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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(MARK ONE)

For the fiscal year ended December 31, 2003

OR

Commission file number 1-6462

TERADYNE, INC.

(Exact Name of Registrant as Specified in Its Charter)

Registrant’s telephone number, including area code: (617) 482-2700

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

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.

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 the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or in any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12(b-2).

Yes x    No ¨

The aggregate market value of the voting stock held by nonaffiliates of the registrant as of June 29, 2003 was $3.2 billion based upon the composite closing price of the registrant’s Common Stock on the New York Stock Exchange on that date.

The number of shares outstanding of the registrant’s only class of Common Stock as of February 27, 2004 was 193,908,836 shares.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s proxy statement in connection with its 2004 annual meeting of shareholders are incorporated by reference into Part III.

TERADYNE, INC.

FORM 10-K

PART I

Item 1:    Business

Teradyne, Inc. is a leading supplier of automatic test equipment and a leading provider of high performance interconnection systems.

Teradyne’s automatic test equipment products include systems that:

Teradyne’s interconnection systems products and services (“Connection Systems”) include:

Broadband Test Systems and Diagnostic Solutions have been combined into “Other Test Systems” for purposes of reporting Teradyne’s operating segments. For financial information concerning Teradyne’s operating segments, see “Note T: Operating Segment and Geographic Information” in Notes to Consolidated Financial Statements.

Statements in this Annual Report on Form 10-K which are not historical facts, so called “forward looking statements,” are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. Investors are cautioned that all forward looking statements involve risks and uncertainties, including those detailed in Teradyne’s filings with the Securities and Exchange Commission. See also “Item 7: Management’s Discussion and Analysis of Financial Condition and Results of Operations—Certain Factors That May Affect Future Results” and “Note E: Risks and Uncertainties” in Notes to Consolidated Financial Statements.

Products

Semiconductor Test Systems

Teradyne produces Semiconductor Test Systems which test a wide variety of “system on a chip” (“SOC”) semiconductor devices during the manufacturing process. These devices contain integrated analog, digital and memory functions which allow an entire system or subsystem to reside on a single device or “chip.” These chips are used in automotive, communications, consumer, computer and electronic game applications, among others. Semiconductor Test Systems are sold to Integrated Device Manufacturers (“IDMs”), Fabless companies and to subcontractors (“Subcons”). Subcons provide test and assembly services for the final packaged devices to both Fabless companies and IDMs. Fabless companies perform the design of integrated circuits without manufacturing capabilities, and use Foundries for wafer manufacturing and Subcons for test and assembly. These customers use Teradyne’s Semiconductor Test Systems to:

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with the overall benefit of comprehensively testing advanced performance devices while reducing their total costs associated with testing. The systems work in both wafer probe test and final package test applications.

SOC devices span a huge range of functionality, from very simple low-cost devices such as operational amplifiers or voltage regulators to complex digital signal processors and microprocessors. Teradyne offers a suite of test solutions to cover this range in the most economical way for each segment. The main test equipment products are described below:

The J750 and J750K test systems are designed to address the highest volume semiconductor devices. Devices such as microcontrollers are at the heart of almost every consumer electronics product, from small appliances to automotive engine controllers. These devices are produced in enormous quantities. The lowest cost of test at very high production throughput rates is essential to meeting the economic requirements in these markets. Teradyne’s J750 test systems combine compact packaging, high throughput and ease of production test. These benefits are possible due to the high level of integration in the design. A single circuit board in the J750 test system provides up to 64 digital input/output channels. This innovative approach eliminated the traditional “mainframe,” creating a “tester in the test head,” or “zero footprint design.” This approach allows the test system to be placed directly on top of a wafer prober, without the need for any floor space for the tester itself. The J750 has met with great success in the marketplace, and has an installed base of over 1,300 systems. The J750 platform technology also has been used to create Teradyne’s IP750 Image Sensor test system. The IP750 is focused on testing image sensor devices used in digital cameras and other imaging products.

