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

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------

FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED MAY 30, 1998 OR

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-4837
------------------------

TEKTRONIX, INC.

(Exact name of Registrant as specified in its charter)

OREGON 93-0343990
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

26600 S.W. PARKWAY AVENUE
WILSONVILLE, OREGON 97070
(Address of principal executive (Zip Code)
offices)

Registrant's telephone number, including area code:

(503) 627-7111

Securities registered pursuant to Section 12(b) of the Act:

NAME OF EACH EXCHANGE ON WHICH
TITLE OF EACH CLASS REGISTERED
- -------------------------------------- --------------------------------------
Common Shares, New York Stock Exchange
without par value Pacific Stock Exchange

Series A No Par Preferred New York Stock Exchange
Shares Purchase Rights Pacific Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE
------------------------

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes /X/ No / /

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /

The aggregate market value of the voting stock held by nonaffiliates of the
Registrant was approximately $1,345,950,348 at August 3, 1998.

At August 3, 1998 there were 49,638,025 Common Shares of the Registrant
outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

PART OF 10-K INTO WHICH
DOCUMENT INCORPORATED
- ----------------------------------------- ---------------------------------

Registrant's Proxy Statement Part III
dated August 20, 1998

1998 Annual Report to Shareholders Parts I, II and IV

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

PART I

ITEM 1. BUSINESS.

Tektronix is an Oregon corporation organized in 1946. Its principal
executive offices are located at 26600 S.W. Parkway Avenue, Wilsonville, Oregon
97070, approximately 18 miles south of Portland. Its telephone number is (503)
627-7111. References herein to "Tektronix" or the "Company" are to Tektronix,
Inc. and its wholly-owned subsidiaries unless the context indicates otherwise.

Tektronix' products cover a wide range of electronic equipment. Measurement
Business products include general purpose test instruments, such as digital and
analog oscilloscopes, logic analyzers, digital multimeters, VXI standard modular
products and probes; RF and wireless test instruments, such as spectrum
analyzers, communication test sets and high frequency signal sources;
telecommunications instruments, such as optical time domain reflectometers
(OTDRs) and cable testers; and television test instruments, such as audio and
video measurement sets, waveform monitors, vectorscopes, signal generators and
RF/cable measurement products. Color printing and imaging products include color
printers, ink and related products and supplies. Video and networking products
include digital video storage products; integrated video system solutions,
including switchers, digital picture manipulating and editing equipment;
business network computers and interactive video services products;
windows-based terminals; Lightworks digital non-linear editing systems; newsroom
solutions; and video transmission products.

PRODUCTS

The table below sets forth the contribution to total net sales of the
Company's product groupings for the last three fiscal years (in thousands of
dollars).

MEASUREMENT COLOR PRINTING VIDEO AND
BUSINESS AND IMAGING NETWORKING
PRODUCTS PRODUCTS PRODUCTS
----------------- ----------------- -----------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
-------- ------- -------- ------- -------- -------

1996.................. $812,250 45.9% $561,642 31.8% $394,966 22.3%
1997.................. $852,827 44.0% $638,456 32.9% $448,799 23.1%
1998.................. $962,858 46.2% $728,697 34.9% $394,247 18.9%

MEASUREMENT BUSINESS PRODUCTS

Because of their wide range of capabilities, measurement business products
are used in a variety of applications, including research, design, testing,
installation, manufacturing and service in the computer, television,
telecommunications, process control, commercial aerospace, automotive and
military industries.

Tektronix pioneered the development of high precision oscilloscopes over 50
years ago, and the oscilloscope is the Company's primary measurement product.
Oscilloscopes are used by engineers and technicians when an electrical signal
needs to be viewed, measured, tested or calibrated. Oscilloscopes are used
extensively in the computer, communications, aerospace and other industries for
design, manufacturing and maintenance. In addition to electrical signals,
oscilloscopes can be adapted to measure mechanical motion (vibration), sound,
light, heat, pressure, strain and velocity.

Oscilloscopes produce graphic representations of electrical signals on a
cathode ray tube or other display device. Normally, the display shows the signal
as a graph of its amplitude over a certain period of time, which may range from
minutes to less than a billionth of a second. Oscilloscopes provide a convenient
way to visually monitor and interpret analog electrical fluctuations, mechanical
motion and sound.

The development of the microprocessor and associated growth in
microprocessor-based devices stimulated both the existing analog markets and new
digital markets. In addition, the microprocessor made

possible significant improvements in oscilloscope design and performance. Many
of the oscilloscopes and other measurement products manufactured by Tektronix
feature digital storage and conversion functions, programmable operations, the
ability to work in conjunction with personal computers and workstations and
combinations of these capabilities. In addition, trends toward smaller
microelectronic devices have opened new segments for specialized measurement
equipment, such as connectors, probes, adapters, and cameras and plotters to
record displayed wave- forms.

Tektronix has designed a substantial portion of its oscilloscope product
line to provide a consistent "architecture" across products and to enhance ease
of use. Because the Company manufactures oscilloscopes in a wide range of
configurations, bandwidths and other performance characteristics and in sizes
ranging from hand-held to large laboratory units, this design provides customers
with reduced learning time and higher productivity. The design also reduces the
time required by the Company to develop new products because many essential user
interface aspects have been standardized. Some elements of this design also have
been patented and provide the Company with certain competitive advantages.

