SCHEDULE 14A
(RULE 14a-101)

INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

FILED BY THE REGISTRANT [X] FILED BY A PARTY OTHER THAN THE REGISTRANT [ ]

- --------------------------------------------------------------------------------

Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

TERADYNE, INC.
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.

1) Title of each class of securities to which transaction applies:

2) Aggregate number of securities to which transaction applies:

3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

[ ] Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the form or schedule and the date of its filing.

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement no.:

3) Filing Party:

4) Date Filed:

- --------------------------------------------------------------------------------
2

TERADYNE, INC.
321 HARRISON AVENUE
BOSTON, MASSACHUSETTS 02118

------------------------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
------------------------------

TO THE SHAREHOLDERS:

The Annual Meeting of Shareholders of Teradyne, Inc., a Massachusetts
corporation ("Teradyne" or the "Corporation"), will be held on Thursday, May 24,
2001, at 10:00 A.M., at Fleet National Bank, 100 Federal Street (Second Floor),
Boston, Massachusetts, for the following purposes:

1. To elect three members to the Board of Directors to serve for a
three-year term as Class III Directors.

2. To ratify the selection of the firm of PricewaterhouseCoopers LLP as
auditors for the fiscal year ending December 31, 2001.

3. To transact such other business as may properly come before the meeting
and any adjournments thereof.

Shareholders entitled to notice of and to vote at the meeting shall be
determined as of the close of business on April 9, 2001, the record date fixed
by the Board of Directors for such purpose.

By Order of the Board of Directors,

RICHARD J. TESTA, Clerk

April 18, 2001

------------------------

SHAREHOLDERS ARE REQUESTED TO SIGN THE ENCLOSED PROXY CARD AND
RETURN IT IN THE ENCLOSED STAMPED ENVELOPE BY RETURN MAIL.
3

TERADYNE, INC.
321 HARRISON AVENUE
BOSTON, MASSACHUSETTS 02118
------------------------------

PROXY STATEMENT
APRIL 18, 2001

Proxies in the form enclosed with this proxy statement ARE SOLICITED BY THE
BOARD OF DIRECTORS OF TERADYNE, INC. ("Teradyne" or the "Corporation") for use
at the Annual Meeting of Shareholders (the "Annual Meeting") to be held on May
24, 2001, at 10:00 A.M., at Fleet National Bank, 100 Federal Street (Second
Floor), Boston, Massachusetts.

Only shareholders of record as of the close of business on April 9, 2001
(the "Record Date"), will be entitled to vote at the Annual Meeting and any
adjournments thereof. As of the Record Date, 174,303,990 shares (excluding
treasury shares) of Teradyne's Common Stock were issued and outstanding. Each
share outstanding as of the Record Date will be entitled to one vote, and
shareholders may vote in person or by proxy. Execution of a proxy will not in
any way affect a shareholder's right to attend the Annual Meeting and vote in
person. Any shareholder delivering a proxy has the right to revoke it only by
written notice to the Clerk delivered at any time before it is exercised,
including at the Annual Meeting.

The persons named as attorneys in the proxies are officers and directors of
Teradyne. All properly executed proxies returned in time to be cast at the
Annual Meeting will be voted. With respect to the election of Directors, any
shareholder submitting a proxy has a right to withhold authority to vote for any
individual nominee by writing that nominee's name in the space provided on the
proxy. The proxies will be voted as stated below under "Election of Directors."
In addition to the election of Directors, the shareholders will consider and
vote upon a proposal to ratify the selection of auditors. Where a choice has
been specified on the proxy with respect to the foregoing matters, the shares
represented by the proxy will be voted in accordance with the specification and
will be voted FOR if no specification is indicated.

A majority in interest of the outstanding shares represented at the meeting
in person or by proxy shall constitute a quorum for the transaction of business.
Votes withheld from any nominee, abstentions and broker "non-votes" are counted
as present or represented for purposes of determining the presence or absence of
a quorum for the meeting. A "non-vote" occurs when a nominee holding shares for
a beneficial owner votes on one proposal, but does not vote on another proposal
because the nominee does not have discretionary voting power and has not
received instructions from the beneficial owner. Directors are elected by a
plurality of the votes cast by shareholders entitled to vote at the meeting. On
all other matters being submitted to shareholders, an affirmative vote of at
least a majority of the shares present, or represented, and entitled to vote at
the meeting is required for approval. An automated system administered by
Teradyne's transfer agent tabulates the votes. The vote on each matter submitted
to shareholders is tabulated separately. Abstentions are included in the number
of shares present or represented and voting on each separate matter. Broker
"non-votes" are not so included.

The Board of Directors knows of no other matter to be presented at the
Annual Meeting. If any other matter should be presented at the Annual Meeting
upon which a vote properly may be taken, shares represented by all proxies
received by the Board of Directors will be voted with respect thereto in
accordance with the judgment of the persons named as attorneys in the proxies
and in accordance with the SEC's proxy rules. See "Shareholder Proposals" below.

An Annual Report to Shareholders, containing financial statements for the
fiscal year ended December 31, 2000, has been mailed to all shareholders
entitled to vote at the Annual Meeting. This proxy statement and the
accompanying proxy were first mailed to shareholders on or about April 18, 2001.
4

ELECTION OF DIRECTORS

Teradyne's Board of Directors is divided into three classes. Each class
serves three years, with the terms of office of the respective classes expiring
in successive years. The present term of office for the directors in Class III
expires at the Annual Meeting. The nominees for election as Class III directors
are Messrs. Mulroney and Testa and Ms. Wolpert, each of whom was elected at the
Annual Meeting of Shareholders held May 21, 1998. If re-elected, the Class III
nominees will hold office until the Annual Meeting of Shareholders to be held in
2004, and until their successors shall have been elected and shall have been
qualified. Shares represented by all proxies received by the Board of Directors
and not so marked as to withhold authority to vote for any individual nominee
will be voted (unless one or more nominees are unable or unwilling to serve) for
the election of the Class III nominees. The Board of Directors knows of no
reason why any such nominee should be unable or unwilling to serve, but if such
should be the case, proxies will be voted for the election of some other person
or the Board of Directors will fix the number of directors at a lesser number.

The following table sets forth the nominees to be elected at the Annual
Meeting and the other current directors, the year each nominee or director was
first appointed or elected a director, the principal occupation of each of the
nominees and directors during at least the past five years, and the ages of each
of the nominees and directors.