The Catalyst and Catalyst-Tiger test systems are designed to test a broad range of higher performance SOC devices. The Catalyst is designed to test devices requiring data rates up to 400 Mega bytes per second (“bps”) with a broad range of analog performance. Over 1,200 Catalyst systems are in use today at IDMs and Subcons testing integrated circuits for DVD players, wireless cellular phones, networking appliances, telecommunications systems, computer peripherals, and many other applications.

The “Tiger” version of Catalyst provides similar analog capability, but extends the digital performance up to 3.2 Giga bps on up to 1,264 input/output channels. This extended digital performance enables complete functional testing of the world’s most demanding SOC and high-speed logic integrated circuits, used in computer graphics, personal computer chip set, microprocessor, and networking applications. The Tiger is installed at both IDMs and Subcons around the world.

Teradyne’s most recently introduced test system, the FLEX, is the beginning of the next generation of high throughput general purpose SOC test systems and combines the integration and parallelism of the J750 with the synchronization and instrument flexibility of the Catalyst. FLEX employs a unique “SOC tester per pin” architecture bringing a higher degree of parallelism to mixed signal and SOC testing. By testing more functions and more devices at the same time (“in parallel”) FLEX increases the production efficiency of SOC device testing. The core of FLEX design employs a “universal slot” concept, which provides the user the flexibility to install any instrument into any of the tester “slots.” FLEX is similar to the J750 in that the instrumentation tends to be implemented on self contained circuit boards that plug into the test head. This modular design and the universal slot architecture adds a level of adaptability and flexibility to production testing which is new to the industry. FLEX currently tests a range of devices in the consumer electronics area, including automotive, higher performance microcontrollers, and power control. FLEX will be expanded to test wireless, other integrated mixed signal device areas, and other major segments of the SOC device market over time. The system is also designed with an open-architecture, which allows customers and third party companies to add test capability to the system.

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Connection Systems

Connection Systems is a leader in high-performance connection systems, designing and manufacturing backplane systems, printed circuit boards and the industry’s leading high-speed, high-density connectors. Connection Systems helps Original Equipment Manufacturers (“OEMs”) solve system design challenges with integrated interconnect solutions for application in the networking, communications, storage, computer server, and medical equipment markets. Connection Systems’ technology can be found in such products as internet routers, computer servers, mass data storage systems and telecommunication switches.

Advanced printed circuit board fabrication capabilities, leading connector technology and decades of backplane assembly expertise gives Connection Systems unique knowledge and experience with the entire signal transmission path. Teradyne believes this experience enables Connection Systems to differentiate itself in the market by providing integrated solutions for backplane systems. Connection Systems’ engineers are involved early in their customers’ product design process to help them get to market quickly with the optimum solution for price and performance. Engineering support, manufacturing and program management is available worldwide at Connection Systems’ locations in Asia, Europe and North America to support both new product introductions and full-scale volume production.

Connection Systems’ products and services include a broad range of high-speed, high-density connectors covering multiple applications within a single system. A suite of backplane connectors, including GbX^™, VHDM-HSD^™ and VHDM^® are utilized for traditional right-angle interface of printed circuit boards. For parallel connection of printed circuit boards, Connection Systems offers NeXLev^®, VHDM Stacker, and HDM^® Stacker. These products allow designers to relocate high pin count devices onto mezzanine cards to simplify board routing. In 2003, Connection Systems introduced the industry’s first modular optical interconnect, HD-Optyx^™. Connection Systems also offers co-planar, power, guidance and cabling solutions, and will work with customers to develop custom products for specific applications.

Connection Systems’ printed circuit board capabilities are among the industry’s most advanced, employing innovative solutions, such as improving routing to remove layers, or back drilling and blind or buried vias to produce enhanced signal quality and/or lower cost. Connection Systems was the first printed circuit board facility to be qualified to the military specification MIL-PRF-310321A and 2, and delivers boards for mission critical applications such as radar systems and the Patriot Missile.

