GENRAD INC, DEF 14A, 1996-04-08

GENRAD INC
DEF 14A, 1996-04-08
INSTRUMENTS FOR MEAS & TESTING OF ELECTRICITY & ELEC SIGNALS

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<PAGE> 1

SCHEDULE 14A INFORMATION

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

FILED BY THE REGISTRANT /X/ FILED BY A PARTY OTHER THAN THE REGISTRANT / /

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

Check the appropriate box:
/ / Preliminary Proxy Statement
/X/ Definitive Proxy Statement
/X/ Definitive Additional Materials
/ / Soliciting Material Pursuant to [Section].240.14a-11(c) or
[Section].240.14a-12
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))

GenRad, Inc.
(Name of Registrant as Specified In Its Charter)

GenRad, Inc.
(Name of Person(s) Filing Proxy Statement)

PAYMENT OF FILING FEE (CHECK THE APPROPRIATE BOX):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.

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

2) Aggregate number of securities to which transaction applies:

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

4) Proposed maximum aggregate value of transaction:

5) Total fee paid:

/ / Fee paid previously with preliminary materials.

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

1) Amount Previously Paid:

2) Form, Schedule or Registration Statement No.:

3) Filing Party:

4) Date Filed:

- --------------------------------------------------------------------------------
<PAGE> 2

GENRAD, INC.

300 BAKER AVENUE
CONCORD, MASSACHUSETTS 01742-2174

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 9, 1996

The Annual Meeting of Shareholders of GenRad, Inc. (the "Company") will be
held on Thursday, May 9, 1996 at 11:00 a.m. at the Bank of Boston auditorium,
Street Floor, 100 Federal Street, Boston, Massachusetts, for the following
purposes:

1. To elect Russell A. Gullotti and William G. Scheerer to the Board of
Directors to serve as Class III Directors for three-year terms.

2. To consider and act upon a proposal to amend the Company's 1991 Equity
Incentive Plan (the "Incentive Plan") by increasing the number of shares
of Common Stock available for issuance under the Incentive Plan by
920,000 shares, the options for which the Company has granted (subject
to shareholder approval) to four officers of the Company.

3. To consider and act upon a proposal to amend the Incentive Plan by
increasing the number of shares of Common Stock available for issuance
under the Incentive Plan by 830,000 shares, the options for which the
Company intends to grant to members of the Company's business teams and
other Incentive Plan participants.

4. To consider and act upon a proposal to amend the 1994 Director
Restricted Stock Plan by increasing, in lieu of the annual cash
retainer, the amount of the annual award to each non-employee director
under such Plan from 1,500 shares to 2,500 shares of Common Stock and
changing the periods during which shares awarded under such Plan are
subject to restrictions on transfer.

5. To consider and act upon such other business as may properly come before
said Annual Meeting or any adjournment thereof.

Shareholders of record at the close of business on March 29, 1996 will be
entitled to notice of and to vote at said Annual Meeting.

By Order of the Board of Directors

WALTER A. SHEPHARD, Clerk

April 8, 1996

- -------------------------------------------------------------------------------
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND SIGN
THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED ENVELOPE TO ASSURE
REPRESENTATION OF YOUR SHARES. NO POSTAGE NEED BE AFFIXED IF MAILED IN THE
UNITED STATES.
- -------------------------------------------------------------------------------
<PAGE> 3

GENRAD, INC.

300 BAKER AVENUE
CONCORD, MASSACHUSETTS 01742-2174

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

MAY 9, 1996

This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of GenRad, Inc. ("GenRad" or the "Company"), 300 Baker
Avenue, Concord, Massachusetts 01742-2174, of proxies in the enclosed form to be
voted at the Annual Meeting of Shareholders of GenRad, to be held on Thursday,
May 9, 1996 at 11:00 a.m. at the Bank of Boston auditorium, 100 Federal Street,
Boston, Massachusetts, and at any adjournment thereof (the "Meeting"), for the
purposes stated in the accompanying Notice of Meeting.

Any person giving a Proxy may revoke it at any time prior to its being
voted by filing written notice with the Secretary of GenRad, by executing and
delivering a Proxy bearing a later date, or by attending the Meeting and voting
in person. If the Proxy is properly executed and is not revoked, it will be
voted at the Meeting in the manner specified. If no instructions are specified,
the shares represented by the Proxy will be voted for the election of the
nominees to the Board of Directors listed below and for the approval of Items
2-4 in the Notice of Meeting.

The Annual Report of GenRad for the fiscal year ended December 30, 1995 and
this Proxy Statement were first distributed or mailed to shareholders on or
about April 8, 1996.

VOTING SECURITIES

GenRad's Common Stock, $1 par value, is the only class of voting securities
outstanding and entitled to be voted at the Meeting. The Board of Directors has
fixed March 29, 1996 as the record date for determining shareholders who are
entitled to notice of and to vote at the Meeting. At the close of business on
such record date, there were outstanding 20,549,496 shares of Common Stock. Each
share is entitled to one vote. A majority of the issued and outstanding shares
constitutes a quorum.
<PAGE> 4

CERTAIN SHAREHOLDERS

<TABLE>
The following table sets forth, as of March 29, 1996, the beneficial
ownership of the Company's outstanding Common Stock of (i) each person known by
the Company to own beneficially more than 5% of the Company's outstanding Common
Stock, (ii) each executive officer named in the Summary Compensation Table below
and (iii) all directors and executive officers as a group:

<CAPTION>
NUMBER OF SHARES
OF COMMON STOCK PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OF CLASS
- ------------------------------------- ----------------------- --------
<S> <C> <C>
Group consisting of............................................ 1,756,300(2) 8.5%
Lenore Robins
Lee R. Robins
Athena Partners, L.P.
32 East 57th Street
New York, New York 10022

Basil P. Regan
Regan Partners, L.P.
6 East 43rd Street
New York, New York 10017

Morgan Stanley Group Inc. ..................................... 1,822,000(3) 8.9%
1251 Avenue of the Americas
New York, New York 10020

Munn, Bernhard & Associates, Inc............................... 1,685,100(4) 8.2%
6 East 43rd Street
New York, New York 10017

James F. Lyons................................................. 505,305(5) 2.4%
Sarah H. Lucas................................................. 150,000(6) *
George A. O'Brien.............................................. 5,000(7) *
John C. Washburn............................................... 101,000(8) *
All Directors and Executive Officers as a Group................ 797,989(9) 3.7%

<FN>
- ---------------

* Less than 1%.
(1) The number of shares beneficially owned by each director and executive
officer is determined under rules promulgated by the Securities and Exchange
Commission ("SEC"), and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under such rules, beneficial
ownership includes any shares as to which the individual has sole or shared
voting power or investment power and also any shares which the individual has
the right to acquire within 60 days of March 29, 1996 through the exercise of
any stock option or other right. The inclusion herein of such shares, however,
does not constitute an admission that the named shareholder is a direct or
indirect beneficial owner of such shares. Unless otherwise indicated, each
person or entity named in the table has sole voting power and investment power
(or shares such power with his or her spouse) with respect to all shares of
Common Stock listed as owned by such person or entity.
(2) The information reported is based on a Schedule 13D, dated January 7,
1995, filed with the SEC by Athena Partners, L.P. ("Athena"), Lenore Robins, Lee
R. Robins, Regan Partners, L.P. ("Regan Partners") and Basil P. Regan. Lenore
Robins and Mr. Regan are the general partners of Athena. Mr. Regan is the sole
general partner of Regan Partners. Amount set forth includes 422,000 shares of
Common Stock with respect to which Athena has sole voting and dispositive power,
52,800 shares of Common Stock with respect to which Lee R. Robins has sole
voting and dispositive power, 1,200 shares of Common Stock with respect to which
Lenore Robins has sole voting and dispositive power, and 1,280,300 shares of
Common Stock with respect to
</TABLE>