The Company also offers modular instruments delivered on printed circuit
cards that can be mixed and matched by customers and plugged directly into the
backplane of industry-standard VXI-based card cages. These are controlled by
personal computers or workstations to form complete instrument systems tailored
to customers' particular requirements. A number of measurement products are now
available in the VXI standard, which products are used primarily in
manufacturing applications. Tektronix has been instrumental in the development
of VXI-based hardware and software industry standards.

Measurement business products also include video and audio test products.
Video and audio test products include vectorscopes, waveform monitors, signal
generators, automated test equipment, demodulators, and aural modulation
monitors and synchronizers, which are used primarily by the television industry
to test and display the quality of video and audio signals. The resolution of
images and the fidelity of sounds, as well as the stability of the signals that
carry them, are essential to program quality. Tektronix' video and audio test
products excel at the many forms of test and measurement vital to creating and
maintaining signals of the highest quality. With the transition to digital
television and video compression, new products include an MPEG based signal
generator and analyzer, and digital television test products.

Market changes are driving the development of new categories of products
from Tektronix. The proliferation of electronic technology requires technicians
and field engineers to use smart electronic tools for servicing, maintaining and
troubleshooting problems in electrical equipment. Tektronix' broad line of
hand-held instruments, sold through distributors, are smart, rugged products
designed specifically to address these needs.

Tektronix offers a full range of sophisticated, easy-to-use handheld
instruments, including digital multimeters and the award-winning
TekScope-Registered Trademark- handheld oscilloscope/digital multimeter
combination. Tektronix' handheld instruments range in suggested retail price
from below $100 up to about $3,400.

The Company also makes benchtop basic instruments. Applications include
education, light manufacturing, electronic troubleshooting and basic electronic
design.

Logic analyzers are a principal tool for electronic designers, engineers and
technicians in testing and trouble-shooting computers, computer peripheral
devices and digital electronic systems and instruments. Logic analyzers capture,
display and examine streams of data coded as binary digits (bits), which are
transmitted simultaneously over many channels. The Company offers several lines
of logic analyzers, including the 3000 Series, a standalone, mid-range analyzer
targeted at medium sized designs, the newer TLA 500 Series, a high performance,
mid-priced analyzer optimized for embedded software debug, the
DAS-Registered Trademark- Digital Analysis System, a broad application logic
analyzer that combines logic analysis and pattern generation by using card
modular plug-in units to permit a range of performance in one system, and the
new TLA 700 series, which incorporates Microsoft's Windows operating system and
has a novel high speed

front-end and is designed specifically for engineers that design electronic
products. DAS systems are also used by software engineers in the development and
optimization of microprocessor-based designs.

Spectrum analyzers are used in communications and other industries to
display and measure signal amplitude versus frequency rather than amplitude
versus time (the latter being what an oscilloscope typically displays). It is an
essential tool used to design, check and adjust communications transmitting and
receiving equipment.

Products designed for the telecommunications industry play an increasingly
important role in the Company's measurement business portfolio. Tektronix is a
leading supplier of a broad range of test solutions for emerging networks,
designed for ensuring integrity and optimizing performance of networks, and
verifying design and assuring quality of communications equipment. Cable testers
and fiber optic testers use time-domain-reflectometry techniques to locate
faults in metallic and fiber optic cables. Essentially, these instruments send
signals from one end of a cable and then measure the reflection time of the
signals to determine the location of the fault. Cable testers and fiber optic
testers are widely used in the telecommunication and cable television
industries. The Company also provides RF test instruments for the cable
television market, and has developed a series of products for SDH or SONET
transmission testing in the telecommunications industry. The Company's
September, 1997 acquisition of Siemens Communications Test Equipment GmbH
extended Telecom Test Product offerings serving needs being created by the
growth of the Internet and other telecommunications requirements. Tektronix also
sells and supports German manufacturer Rohde & Schwarz' wireless communications
and TV products in the United States and Canada, including the first measurement
solutions for Personal Communications Services (PCS), mobile phones and base
stations available to North American manufacturers.

Tektronix' distributorship arrangement with Advantest, a Japanese instrument
manufacturer, expands the Company's offering within North America and Mexico,
adding more than 100 solutions to the communications test product portfolio.

Other measurement business products include digitizers, signal sources,
curve tracers, wireless and modular lines of general purpose test instruments.

COLOR PRINTING AND IMAGING PRODUCTS

Tektronix' color printing and imaging products include color printers and
related products and supplies. Color printers produce full color hard copies of
images produced by personal computers, workstations and terminals. The Company's
Phaser-Registered Trademark- brand printers are compatible with the industry
standard PostScript-Registered Trademark- page description language, which
specifies how an image is transferred to hard copy. By adopting the Postscript
standard, color printers can be used in conjunction with a wide range of third-
party graphics software. Tektronix produces Phaser color printers using dye
sublimation and laser technologies. In addition, Tektronix has developed a
proprietary printing technology that uses sticks of solid ink, of the Company's
own formulation, that are melted and then jetted onto the paper. This technology
produces vivid and stable images, allows printing on plain rather than coated
paper, and can be applied to a wide range of sizes and gauges of paper.
Tektronix' printers are controlled by software designed and implemented by the
Company.