Assembly Test Systems

The central element of almost every electronic product is a printed circuit board assembly. A circuit board assembly includes all the components and their interconnections that cause the board to perform its intended functions. As more and more product functionality is packed into smaller packages, such as personnel digital assistants (“PDAs”), phone handsets and laptop computers, both the circuit boards and their components become increasingly complex. The circuit board assembly manufacturing process is also complex and demands a number of test and inspection steps. Teradyne’s assembly test equipment is used in the manufacturing process to ensure high production yields, to maintain overall product quality, to diagnose faults quickly where and when they occur, and to reduce total manufacturing cost. The Teradyne assembly test product range includes the following:

In-Circuit Test Systems

In-circuit test systems examine the assembled and soldered printed circuit board for proper construction under both power-off and power-on conditions. Defective components and solder joints are identified quickly and precisely. High throughput, relatively low-cost fault identification and diagnostic accuracy are valued features which cause in-circuit testers to be used universally in virtually every electronics production line. Teradyne’s in-circuit products support a full range of circuit board test applications, including high-volume production, selective or sample test, prototype testing and final or system test. Accordingly, Teradyne offers a

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wide variety of capabilities and options with its Spectrum 8000-series and TestStation product lines. The most recent option added to the Test Station product is SafeTest Technology. This capability allows Teradyne to test the increasing volume of low-voltage, battery-operated electronic assemblies found in products such as laptops and PDAs, with no risk of damage to the product-under-test. Teradyne believes that only its products currently have this capability. Teradyne has begun to receive orders from new customers on the basis of this new capability.

Imaging Inspection Systems

As circuit boards become increasingly dense and complex, achieving the electrical contact required for the traditional in-circuit test method is becoming more difficult, time-consuming and expensive. “Loss of (electrical) access” is a primary driver behind the increasing popularity of imaging inspection systems, which examine the circuit board for physical qualities including correct component presence and orientation, the absence of electrical opens and solder quality. Teradyne’s AXI imaging inspection systems employ automated x-ray inspection (“AXI”), which captures an x-ray image of the board. Teradyne believes AXI is the only technology that is capable of analyzing hidden solder-related defects. Teradyne’s Xstation 4000 AXI product line offers surface mount technology line-speed throughput with high resolution using x-ray transmission technology.

Military/Aerospace Test & Diagnostics

The Mil/Aero test product line applies Teradyne’s expertise in the functional test and diagnosis of assemblies of electronics to the military and commercial aerospace markets. These solutions come in the form of systems, instruments, and software products.

Teradyne’s traditional focus in the military market has been to provide test and diagnostic solutions for factory and depot level maintenance and repair activities. These solutions are typically deployed in stable, fixed environments with an emphasis on fast, accurate diagnostics down to a repairable component on a replaceable unit. Teradyne has recently begun to exploit architectural components that allow the repackaging of Assembly Test Systems solutions into smaller, lighter, ruggedized implementations enabling Teradyne to expand its served markets to include the mobile environments of the military market. The requirements here are to isolate failures down to the smallest replaceable unit in a mobile, harsh environment. The failed unit is then passed back to the depot or factory for further diagnosis down to the repairable component before being cycled back into stock. In the commercial aerospace market, Teradyne utilizes the same functional test and diagnostics capabilities that apply to military markets to test the increasingly complex electronic functions found in today’s aircraft.

The success of Assembly Test Systems’ Mil/Aero product line has been demonstrated by recent design wins on major Department of Defense programs such as the F-35 Joint Strike Fighter, the B1-B Bomber, C-17, and RT-CASS, as well as with aerospace customers such as Boeing. Teradyne believes these design wins lay the foundation for significant growth potential, as Teradyne is serving much larger markets than in the past.