2
<PAGE> 5

which Mr. Regan, individually and as the sole general partner of Regan Partners,
has sole voting and dispositive power. In addition, as general partners of
Athena, Lenore Robins and Mr. Regan share voting and dispositive power with
respect to the 422,000 shares of Common Stock owned by Athena.
(3) The information reported is based on an amended Schedule 13G, dated
February 13, 1996, filed with the SEC by Morgan Stanley Group Inc. ("Morgan
Stanley") and Morgan Stanley Asset Management Limited ("Morgan Stanley
Management"). Morgan Stanley is a parent holding company of Morgan Stanley
Management, a registered investment advisor. Morgan Stanley and Morgan Stanley
Management share voting and dispositive power with respect to 1,822,000 shares
of Common Stock.
(4) The information reported is based on an amended Schedule 13G, dated
February 9, 1996, filed with the SEC by Munn, Bernhard & Associates, Inc., a
registered investment adviser ("MBA"), which has sole dispositive power, but no
voting power with respect to the indicated shares. Amount set forth does not
include shares of Common Stock held by certain individuals affiliated with MBA
who disclaim membership in a group with MBA.
(5) Amount shown includes an option to purchase 500,000 shares of Common
Stock. Amount shown does not include an option to purchase 350,000 shares of
Common Stock that was granted on October 27, 1995, subject to shareholder
approval of Item 2 on the accompanying Notice of Meeting. If Item 2 is approved,
233,334 of such shares will be exercisable because the 20-day average price of
the Common Stock has reached the target prices of $10 and $12 since the date of
grant, and the remaining 116,666 shares will vest if such average price reaches
$14.
(6) Amount shown represents options to purchase 150,000 shares of Common
Stock.
(7) Mr. O'Brien resigned as an officer of the Company in February 1996.
(8) Amount shown includes an option to purchase 100,000 shares of Common
Stock. Mr. Washburn resigned as an officer of the Company effective December 31,
1995.
(9) See notes (5) and (6) above and notes (2) and (3) on page 7. Also
includes 23,334 shares of Common Stock which may be purchased upon the exercise
of an option held by an executive officer and 13,000 shares of Common Stock held
by Edwin M. Martin, Jr., who is not seeking re-election as director of the
Company at the Meeting. The shares for Mr. Martin include 10,000 shares of
Common Stock which may be purchased upon the exercise of options and 3,000
shares of restricted stock which will be vested and transferable immediately
following the election of directors at the Meeting.

SOLICITATION

GenRad will bear the entire cost of preparing, assembling, printing and
mailing this Proxy Statement, the enclosed Proxy and any additional material
which may be furnished to shareholders. Further solicitation of Proxies may be
made by telephone or other communication. Brokers, custodians and fiduciaries in
whose names Common Stock is held will be requested to forward Proxy soliciting
material to the beneficial owners of such stock and GenRad will reimburse them
for this service. GenRad has retained Georgeson & Company Inc. as proxy
solicitor to aid in the solicitation of Proxies at an estimated cost of $6,000.

VOTES REQUIRED

The affirmative vote of the holders of a plurality of the votes cast at the
Meeting is required for the election of directors. The affirmative vote of the
holders of a majority of the shares of Common Stock present or represented at
the Meeting and voting on a matter is required for the approval of Items 2-4 and
any other matters to be voted upon. In addition, the New York Stock Exchange
("NYSE") requires that the total votes cast with respect to Items 2-4 represent
at least a majority of the outstanding shares of Common Stock.

Shares of Common Stock represented by executed Proxies received by the
Company will be counted for purposes of establishing a quorum at the Meeting,
regardless of how or whether such shares are voted on any specific proposal.
With respect to the required vote on any particular matter other than Items 2-4,
abstentions will not be treated as votes cast or as shares present or
represented and voting. With respect to the required vote on Items 2-4,
abstentions will be treated as shares that are present and entitled to vote for
purposes of determining the number of shares that are present and entitled to
vote, but will not be counted as a vote in favor of the matter. Accordingly, an
abstention from voting on each of Items 2-4 has the same effect as a vote

3
<PAGE> 6

against the matter. If a broker or nominee holding stock in "street name"
indicates on the Proxy that it does not have a discretionary authority to vote
as to Items 2-4, those shares will not be considered as present and entitled to
vote with respect to each such matter. Accordingly, "broker non-votes" on each
such matter will not be counted as votes cast in determining approval of the
matter.

ITEM 1.

ELECTION OF DIRECTORS

Pursuant to Section 50A of Massachusetts General Laws Chapter 156B, the
Company has a classified Board of Directors consisting of three Class I
Directors, three Class II Directors and three Class III Directors. The Class I,
Class II and Class III Directors will serve until the Annual Meetings of
Shareholders to be held in 1997, 1998 and 1996, respectively, and until their
respective successors are duly elected and qualified. Under Massachusetts law,
the Board of Directors may be expanded, and vacancies and newly created
directorships may be filled, only by a majority vote of the remaining directors.
At each Annual Meeting of Shareholders, directors are elected for a full term of
three years to succeed those whose terms are expiring. At the Meeting, the
shareholders will elect two Class III Directors, whose terms will extend until
the 1999 Annual Meeting.

Edwin M. Martin, Jr. will complete his term as Class III Director on May 9,
1996, and will not be seeking re-election to the Board of Directors. The
nominees for Class III Directors, Russell A. Gullotti and William G. Scheerer,
were nominated by the Board of Directors in March 1996.

Shares represented by all Proxies received by the Board of Directors and
not so marked as to withhold authority to vote for any individual nominee will
be voted (unless one or more nominees are unable or unwilling to serve) for the
election of the two nominees for Class III Directors. The Board of Directors
knows of no reason why any such nominee should be unable or unwilling to serve,
but if such should be the case, the persons named in the Proxy may vote the
Proxy for the election of a substitute.

NOMINEES FOR DIRECTOR AND CONTINUING DIRECTORS

<TABLE>
The following table sets forth certain information about each nominee for
director and each member of the Board of Directors whose term expires in 1997 or
1998.

<CAPTION>
NUMBER OF
YEAR SHARES OF
BECAME A COMMON STOCK
DIRECTOR OF BENEFICIALLY PERCENT
BIOGRAPHICAL SUMMARIES OF NOMINEES AND DIRECTORS THE COMPANY OWNED(1) OF CLASS
- ---------------------------------------------------------- ----------- ------------ ------------
<S> <C> <C> <C>
NOMINEES FOR DIRECTOR WHOSE TERMS WILL EXPIRE IN 1999
(CLASS III DIRECTORS)

WILLIAM G. SCHEERER, 58, Infrastructure Operations Vice
President, Lucent Technologies (formerly AT&T Bell
Laboratories), Holmdel, New Jersey...................... 1988 19,850(2)(3) *

Mr. Scheerer has been Infrastructure Operations Vice
President at Lucent Technologies since February
1996. From January 1994 to February 1996 he was
Quality, Engineering, Software & Technologies (QUEST
Partnership) Vice President at AT&T Bell
Laboratories. From January 1993 to January 1994 he
was the Executive Director, Quality, Engineering,
Software & Technologies at AT&T Bell Laboratories.
From May 1990 through December 1992, Mr. Scheerer
was Executive Director, Quality Technologies &
International Planning at AT&T Bell Laboratories.
From May 1988 to May 1990, he was Executive
Director, Quality & International Planning at AT&T
Bell Laboratories. Mr. Scheerer is a Director of
LeCroy Corp.
</TABLE>

4
<PAGE> 7

<TABLE>
<CAPTION>
NUMBER OF
YEAR SHARES OF
BECAME A COMMON STOCK
DIRECTOR OF BENEFICIALLY PERCENT
BIOGRAPHICAL SUMMARIES OF NOMINEES AND DIRECTORS THE COMPANY OWNED(1) OF CLASS
- ---------------------------------------------------------- ----------- ------------ ------------
<S> <C> <C> <C>
RUSSELL A. GULLOTTI, 53, Chairman, President and Chief
Executive Officer, National Computer Systems, Inc., Eden
Prairie, Minnesota...................................... 1995 14,000(2)(3) *

Mr. Gullotti has been President and Chief Executive
Officer of National Computer Systems, Inc. since
October 1994 and Chairman of the Board since May
1995. From January 1994 until October 1994, he was
President, Americas Area, at Digital Equipment
Corporation. From 1982 to January 1994, Mr. Gullotti
held senior executive positions in sales and
marketing services and administration at Digital
Equipment Corporation. Mr. Gullotti is a Director of
MTS Systems Corporation.

DIRECTORS WHOSE TERMS WILL EXPIRE IN 1997 (CLASS I
DIRECTORS)

JAMES F. LYONS, 61, President and Chief Executive Officer,
GenRad, Inc., Concord, Massachusetts.................... 1993 505,305(4) 2.4%

Mr. Lyons has been President and Chief Executive
Officer of the Company since July 1993. From January
1992 to July 1993, he was President and Chief
Executive Officer of Harry Gray Associates, a
management consulting and investment company. From
October 1989 to January 1992, Mr. Lyons was
President and Chief Operating Officer of American
Medical International.

ADRIANA STADECKER, 49, Managing Partner, EPIC
International, Newton Centre, Massachusetts............. 1994 18,000(2)(3) *

Ms. Stadecker was Founder and has been Managing
Partner of EPIC International since July 1994. From
October 1992 through June 1994, Ms. Stadecker was
responsible for Executive Operations at Digital
Equipment Corporation. She became Vice President of
this department in January 1993. From January 1991
through September 1992, Ms. Stadecker was Group
Human Resource Manager, Worldwide Manufacturing and
Logistics at Digital Equipment Corporation. From
August 1988 to December 1990, she was Group Human
Resource Manager, Semiconductor Operations at
Digital Equipment Corporation.