NOMINEE'S OR DIRECTOR'S NAME PRINCIPAL OCCUPATION YEAR
AND YEAR NOMINEE OR DIRECTOR AND BUSINESS EXPERIENCE TERM WILL
FIRST BECAME DIRECTOR DURING THE PAST FIVE YEARS EXPIRE/CLASS
---------------------------- -------------------------- ------------

George W. Chamillard.............. Chairman of the Board of Directors, 2003/II
1996 President and Chief Executive Officer(1)
James W. Bagley................... Director(2) 2002/I
1996
Albert Carnesale.................. Director(3) 2003/II
1993
Daniel S. Gregory................. Director(4) 2002/I
1977
Dwight H. Hibbard................. Director(5) 2003/II
1983
John P. Mulroney.................. Director(6) 2001/III
1983
Vincent M. O'Reilly............... Director(7) 2002/I
1998
Richard J. Testa.................. Director, Secretary and Clerk(8) 2001/III
1973
Roy A. Vallee..................... Director(9) 2003/II
2000
Patricia S. Wolpert............... Director(10) 2001/III
1996

- ---------------

(1) Mr. Chamillard, 62, has served as Chairman of the Board of Directors since
May 2000 and as Chief Executive Officer of the Corporation since May 1997.
Mr. Chamillard has served as President of the Corporation and has been a
director of the Corporation since January 1996. Mr. Chamillard served as
Chief Operating Officer of the Corporation from January 1996 until May 1997
and as Executive Vice President of the Corporation from January 1994 until
January 1996. Prior to that time, Mr. Chamillard served as a Vice President
of the Corporation. Mr. Chamillard is also a director of Varian
Semiconductor Equipment Associates and Manufacturers Services Ltd.

2
5

(2) Mr. Bagley, 62, has served as Chairman of the Board of Directors of Lam
Research Corporation since October 1998 and as Chief Executive Officer
since August 1997. Mr. Bagley served as Chairman and Chief Executive
Officer of OnTrak Systems, Inc. from May 1996 until August 1997. From 1987
until May 1996, Mr. Bagley served in various capacities at Applied
Materials, Inc., including President and Chief Operating Officer from 1987
through 1994, Vice Chairman and Chief Operating Officer from January 1994
until October 1995, and Vice Chairman from October 1995 until May 1996. Mr.
Bagley is also a director of Micron Technology, Inc.

(3) Mr. Carnesale, 64, has served as Chancellor of the University of
California, Los Angeles since July 1997. He served as Provost of Harvard
University from October 1974 until June 1997 and was the Dean of the John
F. Kennedy School of Government from November 1991 through 1995 where he
also served as Professor of Public Policy from 1974 through 1995.

(4) Mr. Gregory, 72, has been a General Partner of various Greylock
partnerships since January 1965. From January 1991 until January 1992, Mr.
Gregory served as the Secretary of the Executive Office of Economic Affairs
for the Commonwealth of Massachusetts. From 1976 through 1990, Mr. Gregory
served as Chairman of Greylock Management Corporation.

(5) Mr. Hibbard, 77, served as Chairman of Cincinnati Bell Inc. from October
1993 until May 1996 and served as Chief Executive Officer and Chairman of
Cincinnati Bell Inc. from February 1984 until October 1993. Mr. Hibbard
retired from his position as Chairman of Cincinnati Bell Inc. in May 1996.

(6) Mr. Mulroney, 65, served as Chief Operating Officer and President of Rohm
and Haas Company from March 1986 until December 1998. He is a director of
Aluminum Company of America.

(7) Mr. O'Reilly, 64, was a partner, Chief Operating Officer and Vice-Chairman
at Coopers & Lybrand L.L.P. until his retirement in September 1997. Since
October 1997, Mr. O'Reilly has served as a Distinguished Senior Lecturer at
the Carroll Graduate School of Management of Boston College. Mr. O'Reilly
is also a director of the Neiman Marcus Group, Inc. and Eaton Vance Corp.

(8) Mr. Testa, 61, has been a partner at the law firm of Testa, Hurwitz &
Thibeault, LLP since 1973. Testa, Hurwitz & Thibeault, LLP serves as
counsel to the Corporation.

(9) Mr. Vallee, 48, has been Chairman of the Board of Directors and Chief
Executive Officer of Avnet, Inc. since July 1998. From November 1992 until
July 1998, Mr. Vallee was Vice Chairman of the Board of Directors of Avnet
and served as President and Chief Operating Officer from March 1992 until
July 1998. Avnet, Inc. is a supplier of electronic components to the
Corporation.

(10) Ms. Wolpert, 51, has served as Vice President, Central Region, Americas at
International Business Machines Corporation since June 2000 and from
January 1999 until June 2000, served as Vice President, Business
Operations, Americas. From January 1993 until December 1998, Ms. Wolpert
served in various capacities at International Business Machines
Corporation, including General Manager System Sales, Latin America;
Executive Assistant to the Chairman's Office; General Manager, Northeast
Area; Vice President of Operations, Northeast Area; and General Manager,
Northern New England.

BOARD OF DIRECTORS' MEETINGS AND COMMITTEES

The Board of Directors of the Corporation met seven times and took action
by unanimous written consent once during the fiscal year ended December 31,
2000. The Audit and Finance Committee, which oversees the accounting and
financial functions of the Corporation, including matters relating to the
appointment and activities of the Corporation's independent auditors, met three
times during 2000. Messrs. Carnesale, Gregory, Mulroney and O'Reilly are
currently members of the Audit and Finance Committee. The Management
Compensation and Development Committee (the "Compensation Committee"), which
determines the cash compensation of the Corporation's executive officers, met
four times during 2000. Messrs. Bagley, Hibbard,
3
6

Testa and Vallee and Ms. Wolpert are currently members of the Compensation
Committee. The Stock Option Committee, which administers the Corporation's stock
option and certain other benefit plans, met four times during 2000. Messrs.
Bagley, Hibbard and Vallee and Ms. Wolpert are currently members of the Stock
Option Committee. The Board Composition and Agenda Committee, which acts, in
part, as the Corporation's nominating committee, and is responsible for
recommending individuals to be nominated for election to the Board of Directors
and recommending the time, location and agenda of the meetings of the Board of
Directors, did not meet during 2000. Messrs. Mulroney and Carnesale are
currently members of the Board Composition and Agenda Committee. Shareholders
wishing to suggest nominees for election to the Board of Directors should direct
such suggestions to the Clerk of the Corporation at the Corporation's principal
address in accordance with the nomination procedures set forth in the
Corporation's By-Laws. All directors attended at least 75% of the aggregate of
the total number of meetings of the Board of Directors and the total number of
meetings of all committees of the Board on which they served.

DIRECTOR COMPENSATION

All non-employee directors are compensated at the rate of $35,000 per year,
plus reimbursement of reasonable expenses. Non-employee directors who serve as
chair of a committee of the Board of Directors receive an additional $5,000 per
year. Directors who are employees of the Corporation receive no compensation in
their capacity as a director. Non-employee directors may elect to defer all or a
portion of their cash compensation and have the cash invested into a
cash-equivalent instrument or Teradyne stock unit and receive either the cash or
underlying Teradyne stock when they retire from the Board.

