As filed with the Securities and Exchange Commission on December 16, 1998.
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GENRAD, INC.
(Exact name of issuer as specified in its charter)
Massachusetts 04-1360950
-------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
7 Technology Park Drive, Westford, MA 01886
-------------------------------------------
(Address of principal executive offices)
----------------
GENRAD CHOICE INVESTMENT PLAN
(Full title of plan)
----------------
Copy to:
James F. Lyons Constantine Alexander, Esq.
President and Chief Executive Officer Nutter, McClennen & Fish, LLP
GenRad, Inc. One International Place
7 Technology Park Drive Boston, Massachusetts 02110-2699
Westford, MA 01886 (617) 439-2000
(978) 589-7000
(Name, address and telephone
number of agent for service)
----------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
==================================================================================================================================
Proposed
Title of each class of securities to Amount being registered maximum offering Proposed maximum Amount of
be registered (1) price per share aggregate offering price registration fee
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, 500,000 Shares $16.78(2) $8,390,000(2) $2,332.42(2)
$1.00 par value per share
==================================================================================================================================
</TABLE>
(1) This Registration Statement covers 500,000 shares of Common Stock that
may be purchased for participants' accounts in accordance with the
GenRad Choice Investment Plan (the "Plan"). Pursuant to Rule 416(b)
under the Securities Act of 1933, as amended (the "Securities Act"),
this Registration Statement also covers an indeterminate number of
additional shares of Common Stock which may be purchased in accordance
with said Plan as a result of a stock dividend, stock split or other
recapitalization. In addition, pursuant to Rule 416(c) under the
Securities Act, this Registration Statement also covers an
indeterminate amount of interests to be offered or sold pursuant to the
Plan.
(2) Calculated based on the average of the high and low prices per share of
the Common Stock as reported on the New York Stock Exchange on December
14, 1998.
================================================================================
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
----------------------------------------
GenRad, Inc. (the "Company") and the Plan hereby incorporate by
reference in this Registration Statement the following documents and information
heretofore filed with the Securities and Exchange Commission (the "Commission"):
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
January 3, 1998 and the Plan's Annual Report on Form 11-K for the Plan's fiscal
year ended December 31, 1997;
(b) The Company's Quarterly Reports on Form 10-Q for the quarterly
periods ended April 4, July 4 and October 3, 1998, and its Current Report on
Form 8-K dated June 22, 1998, as amended on July 10, 1998; and
(c) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-3 (File No. 333-57251).
All documents subsequently filed by the Company and the Plan pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), prior to the filing of any post-effective
amendment which indicates that all securities offered hereunder have been sold
or which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be a part hereof
from the date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Registration Statement to the
extent that any other subsequently-filed document which also is incorporated or
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Registration
Statement.
Item 4. Description of Securities.
--------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel.
---------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers.
------------------------------------------
The Company's By-laws, as amended to date, provide for indemnification
of officers and directors to the fullest extent permitted by the laws of the
Commonwealth of Massachusetts.
-2-
<PAGE>
Section 67 of Chapter 156B of the Massachusetts General Laws, which is
applicable to the Company as a Massachusetts corporation, provides as follows:
"Indemnification of directors, officers, employees and other agents of
a corporation, and persons who serve at its request as directors, officers,
employees or other agents of another organization, or who serve at its request
in any capacity with respect to any employee benefit plan, may be provided by it
to whatever extent shall be specified in or authorized by (i) the articles of
organization or (ii) a by-law adopted by the stockholders or (iii) a vote
adopted by the holders of a majority of the shares of stock entitled to vote on
the election of directors. Except as the articles of organization or by-laws
otherwise require, indemnification of any persons referred to in the preceding
sentence who are not directors of the corporation may be provided by it to the
extent authorized by the directors. Such indemnification may include payment by
the corporation of expenses incurred in defending a civil or criminal action or
proceeding in advance of the final disposition of such action or proceeding,
upon receipt of an undertaking by the person indemnified to repay such payment
if he shall be adjudicated to be not entitled to indemnification under this
section which undertaking may be accepted without reference to the financial
ability of such person to make repayment. Any such indemnification may be
provided although the person to be indemnified is no longer an officer,
director, employee or agent of the corporation or of such other organization or
no longer serves with respect to any such employee benefit plan.
"No indemnification shall be provided for any person with respect to
any matter as to which he shall have been adjudicated in any proceeding not to
have acted in good faith in the reasonable belief that his action was in the
best interest of the corporation or to the extent that such matter relates to
service with respect to an employee benefit plan, in the best interests of the
participants or beneficiaries of such employee benefit plan.
"The absence of any express provision for indemnification shall not
limit any right of indemnification existing independently of this section.
"A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or other agent
of the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or other agent of another organization or with
respect to any employee benefit plan, against any liability incurred by him in
any such capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability."
The Company provides officers' and directors' liability insurance for
its officers and directors and has entered into indemnification agreements with
each of its executive officers providing contractual indemnification by the
Company to the fullest extent permissible under the laws of the Commonwealth of
Massachusetts.
Item 7. Exemption from Registration.
----------------------------
Not applicable.
-3-
<PAGE>
Item 8. Exhibits.
---------
See the exhibit index immediately preceding the exhibits attached
hereto. The registrant has submitted the Plan and all amendments thereto to the
Internal Revenue Service (the "IRS") in a timely manner, and has made (and
hereby undertakes to make) all changes required by the IRS in order to qualify
the Plan (or keep the Plan qualified) under Section 401 of the Internal Revenue
Code.
Item 9. Undertakings.
-------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement to include
any material information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions of the Delaware General
Corporation Law and the registrant's Certificate of Incorporation and By-laws,
or otherwise, the registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy, as expressed in the Act,
and will be governed by the final adjudication of such issue.
-4-
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Westford, Massachusetts, on the 16th day of December, 1998.
GENRAD, INC.
By: /s/ James F. Lyons
--------------------------------------
James F. Lyons
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed below by the following persons on
behalf of the registrant in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ James F. Lyons President, Chief Executive Officer December 16, 1998
- ---------------------- and Director
James F. Lyons
/s/ Walter A. Shephard Chief Financial Officer and December 16, 1998
- ----------------------- Principal Accounting Officer
Walter A. Shephard
/s/ William S. Antle Director December 16, 1998
- -----------------------
William S. Antle
/s/ Russell A. Gullotti Director December 16, 1998
- -----------------------
Russell A. Gullotti
/s/ Lowell B. Hawkinson Director December 16, 1998
- -----------------------
Lowell B. Hawkinson
/s/ Richard G. Rogers Director December 16, 1998
- -----------------------
Richard G. Rogers
</TABLE>
-5-
<PAGE>
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ William G. Scheerer Director December 16, 1998
- -----------------------
William G. Scheerer
/s/ Adriana Stadecker Director December 16, 1998
- -----------------------
Adriana Stadecker
/s/ Ed Zschau Director December 16, 1998
- -----------------------
Ed Zschau
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, the administrator of
the GenRad Choice Investment Plan has duly caused this registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Westford, Commonwealth of Massachusetts, on December 16, 1998.
GENRAD CHOICE INVESTMENT PLAN
By: GenRad, Inc.
By: /s/ Walter A. Shephard
---------------------------
Name: Walter A. Shephard
-------------------------
Title: VP & CFO
-----------------------
-6-
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Title Page
- ----------- ----- ----
<S> <C> <C>
4.1 GenRad Choice Investment Plan 8
5 Opinion of Nutter, McClennen & Fish, LLP 64
23.1 Consent of Nutter, McClennen & Fish, LLP Contained in
Exhibit 5
23.2 Consent of PricewaterhouseCoopers LLP 66
23.3 Consent of PricewaterhouseCoopers LLP 67
</TABLE>
-7-
Exhibit 4.1
FIRST AMENDMENT TO THE
GENRAD CHOICE INVESTMENT PLAN
(Amended and Restated Effective January 1, 1998)
WHEREAS, the GenRad Choice Investment Plan (the "Plan") was adopted for
the benefit of its eligible employees and their beneficiaries; and
WHEREAS, Article IX of the Plan provides the Employer with the right to
amend the Plan; and
WHEREAS, the Employer now desires to modify the participation
requirements of Part II of the GenRad Choice Investment Plan ("CHIP") for
certain Employees employed by the Employer as the result of a plan merger or
acquisition;
NOW, THEREFORE, BE IT RESOLVED that the Plan be and it hereby is
amended effective April 1, 1998 in the following respects, to wit:
Section 10.02 of Article X of the Plan shall be amended by the addition
of a new paragraph at the end to read as follows:
"Subject to the terms of the agreement between GenRad, Inc.
and an entity merged into or acquired by the Employer, an Employee who
was a participant in a qualified deferred compensation plan maintained
by such entity on the date of such merger or acquisition, shall become
a Participant upon filing an enrollment form ("Form") as provided in
Section 10.03, below, on the first scheduled work-day following the
date of the merger or acquisition. Each other Employer who was employed
by an entity merged into or acquired by the Employer shall become a
Participant in accordance with the provisions of this Section 10.02 as
described above."
IN WITNESS WHEREOF, the Employer has caused those presents to execute
this document in its name and on its behalf this 14th day of April, 1998.
GENRAD, INC.
By: /s/ Lori B. Hannay
---------------------------
Lori B. Hannay
Title: Vice President
<PAGE>
SECOND AMENDMENT TO THE
GENRAD CHOICE INVESTMENT PLAN
(Amended and Restated Effective January 1, 1998)
WHEREAS, the GenRad Choice Investment Plan (the "Plan") was adopted for
the benefit of its eligible employees and their beneficiaries; and
WHEREAS, Article IX of the Plan provides the Employer with the right to
amend the Plan; and
WHEREAS, the Employer now desires to modify the Employer Matching
Contributions of Part II of the GenRad Choice Investment Plan ("CHIP");
NOW, THEREFORE, BE IT RESOLVED that the Plan be and hereby is amended
effective July 1, 1998 in the following respects, to wit:
The first paragraph of Section 10.07 of Article X of the Plan shall be
amended to read as follows:
"Employer Matching Contributions. The CHIP Employer may make Employer
Matching Contributions to the account of each CHIP Participant who made a CHIP
contribution to the Plan during the Plan Year. The "Employer Matching
Contribution", shall be 50% of the first 10% of the CHIP Participant
Contribution during the Plan Year."
IN WITNESS WHEREOF, the Employer has caused those presents to execute
this document in its name and on its behalf this 22nd day of June 1998.
GENRAD, INC.
By: /s/ Lori B. Hannay
---------------------------
Lori B. Hannay
Title: Vice President
<PAGE>
GENRAD CHOICE INVESTMENT PLAN
Amended and Restated Effective January 1, 1998
<PAGE>
GENRAD CHOICE INVESTMENT PLAN
January 1, 1998 Amendment and Restatement
WHEREAS, GenRad, Inc. (formerly the General Radio Company), a
Massachusetts Corporation with its principal offices in Concord, Massachusetts
(the "Employer"), established the GenRad Choice Investment Plan (formerly the
General Radio Profit-Sharing Trust) (the "Plan" or "CHIP" Plan), originally
effective December 31, 1943, thereafter amended and restated the Plan from
time-to-time and most recently in 1994 to incorporate provisions required by The
Tax Reform Act of 1986, the Omnibus Budget Reconciliation Act of 1987, the
Technical and Miscellaneous Revenue Act of 1988, and the Omnibus Budget
Reconciliation Act of 1989; and
WHEREAS, the Employer now desires to amend and restate the Plan
effective January 1, 1998; and
WHEREAS, the Employer shall administer said Plan as amended and
restated in accordance with all current law and shall amend the Plan in such
manner and at such time as required; and
WHEREAS, pursuant to Article IX of the Plan, the Employer reserves the
right at any time to amend the Plan by a written instrument, provided that no
amendment shall permit any part of the Trust Fund to revert to the Employer or
to be used or diverted to purposes other than the exclusive benefit of employees
or their beneficiaries prior to satisfaction of all liabilities under the Plan;
NOW, THEREFORE, the Employer hereby amends and restates the Plan,
effective January 1, 1998, to read in its entirety as follows:
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Article or Section Page
- ------------------ ----
<S> <C> <C>
ARTICLE I GENERAL PROVISIONS............................................................................1
1.01 Plan..........................................................................................1
1.02 Named Fiduciary...............................................................................1
1.03 Trust Agreement...............................................................................1
1.04 Trustee...................................................................................... 1
1.05 Trust and Trust Fund..........................................................................1
1.06 Administrator; Accounting.....................................................................1
1.07 Claims and Review.............................................................................1
1.08 No Reversion; Vesting Upon Termination........................................................3
1.09 Exception.....................................................................................3
1.10 Construction; Applicable Law..................................................................3
1.11 Plan Year; Effective Date.....................................................................3
1.12 Definitions...................................................................................4
1.13 Successors and Affiliates.....................................................................4
1.14 Board of Directors............................................................................4
ARTICLE II PARTICIPATION; CREDITED SERVICE; BREAK IN SERVICE.............................................4
2.01 Participant...................................................................................4
2.02 Year of Service...............................................................................5
2.03 Credited Service..............................................................................6
2.04 Mergers, etc..................................................................................8
ARTICLE III EMPLOYER CONTRIBUTIONS........................................................................9
3.01 Contribution Formula..........................................................................9
3.02 Limitation....................................................................................9
3.03 Payments......................................................................................9
ARTICLE IV ALLOCATION OF EMPLOYER CONTRIBUTIONS..........................................................9
4.01 Participant's Accounts........................................................................9
4.02 Allocation of Contribution....................................................................9
4.03 Limitation on Additions......................................................................11
4.04 Other Plans..................................................................................12
4.05 Inventory and Allocation Date................................................................13
4.06 Fair Market Value............................................................................13
ARTICLE V INVESTMENT OF ACCOUNTS.......................................................................13
5.01 Investment Funds.............................................................................13
5.02 Initial Allocation of Assets; Reserved GenRad Stock Fund.....................................13
5.03 Election of Investment Fund..................................................................15
<PAGE>
TABLE OF CONTENTS (Continued)
Article or Section Page
- ------------------ ----
ARTICLE VI BENEFITS.....................................................................................16
6.01 Benefits.....................................................................................16
6.02 Account Balance..............................................................................16
6.03 Retirement Benefit...........................................................................16
6.04 Retirement...................................................................................17
6.05 Death Benefits...............................................................................17
6.06 Disability...................................................................................18
6.07 Termination of Employment....................................................................19
6.08 Distributee..................................................................................19
6.09 Effective Beneficiary Designation............................................................19
6.10 Forms of Distribution........................................................................19
6.11 Alienation; Reaching.........................................................................20
6.12 Payment Under Qualified Domestic Relations Order.............................................20
6.13 Commencement of Benefit Payments.............................................................20
6.14 Employment After Retirement..................................................................20
6.15 Hardship Benefits............................................................................20
6.16 Direct Rollover of Eligible Distribution.....................................................21
ARTICLE VII ADMINISTRATION OF THE PLAN...................................................................22
7.01 General Powers...............................................................................22
7.02 Special Powers...............................................................................22
7.03 Fiduciary Status.............................................................................23
7.04 Meetings.....................................................................................23
7.05 Disbursements and Distributions..............................................................23
7.06 Administrative Expenses; Advisors............................................................24
7.07 Trust Agreement..............................................................................24
7.08 Voting Employer Securities...................................................................24
ARTICLE VIII MISCELLANEOUS PROVISIONS.....................................................................25
8.01 Bonding......................................................................................25
8.02 Insurance and Indemnification................................................................25
8.03 Terminology..................................................................................25
8.04 Miscellaneous................................................................................25
8.05 Registration and Sale of Securities..........................................................25
ARTICLE IX AMENDMENT AND TERMINATION....................................................................27
9.01 Right of Amendment and Termination...........................................................27
<PAGE>
TABLE OF CONTENTS (Continued)
Article or Section Page
- ------------------ ----
ARTICLE X CASH OR DEFERRED ARRANGEMENT -- CHIP PART II...........................................................28
10.01 Purpose......................................................................................28
10.02 Eligibility; Participation...................................................................28
10.03 Enrollment Form..............................................................................28
10.04 CHIP Participant Contributions...............................................................29
10.05 Return of CHIP Participant Contributions Above $7,000........................................29
10.06 Compensation.................................................................................29
10.07 Employer Matching Contributions..............................................................30
10.08 Payment and Allocation of Contributions......................................................30
10.09 Deferral Percentage Limitations..............................................................31
10.10 Procedure to Follow if Deferral Percentage Limitation Exceeded...............................31
10.11 Return of Reduced Salary Deferral Contributions..............................................32
10.12 Determination of Income on Excess Salary Deferral Contributions..............................32
10.13 Contribution Percentage Limitation...........................................................33
10.14 Definitions..................................................................................33
10.15 Withdrawals..................................................................................36
10.16 Loans........................................................................................37
10.17 Special Administrative Provisions for the Choice Investment Plan.............................40
10.18 Vesting of Employer Matching Contributions...................................................41
ARTICLE XI TOP-HEAVY PROVISIONS.........................................................................42
11.01 Applicability................................................................................42
11.02 Definitions..................................................................................42
11.03 Minimum Contribution.........................................................................45
11.04 Adjustment to Maximum Limitations............................................................46
11.05 Termination of Top-Heavy Status..............................................................46
ARTICLE XII ROLLOVER CONTRIBUTIONS.......................................................................47
12.01 Rollover Contributions.......................................................................47
12.02 Investment of Rollover or Trustee Transfer Contributions.....................................47
12.03 Withdrawal of Rollover Contributions.........................................................47
</TABLE>
<PAGE>
ARTICLE I
GENERAL PROVISIONS
1.01 Plan. This instrument evidences a profit-sharing plan (the "Plan")
established and maintained by GenRad, Inc., a Massachusetts corporation
with its principal office in Concord, Massachusetts (the "Employer").