Diagnostic Solutions

Diagnostic Solutions provides electronic test and diagnostic systems to the automotive OEM’s and their major subcontractors. The systems are used throughout the vehicle’s lifecycle from design through manufacture to after sale service and consist of highly integrated software and hardware components. As the number and complexity of electronic systems and embedded software proliferate in vehicles, the ability to manufacture and service those vehicles becomes increasingly dependent on electronic diagnostic equipment. Diagnostic Solutions’ products fall into two categories:

Vehicle Configuration and Test Solutions (“VCATS”)

Diagnostic Solution’s VCATS products are used on automotive and major automotive subassembly production lines. Diagnostic Solution’s connects to the vehicle to test and program (or “configure”) the electronic

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systems on vehicles. These vehicle electronic systems include engine control modules and subsystems such as braking, navigation and air conditioning. Diagnostic Solutions is also able to link to an OEM’s manufacturing control system in order to provide statistical quality reports to operators and management. In addition, Diagnostic Solutions also provides VCATS solutions to subcontractors to the OEMs.

OEM Service Diagnostics

OEM dealer service technicians use Diagnostic Solutions’ systems to find faults in vehicles in use by their customers, and to reduce OEM warranty costs. Historically, the focus has been on fixing faults in the service bay, but is growing to include constant monitoring of the vehicle to predict and prevent failure.

Both VCATS and OEM Service Diagnostics products utilize Diagnostic Solutions’ “GRADE-X” authoring software enabling the manufacturing and service phases of vehicle development. Diagnostics for electronic modules and systems used on Diagnostic Solutions’ customers’ vehicles can be developed and written using the GRADE-X authoring software. The actual diagnosis of a customer’s vehicle occurs in the OEM dealer’s service bay utilizing a runtime portion of the software to facilitate the service and repair of the vehicle.

Broadband Test Systems

Broadband Test provides test systems for voice and digital subscriber line (“DSL”) telephone networks and high-speed internet test products for cable networks. Teradyne’s Celerity systems are equipped on approximately 30 million subscriber lines to qualify DSL services provided by major telephone companies. Testing more than 120 million access lines worldwide for many of the world’s largest telecommunications companies, Teradyne’s 4TEL is designed to reduce operating costs by accurately detecting and identifying faults within the copper access network and providing a dispatch statement to customer service representatives.

Teradyne products within the Broadband Test Systems market include:

4TEL & 4TEL II Voice Service Test Systems

Teradyne’s 4TEL voice service test system automates the process to accurately identify and isolate faults within the copper access network including the “last mile of copper” between the home to the central office exchange. The 4TEL II voice service test system is a software upgrade to 4TEL that uses expert system technology to further isolate faults primarily between the consumers’ premises and outside copper plant without the need to install a remote isolation device (“RID”) at the consumers’ premises.

The 4TEL and 4TEL II systems enable telephone companies to automate customer care and field repair processes resulting in substantial reductions in network maintenance and operating costs.

Celerity ^TM DSL Test System

Telephone companies need to know which telephone lines between the central office and the consumer are qualified for broadband DSL service before committing service to consumers. Existing cable records are typically not sufficient. Teradyne’s Celerity uses accurate insertion loss, length and load coil detection, to qualify millions of lines in hours for DSL service. The system augments the phone company’s system showing which lines are qualified, which lines require conditioning, and which lines are disqualified. This information is then used to support DSL point-of-sale and marketing efforts. Celerity finds more DSL-ready lines in the network that can be sold to residential and small business customers. It also helps reduce the cost of provisioning DSL through automation of the loop qualification process and reduction of field dispatches.

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Celerity provides reactive, on-demand testing for in-service DSL lines to support fault isolation and dispatch. After DSL service is installed, the requirement is to accurately determine whether the copper loop has a problem that requires a repair. Line test systems in use today for voice service normally cannot detect certain DSL-related problems, affecting physical faults and may incorrectly conclude that faults affecting voice also affect DSL. The Celerity system enables a repair technician or call center receptionist to determine the cause of a DSL-related problem by identifying both the type of problem on the line and the dispatch location of the fault. This capability reduces operating costs and decreases DSL maintenance costs.