Each non-employee director is entitled to participate in the Teradyne 1996
Non-Employee Director Stock Option Plan, as amended (the "Director Plan"). In
January 2001, the Director Plan was amended to authorize the automatic grant (i)
of an option to purchase 22,500 shares of Teradyne Common Stock to each
non-employee director who becomes a member of the Board of Directors on or after
August 26, 1999, (ii) on February 5, 2001, of an option to purchase 6,750 shares
of Teradyne Common Stock to each person who was a non-employee director on
February 7, 2000 (iii) on February 5, 2001, of an option to purchase 15,750
shares of Teradyne Common Stock to each non-employee who became a new member of
the Board during February 2000, and (iv) of an option to purchase 11,250 shares
of Teradyne Common Stock to each person who is a non-employee director on the
first Monday of February in each year beginning on February 5, 2001 and
continuing throughout the term of the Director Plan. The Director Plan is
administered by the Stock Option Committee of the Board of Directors of the
Corporation. Options granted under the Director Plan prior to February 5, 2001
become exercisable at the rate of 25% per year and options granted on or after
February 5, 2001 are immediately exercisable. The exercise price per share for
all options granted under the Director Plan is equal to the fair market value
per share of Teradyne Common Stock on the date of grant and the term of each
option is for a period of five years from the date of grant.

As of December 31, 2000, options to purchase 652,750 shares of Teradyne
Common Stock under the Director Plan were outstanding at a weighted average
exercise price of $30.94.

4
7

SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth as of April 9, 2001 information relating to
the beneficial ownership of the Corporation's Common Stock by each director,
each executive officer named in the Summary Compensation Table on page 7, and by
all directors and executive officers as a group.

AMOUNT AND
NATURE OF PERCENT OF
NAME OWNERSHIP(1)(2) CLASS
---- --------------- ----------

James W. Bagley............................................ 115,243 *
Michael A. Bradley......................................... 201,409 *
Albert Carnesale........................................... 62,863 *
John M. Casey.............................................. 118,500 *
George W. Chamillard....................................... 554,244 *
Daniel S. Gregory.......................................... 146,055 *
Dwight H. Hibbard.......................................... 112,976(3) *
John P. Mulroney........................................... 85,523 *
Vincent M. O'Reilly........................................ 38,313 *
Edward Rogas, Jr........................................... 238,501 *
David L. Sulman............................................ 244,067(4) *
Richard J. Testa........................................... 59,813 *
Roy A. Vallee.............................................. 34,625 *
Patricia S. Wolpert........................................ 73,063 *
All executive officers and directors as a group (19
people)(5)............................................... 2,392,556 1.36%

- ---------------

* less than 1%

(1) Unless otherwise indicated, the named person possesses sole voting and
dispositive power with respect to the shares. The address for each named
person is: c/o Teradyne, Inc., 321 Harrison Avenue, Boston, Massachusetts
02118.

(2) Includes shares of Common Stock which have not been issued but which are
subject to options which either are presently exercisable or will become
exercisable within 60 days, as follows: Mr. Bagley, 62,063 shares; Mr.
Bradley, 159,000 shares; Mr. Carnesale, 62,063 shares; Mr. Casey, 78,500
shares; Mr. Chamillard, 378,000 shares; Mr. Gregory 62,063 shares; Mr.
Hibbard, 92,376 shares; Mr. Mulroney, 62,063 shares; Mr. O'Reilly, 37,313
shares; Mr. Rogas, 173,000 shares; Mr. Sulman, 183,000 shares; Mr. Testa,
35,813 shares; Mr. Vallee, 36,625 shares; Ms. Wolpert, 67,063 shares; all
directors and executive officers as a group 1,677,142 shares.

(3) Includes 400 shares of Common Stock held by Mr. Hibbard's wife.

(4) Includes 6,000 shares of Common Stock held by members of Mr. Sulman's
family.

(5) The group is comprised of the individuals named in the Summary Compensation
Table on page 7, the remaining executive officers of the Corporation, and
those persons who were directors of the Corporation on April 9, 2001.
Includes 1,677,142 shares which the directors and executive officers as a
group have the right to acquire by exercise of stock options within 60 days
granted under Teradyne's stock plans.

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8

Listed below are certain persons who to the knowledge of Teradyne own
beneficially, as of the dates indicated below, more than five percent of
Teradyne's Common Stock outstanding at such date.

NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL HOLDER OF OWNERSHIP CLASS
-------------------- ----------------- ----------

FMR Corporation(1)....................................... 17,599,030 10.86%
82 Devonshire Street
Boston, Massachusetts 02109
Capital Group International, Inc.(2)..................... 15,521,920 8.9%
1100 Santa Monica Boulevard
Los Angeles, California 90025
Wellington Management Company, LLP(3).................... 10,928,262 7.98%
75 State Street
Boston, Massachusetts 02109

- ---------------

(1) According to a Schedule 13G filed on January 10, 2001. As of January 10,
2001, FMR Corporation had sole dispositive power with respect to all of the
shares and sole voting power with respect to 3,927,440 shares.

(2) According to a Schedule 13G filed on February 12, 2001. As of February 12,
2001, Capital Group International, Inc. ("Capital Group") had sole
dispositive power with respect to all of the shares and sole voting power
with respect to 13,741,620 shares. Capital Group is the parent holding
company of a group of investment management companies that hold investment
power and, in some cases, voting power over the shares. Capital Group does
not have direct investment power or voting power over any of the shares,
however, Capital Group may be deemed to "beneficially own" such shares by
virtue of Rule 13d-3 under the Securities Exchange Act of 1934.

(3) According to a Schedule 13G filed on February 13, 2001. As of February 13,
2001, Wellington Management Company, LLP ("WMC") had shared dispositive
power with respect to all of the shares and shared voting power with respect
to 3,191,564 shares. WMC is an investment adviser registered with the
Securities and Exchange Commission. WMC, in its capacity as investment
adviser, may be deemed to have beneficial ownership of shares of the Common
Stock of the Company that are owned of record by investment advisory clients
of WMC.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Based on a review of the forms and written representations received by
Teradyne pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Teradyne believes that during the fiscal year January 1, 2000 through December
31, 2000, the directors and executive officers complied with all applicable
Section 16 filing requirements, except: (a) a Form 4 was not filed in June 2000
for Mr. Mulroney and a correcting Form 5 was filed in February 2001; and (b) a
Form 3 for Mr. Grilk was filed late.

