SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )

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Filed by a Party other than the Registrant / /

Check the appropriate box:
/ / Preliminary Proxy Statement
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BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
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/ / Soliciting Material Pursuant to Section240.14a-12

GENRAD, INC.
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(Name of Registrant as Specified In Its Charter)

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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)

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GENRAD, INC.
7 TECHNOLOGY PARK DRIVE
WESTFORD, MASSACHUSETTS 01886-0033

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD ON MAY 9, 2001

The Annual Meeting of Shareholders of GenRad, Inc. (the "Company") will be held
on Wednesday, May 9, 2001 at 10:00 a.m. at the BankBoston Auditorium,
100 Federal Street, Boston, Massachusetts, for the following purposes:

1. To elect two Class II Directors to serve for three-year terms and until
their successors are duly elected and qualified.

2. To consider and act upon a proposal to approve and adopt GenRad's 2001
Directors' Stock Option Plan.

3. To consider and act upon a proposal to approve and adopt GenRad's 2001
Equity Incentive Plan.

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

Shareholders of record at the close of business on March 14, 2001 will be
entitled to notice of and to vote at said Annual Meeting.

By Order of the Board of Directors

WALTER A. SHEPHARD
CLERK

April 6, 2001

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

GENRAD, INC.

7 TECHNOLOGY PARK DRIVE
WESTFORD, MASSACHUSETTS 01886-0033

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
MAY 9, 2001

This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of GenRad, Inc. ("GenRad" or the "Company"), 7 Technology
Park Drive, Westford, Massachusetts 01886-0033, of proxies in the enclosed form
to be voted at the Annual Meeting of Shareholders of GenRad, to be held on
Wednesday, May 9, 2001 at 10:00 a.m. at the BankBoston Auditorium, 100 Federal
Street, Boston, Massachusetts, and at any adjournment thereof (the "Meeting"),
for the purposes stated in the accompanying Notice of Meeting.

Any person giving a Proxy may revoke it at any time prior to its being voted
by filing written notice with the Clerk of GenRad, by executing and delivering a
Proxy bearing a later date, or by attending the Meeting and voting in person. If
the Proxy is properly executed and is not revoked, it will be voted at the
Meeting in the manner specified. If no instructions are specified, the shares
represented by the Proxy will be voted for the election of the nominees to the
Board of Directors listed below and for the approval of Item 2 and Item 3 in the
Notice of Meeting.

The Annual Report of GenRad for the fiscal year ended December 30, 2000 and
this Proxy Statement were first distributed or mailed to shareholders on or
about April 6, 2001.

VOTING SECURITIES

GenRad's common stock, $1.00 par value per share ("Common Stock"), is the
only class of voting securities outstanding and entitled to be voted at the
Meeting. The Board of Directors has fixed March 14, 2001 as the record date for
determining shareholders who are entitled to notice of and to vote at the
Meeting. At the close of business on such record date, there were issued and
outstanding 28,509,554 shares of Common Stock. Each share is entitled to one
vote. A majority of the issued and outstanding shares constitutes a quorum.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth, as of March 14, 2001, certain information
regarding the beneficial ownership of the Company's outstanding Common Stock by
(i) each person known by the Company to own beneficially more than 5% of the
Company's outstanding Common Stock, (ii) each executive officer named in the
Summary Compensation Table below and (iii) all directors and executive officers
as a group. All information with respect to beneficial ownership by the
Company's directors, officers or beneficial owners has been furnished by the
respective director, officer or beneficial owner, as the case may be. The number
of shares set forth below includes shares beneficially owned by spouses and
minor children.

NUMBER OF SHARES
OF COMMON STOCK PERCENT
NAME OF BENEFICIAL OWNER BENEFICIALLY OWNED (1) OF CLASS
- - ------------------------ ---------------------- --------

Daruma Asset Management, Inc ............................... 2,517,900(2) 8.83%
Mariko O. Gordon
60 East 42nd Street, Suite 1111
New York, New York 10165

State of Wisconsin Board of Investment ..................... 1,827,000(3) 6.41%
P.O. Box 7842
Madison, Wisconsin 53707

The TCW Group, Inc ......................................... 1,564,182(4) 5.49%
Robert Day
865 South Figueroa Street
Los Angeles, California 90017

Robert M. Dutkowsky......................................... 532,000(5) 1.83%

James F. Lyons.............................................. 870,500(6) 2.98%

Lori B. Hannay.............................................. 146,518(7) *

Ronald W. Lindell........................................... 13,879(8) *

Brian Quirk................................................. 65,000(9) *

Walter A. Shephard.......................................... 81,800(10) *

Michael W. Schraeder........................................ -- *

All Directors and Executive Officers as a Group
(12 persons)................................................ 1,094,991(11) 3.71%

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

* Less than 1%.

(1) The number of shares beneficially owned is determined under rules
promulgated by the Securities and Exchange Commission ("SEC"), and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares
as to which the individual has sole or shared voting power or investment
power and also any shares which the individual has the right to acquire
within 60 days of March 14, 2001 through the exercise of any stock option,
warrant or other right. The inclusion herein of such shares, however, does
not constitute an admission that the named shareholder has a direct or
indirect pecuniary interest in such shares. Unless otherwise indicated,
each person or entity named in the table has sole voting power and
investment power (or shares such power with his or her spouse) with respect
to all shares of Common Stock listed as owned by such person or entity.

(2) The information reported is based on a Schedule 13G, dated February 6,
2001, filed with the SEC by Daruma Asset Management, Inc. ("Daruma") and
Mariko O. Gordon. Daruma is an investment advisor and Ms. Gordon is its
principal shareholder.

(3) The information reported is based on a Schedule 13G, dated February 9,
2001, filed with the SEC by the State of Wisconsin Investment Board.

(4) The information reported is based on a Schedule 13G, dated February 14,
2001, filed with the SEC by The TCW Group, Inc. ("TCW") and Robert Day.
Robert Day may be deemed a control person of TCW.

(5) Amount shown includes options to purchase 500,000 shares of Common Stock.

(6) Amount shown includes options to purchase 737,500 shares of Common Stock.

(7) Amount shown includes options to purchase 146,500 shares of Common Stock.

(8) Amount shown includes options to purchase 12,500 shares of Common Stock.

(9) Amount shown is comprised of options to purchase shares of Common Stock.

(10) Amount shown includes options to purchase 74,800 shares of Common Stock.

(11) Amount shown includes options to purchase 53,333 shares of Common Stock
held by an executive officer not named in the Summary Compensation Table
below. Also includes the options listed above and the options and
restricted stock referenced in notes (2), (3) and (4) on page 7.

SOLICITATION

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

VOTES REQUIRED

As long as a quorum is present, the vote of a plurality of the votes cast by
the stockholders entitled to vote on the election of Directors is necessary for
the election of the Class II Directors. Approval of the Company's 2001 Equity
Incentive Plan and the 2001 Directors' Stock Option Plan will require the
affirmative vote of a majority of the votes cast on the proposal, provided that
the total votes cast on the proposal represents over 50% in interest of all
securities entitled to vote on each of the proposals. Votes may be cast in favor
of the election of each of the nominees for Class II Directors or withheld;
votes that are withheld will have no effect on the outcome of the election of
the Class II Directors. For purposes of the vote on the approval of each of the
Company's 2001 Equity Incentive Plan and the 2001 Directors' Stock Option Plan,
(i) an abstention will have the effect of a vote against the proposal and
(ii) a broker non-vote will have the effect of a vote against the proposal
unless holders of more than 50% in interest of all securities to vote on the
proposal cast votes (by a vote for or against the proposal or an abstention).

ITEM 1.
ELECTION OF DIRECTORS

Pursuant to Section 50A of Massachusetts General Laws Chapter 156B, the
Company has a classified Board of Directors consisting of two Class I Directors,
two Class II Directors and three Class III Directors. The Class I, Class II and
Class III Directors will serve until the Annual Meetings of Shareholders to be
held in 2003, 2001 and 2002, respectively, and until their respective successors
are duly elected and qualified. Under Massachusetts law, the Board of Directors
may be expanded and vacancies and newly created directorships may be filled only
by a majority vote of the remaining directors. The number of directors may be
fixed only by a vote of the Board of Directors. At each Annual Meeting of
Shareholders, directors are elected for a full term of three years to succeed
those whose terms are expiring. At the Meeting, the shareholders will elect two
Class II Directors, whose terms will extend until the 2004 Annual Meeting.

