messrs. McBee and Churchill held 15,000 shares each as to which restrictions have not lapsed, with an aggregate market value of $344,100 each. As of May 28, 2005, Mr. Dalton held 10,000 shares as to which restrictions have not lapsed, with an aggregate market value of $229,400. Dividends are paid on these restricted shares. |
(10) | Represents stock awarded on January 20, 2004 under which Messrs. McBee and Churchill each have or had the right to receive, subject to vesting, 4,000 shares of common stock. The stock award vests 100% on January 20, 2006. The value set forth above is based on the closing price on the date of grant, January 20, 2004, which was $32.09. Dividends are paid on these restricted shares. |
(11) | Represents the fair market value of 10,000 restricted shares granted on June 19, 2003 to each of Messrs. McBee and Churchill. The shares are subject to three-year vesting from the date of grant. The value set forth above is based on the date of grant, June 19, 2003, which was $21.08. Dividends are paid on these restricted shares. |
(12) | Mr. Churchill resigned from the Company on June 2, 2005. Restricted stock grants and stock options that were not vested as of such date were forfeited to the Company or terminated pursuant to their terms. |
(13) | Relocation and automobile expenses associated with Mr. Churchill’s tenure in Richardson, Texas paid by the Company on his behalf. |
Individual Grants | ||||||||||||||||||||
Number of | Percent of | |||||||||||||||||||
Securities | Total Options | Exercise | ||||||||||||||||||
Underlying | Granted to | or Base | Grant Date | |||||||||||||||||
Options | Employees in | Price | Expiration | Present Value | ||||||||||||||||
Name | Granted(#)(1) | Fiscal Year | ($/Sh) | Date | ($)(2) | |||||||||||||||
Richard H. Wills | 100,000 | 3.4 | % | $ | 28.6900 | 01/18/15 | $ | 932,000 | ||||||||||||
Colin L. Slade | 35,000 | 1.2 | % | $ | 28.6900 | 01/18/15 | $ | 326,200 | ||||||||||||
Richard D. McBee | 25,000 | 0.9 | % | $ | 28.6900 | 01/18/15 | $ | 233,000 | ||||||||||||
David S. Churchill | 25,000 | 0.9 | % | $ | 28.6900 | 01/18/15 | $ | 233,000 | ||||||||||||
James F. Dalton | 25,000 | 0.9 | % | $ | 28.6900 | 01/18/15 | $ | 233,000 |
(1) | The options were granted on January 18, 2005 at 100% of the fair market value on the date of grant pursuant to the Company’s stock option plans. Each option becomes exercisable to the extent of 25% of the shares in 12-month increments, and the optionee may exercise the option for a period of ten years provided that the optionee has been continuously employed by the Company or one of its subsidiaries. Each option is subject to accelerated vesting in the event of a future change in control of the Company or the occurrence of certain events indicating an imminent change in control of the Company. Vesting is also accelerated upon the death or disability of the optionee. |
(2) | The Company has used a modified Black-Scholes model of option valuation to estimate grant date present value. The actual value realized, if any, may vary significantly from the values estimated by this model. Any future values realized will ultimately depend upon the excess of the stock price over the exercise price on the date the option is exercised. The assumptions used to estimate the January 18, 2005 grant date present value were volatility (32.70%), risk-free rate of return (3.67), dividend yield (.83%), and time to exercise (5.07 years). |
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Number of Securities | Value of Unexercised | |||||||||||||||||||||||
Number | Underlying Unexercised | In-the-Money Options at | ||||||||||||||||||||||
of Shares | Options at Fiscal Year-End | Fiscal Year-End(1)(2) | ||||||||||||||||||||||
Acquired | Value | |||||||||||||||||||||||
Name | on Exercise | Realized | Exercisable | Unexercisable | Exercisable | Unexercisable | ||||||||||||||||||
Richard H. Wills | 15,000 | $ | 152,959 | 613,750 | 266,250 | $ | 1,398,888 | $ | 362,175 | |||||||||||||||
Colin L. Slade | 0 | $ | 0 | 141,750 | 99,250 | $ | 298,338 | $ | 180,360 | |||||||||||||||
Richard D. McBee | 0 | $ | 0 | 111,250 | 81,750 | $ | 199,218 | $ | 150,300 | |||||||||||||||
David S. Churchill | 7,500 | $ | 117,533 | 176,250 | 81,750 | $ | 386,580 | $ | 150,300 | |||||||||||||||
James F. Dalton | 4,900 | $ | 55,408 | 145,850 | 81,750 | $ | 273,904 | $ | 150,300 |