LOWELL B. HAWKINSON, 53, Chairman of the Board and
Chief Executive Officer, Gensym Corporation,
Cambridge, Massachusetts................................ 1995 14,000(2)(3) *

Mr. Hawkinson has been Chairman and Chief Executive
Officer of Gensym Corporation, a software company,
since September 1986.
</TABLE>

5
<PAGE> 8

<TABLE>
<CAPTION>
NUMBER OF
YEAR SHARES OF
BECAME A COMMON STOCK
DIRECTOR OF BENEFICIALLY PERCENT
BIOGRAPHICAL SUMMARIES OF NOMINEES AND DIRECTORS THE COMPANY OWNED(1) OF CLASS
- ---------------------------------------------------------- ----------- ------------ ------------
<S> <C> <C> <C>
DIRECTORS WHOSE TERMS WILL EXPIRE IN 1998
(CLASS II DIRECTORS)

WILLIAM S. ANTLE III, 51, President and Chief Executive
Officer, Oak Industries, Inc., Waltham, Massachusetts... 1995 14,000(2)(3) *

Mr. Antle has been President and Chief Executive
Officer of Oak Industries, Inc., a provider of
components and controls for leading manufacturers in
a range of industries, since December 1989. From
April 1989 to December 1989, Mr. Antle co-founded
and was Chairman of the Hadleigh Group. Mr. Antle is
a Director of ESCO Electronics Corporation and Oak
Industries, Inc.

RICHARD G. ROGERS, 63, President, Tokyo Electron America,
Austin, Texas........................................... 1995 14,000(2)(3) *

Mr. Rogers has been President of Tokyo Electron
America, a company that imports fabrication
equipment for use by U.S. semiconductor
manufacturers, since March 1994. From November 1991
to March 1994, he was President and Chief Executive
Officer of Electronic Associates Inc., an electronic
contract manufacturing company, located in West Long
Branch, New Jersey. From May 1991 through October
1991, Mr. Rogers was a private consultant. From
March 1988 through April 1991, he was Chief
Operating Officer of BTU International.

ED ZSCHAU, 56, Senior Lecturer of Business Administration,
Harvard University, Cambridge, Massachusetts............ 1995 12,500(2) *

Mr. Zschau has been a Senior Lecturer of Business
Administration at Harvard University since February
1996. From April 1993 to July 1995, Mr. Zschau was
General Manager, Storage System Division at IBM
Corporation. From July 1988 to April 1993, Mr.
Zschau was Chairman and Chief Executive Officer of
Censtor Corp., a company that researches and
develops magnetic recording components for disk
drives. Mr. Zschau is a Director of Identix,
Incorporated.

<FN>
- ---------------

* Less than 1%.

(1) Share ownership information is as of March 29, 1996. Each person has sole
voting and investment power (or such power shared only with a spouse)
unless otherwise indicated.

(2) Includes for the following persons options to purchase the indicated number
of shares of Common Stock: Ms. Stadecker (15,000 shares), Mr. Scheerer
(12,500 shares), Mr. Gullotti (12,500 shares), Mr. Antle (12,500 shares),
Mr. Rogers (12,500 shares), Mr. Zschau (12,500 shares) and Mr. Hawkinson
(12,500 shares).

(3) Includes 1,500 shares of restricted stock issued on each of August 31, 1994
and 1995 to each of Mr. Scheerer and Ms. Stadecker and 1,500 shares of
restricted stock issued on August 31, 1995 to each of Messrs. Gullotti,
Antle, Hawkinson and Rogers. These shares may not be transferred prior to
the earlier
</TABLE>

6
<PAGE> 9

to occur of (i) the first, second and third anniversaries of the respective
dates of grant, each with respect to one-third of the shares (assuming
shareholder approval of Item 4 on the accompanying Notice of Meeting), (ii)
the resignation of the director from the Board of Directors with the
consent of the majority of the members of the Board, or the death or
disability of the director, or (iii) a change in control of the Company.
Further, if a director resigns from the Board of Director or refuses to
stand for re-election without the consent of the majority of the members of
the Board prior to the date upon which the restrictions on transfer lapse,
the director forfeits to the Company all shares of restricted stock issued
to such director during the year preceding such resignation or refusal.

(4) Amount shown includes an option to purchase 500,000 shares of Common Stock.
Amount shown does not include an option to purchase 350,000 shares of
Common Stock that was granted on October 27, 1995, subject to shareholder
approval of Item 2 on the accompanying Notice of Meeting. If Item 2 is
approved, 233,334 of such shares will be exercisable because the 20-day
average price of the Common Stock has reached the target prices of $10 and
$12 since the date of grant, and the remaining 116,666 shares will vest if
such average price reaches $14.

FURTHER INFORMATION REGARDING THE BOARD OF DIRECTORS AND CERTAIN EXECUTIVE
OFFICERS

The Compensation Committee of the Board reviews and makes recommendations
to the Board on matters relating to employee compensation and benefits,
determines the compensation of officers and other key employees and administers
the Company's 1982 Stock Option Plan, 1991 Equity Incentive Plan and Employee
Stock Purchase Plan. The members are Edwin M. Martin, Jr. (Chair), Richard G.
Rogers and Adriana Stadecker. The Corporate Governance Committee of the Board
articulates matters which should be raised to the Board and defines the Board's
accountability. The members are Adriana Stadecker (Chair), William G. Scheerer
and Lowell B. Hawkinson. The Audit Committee of the Board reviews and monitors
the Company's financial reporting and accounting practices, and works with
representatives of the Company's independent auditors in establishing the scope
of the audit and conducting an independent review of the audit after its
completion. The members are William S. Antle III (Chair), Edwin M. Martin, Jr.
and Russell A. Gullotti. The Technology and Quality Committee of the Board
periodically reviews issues concerning product technology with the Company's
technical management and reports its assessments to the Board. The members are
William G. Scheerer (Chair), Lowell B. Hawkinson and Richard G. Rogers.

In 1995 the Board of Directors met seven times, its Audit Committee met
four times, its Compensation Committee met four times, its Corporate Governance
Committee met twice and its Technology and Quality Committee met once. All
directors attended at least 75% of the meetings of the Board and of all meetings
of the committees of the Board on which they served.

SECTION 16 COMPLIANCE

Russell A. Gullotti, who became a director of the Company on March 20,
1995, filed a Form 3 with the SEC on April 13, 1995.

7
<PAGE> 10

COMPENSATION OF EXECUTIVES AND DIRECTORS

SUMMARY COMPENSATION TABLE

<TABLE>
The following table sets forth certain information for the past three
fiscal years with respect to the annual and long-term compensation of the
Company's Chief Executive Officer and certain other highly compensated executive
officers of the Company during the most recent fiscal year (such executive
officers are sometimes collectively referred to in this Proxy Statement as the
"named executive officers"):

<CAPTION>
LONG-TERM
COMPENSATION
-------------
AWARDS
ANNUAL COMPENSATION -------------
---------------------- SECURITIES ALL OTHER
SALARY BONUS UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION(A) YEAR ($) ($)(B) OPTIONS(#)(C) ($)(D)
- --------------------------------------------- ---- --------- -------- ------------- ------------
<S> <C> <C> <C> <C> <C>
James F. Lyons............................... 1995 $357,504 $160,162 350,000 $4,125
President and Chief 1994 341,616 98,314 -- 1,125
Executive Officer 1993 157,921 150,000 500,000 --

Sarah H. Lucas............................... 1995 155,434 83,200 50,000 4,125
Vice President Operations -- 1994 139,874 50,000 100,000 --
Strategic Businesses and Chief 1993 -- -- -- --
Strategic Officer

George A. O'Brien............................ 1995 200,004 76,802 -- 11,258
Vice President, 1994 53,847 15,000 100,000 --
Chief Financial Officer 1993 -- -- -- --
and Secretary

John C. Washburn............................. 1995 212,004 81,410 -- 4,125
Vice President, 1994 146,028 50,000 100,000 1,125
General Manager 1993 -- -- -- --
Concord Operations
<FN>

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

(A) Mr. Lyons joined the Company as President and Chief Executive Officer in
July 1993. Ms. Lucas joined the Company as an executive officer in January
1994. Mr. O'Brien joined the Company in September 1994, and became an
executive officer in November 1994. Mr. O'Brien's employment with the
Company terminated in February 1996. Mr. Washburn joined the Company as an
executive officer in April 1994, and his employment with the Company
terminated on December 31, 1995.