NetFlare ^TM for Cable High-speed Data (“HSI”) Service Assurance

NetFlare’s patented design quickly performs the complex diagnostics required to identify and locate cable HSI performance and connectivity problems. End-to-end performance is tested from the subscriber’s perspective identifying specific jurisdictions operating below service expectations. Connectivity problems in the access network are located for proper dispatch to repair. By automating otherwise manual troubleshooting procedures, operating costs can be reduced and consistent problem handling can be ensured for each subscriber reported problem.

NetFlare is a server-based web solution requiring only a web browser for access, thereby eliminating the overhead of distributing software to end user desktops and laptops. Data generated by the NetFlare proprietary IP test suite, combined with industry standard cable modem data, provides for accurate analysis of service faults and dispatch for repair.

Broadband access to the internet is provided through telephone/DSL, cable, or wireless technologies. While DSL is a global leader, cable is the dominant supplier in the U.S. In the race to acquire broadband subscribers, a major issue for cable providers is cost effective management of the field installation and repair workforce. NetFlare went into trial in the latter half of 2003 with the Service Verification application to address this problem in the cable market.

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Summary of Net Revenue by Operating Segment

Teradyne’s four principal operating segments accounted for the following percentages of consolidated net revenue for each of last three years:

Investor Information

Teradyne, a Massachusetts corporation incorporated on September 23, 1960, is subject to the informational requirements of the Securities Exchange Act of 1934 (the “Exchange Act”). Therefore, Teradyne files periodic reports, proxy statements and other information with the Securities and Exchange Commission (the “SEC”). Such reports, proxy statements and other information may be obtained by visiting the Public Reference Room of the SEC at 450 Fifth Street, NW, Washington, DC 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding issuers that file electronically.

You can access financial and other information, including charters for Teradyne’s Audit Committee, Compensation Committee and Nomination and Corporate Governance Committee and Teradyne’s Corporate Governance Guidelines and Standards of Business Conduct (“Ethics Policy”), by clicking the Investors link on Teradyne’s website at www.teradyne.com. Teradyne makes available, free of charge, copies of its SEC filings, including its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act through Teradyne’s website as soon as reasonably practicable after filing such material electronically or otherwise furnishing it to the SEC.

Sales and Distribution

Prices for Teradyne’s systems can reach $3 million or more. In 2003, 2002, and 2001 no single customer accounted for more than 10% of Teradyne’s consolidated net revenue. In each of the years, 2003, 2002, and 2001, Teradyne’s three largest customers in aggregate accounted for 21%, 23%, and 24% of consolidated net revenue, respectively.

Direct sales to United States government agencies accounted for less than 2% of consolidated net revenue in 2003, 2002 and 2001. Approximately 12% and 10% of Assembly Test Systems revenue in 2003 and 2002, respectively, was to United States government agencies and 28%, 15% and 27% of Assembly Test Systems revenue in 2003, 2002 and 2001, respectively, was to customers who are government contractors.

Teradyne has sales and service offices located throughout North America, Asia, and Europe, as Teradyne’s customers outside the United States are located primarily in these geographic areas. Teradyne sells in these areas predominantly through a direct sales force. Although Teradyne conducts manufacturing activities outside the U.S. as detailed in Item 2—Properties, Teradyne’s manufacturing activities are primarily conducted in the United States. Sales to customers outside the United States accounted for 63% of consolidated net revenue in 2003, 54% in 2002, and 49% in 2001. Sales to customers located in Singapore were 11% of consolidated net revenue in 2003, 8% of consolidate net revenue in 2002 and 4% of consolidated net revenue in 2001. Sales to customers located in Taiwan were 9% of consolidated net revenue in 2003 and 2002 and 10% of consolidated net revenue in 2001. Sales are attributed to geographic areas based on the location of the customer site.