The use of color in computing and printing has been stimulated by
enhancements in the underlying microprocessor technology of personal computers
and workstations, by large system and peripheral storage capabilities, by
enhancements in computer display capability, and by the increased use of the
Internet. As personal computers increasingly become capable of displaying
complex, colorful images, there has been an accompanying growth in demand for
printers that can print such images in color.

Tektronix has been manufacturing and selling color printers for over
thirteen years. Early users were graphics artists, engineers and scientists. In
recent years, workgroup office users have also become significant users of the
Company's color printers.

In September of 1996, the Company introduced its Phaser 350 printer,
followed in January of 1997 by the Phaser 360, and in July of 1997, its Phaser
560 printer. These are improved, follow-on products to the Phaser 340 introduced
in 1995, and the Phaser 550 introduced in January of 1996. The Phaser 350 and
Phaser 360 are solid-ink color printers combining laser-class speed, low cost
per page, and high quality output. The Phaser 560 is a high-performance color
laser printer. The Phaser 350, 360 and 560 printers are intended to broaden the
appeal of color for the average business user and help move color into the
office printing environment.

In September of 1997, the Company introduced the Phaser 380 printer, a
high-performance tabloid print size printer complimenting the Phaser 300x
tabloid size printer and the Phaser 600 wide format printer. These are solid
ink, high quality output color printers for the specialty graphics and office
markets. The Phaser 600 printer prints vivid, saturated color on any paper up to
36 inches wide. The wide-format color printer targets two fast-expanding markets
for large color prints: in-house departments (including design departments
within Fortune 1000 companies, government, and advertising agencies) and "pay
for print" businesses (including service bureaus, reprographic shops, color
photo labs, and quick-print shops). In January of 1996, the Company introduced
the Phaser 450 printer, an improved follow-on product to the Phaser 440. This
printer produces photographic quality color prints using dye sublimation
technology. The Phaser 480x, introduced in 1994, produces tabloid-size prints
using similar technology. Both products are targeted to the specialty printing
market.

Also included in color printing and imaging products are supplies for use
with the Company's color printers, including inks, toner, transfer ribbons,
maintenance kits and media (paper and transparencies). These supplies are a very
significant source of ongoing color printing and imaging revenue and profit. The
Company also manufactures a scanner accessory that enables a color printer to
function as a color copier.

VIDEO AND NETWORKING PRODUCTS

As television continues to move to digital, non-tape based technologies
while expanding its offering content and distribution, markets have emerged for
products capable of supporting development of content through the integration of
computer applications. Those trends, coupled with the increasing use of cable
and satellite to distribute content, are expanding the market for Tektronix'
video products. These trends may result in increased demand for lower cost
production products based on industry standard platforms and for systems that
support the development and distribution of new forms of content.

The Company's video products are produced at its facilities in Grass Valley,
California and Beaverton, Oregon. Grass Valley-TM- products are used by the
television industry for program production and distribution. Products include
studio production equipment, signal processing, distribution equipment and
transmission systems. Studio production equipment is used in the creative
process of television program production and assembly. Production equipment
products include production switchers, special effects devices and editing
controllers. Production switchers allow an operator to select signals from
various sources, such as cameras, video tape recorders and network or remote
transmissions, and to combine these signals into the continuous program seen by
the viewing audience. Signal processing and distribution equipment is used in
the process of moving signals within a television production facility or between
facilities. Such equipment includes routing switchers, amplifiers, timing
systems and signal conversion devices. Transmission systems are used in the
process of transporting signals between facilities. Transmission system products
include fiber optic video transmitter/receiver systems, digital video
coders/decoders, cross-connect switches and interactive conferencing systems
including distance learning systems. Customers for Grass Valley products include
the television networks, local television stations, post-production houses
(which assemble commercials and television programs from recorded footage),
telephone and cable companies and corporate and educational users.

Tektronix U.K. Development Centre Limited (previously named Lightworks
Editing Systems Limited), a United Kingdom subsidiary of the Company, designs,
manufactures and distributes non-linear

editing systems used for film and video editing. Video products also include the
Company's Profile-Registered Trademark- disk-based, multi-channel video storage
and playback system. In contrast to conventional tape storage technology, the
Profile system provides instant access to stored video images and better
reliability due to the durability of the media. The Company's line of
professional video disk recording products is manufactured at its facility in
Beaverton, Oregon. High-speed computer networking interfaces sold by the Company
allow the connection of a number of Profile disk recorders to allow sharing of
material between multiple users. Customers for these products include major
television networks, local broadcast stations, satellite program providers and
postproduction companies.

The Company's main networking product is a line of network computers, which
are X windows-based graphics terminals that provide multiple windowing and
networking capability. Also commonly referred to as X terminals, network
computers allow users to communicate with one or more host computers and other
devices such as printers, that make up a networked computing system. Most
applications include a central "server" (containing applications and data)
connected to multiple network computers, thereby allowing a number of users to
access those applications and data. The Company no longer manufactures its older
line of proprietary graphics terminals, but it still has a service business for
its installed base of such products. This service business has continually
declined as the installed base of these proprietary graphics terminals declines.

