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EXHIBIT 4
GENRAD, INC.
NON-STATUTORY STOCK OPTION AGREEMENT
1. GRANT OF OPTION:
GenRad, Inc., a Massachusetts corporation (the "Company"), hereby
grants Robert M. Dutkowsky (the " Optionee") an option to purchase up
to an aggregate of 500,000 shares of Common Stock of the Company
("Common Stock") at a price of $7.375 per share (the "Option Exercise
Price"), purchasable as set forth in, and subject to the terms and
conditions of, this option. Except where the context otherwise
requires, the term "Company" shall include the parent and all present
and future subsidiaries of the Company as defined in Section 424(e) and
424(f) of the Internal Revenue Code of 1986, as amended or replaced
from time to time (the "Code").
The date of grant of this option is April 24, 2000 (the "Effective
Date").
2. NON-STATUTORY STOCK OPTION:
This option is NOT intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code.
3. EXERCISE OF OPTION AND PROVISIONS FOR TERMINATION:
(A) TIMING OF EXERCISE.
Except as otherwise provided in this Agreement, this option
may be exercised at any time, in whole or in part, subject to
the Company's right to repurchase of this Agreement any shares
acquired upon exercise of this option in accordance with
Section 12 of this Agreement.
(B) EXERCISE PROCEDURE.
Subject to the conditions set forth in this Agreement, this
option shall be exercised by the Optionee's delivery of
written notice of exercise to the Treasurer of the Company,
specifying the number of shares to be purchased and the
purchase price to be paid therefor and accompanied by payment
in full in accordance with Section 4. Such exercise shall be
effective upon receipt by the Treasurer of the Company of such
written notice together with the required payment. The
Optionee may at any time or from time to time purchase less
than the number of shares covered hereby, provided that no
partial exercise of this option may be for any fractional
share or for fewer than ten whole shares.
(C) TERMINATION OF EMPLOYMENT.
If the Optionee ceases to be employed by the Company for any
reason other than death, this option shall continue to be
exercisable during the thirty (30) days immediately following
such cessation, after which time the Option shall terminate.
If the Optionee ceases to be employed by the Company by reason
of his death, this option shall continue to be exercisable
either by the Optionee's
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executor or administrator or, if not so exercised, by the
legatees or distributees of the Optionee's estate, during the
twelve (12) months immediately following the Optionee's death,
after which time the Option shall terminate. The date on which
the Optionee ceases to be employed by the Company is
hereinafter referred to as the "Termination Date".
(D) EXPIRATION.
Notwithstanding any other provisions set forth in this
Agreement, in no event shall this option be exercised more
than ten (10) years after the Effective Date.
(D) TERMINATION FOR CAUSE.
Notwithstanding any other provisions set forth in this
Agreement, this option shall terminate automatically and
without notice to the Optionee on the date the Optionee's
employment is terminated for "cause" (as defined in the
Employment Agreement dated April 10, 2000 between the Company
and the Optionee). A termination for "cause" will include any
resignation in anticipation of discharge for "cause" or
accepted by the Company in lieu of a formal discharge for
"cause".
4. PAYMENT OF PURCHASE PRICE.
(A) METHOD OF PAYMENT.
Payment of the purchase price for shares purchased upon
exercise of this option shall be made (i) by delivery to the
Company of cash or a check to the order of the Company in an
amount equal to the purchase price of such shares, (ii) with
the approval of the Compensation Committee of the Company's
Board of Directors (the "Compensation Committee"), by delivery
to the Company of shares of Common Stock of the Company then
owned by the Optionee having a fair market value equal in
amount to the purchase price of such shares, (iii) by any
other means which the Compensation Committee determines are
consistent with applicable laws and regulations (including,
without limitation, the provisions of Rule 16b-3 under the
Securities Exchange Act of 1934 and Regulation T promulgated
by the Federal Reserve Board), or (iv) by any combination of
such methods of payment.
(B) VALUATION OF SHARES OR OTHER NON-CASH CONSIDERATION TENDERED
IN PAYMENT OF PURCHASE PRICE.
For the purposes hereof, the fair market value of any share of
the Company's Common Stock or other non-cash consideration
which may be delivered to the Company in exercise of this
option shall be determined in good faith by the Compensation
Committee.
(C) DELIVERY OF SHARES TENDERED IN PAYMENT OF PURCHASE PRICE.
If the Optionee exercises this option by delivery of shares of
Common Stock of the Company, the certificate or certificates
representing the shares of Common Stock of the Company to be
delivered shall be duly executed in blank by the Optionee or
shall be accompanied by a stock power duly executed in blank
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suitable for purposes of transferring such shares to the
Company. Fractional shares of Common Stock of the Company will
not be accepted in payment of the purchase price of shares
acquired upon exercise of this option.
(D) RESTRICTIONS ON USE OF OPTION STOCK TO PAY PURCHASE PRICE.
Notwithstanding the foregoing, no shares of Common Stock of
the Company may be tendered in payment of the purchase price
of shares purchased upon exercise of this option if the shares
to be so tendered were acquired within twelve (12) months
before the date of such tender through the exercise of an
option granted under any stock option plan of the Company or
through any restricted stock plan of the Company.