The nominees for Class II Directors, William S. Antle III and Ed Zschau,
were nominated by the Board of Directors in February 2001.

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

NOMINEES FOR DIRECTOR AND CONTINUING DIRECTORS

The following table sets forth certain information about each nominee for
Director who will serve (if elected) until 2004 and each member of the Board of
Directors whose term expires in 2002 or 2003.

NUMBER OF SHARES OF
YEAR BECAME COMMON STOCK
A DIRECTOR BENEFICIALLY PERCENT
BIOGRAPHICAL SUMMARIES OF NOMINEES AND DIRECTORS OF THE COMPANY OWNED (1) OF CLASS
- - ------------------------------------------------ -------------- ------------------- --------

NOMINEES FOR DIRECTORS WHOSE TERMS WILL EXPIRE IN
2004
(CLASS II DIRECTORS)

William S. Antle III, 56............................. 1995 35,500(2)(3) *

Mr. Antle was President and Chief Executive Officer
of Oak Industries Inc., a manufacturer of
components for leading manufacturers in the
telecommunications industry, from December 1989
until its acquisition in January 2000. He became
Chairman of the Board of Oak Industries Inc. in
May 1996 and served in that capacity until
January 2000. Mr. Antle is a director of ESCO
Technologies and the John H. Harland Company.

Ed Zschau, 61, Professor and Visiting Lecturer,
Princeton University, Princeton, New Jersey........ 1995 24,000(2)(3) *

Mr. Zschau has been a Professor and Visiting
Lecturer at Princeton University since
September 1997. From February 1996 to
August 2000, Mr. Zschau was a Professor of
Management at Harvard University. Prior to
joining the Harvard faculty, Mr. Zschau was
General Manager of the Storage Systems Division
of the International Business Machines
Corporation. Mr. Zschau is a director of The
Reader's Digest Association, Inc. and
StarTek, Inc.

DIRECTORS WHOSE TERMS WILL EXPIRE IN 2002
(CLASS III DIRECTORS)

William G. Scheerer, 63, President, Performance
Quest, LLC, Morganville, New Jersey................ 1988 33,500(2)(3) *

Mr. Scheerer has been President of Performance
Quest, LLC, Morganville, New Jersey since
January 1997. From January 1998 until
January 2001, Mr. Scheerer was also Vice
President of Kalman Saffran Associates, Inc. From
February 1996 to September 1996 Mr. Scheerer was
CIO, Infrastructure Operations Vice President at
Lucent Technologies. Prior to joining Lucent,
Mr. Scheerer was Vice President of the Quality,
Engineering, Software & Technologies (QUEST)
Partnership at AT&T Bell laboratories.
Mr. Scheerer is a director of LeCroy Corp.

Russell A. Gullotti, 58.............................. 1995 32,085(2)(3) *

Mr. Gullotti, was Chairman, President and Chief
Executive Officer of National Computer
Systems, Inc. from May 1995 until its
acquisition in October 2000. Mr. Gullotti had
previously served as President and CEO of NCS
from October 1994 and previously been President,
Americas Area at Digital Equipment Corporation.
Mr. Gullotti is a director of MTS Systems
Corporation and Capella Education Company.

Robert M. Dutkowsky, 46, Chairman, President and
Chief Executive Officer, GenRad, Inc., Westford,
Massachusetts...................................... 2000 532,000(4) 1.83%

Mr. Dutkowsky has been Chairman, President and
Chief Executive Officer of the Company since
April 9, 2000. From September 1999 until
April 2000, Mr. Dutkowsky was President of Data
General, a division of EMC Corporation.
Mr. Dutkowsky served as Executive Vice President,
Markets and Channels for EMC Corporation from
September 1997 until October 1999. Prior to
September 1997, Mr. Dutkowsky served in various
executive capacities with International Business
Machines Corporation.

DIRECTORS WHOSE TERMS WILL EXPIRE IN 2003
(CLASS I DIRECTORS)

Adriana Stadecker, 54, President, EPIC International,
Cambridge, Massachusetts........................... 1994 27,000(2)(3) *

Ms. Stadecker has been President of EPIC
International since November 2000. From
November 1999 until November 2000, Ms. Stadecker
was Senior Vice President of Human Resources of
The Pioneer Group, Inc. During the period
July 1997 until June 1999, Ms. Stadecker was the
Director of Human Resources at BTR, p1c. From
July 1994 until June 1997, Ms. Stadecker was
Founder and President of EPIC International.

Lowell B. Hawkinson, 58.............................. 1995 47,500(2)(3) *

Mr. Hawkinson has been working as an independent
consultant since November 1999. Mr. Hawkinson was
Chief Executive Officer and Chairman of the Board
of Directors of Gensym Corporation, a software
company, from September 1986 until October 1999.
Mr. Hawkinson is a director of Gensym
Corporation.

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

* Less than 1%.

(1) The number of shares beneficially owned by each director is determined under
rules promulgated by the SEC, and the information is not necessarily
indicative of beneficial ownership for any other purpose. Under such rules,
beneficial ownership includes any shares as to which the individual has sole
or shared voting power or investment power and also any shares which the
individual has the right to acquire within 60 days of March 14, 2001 through
the exercise of any stock option or other right. The inclusion herein of
such shares, however, does not constitute an admission that the named
shareholder has a direct or indirect pecuniary interest in such shares.
Unless otherwise indicated, each person named in the table has sole voting
power and investment power (or shares such power with his or her spouse)
with respect to all shares of Common Stock listed as owned by such person.

(2) Includes options to purchase 12,500 shares of Common Stock for each of
Ms. Stadecker and Messrs. Antle, Gullotti, Hawkinson, Scheerer and
Mr. Zschau.

(3) Includes 2,500 shares of restricted stock issued on each of August 31, 1998,
August 31, 1999 and August 31, 2000 to each of Ms. Stadecker and
Messrs. Antle, Gullotti, Hawkinson, Scheerer and Zschau. These shares may
not be transferred prior to the earlier to occur of (i) the first, second
and third anniversaries of the respective dates of grant, each with respect
to one-third of the shares, (ii) the resignation of the director from the
Board of Directors with the consent of the majority of the members of the
Board, or the death or disability of the director, or (iii) a change of
control of the Company. Further, if a director resigns from the Board of
Directors or refuses to stand for re-election without the consent of the
majority of the members of the Board prior to the date upon which the
restrictions on transfer lapse, the director forfeits to the Company all
shares of restricted stock issued to such director during the year preceding
such resignation or refusal.

(4) Amount shown includes options to purchase 500,000 shares of Common Stock
that are currently exercisable.

FURTHER INFORMATION REGARDING THE BOARD OF DIRECTORS AND CERTAIN EXECUTIVE
OFFICERS

The Compensation Committee of the Board reviews and makes recommendations to
the Board on matters relating to employee compensation and benefits, determines
the compensation of officers and other key employees and administers the
Company's 1982 Stock Option Plan, 1991 Equity Incentive Plan, Employee Stock
Purchase Plan and the 1997 Non-Qualified Stock Option Plan. The Compensation
Committee will also administer the 2001 Equity Incentive Plan if it is approved
by the Company's shareholders. The members of the Compensation Committee are Ed
Zschau (Chair), William S. Antle III and Lowell B. Hawkinson. The Corporate
Governance Committee of the Board articulates matters which should be raised to
the Board and defines the Board's accountability. The members are William G.
Scheerer (Chair), Adriana Stadecker and Russell A. Gullotti. The Audit Committee
of the Board reviews and monitors the Company's financial reporting and
accounting practices, and works with representatives of the Company's
independent accountants in establishing the scope of the audit and conducting an
independent review of the audit after its completion. Its members are Russell A.
Gullotti (Chair), William S. Antle III and Adriana Stadecker.

In Fiscal Year 2000 the Board of Directors met nine times and its Audit
Committee met eight times. Although the Compensation Committee met one time
formally, the Compensation Committee met informally several times throughout
2000. All directors attended at least 75% of the meetings of the Board and of
all meetings of the committees of the Board on which they served.

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors, executive officers and persons who own more than ten
percent of a registered class of the Company's equity securities to file with
the Securities and Exchange Commission initial reports of ownership and reports
of changes in ownership of Common Stock and other equity securities of the
Company. Officers, directors and greater than ten percent beneficial owners are
required to furnish the Company with copies of all Section 16(a) forms they
file.