The Plan shall be known as the GenRad Choice Investment Plan ("CHIP").
Any other entity which adopts this Plan shall be considered to have
established a Plan as the Employer hereunder and the terms of this
instrument shall apply to the employees of such Employer separately
except as otherwise expressly provided.
1.02 Named Fiduciary. Effective July 1, 1987, The Committee on Employee
Benefit Plans (the "Committee") shall constitute, collectively, the
Named Fiduciary of the Plan and have general authority to control and
manage the operation and administration of the Plan established
hereunder, including authority to appoint and remove the Plan
Administrator and to adopt rules interpreting or implementing this
instrument.
1.03 Trust Agreement. This means the agreement entered into with the Trustee
providing for the Trust Fund in which contributions to the Plan are
held.
1.04 Trustee. This means the trustee by whom the accounts and assets of the
Plan are held under any Trust Agreement, including any successor or
successors.
1.05 Trust or Trust Fund. This means the fund established pursuant to the
Trust Agreement and shall include all assets held by the Trustee under
said Trust Agreement.
1.06 Administrator; Accounting. The Committee shall be the Plan
Administrator, unless another appointment is made under Section 1.02,
and shall be responsible for disclosure and reporting. Compliance with
the disclosure and reporting requirements of the Employee Retirement
Income Security Act of 1974 ("ERISA") shall be sufficient to discharge
any duty to account which would otherwise exist regarding the Plan and
Trust.
1.07 Claims and Review. All inquires and claims respecting the Plan shall be
in a writing directed to the Plan Administrator for Claims and Review.
(a) Claims. In the case of a claim regarding a benefit, a
written determination allowing or denying the claim shall be
furnished to the claimant promptly upon receipt of the
claim. A denial or partial denial of a claim shall be dated
and signed by the Plan Administrator and shall clearly set
forth the following information:
<PAGE>
(1) The specific reason or reasons for the denial;
(2) Specific reference to pertinent Plan provisions on
which the denial is based;
(3) A description of any additional material or
information necessary for the claimant to perfect the
claim and an explanation of why such material or
information is necessary;
(4) An explanation of the review procedures set forth below.
If no written determination is furnished to the claimant within thirty
(30) days after the receipt of the claim, then the claim shall be
deemed denied and the thirtieth (30th) day after such receipt shall be
the determination date.
(b) Review. A claimant may obtain review of an adverse
determination by filing a written notice of appeal with the
Committee within sixty (60) days after the determination
date or within sixty (60) days after the receipt of a
written notice denying the claim whichever is applicable.
Thereupon the Committee shall appoint one or more persons
who may be themselves, one or more of their number, or any
other person or persons whether or not connected with an
Employer to conduct a full and fair review. As part of the
review the claimant shall have the right:
(1) To be represented by a spokesperson;
(2) To present a written statement of facts and of the
claimant's interpretation of any pertinent document,
statute or regulation; and
(3) To receive a prompt written decision clearly setting
forth findings of fact and the specific reasons for
the decision written in a manner calculated to be
understood by the claimant and containing specific
references to pertinent plan provisions on which the
decision is based.
A decision shall be rendered no more than sixty (60) days after the
request for review, except that such period may be extended for an
additional sixty (60) days if the person or persons reviewing the claim
determine that special circumstances, including the advisability of a
hearing, require such extension.
If benefits under the Plan are provided through an insurance contract,
group prepayment contract or other similar agreement and if the
contract so provides, review of a claim shall be made by the insurance
company or other contracting
-2-
<PAGE>
organization and the Plan Administrator to whom a claim is addressed
shall so advise the claimant.
All applicable governmental regulations regarding claims and review
shall be observed.
1.08 No Reversion; Vesting Upon Termination. Notwithstanding any provision
of this Article except Section 1.09, below,
(a) No part of the income or principal of the Trust shall be
used for or diverted to purposes other than for the
exclusive benefit of the Participants and beneficiaries
(including the reasonable expenses of administering the
Plan).
(b) Upon any termination or partial termination of the Plan or
complete discontinuance of contributions thereunder (within
the meaning of Section 411(d)(3) of the Internal Revenue
Code of 1954, as amended (the "Code")) the interest of each
affected Participant in his account at the date of such
termination, partial termination or discontinuance shall be
nonforfeitable and all unallocated contributions shall be
allocated and shall become nonforfeitable.
1.09 Exception. Notwithstanding the provisions of Section 1.08, above, if
the Commissioner of Internal Revenue or the Secretary of Labor (or the
delegate of either) determines that the 1989 Amendment and Restatement
or any subsequent material amendment does not qualify under Section
401(a) of the Code or comply with ERISA, any contribution made by the
Employer for the year with respect to which such 1989 Amendment and
Restatement or any subsequent material amendment is applicable shall
be returned to the Employer within one year after the date of denial
of qualification or failure of compliance, if the Employer so elects.
1.10 Construction; Applicable Law. It is intended that the Plan and the
Trust be organized and operated in conformity with ERISA, with the Code
and with regulations issued pursuant to those laws. This instrument
shall be construed accordingly. The Plan and Trust shall also be
subject to the laws of the Commonwealth of Massachusetts to the extent
that they are applicable.
1.11 Plan Year; Effective Date. The fiscal year for the Plan ("Plan Year")
and the Trust shall end on December 31. The Plan is originally
established December 31, 1943. The effective date of the Plan as
amended herein is January 1, 1998, unless a different effective date is
specifically noted for a particular provision. The first Plan Year of
this 1998 Amendment and Restatement is the twelve (12) month period
ending December 31, 1998.
-3-
<PAGE>
1.12 Definitions.
------------
(1) ERISA Definitions. Any term defined in Section 3 of ERISA
shall have the same definition for purposes of this
instrument. Any term not so defined but given a definite
meaning ascertainable elsewhere in ERISA or in the
interpretative regulations under ERISA (e.g., "Hour of
Service") shall have the same meaning for purposes of this
instrument.
(2) Code References. This instrument contains certain references
to the Internal Revenue Code of 1986 (the "Code").
(3) Definitions in Context. Any term which is given a definite
meaning ascertainable in any provision of this instrument
(e.g., the term "Plan" in Section 1.01), shall have the same
meaning when used elsewhere herein.
1.13 Successors and Affiliates. A reference to the "Employer" shall be
construed to refer also to the product of any merger or to the
transferee or transferees in any similar reorganization, to the other
members of any controlled group of corporations (as defined for
purposes of Section 210(c) of ERISA and Section 414(b) of the Code) of
which GenRad, Inc. is a member and which adopts the Plan, and to the
other members of any affiliated service group (as defined in Section
414(m)) of the Code) of which GenRad, Inc. is a member and which adopts
the Plan.
1.14 Board of Directors. A reference to the "Board of Directors" shall mean
the Board of Directors of GenRad, Inc.
ARTICLE II
PARTICIPATION; CREDITED SERVICE; BREAK IN SERVICE
2.01 Participant.
(a) An Employee of the Employer becomes a Participant on the
first scheduled work-day of the first Plan year during which
the Employee completes a Year of Service (as defined in
Section 2.02) with the Employer. "Employee" means any person
who is employed by the Employer or affiliated Employer, but
excludes any person who is an independent contractor.
Employee shall include Leased Employees within the meaning
of Code Sections 414(n)(2) and 414(o)(2) unless such Leased
Employees do not constitute more than 20% of the recipient's
non-highly compensated work force.
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(b) A former Employee who had met the eligibility requirements
stated in this Section 2.01 prior to termination of
employment and who is re-employed by the Employer shall
become a Participant on the date he is re-employed. A former
Employee who did not meet the eligibility requirements prior
to termination of employment and who is re-employed shall
become a Participant upon the earlier of the following two
dates:
(1) The date he or she fist completes a Year of Service
under Sections 2.02 and 2.03 disregarding service
prior to termination, or
(2) The date on which he or she would first complete a
Year of Service under Section 2.02 and 2.03 after
taking into account service completed prior to such
termination.
(c) Service with an entity prior to its adoption of this Plan
shall be counted for purposes of this Plan unless otherwise
expressly excluded in the resolution adopting the Plan.
Service with any member of a controlled group or an
affiliated service group shall be considered service with
the Employer after the individual completes one hour of
service with the Employer. Hours of service shall include
all service with a company incorporated outside the U.S. all
of the stock of which is owned by GenRad, Inc., but only
after such an employee is employed by an Employer.
(d) Cooperative students employed by the Employer shall not be
eligible for participation in this Plan and service as a
cooperative student shall be excluded for all purposes under
the Plan.
After an Employee has become a Participant, the continuation
of his status as a Participant shall be determined by the
definition of "Participant" in ERISA Section 3(7).
2.02 Year of Service. An Employee has completed a "Year of Service" if the
Employee completes one thousand (1,000) hours of service for the
Employer during either of the following computation periods:
(a) The first computation period is the completed twelve (12)
month period beginning with the first day on which he
completes an hour of service, except that if the first day
on which an Employee completes an hour of service is the
first regular work day of any year, the computation period
ends on the last regular work day of that year; or
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(b) If he does not complete one thousand (1,000) hours of
service in the period described in (a) above, then the
succeeding twelve (12) month computation period begins with
the first anniversary of the Employee's employment date.
2.03 Credited Service. The following rules shall apply:
(a) Computation of Service. Except as provided above, hours of
service shall be counted from the first hour of service
performed by an Employee for the Employer after January 1,
1976.
(b) Hours Counted. Hours of service shall consist of:
(1) Each hour for which an Employee is paid, or entitled
to payment, for the performance of duties for the
Employer.
(2) Each hour for which an Employee is paid, or entitled
to payment, directly or indirectly by the Employer on
account of a period of time during which no duties
are performed due to vacation, holiday, illness,
incapacity (including disability), layoff, severance,
jury duty, military duty or authorized absence
described below; and
(3) Each hour for which the Employee is paid for a period
of wage continuation during disability, including
periods with respect to which benefits are payable
under long-term disability insurance maintained by
the Employer; and
(4) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to
by the Employer and which is not otherwise counted.
No hours of service shall be recognized for any payments made in
compliance with workmen's compensation or unemployment compensation.
Neither shall any hours be recognized for a payment made solely to
reimburse an Employee for medical or medically related expenses.
(c) Conversion of Payments to Hours. In the case of payments
made to the Employee under Paragraphs (b)(2), (3), and (4)
above, the number of hours to be counted shall be:
(1) Payments Based on Units of Time. If the payment is
calculated on the basis of units of time, the number
of such hours counted shall be the
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number of working hours that the Employee is
regularly scheduled during that unit of time.
(2) Payments Not Based on Units of Time. If the payment
is not calculated on the basis of units of time, the
number of hours counted shall be determined by
dividing the amount of the payment by the Employee's
most recent hourly rate of compensation.
