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Exhibit 4
GENRAD, INC.
1997 NON-QUALIFIED EMPLOYEE STOCK OPTION PLAN
AS AMENDED THROUGH AUGUST 4, 2000
1. PURPOSE
The purpose of this 1997 Non-Qualified Employee Stock Option Plan
(the "Plan") is to advance the interests of GenRad, Inc. (the "Company") by
enhancing the ability of the Company and its subsidiaries to attract and
retain employees, consultants or advisers who are in a position to make
significant contributions to the success of the Company, to reward them for
their contributions and to encourage them to take into account the long-term
interests of the Company.
The Plan provides for the award of options to purchase shares of the
Company's common stock ("Stock"). Options granted pursuant to the Plan shall
be non-qualified options and not incentive stock options as defined in
Section 422 of the Internal Revenue Code of 1986.
2. ELIGIBILITY FOR AWARDS
Persons eligible to receive awards under the Plan shall be all
employees, consultants and advisers of the Company and its subsidiaries who,
in the opinion of the Board, are in a position to make a significant
contribution to the success of the Company and its subsidiaries. Directors
and officers of the Company shall not be eligible to receive awards under the
Plan. A subsidiary for purposes of the Plan shall be a corporation in which
the Company owns, directly or indirectly, stock possessing 50% or more of the
total combined voting power of all classes of stock. Persons selected for
awards under the Plan are referred to herein as "participants".
3. ADMINISTRATION
The Plan shall be administered by the Board of Directors (the
"Board") of the Company. The Board shall have authority, not inconsistent
with the express provisions of the Plan, (a) to grant awards consisting of
options to such participants as the Board may select; (b) to determine the
time or times when awards shall be granted and the number of shares of Stock
subject to each award; (c) to determine the terms and conditions of each
award; (d) to prescribe the form or forms of any instruments evidencing
awards and any other instruments required under the Plan and to change such
forms from time to time; (e) to adopt, amend and rescind rules and
regulations for the administration of the Plan; and (f) to interpret the Plan
and to decide any questions and settle all controversies and disputes that
may arise in connection with the Plan. Such determination of the Board shall
be conclusive and shall bind all parties. Subject to Section 8, the Board
shall also have the authority, both generally and in particular instances, to
waive compliance by a participant with any obligation to be performed by the
participant under an award, to waive any condition or provision of an award,
and to amend or cancel any award (and if an award is canceled, to grant a new
award on such terms as the Board shall specify), except that the Board may
not take any action with respect to an outstanding award that would adversely
affect the rights of the participant under such award without such
participant's consent. Nothing
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in the preceding sentence shall be construed as limiting the power of the
Board to make adjustments required by Section 5(c) and Section 6(i).
The Board may, in its discretion, delegate some or all of its powers
with respect to the Plan to a committee (the "Committee"), in which event all
references in this Plan (as appropriate) to the Board shall be deemed to
refer to the Committee. The Committee, if one is appointed, shall consist of
at least two directors. A majority of the members of the Committee shall
constitute a quorum, and all determinations of the Committee shall be made by
a majority of its members. Any determination of the Committee under the Plan
may be made without notice or meeting of the Committee by a writing signed by
a majority of the Committee members.
4. EFFECTIVE DATE AND TERM OF PLAN
The Plan shall become effective on the date on which it is approved
by the Board.
No awards shall be granted under the Plan after the completion of
ten years from the date on which the Plan was adopted by the Board, but
awards previously granted may extend beyond that date.
5. SHARES SUBJECT TO THE PLAN
(a) Number of Shares. Subject to adjustment as provided in Section
5(c), the aggregate number of shares of Stock that may be delivered upon the
exercise of awards granted under the Plan shall be 4,500,000. If any award
granted under the Plan terminates without having been exercised in full, or
upon exercise is satisfied other than by delivery of Stock, the number of
shares of Stock as to which such award was not exercised shall be available
for future grants within the limits set forth in this Section 5(a).
(b) Shares to be Delivered. Shares delivered under the Plan shall be
authorized but unissued Stock or, if the Board so decides in its sole
discretion, previously issued Stock acquired by the Company and held in its
treasury. No fractional shares of Stock shall be delivered under the Plan.