5. DELIVERY OF SHARES; COMPLIANCE WITH SECURITIES LAWS, ETC.
(A) GENERAL.
The Company shall, upon payment of the option price for the
number of shares purchased and paid for, make prompt delivery
of the certificate representing such shares to the Optionee,
provided that if any law or regulation requires the Company to
take any action with respect to such shares before the
issuance thereof, then the date of delivery of such
certificate shall be extended for the period necessary to
complete such action.
(B) LISTING, QUALIFICATIONS, ETC.
This option shall be subject to the requirement that if, at
any time, counsel to the Company shall determine that the
listing, registration or qualification of the shares subject
hereto upon any securities exchange or under any state or
federal law, or the consent or approval of any governmental or
regulatory body, or that the disclosure of non-public
information or the satisfaction of any other condition is
necessary as a condition of, or in connection with, the
issuance or purchase of shares hereunder, this option may not
be exercised, in whole or in part, unless such listing,
registration, qualification, consent or approval, disclosure
or satisfaction of such other condition shall have been
effected or obtained on terms acceptable to the Compensation
Committee.
6. NON-TRANSFERABILITY OF OPTION.
This option is personal and no rights granted hereunder may be
transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) nor shall any such rights be subject to
execution, attachment or similar process, except that this option may
be transferred by will or the laws of descent and distribution or with
the prior approval of the Compensation Committee. Upon any attempt to
transfer, assign, pledge, hypothecate or otherwise dispose of this
option or of such rights contrary to the provisions hereof, or upon the
levy of any attachment or similar process upon this option or such
rights, this option and such rights shall, at the election of the
Company, become, null and void.
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7. NO SPECIAL EMPLOYMENT OR SIMILAR RIGHTS.
Nothing contained in this Agreement shall be construed or deemed by any
person under any circumstances to bind the Company to continue the
employment of the Optionee with the Company.
8. RIGHTS AS A SHAREHOLDER.
The Optionee shall have no rights as a shareholder with respect to any
shares which may be purchased by exercise of this option (including,
without limitation, any rights to receive dividends or non-cash
distributions with respect to such shares), unless and until a
certificate representing such shares is duly issued and delivered to
the Optionee. No adjustment shall be made for dividend or other rights
for which the record date is prior to the date such stock certificate
is issued.
9. ADJUSTMENT PROVISIONS.
(A) GENERAL.
If, through or as a result of any recapitalization,
reclassification, stock dividend, stock split, reverse stock
split or other similar transaction involving shares of Common
Stock (i) the outstanding shares of Common Stock are increased
or decreased or are exchanged for a different number of kind
of shares or other securities of the Company, or (ii)
additional shares or new or different shares of other
securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock or
other securities, an appropriate and proportionate adjustment
may be made in (x) the number and kind of shares or other
securities then subject to this option, and (y) the price for
each share then subject to this option, without changing the
aggregate purchase price as to which this option remains
exercisable.
(B) COMPENSATION COMMITTEE AUTHORITY TO MAKE ADJUSTMENTS.
Any adjustments under this Section 9 will be made by the
Compensation Committee, whose determination as to what
adjustments, if any, will be made and the extent thereof will
be final, binding and conclusive. No fractional shares will be
issued pursuant to this option on account of any such
adjustments.
10. MERGERS, CONSOLIDATIONS, DISTRIBUTIONS, LIQUIDATIONS, 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 Common 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, prior to the termination of this option,
the Board of Directors of the Company 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 this
option: (i) provide that this option shall be assumed, or an equivalent
option shall be substituted, by the acquiring or succeeding corporation
(or an affiliate thereof), (ii) upon written notice to the Optionee,
provide that any unexercised portion of this option 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, and (iii) in the event of a merger under the terms of
which holders of the
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Common Stock of the Company 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 Optionee equal to
the difference between (A) the Merger Price times the number of shares
of Common Stock subject to the unexercised portion of this option (to
the extent then exercisable at prices not in excess of the Merger
Price) and (B) the aggregate exercise price of any unexercised portion
of this option, which cash payment shall be in exchange for the
termination of this option.
11. WITHHOLDING TAXES.
The Company's obligation to deliver shares upon the exercise of this
option shall be subject to the Optionee's satisfaction of all
applicable federal, state and local income and employment tax
withholding requirements.
12. RIGHT TO REPURCHASE SHARES ISSUED ON EXERCISE.
(A) REPURCHASE RIGHT.
Subject to the terms of this Article 12, the Company shall
have the right and option, but not the obligation, to purchase
from the Optionee all or any part of the shares acquired by
the Optionee upon exercise of this option if a Termination
Date has occurred (the "Repurchase Right").
(B) REPURCHASE PRICE.
The Repurchase Right shall be exercised at the Option Exercise
Price, as equitably adjusted in the event of any stock split,
stock dividend or similar transaction.
(C) DURATION OF REPURCHASE RIGHT.
