What is the purpose of the 2006 Variable Compensation Plan?

The 2006 Variable Compensation Plan (2006 VC Plan) is designed to incentivize executive officers and certain eligible senior employees by offering variable compensation payments based on the company's and individual business unit's performance in the prior year. These payments are calculated as a percentage of the employee's base annual salary, with the percentage (VC Factor) varying based on responsibility and performance.

How are Restricted Stock Units (RSUs) structured for executives and directors?

For executive officers, including the CEO, RSUs will vest over two years, with 50% subject to time-based vesting and the other 50% subject to performance-based vesting tied to criteria consistent with the 2006 VC Plan. For non-employee directors, RSUs will vest fully after one year from the grant date, replacing their scheduled stock option grants.

What is Teradyne's intention regarding its convertible senior notes?

Teradyne's Board of Directors has authorized management to repurchase up to $300 million of its outstanding 3.75% Convertible Senior Notes due October 15, 2006. This action, which can be executed through various market mechanisms, represents the full remaining outstanding amount of these notes and suggests a proactive approach to managing its debt obligations.

What change has been made to Teradyne's Corporate Governance Guidelines?

Teradyne has amended its Corporate Governance Guidelines to implement a 'majority of votes withheld' policy for director elections. Under this new policy, any director nominee who receives more 'withheld' votes than 'for' votes in an uncontested election must promptly tender their resignation. The Board will then decide whether to accept the resignation.

TER 8-K: Material Agreements

Summary

Teradyne, Inc. (TER) filed an 8-K on January 30, 2006, detailing significant changes and approvals made by its Board of Directors on January 25th and 26th, 2006. Key among these is the approval of the 2006 Variable Compensation Plan, which outlines performance-based bonuses for executive officers and senior employees, tied to business unit performance and a percentage of base salary. The plan features flexible VC Factors, potentially ranging from 10% to 200% of base salary, with performance evaluation considering profitability, market share, and strategic goals. Additionally, the filing announces the approval of Restricted Stock Unit (RSU) grant agreements for both executive officers and non-employee directors. Executive RSU awards will vest over two years, with 50% time-based and 50% performance-based, aligning executive incentives with company performance. Directors' RSUs will vest after one year. The company also approved the repurchase of up to $300 million of its 3.75% Convertible Senior Notes due October 15, 2006, indicating a strategic move to manage its debt. Finally, an amendment to the Corporate Governance Guidelines was approved, introducing a 'majority of votes withheld' policy for director elections, requiring resignation offers from directors who fail to receive majority support.

Key Highlights

1Approval of the 2006 Variable Compensation Plan for executive officers and senior employees, with bonuses tied to business unit performance and base salary.
2Introduction of Restricted Stock Unit (RSU) grants for executive officers, featuring a two-year vesting schedule with both time-based and performance-based components.
3Granting of Restricted Stock Units to non-employee directors, with a one-year vesting period, replacing their previously scheduled stock option grants.
4Authorization for the repurchase of up to $300 million of 3.75% Convertible Senior Notes due October 15, 2006.
5Amendment to Corporate Governance Guidelines adopting a policy requiring resignation offers from directors who receive a majority of 'withheld' votes in uncontested elections.
6Disclosure of specific base salaries for named executive officers for 2006, including adjustments for the CEO.

TERADYNE, INC 8-K Report, Material Agreement (Jan 30, 2006)

Summary

Key Highlights

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