(c) Changes in Stock. In the event of a stock dividend, stock split
or combination of shares, recapitalization or other change in the Company's
capital stock, the number and kind of shares of Stock subject to awards then
outstanding or subsequently granted under the Plan, the exercise price of
such awards, the maximum number of shares of Stock that may be delivered
under the Plan, and other relevant provisions shall be appropriately adjusted
by the Board, whose determination shall be binding on all persons.
The Board may also adjust the number of shares subject to
outstanding awards and the exercise price and the terms of outstanding awards
to take into consideration material changes in accounting practices or
principles, extraordinary dividends, consolidations or mergers (except those
described in Section 6(i)), acquisitions or dispositions of stock or property
or any other
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event if it is determined by the Board that such adjustment is appropriate to
avoid distortion in the operation of the Plan.
6. TERMS AND CONDITIONS OF OPTIONS
(a) Exercise Price of Options. The exercise price of each option
shall be determined by the Board but shall not be less, in the case of an
original issue of authorized stock, than par value.
(b) Duration of Options. Options shall be exercisable during such
period or periods as the Board may specify. The latest date on which an
option may be exercised (the "Final Exercise Date") shall be the date that is
ten years from the date the option was granted or such earlier date as the
Board may specify at the time the option is granted.
(c) Exercise of Options.
(i) Options shall become exercisable at such time or times and
upon such conditions as the Board shall specify. In the
case of an option not immediately exercisable in full, the
Board may at any time accelerate the time at which all or
any part of the option may be exercised.
(ii) Options may be exercised only in writing. Written notice
of exercise must be signed by the proper person and
furnished to the Company, together with (A) such documents
as the Board requires and (B) payment in full as specified
below in Section 6(d) for the number of shares for which
the option is exercised.
(iii) The delivery of Stock upon the exercise of an option shall
be subject to compliance with (A) applicable federal and
state laws and regulations, (B) if the outstanding Stock
is at the time listed on any stock exchange, the listing
requirements of such exchange, and (C) Company counsel's
approval of all other legal matters in connection with the
issuance and delivery of such Stock. If the sale of Stock
has not been registered under the Securities Act of 1933,
as amended, the Company may require, as a condition to
exercise of the option, such representations or agreements
as counsel for the Company may consider appropriate to
avoid violation of such Act and may require that the
certificates evidencing such Stock bear an appropriate
legend restricting transfer.
(iv) The Board shall have the right to require that the
participant exercising the option remit to the Company an
amount sufficient to satisfy any federal, state, or local
withholding tax requirements (or make other arrangements
satisfactory to the Company with regard to such taxes)
prior to the delivery of any Stock pursuant to the
exercise of the option. If permitted by the Board, either
at the time of the grant of the option or the time of
exercise, the participant may elect, at such time and in
such manner as the Board may
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prescribe, to satisfy such withholding obligation by
(A) delivering to the Company Stock (which in the case
of Stock acquired from the Company shall have been
owned by the participant for at least six months prior
to the delivery date) having a fair market value equal
to such withholding obligation, or (B) requesting that
the Company withhold from the shares of Stock to be
delivered upon the exercise a number of shares of Stock
having a fair market value equal to such withholding
obligation.
(v) If an option is exercised by the executor or administrator
of a deceased participant, or by the person or persons to
whom the option has been transferred by the participant's
will or the applicable laws of descent and distribution,
the Company shall be under no obligation to deliver Stock
pursuant to such exercise until the Company is satisfied
as to the authority of the person or persons exercising
the option.
(d) Payment for and Delivery of Stock. Stock purchased upon exercise
of an option under the Plan shall be paid for as follows:
(i) in cash or by personal check, certified check, bank draft
or money order payable to the order of the Company; or
(ii) if so permitted by the Board, (A) through the delivery of
shares of Stock (which, in the case of Stock acquired from
the Company, shall have been held for at least six months
prior to delivery) having a fair market value on the last
business day preceding the date of exercise equal to the
purchase price or (B) by delivery of a promissory note of
the participant to the Company, such note to be payable on
such terms as are specified by the Board or (C) by
delivery of an unconditional and irrevocable undertaking
by a broker to deliver promptly to the Company sufficient
funds to pay the exercise price or (D) by any combination
of the permissible forms of payment; provided, that if the
Stock delivered upon exercise of the option is an original
issue of authorized Stock, at least so much of the
exercise price as represents the par value of such Stock
shall be paid by a personal check or promissory note of
the person exercising the option.