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9

EXECUTIVE COMPENSATION

The following Summary Compensation Table sets forth the compensation for
the three fiscal years most recently ended received by the Chief Executive
Officer of Teradyne and the four other most highly compensated executive
officers of Teradyne (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
AWARDS(3)
SECURITIES
ANNUAL COMPENSATION UNDERLYING
NAME AND --------------------------- OPTIONS/ ALL OTHER
PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) SARS(#) COMPENSATION(4)
------------------ ---- --------- -------- ------------ ---------------

George W. Chamillard......... 2000 $590,837 $981,926 150,000 $126,012
Director, President and 1999 472,695 742,221 105,000 74,919
Chief Executive Officer 1998 411,036 376,726 310,000(5) 37,549
Edward Rogas, Jr............. 2000 336,191 496,711 75,000 44,683
Senior Vice President 1999 281,944 373,289 60,000 28,031
1998 271,500 197,100 190,000(6) 898
David L. Sulman.............. 2000 317,900 469,643 75,000 61,015
Senior Vice President 1999 253,690 327,168 60,000 37,114
1998 213,528 164,881 160,000(7) 31,160
Michael A. Bradley(10)....... 2000 317,900 469,643 75,000 61,015
Chief Financial Officer and 1999 261,544 327,862 55,000 38,769
Vice President 1998 242,616 179,081 170,000(8) 19,928
John M. Casey................ 2000 286,818 409,299 62,500 --
Vice President 1999 258,636 313,917 50,000 --
1998 254,262 184,587 170,000(9) --

- ---------------

(1) The amounts in the "Salary" column represent the annual base salary for
each of the Named Executive Officers, which is paid monthly.

(2) The amounts in the "Bonus" column represent the Variable Compensation
earned pursuant to Teradyne's Cash Compensation Plan and Cash Profit
Sharing Plan.

(3) The Named Executive Officers did not, as of December 31, 2000, receive from
Teradyne any grants of restricted stock as compensation.

(4) The amounts in the "All Other Compensation" column represent the matching
contributions that Teradyne makes to the Savings Plan, Supplemental Savings
Plan and its 401(K) plan.

(5) Includes 160,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.

(6) Includes 100,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.

(7) Includes 80,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.

(8) Includes 90,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.

(9) Includes 90,000 stock options which were repriced on August 27, 1998 from
$18.25 per share to $9.59375 per share.

(10) Mr. Bradley was promoted to President of the Semiconductor Test Division in
March 2001. At that time, Gregory Beecher replaced Mr. Bradley as Chief
Financial Officer and Vice President.
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10

The following table provides information with respect to Teradyne stock
option grants to the Named Executive Officers in 2000. Teradyne did not grant
any stock appreciation rights in 2000.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

POTENTIAL REALIZED VALUE
PERCENTAGE OF AT ASSUMED ANNUAL RATES
NUMBER OF TOTAL OPTIONS OF STOCK PRICE
SECURITIES GRANTED TO APPRECIATION OVER THE
UNDERLYING EMPLOYEES EXERCISE OPTION TERM(2)
OPTIONS IN FISCAL PRICE EXPIRATION -------------------------
NAME GRANTED(1) YEAR ($/SHARE) DATE 5% 10%
---- ---------- ------------- --------- ---------- ----------- -----------

George W. Chamillard... 150,000 1.90% $28.125 10/20/05 $1,165,557 $2,575,583
Edward Rogas, Jr....... 75,000 .95% 28.125 10/20/05 582,776 1,287,788
David L. Sulman........ 75,000 .95% 28.125 10/20/05 582,776 1,287,788
Michael A. Bradley..... 75,000 .95% 28.125 10/20/05 582,776 1,287,788
John M. Casey.......... 62,500 .79% 28.125 10/20/05 485,646 1,073,156

- ---------------

(1) Stock options were granted under Teradyne's 1991 Employee Stock Option Plan
at an exercise price equal to the fair market value of Teradyne's Common
Stock on the date of grant. The options have a term of five years from the
date of grant. The options become exercisable as follows: 20% on the date of
grant and, following the first year of grant, 20% on an annual basis.

(2) Amounts reported in these columns represent amounts that may be realized
upon exercise of the options immediately prior to the expiration of their
term assuming the specified compounded rates of appreciation (5% and 10%) of
Teradyne's Common Stock over the term of the options. These numbers are
calculated based on rules promulgated by the Securities and Exchange
Commission and do not reflect Teradyne's estimate of future stock price
increases. Actual gains, if any, on stock option exercises and Common Stock
holdings are dependent on the timing of such exercise and the future
performance of Teradyne's Common Stock. There can be no assurance that the
rates of appreciation assumed in this table can be achieved or that the
amounts reflected will be received by the individuals.

The following table provides information on stock option exercises in
fiscal year 2000 by the Named Executive Officers and the value of each officer's
unexercised options at December 31, 2000.

AGGREGATED OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES

SHARES
ACQUIRED NUMBER OF SECURITIES
UPON UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTION OPTIONS HELD AT IN-THE-MONEY OPTIONS AT
EXERCISE DECEMBER 31, 2000 DECEMBER 31, 2000
DURING VALUE --------------------------- ---------------------------
NAME 2000 REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------

George W. Chamillard..... 40,000 $2,863,748 378,000 307,000 $9,347,620 $4,829,246
Edward Rogas, Jr......... 84,000 6,868,123 173,000 172,000 3,986,497 2,818,498
David L. Sulman.......... 92,000 6,890,246 183,000 160,000 4,385,997 2,490,998
Michael A. Bradley....... 60,000 5,038,124 159,000 161,000 3,652,434 2,586,623
John M. Casey............ -- -- 78,500 148,000 1,528,061 2,475,123

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11

RETIREMENT BENEFITS

Teradyne established a Retirement Plan for the purpose of providing a
lifetime annual income upon retirement to substantially all employees, including
officers, of Teradyne and its United States subsidiaries. Membership in the
Retirement Plan begins after one year of employment with Teradyne. The
Retirement Plan provides for credit toward retirement income for years of
employment with Teradyne prior to January 1, 2000 based upon a formula tied to
average compensation from 1995 to 1999. For years of service after December 31,
1999, credit towards retirement income is determined on a yearly basis and is
equal to the sum for each year of credited service under the Retirement Plan of
(1) .75% of the employee's compensation for the year which is under the defined
covered compensation for the year and (2) 1.5% of the amount of the employee's
compensation for the year that exceeds the covered compensation for the year.
The covered compensation under the Retirement Plan is based on the average of
the social security wage basis in effect during the thirty-five years up to and
including normal retirement age. However, federal tax law limitations on the
total amount of benefits which a participant may receive under qualified
retirement plans may limit some participants' benefits under the Retirement
Plan.

Under the Retirement Plan, for participants employed by Teradyne on or
after January 1, 1989, accumulated annual retirement income vests partially
after three years of service with Teradyne and becomes fully vested after seven
years of service or upon normal, early or disability retirement. Benefits are
payable in the form of an annuity either at normal retirement age, upon early
retirement or upon disability. The Retirement Plan also provides for certain
benefits to a surviving spouse.