(B) The amount shown in 1993 for Mr. Lyons represents a one-time hiring bonus.

(C) The option to purchase 350,000 shares was granted to Mr. Lyons subject to
shareholder approval of Item 2 on the accompanying Notice of Meeting.

(D) For Messrs. Lyons and Washburn and Ms. Lucas, the amounts shown constitute
payments by the Company under its 401(k) plan. The amount shown for Mr.
O'Brien is comprised of a payment of $4,113 by the Company under its 401(k)
plan, and payment of relocation expenses on Mr. O'Brien's behalf by the
Company in the amount of $7,145.
</TABLE>

EMPLOYMENT AGREEMENTS

The Company has entered into an employment agreement with Mr. Lyons dated
July 7, 1993 which expires on July 7, 1996 and an employment agreement with Ms.
Lucas dated January 17, 1994 which, as extended, expires on July 7, 1996. During
the terms of their agreements, Mr. Lyons and Ms. Lucas will continue to receive
a salary not less than their base salary in effect on the date of their
agreements, as such base salary may be increased from time to time (but subject
to reduction prior to a change in control in accordance with a general salary
reduction program), and fringe benefits consistent with those which they were
eligible to receive on the dates of their agreements. Pursuant to the terms of
their employment agreements, in the event that Mr. Lyons' or Ms. Lucas'
employment is terminated without cause (including certain terminations deemed to
be without cause following a change in control) prior to July 7, 1996, Mr. Lyons
or Ms. Lucas is entitled to receive during the two-year period commencing with
the date of

8
<PAGE> 11

termination the continued payment of his or her base salary on such date, except
that during the second year of such period the amount to be paid will be reduced
by any salary or other compensation earned by Mr. Lyons or Ms. Lucas from other
employment. The Company is also required to continue to provide Mr. Lyons or Ms.
Lucas with medical, dental and similar health benefits until the earlier to
occur of his or her full-time employment by another company or the second
anniversary of his or her date of termination.

The employment of Mr. Washburn was terminated on December 31, 1995.
Pursuant to the terms of an agreement with the Company dated October 13, 1995,
Mr. Washburn is entitled to receive his base annual salary until December 31,
1997. However, if Mr. Washburn secures new employment at any time after December
31, 1996, he will no longer be entitled to receive any such salary.

OPTION GRANTS IN LAST FISCAL YEAR

<TABLE>
The following table sets forth certain information regarding options
granted during the fiscal year ended December 30, 1995 by the Company to each of
the named executive officers:

<CAPTION>
POTENTIAL
REALIZABLE
VALUE AT
ASSUMED
ANNUAL
RATES OF
STOCK
PRICE
APPRECIAITON
FOR OPTION
INDIVIDUAL GRANTS TERM(A)
- ------------------------------------------------------------------------------------------------------ ----------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES OR BASE
GRANTED IN FISCAL PRICE EXPIRATION
NAME (#)(B) YEAR ($/SH) DATE 5%($) 10%($)
- ------------------------------------ ---------- ---------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
James F. Lyons...................... 350,000 33.5% $8.25 10/26/05 $1,855,933 $4,601,931
Sarah H. Lucas...................... 50,000 4.8% 5.38 4/09/05 169,015 428,318
George A. O'Brien................... -- -- -- -- -- --
John C. Washburn.................... -- -- -- -- -- --

<FN>
- ---------------

(A) Amounts represent hypothetical gains that could be achieved for the
respective options if exercised at the end of the option term. These gains
are based on assumed rates of stock appreciation of 5% and 10% compounded
annually from the date the respective options were granted to their
expiration date. Actual gains, if any, on stock appreciation exercises will
depend on the future performance of the Common Stock and the date on which
the options are exercised. Amounts shown assume that all options vest in
accordance with terms of each executive officer's own stock option
agreement. The Company has not granted stock appreciation rights to date.

(B) Subject to shareholder approval of Item 2 on the accompanying Notice of
Meeting, two-thirds of Mr. Lyons option shares became exercisable after the
20-day average price of the Common Stock reached the target prices of $10
and $12, and the remaining one-third will become exercisable if such average
price reaches $14. Ms. Lucas' option became exercisable with respect to
one-third of her option shares after such average price reached each of the
target prices of $8, $10 and $12.
</TABLE>

9
<PAGE> 12

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

<TABLE>
The following table sets forth the aggregate dollar value of all options
exercised and the total number of unexercised options held on December 30, 1995
by each of the named executive officers:

<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS
FY-END(#) AT FY-END($)(B)
SHARES ACQUIRED VALUE --------------------------- ---------------------------
NAME ON EXERCISE(#) REALIZED($)(A) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- -------------- --------------- -------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James F. Lyons................. -- $ -- 375,000 475,000 $2,343,750 $ 1,306,250
Sarah H. Lucas................. -- -- 50,001 99,999 206,254 412,496
George A. O'Brien.............. -- -- 33,334 66,666 133,336 266,664
John C. Washburn............... -- -- 33,334 66,666 133,336 266,664
<FN>

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

(A) Value is calculated based on the difference between the option exercise
price and the closing market price of the Common Stock on the date of
exercise multiplied by the number of shares to which the exercise relates.
(B) The closing price for the Company's Common Stock on the NYSE on December 29,
1995, the last business day of fiscal 1995, was $9.75. Value is calculated
on the basis of the difference between the option exercise price and $9.75
multiplied by the number of shares of Common Stock underlying the option.
</TABLE>

PENSION PLAN

GenRad has a defined benefit pension plan designed to provide retirement
benefits for employees in the United States and incidental benefits to their
beneficiaries. On January 31, 1995, the Company closed the Pension Plan to new
participants and ceased all benefit accruals. Only one executive officer, James
F. Lyons, qualifies for participation in the Pension Plan based upon at least
one qualified year of service prior to January 31, 1995. His annual benefits
under the plan have been frozen at approximately $120, assuming vesting of the
benefits after five years of service and retirement at age 65.

COMPENSATION OF DIRECTORS

Directors who are not employees of GenRad currently receive an annual cash
retainer of $10,000 generally paid in January and an annual grant in August of
1,500 restricted shares of the Company's Common Stock. If Item 4 on the
accompanying Notice of Meeting is approved by the shareholders at the Meeting,
in lieu of the annual cash retainer, the annual grant of restricted shares of
the Company's Common Stock will be increased to 2,500. Directors who are not
employees of GenRad also receive a fee of $750 for each directors' meeting
attended. Non-employee directors who serve as committee chair of the Audit
Committee, the Compensation Committee, the Corporate Governance Committee or the
Technology and Quality Committee receive a fee of $1,000 for attending each
committee meeting. Non-employee directors who are members of the Audit
Committee, the Compensation Committee, the Corporate Governance Committee and
the Technology and Quality Committee receive a fee of $750 for attending each
committee meeting. Directors are also reimbursed for any expenses attendant to
Board membership.

Pursuant to the 1991 Directors' Stock Option Plan, each non-employee
director is granted an option to purchase 2,500 shares of the Company's Common
Stock each year on the fifth business day following the release of annual
earnings. The option exercise price for options granted under the 1991
Directors' Stock Option Plan is equal to the closing price per share of the
Company's Common Stock on the date of grant ($5.88 in 1995). Each option may be
exercised at any time, in whole or in part, prior to the fifth anniversary of
the date of grant. Also pursuant to the 1991 Directors' Stock Option Plan, each
non-employee who becomes a director is granted options to purchase 10,000 shares
of the Company's Common Stock on the day that he or she becomes a director. The
option exercise price for these options is equal to the closing price per share
of the Company's Common Stock on the date of grant. Each option may be exercised
at any time, in whole or in part, prior to the fifth anniversary of the date of
grant.

10
<PAGE> 13

BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The Compensation Committee of the Company's Board of Directors is
responsible for establishing compensation policies with respect to the Company's
executive officers, including the Chief Executive Officer and the other named
executive officers, and setting the compensation for these individuals. The
Compensation Committee consists of the three nonemployee directors listed below.

The Compensation Committee seeks to achieve three broad goals in connection
with the Company's executive compensation programs and decisions regarding
individual compensation. First, the Compensation Committee structures executive
compensation programs in a manner that the Committee believes will enable the
Company to attract and retain key executives. Second, the Compensation Committee
establishes compensation programs that are designed to reward executives for the
achievement of specified business objectives of the Company. By tying
compensation in part to particular goals, the Compensation Committee believes
that a performance-oriented environment is created for the Company's executives.
Finally, the Company's executive compensation programs are intended to provide
executives with an equity interest in the Company so as to link a portion of the
compensation of the Company's executives with the performance of the Company's
Common Stock.