(e) Rights as Shareholder. A participant shall not have the rights
of a shareholder with regard to awards under the Plan except as to Stock
actually received by the participant under the Plan.
(f) Nontransferability of Awards; Restrictions on Stock. Except as
the Board may otherwise determine, no award may be transferred other than by
will or by the laws of descent and distribution, and during a participant's
lifetime an award may be exercised only by the participant.
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The Board, in its discretion, may at the time an award is granted
make Stock delivered under the award subject to such restrictions and
conditions, including restrictions on resale and buy-back rights, as it deems
appropriate.
(g) Death. Except as otherwise provided in the award by the Board at
the time of grant, if a participant dies, each option held by the participant
immediately prior to death may be exercised, to the extent it was exercisable
immediately prior to death, by the participant's executor or administrator or
by the person or persons to whom the option is transferred by will or the
applicable laws of descent and distribution, at any time within the one-year
period (or such longer or shorter period as the Board may determine)
beginning with the date of the participant's death but in no event beyond the
Final Exercise Date.
(h) Termination of Service other than by Death. Except as otherwise
provided in the award by the Board at the time of grant, if an employee's
employment with the Company and its subsidiaries terminates for any reason
other than by death, all options held by the employee that are not then
exercisable shall terminate. Options that are exercisable on the date
employment terminates shall continue to be exercisable for a period of 30
days (or such longer period as the Board may determine, but in no event
beyond the Final Exercise Date) unless the employee (i) was discharged for
cause or (ii) resigned and within 30 days thereafter the Board determines
that the participant's conduct prior to his or her resignation warranted a
discharge for cause. After completion of the post-termination exercise
period, such options shall terminate to the extent not previously exercised,
expired or terminated. For purposes of this Section 6(h), (i) employment
shall not be considered terminated (A) in the case of sick leave or other
bona fide leave of absence approved for purposes of the Plan by the Board, so
long as the employee's right to reemployment is guaranteed either by statute
or by contract, or (B) in the case of a transfer of employment between the
Company and a subsidiary or between subsidiaries and (ii) "cause" shall mean
willful misconduct by the participant or willful failure to perform his or
her responsibilities in the best interests of the Company (including, without
limitation, breach by the participant of any provision of any employment,
advisory, consulting, nondisclosure, non-competition or other agreement
between the participant and the Company or any subsidiary of the Company).
In the case of a participant who is not an employee, provisions
relating to the exercisability of options following termination of service
shall be specified in the award. If not so specified, all options held by
such participant that are not then exercisable shall terminate upon
termination of service. Options that are exercisable on the date the
participant's service as a consultant or adviser terminates shall continue to
be exercisable for a period of 30 days (or such longer period as the Board
may determine, but in no event beyond the Final Exercise Date) unless the
consultant or adviser (i) was terminated for cause or (ii) resigned and
within 30 days thereafter the Board determines that the participant's conduct
prior to his or her resignation warranted a discharge for cause. After
completion of the post-termination exercise period, such options shall
terminate to the extent not previously exercised, expired or terminated.
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(i) Merger, Consolidation, Asset Sale, Liquidation, etc. In the
event of a consolidation or merger or sale of all or substantially all of the
assets of the Company in which outstanding shares of Stock are exchanged for
securities, cash or other property of any other corporation or business
entity or in the event of a liquidation of the Company, the Board, or the
board of directors of any corporation assuming the obligations of the
Company, may, in its discretion, take any one or more of the following
actions, as to outstanding options: (i) provide that such options shall be
assumed, or equivalent options shall be substituted, by the acquiring or
succeeding corporation (or an affiliate thereof), (ii) upon written notice to
the optionees, provide that all unexercised options will terminate
immediately prior to the consummation of such transaction unless exercised by
the optionee within a specified period following the date of such notice,
(iii) in the event of a merger under the terms of which holders of the Stock
will receive upon consummation thereof a cash payment for each share
surrendered in the merger (the "Merger Price"), make or provide for a cash
payment to the optionees equal to the difference between (A) the Merger Price
times the number of shares of Stock subject to such outstanding options (to
the extent then exercisable at prices not in excess of the Merger Price) and
(B) the aggregate exercise price of all such outstanding options in exchange
for the termination of such options, and (iv) provide that all or any
outstanding options shall become exercisable in full and all restrictions on
outstanding awards shall terminate immediately prior to such event.