In the case of an Employee whose compensation is based on a fixed rate
for a specified period other than an hour, his most recent hourly rate
of compensation shall be his most recent rate of compensation for such
period divided by the number of his regularly scheduled working hours
in such period. In the case of an Employee whose compensation is not
based on a fixed rate for a specified period, his most recent hourly
rate of compensation shall be the hourly rate of compensation paid by
the Employer to employees in his job classification, or, if no employee
in that job classification has an hourly rate, the minimum wage as
established under Section 6(a)(1) of the Fair Labor Standards Act of
1938, as amended.
Notwithstanding the above, an Employee will not be credited with a
number of hours of service which is greater than the number of working
hours regularly scheduled during such period.
For the purposes of subparagraphs (1) and (2) above, if an Employee
does not have a regular work schedule, he shall be treated as if he
were to regularly work eight hours per day, but not more than 40 hours
per week.
(d) Military Service. An Employee shall receive credit for a
period of absence during military service in the armed
forces of the United States but only if the individual is
entitled under Federal law to Veterans' re-employment rights
with respect to such period of absence. The number of hours
counted will be the number of hours that would have been
counted under Paragraph (b) above had the Participant been
regularly scheduled to work during his absence.
(e) Authorized Absence. Credit shall be given for each day of a
Participant's authorized absence (including layoffs), for
any period, whether paid or unpaid; provided that no credit
shall be available under this subsection which has been
given under any other provision of this section. Credit will
be given for the number of hours the Participant would have
been regularly scheduled to work during such absence.
Notwithstanding the preceding
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sentence, no credit shall be given for an unpaid absence if
the Participant fails to return to work for the Employer
within 90 days following the termination of such absence.
(f) Other Federal and State Law. Nothing in this Plan shall be
construed to deny any Employee recognition of an hour of
service if such recognition is otherwise required by
applicable Federal or state law.
(g) Computation Period; Period Credited. The computation period
for Years of Service is as described in Section 2.02, above.
Hours counted for the performance of duties shall be
credited to the computation period in which the duties were
performed. Hours counted for a period in which no duties
were performed (the non-work period) and for which the
payment was based on units of time shall be credited to the
computation period(s) in which such non-work period
occurred. Hours counted for a non-work period for which the
payment was not based on units of time shall be credited to
the computation period(s) in which such non-work period
occurred; such hours, however, shall be allocated to no more
than two computation periods on any reasonable basis
consistently applied to all employees. Hours counted due to
an award or agreement for back pay shall be credited to the
computation period(s) for which the back pay is allowed,
rather than to the Plan Year in which the award, agreement
or payment is made. In the case of hours to be credited for
a period of not more than 31 days which overlaps two
computation periods, all such hours may be credited to
either computation period in a manner which is consistent
with respect to all employees within the same job
classification, which classifications have been reasonably
defined.
2.04 Mergers, etc. A termination of employment occurring merely by reason
of a reorganization described in Section 368(a) or Section 371(a)(1)
of the Code shall not be deemed a termination of employment for
purposes of this Plan and shall be disregarded for purposes of Section
2.03. In the case of any merger or consolidation with, or transfer of
assets or liabilities to, any other plan, each Participant in this
Plan shall be entitled to receive a benefit on termination of the Plan
immediately after the merger, consolidation or transfer which is equal
to or greater than the benefit he would have been entitled to receive
on termination of the Plan immediately before the merger.
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ARTICLE III
EMPLOYER CONTRIBUTIONS
3.01 Contribution Formula. The Employer may make a contribution each year
from its consolidated current or accumulated earnings in an amount
(which may be zero) determined by the Board of Directors and such
determination may be a percentage of Participant compensation for the
Plan Year rather than a dollar amount.
3.02 Limitation. Section 3.01 above notwithstanding, the amount to be
contributed by the Employer shall not exceed the maximum amount
allowable as a deduction in the taxable year under section 404 of the
Code, unless the Board of Directors expressly elects to exceed such
amount.
3.03 Payments. The Employer contribution otherwise provided for in this
Article III shall be accrued in the fiscal year of the Employer and
shall be paid to the Trustee not later than the time prescribed
(including any extensions actually taken) for filing the Employer's
Federal income tax return for such year.
ARTICLE IV
ALLOCATION OF EMPLOYER CONTRIBUTIONS
4.01 Participant's Accounts. The Committee shall establish a separate
account in the name of each Participant. All contributions made to a
Participant's account are fully vested as of the date they are
contributed. The Committee shall also establish accounts for each
Participant in each of the Investment Funds described in Section 5.01.
4.02 Allocation of Contribution. The Committee shall allocate to the account
of each Participant employed by the Employer on the last regular work
day of the Plan Year a fraction of the contribution made by the
Employer for that Plan Year. If a Participant is employed by two or
more companies, included in the definition of Employer as defined in
Section 1.13, and such Participant is employed by either Employer on
the last regular work day of the Plan Year, the Committee shall
allocate to the account of such Participant, as of the last day of the
Plan Year, a fraction of the contribution made by each company for such
Plan Year under this Plan as the Employer. The numerator of the
fraction is the Participant's Gross Earnings paid by the Employer
making the contribution for such Plan Year, and the denominator is the
Gross Earnings paid by such Employer during the Plan Year to all
Participants who are entitled to an allocation of such Employer's
contribution under this Section 4.02. "Gross Earnings" means the
Participant's regular pay, shift differential pay, vacation
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and holiday pay, sickness and accident pay, and pay received while the
employee is absent on military or jury duty or absent due to a death in
the family. "Gross Earnings" shall not include any other amounts paid
by the Employer to the Participant, including without limitation,
reimbursement of expenses such as tuition or moving expenses.
Gross Earnings in excess of $200,000 shall be disregarded. Such amount
shall be adjusted at the same time and in such manner as permitted
under Code Section 415(d), except that the dollar increase in effect on
January 1 of any calendar year shall be effective for the Plan Year
beginning with such calendar year and the first adjustment to the
$200,000 limitation shall be effective on January 1, 1990. For any
short Plan Year the Gross Earnings limit shall be an amount equal to
the Gross Earnings limit for the calendar year in which the Plan Year
begins multiplied by the ratio obtained by dividing the number of full
months in the short Plan Year by twelve (12). In applying this
limitation, the family group of a Highly Compensated Employee who is
subject to the family member aggregation rules of Code Section
414(q)(6) because such Participant is either a "five percent owner" of
the Employer or one of the ten (10) Highly Compensated Employees paid
the greatest "415 Compensation" during the year, shall be treated as a
single Participant, except that for this purpose family members shall
include only the affected Participant's spouse and any lineal
descendants who have not attained age nineteen (19) before the close of
the year. If, as a result of the application of such rules the adjusted
$200,000 limitation is exceeded, then the limitation shall be prorated
among the affected family members in proportion to each such family
member's Gross Earnings prior to the application of this limitation, or
the limitation shall be adjusted in accordance with any other method
permitted by Regulation.
In addition to other applicable limitations set forth in the Plan, and
notwithstanding any other provision of the Plan to the contrary, for
Plan Years beginning on or after January 1, 1994, the annual Gross
Earnings of each Employee taken into account under the Plan shall not
exceed the OBRA '93 annual compensation limit. The OBRA '93 annual
compensation limit is $150,000, as adjusted by the Commissioner for
increases in the cost of living in accordance with Code Section
401(a)(17)(B). The cost of living adjustment in effect for a calendar
year applies to any period, not exceeding 12 months, over which Gross
Earnings is determined (determination period) beginning in such
calendar year. If a determination period consists of fewer than 12
months, the OBRA '93 annual compensation limit will be multiplied by a
fraction, the numerator of which is the number of months in the
determination period, and the denominator of which is 12.
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For Plan Years beginning on or after January 1, 1994, any reference in
this Plan to the limitation under Code Section 401(a)(17) shall mean
the OBRA '93 annual compensation limit set forth in this provision.
If Gross Earnings for any prior determination period is taken into
account in determining an Employee's benefits accruing in the current
Plan Year, the Gross Earnings for that prior determination period is
subject to the OBRA '93 annual compensation limit in effect for that
prior determination period. For this purpose, for determination periods
beginning before the first day of the first Plan Year beginning on or
after January 1, 1994, the OBRA '93 annual compensation limit is
$150,000.
If, as a result of such rules, the maximum "annual addition" limit of
Section 4.03 would be exceeded for one or more of the affected family
members, the prorated Gross Earnings of all affected family members
shall be adjusted to avoid or reduce any excess. The prorated Gross
Earnings of any affected family member whose allocation would exceed
the limit shall be adjusted downward to the level needed to provide an
allocation equal to such limit. The prorated Gross Earnings of affected
family members not affected by such limit shall then be adjusted upward
on a pro rata basis not to exceed each such affected family member's
Gross Earnings as determined prior to application of the family member
rule. The resulting allocation shall not exceed such individual's
maximum "annual addition" limit. If, after these adjustments, an
"excess amount" still results, such "excess amount" shall be disposed
of in the manner described in Section 4.03 pro rata among all affected
family members.
For Plan Years beginning prior to January 1, 1989, the $200,000 limit
(without regard to family member aggregation) shall apply only for Top
Heavy Plan Years and shall not be adjusted.
4.03 Limitation on Additions.
------------------------
(a) Notwithstanding any provisions of this instrument, if the
annual additions equal to the sum of the contributions under
Sections 3.01, 10.04 and 10.07 allocable to the account of a
Participant in any Plan Year exceeds the lesser of (i)
$30,000 (or if greater, one-quarter of the dollar limitation
in effect under Section 415(b)(1)(A) of the Code) or (ii)
25% of the Participant's compensation, then such allocation
shall be reduced to the extent necessary to avoid exceeding
such limit and the Employer contributions shall be reduced
similarly. The annual addition shall be the sum for any Plan
Year of all contributions made by the Employer on behalf of
the CHIP Participant and voluntary contributions made by the
CHIP Participant in accordance with
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Internal Revenue Code Sections 415(c), 415(l), 419A(d)(2)
and Regulations Section 1.415-6.
(b) In the event a Participant's total annual additions for a
Plan Year exceed the limitations of paragraph (a) above
Employer contributions otherwise required with respect to
such Participants under Section 3.01 and 10.07 shall be
reduced to the extent necessary to comply with the
limitations of paragraph (a) above. If such reduction is not
effected in time to prevent such allocations for any Plan
Year from exceeding the limitations of paragraph (a) above,
such excess amount shall, if permissible under Income Tax
Regulation 1.415-6(b)(6)(iv), be distributed to the
Participant. If such excess amount is not distributed, it
shall be used to reduce Employer contributions for such
Participant in the next Plan Year, and each succeeding Plan
Year, if necessary, provided that if the Participant is not
covered by the Plan at the end of the current Plan Year, the
portion exceeding the limitation set forth in paragraph (a)
above shall be held unallocated in a suspense account for
such Plan Year, and shall be reallocated in the next Plan
Year to the accounts of other Participants to the extent
such allocations do not exceed the limitations of paragraph
(a) above.
All amounts held in the suspense account shall be invested
by the Committee and be used to reduce future Employer
contributions for all remaining Participants in succeeding
Plan Years (subject to the limitations of paragraph (a)
above) before any Employer contributions or Participant
contributions which would constitute annual additions may be
made to the Plan for the Plan Year.
If a suspense account is in existence at any time during a
Plan Year, it will participate in such suspense account's
investment gains or losses.
Upon termination of the Plan, any unallocated amounts
remaining in a suspense account shall be allocated to the
extent possible under this Section for the Plan Year of
termination. Any amount remaining in such suspense account
upon termination of the Plan shall be returned to the
Employer, notwithstanding any other provision of the Plan or
Trust Agreement.
4.04 Other Plans. The limitations set forth in Section 4.03 shall be applied
as if any amount allocated to the account of a Participant under any
other defined contribution plan maintained by the Employer or an
affiliate (within the meaning of Section 414(b) and (c) of the Code and
subject to Section 415(h) thereof) were allocated prior to any
allocation under this Plan. Further, the amount allocable to the
account of a Participant pursuant to the preceding sentence shall not
cause the Participant's defined
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contribution fraction (as defined in section 415(e) of the Code) to
exceed the defined contribution fraction which is determined by
subtracting from 1.0 the defined benefit fraction (as defined in said
Section 415(e)) which represents all defined benefit plans (in the
aggregate) maintained by the Employer and benefiting the Participant in
question.
4.05 Inventory and Allocation Date. Each day on which the New York Stock
Exchange is open for business shall be the inventory and allocation
date (the "Inventory and Allocation Date").
4.06 Fair Market Value. The Committee shall direct the Trustee to determine
the fair market value of the Trust Fund and of each Investment Fund as
of the Inventory and Allocation Date in accordance with a method
consistently followed and uniformly applied.
ARTICLE V
INVESTMENT OF ACCOUNTS
5.01 Investment Funds. The Participant's account shall be invested in one or
more of the funds described below (the "Investment Funds" or "Funds"),
at the election of the Participant as set forth in Section 5.02.
(a) The GenRad Stock Fund designed to invest in voting common
stock of GenRad, Inc.
(b) Effective August 1, 1987, one or more Mutual funds as
selected from time-to-time by the Committee.
The Committee may adopt such investment procedures as it deems
appropriate to implement any change in the funds selected from
time-to-time.
Each of the Investment Funds may contain cash or cash equivalents to
the extent the Trustees deem it advisable to retain uninvested cash to
carry out their obligations under the Plan.
5.02 Initial Allocation of Assets; Reserved GenRad Stock Fund. On a date
selected by the Trustees which is prior to December 31, 1983 (the
"Special Allocation Date"), the Trustees shall allocate all the assets
of the Trust to the Investment Funds described above after such
discussions with the investment managers as they deem appropriate. In
making such allocation the Trustees shall try to create Funds which
have
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investments that are in keeping with the Fund description in Section
5.01 given the assets available for allocation in the Trust. Cash and
cash equivalents may be allocated among the three Funds in such manner
as the Trustees deem advisable. Three-quarters of the GenRad stock in
the GenRad Stock Fund which had previously been held in what was known
as the "Mingled Fund" prior to this Amendment and Restatement shall be
allocated to a part of the GenRad Stock Fund known as the "Reserved
GenRad Stock Fund" (or the "Reserved portion of the GenRad Stock Fund"
or the "Reserved Fund"). The balance of the GenRad stock in the GenRad
Stock Fund which includes one-quarter of such stock which was
previously held in the Mingled Fund and all the GenRad stock previously
held in what was known as the "Segregated Accounts" of the Trust shall
be held in the Discretionary GenRad Stock Fund (or the "Discretionary
Fund" or the "Discretionary Portion of the GenRad Stock Fund") and be
subject to the investment elections of the Participants. The Trustees
shall allocate such portion of the cash or cash equivalents allocated
to the GenRad Stock Fund between the Reserve GenRad Stock Fund and the
Discretionary Fund as they deem advisable.