The compensation programs for the Company's executives established by the
Compensation Committee consist of three elements tied to the foregoing
objectives: base salary; annual cash bonus; and stock-based equity incentives,
primarily participation in the Company's 1991 Equity Incentive Plan. In
establishing base salaries for executives, the Compensation Committee monitors
standards at comparable companies, particularly those that are in the same
industry as the Company or related industries and/or are located in the same
general geographical area as the Company, considers historic salary levels of
the individual and the nature of the individual's responsibilities and compares
the individual's base salary with those of other executives of the Company. To
the extent determined appropriate, the Compensation Committee also considers
general conditions and the Company's financial performance in establishing base
salaries of executives. In deciding to award options, the Compensation Committee
also considers the number of options outstanding or previously granted and the
aggregate size of current awards.

On July 7, 1993, the Company elected a new Chief Executive Officer, James
F. Lyons. In determining his compensation arrangements in 1995, the Compensation
Committee followed the policies set forth above. First, Mr. Lyons' base
compensation was established to match median levels for Chief Executive Officers
of electronics companies of comparable size. His base salary was increased by
10% in 1994 and maintained at the same level in 1995. Second, consistent with
the goal to reward for the accomplishment of the Company objectives, Mr. Lyons
received incentive compensation equal to 45% of his base compensation as a
result of the Company's achievement of its objectives. Finally, the stock option
granted to Mr. Lyons in 1993, particularly its vesting provisions which are tied
to increases in the trading price of the Company's Common Stock on the New York
Stock Exchange, was intended to link the rewards of the Chief Executive Officer
to those of the Company's shareholders. In 1995, the Company gave Mr. Lyons an
additional option for the purchase of 350,000 shares of the Company's Common
Stock with similar vesting provisions tied to increased stock prices.

Section 162(m) of the Internal Revenue Code, enacted in 1993, generally
disallows a tax deduction to public companies for compensation over $1 million
paid to the corporation's Chief Executive Officer and four other most highly
compensated executive officers. Qualifying performance-based compensation will
not be subject to the deduction limit if certain requirements are met. The
Company is currently considering whether to structure the performance-based
portion of the compensation of its executive officers in a manner that complies
with this new statute, although the Company believes that, in light of its
current net operating loss carryforward, such compliance will not be important
in the near future.

Edwin M. Martin, Jr., Chair
Richard G. Rogers
Adriana Stadecker

11
<PAGE> 14

<TABLE>

STOCK PERFORMANCE CHART

The following chart and table compare the yearly percentage change in the
cumulative total shareholder return on the Company's Common Stock during the
five years ended December 31, 1995 with the total return on the S&P High
Technology Composite Index and the S&P 500 Composite Index. The comparison
assumes $100 was invested on December 31, 1990 in the Company's Common Stock and
in each of the foregoing indices and assumes reinvestment of dividends.

<CAPTION>
S&P High
Technology S&P 500
Measurement Period Composite Composite
(Fiscal Year Covered) GenRad, Inc. Index Index
<S> <C> <C> <C>
1990 100 100 100
1991 113 114 130
1992 256 119 140
1993 313 146 154
1994 300 170 156
1995 488 245 215
</TABLE>

<TABLE>
<CAPTION>
Company/Index 1990 1991 1992 1993 1994 1995
-------------- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
GenRad, Inc. $100 $113 $256 $313 $300 $488
S&P High Technology Composite Index 100 114 119 146 170 245
S&P 500 Composite Index 100 130 140 154 156 215
</TABLE>

ITEMS 2 AND 3

PROPOSALS TO AMEND THE 1991 EQUITY INCENTIVE PLAN

In the opinion of the Board of Directors, the future success of the Company
depends, in large part, on its ability to attract, retain and motivate key
employees with experience and ability. Under the Company's 1991 Equity Incentive
Plan (the "Incentive Plan"), the Company is currently authorized to make awards
of restricted stock and to grant incentive and non-statutory stock options to
employees, officers and employee directors of, and consultants and advisers to,
the Company to purchase up to 4,500,000 shares of Common Stock. Currently,
approximately 200 members of GenRad's worldwide management team participate in
the Incentive Plan. On March 15, 1996, options to purchase 2,952,475 shares of
Common Stock were outstanding under the Incentive Plan and 189,688 shares were
available for future grants under the Incentive Plan. Accordingly, the Board of
Directors has adopted, subject to shareholder approval, amendments (the
"Incentive Plan Amendments") to the Incentive Plan increasing the number of
shares of Common Stock available for issuance under the Incentive Plan by an
aggregate of 1,750,000 shares.

In Item 2 of the accompanying Notice of Meeting, the Board of Directors
proposes to amend the Incentive Plan by increasing the number of shares of
Common Stock available for issuance under the Incentive Plan by 920,000 shares,
the options for which the Company has granted (subject to shareholder approval)
to four officers, James F. Lyons, Sarah H. Lucas, Daniel F. Harrington and Paul
Geere, as more fully described below.

12
<PAGE> 15

In Item 3 of the accompanying Notice of Meeting, the Board of Directors
proposes to amend the Incentive Plan by increasing the number of shares of
Common Stock available for issuance under the Incentive Plan by an additional
830,000 shares. The Company intends to use 500,000 of these shares to grant
stock options to members of its business teams, including its executive
leadership teams, functional management teams and strategic businesses,
initiatives and acquisitions teams. Approximately 55 employees (other than the
four officers named above) are members of these teams and are eligible to
receive stock option grants for 500,000 shares. The members of the Company's
business teams are responsible for managing the Company's four core product
businesses and its seven global staff functions. The remaining 330,000
additional shares will be issued by the Compensation Committee in its discretion
under the terms of the Incentive Plan.

<TABLE>
The following table summarizes the proposed allocation of the 1,420,000
option shares which have been allocated for issuance to individuals or groups
upon (or, in the case of the officers named below, subject to) shareholder
approval of Items 2 and 3. All of such options have been or will be granted with
exercise prices equivalent to the market prices of the Company's Common Stock on
the dates of grant. While the Company intends to grant options for 1,420,000 of
the additional option shares as indicated below, assuming shareholder approval,
shares subject to options which expire or terminate without being exercised may
be awarded again by the Compensation Committee in accordance with the terms of
the Incentive Plan.

1991 EQUITY INCENTIVE PLAN

<CAPTION>
NUMBER OF SHARES
NAME AND POSITION DOLLAR VALUE($)(A) OF COMMON STOCK
-------------------------------------------------- ------------------ ----------------
<S> <C> <C>
James F. Lyons, President and Chief Executive
Officer......................................... $1,400,000 350,000(B)
Sarah H. Lucas, Vice President Operations --
Strategic Businesses and Chief Strategic
Officer......................................... -- 150,000(C)
Daniel F. Harrington, Chief Financial Officer and
Secretary....................................... -- 170,000(C)
Paul Geere, Managing Director, ADS................ -- 250,000(C)
All Current Executive Officers and Mr. Geere...... 1,400,000 920,000
Non-Executive Director Group...................... -- 0
Non-Executive Officer Employee Group, including
business teams (excluding Mr. Geere)............ -- 500,000(D)
</TABLE>

[FN]
- ---------------

(A) Value is calculated on the basis of the positive difference between the
option exercise price and $12.25, the closing price for the Company's Common
Stock on the NYSE on March 27, 1996, multiplied by the number of option shares.

(B) The option was granted on October 27, 1995 and, if shareholder approval of
Item 2 is obtained, 233,334 of the option shares will be exercisable because the
20-day average price of the Common Stock has reached the target prices of $10
and $12 since the date of grant, and the remaining shares will vest if such
average price reaches $14. The option expires 10 years after the date of grant.

(C) The option was granted on March 15, 1996 with an exercise price of $12.50
and, if shareholder approval of Item 2 is obtained, becomes exercisable with
respect to 25% of the option shares on each of the first four anniversaries of
the date of grant. The option expires 10 years after the date of grant.

(D) The options will become exercisable with respect to 25% of the option shares
on each of the first four anniversaries of the date of grant. Each of the
options will expire 10 years after the date of its grant.

13
<PAGE> 16

The following is a summary of the material provisions of the Incentive
Plan:

ELIGIBILITY

All key employees of the Company are eligible to receive incentive stock
options, non-statutory stock options and awards of restricted stock under the
Incentive Plan. Outside consultants and advisors to the Company are eligible to
receive non-statutory options and awards of restricted stock. As of March 15,
1996, approximately 554 employees of the Company were eligible to participate in
the Incentive Plan.

ADMINISTRATION

The Incentive Plan is administered by the Compensation Committee of the
Board of Directors, consisting of Messrs. Martin and Rogers and Ms. Stadecker.