To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended December 30, 2000, all
Section 16(a) filing requirements applicable to the Company's officers,
directors and greater than ten percent beneficial owners were satisfied, except
that a transaction that should have been reported by Mr. Zschau earlier on a
Form 4 was reported on a Form 5 in February 2001.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

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

LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------- ------------
OTHER ANNUAL SECURITIES ALL OTHER
SALARY BONUS COMPENSATION UNDERLYING COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($) ($)(A) OPTIONS (#) ($)(B)
- - --------------------------- -------- -------- -------- ------------ ------------ ------------

Robert M. Dutkowsky ................ 2000 $346,158 $ -- $ -- 500,000 $ 138,645
Chairman, President, Chief 1999 -- -- -- -- --
Executive Officer 1998 -- -- -- -- --

James F. Lyons ..................... 2000 133,080 -- 2,543 -- 3,092,110(c)
Former President, Chief Executive 1999 432,510 -- 5,181 -- 38,173
Officer 1998 453,573 -- 4,412 -- 32,154

Lori B. Hannay ..................... 2000 195,246 -- -- 45,000 8,584
Vice President--Global Human 1999 183,805 -- -- -- 5,931
Resources 1998 146,170 100,000 1,014 -- 5,239

Ronald W. Lindell .................. 2000 153,487 -- 542 100,000 12,817
Vice President--Process Solutions 1999 -- -- -- -- --
1998 -- -- -- -- --

Brian Quirk ........................ 2000 198,172 -- -- 50,000 7,548
Vice President--Global Technology 1999 183,805 -- -- 100,000 5,733
1998 146,170 50,000 -- -- 5,489

Walter A. Shephard ................. 2000 185,016 -- -- 50,000 5,827
Vice President, Chief Financial 1999 193,094 -- -- 100,000 5,733
Officer 1998 121,802 37,800 -- 24.000 5,603

Michael W. Schraeder ............... 2000 173,085 -- -- -- 342,420(d)
Former President--Electronic 1999 300,014 -- -- -- 5,120
Manufacturing Solutions 1998 276,035 -- 4,091 100,000 6,613

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

(a) The amounts shown represent the dollar value of the difference between the
price paid by the named executive officer for Common Stock under the
Company's Employee Stock Purchase Plan and the fair market value of such
stock on the date of purchase.

(b) In 2000, the amount shown includes payments for auto allowance for
Mr. Dutkowsky $12,461; Ms. Hannay $2,923; Mr. Lindell $7,567; and Mr. Quirk
$2,923. The amount in 2000 includes $125,000 paid to Mr. Dutkowsky as an
incentive to join the Company. A housing allowance of $10,154 is included
for Mr. Lyons in 2000. Matching payments made by the Company under its
401(K) plan are included in the 2000 amount. For each of Messrs. Lyons,
Lindell and Shephard and Ms. Hannay, this amount was $5,250; for Mr. Quirk,
this amount was $4,625; and for Mr. Schraeder, this amount was $5,100. The
2000 amount also includes insurance premiums paid by the Company for term
life insurance as follows: Mr. Dutkowsky $1,184; Mr. Lyons $3,826;
Ms. Hannay $411; Mr. Lindell $510; Mr. Quirk $418; Mr. Shephard $577; and
Mr. Schraeder $381.

(c) Includes the sum of $3,072,880 paid to Mr. Lyons in connection with the
termination of his employment in April 2000 pursuant to his employment
agreement. Pursuant to that agreement, the Company is obligated to maintain
Mr. Lyons' benefits for a period of three years from the date of
termination. The Company has agreed to retain Mr. Lyons as a consultant for
a period of three years for a fee of $10,000 per calendar quarter, with
additional PER DIEM payments in the event he is required to consult for an
excess of five business days in a calendar quarter. So long as Mr. Lyons
remains a consultant to the Company, he may not engage in activities
competitive with the Company and his options to purchase the Company's stock
held by him on the date of termination will continue to vest. Each of
Mr. Lyons and the Company may terminate the consulting agreement at any
time.

(d) Includes the sum of $336,939 paid to Mr. Schraeder in connection with the
termination of his employment on August 14, 2000 pursuant to his severance
agreement.

SEVERANCE AND EMPLOYMENT AGREEMENTS

Effective April 10, 2000, the Company entered into an Employment Agreement
with Mr. Dutkowsky (the "Dutkowsky Agreement"). Under the terms of the Dutkowsky
Agreement, as the Company's Chairman, President and Chief Executive Officer,
Mr. Dutkowsky will receive a base salary of $500,000 per year and a bonus
opportunity of up to 100 percent of his base salary based upon achievements to
be determined by him and the Compensation Committee. Mr. Dutkowsky received an
initial bonus of $125,000 which would have been repayable pro rata on a
declining basis if he had been terminated for cause or resigned otherwise than
for good reason within 12 months of the Dutkowsky Agreement's effective date. On
the second full business day following the date the Company publicly announced
its financial results for the first quarter of fiscal 2000, Mr. Dutkowsky
received stock options for 500,000 shares of the Common Stock of the Company at
an exercise price of $7.375, the closing price for a share of Common Stock of
the Company on the date of grant. These options are exercisable in full, but are
subject to a right of repurchase in favor of the Company at the exercise price
on a declining basis over four years if Mr. Dutkowsky ceases to be employed by
the Company. In the event Mr. Dutkowsky's employment with the Company is
terminated other than in connection with a change of control, Mr. Dutkowksy's
salary and benefits shall continue for 12 months and any right to repurchase
shares acquired upon exercise of stock options with respect to this 12 month
period shall end unless Mr. Dutkowsky's employment was terminated by the Company
for cause or by Mr. Dutkowsky other than for good reason. In the event of a
change of control of the Company and provided that Mr. Dutkowsky has remained in
the employ of the Company for six months following the change of control, he
shall have the right during the successive six-month period to terminate his
employment and to receive a lump-sum cash payment equal to three times the sum
of his annual salary at the time of the change of control and his average bonus
for the two prior fiscal years (or for the prior fiscal year if two fiscal years
have not elapsed). He shall also receive this payment if he terminates his
employment for good reason within six months after the change of control or,
during this period, the Company terminates his employment other than for cause
or if he dies or becomes disabled. Furthermore, under the circumstances in which
he is entitled to receive the lump-sum cash payment, any right to repurchase
shares acquired upon exercise of stock options shall terminate and
Mr. Dutkowsky's fringe benefits shall continue for three years or until he
becomes entitled to receive a comparable benefit from a new employer. The
Dutkowsky Agreement contains a covenant not to compete.

The Company entered into severance agreements (each a "Severance Agreement")
with Messrs. Schraeder, Shephard and Quirk and Ms. Hannay (each a "Named
Executive"). Under each Severance Agreement the Named Executive is entitled to a
base salary, all benefits generally made available to officers of the Company
and is eligible for an annual performance bonus. Each Severance Agreement will
terminate two years from the date the Company notifies the Named Executive that
it is terminating the Severance Agreement. Each Severance Agreement provides
that either party may terminate such Named Executive's employment with the
Company upon 30 days' notice to the other party; provided, however, if (i) the
Company terminates the Named Executive's employment without cause;

(ii) the Named Executive dies or becomes disabled; or (iii) the Named Executive
terminates his employment with the Company for good reason, then the Company
will pay to the Named Executive a lump-sum cash amount equal to one hundred
percent of the Named Executive's base salary and will continue to provide
benefits to the Named Executive for a period of one year from the date of the
termination. In addition, all options to purchase Company stock held by the
Named Executive will immediately become exercisable. In the event of a change in
control of the Company, if within three years of the date of the change in
control, (i) the Company terminates the Named Executive's employment without
cause, (ii) the Named Executive dies or becomes disabled; or (iii) the Named
Executive terminates his employment with the Company for good reason, then the
Company will pay to the Named Executive, in lieu of the foregoing severance
payments and benefits, a lump-sum cash amount equal to two hundred percent of
the sum of (a) the Named Executive's base salary and (b) an amount equal to the
bonus earned by the Named Executive for the prior fiscal year. In addition, the
Company will pay to the Named Executive the pro-rata portion of the Named
Executive's target bonus for the year of termination and will continue to
provide benefits to the Named Executive for a period of three years from the
date of termination. Moreover, all options to purchase Company stock held by the
Named Executive will become immediately exercisable. However, the payments and
benefits to which each Named Executive will be entitled under each Severance
Agreement will be reduced to the extent necessary to prevent the Named Executive
from becoming liable for the excise tax levied on certain "excess parachute
payments" under Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code"). Each Severance Agreement imposes certain confidentiality
obligations on the Named Executive and provides each Named Executive with
indemnification rights.