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Teradyne is subject to the inherent risks involved in international trade, such as:

Teradyne attempts to reduce the effects of currency fluctuations by hedging those currency exposures associated with certain assets and liabilities denominated in non-functional currencies and by conducting some of its international transactions in U.S. dollars or dollar equivalents. See also “Item 7A. Quantitative and Qualitative Disclosures About Market Risks” and “Note F: Financial Instruments” in Notes to Consolidated Financial Statements.

Competition

Teradyne faces significant competition throughout the world in each of its operating segments. Some of Teradyne’s competitors have substantially greater financial and other resources to pursue engineering, manufacturing, marketing and distribution of their products. Teradyne also faces competition from internal suppliers at several of its customers. Some of Teradyne’s competitors have introduced or announced new products with certain performance characteristics which may be considered equal or superior to those Teradyne currently offers. Teradyne expects its competitors to continue to improve the performance of their current products and to introduce new products or new technologies that provide improved cost of ownership and performance characteristics. New product introductions by competitors could cause a decline in revenues or loss of market acceptance of Teradyne’s products. Moreover, increased competitive pressure could lead to intensified price based competition, which could materially adversely affect Teradyne’s business, financial condition and results of operations.

Backlog

At December 31, 2003 and 2002, Teradyne’s backlog of unfilled orders in each of its four principal operating segments was as follows:

The increase in Semiconductor Test Systems backlog from 2002 to 2003 of $94 million was due to a sharp increase in the demand for testers at the end of 2003. The decrease in Connection Systems backlog from 2002 to 2003 of $29 million was primarily due to a decrease in the storage market as a result of Teradyne’s decision to exit the lower margin electronic manufacturing services (“EMS”) business. Of the backlog at December 31, 2003, approximately 99% of the Semiconductor Test Systems backlog, 99% of the Connection Systems backlog, 84% of Assembly Test Systems backlog, and 93% of the Other Test Systems backlog is expected to be delivered in 2004. Generally, Teradyne’s backlog policy requires delivery of products and services within twelve months.

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Customers may delay delivery of products or cancel orders suddenly and without significant notice, subject to possible cancellation penalties. Due to possible customer changes in delivery schedules and cancellation of orders, Teradyne’s backlog at any particular date is not necessarily indicative of the actual sales for any succeeding period. Delays in delivery schedules and/or cancellations of backlog during any particular period could have a material adverse effect on Teradyne’s business, financial condition, and results of operations.

Raw Materials

Teradyne’s products require a wide variety of electronic and mechanical components from 3,000 suppliers of which 47 represent 80% of the spending. Teradyne can experience occasional delays in obtaining timely delivery of certain items. Additionally, Teradyne could experience a temporary adverse impact if any of its sole source suppliers ceased to deliver products. Approximately 30% of material purchases require some custom work where having multiple suppliers would be cost prohibitive. Any prolonged inability to obtain adequate supplies, or any other circumstances that would require Teradyne to seek alternative sources of supply could have a material adverse effect on its business, financial condition, and results of operations.

Patents and Licenses

Teradyne’s development of its products, both hardware and software, is based in significant part on proprietary information and technology. Teradyne protects its rights in proprietary information and technology through various methods, such as:

However, these protections might not be effective in all circumstances. Competitors might independently develop similar technology or exploit Teradyne’s proprietary technology and/or information in countries where Teradyne lacks enforceable intellectual property rights (“IP”) or enforcement of such rights through the legal system provides an insufficient deterrent. Also, IP protections can be invalidated through legal processes. While Teradyne does not believe that any single piece of intellectual property or proprietary rights is essential to its business, if a significant portion of Teradyne’s intellectual property or proprietary rights is invalidated or ineffective, Teradyne’s business could be materially adversely affected.

Employees

As of December 31, 2003, Teradyne employed approximately 6,100 people. Since the inception of Teradyne’s business, there have been no work stoppages or other labor disturbances. Teradyne has no collective bargaining contracts.

Engineering and Development Activities

The highly technical nature of Teradyne’s products requires a large and continuing engineering and development effort. Engineering and development expenditures were $254.6 million in 2003, $293.9 million in 2002 and $287.3 million in 2001. These expenditures amounted to approximately 19% of consolidated net revenue in 2003, 24% in 2002 and 20% in 2001.