(1) | The unrealized value of in-the-money options at year-end represents the aggregate difference between the market value on May 27, 2005 and the applicable exercise prices. The closing price of the Company’s Common Shares on the last trading day of the fiscal year was $22.94. |
(2) | “In-the-money” options are options whose exercise price was less than the market price of Common Shares at May 28, 2005. |
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• | Attract and retain talented executives; | |
• | Motivate executives to achieve long-term business strategies while achieving near-term financial targets; and | |
• | Align executive performance with Tektronix’ goals for delivering shareholder value. |
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Gerry B. Cameron, Chairman | |
Pauline Lo Alker | |
David N. Campbell | |
Frank C. Gill | |
Merrill A. McPeak |
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S&P | ||||||
Info-Tech | ||||||
Fiscal Year | Tektronix | S&P 500 | Composite | |||
2000 | 100 | 100 | 100 | |||
2001 | 91.63 | 89.45 | 52.63 | |||
2002 | 75.81 | 77.06 | 36.95 | |||
2003 | 78.80 | 70.85 | 34.91 | |||
2004 | 118.46 | 83.83 | 42.58 | |||
2005 | 85.76 | 90.74 | 42.97 | |||
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Equity Compensation Plan Information | |||||||||||||
Number of Securities | Number of Securities | ||||||||||||
to Be Issued | Weighted Average | Remaining Available | |||||||||||
upon Exercise of | Exercise Price of | for Future Issuance | |||||||||||
Outstanding Options, | Outstanding Options, | (excluding shares | |||||||||||
Warrants and Rights | Warrants and Rights | listed in (a)) | |||||||||||
Plan Category | (a) | (b) | (c) | ||||||||||
Equity Compensation Plans Approved by Shareholders | |||||||||||||
2002 Stock Incentive Plan | 7,277,996 | $ | 22.97 | 1,278,302 | |||||||||
1998 Stock Option Plan | 1,802,990 | $ | 22.51 | �� | 0 | ||||||||
1989 Stock Incentive Plan | 3,934,768 | $ | 29.17 | 0 | |||||||||
Employee Stock Purchase Plan | 175,671 | $ | 21.05 | 146,371 | |||||||||
Equity Compensation Plan Not Approved by Shareholders | |||||||||||||
2001 Stock Option Plan(1) | 35,431 | $ | 25.69 | 0 | |||||||||
Total(2) | 13,226,856 | $ | 24.73 | 1,424,673 |
(1) | This plan was adopted by the Board of Directors for the sole purpose of making grants to new non-officer employees who join the Company as a result of acquisitions, and grants were limited to such non-officer employees. Options with a term of 10 years were granted at fair market value at the time of grant. The terms of the options are substantially the same as the options granted under plans approved by shareholders. The Board of Directors terminated this Plan, therefore there will be no further grants. |
(2) | These totals do not include information relating to the Inet Stock Option Plan, which was approved by the shareholders of Inet Technologies, Inc. and assumed by the Company in a transaction approved by shareholders of Inet. No additional grants will be made under this plan. The applicable information for the Inet Stock Option Plan is as follows: (i) 1,126,193 securities are issuable upon exercise of outstanding options and 7,410 rights; (ii) the weighted average exercise price of outstanding options, warrants and rights is $61.28; and (iii) no securities are available for future issuance. |
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2004 | 2005 | |||||||
Audit Fees | $ | 1,412,500 | $ | 2,266,000 | ||||
Audit-Related Fees | 230,852 | 165,000 | ||||||
Tax Fees | 167,294 | 159,000 | ||||||
All Other Fees | 0 | 0 | ||||||
Total | $ | 1,810,646 | $ | 2,590,000 |
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Merrill A. McPeak, Chairman | |
A. Gary Ames | |
Gerry B. Cameron | |
David N. Campbell | |
Robin L. Washington (appointed to Audit Committee in May 2005) | |
Cyril J. Yansouni |
Proposal 3: | Approval of 2005 Stock Incentive Plan |
• | Add 3,800,000 shares to the total available for grant. | |
• | Of this number, allow not more than 2,850,000 shares, or 75% of the total, to be issued as restricted stock, subject to minimum vesting periods as described below. | |
• | Including the remaining shares available under the existing 2002 Plan, allow a total of 5,078,302 Common Shares to be granted under all plans, of which up to 3,591,680 shares, or 71% of the total, would be available for restricted stock grants. |