The assets in the Reserved GenRad Stock Fund shall not be immediately
subject to the investment elections described below. The GenRad stock
in the Reserved Fund shall be held by the Trustees for transfer to the
Discretionary Fund as described below. However, the Trustees are
authorized to sell part or all of the stock in the Reserved Fund in one
or more transactions at such time and in such manner as the Trustees
deem advisable. In particular, they may sell such stock with a view to
limiting the problems which may arise in selling a large number of
shares of stock at the direction of the Participants once it becomes
part of the Discretionary Fund. If any stock in the Reserved Fund is
sold, the Trustees may, but are not required to, transfer that portion
of each Participant's account in the Reserved Fund which represents the
proceeds of such sale to an account of the Participant in another Fund
(whether or not the Participant previously had an account balance in
such Funds). The allocation of the proceeds between accounts in such
other Fund(s) shall be in proportion to the aggregate value of the
accounts of all Participants in those Funds on the most recent
Inventory and Allocation Date. The Trustees, from time-to-time, may
transfer any part or all of the GenRad securities and other assets in
the Reserved Fund to the Discretionary Fund if they believe that such a
transfer would not create or increase their problems in implementing
the Participant investment elections or create any other problems. It
is anticipated that the Trustees will transfer at least 1/3 of the
assets held in the Reserved Fund on December 31, 1983 to the
Discretionary Fund as of December 31, 1984, 1/2 as of December 31, 1985
and the balance, if any, as of December 31, 1986 at which time the
Reserved Fund shall terminate, but they may defer the transfer of all
or any part of such assets to any future date if they deem it advisable
for any reason.
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Any Employer contribution on account of any Plan Year will be invested
in the Discretionary Portion of the GenRad Stock Fund. If the
contribution is in cash the Trustees may, but are not required to,
invest such cash in GenRad common stock. In order to make such
investment the Trustees may, at their option, transfer GenRad common
stock from the Reserved Fund to the Discretionary Fund in exchange for
cash. Such a transfer, if made, shall be treated as a sale of stock in
the Reserved Fund and the Trustees shall account for the proceeds of
such sale in the manner describe above. Such Employer contribution,
whether or not invested in GenRad common stock, shall be subject to the
Participant's investment elections at the end of the Plan Year
following the Plan Year for which it is made.
Each Participant in the Mingled Fund in the Plan prior to the Special
Allocation Date whose account has not been distributed prior to such
date shall have an account in each Fund and in each portion of the
GenRad Stock Fund. Each account will represent an undivided interest in
the assets of such Fund. The value of each Participant's account in
each Fund and in each portion of the GenRad Stock Fund as of the
Special Allocation Date shall be determined by multiplying the value of
each Fund and each portion of the GenRad Stock Fund as of that date
(without including the assets of the Segregated Accounts under the Plan
prior to this Amendment) by a fraction the numerator of which is the
value of the Participant's total account on that date and the
denominator of which is the value of all participant Accounts in the
Mingled Fund of the Plan on such date.
Each participant who had a Segregated Account in the Plan prior to the
Special Allocation Date and whose account has not been distributed
prior to such date shall have an account in each Fund to which assets
previously held in his or her Segregated Account have been allocated.
The value of the account of each such Participant in each such
Investment Fund shall be the same as the value of that type of asset in
his or her Segregated Account with such limited adjustments as the
Trustees determine are administratively necessary.
The value of all Participants accounts in each Fund shall be reported
to Participants.
5.03 Election of Investment Funds. The Committee shall notify each
Participant of the value of his or her account in each Investment Fund
at least once each calendar quarter.
The Participant may direct the Committee to reallocate his or her
account balance among the Investment Funds by making an investment
election in any manner or format authorized by the Committee. Such
change in a Participant's investment election shall be made on a daily
basis; provided, however, that any change, in a Participant's
investment election with respect to the GenRad Stock Fund shall be
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made as soon as reasonably practicable in accordance with procedures
established by the Committee. A Participant's investment election which
makes any change in his existing and future investments must be in one
percent (1%) increments of his or her total account balance on that
date (except an election under the Life Strategy investment option
which requires a 100% allocation). If the Participant does not make an
investment election in a manner consistent with the terms of this
Section 5.03, the Participant shall be deemed to have elected to
maintain his or her existing investments without change.
ARTICLE VI
BENEFITS
6.01 Benefits. The benefits provided under this Plan consist of the right of
a Participant, upon Retirement, death, or other termination of
employment to a distribution of the balance of his Plan account(s), in
accordance with Sections 6.03, 6.04 or 6.05 below, whichever is
applicable.
6.02 Account Balance. Except as otherwise expressly provided below, a
Participant's account shall be valued for purposes of distribution as
of the "Valuation Date." The term "Valuation Date" means the business
day on which the New York Stock Exchange is open for business.
6.03 Retirement Benefit. Prior to Retirement, a Participant (sometimes
referred to as the "Retired Participant") may elect to receive either
(i) a lump sum distribution of the entire balance of his or her account
immediately following his or her Retirement, (ii) installment
distributions commencing immediately following his or her Retirement,
or (iii) a deferral of the distributions of his or her account balance
to a date which may be no later than April 1, of the calendar year in
which the Participant reaches age 70 1/2, at which time the
distribution may be made in a lump sum or installments. Payments to a
five percent (5%) owner of the Employer shall be made or commenced no
later than the date specified in Clause (iii) of the preceding sentence
regardless if Retirement has occurred. If distribution is deferred, the
account shall be valued for purposes of distribution as of the
Valuation Date that authorized distribution directions are received by
the Trustee from the Committee. Elections provided in this section 6.03
concerning the date to which distribution is deferred and the manner in
which the account will be distributed at the deferred distribution date
may be changed at any time prior to the date distribution commences.
The account of a Participant who retires and does not receive a lump
sum immediately after Retirement shall continue to be subject to and
accounted for in
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accordance with Sections 4.05 and 4.06 and such participant may make
elections in accordance with Section 5.03 concerning the investment of
his or her account in the same manner as of any other Participant. A
Retired Participant who defers distribution of his or her account may,
from time-to-time, prior to the date of planned distribution, request
distribution of any portion or all of his or her accounts in any one or
more of the Investment Funds in which he or she has a remaining
balance. Such distribution shall be made as soon as practicable after
authorized distribution directions are received by the Trustee from the
Committee.
Installment distributions may be made either monthly or annually as the
Participant and the Committee agree. Distributions shall be made, in
cash, from the Investment Funds proportionately; when they are
exhausted, distribution shall be made in shares of stock from his or
her GenRad Stock Fund account. The value of the account of a Retired
Participant receiving installment may be reviewed periodically by the
Committee to determine whether any adjustment should be made in the
size of the installment. Any installment payments shall be made over a
period which does not exceed the life expectancy of the Retired
Participant on the date benefits commence or the lives of the Retired
Participant and his or her spouse on the date benefits commence. The
periods of payment under these options cannot exceed the period
computed by the use of the Expected Return multiples in IRS Regulation
Section 1.72-9 in effect on the date the installment payments commence.
6.04 Retirement. Retirement is deemed to occur on the day a Participant
terminates employment after the earliest of (1) the date the
Participant has reached age 50 and the sum of his or her age and
service equal 80, or (2) the date the Participant has reached age 60
and completed ten years of service, or (3) the date the Participant has
reached age 65. The Normal Retirement Age under the plan is 65. For
purposes of this provision only Years of Service are defined by company
policy.
6.05 Death Benefits. In the case of the death of a Participant or Retired
Participant before or after Retirement, the entire remaining balance of
the Participant's account in the Plan shall be distributed to the
Distributee as follows:
(a) If benefit payments in the form of installments had
commenced the balance of the deceased Participant's account
balance shall be distributed at least as rapidly as under
the method of distribution being used as of the date of
death. In all other cases (b) and (c) shall apply.
(b) If the Distributee of such balance is the Participant's
spouse then such spouse may elect to receive either (i) a
lump sum distribution, or (ii) installment distributions of
the deceased Participant's account balance as described in
Section 6.03, or (iii) said spouse may, leave the balance in
the Trust for
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continued investment in the Funds and distribution at a
later date in a lump sum or installments all as if said
spouse were a Retired Participant and making such elections
in accordance with Section 6.03. The spouse shall have one
year from the date of the Participant's death to make such
elections. If the spouse elects an immediate lump sum
distribution it shall be valued as of the Valuation Date
that authorized distribution directions are received by the
Trustee from the Committee. In the case of an election of a
deferred distribution or an installment distribution the
amount shall be valued as of Valuation Date that authorized
distribution directions are received by the Trustee from the
Committee. Such spouse shall have the same rights under this
instrument as a Retired Participant, including without
limitation, the right to make elections concerning the
investment of the account. An installment distribution shall
commence no later than the later of (a) the first
anniversary of the Participant's death or (b) of the date
the Participant would have attained age 70 1/2. A lump sum
distribution shall be made within five years after the
Participant's death.
If no election is made by the spouse concerning the time and
manner of distribution of the account within one year of the
Participant's death then the decedent's account balance
shall be distributed to said spouse, in a lump sum, at the
beginning of the month which next follows the first
anniversary of the Participant's death, valued as of the
Valuation Date that authorized distribution directions are
received by the Trustee from the Committee.
(c) If the Distributee is not the spouse of a Participant or a
Retired Participant then the Committee shall direct the
Trustee to distribute the Participant's account balance in a
lump sum as promptly as the Committee deems advisable within
five years after the Participant's death, valuing such
account as of the Valuation Date that distribution
directions are received by the Trustee from the Committee.
6.06 Disability. In the event of a change in the Participant's employment
classification to long term disability status, the Participant may
request a distribution from his or her account as a hardship
distribution in accordance with the procedures outlined in Section
6.15, below. However, such disabled Participant will not be deemed to
have terminated employment solely as a result of such disability. A
disabled Employee will continue to be treated as an Employee, except
for purposes of receiving a contribution hereunder, until his or her
employment terminates. At such time his or her entitlement to benefits
shall be determined under this Plan on the basis of the circumstances
at that time.
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6.07 Termination of Employment. If the value of a Participant's account is
less than or equal to $3,500 upon termination of a Participant's
employment for reasons other than Retirement, death, or disability, the
Participant's entire account balance shall be valued as of the
Valuation Date that distribution directions are received by the Trustee
from the Committee and distributed in a lump sum as soon as reasonably
practicable thereafter. If the value of a Participant's account is
greater than $3,500 the account may not be distributed without the
Participant's consent except as required by law.
6.08 Distributee. Any distribution shall be made to the Participant if he or
she is living. However, if the Participant is living and under
guardianship or conservatorship then such distribution shall be made to
his or her guardian or conservator. If the Participant is not living,
any distribution shall be made in accordance with the Effective
Beneficiary Designation, or if an Effective Beneficiary Designation has
not been made, then distribution shall be made in full to the
Participant's surviving spouse, if any, and, if none, by right of
representation to the Participant's surviving issue, if any, and if
none is living to the persons who would be entitled to take the
Participant's personal estate if the Participant had died at the time
for distribution intestate, unmarried and domiciled in the state in
which he or she resided at the time of his or her death.
6.09 Effective Beneficiary Designation. An Effective Beneficiary Designation
is a written direction in the custody of the Plan Administrator, signed
by the Participant or Retired Participant and not subsequently revoked,
designating a person or persons (including individuals, partnership,
corporations and trusts) to receive a distribution to be made when the
Participant or Retired Participant is not living if the person or
persons designated is or are living or in existence when the
distribution is to be made, with such order of priority as may be
specified.
If the Participant was married at the time of his or her death, the
designation of a person other than the Participant's surviving spouse
to receive any distribution to be made when the Participant is not
living, regardless of when made, shall not be effective and shall be
treated as a designation of such surviving spouse unless (a) such
surviving spouse had consented to such designation in writing and such
consent was witnessed by a representative of the Plan or a notary
public or (b) it is established to the satisfaction of the Plan
Administrator that such consent may not be obtained, because such
spouse cannot be located, or because of such other circumstances as the
Secretary of Labor may prescribe. Such consent shall be effective only
with respect to such spouse.
6.10 Forms of Distribution. Distributions from the Investment Funds (other
than the GenRad Stock Fund) shall be made in cash. Distributions from
the GenRad Stock Fund shall be made in shares of stock and cash in the
same proportions in which they
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are held in the Fund; provided that cash shall also be distributed in
lieu of shares if a Participant would receive less than ten shares or
in lieu of fractional shares. Notwithstanding the foregoing, any
hardship distribution from the GenRad Stock Fund shall be made in cash
in the discretion of the Committee.
6.11 Alienation; Reaching. The interest of a Participant or other
Distributee in any account shall not be subject to alienation,
anticipation or assignment and is not subject to being attached or
reached and applied by any creditor of a Participant or other
Distributee. The provisions of the preceding sentence shall apply in
general to the creation, assignment or recognition of a right to any
benefit payable with respect to a Participant pursuant to a domestic
relations order unless such domestic relations order is a qualified
domestic relations order.
6.12 Payment Under Qualified Domestic Relations Order. Notwithstanding any
provision of this Plan to the contrary, if there is entered any
qualified domestic relations order that affects the payment of benefits
hereunder, such benefits shall be paid in accordance with the
applicable requirements of such order.
6.13 Commencement of Benefit Payments. Unless a Retiring Participant elects
otherwise the Trustee must begin distribution of the account balance of
a Participant who has terminated employment for any reason other than
death, within 60 days after the end of the Plan Year in which
termination of employment occurs, or, if later, the Plan Year in which
he reaches age 65.
6.14 Employment After Retirement. Installment payments of a retirement
benefit shall be suspended during any period, subsequent to the
commencement of payments, during which the Participant is re-employed
by the Employer. Credited Service shall include such service after
Retirement.