The Company's networking products also include WinDD-TM- software, which
allows network computer users on a Unix-Registered Trademark- network to run
Microsoft Windows based applications in native mode (that is, without
translation or emulation).

The Company produces the NewStar-TM- line of television newsroom computer
systems. These products provide a complete computer based environment for the
collection, management and presentation of television news stories. They provide
management of incoming wire service and video feeds, computerized script
development and story lineup for transmission to air. EditStar-TM-, a
combination of the NewStar journalist software and the Company's Profile video
disk recorder, provides a unique tool for concurrent editing of the script and
video. Customers for NewStar systems include large and small television news
operations worldwide.

The Company has formed a separate business unit, called VideoTele.com, to
sell products to service providers wanting to move video signals over
telecommunications networks.

MANUFACTURING

During fiscal 1994, the Company sold its integrated circuits operation to
Maxim Integrated Products, Inc. and transferred its hybrid circuits operation to
a joint venture with Maxim, and in early 1995 completed the sale of
approximately 65% of the stock of its printed circuit board operation in the
initial public offering of Merix Corporation. As a result of these activities
and other component operation divestitures, the Company's manufacturing
operations are no longer highly integrated. The Company purchases products from
each of the companies now operating the respective component operations.

Tektronix also purchases raw materials, additional components, data
processing equipment and computer peripheral devices for use in its products and
systems. The Company purchases raw materials and additional components of its
products from a variety of third party suppliers. Such purchased materials and
components are generally available to Tektronix as needed. Although shortages
are experienced from time to time, the Company currently believes that it will
be able to acquire the required components as needed. Because some of these
components are unique, disruptions in supply can have an effect on Company
operations.

Tektronix owns substantially all of its manufacturing facilities. Its
primary manufacturing facilities are located in or near the Portland, Oregon
metropolitan area. Some software and product development occurs in Madison,
Wisconsin, Boston, Massachusetts, London, U.K., and Bangalore, India. Some of

Tektronix' products, components and accessories are assembled in the Peoples
Republic of China. A
logistics center is maintained in Heerenveen, The Netherlands. Grass Valley
products are manufactured in Nevada City, California. A color printer component
manufacturing plant is located in Penang, Malaysia. Telecommunications test
products are manufactured at a plant in Berlin acquired in connection with the
Siemens purchase described above. See Item 2, "Properties", for additional
information regarding the Company's manufacturing facilities.

Certain Tektronix products are manufactured for the Japanese market at a
plant in Gotemba, Japan by Sony/Tektronix Corporation, a Japanese corporation
equally owned by Tektronix and Sony Corporation. Sony/Tektronix also designs and
manufactures arbitrary waveform and function generators and benchtop
semiconductor testers in Japan for sale worldwide by Tektronix. In June of 1998,
the Company purchased certain assets of CAM Advanced Technologies (M) Sdn Bhd, a
printer component manufacturer with manufacturing facilities in Penang,
Malaysia. The acquisition adds lower cost color printer component manufacturing
capacity.

SALES AND DISTRIBUTION

Tektronix maintains its own worldwide sales and field maintenance
organization, staffed with technically trained personnel. Sales in the United
States, Canada, Brazil, the United Kingdom, Germany, France, Italy, Spain, The
Netherlands, Belgium, Sweden, Denmark, Norway, Finland, Switzerland, Australia,
Austria, Hong Kong, Taiwan, Korea, Singapore, China, India and Mexico are made
through the Company and its subsidiaries and their field offices or distribution
channels located in principal market areas. In most countries, all sales are
made either directly by Tektronix or by independent distributors to whom
Tektronix provides direct technical and administrative assistance. Certain of
the Company's independent distributors also sell products manufactured by the
Company's competitors. Sales of joint venture products in the Peoples Republic
of China are made by three companies which are joint ventures between Tektronix
and three different Peoples Republic of China corporations. Except for Grass
Valley products, sales in Japan are made by Sony/Tektronix Corporation. A number
of the Tektronix field offices in the U.S. also perform major maintenance and
reconditioning operations. Tektronix' principal customers are electronic and
computer equipment manufacturers and service providers, private industrial
concerns engaged in commercial or governmental projects, military and
nonmilitary agencies of the United States and of foreign countries, public
utilities, educational institutions, radio and television stations and networks,
graphics arts companies and users of sophisticated office products. Certain
products are sold both to equipment users and to original equipment
manufacturers.

Most Tektronix product sales are sold as standard catalog items. Tektronix
attempts to fill its orders as promptly as possible.

At May 30, 1998, Tektronix' unfilled product orders amounted to
approximately $134 million, as compared to approximately $175 million at May 31,
1997. Tektronix expects that substantially all unfilled product orders at May
30, 1998 will be filled during its current fiscal year. Orders received by the
Company are subject to cancellation by the customer.