In 1999, Teradyne offered all eligible domestic employees participating in
the Retirement Plan a choice, to either continue to be eligible for and to
continue to accrue benefits under the Retirement Plan or to have the Retirement
Plan benefits stop accruing and instead to become eligible for an increased
matching contribution by Teradyne into an employee savings plan. The accrued
Retirement Plan benefits of those employees who elected the increased matching
option were frozen on January 1, 2000. In addition, beginning in the year 2000,
all newly hired Teradyne employees participate exclusively in this employee
savings plan in lieu of participating in the Retirement Plan.

The Corporation also maintains the Teradyne, Inc. Supplemental Executive
Retirement Plan (the "SERP"). Under the SERP, annual pensions for Messrs.
Chamillard, Rogas, Sulman, Bradley and Casey and other senior managers are
computed based on model compensation. (See discussion of model compensation
under Management and Compensation Development Committee Report.) The pension
formula is identical to that of the qualified plan, except an employee's annual
pension is based on the average of the employee's last five years of model
compensation. The resulting benefit is reduced by the benefit received from the
qualified Retirement Plan.

9
12

The following table shows the estimated annual benefits payable to covered
participants in the United States upon retirement at age 65 under both the
Retirement Plan and the SERP. The amounts shown are computed on a single life
annuity basis and are not subject to deductions for Social Security benefits or
other amounts. Remuneration for purposes of the table is based upon an
employee's average model compensation for the five-year period preceding
retirement.

PENSION PLAN TABLE

YEARS OF SERVICE
FIVE YEAR AVERAGE ----------------------------------------------------------------------------------
COMPENSATION 10 15 20 25 30 35 40
- ----------------- -- -- -- -- -- -- --

$ 500,000 .................... $ 72,300 $108,500 $144,700 $180,900 $217,100 $253,200 $ 289,400
600,000 .................... 87,300 131,000 174,700 218,400 262,100 305,700 349,400
700,000 .................... 102,300 153,500 204,700 255,900 307,100 358,200 409,400
800,000 .................... 117,300 176,000 234,700 293,400 352,100 410,700 469,400
900,000 .................... 132,300 198,500 264,700 330,900 397,100 463,200 529,400
1,000,000 .................... 147,300 221,000 294,700 368,400 442,100 515,700 589,400
1,100,000 .................... 162,300 243,500 324,700 405,900 487,100 568,200 649,400
1,200,000 .................... 177,300 266,000 354,700 443,400 532,100 620,700 709,400
1,300,000 .................... 192,300 288,500 384,700 480,900 577,100 673,200 769,400
1,400,000 .................... 207,300 311,000 414,700 518,400 622,100 725,700 829,400
1,500,000 .................... 222,300 333,500 444,700 555,900 667,100 778,200 889,400
1,600,000 .................... 237,300 356,000 474,700 593,400 712,100 830,700 949,400
1,700,000 .................... 252,300 378,500 504,700 630,900 757,100 883,200 1,009,400

The executive officers named in the Summary Compensation Table have been
credited as of January 1, 2001 with the following years of service: Mr.
Chamillard, 31 years; Mr. Rogas, 24 years; Mr. Sulman, 26 years; Mr. Bradley, 21
years; and Mr. Casey, 23 years.

10
13

MANAGEMENT COMPENSATION AND
DEVELOPMENT COMMITTEE REPORT AND
STOCK OPTION COMMITTEE REPORT

OVERVIEW AND PHILOSOPHY

Teradyne's executive compensation program is administered by the Management
Compensation and Development Committee of the Board of Directors (the
"Compensation Committee"), which is comprised entirely of outside directors. The
Compensation Committee is responsible for developing and making recommendations
to the Board of Directors with respect to Teradyne's compensation policies other
than with respect to stock option awards. In addition, the Compensation
Committee, pursuant to authority delegated by the Board of Directors, determines
on an annual basis the cash compensation to be paid to each of the executive
officers. The Stock Option Committee also is comprised entirely of non-employee
directors. The Stock Option Committee is responsible for developing and making
recommendations to the Board of Directors with respect to Teradyne's
compensation policies in connection with the awarding of stock options. In
addition, the Stock Option Committee, pursuant to authority delegated by the
Board of Directors, determines on an annual basis the stock option awards to be
granted to each of the executive officers.

The executive compensation policies are designed to provide competitive
levels of compensation that assist the Corporation in attracting and retaining
qualified executives. In setting cash compensation levels for executive
officers, the Compensation Committee takes into account such factors as:
Teradyne's history and future expectations; the general and industry-specific
business environment; annual and long-term performance goals; and corporate and
group performance.

EXECUTIVE OFFICER COMPENSATION PROGRAM

Teradyne's executive officer compensation program consists of compensation
received pursuant to its Cash Compensation Plan, Cash Profit Sharing Plan,
long-term compensation in the form of stock option, savings and retirement plans
and various other benefits generally available to employees of Teradyne.

Under Teradyne's Cash Compensation Plan, the Compensation Committee assigns
to each senior employee of Teradyne, including all executive officers, at the
beginning of each year, a "model compensation" amount. The model compensation
amount is based on salary surveys of similarly sized electronics companies, and
on an as adjusted basis, larger sized companies, some of which are represented
in the S&P High Technology Composite Index appearing in the Performance Graph on
page 16 herein.

Once model compensation for each participant has been determined, the
actual cash compensation paid to each employee under the Cash Compensation Plan
is comprised of two components: (1) a fixed monthly salary and (2) an annual
variable amount based upon overall corporate and group performance (referred to
herein as "Variable Compensation"). The fixed salary amount is set at a level
which is below the model compensation, and the variable portion is based upon
factors which, if achieved, would entitle the employee to reach or exceed model
compensation.

The amount of Variable Compensation each participant receives is a function
of four factors:

(A) The employee's base annual salary as of the end of the year;

(B) Overall corporate performance versus goal;

(D) The employee's "variable compensation factor," which is determined
by the Compensation Committee on the basis of the employee's responsibility
and experience level.

An employee's "variable compensation factor" is a percentage of his or her
base annual salary starting at 10% for new participants. At greater levels of
responsibility and experience, the variable compensation factor

11
14

may increase to 160% of base annual salary. An employee's model compensation is
set assuming a 50% payout of the variable compensation factor. Accordingly, in a
given year an employee may achieve more or less than his or her model
compensation depending on corporate and business group performance.

At year-end, the Compensation Committee evaluates Teradyne's overall
performance versus goal and each individual group's performance versus goal.
Given the dynamics of the business, Teradyne's Cash Compensation Plan relies
heavily on the Compensation Committee's subjective judgment of performance.