6.15 Hardship Benefits. The Committee may direct the Trustee, if the
Committee deems it advisable, to make distributions to a Participant of
Employer contribution (and earnings thereon) made under Section 3.01
upon his or her written request, if they determine in their absolute
discretion, that he or she is entitled to a hardship benefit. A
hardship benefit includes any distribution for the following reasons:
(a) Injury or illness (whether mental or physical) of the
Participant or any member of his or her immediate family,
including, without limitation, the Participant's parents and
the parents of the Participant's spouse;
(b) Substantial uninsured financial loss to the Participant's
home or tangible personal property, but not including money
or securities; or
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(c) Any such other hardships as the Committee may from
time-to-time define by rule.
Any hardship benefit shall be distributed from the Participant's
account containing Employer contributions proportionately based on
balances in each account valued as of the Inventory and Allocation Date
after the request for distribution is approved, and any distribution
thereby required from the GenRad Stock Fund shall be made in cash in
the discretion of the Committee.
6.16 Direct Rollover of Eligible Distribution. Notwithstanding any provision
of the Plan to the contrary, if any distribution to a Distributee (i)
is made on or after January 1, 1993, (ii) totals $200 or more, and
(iii) constitutes an Eligible Rollover Distribution, the individual may
elect on a form provided by the Committee to have all or part of such
Eligible Rollover Distribution paid in a direct rollover to an Eligible
Retirement Plan selected by the individual. For the purpose of this
Section, a Distributee, Eligible Rollover Distribution and Eligible
Retirement Plan shall be deemed as follows:
(a) Distributee means a Participant, surviving spouse of a
Participant, or spouse or former spouse of a Participant who
is the alternative payee under a qualified domestic
relations order, as defined in Internal Revenue Code Section
414(p).
(b) Eligible Rollover Distribution means any distribution of all
or any portion of the balance to the credit of a
Distributee, except that an Eligible Rollover Distribution
does not include: Any distribution that is one of a series
of substantially equal periodic payments (not less
frequently than annually) made for the life (or life
expectancy) of the Distributee or the joint lives (or joint
life expectancies) of the Distributee and the Distributee's
designated beneficiary, or for a specified period of ten
years or more; any distribution to the extent such
distribution is required under Internal Revenue Code Section
401(a)(9); and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(c) Eligible Retirement Plan means a plan described below:
(i) An individual retirement account described in
Internal Revenue Code Section 408(a);
(ii) An individual retirement annuity (other than an
endowment contract) described in Internal Revenue
Code Section 408(b);
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(iii) A qualified defined contribution plan and exempt
trust described in Internal Revenue Code Sections
401(a) and 501(a) respectively, the terms of which
permit the acceptance of rollover contributions; or
(iv) An annuity plan described in Internal Revenue Code
Section 403(a). However, in the case of an Eligible
Rollover Distribution to the surviving spouse of a
Participant, an Eligible Retirement Plan is an
individual retirement account or individual
retirement annuity.
If an election is made to have only a part of an eligible rollover
distribution paid in a direct rollover, the amount of the direct
rollover must total $500 or more.
Direct rollovers shall be accomplished in accordance with procedures
established by the Committee, including, in the case of distributions
not subject to the consent requirements of Internal Revenue Code
Section 411(a)(11), procedures for affirmatively waiving the minimum
notice period described in Income Tax Regulation 1.401(c)-2T.
The procedures established by the Committee shall be made in accordance
with the rules set forth in Income Tax Regulation 1.401(a)(31)-1T.
ARTICLE VII
ADMINISTRATION OF THE PLAN
7.01 General Powers. Effective July 1, 1987, the Committee on Employee
Benefits Plans shall have general authority to control and manage the
Plan. Each of the members of the Committee may serve in more than one
fiduciary capacity with respect to the Plan.
7.02 Special Powers. The Committee has the following authority:
(a) To appoint and remove (i) a Plan Administrator, with
responsibility for reporting and disclosure under Title I of
ERISA and for inquiries and claims; (ii) a person with
responsibility for reporting and disclosure under the
Internal Revenue Code of 1954 (as amended) or any other
applicable law; (iii) attorneys and others to represent them
before any court or governmental agency; (iv) an investment
manager or managers with exclusive authority and discretion
to manage, acquire and dispose of any part or all of the
assets of the plan; (v) one or more investment companies
(hereinafter referred to as
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"Mutual Funds"), registered under the Investment Company of
1940, to comprise the Investment Funds under Section 5.01.
(b) To sign written instruments setting forth any plan
amendments adopted by the Employer;
(c) To act for the Employer in connection with any
administrative or judicial proceeding affecting the Plan;
(d) To employ, subject to the requirements of the financial
policies of the Employer, persons to render accounting,
actuarial, legal, investment or insurance advice and to rely
on such advice;
(e) To designate persons to carry out designated fiduciary
responsibilities under the Plan;
(f) To allocate fiduciary responsibilities (other than Trustee
responsibilities) among themselves; and
(g) To appoint and remove a Trustee, who shall be no fewer than
three and no more than seven individuals who are employees
or directors of GenRad, Inc. or a banking institution
chartered under the laws of the Commonwealth of
Massachusetts or the United States.
7.03 Fiduciary Status. The members of the Committee are fiduciaries
obligated to discharge their duties solely in the interests of the Plan
Participants and their beneficiaries. They shall be free from
interference by any person with the discharge of their duties.
7.04 Meetings. The members of the Committee shall hold such meetings as they
deem necessary at such times and places as are agreed upon in advance.
Action at meetings shall be approved by a vote of a majority of all
members in office, whether or not they are all present at such
meetings. The Committee may act without a meeting by the unanimous
written consent of the members. One of the members shall maintain a
record book containing the minutes of the Committee's actions.
7.05 Disbursements and Distributions. The Committee shall direct the Trustee
to make such disbursements for the purposes of investment as the
Committee in its sole discretion deem advisable and proper subject to
Section 5.03. The Committee shall direct the Trustee to make
disbursements for the payment of expenses in accordance with Section
7.06. The Committee shall direct the Trustee to make distributions to
Participants and their beneficiaries in accordance with the terms of
this instrument.
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7.06 Administrative Expenses; Advisors. All administrative expenses of the
Plan and Trust shall be charged to and paid out of the Trust Fund upon
approval by the Committee. The Committee shall not approve any expense
the payment of which would be inconsistent with the obligation of a
fiduciary under ERISA or would constitute a prohibited transaction
thereunder. Expenses payable hereunder include, without limitation,
Trustees' fees, administrative, actuarial, accounting and legal fees,
and fees for investment of insurance advice.
7.07 Trust Agreement. The Employer shall enter into a Trust Agreement with a
Trustee for the purpose of holding the Trust Fund. The Trust Agreement
shall provide, among other things, that all funds received by the
Trustee thereunder shall be held, administered, invested subject to
Article V, and distributed by the Trustee, and no part of the corpus or
income of the Trust Fund held by the Trustee shall be used for, or
diverted to, purposes other than for the exclusive benefit of
Participants or their beneficiaries. The Committee shall have the
authority to remove Trustee or any successor Trustee by giving written
notice 60 days in advance to this effect. Any Trustee or any successor
Trustee may resign and in this event the Trustee or successor Trustee
shall notify the Committee by giving written notice 60 days in advance
to this effect. Upon removal or resignation of a Trustee, the Committee
shall appoint a successor Trustee.
The Committee shall also have the authority to direct that any portion
of the assets shall be invested as directed by Participants in
accordance with Section 5.03 or by a qualified investment manager
appointed by the Committee.
7.08 Voting Employer Securities. The Committee and Trustee shall obey the
directions, if any, of the Participant or the Participant's spouse (the
"Voter"), respecting any voter rights attributable to the GenRad
securities allocable to their accounts in the Reserved or Discretionary
Portions of the GenRad Stock Fund after the Special Allocation Date,
determined for each portion of such Fund separately by multiplying the
number of shares of GenRad stock in each portion of such Fund by a
fraction the numerator of which is the value of the Participant's
account in each portion of such Fund as of the most recent Inventory
and Allocation Date and the denominator of which is the value of all
accounts in each portion of such Fund on such date. The number of
shares to be voted shall be determined as of the Inventory and
Allocation Date next preceding the record date on which the
shareholders who are entitled to vote are determined. (If a Participant
has died and the deceased's spouse is not the Distributee under Section
6.08, or the spouse of a deceased Participant has died and such spouse
had an interest in one or both portions of the GenRad Stock Fund, then
the Trustee shall exercise the voting rights attributable to the GenRad
Stock allocated to such account or accounts in the GenRad Stock Fund if
such stock has not been distributed on the date such voting rights must
be exercised)
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Voter instructions to the Trustee shall set forth on a "Voting
Instruction Card" designated by the Employer and sent to each Voter
prior to any meeting of the stockholders of the Employer at which
stockholders will vote. The Voting Instruction Card will state the type
of GenRad securities to be voted, the number of shares he or she is
entitled to vote as of the record date of the stockholders' meeting,
and the issue or issues to be voted on at the meeting. If the Voting
Instruction Card is returned, as directed, if no direction is given,
such shares shall be voted in the manner, if any, printed on the card.
If the card contains no such printed instructions or if it is not
returned, the shares shall not be voted. All shares, whether or not
voted, shall be counted in determining whether a quorum is present at
the stockholders' meeting for which the cards are distributed.
ARTICLE VIII
MISCELLANEOUS
8.01 Bonding. To the extent permitted by law the requirements of giving bond
by any Committee member or other fiduciary or of giving surety on any
bond shall be dispensed with.
8.02 Insurance and Indemnification. Trust Funds may be applied to the
purchase of lawful insurance covering the fiduciary obligations of
persons who are fiduciaries respecting the Plan and Trust, and such
fiduciaries may purchase, with funds other than Trust Funds, waivers of
subrogation.
8.03 Terminology. Where the context permits, the use of any gender or number
shall not be construed to exclude any other gender or number, and the
enumeration of instances shall not be construed to diminish the
generality of a statement. This instrument shall be liberally construed
so as to effectuate its purposes.
8.04 Miscellaneous. This Plan shall not constitute an express or implied
contract between the Employer and any Participant and nothing contained
herein shall give to any Employee or Participant the right to be
retained in the employ of the Employer or to interfere with the
management of the Employer's business or, except as otherwise provided
by law, the right of the Employer to discharge any Employee or
Participant at any time, nor shall it give the Employer the right to
require any Employee to remain in its employ, nor shall it interfere
with the rights of any Employee to terminate his employment at any
time.
8.05 Registration and Sale of Securities. Notwithstanding any other
provision of this instrument, the Committee may take such action as
they deem advisable for the Form
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S-1, S-7 or S-16 (or similar form) registration and sale of Employer
securities held by the Trustees. Such actions may include but are not
limited to:
(a) Approving, executing and delivering any agreement or
contract with underwriters, custodians or others upon such
terms and conditions as they deem advisable in connection
with such registration and sale and taking all action they
deem advisable to carry out the terms and conditions of said
agreement or contract, including without limitation, the
deposit of securities under any escrow or custodianship
arrangements;
(b) Appointing, in accordance with Section 7.02, one or more of
the Committee members, whether revocably or irrevocably, as
agents or attorneys-in-fact, and delegating to him or them
such powers as the Committee shall deem advisable in order
to effect such registration and sale, which may include,
without limitation:
(i) The powers enumerated in subparagraph (a), above.
(ii) The power to execute and deliver any agreement or
contract with respect to such registration and sale
and the power to alter, amend, add to, rescind or
otherwise modify the terms of any agreement or
contract previously approved or executed by the
Committee.
(iii) The power, within such limits as may be set by the
Committee in the instrument of appointment, to set
the price for sale and the number of shares to be
sold by the Trust.
Such appointment shall be valid for a period of no more than three
months but may be renewed. Any agreement or other instrument executed
or delivered or any other action taken pursuant to this Section 8.05 by
the holder or holders of such powers shall be conclusive evidence in
favor of every person relying thereon or claiming thereunder that at
the time of the execution or delivery thereof or the taking of such
action that such appointments and delegation of powers were valid and
in full force, and that the execution and delivery thereof or the
taking of such action was duly authorized, empowered and directed and
that such instrument or action taken is valid, binding, effective and
legally enforceable. Any agent or attorney-in-fact appointed under this
subparagraph (b) shall promptly account to the other Committee members,
but no breach of the duty to account shall have any effect on any
person relying on the action of the agent or attorney-in-fact pursuant
to the preceding sentence.
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(c) Providing such indemnification for such underwriters,
agents, attorneys-in-fact, custodians or others as they deem
advisable in connection with such registration and sale; and
(d) Making such representations and warranties, in connection
with such registration and sale, as they deem advisable
notwithstanding any investigation by or actual knowledge of
others.
Any obligation created by a Committee member, agent or attorney-in-fact
pursuant to this Section 8.05 whether by the making of a
representation, the giving of an indemnification or by any contractual
undertaking, whether executory or otherwise, shall be binding on the
trust estate and not individually upon the Committee members, agents or
attorneys-in-fact, and may bind the trust estate for a period longer
than the potential duration of the trust.
ARTICLE IX
AMENDMENT AND TERMINATION
9.01 Right of Amendment and Termination. The Employer has reserved to itself
the right to modify, amend or terminate the Plan. The right of the
Employer to take such actions with respect to the Plan is reserved to
the Committee. The Committee may modify, amend or terminate the Plan to
the extent it may deem necessary or appropriate, in its sole
discretion, by resolution at any meeting of the Committee, including a
telephonic meeting, or by unanimous consent, or pursuant to any
procedure established for action of the Committee by the Articles of
Incorporation and By-Laws of GenRad, Inc. for applicable law.
The Committee may, in its sole discretion, delegate its authority to
modify, amend or terminate the Plan to any other entity, person or
committee, and such delegate shall have the authority of the Committee
to the extent provided in the delegating action. Upon written request,
the Plan Administrator, Plan supervisor and Employer may provide
written notice to individuals covered by the Plan of the identity or
membership, as applicable, of such entity, person or committee.
The right reserved to the Employer to modify, amend or terminate the
Plan, as exercised by the Committee or its duly authorized delegate,
shall be a power reserved to the Employer as sponsor of the Plan. No
action taken pursuant to the right of modification, amendment or
termination shall be subject to appeal by any person claiming a right
under the Plan, except as may otherwise be provided by applicable law.