INTERNATIONAL SALES

The following table sets forth the breakdown between U.S. and international
sales, based upon purchaser location, for each of the last three fiscal years
(in thousands of dollars):

U.S. SALES INTERNATIONAL SALES
------------------- -------------------
AMOUNT PERCENT AMOUNT PERCENT
---------- ------- ---------- -------

1996................................. $ 890,930 50.4% $ 877,928 49.6%
1997................................. $1,027,294 53.0% $ 912,788 47.0%
1998................................. $1,077,649 51.7% $1,008,153 48.3%

See "Business Segments" in the Notes to Consolidated Financial Statements at
page 28 of the Company's 1998 Annual Report to Shareholders, containing
information on sales, operating income and assets by geographic area based upon
the location of the seller, which is incorporated by reference.

Tektronix products are sold worldwide. European sales are made principally
in Germany, France, the United Kingdom, Switzerland, Italy, Spain, Sweden, and
The Netherlands. Other international sales are principally in Japan, Korea,
Canada, Australia, the People's Republic of China and Hong Kong. International
sales include both export sales from the United States and sales by non-U.S.
subsidiaries. Fluctuating exchange rates and other factors beyond the control of
Tektronix, such as the stability of international monetary conditions, tariff
and trade policies and domestic and foreign tax and economic policies, affect
the level and profitability of international sales. The Company does not believe
it is materially exposed to exchange rate fluctuation, although the Company is
unable to predict the effect of these factors on its business. The Company
hedges against certain currency exposures in order to minimize their impact.

RESEARCH AND DEVELOPMENT

Tektronix operates in an industry characterized by rapid technological
change and research and development are important elements in its business.
Expenditures during fiscal years ended May 25, 1996, May 31, 1997, and May 30,
1998 for research and development amounted to approximately $164,292,000,
$188,192,000, and $203,312,000 respectively. Almost all of these funds were
Company generated.

Research and development activities are conducted by research and design
groups and specialized product development groups within the three product
groups. These activities include: (i) research on basic devices and techniques
(ii) the design and development of products and components and specialized
equipment and (iii) the development of processes needed for production. Most of
Tektronix' research and development is devoted to enhancing and developing its
own products.

PATENTS AND INTELLECTUAL PROPERTY

It is Tektronix' policy to seek patents in the United States and appropriate
foreign countries for its significant patentable developments. However,
electronic equipment as complex as most of Tektronix' products is generally not
patentable in its entirety. The Company also seeks to protect significant
trademarks and software through trademark and copyright registration. The
Company has entered into license arrangements for components important to the
manufacturing of some of its printers. The Company's printer business relies on
an integrated strategy of licensed and internally developed technology to
produce its industry leading products. This technology includes software,
equipment, printing process and ink developments. As with any company whose
business involves intellectual property, Tektronix is subject to claims of
infringement. There are no material pending claims.

COMPETITION

The electronics industry continues to become more competitive, both in the
United States and abroad. Primary competitive factors are product performance,
technology, customer service, product availability and price. Tektronix believes
that its reputation in the marketplace is a significant positive competitive
factor. With respect to many of its products, the Company competes with
companies that have substantially larger resources.

Tektronix is the world's largest manufacturer of oscilloscopes and no single
competitor offers as complete a product line. The Company is also the leader in
sales of test and measurement equipment for the television industry. Tektronix
competes with a number of companies in specialized areas of other test and
measurement products, and it competes with one very large company that sells a
broad line of test and measurement products.

Tektronix is also the leader in unit sales of office workgroup laser-class
color printers, including color laser and solid ink jet color printers. While
the market for color printers is currently growing rapidly, it is

still much smaller than the market for monochrome printers. Moreover, it is
characterized by intense and increasing competition, resulting in a competitive
pricing environment. Because the market for color hard copy is still small
compared to the market for monochrome printers, distribution of products from
manufacturer to end user is less efficient. The Company expects distribution
channels to expand as color hard copy becomes a more prominent feature in
computer applications.

Tektronix competes with a number of large, worldwide electronics firms that
manufacture specialized equipment for the television industry, both with respect
to its television test and measurement products and its Grass Valley products.
Grass Valley products include leading high-performance production switchers and
high-performance distribution/processing equipment.

Tektronix is a leading supplier of network computers. Network computer
products are based on standard architecture originally developed by the
Massachusetts Institute of Technology. Consequently, it is difficult for any
manufacturer to develop a proprietary advantage in either the underlying
hardware or in elements of the operating system, and competition in the
netstation market is accordingly intense.

Tektronix is the leading supplier of multi-channel disk-based recording
devices to the professional television industry. The Company expects this market
to experience significant growth as broadcasters and other professional video
users replace video tape recorders with disk-based products.

EMPLOYEES

At May 30, 1998, Tektronix had 8,630 employees, of whom 2,258 were located
in foreign countries. Tektronix' employees in the United States and most foreign
countries are not covered by collective bargaining agreements. The Company
believes that relations with its employees are good.

ENVIRONMENT

The Company's facilities are subject to numerous laws and regulations
concerning the discharge of materials into the environment, or otherwise
relating to protection of the environment. The Company operates a licensed
hazardous waste management facility at its Beaverton campus. Although future
regulatory actions cannot be predicted with certainty, compliance with
environmental laws has not had and is not expected to have a material effect
upon the capital expenditures, earnings or competitive position of the Company.