The Company has also entered into a severance agreement with Mr. Lindell
(the "Lindell Agreement") effective as of February 15, 2001. Under the Lindell
Agreement, Mr. Lindell is entitled to a base salary, all benefits generally made
available to officers of the Company and is eligible for an annual performance
bonus. The Lindell Agreement will terminate one year from the date the Company
notifies Mr. Lindell that it is terminating the Lindell Agreement. If (i) the
Company terminates Mr. Lindell's employment without cause or (ii) Mr. Lindell
terminates his employment with the Company for good reason, then upon receipt of
a written release and waiver from Mr. Lindell, the Company will pay to
Mr. Lindell a lump-sum cash amount equal to one hundred percent of
Mr. Lindell's base salary and will continue to provide certain benefits to
Mr. Lindell for a period of one year from the date of the termination or until
Mr. Lindell obtains similar benefits from another employer. In the event of a
change of control of the Company, if within three years of the date of the
change of control (i) the Company terminates Mr. Lindell's employment without
cause or (ii) Mr. Lindell terminates his employment with the Company for good
cause, then upon receipt of a written release and waiver from Mr. Lindell, the
Company will pay to Mr. Lindell, in lieu of the foregoing severance payments and
benefits, a lump-sum cash amount equal to two hundred percent of the sum of
(a) Mr. Lindell's base salary and (b) an amount equal to the bonus earned by
Mr. Lindell for the prior fiscal year. In addition, the Company will pay to
Mr. Lindell the pro-rata portion of Mr. Lindell's target bonus for the year of
termination and will continue to provide benefits to Mr. Lindell for a period of
three years from the date of termination or until Mr. Lindell obtains similar
benefits from another employer. Moreover, all options to purchase Company stock
held by Mr. Lindell will become immediately exercisable. Any payments and
benefits to which Mr. Lindell will be entitled under the Lindell Agreement will
be reduced to the extent necessary to prevent Mr. Lindell from becoming liable
for the excise tax levied on certain "excess parachute payments" under
Section 4999 of the Code. Finally, the Lindell Agreement imposes certain
confidentiality obligations on Mr. Lindell.

OPTION GRANTS IN LAST FISCAL YEAR

The following table sets forth certain information regarding options granted
during the fiscal year ended December 30, 2000 by the Company to each of the
named executive officers:

POTENTIAL REALIZABLE
VALUE AT ASSUMED
RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(A)
-------------------- -----------------------
NUMBER OF SECURITIES % OF TOTAL OPTIONS EXERCISE OR
UNDERLYING OPTIONS GRANTED TO EMPLOYEES BASE PRICE EXPIRATION
NAME GRANTED (#) IN FISCAL YEAR ($/SH) DATE 5%($) 10%($)
- - ---- -------------------- -------------------- ----------- ---------- ---------- ----------

Robert M. Dutkowsky.... 500,000 15.19% $7.375 04/24/10 $2,319,049 $5,876,925
James F. Lyons......... -- -- -- -- -- --
Lori B. Hannay......... 45,000 1.37% $8.063 08/03/10 $ 228,185 $ 578,266
Ronald W. Lindell...... 50,000 1.52% $8.063 08/03/10 $ 253,539 $ 642,517
Brian Quirk............ 50,000 1.52% $8.063 08/03/10 $ 253,539 $ 642,517
Walter A. Shephard..... 50,000 1.52% $8.063 08/03/10 $ 253,539 $ 642,517
Michael W. Schraeder... -- -- -- -- -- --

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

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

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

The following table sets forth the aggregate dollar value of all options
exercised during the last fiscal year and the total number and value of
unexercised options held on December 30, 2000 by each of the named executive
officers:

NUMBER OF VALUE OF UNEXERCISED
UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT FISCAL YEAR END (#) AT FISCAL YEAR END($)(A)
SHARES ACQUIRED VALUE REALIZED --------------------------- ---------------------------
NAME ON EXERCISE (#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- --------------- -------------- ----------- ------------- ----------- -------------

Robert M. Dutkowsky....... -- -- 500,000 -- $1,312,500 --
James F. Lyons............ 250,000 $1,718,750 700,000 150,000 $ 612,500 --
Lori B. Hannay............ 1,500 $ 15,281 134,000 57,500 $ 23,625 $87,188
Ronald W. Lindell......... -- -- -- 100,000 -- $96,875
Brian Quirk............... -- -- 65,000 125,000 -- $96,875
Walter A. Shephard........ -- -- 74,800 142,000 $ 96,900 $96,875
Michael W. Schraeder...... 35,000 $ 161,594 -- -- -- --

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

(a) The closing price for the Company's Common Stock on the New York Stock
Exchange on December 29, 2000, the last trading day of fiscal 2000, was
$10.00. Value is calculated on the basis of the positive difference between
the option exercise price and $10.00 multiplied by the number of shares of
Common Stock underlying the option. On March 30, 2001, the closing price for
the Company's Common Stock on the New York Stock Exchange was $8.00.

PENSION PLAN

GenRad has a defined benefit pension plan designed to provide retirement
benefits for employees in the United States and incidental benefits to their
beneficiaries. On January 31, 1995, the Company closed the Pension Plan to new
participants and ceased all benefit accruals. Only two named executive officers,
Messrs. Lyons and Schraeder, qualified prior to their resignation from the
Company for participation in the Pension Plan based upon at least one qualified
year of service prior to January 31, 1995. Mr. Schraeder's annual benefits under
the plan have been frozen at approximately $15,452, assuming retirement at age
65. Mr. Lyons' annual benefit under the plan has been frozen at $117.84 but will
be reduced based on actuarial calculations.

COMPENSATION OF DIRECTORS

Directors who are not employees of GenRad currently receive an annual grant
of 2,500 restricted shares of the Company's Common Stock. Directors who are not
employees of GenRad also receive a fee of $750 for each directors' meeting
attended. The standing committees of the Board of Directors are the Audit
Committee, the Compensation Committee and the Corporate Governance Committee.
Non-employee directors who serve as committee chair receive a fee of $1,000 for
attending each committee meeting. Non-employee directors who are members of a
Committee receive a fee of $750 for attending each committee meeting. Directors
are also reimbursed for any expenses attendant to Board membership.

Pursuant to the Company's 1991 Directors' Stock Option Plan, each
non-employee director is granted (i) options to purchase 10,000 shares of the
Company's Common Stock on the day that he or she first becomes a director and
(ii) thereafter, an option to purchase 2,500 shares of the Company's Common
Stock each year on the fifth business day following the release of annual
earnings. The option exercise price for options granted under the 1991
Directors' Stock Option Plan is equal to the closing price per share of the
Company's Common Stock on the date of grant ($8.69 in 2001). Each option may be
exercised at any time, in whole or in part, prior to the fifth anniversary of
the date of grant.

BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

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

The compensation programs for the Company's executives established by the
Compensation Committee consist of three elements tied to the foregoing
objectives: base salary; annual cash bonus; and stock-based equity incentives,
primarily participation in the Company's 1991 Equity Incentive Plan. Because the
1991 Plan expired in March 2001, the Committee and the Board have recommended
that the shareholders adopt the 2001 Equity Incentive Plan. Adoption of the 2001
Equity Incentive Plan will allow the Compensation Committee to continue using
equity incentives as a key component of its compensation strategy. In
establishing base salaries for executives, the Compensation Committee monitors
standards at comparable companies, particularly those that are in the same
industry as the Company or related industries and/or are located in the same
general geographical area as the Company, considers historic salary levels of
the individual and the nature of the individual's responsibilities and compares
the

individual's base salary with that of other executives of the Company. To the
extent determined appropriate, the Compensation Committee also considers general
conditions and the Company's financial performance in establishing base salaries
of executives. In deciding to award options, the Compensation Committee also
considers the number of options outstanding or previously granted and the
aggregate size of current awards.