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ARTICLE X
CASH OR DEFERRED ARRANGEMENT -- CHIP PART II
10.01 Purpose. This Article X sets forth, and may be referred to as, Part II
of the GenRad Choice Investment Plan ("CHIP"), which is effective as of
January 1, 1985. Part II of CHIP will be administered upon the terms
set forth in this Article X, and upon the terms set forth elsewhere in
this instrument to the extent they are not inconsistent.
10.02 Eligibility; Participation. All Employees of GenRad, Inc. (and of any
U.S. corporation a majority of the stock of which is owned by GenRad,
Inc. and which elects to participate in Part II of CHIP with the
consent of GenRad, Inc.), who are on the U.S. payroll and are scheduled
to work at least 1,000 hours per year, are eligible to participate in
Part II of CHIP. An Employee who is not scheduled to work 1,000 hours,
but actually completes a Year of Service shall also be eligible to
participate. Seasonal Employees shall be excluded from participation in
the Plan. Each company whose employees are eligible under the preceding
sentence shall be referred to as a "CHIP Employer."
Eligible Employees will become Participants in Part II of CHIP ("CHIP
Participants") upon (i) filing an enrollment form ("Form") as provided
in Section 10.03, below, and (ii) completing 30 days of employment for
an Employer (as defined in Section 1.13, above); provided, however,
that Employees who previously completed 30 days of employment and who
are transferring from a company, a majority of the stock of which is
owned by GenRad, Inc. but which for any reason does not qualify as a
CHIP Employer, or who are returning from a leave of absence or long
term disability, or who are being rehired, will not be required to
complete an additional 30 days of employment.
An Employee will be a CHIP Participant under this Article X as long as
the Employee has a CHIP account as described in section 10.08, below,
even if the Employee is not then actively making CHIP Participant
Contributions as described in Section 10.04, below.
10.03 Enrollment Form. Any Employee who has met the eligibility requirements
described in Section 10.02, above, will become a CHIP Participant
either initially or after having previously terminated Participation,
by filing with the Plan Administrator a Form that has been prescribed
or approved by the Plan Administrator. The Form may be filed during the
two (2) week Enrollment Period within the month prior to an Entry Date.
The Entry Dates shall be the first day of each calendar quarter
(January 1, April 1, July 1 and October 1). The Enrollment Period for
each Entry
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Date shall be announced by the Committee. An Employee will become a
CHIP Participant effective with the first day of the payroll period
following his Entry Date.
10.04 CHIP Participant Contributions. Each CHIP Participant shall designate
on the Form a percentage of the Participant's Deferrable Compensation
to be contributed by the Employer on behalf of the Participant
("Contribution Percentage"), which percentage shall be a whole number
between 0 and 15, inclusive; provided however, that effective January
1, 1987, the maximum dollar amount that any Participant can contribute
during any Plan Year is $7,000 (or such higher amount as permitted by
the Internal Revenue Code). The Committee will determine the amount to
be contributed as a CHIP "Participant Contribution" for each CHIP
Participant by multiplying the CHIP Participant's Contribution
Percentage by the CHIP Participant's Deferrable Compensation during
each pay period.
A CHIP Participant may change the Contribution Percentage by filing a
new Form during an Enrollment Period. Such change will become effective
in the same manner an initial enrollment under Section 10.03 would
become effective; provided, however, that if a CHIP Participant changes
the Contribution Percentage to zero, such change will be implemented as
soon as administratively practicable. CHIP Participants who reduce
their Contribution Percentage to zero remain CHIP Participants and may
again have contributions to CHIP made on their behalf by filing a Form
with the Plan Administrator during an Enrollment Period that will
become effective at the same time as an initial enrollment Form under
Section 10.03, above.
10.05 Return of CHIP Participant Contributions Above $7,000. If the Committee
determines that during any Plan Year beginning on or after January 1,
1987, the CHIP Participant Contributions for a CHIP Participant exceeds
the dollar limitation in Section 10.04, such excess amount (together
with any attributable earnings to such amount determined on a pro-rata
basis in accordance with the procedures set out in 10.12) shall be
returned to the CHIP Participant by April 15 of the next Plan Year. The
member shall be responsible for notifying the Committee by March 1 of
the following Plan Year of any excess in the pay deferral contributions
made under the Plan and any other qualified plan, and the amount of
such excess (together with earnings) to be returned to the CHIP
Participant from this Plan by April 15 of the next Plan Year. Such
distributions shall be made notwithstanding the requirement that the
CHIP Participant or the CHIP Participant's spouse consent to certain
distributions. Excess amounts to be distributed under this Section
10.05 shall not be considered in the calculation of the Deferral
Percentages of CHIP Participants.
10.06 Compensation. For purposes of this Article X, the following definitions
shall apply:
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(a) Compensation shall mean the Participant's Gross Earnings
paid during the Plan Year for services performed for the
Employer and if elected by the Employer, Compensation shall
also include CHIP Participant Contributions for the Plan
Year.
(b) Deferrable Compensation shall mean all CHIP Participant
Contributions made for a CHIP Participant during the Plan
Year plus the CHIP Participant's base salary, overtime,
commissions and shift differential paid during the Plan
Year, but excluding bonuses and severance pay.
10.07 Employer Matching Contributions. The CHIP Employer may make an Employer
Matching Contribution to the account of each CHIP Participant who made
a CHIP Contribution to the Plan during the Plan Year. The "Employer
Matching Contribution", shall be 50% of the first 6% of the CHIP
Participant Contribution during the Plan Year.
If as a result of the IRS Section 402(g) dollar limitation on the
amount of the annual Effective Deferral Contribution, or the IRC
Section 401(a)(17) dollar limitation on Compensation, the Participant
does not receive a total Matching Contribution under the payroll
matching procedure, an additional Matching Contribution shall be made
on the Participant's behalf so that the Participant's total Matching
Contribution is equal to 100% of the Participant's annual Elective
Deferral Contribution eligible for Matching Contributions.
10.08 Payment and Allocation of Contributions. The CHIP Participant
Contribution and the Employer Matching Contribution, if any, will be
transferred by the CHIP Employer to the Trustees as soon as
administratively practicable after the Trustees have been informed by
the persons maintaining the CHIP records of the amount to be invested
in each Investment Fund, in accordance with the investment elections
made by the CHIP Participant; provided, that such transfer shall be
made not later than the time prescribed by law for filing such CHIP
Employer's return for the taxable year (including extensions thereof)
for which the payment is on account.
Contributions under this Plan (including contributions under Article X
and Article III) shall be made without regard to the existence of
current or accumulated earnings or profits.
Further, the amount contributed under this Article X, when added to the
amount contributed under Article III, shall not exceed the maximum
amount allowable as a deduction in the taxable year under Section 404
of the Code, unless the Board of Directors expressly elects to exceed
this amount. If such election is not made and the
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contributions would otherwise exceed the maximum allowable deduction
then they shall be reduced as provided above in order to comply with
such limitation.
The Committee or the recordkeeper for CHIP shall establish an account
to be known as the CHIP account to which all CHIP Participant
Contributions and all Employer Matching Contributions shall be
allocated. This account will be in addition to any account established
under Article IV. The Committee or recordkeeper for CHIP shall also
establish an account reflecting the investment of CHIP Participant
Contributions and Employer Matching Contributions in each of the
Investment Funds described in Section 5.01, above.
10.09 Deferral Percentage Limitations. Effective January 1, 1987, in order to
meet the requirements of Section 401(k) of the Code, the Average
Deferral Percentage ("ADP") for Participants who are Highly Compensated
Employees for such Plan Year and the ADP for Participants who are
Non-Highly Compensated Employees for the same Plan Year must satisfy
one of the following tests:
(i) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are Non-Highly Compensated Employees for
the same Plan Year multiplied by 1.25.
(ii) The ADP for Participants who are Highly Compensated
Employees for the Plan Year shall not exceed the ADP for
Participants who are Non-Highly Compensated Employees for
the same Plan Year multiplied by 2.0, provided that the ADP
for such Highly Compensated Employees is not more than two
percentage points higher than the ADP for such Non-Highly
Compensated Employees."
10.10 Procedure to Follow if Deferral Percentage Limitation Exceeded. From
time-to-time during the Plan Year and after the Plan Year the Committee
will determine if the limitations above will be satisfied. If the
Committee determines during any Plan Year that the Average Deferral
Percentage limitation will otherwise be exceeded based on CHIP
Participant Contributions in effect for such year, it shall adjust on a
prospective basis for the remainder of such Plan Year to the extent
deemed necessary the salary deferral agreements of the Highly
Compensated Employees whose Deferral Percentage exceeds the maximum
Average Deferral Percentage for Highly Compensated Employees. If after
the end of the Plan Year the prospective adjustment of salary deferral
agreements is not sufficient for the Average Deferral Percentage for
Highly Compensated Employees to satisfy the limitations in Section
10.09, the Committee shall reduce the CHIP Participant Contributions
made for Highly Compensated Employees whose Deferral Percentage exceeds
the maximum Average Deferral Percentage for Highly Compensated
Employees. Such adjustment or
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<PAGE>
reduction shall be performed by reducing the Deferral Percentage of
Highly Compensated Employees in descending order beginning with the
Highly Compensated Employee(s) with the highest Deferral Percentage
until such limitation has been satisfied. In performing the reduction
or adjustment, the reduced Deferral Percentage of any affected Highly
Compensated Employee shall in no event be lower than the Deferral
Percentage of any Highly Compensated Employee with the next highest
Deferral Percentage.
10.11 Return of Reduced Salary Deferral Contributions. Effective January 1,
1987, the Plan Administrator shall distribute to the Highly Compensated
Employee the amount of any excess CHIP Participant Contribution
(together with the income allocable thereto determined on a pro-rata
basis) as determined in Section 10.10 within two and one-half (2 1/2)
months after the end of the Plan Year, but in no event later than by
the end of the next Plan Year. If there is a loss allocable to the
amount of any excess CHIP Participant Contribution, the amount
distributed shall in any event be less than the lesser of the Highly
Compensated Employee's account or the CHIP Participant Contributions
for the Plan Year. Such distribution shall be made without the consent
of the Participant.
10.12 Determination of Income on Excess Salary Deferral Contributions. The
excess amount distributed under Section 10.11 shall include a
proportionate share of gain (or loss) for the Plan Year and for the
period between the end of the Plan Year and the date of distribution.
Income allocable to excess CHIP Participant Contributions for the Plan
Year shall be determined by multiplying the income on all CHIP
Participant Contributions by a fraction where:
(a) The numerator is the amount of the excess CHIP Participant
Contributions; and
(b) The denominator is the value of the CHIP account as of the
end of the Plan Year, reduced by the gain and increased by
the loss allocable to such amounts for the Plan Year.
Income allocable to excess CHIP Participant Contributions
for the period from the end of the Plan Year to the date of
distribution shall be determined by multiplying the amount
of income on excess CHIP Participant Contributions as
determined for the Plan Year by the product of ten percent
(10%) times the number of months between the Plan Year end
and the date of distribution (with 16 days being treated as
a full month).
For purposes of this Section 10.12 income shall be determined by
including dividends, interest, realized gains and appreciation (whether
or not realized). The
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income allocable to CHIP Participant Contributions shall be the net
amount from all gains and losses to the CHIP account.
10.13 Contribution Percentage Limitation. Effective January 1, 1987, in order
to meet the requirements of Section 401(m) of the Code, the Average
Contribution Percentage ("ACP") for Highly Compensated Employees for
any Plan Year shall be limited by applying the same percentage
limitations as in Section 10.09.
The alternate limitations applicable to this Section and Section 10.09
shall be applied in accordance with regulations issued by the Secretary
of the Treasury and to the extent permitted, the Employer may elect to
take into account salary deferral contributions in determining Employer
Contribution Percentages. If the Employer Contribution Percentage
limitation is exceeded, excess Employer contributions (including the
income allocable thereto determined on a pro-rata basis) shall be
reduced proportionately within two and one-half (2 1/2) months after
the end of the Plan Year in accordance with the procedures in Section
10.10. If there is a loss allocable to the amount of any excess
Employer contributions the amount of the reduction shall in no event be
less than the lesser of the Highly Compensated Employees' account or
the Employer contributions for the Plan Year. The reduced Employer
contributions shall be distributed, if vested, or, if forfeitable,
forfeited and placed in a suspense account and applied to meet Employer
contributions in the current or succeeding Plan Years until exhausted.
In no event shall any excess Employer contribution be distributed (or
forfeited, if applicable) later than the end of the next Plan Year.
Such distribution or forfeiture shall be made without the consent of
the Participant.
10.14 Definitions.
(a) The "Average Contribution Percentage" for a specified group
of Employees for a Plan Year means the sum of the Employer
Contribution Percentages of each Employee in the group
divided by the number of Employees in such group. The
"Employer Contribution Percentage" of each CHIP Participant
shall be equal to the percentage obtained by dividing the
amount of Employer Matching Contributions made on behalf of
the CHIP Participant for the Plan Year by his Compensation
for the Plan Year. The Employer Contribution Percentage of
an eligible Employee who does not elect to make CHIP
Participant Contributions shall be zero.
(b) The "Average Deferral Percentage" means with respect to the
group of Highly Compensated Employees or the group of
Non-Highly Compensated Employees, the sum of the Deferral
Percentages of each Employee in the group eligible to make
CHIP Participant Contributions divided by the
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number of Employees in such group. The "Deferral Percentage"
of each CHIP Participant shall be equal to the percentage
obtained by dividing the amount CHIP Participant
Contributions (and Employer Matching Contributions, as
provided below) paid under the Plan on behalf of each CHIP
Participant for the Plan Year by his Compensation for the
Plan Year. The Deferral Percentage of an eligible Employee
who elects to have no CHIP Participant Contributions made on
his behalf for the Plan Year shall be zero.
For purposes of determining the Average Deferral Percentage,
the Committee may determine on a year-to-year basis and in
accordance with Regulations issued by the Secretary of the
Treasury whether or not to include Employer Matching
Contributions; and, if so included, the separate
Contribution Percentage limitation in Section 10.13 shall
not be applicable to the extent permitted by Regulations.
(c) "Highly Compensated Employee" means any employee who during
the current Plan Year or the preceding Plan Year.