EXECUTIVE OFFICERS OF THE COMPANY

The following are the executive officers of the Company:

HAS SERVED AS
AN EXECUTIVE
OFFICER OF
NAME POSITION AGE TEKTRONIX SINCE
- ---------------------------- ---------------------------- --- ---------------

Jerome J. Meyer............. Chairman of the Board, Chief 60 1990
Executive Officer and
President

William D. Walker........... Vice Chairman of the Board, 67 1992 (also
Director served in 1990
and from 1969
to 1984)

James F. Dalton............. Vice President, General 39 1998
Counsel and Secretary

Carl W. Neun................ Senior Vice President and 54 1993
Chief Financial Officer

HAS SERVED AS
AN EXECUTIVE
OFFICER OF
NAME POSITION AGE TEKTRONIX SINCE
- ---------------------------- ---------------------------- --- ---------------

Richard H. Wills............ Vice President and 43 1997
President, European
Operations

Douglas C. Shafer........... Vice President and 37 1997
President, Americas
Operations

Timothy E. Thorsteinson..... Vice President and 45 1991
President, Video and
Networking Division

Gerald Perkel............... Vice President and 42 1995
President, Color Printing
and Imaging Division

Daniel Terpack.............. Vice President and 57 1993
President, Measurement
Business Division

Daniel R. Brophy............ Vice President and 60 1996
President, Pacific
Operations

The executive officers are elected by the board of directors of the Company
at its annual meeting, except for interim elections to fill vacancies. Executive
officers hold their positions until the next annual meeting or until their
successors are elected, or until such tenure is terminated by death, resignation
or removal in the manner provided in the bylaws. There are no arrangements or
understandings between executive officers or any other person pursuant to which
the executive officers were elected and none of the executive officers are
related.

All of the executive officers named have been employed by Tektronix in
management positions for the last five years except: Mr. William D. Walker, who
is not an employee of the Company and has been a director of the Company since
1980; and Mr. Daniel R. Brophy, who joined the Company in December 1994 and
prior to that time served as Assistant Vice President of Ascom Timeplex, a
division of Ascom Holding AG, an international telecommunications company.

ITEM 2. PROPERTIES.

The Company's offices are located at 26600 S.W. Parkway, Wilsonville,
Oregon. Listed below are the principal facilities. All properties are maintained
in good working order and, except for those held for sale or lease, are
substantially utilized and are suitable for the conduct of its business. The
Company believes that its facilities are adequate for their intended uses.

Tektronix owns an industrial park (the "Howard Vollum Park") near Beaverton,
Oregon. The Howard Vollum Park includes 21 buildings arranged in a campus-like
setting and containing an aggregate of approximately 2.5 million gross square
feet of enclosed floor space. A substantial portion of the Company's product
manufacturing and administrative activities is located at Howard Vollum Park.
Most of the Company's Measurement Business Division and a variety of the Video
Networking Division products are manufactured at Howard Vollum Park. The Company
leases certain excess space at the Howard Vollum Park to other corporations. The
Company also owns property near Howard Vollum Park, which is leased to another
corporation. The Company has entered into an agreement to sell approximately 40
acres on the Vollum site, subject to a number of contingencies.

The Company's Color Printing and Imaging Division, and corporate
headquarters occupy four buildings containing approximately 790,000 square feet
on property owned by the Company in Wilsonville, Oregon, approximately 16 miles
south of Howard Vollum Park.

Tektronix' Video and Networking Division also has operating facilities in
Nevada City, California comprised of approximately 151,000 square feet on owned
property. An additional surplus site located at

Bitney Springs, California is currently offered for sale. The Bitney Springs
site consists of approximately 190,000 owned square feet and is mostly vacant.
NewStar software development occurs at leased facilities in Madison, Wisconsin.

The buildings described above were constructed after 1957. Warehouses,
production facilities and other critical operations are protected by fire
sprinkler installations. Most manufacturing, office and engineering areas are
air-conditioned.

A 92,600 square foot logistics center leased by Tektronix is located in
Heerenveen, The Netherlands. A surplus building previously used as the logistics
center in Heerenveen, consisting of 104,000 square feet, is offered for sale. A
manufacturing plant for color printer components, consisting of approximately
160,000 square feet, is located in Penang, Malaysia. Acquisition of the facility
is expected to be completed in September 1998.

Field offices near London (83,000 square feet) and Sydney, Australia (23,000
square feet) are located in buildings owned by the Company. The Lightworks video
editing manufacturing operations are located on leased premises in Reading and
London U.K. Field Offices in other foreign countries occupy leased premises of
approximately 475,000 square feet.

Tektronix' U.S. Sales and Service field offices aggregate approximately
317,000 square feet of leased space, of which 31,000 square feet is vacant.
Tektronix also owns an approximately 9,000 square foot facility in Nanticoke,
Pennsylvania, which is leased to another company.

ITEM 3. LEGAL PROCEEDINGS.

There are no material pending legal proceedings.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.