On April 9, 2000, Robert M. Dutkowsky was elected Chairman, President and
Chief Executive Officer of the Company. Mr. Dutkowsky's compensation
arrangements were determined at that time and he entered into an employment
agreement with the Company evidencing such arrangements. In determining such
compensation arrangements, the Compensation Committee has followed the policies
set forth above. As an incentive to join the Company, Mr. Dutkowsky received a
stock option to purchase up to an aggregate of 500,000 shares of the Company's
Common Stock. In addition, Mr. Dutkowsky received a one-time signing bonus of
$125,000. Mr. Dutkowsky's base compensation was established at an annual rate of
$500,000 to match median levels for chief executive officers of electronics
companies of comparable size. Consistent with the goal of rewarding for the
accomplishment of Company objectives, Mr. Dutkowsky is eligible to receive
incentive compensation as a result of the Company's achievement of its
objectives. Mr. Dutkowsky received no incentive compensation in 2000 other than
the initial incentive mentioned above. The grant of stock options to
Mr. Dutkowsky in 2000 was intended to link the rewards of the Chief Executive
Officer with those of the Company's shareholders. Mr. Dutkowsky is also eligible
to receive an annual bonus based upon achievement of goals established by him
and Compensation Committees of the Board.

Mr. Dutkowsky's employment agreement also contains terms that provide for
severance payments in certain instances upon his termination of service to the
Company.

Section 162(m) of the Code, enacted in 1993, generally disallows a tax
deduction to public companies for compensation over $1 million paid to the
Company's Chief Executive Officer and its four other most highly compensated
executive officers. Qualifying performance-based compensation will not be
subject to the deduction limit if certain requirements are met. Where possible,
the Company tries to maintain the deductibility of compensation paid to the
Company's executive officers.

Ed Zschau, Chair
William S. Antle III
Lowell B. Hawkinson

BOARD AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors (the "Board") is appointed by
the Board and consists of three independent directors. As required by the Audit
Committee's charter, the members of the Audit Committee meet or exceed the
independence and experience requirements of the New York Stock Exchange. On
behalf of the Board, the Audit Committee oversees the Company's financial
reporting process and the Company's system of internal accounting and financial
controls. Management is vested with the primary responsibility for the
development and maintenance of the Company's financial statements, financial
reporting process and system of internal controls. In order to effectively
discharge its oversight role, the Audit Committee is empowered to investigate
any matter brought to its attention with full access to all books, records,
facilities and personnel of the Company and the power to retain outside legal
counsel, auditors or other experts for this purpose.

The Company's independent auditors, PricewaterhouseCoopers, LLP, are
responsible for expressing an opinion on the conformity of the audited financial
statements with generally accepted accounting principles. Their opinion, titled
"Report of Independent Accountants" may be found in the Annual Report on
Form 10-K (the "Annual Report"). The Audit Committee reviewed with the
independent auditors their judgments as to the quality and acceptability of the
Company's accounting principles and such other matters as are required to be
discussed with the Committee under generally accepted auditing standards.
Additionally, the Audit Committee discussed with the independent auditors the
auditors' independence from management and from the Company including the
matters in the written disclosures required by the Independence Standards Board.

In fulfilling its oversight responsibilities for the fiscal year ended
December 30, 2000, the Audit Committee reviewed the financial statements
published in the Annual Report with management by examining and discussing the
quality and acceptability of the accounting principles, the reasonableness of
significant judgments and the clarity of disclosures in the financial
statements. In addition, the Audit Committee discussed with the Company's
independent auditors the overall scope and plans for their audit. The Audit
Committee met with the independent auditors, with and without management
present, to discuss the results of their examinations, their evaluations of the
Company's internal controls and the overall quality for the company's financial
reporting.

In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board (and the Board approved) that the audited
financial statements be included in the Annual Report for the fiscal year ended
December 30, 2000 for filing with the Securities and Exchange Commission. The
Audit Committee and the Board have selected PricewaterhouseCoopers, LLP as
independent auditors of the Company for the fiscal year ended December 29, 2001.

Russell Gullotti, Chair
William S. Antle III
Adriana Stadecker

FEES BILLED BY THE INDEPENDENT AUDITOR

AUDIT FEES

Aggregate fees billed for PricewaterhouseCoopers' audit
of the Company's 2000 annual financial statements and
their reviews of the financial statements included in
the Company's Forms 10-Q filed in 2000.................. $ 507,400

FINANCIAL INFORMATION SYSTEMS DESIGN AND IMPLEMENTATION FEES

Aggregate fees billed by PricewaterhouseCoopers for
professional services rendered for 2000 in connection
with financial information systems design and
implementation, or operation or management of GenRad's
information systems..................................... --

ALL OTHER FEES(a)

Aggregate fees billed for all other services provided by
PricewaterhouseCoopers to the Company during 2000....... 781,900
----------

Total Fees Billed................................... $1,289,300
==========

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

(a) Consists of the following services: acquisition work $422,000; tax
consulting and compliance work $241,900; transfer pricing analysis $45,000;
statutory audits $22,000; human resource consulting $8,500; and other
professional services $42,500. The Audit Committee of the Board of Directors
considered whether the provision of other services is compatible with
maintaining the principal accountant's independence.

STOCK PERFORMANCE CHART

The following chart and table compare the yearly change in the cumulative
total shareholder return on the Company's Common Stock during the five years
ended December 31, 2000 with the total return of the S&P Technology Sector Index
and the S&P 500 Composite Index. The comparison assumes $100 was invested on
December 31, 1995 in the Company's Common Stock and in each of the foregoing
indices and assumes reinvestment of dividends.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN
AMONG GENRAD, INC., THE S&P 500 COMPOSITE INDEX
AND THE S&P TECHNOLOGY SECTOR INDEX

EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC

GENRAD, INC. S&P 500 S&P TECHNOLOGY SECTOR

1995 $100 $100 $100
1996 $238 $123 $142
1997 $310 $164 $179
1998 $162 $211 $309
1999 $165 $255 $542
2000 $103 $232 $325

COMPANY/INDEX 1995 1996 1997 1998 1999 2000
- - ------------- -------- -------- -------- -------- -------- --------

GenRad, Inc.......................................... $100 $238 $310 $162 $165 $103
S&P Technology Sector Index.......................... 100 142 179 309 542 325
S&P 500 Composite Index.............................. 100 123 164 211 255 232

ITEM 2
PROPOSAL TO APPROVE GENRAD'S
2001 DIRECTORS' STOCK OPTION PLAN

The Company's 1991 Directors' Stock Option Plan, as amended to date (the
"1991 Directors' Plan") expired in March 2001. To replace the 1991 Directors'
Plan, on March 12, 2001, the Board adopted a directors' stock option plan,
subject to shareholder approval, entitled the 2001 Directors' Stock Option Plan
("2001 Directors' Plan") with substantially similar terms and conditions as the
1991 Directors' Plan. The following description summarizes the material
provisions of the 2001 Directors' Plan, which is qualified in its entirety by
the complete text of the 2001 Directors' Plan attached to this Proxy Statement
as Appendix A.

ADMINISTRATION. The 2001 Directors' Plan will be administered by the Board
of Directors (the "Board"). Grants of stock options under the 2001 Directors'
Plan and the size and nature of the options to be granted shall be automatic and
non-discretionary. The Board has authority to adopt, alter and repeal rules and
guidelines governing the 2001 Directors' Plan, interpret provisions of the 2001
Directors' Plan and decide all disputes arising in connection with the 2001
Directors' Plan.

STOCK AVAILABLE FOR GRANT. The 2001 Directors' Plan provides for the award
of up to 75,000 shares of Common Stock in the form of non-qualified stock
options (each an "Option").

OPTIONS. Options shall be granted pursuant to the 2001 Directors' Plan
automatically to all eligible directors as follows: (i) each person who becomes
an eligible director after the date of approval of the Plan shall be granted an
Option to purchase 10,000 shares of Common Stock on the close of business on the
date of his or her initial election to the Board of Directors and
(ii) thereafter, each eligible director shall be granted an option to purchase
2,500 shares of Common Stock for each fiscal year on the close of business on
the fifth business day following public release of the Company's annual earnings
for the preceding fiscal year, provided he or she is an eligible director on the
date of grant. Each Option granted under the 2001 Directors' Plan shall be
evidenced by a written agreement, the form of which the Board shall approve from
time to time. Options granted under the 2001 Directors' Plan will have a term of
five years and will be exercisable in full on the date of grant.

EXERCISE PRICE. The exercise price per share for each Option granted under
the 2001 Directors' Plan shall equal the closing price per share of the
Company's Common Stock on the New York Stock Exchange, or the principal exchange
on which the Common Stock is then listed, on the date of grant, or on the
nearest preceding date such price is reported if not reported on the date of
grant.