(i) Was at any time a five percent (5%) owner, as that
term is defined in Section 416(i)(1)(B) of the Code;
(ii) Received Compensation in excess of $75,000, as
adjusted pursuant to Section 415(d) of the Code;
(iii) Received Compensation in excess of $50,000, as
adjusted pursuant to Section 415(d) of the Code and
was in the "top 20% group" of employees in
compensation as determined in Section 414(q)(4) of
the Code; and
(iv) Was an officer of the Employer and received
Compensation greater than 50% of the dollar
limitation contained in Section 415(b)(1)(A) of the
Code; provided that no less than three and no more
than ten percent (10%) of the Employees (up to a
maximum of 50) must be included in officers.
Notwithstanding the foregoing an Employee who is a Highly Compensated
Employee during the current Plan Year shall not be treated as a Highly
Compensated Employee for the purpose of this Section unless he;
(1) Was also a Highly Compensated Employee during the
preceding Plan Year;
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(2) Is within the top 100 Employees in Compensation
during the current Plan Year; or
(3) Is a five percent (5%) owner in the current Plan
Year.
The following will apply in determining Highly Compensated Employees:
(i) A family member of an Employee who is a five percent
(5%) owner or who is one of the ten highest paid
Employees shall not be considered as a separate
Employee for purposes of determining Highly-
Compensated Employees, and such family member's
salary deferral contributions, Employer contributions
and Compensation shall be aggregated with that of the
five percent (5%) owner or the Employee among the ten
highest paid Employees. For purposes of this Section,
a family member shall include an Employee's spouse
and lineal ascendants or descendants and the spouse
of such lineal ascendants or descendants.
(ii) A former Employee who terminates employment during
the current or the preceding Plan Year (but after
December 31, 1986) shall be excluded unless he was a
Highly Compensated Employee upon termination or at
any time after attaining age 55.
(iii) The determination as to who is a Highly Compensated
Employee shall be made after determining Employees
within the controlled group (as defined in Section
414(b) of the Code and after application of the
special rules in Section 414(m) and (n) of the Code).
(d) For purposes of determining Deferral Percentages and
Contribution Percentages under the Plan, elective salary
deferral contributions, Employee contributions and Employer
Matching Contributions to the following plans maintained by
the Employer shall be aggregated with CHIP Participant
Contributions and Matching Contributions:
(1) Plans that must be aggregated and treated as a single
plan for purposes of compliance with Sections
401(a)(4) and 401(b) of the Code; and
(2) Plans under which a Highly Compensated Employee is
eligible to make elective salary deferral
contributions; but only for purposes of determining
such Employee's Deferral Percentage.
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<PAGE>
10.15 Withdrawals. Withdrawals of CHIP Participant or Employer Matching
Contributions made under the terms of this Article X will only be
permitted in the event of financial hardship or after the CHIP
Participant attains age 59 1/2.
(a) Financial hardship is defined as an immediate and heavy
financial need of the CHIP Participant:
(i) To pay expenses incurred or necessary for medical
are, described in Section 213(d) of the Code, of the
Participant or the Participant's spouse, children or
dependents;
(ii) to purchase the principal residence of the
Participant (excluding mortgage payments);
(iii) to pay tuition and related educational fees for the
next 12 months of post-secondary education for the
Participant or the Participant's spouse, children, or
dependents; or
(iv) to prevent the eviction of the Participant from his
or her principal residence or foreclosure on the
mortgage of the Participant's principal residence.
(b) Hardship withdrawals shall be requested in a signed, written
instrument filed by the CHIP Participant with the Plan
Administrator, specifying the amount of withdrawal required
(which may not be less than $500), and the type of financial
hardship sustained. Such written instrument shall indicate
what other financial resources of the CHIP Participant are
immediately available to meet the financial hardship. The
CHIP Participant may be required to submit with the
statement, or in response to later inquiry, such proof of
the financial hardship as the Plan Administrator deems
advisable (as, for example, invoices, deeds, and doctor
bills).
(c) The following administrative rules will govern the
administration of the hardship withdrawals:
(i) The Plan Administrator shall determine in writing in
the manner provided in Section 1.07(a), above, as to
whether a financial hardship exists based on the
standards set forth above and as to the amount of any
withdrawal which will be permitted to meet any such
hardship. Such determinations of the Plan
Administrator shall be subject to review as provided
in Section 1.07(b), above. The Plan Administrator
shall have the authority to interpret and implement
this provision and
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<PAGE>
shall apply the standards set forth in this provision
in a uniform and nondiscriminatory manner. The Plan
Administrator may impose such additional restrictions
or adopt such additional regulations as the Plan
Administrator deems necessary or advisable to
administer this Section or to maintain the
qualification of the Plan.
(ii) Distributions shall be made as soon as practicable
after the written instrument described above is
received.
(iii) The amounts distributed shall be distributed from the
CHIP account under this Article X. They shall also be
distributed proportionately from the Investment Funds
in which this account is invested as of the Inventory
and Allocation Date immediately preceding the
hardship distribution.
(iv) Hardship distributions from the Investment Funds
shall be made in cash. Distributions from the GenRad
Stock Fund shall be made in shares of stock and cash
in the same proportions in which they are held in the
fund; provided that cash shall also be distributed in
lieu of shares if a Participant would receive less
than ten shares or in lieu of fractional shares.
(v) There is no limitation on the number of hardship
withdrawals which may be requested.
(vi) A CHIP Participant shall not be permitted to
redeposit amounts withdrawn as a result of this
provision.
(d) Withdrawals after attainment of age 59 1/2 may be requested
by any CHIP Participant from the CHIP Participant's CHIP
account in a signed, written instrument delivered to the
Plan Administrator. Only one withdrawal may be made after
59-1/2 which is not made on account of hardship or as a
result of termination of employment. The provisions of
Section 10.15(c) shall apply to any withdrawal made under
this Section 10.15(d).
10.16 Loans.
(a) Each CHIP Participant with a CHIP account will be permitted
to borrow an account not greater than the balance of that
account, subject to the additional limitations set forth
below:
(i) The minimum amount which may be borrowed is $500.
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(ii) The maximum amount which may be borrowed is the
lesser of (1) $50,000, reduced by the excess of the
highest outstanding loan balance during the one-year
period ending on the day before the loan is made over
the outstanding loan balance on the day the new loan
is made, or (2) one-half of the CHIP Participant's
vested account balance under this Article X,
excluding that portion of the Participant's account
balance invested in the GenRad Stock Fund.
(iii) The amount borrowed shall be subject to such terms
concerning the interest rate applicable to the loan,
the timing and amount of repayment, and the security
for such borrowing as are agreed by the CHIP
Participant and the Plan Administrator.
(iv) The loan must be repaid within a period of one to
five years, provided that the repayment period may be
extended to 15 years if the loan is being used to
acquire, construct, reconstruct, or substantially
rehabilitate any dwelling unit which within a
reasonable time is to be used (determined at the time
the loan is made) as a principal residence of the
CHIP Participant.
The Plan Administrator shall have the right to
establish from time-to-time such general rules as are
consistent with the provisions of ERISA and the Code
that will apply to all loans made under this Article
X. However, until modified by the Plan Administrator,
the following general rules will apply to all loans
made under this Article X.
(A) The CHIP Participant shall have the right to
select the term of the loan, subject to the
limitations described in subparagraph (iv),
above, and subject to a minimum repayment of
$5.00 per week, except that it is required
that the loan be paid not less frequently
than quarterly and payments shall result in
a substantially level amortization of the
loan, unless otherwise permitted by
regulations. The term selected by the CHIP
Participant shall not be extended, except as
provided in subparagraph B, below.
(b) Loans shall be repaid through payroll
deductions as described in the loan
documents. However, any CHIP Participant on
an approved leave of absence who is not
receiving any payments from the CHIP
Employer will be allowed to defer repayment
for up to one year (thereby extending the
loan term for up to one year, but such
extension may not extend the total loan term
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beyond the limits described in subparagraph
(iv), above, in which case the deferred
payments shall be added to the remaining
payments proportionately). At the end of the
deferral period, if the CHIP Participant has
not returned to active status and is not
able to resume payroll deduction repayments,
the CHIP Participant will have the option of
repaying the entire amount directly to CHIP
or the loan will be treated as a withdrawal
with the value of the Participant's CHIP
account being adjusted accordingly as long
as the provision of the previous sentence
does not adversely affect the qualification
of Article X under the provisions of Section
401(k) of the Code.
(C) All loans may be repaid early without
penalty in accordance with their terms.
(D) Each CHIP Participant may obtain only one
loan during any 12 month period and only two
loans per CHIP Participant may be
outstanding at any time.
(E) Loans shall be made as soon as reasonably
practicable after authorized directions are
received by the Trustee from the Plan
Administrator.
(F) All loans under this Section shall bear a
reasonable rate of interest and shall be
adequately secured. The interest rate shall
be no less than the prime rate of interest
charged by any bank, serving as Trustee or
recordkeeper to the Plan, to its best
customers on the first day of business in
January and July of each year. This rate
will apply for the full term of all loans
made during the six months following such
date. If no bank is serving as Trustee or
recordkeeper, the Plan Administrator may
select a bank whose prime rate of interest
will be used for this purpose. Loans shall
be secured by the borrower's CHIP account.
(G) A loan shall be deemed to have been made
proportionately from the Investment Funds in
which the borrower's CHIP account is
invested as of the Inventory and Allocation
Date immediately preceding the date the loan
is made.
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(H) Loan repayments will be invested among the
Investment Funds in accordance with the
Participant's most recent investment
elections.
(I) Any loans outstanding at the CHIP
Participant's Retirement, death or
termination of employment shall be converted
into a withdrawal and the principal amount
plus accrued interest will be treated as a
reduction in the value of the CHIP
Participant's CHIP account.
(J) The Plan Administrator is authorized to
adopt from time-to-time such additional
regulations or guidelines as the Plan
Administrator deems advisable in
administering this loan program.
(K) No loan shall be made to a Participant from
the Plan unless within the 90-day period
before the making of the loan the
Participant's spouse consents in writing to
the pledge of the participant's interest in
the Plan as security for the loan. Any such
consent by the Participant's spouse shall be
in writing, shall acknowledge the effect of
the loan, and shall be witnessed by a notary
public. The spouse's consent shall be
thereafter binding on the consenting spouse
or any subsequent spouse with respect to the
Participant's loan. A new spousal consent
shall be required for any renegotiation,
extension, renewal or other revision of the
Participant's loan.
10.17 Special Administrative Provisions for the Choice Investment Plan.
(a) All contributions are fully vested as of the date they are
made. The value of the accounts reflecting the investment of
CHIP Participant and Employer Matching Contributions in each
of the Investment Funds shall be adjusted as described in
Section 4.06(a). Upon Retirement, death or other termination
of employment, the balance of a Participant's CHIP account
(determined as of the Valuation Date that authorized
distribution directions are received by the Trustee from the
Committee) shall be paid in a lump sum, as soon as
reasonably practicable after directions are received by the
Committee. Payment to a Participant shall be made no later
than April 1 of the calendar year following the calendar
year in which the Participant reaches age 70 1/2 or, if
later, and the Participant is not a five percent (5%) owner
of the Employer, April 1 of the calendar year following the
calendar year in which Retirement occurs. Distributions from
the Funds other than the GenRad
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Stock Fund shall be made in cash. Distributions from the
GenRad Stock Fund shall be made in shares of stock and cash
in the same proportions in which they are held in the fund;
provided that cash shall also be distributed in lieu of
shares if a Participant would receive less than ten shares
or in lieu of fraction shares.
(b) Investment of the CHIP account shall be governed by election
of the Investment Funds separate from that for accounts
established under other Articles of this Plan. On the Form
which the Participant initially files in order to
participate in CHIP, the Participant must make an initial
election, in increments of one percent (1%) (except for the
Life Strategy investment option which requires an election
of 100%), as to the manner in which the CHIP Participant's
CHIP account will be invested among the Investment Funds. A
Form which does not contain such election will not be
considered to have been properly filed with the Plan
Administrator. After this initial election, Section 5.03
above, relating to Election of Investment Funds, shall
apply.
(c) To the extent the investment elections concerning CHIP
accounts would otherwise require the Trustees to acquire
GenRad stock for such accounts they may acquire such stock
from the GenRad Stock Fund (either the Discretionary Fund or
the Reserved Fund), paying the price at which the stock
closed on the New York Stock Exchange on the last trading
day. A blackout period shall apply with respect to the
ability to make an investment or divestment in the GenRad
Stock Fund. The blackout period begins five business days
before the end of each fiscal quarter and ends two business
days after quarterly earnings are announced by the Company.
(d) The CHIP accounts may be segregated from or commingled with
other plan accounts in each Investment Fund as the Trustees
deem advisable. If commingled, the Trustees shall maintain
such records as they deem advisable of the separate accounts
maintained under this instrument.
10.18 Vesting of Employer Matching Contributions.
For Employees hired on or after January 1, 1995, the vested percentage
in each Participant's Employer Matching Contribution is determined
under the following schedule and is based on Years of Service. A
Participant will always, however, be 100% vested in the Employer
Matching Contribution upon attaining Normal Retirement Age. The vested
percentage for an Employer Matching Contribution will not be less than
the vested percentage under the Plan before this amendment.
Participants are immediately 100% vested in their Participant
Contributions.
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Employees hired prior to January 1, 1995 are 100% vested in their
Employer Matching Contributions.
<TABLE>
<CAPTION>
Years of Service Vesting Percentage
---------------- ------------------
<S> <C>
1 25%
2 50%
3 75%
4 100%
</TABLE>
Forfeitures are created when Participants terminate employment before
becoming 100% vested in their Employer Matching Contributions under the
Plan. These forfeited amounts will be used to reduce future Employer
Matching Contributions to the Plan.
ARTICLE XI
TOP-HEAVY PROVISIONS
11.01 Applicability. The provisions of this Article XI shall apply to any
Plan Year if, as of the applicable Determination Date, the Plan
constitutes a Top-Heavy Plan.
11.02 Definitions. The following definitions apply to this Article XI and
unless otherwise specifically stated in another section hereof do not
apply to any other section of this Plan.
(A) Affiliated Employer. Any corporation or other business entity
which is required to be aggregated with the Employer by reason
of Section 414(b), 414(c) or 414(m) of the Code.
(B) Determination Date. In the case of the first Plan Year, the
Determination Date shall be the final day of such Plan Year
and with respect to each Plan Year thereafter, the
Determination Date shall be the final day of the immediately
preceding Plan Year.