STOCK OPTIONS

The Compensation Committee designates the optionee, date of grant and term
of each option, except that no incentive stock option can have a term exceeding
ten years (five years in the case of a 10% shareholder). The exercise price of
options is determined by the Compensation Committee, but may not be less than
100% (110% in the case of a 10% shareholder) of the fair market value on the
date of grant for incentive stock options. Under Section 422 of the Code, to the
extent that the aggregate fair market value of stock with respect to which
incentive stock options are exercisable for the first time by any individual
during any calendar year exceeds $100,000, such options will be treated as
non-statutory options. Payment of the option exercise price may be made in cash,
shares of Common Stock, a combination of cash or stock or by any other method
(including delivery of a promissory note payable on terms specified by the
Compensation Committee) approved by the Compensation Committee consistent with
Section 422 of the Code and Rule 16b-3 under the Securities Exchange Act of 1934
("Rule 16b-3"). While the Company may grant options which are exercisable at
different times or within different periods, it is anticipated that options
granted generally will be exercisable on a cumulative basis with respect to 25%
of the shares after one year from the date of grant and an additional 25% per
year thereafter. Options are not assignable or transferable except by will or
the laws of descent and distribution or, in the case of non-statutory options,
pursuant to a qualified domestic relations order. The Compensation Committee
will determine the length of time during which an optionee may exercise his or
her option following the termination of employment (which may not exceed three
months in the case of incentive stock options) and upon death or disability
(which may not exceed one year in the case of incentive stock options).

The Compensation Committee, in its sole discretion, may include additional
provisions in any option granted under the Incentive Plan, including without
limitation restrictions on transfer, repurchase rights, commitments to pay cash
bonuses, to make, arrange for or guaranty loans or to transfer other property to
optionees upon exercise of options, or such other provisions as shall be
determined by the Compensation Committee so long as not inconsistent with the
Incentive Plan. The Compensation Committee generally, in its sole discretion,
may also accelerate or extend the date or dates on which all or any particular
option or options granted under the Incentive Plan may be exercised.

RESTRICTED STOCK AWARDS

Restricted stock awards entitle the recipient to purchase Common Stock from
the Company under terms which provide for vesting over a period of time and a
right of repurchase of unvested stock when the recipient's relationship with the
Company terminates. The Compensation Committee selects the recipients of
restricted stock awards and determines (i) the number of shares of Common Stock
to be issued and sold to the recipient, (ii) the price of the stock, which can
be less than the fair market value, and (iii) the vesting schedule for such
shares. While the Company may make awards of restricted stock which vest at
different times or within different periods, it is anticipated that awards
generally will vest on a cumulative basis with respect to 33 1/3% of the shares
after one year from the date of award and an additional 33 1/3% per year
thereafter. The recipient may not sell, transfer or otherwise dispose of such
stock until it vests. Upon

14
<PAGE> 17

termination of the recipient's relationship with the Company, the Company will
be entitled to repurchase those shares which are not vested on the termination
date at a price equal to their original purchase price.

CANCELLATION AND NEW GRANT OF OPTIONS

The Compensation Committee, with the consent of the affected option holder,
may at any time cancel any or all outstanding options under the Incentive Plan
and grant in substitution therefor new options under the Incentive Plan covering
the same or different numbers of shares of Common Stock. Such new options shall
have an exercise price per share determined by the Compensation Committee, but
not less than 100% (110% in the case of a 10% shareholder) of fair market value
on the date of the new grant in the case of incentive stock options. The Company
anticipates that in most cases the option price in effect under any such new
grant will be less than the option price which would have been payable under the
cancelled options since the new grant is likely to arise in situations where the
exercise price of existing options exceeds the market price and new options are
granted at lower prices to restore an incentive to recipients of such options.
Under the Incentive Plan, an exchange program such as that described above would
not require shareholder approval.

MERGERS AND CHANGE IN CONTROL

In the event of a consolidation or merger or sale of all or substantially
all of the assets of the Company, the Compensation Committee, in its discretion,
may take one or more of the following actions: (i) provide that outstanding
options shall be assumed, or equivalent options shall be substituted, by the
acquiring corporation, (ii) upon written notice to optionees, provide that all
unexercised options will terminate unless exercised within a specific time,
(iii) in the event of a merger in which cash payments are paid to shareholders,
make or provide for a cash payment to optionees equal to the difference between
the cash payment payable in the merger per share of Common Stock and the
exercise price per share, multiplied by the number of shares subject to each
outstanding option, and (iv) provide that all or any outstanding options shall
become exercisable in full and all restrictions on outstanding awards of
restricted stock shall terminate.

Notwithstanding any other provision of the Incentive Plan, in the event of
a "Change in Control of the Company," as defined in the Incentive Plan, the
exercise dates of all options then outstanding shall be accelerated in full, any
restrictions on exercising outstanding options issued pursuant to the Incentive
Plan shall terminate and any restrictions on and rights of the Company to
repurchase shares covered by outstanding awards of restricted stock issued
pursuant to the Incentive Plan shall terminate.

AMENDMENT AND TERMINATION OF THE PLAN

The Compensation Committee at any time may amend or modify the terms of the
Incentive Plan in any respect except that the Compensation Committee may not
adopt any amendment requiring shareholder approval under Rule 16b-3 or Section
422 of the Code without the approval of the shareholders of the Company.

WITHHOLDING TAXES

Subject to the approval of the Company, a participant may elect to satisfy
federal, state or local withholding tax requirements incurred in connection with
the exercise of an option or purchase of shares subject to a restricted stock
award, in whole or in part, by (i) causing the Company to withhold shares of
Common Stock which would otherwise be issued pursuant to the exercise of an
option or the purchase of shares subject to an award, or (ii) delivering to the
Company shares of Common Stock already owned by the optionee.

FEDERAL INCOME TAX CONSEQUENCES

The following is a summary of the federal income tax treatment of incentive
stock and non-statutory options and restricted stock awards.

15
<PAGE> 18

Non-Statutory Stock Options. No taxable income is recognized by the
optionee upon the grant of a non-statutory stock option. The optionee must
recognize as ordinary income in the year in which the option is exercised the
amount by which the fair market value of the purchased shares on the date of
exercise exceeds the option price. However, special rules may apply to persons
required to file reports under Section 16(b) of the Securities Exchange Act of
1934 as a consequence of the interaction of Section 83 of the Code and Rule
16b-3. Subject to Section 162(m) of the Code, the Company will be entitled to a
business expense deduction equal to the amount of ordinary income recognized by
the optionee. Any additional gain or any loss recognized by the optionee upon
the subsequent disposition of the purchased shares will be a capital gain or
loss, and will be a long-term gain or loss if the shares are held for more than
one year.

Incentive Stock Options. As in the case of non-statutory options, no
taxable income is recognized by the optionee upon the grant of an incentive
stock option. However, unlike non-statutory options, no taxable income is
recognized by the optionee upon the exercise of an incentive stock option, and
no corresponding expense deduction is available to the Company. Generally, if an
optionee holds shares acquired upon the exercise of an incentive stock option
until the later of (i) two years from the grant of the option and (ii) one year
from the date of transfer of the purchased shares to him or her (the "Statutory
Holding Period"), any gain recognized by the optionee on a subsequent sale of
the shares will be treated as long-term capital gain. The federal income tax
effect on the holder of incentive stock options is to defer, until the purchased
shares are sold, taxation of any increase in the shares' value from the time of
grant to the time of exercise.

If the optionee sells shares acquired upon the exercise of an incentive
stock option prior to the expiration of the Statutory Holding Period, he or she
will recognize taxable income at ordinary income tax rates in an amount equal to
the lesser of (i) the value of the shares on the date of exercise less the
option price; or (ii) the amount realized on the date of sale less the option
price. Subject to Section 162(m), the Company will be entitled to a
corresponding business expense deduction.

For purposes of the "alternative minimum tax" applicable to individuals,
the exercise of an incentive stock option is treated in the same manner as the
exercise of a non-statutory stock option. Thus, in the year of option exercise
an optionee must generally include in his or her alternative minimum taxable
income the difference between the exercise price and the fair market value of
the purchased shares on the date of exercise. The alternative minimum tax is
imposed upon an individual's alternative minimum taxable income at rates of 26%
to 28%, but only to the extent that such tax exceeds the taxpayer's regular
income tax liability for the taxable year.