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Environmental Affairs

Teradyne is subject to various federal, state, and local government laws and regulations relating to the protection of employee health and safety and the environment. Teradyne accrues for all known environmental liabilities when it becomes probable that Teradyne will incur cleanup costs and those costs can reasonably be estimated. The amounts accrued do not cover sites that are in the preliminary stages of investigation. Estimated environmental costs are not expected to materially affect the financial position or results of Teradyne’s operations in future periods. However, estimates of future costs are subject to change due to protracted cleanup periods and changing environmental remediation laws and regulations.

In 2001, Teradyne was designated as a “potentially responsible party” (“PRP”) at a clean-up site in Los Angeles, California. This claim arises out of Teradyne’s acquisition of Perception Laminates, Inc. in August 2000. Prior to that date, Perception Laminates had itself acquired certain assets of Alco Industries, Inc. under an asset purchase agreement dated July 30, 1992. Neither Teradyne nor Perception Laminates have ever conducted any operations at the Los Angeles site. Teradyne has asked the State of California to drop the PRP designation, but California has not yet agreed to do so. Management does not believe that the outcome of this matter will have a material adverse effect on Teradyne’s financial position or results of operations but there can be no assurance that any such outcome would not have a material adverse effect on Teradyne’s financial position or results of operations.

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EXECUTIVE OFFICERS OF THE COMPANY

The following table sets forth the names of all executive officers of Teradyne and certain other information relating to their positions held with Teradyne and other business experience. Executive officers of Teradyne do not have a specific term of office but rather serve at the discretion of the Board of Directors.

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Item 2:    Properties

The following table provides certain information as to Teradyne’s principal general offices and manufacturing facilities.

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Item 3:    Legal Proceedings

After the August 2000 acquisition of Herco Technology Corp. and Perception Laminates, Inc. the former owners of those companies filed a complaint on September 5, 2001 against Teradyne and two of its executive officers. The case is now pending in Federal District Court, in San Diego, California. Teradyne and the two individual defendants filed a motion to dismiss the complaint in its entirety. The court granted the motion in part, and the only remaining claims were that the sale of Teradyne’s common stock to the former owners violated certain California securities statutes and common law and that Teradyne breached certain contractual obligations in the agreements relating to the acquisitions. Teradyne’s subsequent motion for partial summary judgment with respect to the breach of contract claims was granted on November 7, 2002. On December 9, 2002, the plaintiffs filed a motion asking the court to reconsider its summary judgment ruling or, alternatively, for certification under Rule 54(b) which would grant the plaintiffs leave to appeal both the Court’s ruling regarding dismissal of claims and its ruling granting summary judgment to the Ninth Circuit Court of Appeals. Teradyne opposed these motions. On April 22, 2003, the Court denied the plaintiffs’ motion for reconsideration and the plaintiffs’ request for certification under Rule 54(b). A small portion of the original complaint relating to alleged fraud in connection with setting the transaction price remains pending before the District Court. Teradyne has answered and denied all liability. Discovery proceedings are continuing.

Teradyne and two of its executive officers were named as defendants in three purported class action complaints that were filed in Federal District Court, Boston, Massachusetts, in October and November 2001. The court consolidated the cases and has appointed three lead plaintiffs. On November 8, 2002, plaintiffs filed and served a consolidated amended class action complaint. The complaint alleges, among other things, that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by making, during the period from July 14, 2000 until October 17, 2000, material misrepresentations and omissions to the investing public regarding Teradyne’s business operations and future prospects. The complaint seeks unspecified damages, including compensatory damages and recovery of reasonable attorneys’ fees and costs. Teradyne filed a motion to dismiss all claims asserted in the complaint on February 7, 2003. On April 9, 2003, the lead plaintiffs filed a memorandum in opposition to Teradyne’s motion to dismiss. On Ma