TAXATION OF OPTIONS. An eligible director who is granted an Option (an
"Optionee") will not have taxable income at the date of grant, but an optionee
will be deemed to have received compensation income on the date of exercise in
an amount equal to the excess, if any, of the fair market value of the shares on
the date of exercise over the Option exercise price. The optionee's basis for
such shares will be increased by the amount that is deemed compensation income.
For the year in which an Option is exercised, the Company will be entitled to a
deduction in the same amount as the optionee is required to include in his or
her income, provided that the Company satisfies applicable reporting
requirements with respect to such income in a timely manner. When the optionee
disposes of such shares, he or she will recognize a capital gain or loss.

GENERAL PROVISIONS APPLICABLE TO OPTIONS. Payment of the exercise price may
be made, at the election of the optionee, (i) by delivery of cash or a check to
the order of the Company in an amount equal to the exercise price; (ii) by
delivery to the Company of shares of Common Stock of the Company already owned
and held by the Optionee for at least twelve months and having a fair market
value equal in amount to the exercise price of the Options being exercised, or
(iii) by any combination of such methods of payment. The

fair market value of any shares of Common Stock which may be delivered upon
exercise of an option shall be determined by the Company as of the date that
such shares are delivered.

The Board may at any time, or from time to time, in any respect, modify,
amend, suspend or terminate the 2001 Directors' Plan or any portion thereof,
provided that no amendment shall be made without shareholder approval if such
approval is necessary to comply with any applicable tax, stock exchange or
regulatory requirement. The termination or any modification or amendment of the
Plan or any portion thereof shall not, without the consent of the optionee
affect his or her rights under an Option previously granted to him or her. With
the consent of the optionees affected, the Board may amend an outstanding Option
in a manner not inconsistent with the 2001 Directors' Plan. If approved by the
Company's shareholders, the 2001 Directors' Plan shall become effective on
May 9, 2001.

If, through or as a result of any merger, consolidation, sale of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, (i) the outstanding shares of Common Stock
are increased or decreased or are exchanged for a different number or kind of
shares or other securities of the Company, or (ii) additional shares or new or
different shares or 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 maximum number
and kind of shares reserved for issuance under the 2001 Directors' Plan,
(y) the number and kind of shares or other securities subject to then
outstanding Options under the 2001 Directors' Plan, and (z) the price for each
share subject to any then outstanding Options under the 2001 Directors' Plan,
without changing the aggregate purchase price as to which such Options remain
exercisable.

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, 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, and (iii) in the event of
a merger under the terms of which holders of the 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
optionees equal to the difference between (A) the Merger Price times the number
of shares of Common 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.

PLAN BENEFITS. Future grants of Options under the 2001 Directors' Plan are
subject to the size and make-up of the Board of Directors. Therefore, it is
impossible to indicate the specific number of Options that will be granted to or
benefits that will be received by any individual participant or group of
participants under the 2001 Directors' Plan. However, the table below indicates
all options granted under the 1991 Directors' Plan in February 2001.

NUMBER OF
SECURITIES UNDERLYING
NAME OPTIONS GRANTED (#)
- - ---- ---------------------

William S. Antle III........................................ 2,500
Russell A. Gullotti......................................... 2,500
Lowell B. Hawkinson......................................... 2,500
William G. Scheerer......................................... 2,500
Adriana Stadecker........................................... 2,500
Ed Zschau................................................... 2,500

BOARD RECOMMENDATION

The Board of Directors believes that approval of the proposed 2001
Directors' Stock Option Plan is in the best interests of the Company and its
shareholders and recommends a vote "FOR" the proposal.

ITEM 3
PROPOSAL TO APPROVE AND ADOPT GENRAD'S
2001 EQUITY INCENTIVE STOCK OPTION PLAN

The Company's 1991 Equity Incentive Plan, as amended to date (the "1991
Plan"), adopted by the Company's shareholders in March 1991, expired in
March 2001. To replace the 1991 Plan, on March 12, 2001, the Board adopted a new
equity incentive plan, subject to shareholder approval, entitled the 2001 Equity
Incentive Plan ("2001 Incentive Plan"). The following description summarizes the
material provisions of the 2001 Incentive Plan, which is qualified in its
entirety by the complete text of the 2001 Incentive Plan attached to this Proxy
Statement as Appendix B.

ADMINISTRATION. The 2001 Incentive Plan will be administered by the
Compensation Committee of the Board of Directors (the "Committee"). The
Committee, whose members are ineligible to participate in the 2001 Incentive
Plan, determines which employees and consultants (including directors who are or
are not employees or consultants) receive Awards (as defined herein) and the
size and type of Awards. The Committee has authority to adopt, alter and repeal
rules and guidelines governing the 2001 Incentive Plan, interpret provisions of
the 2001 Incentive Plan and decide all disputes arising in connection with the
2001 Incentive Plan.

STOCK AVAILABLE FOR AWARDS. The 2001 Incentive Plan provides for the award
of up to 2,098,453 shares of Common Stock, which is equal to the number of
shares currently available for grant under the 1991 Plan, in the form of
incentive stock options ("ISOs"), non-qualified stock options, restricted stock,
stock appreciation rights, performance shares or stock units (each, an "Award").
The number of shares of Common Stock available for issuance to any participant
in any calendar year is limited to 500,000 shares. The 1991 Plan only permitted
awards of ISOs, non-qualified stock options and restricted stock.

OPTIONS. The Committee may award ISOs and non-qualified stock options
(collectively, the "Options") and determine the number of shares to be covered
by each Option, the term of the Option, its exercise date, and other conditions
and limitations applicable to the exercise of the Option. The Committee also
determines, in its sole discretion, the exercise price of each Option; provided,
however, that (i) the exercise price shall not be less than eighty-five percent
(85%) of the fair market value of the shares of Common Stock underlying the
Option on the grant date and (ii) the exercise price shall not be less than the
par value of the shares of Common Stock subject to the Option. As required by
the Code, the Option price per share of Common Stock underlying an ISO cannot be
less than 100% of the fair market value of the Common Stock on the date of grant
(or 110%, in the case of a greater-than-10% shareholder). Options may be
exercisable for not more than 10 years after the date the Option is granted. The
Committee may at any time accelerate the exercisability of all or any portion of
any Option. Once an Option is awarded, the exercise price per share shall not be
reduced without the approval of the shareholders of the Company.

TAXATION OF OPTIONS. For federal income tax purposes, no taxable income
results to the optionee upon the grant of an ISO or upon the issuance of shares
to him or her upon the exercise of an ISO. Correspondingly, no deduction is
allowed to the Company upon either the grant or the exercise of an ISO. To the
extent that the aggregate fair market value of the Common Stock with respect to
which ISOs are exercisable by a participant for the first time in a calendar
year exceeds $100,000, options with respect to shares having a value in excess
of that amount cannot be treated as ISOs. However, there is a limit on the
options that can be granted to an individual that will qualify as ISOs. This
limit is determined by the value of the Common Stock underlying the ISOs at the
time of the grant.

If shares acquired upon the exercise of an ISO are not disposed of within
the two-year period following the date the ISO is granted and within the
one-year period following the date the shares are transferred to the optionee
pursuant to exercise of the ISO, the difference between the amount realized on
any disposition thereafter and the Option price will be treated as long-term
capital gain or loss to the optionee. If a disposition occurs before the
expiration of either of the requisite holding periods, then the

lower of (i) any excess of the fair market value of the shares at the time of
exercise of the ISO over the Option exercise price or (ii) the actual gain
realized on disposition will be deemed to be compensation to the optionee and
will be taxed at ordinary income tax rates. In such event, the Company will be
entitled to a corresponding deduction from its income, subject to
Section 162(m) of the Code, provided the Company satisfies applicable reporting
requirements with respect to such income in a timely manner. Any such increase
in the income of the optionee or deduction from the income of the Company
attributable to such disposition is treated as an increase in income or a
deduction from the income in the taxable year in which the disposition occurs.
Any excess of the amount realized by the optionee on disposition over the fair
market value of the shares at the time of exercise will be treated as capital
gain.

"Alternative minimum taxable income" in excess of a taxpayer's exemption
amount is subject to the alternative minimum tax, which is imposed at rates of
26% to 28% on individuals and is payable to the extent it exceeds the regular
income tax. The excess of the fair market value on the date of exercise over the
Option price of shares acquired on exercise of ISOs generally constitutes an
item of alternative minimum taxable income for the purpose of the alternative
minimum tax. The payment of any alternative minimum tax resulting therefrom will
not increase the optionee's basis in the shares acquired for regular income tax
purposes.