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• | Based upon current projections, allow the Company to provide sufficient grants of awards for the next three years. |
• | Simple overhang, which is calculated by dividing the sum of existing option awards outstanding and shares available for grant by Common Shares outstanding; | |
• | Fully diluted overhang, which is calculated by dividing the sum of existing option awards outstanding and shares available for grant by the sum of Common Shares outstanding plus existing option awards outstanding and shares available for grant; | |
• | Gross run rate for share usage, which is calculated by dividing the number of shares granted per year (including options, restricted stock, and other equity based awards) by the number of Common Shares outstanding at year end; |
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• | Net run rate, which is calculated by dividing the number of shares granted per year (including options, restricted stock, and other equity based awards) minus forfeited shares by Common Shares outstanding at year-end. |
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BY ORDER OF THE BOARD OF DIRECTORS | |
James F. Dalton | |
Senior Vice President, General Counsel | |
and Secretary |
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I. | Audit Committee Purpose |
II. | Membership |
III. | Committee Meetings |
IV. | Audit Committee Responsibilities and Duties |
1. | The Audit Committee shall meet to review and discuss with management and the independent auditor the Company’s annual audited financial statements and quarterly financial statements, as well as the Company’s specific disclosures under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” The Committee shall recommend to the Board whether the audited financial statements should be included in the Company’s Annual Report on Form 10-K for filing with the Securities and Exchange Commission. |
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2. | In connection with audits performed by the Company’s independent auditor, the Committee shall obtain from the independent auditor a report addressing all critical accounting policies and practices to be used; all alternative treatments within generally accepted accounting principles related to material items that have been discussed with management, including ramifications of the use of such treatments and the treatment preferred by the independent auditor; and other material written communications between the independent auditor and management, such as any management letter or schedule of unadjusted differences. | |
3. | The Committee shall resolve any disagreements between the independent auditor and management regarding financial reporting. | |
4. | The Committee shall discuss the type and presentation of information included in earnings press releases, including pro forma or adjusted non-GAAP information, as well as the type of financial information and earnings guidance provided to analysts and rating agencies. | |
5. | Prior to releasing the year-end earnings, the Committee shall discuss the results of the audit with the independent auditor, including matters required to be communicated to audit committees in accordance with Statement of Auditing Standards No. 61 (relating to the auditor’s responsibilities, significant accounting policies, estimates, audit adjustments, quality of reporting, and disagreements with management). The Committee shall review with the independent auditor any audit problems or difficulties and management’s response. The communication may be in writing or oral. | |
6. | In consultation with management, the independent auditor and the internal auditors, the Committee shall (a) review disclosures made to the Committee by the Company’s CEO and CFO during their certification process for the Form 10-K and Form 10-Q about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls, (b) review management’s annual report on internal controls over financial reporting and the auditor’s attestation of the report, and (c) consider the adequacy of the Company’s internal control structure and procedures for financial reporting and any special audit steps adopted in light of material weaknesses or significant deficiencies. | |