The Repurchase Right shall lapse (i) as to 125,000 shares of
Common Stock, adjusted in the event of any stock split, stock
dividend or similar transaction, on the first anniversary of
the Effective Date, (ii) as to an additional 125,000 shares of
Common Stock, adjusted in the event of any stock split, stock
dividend or similar transaction, on the second anniversary of
the Effective Date, (iii) as to an additional 125,000 shares
of Common Stock, adjusted in the event of any stock split,
stock dividend or similar transaction, on the third
anniversary of the Effective Date, and (iv) as to the final
125,000 shares of Common Stock, adjusted in the event of any
stock split, stock dividend or similar transaction, on the
fourth anniversary of the Effective Date. The Repurchase Right
shall lapse (i) as to 125,000 shares of Common Stock, adjusted
in the event of any stock split, stock dividend or similar
transaction, if the Optionee's employment with the Company is
terminated by the Company other than for cause (as defined in
the Employment Agreement) or by the Optionee for good reason
(as defined in the Employment Agreement) and (ii) in its
entirety (A) six months after the Termination Date has
occurred or (B) immediately upon a Change of Control (as
defined in the Employment Agreement).
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(D) EXERCISE OF REPURCHASE RIGHT.
In the event the Company shall be entitled to and shall elect
to exercise the Repurchase Right, it shall give to the
Optionee (or his heirs or personal representative, as the case
may be) a written notice specifying such exercise, the number
of shares that the Company elects to repurchase and specifying
a date for closing hereunder, which date shall be not more
than ten (10) business days after the giving of such notice.
The closing shall take place at the Company's principal
offices or such other location as the Company may reasonably
designate in such notice. At the closing, the Optionee (or his
heirs or personal representative, as the case may be) shall
deliver the certificates representing the shares being
repurchased, duly endorsed in blank for transfer (and if the
seller shall be the heirs or personal representative of the
Optionee, together with proof as to the authority of the
person or persons to make such delivery), against the
simultaneous delivery to the Optionee (or his heirs or
personal representative, as the case may be) of the purchase
price for the number of shares then being repurchased. In the
event that the Optionee (or his heirs or personal
representative, as the case may be) fails so to deliver the
certificates for the shares to be repurchased duly endorsed as
aforesaid, the Company may elect (a) to establish a segregated
account in the amount of the purchase price, such account to
be turned over to the Optionee (or his heirs or personal
representative, as the case may be) upon delivery of such
certificates duly endorsed as aforesaid, and (b) immediately
to take such action as is appropriate to transfer record title
of such shares from the Optionee (or his heirs or personal
representative, as the case may be) to the Company and to
treat the Optionee (or his heirs or personal representative,
as the case may be) and such shares in all respects as if
delivery of the certificates for such shares duly endorsed as
aforesaid had been made as required. The Optionee (and any
heir or personal representative of the Optionee, by reason of
his or her receipt of the shares) hereby irrevocably grants
the Company a power of attorney for the purpose of
effectuating the preceding sentence.
(E) RIGHTS TO SHARES AND RESTRICTION ON TRANSFER DURING REPURCHASE
OPTION.
So long as shares acquired by the Optionee upon exercise of
this option have not been repurchased, the Optionee shall have
ownership rights with respect to the shares, including the
right to vote and to receive dividends. The Optionee may not
sell, transfer, pledge or hypothecate any shares that are
subject to the Repurchase Right except to a person or entity
which expressly agrees in writing with the Company to be bound
by the Repurchase Right.
(F) LEGENDS.
The Company may require that certificates representing any
shares to be issued to the Optionee upon exercise of this
Option which are subject to the Repurchase Right shall have
endorsed thereon a legend substantially as follows:
"The shares represented by this certificate are
subject to the repurchase rights and restrictions on
transfer set forth in a Non-Statutory Stock Option
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Agreement dated April 24, 2000, a copy of which will
be furnished free of charge upon written request."
13. MISCELLANEOUS.
(a) Except as provided herein, this option may not he amended or
otherwise modified unless evidenced in writing and signed by
the Company and the Optionee.
(b) All notices under this option shall be mailed or delivered by
hand to the. parties at their respective addresses set forth
beneath their names below or it such other address as may be
designated in writing by either of the parties to one another.
(c) Although this option has not been granted under the Company's
1991 Equity Incentive Plan (the "Plan"), it shall be governed
by the terms and conditions thereof except to the extent the
terms of this option and the terms of the Plan are
inconsistent or contradictory, in which event the terms of
this option shall govern.
(d) This option shall be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
GENRAD, INC.
By: /s/ Ed Zschau
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Ed Zschau
Chairman, Compensation Committee
of the Board of Directors
Address: 7 Technology Park Drive
Westford, MA 01886
OPTIONEE'S ACCEPTANCE
The undersigned, hereby accepts the foregoing option and agrees to the
terms and conditions thereof.
OPTIONEE: /s/ Robert M. Dutkowsky
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Robert M. Dutkowsky
ADDRESS: 7 Gable Ridge Road
Westboro, MA 01581
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