(C) Key Employee. "Key Employee" shall mean any individual
currently or formerly employed by the Employer or any
Affiliated Employer who, at any time during the Plan Year
containing the Determination Date for the Plan Year in
question, or any of the four (4) preceding Plan Years, is (in
accordance with Code Section 416(i) and the regulations
promulgated thereunder):
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(i) An officer of the Employer or any Affiliated Employer
with total annual compensation (within the meaning
of Section 415(c) of the Code) from the Employer or
any Affiliated Employer greater than fifty percent
(50%) of the dollar limitation in effect under
Section 415(b)(1)(A) of the code for the calendar
year in which such Plan Year ends, provided that in
no event shall more than the lesser of fifty (50)
employees or ten percent (10%) of all employees be
considered offices hereunder (but in no event less
than three (3) employees).
(ii) One of ten (10) employees of the Employer or any
Affiliated Employer owning or considered as owning
(within the meaning of Section 318 of the Code) both
more than a one-half percent (1/2%) ownership
interest in the value and the largest percentage
ownership of the Employer or any Affiliated
Employer, excluding, however, any employee who earns
an amount equal to or less than the maximum dollar
limitation under Section 415(c)(1)(A) as in effect
for the calendar year in which such Plan Year ends,
but treated as owning the greater interest, any such
employee who, among others with the same interest,
has the greatest annual compensation (within the
meaning of Section 415(c) of the Code) from the
Employer or any Affiliated Employer for the Plan
Year during which any part of that ownership
interest existed.
(iii) An employee of the Employer or any Affiliated
Employer who owns (or is considered as owning within
the meaning of Section 318 of the Code) more than
five percent (5%) of the outstanding stock of the
Employer or of stock possessing more than five
percent (5%) of the total combined voting power of
all stock of the Employer; or
(iv) An employee of the Employer or Affiliated Employer
who owns (or is considered as owning within the
meaning of Section 318 of the Code) more than one
percent (1%) of the outstanding stock of the
Employer or more than one percent (1%) of the total
combined voting power of all stock of the Employer,
and who receives annual compensation (within the
meaning of Section 415(c) of the Code) from the
Employer or any Affiliated Employer in excess of One
Hundred Fifty Thousand Dollars ($150,000).
(v) For the purpose of applying Section 318 of the Code
under subparagraphs (ii), (iii) and (iv) of this
Section 11.02(C), the phrase "50 percent" in Section
318(a)(2) of the Code shall be replaced with the
phrase "five percent."
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(D) Non-Key Employee. Any individual currently or formerly
employed by the Employer or any Affiliated Employer who is not
a Key Employee, and has never been a Key Employer.
(E) Aggregated Plans. "Aggregated Plans" shall mean all plans of
the Employer and any Affiliated Employer that (i) are
qualified under Code Section 401(a) and are required to be
aggregated pursuant to Code Section 416(g)(2) including any
plan, whether or not terminated, in which a Key Employee
participates, and (ii) which may be taken into account under
the permissive aggregation rules of Code Section
416(g)(2)(A)(ii) if such permissive aggregation thereby
eliminates the status as a Top-Heavy Plan of the plans
required to be aggregated pursuant to (i) above and such
inclusion will not result in the Aggregated Plans ceasing to
meet the requirements of Code Sections 401(a)(4) and 410.
Notwithstanding the foregoing, the Committee may elect to
exclude any plan that is permitted, but not required, to be
aggregated if such plan is a collectively bargained plan and
the necessary information as to participants and benefits is
not available.
(F) Top-Heavy Plan. The Plan shall constitute a "Top-Heavy Plan"
for any Plan Year if, as of the Determination Date, the
present value of the cumulative accrued benefits and
aggregated accounts of Key Employees under any Aggregate Plan
exceeds sixty percent (60%) of the present value of the
cumulative accrued benefits and aggregate accounts of all Key
Employees and Non-Key Employees under any Aggregated Plan. The
above determinations shall be made in accordance with Code
Section 416(g) and in accordance therewith: (1) The accrued
benefit of the Employee who has not performed services for the
Employer in the five-year period ending on the Determination
Date shall be excluded; (2) The accrued benefit of each
Employee shall include distributions made to the Employee
during the five-year period ending on the Determination Date;
(3) The accrued benefit of a Non-Key Employee who was
previously a Key Employee shall be excluded and (4) The
accrued benefit of an Employee shall not include any rollover
contributions, except to the extent arising at the Employee's
initiation and from a plan of an Affiliated Employer.
Solely for the purpose of determining if the Plan, or any
other plan included in a required aggregation group of which
this Plan is a part, is a Top-Heavy Plan, the accrued benefit
of an Employee other than a Key Employee shall be determined
under (a) the method, if any, that uniformly applies for
accrual purposes under all plans maintained by the Affiliated
Employers, or (b) if there is no such method, as if such
benefit accrued not more rapidly than the slowest accrual rate
permitted under the fractional accrual rate of Section
411(b)(1)(C) of the Internal Revenue Code. In addition, in
determining
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<PAGE>
whether Aggregate Plans are Top-Heavy, the cumulative accrued
benefits and aggregate accounts shall be determined as of the
Determination Date for each Plan in the group of Aggregated
Plans, and the result shall then be aggregated based on
Determination Dates for each plan that falls within the same
calendar year.
(G) Super Top-Heavy Plan. The Plan shall constitute a "Super
Top-Heavy Plan" for any Plan Year if, as of the applicable
Determination Date, the present value of the cumulative
accrued benefits and aggregate accounts of Key Employees under
any Aggregated Plan exceeds ninety percent (90%) of the
present value of the cumulative accrued benefits and aggregate
accounts of all Key Employees and Non-Key Employees under the
Aggregated Plan. The above determination shall be made in
accordance with Code Section 416(g).
(H) Non-Compensated Participants. For purposes of the tests in
subparagraphs (F) and (G) of this Section, the cumulative
accrued benefits and aggregate accounts shall exclude such
benefits and accounts for all Participants who have not
performed any service for the Employer at any time during the
five year period ending on the applicable Determination Date.
(I) Top-Heavy Compensation. "Top-Heavy Compensation" shall mean
compensation of the Participant from the Employer within the
meaning of Section 415 of the Code.
11.03 Minimum Contribution. Each Participant (other than a Key Employee)
regardless of whether such Participant has completed a year of service
in such Plan Year and regardless of such Participant's level of
compensation, or whether the Participant has made CHIP Participant
Contributions, and who has not terminated his employment as of the last
day of such Plan Year, shall be credited with, in each Plan Year in
which the Plan is a Top-Heavy Plan, an additional Employer contribution
to the extent required to assure that such Participant has credited
from this Plan and all other defined contribution plans of the Employer
for such Plan Year in which the Plan is a Top-Heavy Plan, an Employer
contribution not less than the lessor of:
(A) Three percent (3%) of the Participant's total compensation for
the Plan Year; or
(B) A percentage of the Participant's Top-Heavy Compensation for
the Plan Year which equals the total Employer contribution
stated as a percentage of Top-Heavy Compensation (including
any CHIP Participant Contributions under the Plan) for the Key
Employee for which such percentage is the highest.
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<PAGE>
Notwithstanding the foregoing, if the Plan is determined to be
top-heavy for a Plan Year for which it is part of an aggregation group
which includes a qualified defined benefit plan which is also
top-heavy, the requirements of Code Section 416(c) shall be satisfied
for such Plan Year by providing the minimum benefit required by said
Section under such defined benefit plan to each Participant or eligible
Employee who is also covered under the defined benefit plan in lieu of
the minimum contribution under this Plan. In determining the
compensation (determined over a five year period) of an Employee for
purposes of calculating the minimum contribution under a defined
benefit plan, years of service during which the Employee failed to
complete 1,000 hours of service shall be disregarded.
11.04 Adjustment to Maximum Limitations. In the event that a Participant or
an eligible Employee of the Plan also participates in a defined
benefit plan of the Employer or any Affiliated Employer during a Plan
Year in which the Plan is a Top-Heavy Plan or a Super Top-Heavy Plan,
the limitations under Article III, and Article IV of the Plan shall
apply, except that the factor of 1.0 shall be substituted for the
factor of 1.25 as set forth under such Article with regard to the
defined benefit plan and defined contribution plan fractions. If the
Top-Heavy Plan is not Super Top-Heavy Plan, the preceding sentence
shall apply only if:
(a) The Participant's minimum contribution under Section 11.03 of
the Plan is not increased to four percent (4%) of his
compensation or such lesser amount as may be permitted under
applicable law; or
(b) The Participant's minimum benefit under the defined benefit
plan is not increased to equal the product of (i) and (ii)
below:
(i) The lesser of:
(A) Three percent (3%) multiplied by his years of
service (up to a maximum of ten years); or
(B) Thirty percent (30%); multiplied by:
(ii) His highest average compensation determined under the
top-heavy provisions of such plan.
11.05 Termination of Top-Heavy Status. If the Plan has been deemed to be
top-heavy for one or more Plan Years and thereafter ceases to be top-heavy, the
provisions of this Article XI shall cease to apply to the Plan effective as of
the day following the Determination Date on which it is determined to no longer
be top-heavy.
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<PAGE>
ARTICLE XII
ROLLOVER CONTRIBUTIONS
12.01 Rollover Contributions. A Participant or an employee who would be a
Participant but for failure to satisfy the requirements of Section
10.02, above, may, with the consent of the Committee, make a Rollover
Contribution or have the Trustee accept a trustee transfer
contribution. A "Rollover Contribution" is a contribution from the plan
of another employer (but not an Individual Retirement Account)
described in Section 402(a) of the Code and is exempt from tax under
Section 501(a) of the Code of the entire amount to the credit of such
Participant or Employee in such trust. The Committee may require the
Participant to produce such evidence with respect to compliance with
said Section 402(a)(5) as it deems necessary in whatever manner it
deems necessary, in order to ensure favorable tax treatment under the
Code.
Rollover Contributions and trustee transfer contributions shall be
nonforfeitable, shall be credited to sub-accounts known as the
"Rollover Account" or the "Trustee Transfer Account," and shall be
accounted for separately from other amounts contributed by or for the
Participant hereunder. Rollover Contributions for the purpose of the
limits on annual additions set forth in Section 4.03, above.
12.02 Investment of Rollover or Trustee Transfer Contributions. At the time a
Participant makes a Rollover or trustee transfer contribution, the
Participant shall direct the Employer to invest the contribution in one
or more of the Investment Funds. Thereafter, any change in the
Participant's investment election regarding such contributions shall be
made in accordance with Section 5.03 in conjunction with all assets
standing to the credit of the Participant.
12.03 Withdrawal of Rollover Contributions. Rollover Contributions (but not
trustee transfer contributions from a 401(k) cash-or-deferred
arrangement) may be withdrawn at any time by a Participant without a
demonstration of financial hardship by written notice delivered to the
Employer not less than 30 days prior to any Valuation Date.
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<PAGE>
IN WITNESS WHEREOF, the Employer has caused those present to execute this
document in its name and on its behalf this 1st day of January, 1998.
GENRAD, INC.
By: /s/ Lori B. Hannay
----------------------
Title: Vice President
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Exhibit 5
NUTTER, McCLENNEN & FISH, LLP
ATTORNEYS AT LAW
ONE INTERNATIONAL PLACE
BOSTON, MASSACHUSETTS 02110-2699
TELEPHONE: 617-439-2000 FACSIMILE: 617-973-9748
CAPE COD OFFICE DIRECT DIAL NUMBER
HYANNIS, MASSACHUSETTS
December 16, 1998
GenRad, Inc.
7 Technology Park Drive
Westford, MA 01886
Gentlemen/Ladies:
Reference is made to the Registration Statement on Form S-8 (the
"Registration Statement") which GenRad, Inc. (the "Company") is filing
concurrently herewith with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to
500,000 shares of common stock, $1.00 par value per share (the "Common Stock"),
issuable pursuant to the GenRad Choice Investment Plan (the "Plan"), and an
indeterminate number of shares of such Common Stock which may be issued or
become issuable under the Plan by reason of stock dividends, stock splits or
other recapitalizations executed hereafter, and an indeterminate amount of
interests to be offered or sold pursuant to the Plan.
We are familiar with the Company's Articles of Organization and
By-laws, both as amended to date (collectively, the "Organizational Documents"),
and have examined the Plan and such other documents as we deemed necessary for
this opinion. Based upon the foregoing, we are of the opinion that:
1. When issued and paid for in compliance with the terms of the Plan,
the Organizational Documents and applicable state law, the 500,000 shares of
Common Stock referred to above will be duly and validly issued, fully paid and
non-assessable; and
2. The additional shares of Common Stock which may become issuable
under the Plan by reason of stock dividends, stock splits or other
recapitalizations hereafter executed, if and when issued in compliance with the
terms of the Plan, the Organizational Documents and applicable state law, will
be duly and validly issued, fully paid and non-assessable.
We understand that this opinion letter is to be used in connection with
the Registration Statement and hereby consent to the filing of this opinion
letter with and as a part of the Registration Statement and of any amendments
thereto. It is understood that this opinion
<PAGE>
letter is to be used in connection with the offer and sale of the aforesaid
shares only while the Registration Statement, as it may be amended from time to
time as contemplated by Section 10(a)(3) of the Securities Act, is effective
under the Securities Act.
Very truly yours,
/s/ Nutter, McClennen & Fish, LLP
NUTTER, McCLENNEN & FISH, LLP
CA/DSS
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Exhibit 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated January 26, 1998, which appears on
page 20 of the 1997 Annual Report to Stockholders of GenRad, Inc., which is
incorporated by reference in GenRad, Inc.'s Annual Report on Form 10-K for the
year ended January 3, 1998. We also consent to the application of such report to
the Financial Statement Schedule for the three years ended January 3, 1998 when
such schedule is read in conjunction with the financial statements referred to
in our report. The audits referred to in such report included this schedule. We
also consent to the incorporation by reference in this Registration Statement on
Form S-8 of our report dated October 30, 1998 appearing on page 5 of the Annual
Report of the GenRad Choice Investment Plan on Form 11-K for the year ended
December 31, 1997.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 1998
Exhibit 23.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated July 2, 1998 on Industrial Computer
Corporation's financial statements as of December 31, 1997 and for the year then
ended, which is included in GenRad, Inc.'s Form 8-K/A dated July 10, 1998.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
December 16, 1998