Specifically for 2000, in determining Variable Compensation payouts, the
Compensation Committee took the following factors into consideration in
evaluating both overall corporate performance and the performance of Teradyne's
individual business groups: (1) the extent to which quantitative and qualitative
plans were met for the year, with an emphasis on profitability, growth of sales,
growth of bookings, and increase in market share; (2) the extent to which each
business group became a role model in the implementation of "Total Quality
Management"; (3) the extent to which the results for the year verified each
group's strategy and improved its strategic position; and (4) the extent to
which each group's 2001 mid-term plan and strategy contribute to Teradyne's need
for an aggressive and credible mid-term plan and adapt to changes in the
marketplace or environment. The Compensation Committee weighed each of the four
factors approximately equally in setting Variable Compensation amounts. The
factors are reviewed by the Compensation Committee based upon the performance of
the business group in which each executive officer serves rather than upon the
individual performance of the executive officer. In 2000, total cash
compensation for all executive officers from Teradyne's Cash Compensation Plan
ranged from 15% to 21% above model compensation.

Teradyne's stock option program is its long-term incentive plan for
employees, including executive officers. The objectives of the program are to
align executive return with shareholder return and to create and implement a
program which will attract and retain talented employees and executives. Stock
options are awarded annually to employees, including the Chief Executive
Officer, based upon the employee's relative contribution and responsibility
within the Corporation. The factors taken into account by the Stock Option
Committee in determining each executive officer's relative contribution and
responsibility within the Corporation include: the executive officer's level of
model compensation, the executive officer's position, the responsibilities
currently being performed by the executive officer, and the responsibilities
expected to be performed by the executive officer. The individual factors are
reviewed subjectively by the Stock Option Committee when determining stock
option awards for each executive officer. Teradyne conducts surveys of various
companies, some of which appear in the Performance Graph's S&P High Technology
Composite Index, to verify that the relative percentages of stock options
granted to its employees, its Chief Executive Officer and its other executive
officers, are consistent with high technology industry practice, are within the
range of stock options granted by the surveyed companies, and are competitive
with the relative percentages of stock options granted by the surveyed
companies.

CHIEF EXECUTIVE OFFICER COMPENSATION

Mr. Chamillard's cash compensation for 2000 awarded under Teradyne's Cash
Compensation Plan was $1,374,997, which is approximately 21% more than Mr.
Chamillard's 2000 model compensation of $1,131,636. Mr. Chamillard's 2000 cash
compensation awarded pursuant to Teradyne's Cash Compensation Plan is a 20%
increase over his 1999 cash compensation. Mr. Chamillard's fixed salary amount
was $590,837 for 2000 and was set by the Compensation Committee, in conjunction
with his model compensation amount, based upon salary surveys of chief executive
officers for similarly sized electronics companies. Mr. Chamillard's Variable
Compensation payout was $784,160 for 2000. Mr. Chamillard's Variable
Compensation payouts are determined based upon the same factors as Teradyne's
other executive officers who have general responsibilities within Teradyne
rather than responsibilities for one specific business group. Each of such
executive officer's Variable Compensation payout is based 50% upon the
performance of Teradyne as a whole and 50% upon the average of the performances
of each of the individual business groups within Teradyne. Mr. Chamillard also

12
15

received cash compensation in the amount of $197,766 in 2000 pursuant to
Teradyne's Cash Profit Sharing Plan. Cash compensation awards under the plan,
which are calculated on a uniform basis as a percentage of the recipient's
salary, are made to employees of Teradyne on an equal basis.

The stock options granted to Mr. Chamillard during fiscal 2000 are
consistent with the design of the overall program and are shown in the Summary
Compensation Table above. Mr. Chamillard's 150,000 shares, which represented
1.90% of the total option shares awarded to all employees during fiscal 2000,
placed him at the median of the external surveys. In assessing Mr. Chamillard's
individual performance for the year for purposes of his stock option awards, the
Stock Option Committee concluded that, on balance, Mr. Chamillard had achieved
overall positive results for the individual factors for which he was evaluated.
A general description of these factors is detailed above under the description
of Teradyne's stock option program.
MANAGEMENT COMPENSATION AND
DEVELOPMENT COMMITTEE

Patricia S. Wolpert (Chair)
James W. Bagley
Dwight H. Hibbard
Richard J. Testa
Roy A. Vallee

STOCK OPTION COMMITTEE

Patricia S. Wolpert (Chair)
James W. Bagley
Dwight H. Hibbard
Roy A. Vallee

COMPENSATION COMMITTEE INTERLOCK AND INSIDER PARTICIPATION

Messrs. Bagley, Hibbard, Testa and Vallee and Ms. Wolpert comprised the
Compensation Committee for fiscal year 2000. Richard J. Testa is a partner of
the law firm of Testa, Hurwitz & Thibeault, LLP in Boston, Massachusetts. Such
law firm served as counsel for Teradyne during the fiscal year 2000 and Teradyne
expects to retain the services of such firm for the fiscal year 2001.

DEDUCTIBILITY OF EXECUTIVE COMPENSATION

In general, under Section 162(m) of the Internal Revenue Code, as amended
(the "Code"), Teradyne cannot deduct, for federal income tax purposes,
compensation in excess of $1 million paid to certain executive officers. This
deduction limitation does not apply, however, to compensation that constitutes
"qualified performance-based compensation" within the meaning of Section 162(m)
of the Code and the regulations promulgated thereunder. Teradyne has considered
the limitations on deductions imposed by Section 162(m) of the Code, and it is
Teradyne's present intention that, for so long as it is consistent with its
overall compensation objective, substantially all tax deductions attributable to
executive compensation will not be subject to the deduction limitations of
Section 162(m) of the Code. Payments under the Variable Compensation Plan do not
constitute "qualified performance-based compensation." Teradyne is not planning
to change the process for determining compensation under its Variable
Compensation Plan, however, one of the requirements for exemption from Section
162(m), because it is believed to be in Teradyne's best interest to continue to
exercise discretion, in the same manner as in the past, in the determination of
Variable Compensation. Variable Compensation will not, therefore, be deductible
to the extent it causes the applicable employee remuneration of any executive
officer to exceed $1 million during any given taxable year.

13
16

AUDIT AND FINANCE COMMITTEE REPORT

The Board of Directors has an Audit and Finance Committee which oversees
Teradyne's accounting and financial functions, including matters relating to the
appointment and activities of Teradyne's independent auditors. The Audit and
Finance Committee regularly discusses with management and the outside auditors
the financial information developed by Teradyne, Teradyne's systems of internal
controls and its internal audit process. The Audit and Finance Committee
recommends to the Board of Directors each fiscal year the appointment of the
independent auditors and reviews periodically the auditors' performance and
independence. The Audit and Finance Committee met with the independent auditors
(both with and without the presence of Teradyne's management) to review and
discuss the matters required to be discussed by Statement on Auditing Standards
No. 61, including various matters pertaining to the audit, including Teradyne's
financial statements, the report of the independent auditors on the results,
scope and terms of their work, and their recommendations concerning the
financial practices, controls, procedures and policies employed by Teradyne.