7. | The Committee shall review periodically the Company’s policies with respect to risk assessment and risk management. The Committee shall discuss significant accounting and financial risk exposures and the steps management has taken to monitor, control, and report such exposures. | |
8. | The Committee shall review with management the effect of regulatory and accounting initiatives on the financial statements of the Company. | |
9. | The Committee shall review with management and the independent auditor (a) any material financial or non-financial arrangement of the Company that does not appear on the financial statements of the Company; and (b) any transactions or courses of dealing with parties related to the Company, which transactions are significant in size or involve terms or other aspects that differ from those that would likely be negotiated with independent parties, and which arrangements or transactions are relevant to an understanding of the Company’s financial statements. |
10. | The Committee shall appoint, retain, evaluate, determine the compensation for and oversee the Company’s independent auditor and approve any discharge of the auditor when circumstances warrant. The Company’s independent auditor reports directly to the Audit Committee and is ultimately accountable to the Audit Committee and the Board as a whole. The appointment of the auditor shall be submitted to shareholders for ratification. | |
11. | The Committee shall ensure the rotation of the audit partners as required by law. The Committee should consider whether, in order to assure continuing auditor independence, there should be regular rotation of the audit firm. |
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12. | The Committee shall set hiring policies for employees or former employees of the independent auditor. | |
13. | At least annually, the Committee shall obtain and review a report by the independent auditor describing (a.) the firm’s internal quality-control procedures; (b.) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years, respecting one or more independent audits carried out by the firm, and any steps taken to deal with any such issues, and (c.) all relationships between the independent auditor and the Company. | |
14. | The independent auditor shall submit to the Committee the written report concerning auditor independence required by Independence Standards Board Standard No. 1. The Committee shall evaluate the independent auditor’s qualifications, performance and independence. This evaluation should include the review and evaluation of the lead audit partner of the independent auditor. The Committee shall present the Committee’s conclusions with respect to the independent auditor to the Board. | |
15. | The Committee shall approve in advance (or establish policies and procedures in accordance with applicable regulations) for the engagement of the independent auditor to provide permitted nonaudit services. | |
16. | The Committee shall regularly review the independent auditor’s audit plan; discuss scope, staffing, locations, reliance upon management and internal audit, and general audit approach. |
17. | The Audit Committee shall review the appointment and replacement of the senior internal audit executive. | |
18. | The Committee shall review and approve the annual work plan and budget for the internal audit function. | |
19. | The Committee shall supervise the work and performance of the internal audit function. The internal audit function shall regularly report to the Committee the status of the annual work plan, and the Committee may request such additional studies and reports from the internal audit function as the Committee may determine are necessary or advisable. |
20. | On at least an annual basis, the Committee shall review with the Company’s counsel any legal or Code of Business Practices matters that could have a significant impact on the organization’s financial statements, the Company’s compliance with the Code of Business Practices or applicable laws and regulations, and inquiries received from regulators or governmental agencies. | |
21. | The Committee shall review periodically the Company’s information systems, environmental, tax and currency matters, and pension plans. | |
22. | The Committee shall establish and review procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, as well as for confidential, anonymous submissions by employees of concerns regarding questionable accounting or auditing matters. | |