FORWARD LOOKING STATEMENTS

Statements and information included in this Form 10-K that relate to the
Company's goals, strategies and expectations as to future results, events and
expectations are based on the Company's current expectations. They constitute
forward-looking statements subject to a number of risk factors that could cause
actual results to differ materially from those currently expected or desired. As
with many high technology companies, risk factors that could cause the Company's
actual results or activities to differ materially from these forward-looking
statements include but are not limited to: world-wide economic and business
conditions in the electronics industry, including the continuing effect of the
Asian economic crisis on demand for the Company's products; competitive factors,
including pricing pressures, technological developments and products offered by
competitors; changes in product and sales mix, and the related effects on gross
margins; the Company's ability to deliver a timely flow of competitive new
products and market acceptance of these products; the availability of parts and
supplies from third party suppliers on a timely basis and at reasonable prices;
inventory risks due to changes in market demand or the Company's business
strategies; changes in effective tax rates; customer demand; currency
fluctuations; the fact that a substantial portion of the Company's sales are
generated from orders received during the quarter, making prediction of
quarterly revenues and earnings difficult; and other risk factors listed from
time to time in the Company's reports filed with the Securities and Exchange
Commission and press releases.

Additional risk factors specific to the Company's current plans and
expectations that could cause the Company's actual results or activities to
differ materially from those stated include: the significant operational issues
the Company faces in executing its strategy in Video and Networking; the timely

introduction of new products scheduled during the Company's fiscal year, which
could be affected by engineering or other development program slippages, the
ability to ramp up production or to develop effective sales channels; the
customer's acceptance of, and demand for, those products; and changes in the
regulatory environment affecting the transition to high-definition television
within the time frame anticipated by the Company.

The Company may make other forward-looking statements from time to time.
Forward-looking statements speak only as of the date made. The Company
undertakes no obligation to publicly release the result of any revisions to
forward-looking statements which may be made to reflect subsequent events or
circumstances or to reflect the occurrence of unanticipated events.

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.

The information required by this item is included on page 34 of the
Company's 1998 Annual Report to Shareholders and is incorporated herein by
reference.

ITEM 6. SELECTED FINANCIAL DATA.

The information required by this item is included on page 35 of the
Company's 1998 Annual Report to Shareholders and is incorporated herein by
reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.

The information required by this item is included on pages 18 through 20 of
the Company's 1998 Annual Report to Shareholders and is incorporated herein by
reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The information required by this item is included on pages 22 through 35 of
the Company's 1998 Annual Report to Shareholders and is incorporated herein by
reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

The information required by this item regarding directors is included under
"Board of Directors" and "Election of Directors" on pages 2 through 9 of the
Company's Proxy Statement dated August 20, 1998.

The information required by this item regarding executive officers is
contained under "Executive Officers of the Company" in Item 1 of Part I hereof.

The information required by Item 405 of Regulation S-K is included under
"Section 16(a) Beneficial Ownership Reporting Compliance" on page 21 of the
Company's Proxy Statement dated August 20, 1998.

ITEM 11. EXECUTIVE COMPENSATION.

The information required by this item is included under "Directors'
Compensation" and "Executive Compensation" on pages 6 through 11 of the
Company's Proxy Statement dated August 20, 1998.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

The information required by this item is included under "Ownership of
Shares" and "Election of Directors" on pages 1 and 4 though 8 of the Company's
Proxy Statement dated August 20, 1998.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

None.

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as part of this report:

(1) Financial Statements.

The following documents are included in the Company's 1998 Annual Report to
Shareholders at the pages indicated and are incorporated herein by reference:

PAGE IN 1998 ANNUAL
REPORT TO SHAREHOLDERS
----------------------

Independent Auditors' Report........................... 21
Consolidated Statements of Operations.................. 22
Consolidated Balance Sheets............................ 23
Consolidated Statements of Cash Flows.................. 24
Consolidated Statements of Shareholders' Equity........ 25
Notes to Consolidated Financial Statements............. 26 through 34

(2) Financial Statement Schedules.

No financial statement schedules are required to be filed with this
report.

Separate financial statements for the registrant have been omitted because
the registrant is primarily an operating company and the subsidiaries included
in the consolidated financial statements are substantially totally held. All
subsidiaries of the registrant are included in the consolidated financial
statements. Summarized financial information for 50 percent or less owned
persons in which the registrant has an interest, and for which summarized
financial information must be provided, is included in the Notes to Consolidated
Financial Statements appearing in the Company's Annual Report to Shareholders.

(3) Exhibits:

(3)(i) Restated Articles of Incorporation, as amended. Incorporated by
reference to Exhibit (3) of Form 10-Q dated September 28, 1990, SEC
File No. 1-4837.
(ii) Bylaws, as amended. Incorporated by reference to Exhibit (3) of Form
10-K dated August 21, 1997, SEC File No. 1-4837.
(4)(i) Indenture dated as of November 16, 1987, as amended by First
Supplemental Indenture Dated as of July 13, 1993, covering the
registrant's 7 1/2% notes due August 1, 2003,and the registrant's
7 5/8% notes due August 15, 2002. Indenture incorporated by reference
to Exhibit 4(i) of Form 10-K dated August 22, 1990, SEC File No.
1-4837.
(ii) Pursuant to Item 601(b)(4)(iii) of Regulation S-K, the registrant agrees
to furnish to the Commission upon request copies of agreements
relating to other indebtedness.
+(10)(i) 1982 Stock Option Plan, as amended. Incorporated by reference to Exhibit
10(iii) of Form 10-K dated August 22, 1989, SEC File No. 1-4837.