Restricted Stock Awards. If a restricted stock award is subject to
forfeiture provisions and restrictions on transfer (a "Restricted Award"),
neither the Company nor the recipient of the award will realize any federal tax
consequences at the time such award is made under the Incentive Plan unless the
recipient makes an election under Section 83(b) of the Code. If the recipient of
a Restricted Award makes a Section 83(b) election within 30 days of the date of
an award, or if the recipient receives an award that is not subject to
forfeiture provisions and restrictions on transfer, he or she will recognize
ordinary income, for the year in which the award is received, in an amount equal
to the difference between the fair market value of the Common Stock at the time
the award is made and the purchase price paid for the Common Stock. If such
election is made and the recipient subsequently forfeits some or all of the
Common Stock, he or she will not be entitled to any tax refund. If a Section
83(b) election is not made with respect to a Restricted Award, the recipient
will recognize ordinary income, in the first taxable year in which the rights of
the recipient are either transferable or are not subject to a substantial risk
of forfeiture, in an amount equal to the difference between the fair market
value of the Common Stock at that time and the original purchase price for the
shares. Subject to Section 162(m), the Company will be entitled to deduct, as
compensation expense, the same amount as the recipient must include as ordinary
income. Such deduction will be allowed in the Company's tax year which includes
the last day (generally December 31) of the recipient's tax year in which the
recipient is required to include the amount in income. When the recipient sells
the shares, he or she will recognize capital gain at the time of sale equal to
the difference between his or her basis (the price paid for the shares plus any
taxed amount) and the sale price.

16
<PAGE> 19

BOARD RECOMMENDATION

The Board of Directors believes that approval of the proposed amendments to
the Incentive Plan is in the best interests of the Company and its shareholders
and recommends a vote "FOR" the proposals contained in Items 2 and 3 of the
accompanying Notice of Meeting.

ITEM 4.

PROPOSAL TO AMEND THE 1994 DIRECTOR RESTRICTED STOCK PLAN

The purposes of the 1994 Director Restricted Stock Plan (the "1994 Director
Plan") are to encourage stock ownership by outside directors of the Company
whose continued services are considered essential to the Company's future
progress and to provide them with a further incentive to remain as directors of
the Company as well as to more closely align their interests with those of the
Company's stockholders by providing them with an equity interest in the Company.
In order to maximize this incentive, the Board of Directors has adopted, subject
to shareholder approval, an amendment to the 1994 Director Plan increasing the
amount of the annual Award (as defined) granted thereunder from 1,500 shares to
2,500 shares. If the proposed amendment to the 1994 Director Plan is approved by
shareholders, commencing in 1997, the Company will eliminate the $10,000 annual
retainer currently paid to non-employee directors.

The Board of Directors also adopted, subject to shareholder approval, an
amendment to the 1994 Director Plan to provide that restrictions on the transfer
of shares awarded under the plan lapse with respect to one-third of the shares
on each of the first, second and third anniversaries of the date of award,
instead of on each of the third, fourth and fifth anniversaries of the date of
award as the plan currently provides. Under the 1994 Director Plan, restrictions
on the transfer of shares awarded under the plan also lapse upon a director's
death, disability or resignation with the consent of the Board of Directors or
upon a change in control of the Company. The Board proposed the amendment in
order to provide limited flexibility to the participants in the 1994 Director
Plan to transfer a portion of the shares awarded in order to satisfy income tax
liabilities that may arise in connection with the 1994 Director Plan.
Participants in the 1994 Director Plan generally recognize income for federal
income tax purposes in the first year following an award under the plan.

The following is a summary of certain provisions of the 1994 Director Plan.

ADMINISTRATION, ELIGIBILITY AND NUMBER OF SHARES

The 1994 Director Plan is administered by the Board of Directors. Directors
of the Company who are not employees of the Company or any subsidiary of the
Company are eligible to participate in the 1994 Director Plan. Currently the
Company has eight outside directors eligible to participate in the 1994 Director
Plan.

Up to 50,000 shares of the Company's Common Stock may be issued under the
1994 Director Plan. Any shares of Common Stock which are forfeited under the
terms of the 1994 Director Plan will again be available for issuance under the
1994 Director Plan. To date, 18,000 shares of Common Stock have been issued
under the 1994 Director Plan.

AWARDS

On August 31 of each year that the 1994 Director Plan is in effect, each
eligible director is granted a restricted stock award of 1,500 shares (2,500
shares, if the amendment is approved) of the Company's Common Stock (an
"Award"). These Awards are subject to certain restrictions which generally
prohibit the transfer of any shares granted under the 1994 Director Plan prior
to the first to occur of (i) the third, fourth and fifth anniversaries of the
date of the Award (the first, second and third anniversaries of the date of the
Award, if the amendment is approved), each with respect to one-third of the
shares awarded, (ii) the director's death, disability or resignation with the
consent of the Board of Directors or (iii) a change in control of the Company.
If a director resigns or refuses to stand for reelection without the consent of
the Board of Directors, the director forfeits any shares which are still subject
to the foregoing restrictions and which were granted under the 1994 Director
Plan during the one year period preceding such resignation or refusal.

17
<PAGE> 20

AMENDMENTS AND TERMINATION

The 1994 Director Plan may be terminated, modified or amended at any time
by the holders of a majority of the then outstanding voting shares of the
Company. The Board of Directors at any time may modify or amend the 1994
Director Plan in any respect, except that without the approval of the
shareholders of the Company, the Board of Directors may not make any amendment
which would (i) cause the 1994 Director Plan no longer to comply with Rule 16b-3
or (ii) require shareholder approval under any applicable listing requirement.
The provisions of the 1994 Director Plan relating to the amount and timing of
each Award may not be amended more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income Security Act of
1974, or the rules thereunder.

The termination or any modification or amendment of the 1994 Director Plan
may not, without the consent of a recipient of an Award, affect his or her
rights under an Award previously made to him or her. Unless sooner terminated by
the Board of Directors or shareholders, the 1994 Director Plan will terminate
upon the earlier of (i) the close of business on the day next preceding the
tenth anniversary of the date of its adoption by the Board of Directors, or (ii)
the date on which all shares available for issuance under the 1994 Director Plan
shall have been issued pursuant to the final vesting of Awards.

FEDERAL TAX CONSEQUENCES

Neither the Company nor the recipient of an Award will realize any federal
income tax consequences at the time an Award is made under the 1994 Director
Plan unless the recipient makes an election under Section 83(b) of the Code. If
the recipient makes a Section 83(b) election within 30 days of the date of an
Award, he or she will recognize ordinary income, for the year in which the Award
is received, in an amount equal to the fair market value of the Common Stock at
the time the Award is made. If a Section 83(b) election is not made, the
recipient will recognize ordinary income, in the first taxable year in which the
rights of the recipient are either transferable or are not subject to a
substantial risk of forfeiture, in an amount equal to the fair market value of
the Common Stock at that time. Upon the sale of the Common Stock acquired
pursuant to an Award, the recipient will recognize a capital gain or loss equal
to the difference between his or her basis in the shares (any ordinary income
previously recognized) and the sales price. If the recipient holds the shares
for more than one year after vesting or, if an election is made under Section
83(b) of the Code, for more than one year after the date of the Award, he or she
will recognize a long term capital gain or loss. Subject to Section 162(m), the
Company will be entitled to deduct, as compensation expense, the same amount as
the recipient is required to include as ordinary income. Such deduction will be
allowed in the Company's tax year which includes the last day (generally
December 31) of the recipient's tax year in which the recipient is required to
include the amount in income.

BOARD RECOMMENDATION

The Board of Directors believes that approval of the proposed amendment to
the 1994 Director Plan is in the best interests of the Company and its
shareholders and recommends a vote "FOR" this proposal.

SELECTION OF AUDITORS

The Board of Directors has selected Price Waterhouse LLP, independent
public accountants, as independent auditors of GenRad for the fiscal year ending
December 28, 1996. Price Waterhouse LLP originally was engaged by the Board of
Directors as of April 1, 1995.

On March 22, 1995, GenRad notified Arthur Andersen LLP of its dismissal as
GenRad's independent auditors effective April 1, 1995. This action was approved
by the Audit Committee and the Board of Directors. During the two consecutive
fiscal years ending December 31, 1994, and the subsequent interim period (the
first fiscal quarter of 1995), there were no disagreements with Arthur Andersen
LLP on any matter of accounting principles or practices, financial statement
disclosure, or auditing scope or procedure which, if not resolved to the
satisfaction of Arthur Anderson LLP, would have caused it to make a reference to
the subject matter of such disagreement in connection with its audit reports.
Arthur Andersen LLP's report on the

18
<PAGE> 21

Financial Statements of GenRad for the two consecutive fiscal years ended
December 31, 1994 did not contain an adverse opinion or a disclaimer of opinion
nor were the reports qualified or modified as to uncertainty, audit scope or
accounting principles.

GenRad has been advised by Price Waterhouse LLP that representatives will
be present at the Meeting, and will have the opportunity to make a statement if
they so desire as well as be available to respond to appropriate questions.