A person who is granted a non-qualified stock option will not have taxable
income at the date of grant; but an optionee will be deemed to have received
compensation income on the date of exercise in an amount equal to the excess, if
any, of the fair market value of the shares on the date of exercise over the
Option exercise price. The optionee's basis for such shares will be increased by
the amount that is deemed compensation income. For the year in which a
non-qualified stock option is exercised, subject to Section 162(m) of the Code,
the Company will be entitled to a deduction in the same amount as the optionee
is required to include in his or her income, provided the Company satisfies
applicable reporting requirements with respect to such income in a timely
manner. When the optionee disposes of such shares, he or she will recognize
capital gain or loss.

Section 162(m) of the Code generally disallows a tax deduction to companies
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), for compensation exceeding $1,000,000 paid to the
corporation's chief executive officer and to next four most highly compensated
officers. Qualifying performance-based compensation is not subject to the
deduction limit. A stock option granted under the 2001 Incentive Plan (whether
or not it is an ISO) will be excluded from the deduction limit provided that
(i) the exercise price of the Option is equal to the fair market value of the
Company's shares subject to the Option on the date of grant, and (ii) certain
other eligibility requirements relating to (among other things) the composition
of the Committee and stockholder approval of the 2001 Incentive Plan are met. In
order for Options and certain other types of Awards under the 2001 Incentive
Plan to comply with these eligibility requirements, the 2001 Incentive Plan must
state the maximum number of shares underlying any Awards that any participant
may be receive during a specified period.

RESTRICTED STOCK. An Award of restricted stock ("Restricted Stock")
entitles the participant to acquire shares of Common Stock for a purchase price
equal to or greater than par value, subject to such conditions and restrictions,
including a right of the Company, during a specified period or periods, to
repurchase such shares at their original purchase price (or to require
forfeiture of such shares) upon the participant's termination of employment.
Subject to the provisions of the 2001 Incentive Plan, the Committee may award
shares of Restricted Stock and determine the cash purchase price or other
consideration therefor, the duration of the restricted period during which, and
the conditions under which, the shares may be forfeited to or repurchased by the
Company, and the other terms and conditions of these Awards. The Committee may
modify or waive the restrictions with respect to any Restricted Stock. Shares of
Restricted Stock may be issued for no cash consideration or such minimum
consideration as may be required by applicable law. A participant has all the
rights of a stockholder with respect to his or her Restricted Stock including
voting and dividend rights, subject to any applicable restrictions on transfer
and Company repurchase or forfeiture rights, and subject to any other conditions
contained in the Award.

TAXATION OF RESTRICTED STOCK. A recipient of Restricted Stock generally
will be subject to tax at ordinary income rates on the fair market value of the
Common Stock at the time the Common Stock is no longer subject to forfeiture,
less any amount paid for such stock. But a recipient who makes an election under
Section 83(b) of the Code within 30 days of the date of issuance of the
Restricted Stock will realize ordinary income on the date of issuance equal to
the fair market value of the shares of Restricted Stock at that time (measured
as if the shares were unrestricted and could be sold immediately), less any
amount paid for such stock. If the election is made, no taxable income will be
recognized when the shares subject to such election are no longer subject to
forfeiture. If the shares subject to such election are forfeited, the recipient
will not be entitled to any deduction, refund or loss for tax purposes with
respect to amounts previously included in income with respect to the shares. The
holding period to determine whether the recipient has long-term or short-term
capital gain or loss upon sale of the shares begins when the restriction period
expires (or upon issuance of the shares, if the recipient elected immediate
recognition of income under Section 83(b) of the Code). Subject to
Section 162(m) of the Code and satisfaction of the applicable reporting
requirements, the Company will be entitled to deduct, as compensation expense,
the same amount as the recipient must include as ordinary income. Such deduction
will be allowed in the Company's tax year that includes the last day of the
recipient's tax year in which the recipient is required to include the amount in
income. When the recipient sells the shares, he or she will recognize capital
gain at the time of the sale equal to the difference between his or her basis
(the price paid for the shares plus any taxed amount) and the sale price.

GENERAL PROVISIONS APPLICABLE TO AWARDS. The Committee determines whether
Awards are settled in whole or in part in cash, Common Stock, other securities
of the Company, Awards or other property. The Committee may amend, modify or
terminate any outstanding Award, including substituting therefor another Award
of the same or a different type, changing the date of exercise or realization,
and converting an ISO to a non-qualified stock option, if the participant
consents to such action or the Committee determines that the action would not
materially and adversely affect the participant. No employee shall be eligible
to receive in excess of 500,000 shares of Common Stock underlying Awards in any
calendar year. The Committee may award award Restricted Stock with a restricted
period of less than three years, provided that the number of such Options and
shares of Restricted Stock at the time shall not exceed five percent of the
shares of Common Stock reserved for issuance under the 2000 Incentive Plan at
such time. If approved by the Company's shareholders, the 2001 Incentive Plan
shall be effective on May 9, 2001. Before this approval, the shareholders of the
Company must specifically approve any Award made under the 2001 Incentive Plan.

The number of shares of Common Stock issuable pursuant to the 2001 Incentive
Plan may not be changed except by approval of the shareholders. But in the event
that the Committee determines that any stock dividend, extraordinary cash
dividend, creation of a class of equity securities, recapitalization,
reorganization, merger, split-up, spin-off, combination, exchange of shares,
warrants or rights offering to purchase Common Stock at a price substantially
below fair market value, or other similar transaction, affects the Common Stock
such that an adjustment is required in order to preserve the benefits intended
to be made available under the 2001 Incentive Plan, the Committee may adjust
equitably the number and kind of shares of stock or securities in respect of
which Awards may be made under the 2001 Incentive Plan, the number and kind of
shares subject to outstanding Awards, and the award, exercise or conversion
price with respect to any of the foregoing, and if considered appropriate, the
Committee may make provision for a cash payment with respect to an outstanding
Award. Except pursuant to the preceding sentence, the Committee may not reprice
outstanding Options under the 2001 Incentive Plan without approval by the
shareholders. Common Stock subject to Awards that expire or are terminated prior
to exercise or Common Stock that has been forfeited under the 2001 Incentive
Plan will be available for future Awards under the Plan. Any proceeds received
by the Company from transactions under the 2001 Incentive Plan will be used for
the general corporate purposes of the Company.

In the event a merger or other transaction occurs that results or will
result in the Common Stock not being registered under Section 12 of the Exchange
Act, all Awards shall terminate upon the completion of the transaction. If the
transaction is intended to be treated as a pooling of interests for accounting
purposes, then the Committee of the Board of Directors shall cause the acquiring
or surviving corporation or one of its affiliates to grant replacement Awards to
participants. Otherwise, the Committee or the Board of Directors may either
arrange for replacement Awards, accelerate the exercisability of all outstanding
Awards (subject to completion of the transaction) or to provide for a cash
payment in connection with the termination of the Awards.

The 2001 Incentive Plan may be amended from time to time by the Board of
Directors or terminated in its entirety, provided that no amendment may be made
without shareholder approval if such approval is necessary to comply with any
applicable tax or regulatory requirement. The Company is seeking approval of the
2001 Incentive Plan discussed above in order to satisfy the requirements of
Section 422 of the Code and the regulations promulgated under Section 162(m) of
the Code.

PLAN BENEFITS. Future Awards under the 2000 Incentive Plan are subject to
the discretion of the Committee. It is impossible, therefore, to indicate the
specific Awards that will be granted to or benefits that will be received by any
individual participant or group of participants under the 2001 Incentive Plan.
However, the table below suggests the amounts of Awards that might have been
granted under the 2001 Incentive Plan had it been in effect during 2000. This
table shows Awards made during the fiscal year ended December 30, 2000 through
the grant of Options pursuant to the 1991 Plan, the predecessor to the 2001
Incentive Plan, to (1) the named executive officers named in the "Summary
Compensation Table" contained in this Proxy Statement, (2) all current executive
officers, as a group, (3) all directors who are not executive officers, as a
group, and (4) all employees, including all current officers who are not
executive officers, as a group.

NUMBER OF
SECURITIES UNDERLYING
NAME OPTIONS GRANTED (#)
- - ---- ---------------------

Robert M. Dutkowsky......................................... --
James F. Lyons.............................................. --
Lori B. Hannay.............................................. 45,000
Ronald W. Lindell........................................... 50,000
Brian Quirk................................................. 50,000
Walter A. Shephard.......................................... 50,000
Michael Schraeder........................................... --
Current Executive Officer Group............................. 230,000
Non-Executive Officer Director Group........................ --
Non-Executive Officer Employees............................. 295,000

BOARD RECOMMENDATION

The Board of Directors believes that approval of the proposed Incentive Plan
Amendment is in the best interests of the Company and its shareholders and
recommends a vote "FOR" the proposal.