23. | The Committee shall review and assess the performance of the Committee and the adequacy of this Charter at least annually. The Committee shall submit the charter to the Board for approval and have the document published in the proxy statement at least every three years in accordance with Securities and Exchange Commission regulations. | |
24. | The Committee shall regularly report to the Board. The Committee shall review with the Board any issues that arise with respect to the quality or integrity of the Company’s financial statements, the |
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Company’s compliance with legal or regulatory requirements, the performance and independence of the Company’s independent auditor, or the performance of the internal audit function. |
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Offering Commencement Date | Ending Date | |
January 15 | July 14 (Six Months) | |
July 15 | January 14 (Six Months) |
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* | Amended by the Board of Directors on June 22, 2005, except that the amendment to Section 2 increasing the reserved shares by 1,300,000 shares shall be effective upon approval by the shareholders. |
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Hotel Crescent Court, 400 Crescent Court, Dallas, Texas 75201
Annual Meeting of Shareholders, to be held on September 22, 2005 at 10:00 a.m. CDT
• | View account status |
• | View certificate history |
• | View book-entry information |
• | View payment history for dividends |
• | Make address changes |
• | Obtain a duplicate 1099 tax form |
• | Establish/change your PIN |
Monday-Friday Eastern Time
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Mark Here for Address Change or Comments | o | |
PLEASE SEE REVERSE SIDE |
FOR | WITHHOLD | FOR ALL | ||||||
Tektronix, Inc. | ALL | ALL | EXCEPT | |||||
1. ELECTION OF DIRECTORS Nominees: | o | o | o | |||||
01 Pauline Lo Alker | 06 Merrill A. McPeak | |||||||
02 A. Gary Ames | 07 Robin L. Washington | |||||||
03 Gerry B. Cameron | 08 Richard H. Wills | |||||||
04 David N. Campbell | 09 Cyril J. Yansouni | |||||||
05 Frank C. Gill | ||||||||
To withhold authority to vote for a particular nominee, mark “For All Except” and write the number(s) for the nominee(s) on the line below. | ||||||||
FOR | AGAINST | ABSTAIN | ||||||
2. | PROPOSAL Ratification of Selection of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2006. | o | o | o | ||||
3. | PROPOSAL Approval of the Company’s 2005 Stock Incentive Plan. | o | o | o | ||||
4. | PROPOSAL Approval of the Company’s Employee Share Purchase Plan, as amended. | o | o | o | ||||
5. | DISCRETIONARY MATTERS The Proxies are authorized to vote in their discretion upon any other matters properly coming before the meeting or any adjournment or adjournments thereof. | o | o | o |
YES | NO | |||||
Please indicate if you plan to attend this meeting. | o | o |
Signature | Signature (Joint Owners) | Date |
as if you marked, signed and returned your proxy card in the enclosed envelope.
1-866-540-5760
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Annual Meeting of Shareholders, to be held on September 22, 2005 at 10:00 a.m. CDT
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Mark Here for Address Change or Comments | o | |
PLEASE SEE REVERSE SIDE |
FOR | WITHHOLD | FOR ALL | ||||||
Tektronix, Inc. | ALL | ALL | EXCEPT | |||||
1. ELECTION OF DIRECTORS Nominees: | o | o | o | |||||
01 Pauline Lo Alker | 06 Merrill A. McPeak | |||||||
02 A. Gary Ames | 07 Robin L. Washington | |||||||
03 Gerry B. Cameron | 08 Richard H. Wills | |||||||
04 David N. Campbell | 09 Cyril J. Yansouni | |||||||
05 Frank C. Gill | ||||||||
To withhold authority to vote for a particular nominee, mark “For All Except” and write the number(s) for the nominee(s) on the line below. | ||||||||
FOR | AGAINST | ABSTAIN | ||||||
2. | PROPOSAL Ratification of Selection of Deloitte & Touche LLP as the Company’s Independent Registered Public Accounting Firm for Fiscal Year 2006. | o | o | o | ||||
3. | PROPOSAL Approval of the Company’s 2005 Stock Incentive Plan. | o | o | o | ||||
4. | PROPOSAL Approval of the Company’s Employee Share Purchase Plan, as amended. | o | o | o |
YES | NO | |||||
Please indicate if you plan to attend this meeting. | o | o |
Signature | Signature (Joint Owners) | Date |