The Board of Directors has adopted a written charter for the Audit and
Finance Committee setting out the audit related functions the committee is to
perform. A copy of the charter is attached to this proxy statement as Appendix
A. This year, the Audit and Finance Committee reviewed Teradyne's audited
financial statements and met with both management and PricewaterhouseCoopers
LLP, Teradyne's independent auditors, to discuss those financial statements.
Management has represented to us that the financial statements were prepared in
accordance with generally accepted accounting principles.

The Audit and Finance Committee has received from and discussed with
PricewaterhouseCoopers the written disclosures required by Independence
Standards Board Standard No. 1 (Independence Discussions with Audit Committees).
The committee also discussed with PricewaterhouseCoopers the matters required to
be discussed by Statement on Auditing Standards No. 61 (Communication with Audit
Committees).

Based on these reviews and discussions with management and
PricewaterhouseCoopers, the Audit and Finance Committee recommended to the Board
of Directors that Teradyne's audited financial statements be included in its
Annual Report on Form 10-K for the fiscal year ended December 31, 2000.

The Audit and Finance Committee consists of Messrs. Carnesale, Gregory,
Mulroney and O'Reilly, each of whom are "independent" as defined in Sections
303.01(B)(2)(a) and (3) of the New York Stock Exchange listing standards. That
is, the Board of Directors has determined that none of the committee members has
a relationship to Teradyne that may interfere with his independence from
Teradyne and its management.
AUDIT AND FINANCE COMMITTEE

John P. Mulroney (Chair)
Albert Carnesale
Daniel S. Gregory
Vincent M. O'Reilly

AUDIT FEES

The aggregate fees billed by PricewaterhouseCoopers for professional
services rendered for the audit of Teradyne's annual financial statements for
the fiscal year ended December 31, 2000 and for the review of the financial
statements included in Teradyne's Forms 10-Q for the fiscal year ended December
31, 2000 were $529,510.00.

14
17

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

The aggregate fees billed by PricewaterhouseCoopers for financial
information systems design and implementation professional services for the
fiscal year ended December 31, 2000 were $0.00.

ALL OTHER FEES

The aggregate fees billed by PricewaterhouseCoopers for services other than
those described above for the fiscal year ended December 31, 2000 were
$4,843,214.00.

Teradyne's Audit and Finance Committee has determined that the provision of
the services provided by PricewaterhouseCoopers as set forth herein are
compatible with maintaining PricewaterhouseCoopers' independence.

15
18

PERFORMANCE GRAPH (1)(2)

The following graph compares the change in Teradyne's cumulative total
shareholder return in its Common Stock with the Standard & Poor's 500 Index and
the Standard & Poor's High Technology Composite Index. The comparison assumes
$100.00 was invested on December 31, 1995 in Teradyne's Common Stock and in each
of the foregoing indices and assumes reinvestment of dividends, if any.

PERFORMANCE GRAPH

- --------------------------------------------------------------------------------------------------------------
1995 1996 1997 1998 1999 2000
- --------------------------------------------------------------------------------------------------------------

Teradyne, Inc. $100.00 $ 97.02 $127.37 $168.67 $525.39 $295.53
S&P 500 Index $100.00 $122.90 $163.85 $210.58 $254.83 $230.68
S&P High Technology Composite Index $100.00 $141.86 $178.88 $309.27 $541.76 $325.35

- ---------------
(1) This graph is not "soliciting material," is not deemed filed with the
Securities and Exchange Commission and is not to be incorporated by
reference in any Teradyne filing under the Securities Act of 1933 or the
Securities Exchange Act of 1934 whether made before or after the date hereof
and irrespective of any general incorporation language in any such filing.

(2) The stock price performance shown on the graph is not necessarily indicative
of future price performance. Information used on the graph was obtained from
Hewitt Associates, a source believed to be reliable, but Teradyne is not
responsible for any errors or omissions in such information.

16
19

RATIFICATION OF SELECTION OF AUDITORS

The Board of Directors has selected the firm of PricewaterhouseCoopers LLP,
independent certified public accountants, to serve as auditors for the fiscal
year ending December 31, 2001. PricewaterhouseCoopers LLP, or its predecessor
Coopers & Lybrand L.L.P., have served as Teradyne's auditors since 1968. It is
expected that a member of the firm will be present at the Annual Meeting of
Shareholders with the opportunity to make a statement if so desired and will be
available to respond to appropriate questions.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THIS
SELECTION.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended for inclusion in Teradyne's proxy
materials to be furnished to all shareholders entitled to vote at the next
annual meeting of shareholders pursuant to Securities and Exchange Commission
("SEC") Rule 14a-8 must be received at Teradyne's principal executive offices
not later than December 20, 2001.

Under Teradyne's By-Laws, shareholders who wish to make a proposal at the
2002 annual meeting of shareholders -- other than proposals that will be
included in Teradyne's proxy materials -- must notify Teradyne not less than 50
days nor more than 90 days prior to the meeting; provided, however, that in the
event that less than 65 days' notice or prior public disclosure of the date of
the meeting is given or made to shareholders, to be timely, notice by the
shareholder must be so received not later than the close of business on the
fifteenth day following the day on which notice of the date of the meeting was
mailed or public disclosure was made, whichever occurs first. If a shareholder
who wishes to present a proposal fails to timely notify Teradyne, the
shareholder will not be entitled to present the proposal at the meeting. If,
however, notwithstanding the requirements of Teradyne's By-Laws, the proposal is
brought before the meeting, then under the SEC's proxy rules, the proxies
solicited by Teradyne's management with respect to the 2002 annual meeting will
confer discretionary voting authority with respect to the shareholder's proposal
on the persons selected by management to vote the proxies. If a shareholder
makes a timely notification, the proxies may still exercise discretionary voting
authority under circumstances consistent with the SEC's proxy rules.

In order to minimize controversy as to the date on which a proposal was
received by Teradyne, it is suggested that proponents submit their proposals by
Certified Mail -- Return Receipt Requested.

EXPENSES AND SOLICITATION

The cost of solicitation of proxies will be borne by Teradyne, and in
addition to soliciting shareholders by mail through its regular employees,
Teradyne may request banks and brokers to solicit their customers who have
Teradyne stock registered in the name of a nominee and, if so, will reimburse
such banks and brokers for their reasonable out-of-pocket costs. Solicitation by
Teradyne officers and employees, as well as certain outside proxy-solicitation
services may also be made of some shareholders in person or by mail, telephone
or telegraph following the original solicitation.

INCORPORATION BY REFERENCE

Certain of Teradyne's audited financial statements for the fiscal year
ended December 31, 2000 are contained in of Teradyne's Annual Report to
Shareholders. Such financial statements are incorporated herein by reference.

17
20

APPENDIX A

TERADYNE, INC.
(THE "CORPORATION")

AUDIT COMMITTEE CHARTER

A. PURPOSE AND SCOPE

The primary function of the Audit Committee (the "Committee") is to assist
the Board of Directors in fulfilling its responsibilities by reviewing: (i) the
financial reports provided by the Corporation to the Securities and Exchange
Commission ("SEC"), the Corporation's shareholders or to the general public, and
(ii) the Corporation's internal financial and accounting controls.