The Company may grant options under the Plan in substitution for
options held by employees of another corporation who become employees of the
Company, or a subsidiary of the Company, as the result of a merger or
consolidation of the employing corporation with the Company or a subsidiary
of the Company, or as a result of the acquisition by the Company, or one of
its subsidiaries, of property or stock of the employing corporation. The
Company may direct that substitute options be granted on such terms and
conditions as the Board considers appropriate in the circumstances.
(j) Change in Control. Notwithstanding any other provision of the
Plan and except as otherwise provided in the relevant option agreement, in
the event of a "Change in Control of the Company" (as defined below), the
exercise dates of all options then outstanding shall be accelerated in full,
and any restrictions on exercising outstanding options issued pursuant to the
Plan prior to any given date shall terminate. For purposes of the Plan, a
"Change in Control of the Company" shall occur or be deemed to have occurred
only if (i) any "person", as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended ("Exchange Act"), (other than
the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned directly or
indirectly by the shareholder of the Company in substantially the same
proportion as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 50% or more
of the combined voting power of the Company's then outstanding securities;
(ii) during any period of two consecutive years ending during the term of the
Plan (not including any period prior to the adoption of the Plan),
individuals who at the beginning of such period constitute the Board, and any
new director (other than a director designated by a person who has entered
into an agreement with the Company to effect any transaction described in
clause (i), (iii) or (iv) of this subsection (j)) whose election by the Board
or nomination for election by the Company's shareholders was
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approved by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of the period or whose
election or whose nomination for election was previously so approved
(collectively, the "Disinterested Directors"), cease for any reason to
constitute a majority of the Board; (iii) the shareholders of the Company
approve a merger or consolidation of the Company with any other corporation,
other than (A) a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 50% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation or (B) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no "person" (as hereinabove defined) acquires
more than 50% of the combined voting power of the Company's then outstanding
securities; or (iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets which, in either case, has not previously been approved by a majority
of the Disinterested Directors.
7. EMPLOYMENT RIGHTS
Neither the adoption of the Plan nor the grant of awards shall
confer upon any participant any right to continue as an employee of, or
consultant or adviser to, the Company or any subsidiary of the Company or
affect in any way the right of the Company or any such subsidiary to
terminate his or her employment by the Company or any subsidiary of the
Company at any time. Except as specifically provided by the Board in any
particular case, the loss of existing or potential profit in awards granted
under this Plan shall not constitute an element of damages in the event of
termination of the relationship of a participant even if the termination is
in violation of an obligation of the Company or any subsidiary of the Company
to the participant by contract or otherwise.
8. EFFECT, DISCONTINUANCE, CANCELLATION, AMENDMENT AND TERMINATION
Neither adoption of the Plan nor the grant of awards to a
participant shall affect the Company's right to make awards to such
participant that are not subject to the Plan, to issue to such participant
Stock as a bonus or otherwise, or to adopt other plans or arrangements under
which Stock may be issued.
The Board may at any time discontinue granting awards under the
Plan. With the consent of the participant (except as otherwise provided in
the Plan), the Board may at any time cancel an existing award in whole or in
part and grant another award for such number of shares as the Board
specifies. The Board may at any time or times amend the Plan or any
outstanding award for the purpose of satisfying changes in applicable laws or
regulations or for any other purpose that may at the time be permitted by
law, or may at any time terminate the Plan as to further grants of awards,
but no such amendment shall adversely affect the rights of any participant
(without the participant's consent) under any award previously granted.
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