+(ii) Stock Incentive Plan, as amended. Incorporated by reference to Exhibit
10(ii) of Form 10-Q dated April 9, 1993, SEC File No. 1-4837.
+(iii) Restated Annual Performance Improvement Plan. Incorporated by reference
to Exhibit 10(i) of Form 10-Q dated April 9, 1993, SEC File No.
1-4837.
+(iv) Restated Deferred Compensation Plan. Incorporated by reference to
Exhibit 10(i)of Form 10-Q dated December 20, 1984, SEC File No.
1-4837.
+(v) Retirement Equalization Plan, Restatement, Incorporated by reference to
Exhibit (10) (v) of Form 10-K dated August 20, 1996, SEC File No.
1-4837.
+(vi) Indemnity Agreement entered into between the Company and its named
officers and directors. Incorporated by reference to Exhibit 10(ix) of
Form 10-K dated August 18, 1996, SEC File No. 1-4837.
+(vii) Form of Executive Severance Agreement entered into between the Company
and its named officers. Incorporated by reference to Exhibit 10(ix) of
Form 10-K dated August 9, 1995, SEC File No. 1-4837.
+(viii) Executive Compensation and Benefits Agreement (Jerome J. Meyer) dated as
of October 24, 1990. Incorporated by reference to Exhibit 10(ii) of
Form 10-Q dated December 21, 1990, SEC File No. 1-4837.
+(ix) Amendment to Supplemental Executive Retirement Agreement (Jerome J.
Meyer). Incorporated by reference to Exhibit 10(ii) of Form 10-Q dated
October 7, 1994, SEC File No. 1-4837.
+(x) Amendment to Supplemental Executive Retirement Agreement (Jerome J.
Meyer) dated June 16, 1998.
+(xi) Executive Compensation and Benefits Agreement (Carl W. Neun) dated as of
March 29, 1993. Incorporated by reference to Exhibit 10(xiv) of Form
10-K dated August 11, 1994, SEC File No. 1-4837.
+(xii) Amendment to Supplemental Executive Retirement Agreement (Carl W. Neun)
dated September 24, 1997. Incorporated by reference to Exhibit 10(i)
of Form 10-Q dated January 13, 1998, SEC File No. 1-4837.
(xiii) Rights Agreement dated as of August 16, 1990. Incorporated by reference
to Exhibit 1 of Form 8-K dated August 27, 1990, SEC File No. 1-4837.
+(xiv) Non-Employee Directors' Deferred Compensation Plan, 1995 Restatement
dated July 1, 1995. Incorporated by reference to Exhibit 10 (xv) of
Form 10-K dated August 9, 1995, SEC File No. 1-4837.
+(xv) Non-Employee Directors Stock Compensation Plan. Incorporated by
reference to Exhibit 10(xvi) of Form 10-K dated August 9, 1995, SEC
File No. 1-4837.
+(xvi) Supplemental Executive Retirement Plan for named executive officers
dated September 26, 1996. Incorporated by reference to Exhibit 10(xvi)
of Form 10-K dated May 31, 1997, SEC File No. 1-4837.

(13) Portions of the 1998 Annual Report to Shareholders that are incorporated
herein by reference.
(21) Subsidiaries of the registrant.
(23) Independent Auditors' Consent.
(24) Powers of Attorney.
(27) Financial Data Schedule.

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

+ Compensatory Plan or Arrangement

(b) No reports on Form 8-K have been filed during the last quarter of
the period covered by this Report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.

TEKTRONIX, INC.

By: /s/ CARL W. NEUN
-----------------------------------------
Carl W. Neun,
SENIOR VICE PRESIDENT AND CHIEF FINANCIAL
OFFICER

Dated: August 13, 1998

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.

SIGNATURE CAPACITY DATE
- ------------------------------ -------------------------- -------------------

/s/ JEROME J. MEYER*
- ------------------------------ Chairman, Chief Executive August 18, 1998
Jerome J. Meyer Officer, and President

Senior Vice President and
/s/ CARL W. NEUN Chief Financial Officer,
- ------------------------------ Principal Financial and August 13, 1998
Carl W. Neun Accounting Officer

/s/ PAULINE LO ALKER*
- ------------------------------ Director August 18, 1998
Pauline Lo Alker

/s/ A. GARY AMES*
- ------------------------------ Director August 18, 1998
A. Gary Ames

/s/ GERRY B. CAMERON*
- ------------------------------ Director August 18, 1998
Gerry B. Cameron

/s/ DAVID N. CAMPBELL*
- ------------------------------ Director August 18, 1998
David N. Campbell

/s/ PAUL C. ELY, JR.*
- ------------------------------ Director August 18, 1998
Paul C. Ely, Jr.

SIGNATURE CAPACITY DATE
- ------------------------------ -------------------------- -------------------

/s/ A. M. GLEASON*
- ------------------------------ Director August 18, 1998
A. M. Gleason

/s/ MERRILL A. MCPEAK*
- ------------------------------ Director August 18, 1998
Merrill A. McPeak

/s/ WILLIAM D. WALKER*
- ------------------------------ Director August 18, 1998
William D. Walker

*By: /s/ JAMES F. DALTON
-------------------------
James F. Dalton August 18, 1998
AS ATTORNEY-IN-FACT