B. COMPOSITION

The Audit Committee shall comprise a minimum of three directors as
appointed by the Board of Directors, whom shall meet the independence and audit
committee composition requirements under any rules or regulations of the NYSE,
as in effect from time to time, and shall have no relationship to the
Corporation that may interfere with the exercise of their independence from
management and the Corporation.

All members of the Committee shall either (i) be financially literate, as
this qualification is interpreted by the Board of Directors in its business
judgment or (ii) be able to become so within a reasonable period of time after
appointment to the Committee. At least one member of the Committee shall have
accounting or related financial management expertise, as this qualification is
interpreted by the Board of Directors in its business judgment.

The Board may appoint to the audit committee one former employee or one
immediate family member of a former executive officer of the Corporation or its
affiliates considered to be non-independent because of the three year waiting
period for former employees, if the Board under exceptional and limited
circumstances determines in its business judgment that membership on the
Committee by the individual is required in the best interests of the Corporation
and its shareholders. The Board shall disclose in the next proxy statement after
such determination, the nature of the relationship and the reasons for the
determination.

The members of the Committee shall be elected by the Board of Directors at
the meeting of the Board of Directors following each annual meeting of
stockholders and shall serve until their successors shall be duly elected and
qualified or until their earlier resignation or removal. Unless a Chair is
elected by the full Board of Directors, the members of the Committee may
designate a Chair by majority vote of the full Committee membership.

C. RESPONSIBILITIES AND DUTIES

To fulfill its responsibilities and duties the Committee shall:

DOCUMENTS/REPORTS REVIEW

1. Review and assess the adequacy of this Charter periodically as
conditions dictate, but at least annually (and update this Charter if
and when appropriate).

2. Review with representatives of management and representatives of the
independent accounting firm the Corporation's audited annual financial
statements prior to their filing as part of the Annual Report on Form
10-K. After such review and discussion, the Committee shall recommend to
the Board of

A-1
21

Directors whether such audited financial statements should be published
in the Corporation's annual report on Form 10-K.

3. As a whole, or through the Committee Chair, the Committee shall review
with outside auditors the matters (if any) required to be discussed by
SAS No. 61 in connection with the interim financial reviews conducted by
the outside auditors; this review will occur prior to the Company's
filing of the Form 10-Q.

INDEPENDENT ACCOUNTING FIRM

4. Recommend to the Board of Directors the selection of the independent
accounting firm. The Committee shall have the ultimate authority and
responsibility to select, evaluate and, when warranted, replace such
independent accounting firm (or to recommend such replacement for
shareholder approval in any proxy statement). The independent accounting
firm shall be ultimately accountable to the Board of Directors and the
Committee.

5. On an annual basis, receive from the independent accounting firm a
formal written statement identifying all relationships that should be
considered in assessing their independence consistent with Independence
Standards Board ("ISB") Standard No. 1. The Committee shall actively
engage in a dialogue with the independent accounting firm as to any
disclosed relationships or services that may impact its independence.
The Committee shall take, or recommend that the Board of Directors take,
appropriate action in response to the independent accounting firm's
statement in order to satisfy itself of that firm's independence.

6. On an annual basis, discuss with representatives of the independent
accounting firm the matters required to be discussed by Statement on
Auditing Standards No. 61, as it may be modified or supplemented.

7. Review with the independent accounting firm, their annual audit scope.

INTERNAL CONTROL

8. In consultation with the independent accounting firm and management,
review annually the adequacy of the Corporation's internal financial and
accounting controls.

9. Review with management and the Manager of Internal Audit, the scope of
the Internal Audit Plan and any significant findings.

COMPLIANCE

10. To the extent deemed necessary by the Committee, it shall have the
authority to engage outside counsel and/or independent accounting
consultants to review any matter under its responsibility.

REPORTING

11. Prepare, in accordance with the rules of the SEC as modified or
supplemented from time to time, a written report of the audit committee
to be included in the Corporation's annual proxy statement for each
annual meeting of stockholders occurring after December 14, 2000.

While the Audit Committee has the responsibilities and powers set forth in this
Charter, it is not the duty of the Audit Committee to plan or conduct audits or
to determine that the Corporation 's financial statements are complete and
accurate and are in accordance with generally accepted accounting principles.
Those are the responsibilities of the independent auditor and/or management.
A-2
22

0559-PS-01
23

DETACH HERE

PROXY

TERADYNE, INC.

PROXY FOR ANNUAL MEETING OF SHAREHOLDERS

MAY 24, 2001

SOLICITED BY THE BOARD OF DIRECTORS

The undersigned hereby appoints GEORGE W. CHAMILLARD and RICHARD J. TESTA, and
each or both of them, proxies, with full power of substitution to vote all
shares of stock of the Corporation which the undersigned is entitled to vote at
the Annual Meeting of Shareholders of Teradyne, Inc. to be held on Thursday,
May 24, 2001, at 10:00 A.M., at Fleet National Bank, 100 Federal Street (Second
Floor), Boston, Massachusetts, and at any adjournments thereof, upon matters
set forth in the Notice of Annual Meeting of Shareholders and Proxy Statement,
dated on or about April 18, 2001, a copy of which has been received by the
undersigned. The proxies are further authorized to vote, in their discretion,
upon such other business as may properly come before the meeting or any
adjournments thereof.

[SEE REVERSE SIDE] CONTINUED AND TO BE SIGNED ON REVERSE SIDE [SEE REVERSE SIDE]
24
TERADYNE, INC.
c/o EquiServe
P.O. Box 839B
Boston, MA 02205-9398

DETACH HERE
[X] Please mark
votes as in
this example.

THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO
DIRECTION IS GIVEN, WILL BE VOTED FOR THE ELECTION OF CLASS III DIRECTORS AND
FOR THE PROPOSAL IN ITEM 2.

1. To elect three members to the Board FOR WITHHELD
of Directors to serve for a three-year [ ] [ ]
term as Class III Directors.

Nominees: (01) J.P. Mulroney,
(02) R.J. Testa, and
(03) P.S. Wolpert.

[ ]
--------------------------------------
For all nominees except as noted above

2. To ratify the selection of FOR AGAINST ABSTAIN
PricewaterhouseCoopers LLP as auditors [ ] [ ] [ ]
for the fiscal year ending
December 31, 2001.

MARK HERE IF YOU PLAN TO ATTEND THE MEETING [ ]

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [ ]

(Please sign exactly as your name appears hereon. If signing as attorney,
executor, trustee or guardian, please give your full title as such. If stock is
held jointly, each owner should sign. Please read reverse side before signing.)

Signature: Date: Signature: Date:
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