SHAREHOLDER PROPOSALS

Shareholder proposals for inclusion in proxy materials for the 1997 Annual
Meeting of Shareholders must be submitted in writing by December 9, 1996 to the
Secretary of the Company, 300 Baker Avenue, Concord, Massachusetts 01742-2174.

OTHER BUSINESS

The Board of Directors knows of no business which will be presented for
consideration at the Meeting other than as stated in the Notice of Meeting. If
any other business properly comes before the Meeting, it is the intention of the
persons named in the enclosed Proxy to vote or otherwise act in accordance with
their judgment on such matters.

WALTER A. SHEPHARD, Clerk

April 8, 1996
- -------------------------------------------------------------------------------
WHETHER OR NOT YOU INTEND TO BE PRESENT AT THE MEETING, PLEASE SEND IN YOUR
PROXY WITHOUT DELAY. PROMPT RESPONSE IS HELPFUL AND YOUR COOPERATION WILL BE
APPRECIATED. ANY SHAREHOLDER GIVING A PROXY MAY REVOKE AT ANY TIME IF IT HAS NOT
BEEN VOTED.
- -------------------------------------------------------------------------------
19
<PAGE> 22

GENRAD CHOICE INVESTMENT PLAN

300 BAKER AVENUE
CONCORD, MASSACHUSETTS 01742-2174

NOTICE TO PARTICIPANTS OF THE GENRAD CHOICE INVESTMENT PLAN
OF THE ANNUAL MEETING OF GENRAD SHAREHOLDERS

The GenRad Choice Investment Plan ("ChIP") provides that The Vanguard Group
of Investment Companies ("Vanguard"), as Trustee of ChIP, will follow the voting
instructions of the ChIP Participants with respect to any voting rights
pertaining to their respective interests in shares of GenRad, Inc. Common Stock
held in ChIP Parts I and II.

The Annual Meeting of Shareholders of GenRad, Inc. ("GenRad" or the
"Company") will be held on Thursday, May 9, 1996 at 11:00 a.m. at the Bank of
Boston auditorium (Street Floor), 100 Federal Street, Boston, Massachusetts, and
any adjournment thereof (the "Meeting"), for the following purposes:

1. To elect Russell A. Gullotti and William G. Scheerer to the Board of
Directors to serve as Class III Directors for three-year terms.

5. To consider and act upon such other business as may properly come before
said Annual Meeting or any adjournment thereof.

The attached Proxy Statement describes the matters to be acted upon at the
meeting and contains information required to be disclosed in connection with the
solicitation of Proxies for the meeting. The enclosed Voting Instruction Card
identifies the number of shares of GenRad Common Stock that you may direct the
Trustee to vote.

Please complete, date and sign the Voting Instruction Card and return it to
the Bank of Boston, the Company's Transfer Agent (the "Bank"), P.O. Box 1628,
Boston, Massachusetts 02105 on or before May 7, 1996 in the envelope provided.
The Trustee has provided the Bank with a ballot executed in blank. The Bank will
tabulate the total from the Voting Instruction Cards it receives and will enter
these totals on the ballot. This ballot will then be tabulated by the Bank with
all other ballots cast at the Meeting.

Most of the ChIP Participants who are entitled to direct the voting of
shares of GenRad Common Stock held by ChIP are also shareholders of GenRad. A
duplicate copy of the Company's 1995 Annual Report (the "Annual Report") is,
therefore, not enclosed with this notice if you are also a shareholder. If, for
any reason, you have not received an Annual Report, or if you wish to have an
additional copy, please write to GenRad at the above address; call GenRad at
(508) 287-7222; or stop in at GenRad's Clerk's Office in Concord, Massachusetts,
and a copy will be provided to you.

The number of shares indicated on the enclosed Voting Instruction Card is
the total number represented by your allocations to the GenRad Stock Fund in
ChIP Part I (Profit Sharing Trust account) and Part II (employee contribution
account). If you have any questions about the manner in which this number was
computed, or about any other matter in this notice, please contact GenRad's
Human Resources Department at (508) 287-7467.

All ChIP participants are extended a cordial invitation to attend the
Meeting.

GENRAD, INC.

By: WALTER A. SHEPHARD, Clerk
April 8, 1996

PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED VOTING INSTRUCTION CARD AND MAIL IT
PROMPTLY IN THE ENVELOPE PROVIDED.
<PAGE> 23
DETACH HERE

VOTING INSTRUCTIONS VOTING INSTRUCTIONS

GENRAD CHOICE INVESTMENT PLAN
P
R
O The undersigned directs the Trustee of the GenRad Choice Investment
X Plan ("ChIP") to vote as designated herein the shares represented by the
Y undersigned's fractional interest in the total shares of GenRad, Inc.
Common Stock held by ChIP at the Annual Meeting of Shareholders of GenRad,
Inc. to be held on Thursday, May 9, 1996 at 11:00 a.m. at the Bank of
Boston auditorium (Street Floor), 100 Federal Street, Boston,
Massachusetts, and any adjournment thereof (the "Meeting"). The undersigned
acknowledges receipt of the Company's Proxy Statement dated April 8, 1996
(the "Proxy Statement"). THE PROXIES ARE FURTHER AUTHORIZED TO VOTE, IN
THEIR DISCRETION, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE
MEETING.

PLEASE RETURN THIS CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE TO THE
FIRST NATIONAL BANK OF BOSTON, P.O. BOX 1628, BOSTON, MASSACHUSETTS 02105.

-----------
(CONTINUED, AND TO BE SIGNED ON REVERSE SIDE) SEE REVERSE
SIDE
-----------

<PAGE> 24

DETACH HERE

GENRAD, INC.
300 BAKER AVENUE, CONCORD, MA 01742-2174
P THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
R
O The undersigned appoints James F. Lyons, Sarah H. Lucas and Daniel F.
X Harrington and each or any of them as proxies with full power of
Y substitution to vote as designated herein all shares of stock which the
undersigned would be entitled to vote if personally present at the Annual
Meeting of Shareholders of GenRad, Inc. to be held on Thursday, May 9, 1996
at 11:00 a.m. at the Bank of Boston auditorium (Street Floor), 100 Federal
Street, Boston, Massachusetts, and any adjournment thereof (the "Meeting").
The undersigned acknowledges receipt of the Company's Proxy Statement dated
April 8, 1996 (the "Proxy Statement"). THE PROXIES ARE FURTHER AUTHORIZED
TO VOTE, IN THEIR DISCRETION, UPON SUCH OTHER BUSINESS AS MAY PROPERLY COME
BEFORE THE MEETING.

PLEASE RETURN THIS CARD IN THE ENCLOSED POSTAGE PAID ENVELOPE TO THE
FIRST NATIONAL BANK OF BOSTON, P.O. BOX 1628, BOSTON, MASSACHUSETTS 02105.

-----------
(CONTINUED, AND TO BE SIGNED ON REVERSE SIDE) SEE REVERSE
SIDE
-----------

<PAGE> 25

DETACH HERE

/X/ PLEASE MARK
VOTES AS IN THIS
EXAMPLE.

IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED IN FAVOR OF THE
PROPOSALS SET FORTH BELOW..

1. To elect Russell A. Gullotti and William G. Scheerer to
the Board of Directors to serve as Class III Directors
for three-year terms.

FOR WITHHELD MARK HERE
/ / / / FOR ADDRESS
CHANGE AND
NOTE BELOW
/ / / /
--------------------------------------
For all nominees except as noted above

2. To consider and act upon a proposal to FOR AGAINST ABSTAIN
amend the Company's 1991 Equity Incentive / / / / / /
Plan (the "Incentive Plan") by increasing
the number of shares of Common Stock available
for issuance under the Incentive Plan by
920,000 shares, the options for which the
Company has granted (subject to shareholder
approval) to four officers of the Company.

3. To consider and act upon a proposal to FOR AGAINST ABSTAIN
amend the Incentive Plan by increasing the / / / / / /
number of shares of Common Stock available
for issuance under the Incentive Plan by
830,000 shares, the options for which the
Company intends to grant to members of the
Company's business teams and other Incentive
Plan participants.

4. To consider and act upon a proposal to FOR AGAINST ABSTAIN
amend the 1994 Director Restricted Stock / / / / / /
Plan by increasing, in lieu of the annual
cash retainer, the amount of the annual
award to each non-employee director under
such Plan from 1,500 shares to 2,500 shares
of Common Stock and changing the periods
during which shares awarded under such
Plan are subject to restrictions on transfer,
as more fully described in the Proxy Statement.

5. To consider and act upon such other business as may properly come
before said Annual Meeting or any adjournment thereof.

Signature Date Signature Date
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