NOTICE OF AMENDMENT OF BY-LAWS

During 2000, the Board of Directors amended the By-laws of the Company in
certain respects. The following discussion summarizes the principal terms of the
By-law amendments

1. Rather than a fixed date for the annual meeting of shareholders, the
date of the annual meeting of shareholders shall be held within six
months of the end of the Company's fiscal year at a date, time and place
fixed by the Board of Directors.

2. In addition to the Chairman of the Board, the President and the Board of
Directors, only the holders of a majority of the outstanding shares of
the stock of the Company may call a special meeting of shareholders.

3. When a meeting of shareholders is properly adjourned to another time or
place, notice of such adjournment need not be given if the new time and
place, as the case may be, are announced at the meeting, unless
adjournment is for more than thirty days or after adjournment a new
record date is fixed for the adjourned meeting.

4. In accordance with Massachusetts law, at any meeting of shareholders, a
plurality of votes properly cast is necessary for the election of a
Director and a majority of the votes properly cast is necessary to
approve any other question, except when a larger vote is required by law.

5. Notice of nominations for the election of Directors, other than those
made by the Board of Directors, must be given to the Board of Directors
at least ninety days prior to the date of the meeting of shareholders at
which the Directors are to be elected. If public notice of a meeting of
shareholders has not been given at least one hundred days in advance of
the meeting, notice of nomination must be given within ten days of such
public notice.

6. Only that business properly brought before a meeting of shareholders may
be acted upon at such meeting. Notice of any business to be acted upon at
the shareholders' meeting that has not been approved by the Board of
Directors must be given to the Clerk of the Company in writing at least
ninety days prior to the date of the meeting. If public notice of a
meeting of shareholders has not been given at least one hundred days in
advance of the meeting, notice of the business to be brought before the
meeting must be given to the Clerk within ten days of such public notice.

7. Notice of a special meeting of Directors may be given by facsimile,
e-mail or telephone within twenty-four hours of the special meeting.

8. Participation by Directors in a meeting of the Board of Directors, or a
committee thereof, by telephone or other similar means is expressly
recognized and permitted so long as all persons participating in the
meeting can hear each other at the same time. Such participation
constitutes presence in person at the meeting.

9. No contract or transaction between the Company and one or more of its
Directors or officers, or between the Company and another entity in which
a Director or Officer of the Company has an interest, shall be void or
voidable for this reason if (a) the material facts are disclosed and
either the Board of Directors or a committee thereof authorizes the
contract or transaction by a majority vote of the disinterested
Directors, even if they do not constitute a quorum, or the shareholders
approve the contract or transaction or (b) the contract or transaction is
fair to the Company.

SELECTION OF AUDITORS

The Board of Directors has selected PricewaterhouseCoopers LLP, independent
public accountants, as independent auditors of GenRad for the fiscal year ending
December 29, 2001. GenRad has been advised by PricewaterhouseCoopers LLP that
representatives will be present at the Meeting, and will have the opportunity to
make a statement if they so desire as well as be available to respond to
appropriate questions.

SHAREHOLDER PROPOSALS

Proposals of shareholders intended to be presented at the next annual
meeting of shareholders must be received by the Company at its principal
executive offices by December 7, 2001 if the proposal is to be included in the
proxy statement and form of proxy relating to that meeting. The Proxy for the
Meeting confers discretionary authority to vote on any shareholder proposal not
timely received by the Company. To be timely received, notice of any business to
be acted upon at the shareholders' meeting that has not been approved by the
Board of Directors must be given to the Clerk of the Company in writing at least
ninety days prior to the date of the meeting. If public notice of a meeting of
shareholders has not been given at least one hundred days in advance of the
meeting, notice of the business to be brought before the meeting must be given
to the Clerk within ten days of such public notice.

OTHER BUSINESS

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

WALTER A. SHEPHARD, CLERK

April 6, 2001

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

APPENDIX A

GENRAD, INC
2001 DIRECTORS' STOCK OPTION PLAN

1. PURPOSE.

The purpose of this 2001 Directors' Option Plan (the "Plan") of
GenRad, Inc. (the "Company") is to promote the recruiting and retention of
highly qualified outside Directors and to strengthen the commonality of interest
between directors and shareholders. Except where the context otherwise requires,
the term "Company" shall include all present and future subsidiaries of the
Company as defined in Sections 424(e) and 424(f) of the Internal Revenue Code of
1986, as amended or replaced from time to time (the "Code").

2. ADMINISTRATION.

The plan will be administered by the Board of Directors of the Company,
whose construction and interpretation of the terms and provisions of the Plan
shall be final and conclusive. Grants of stock options under the Plan and the
amount and nature of the awards to be granted shall be automatic and
non-discretionary in accordance with Section 5. However, all questions of
interpretation of the Plan or of any options issued under it shall be determined
by the Board of Directors and such determination shall be final and binding upon
all persons having an interest in the Plan. No director shall be liable for any
action or determination under the Plan made in good faith.

3. PARTICIPATION IN THE PLAN.

Directors of the Company who are not employees of the Company shall be
eligible to be granted options under the Plan.

4. STOCK SUBJECT TO THE PLAN.

(a) The maximum number of shares which may be issued under the Plan shall be
75,000 shares of the Company's Common Stock, $1.00 par value per share ("Common
Stock"), subject to adjustment as provided in Section 8.

(b) If any outstanding option under the Plan for any reason expires or is
terminated without having been exercised in full, the shares allocable to the
unexercised portion of such option shall again become available for grant
pursuant to the Plan.

(c) All options granted under the Plan shall be non-qualified options which
are not intended to meet the requirements of Section 422 of the Code.

5. TERMS, CONDITIONS AND FORM OF OPTIONS.

Each option granted under the Plan shall be evidenced by a written agreement
in such form as the Board of Directors shall from time to time approve, which
agreements shall comply with and be subject to the following terms and
conditions:

(a) OPTION GRANT DATES. Options shall be granted automatically to all
eligible directors as follows: (i) each person who becomes an eligible
director after the date of shareholder approval of the Plan shall be granted
an option to purchase 10,000 shares of Common Stock on the close of business
on the date of his or her initial election to the Board of Directors and
(ii) each eligible director shall be granted an option to purchase 2,500
shares of Common Stock for each fiscal year on the close of business on the
fifth business day following public release of the Company's annual earnings
for the preceding fiscal year, provided he or she is an eligible director on
the date of grant.

(b) OPTION EXERCISE PRICE. The option exercise price per share for
each option granted under the Plan shall equal the closing price per share
of the Company's Common Stock on the New York Stock Exchange, or the
principal exchange on which the Common Stock is then listed, on the date of
grant (or if no such price is reported on such date, such price as reported
on the nearest preceding date on which such price is reported).

(c) OPTIONS NON-TRANSFERABLE. Except to the extent the Board of
Directors otherwise determines, each option granted under the Plan by its
terms shall not be transferable by the optionee otherwise than by will or by
the laws of descent and distribution, or pursuant to a qualified domestic
relations order (as defined in Section 414(p) of the Code) and shall be
exercised during the lifetime of the optionee only by such optionee.

(d) EXERCISE PERIOD. Each option may be exercised at any time and from
time to time, in whole or in part, prior to the fifth anniversary of the
date of grant.

(e) EXERCISE PROCEDURE. Options may be exercised only by written
notice to the Company at its principal office accompanied by payment of the
full consideration for the shares as to which they are exercised.

(f) PAYMENT OF PURCHASE PRICE. Payment of the exercise price may be
made, at the election of the optionee, (i) by delivery of cash or a check to
the order of the Company in an amount equal to the exercise price; (ii) by
delivery to the Company of shares of Common Stock of the Company already
owned and held by the optionee for at least twelve months and having a fair
market value equal in amount to the exercise price of the options being
exercised, or (iii) by any combination of such methods of payment. The fair
market value of any shares of Common Stock which may be delivered upon
exercise of an option shall be determined by the Company as of the date that
such shares are delivered.

6. ASSIGNMENTS.

The rights and benefits under the Plan may not be assigned except as
provided in Section 5.

7. LIMITATION OF RIGHTS.

(a) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan, nor the granting
of an option nor any other action taken pursuant to the Plan, shall constitute
or be evidence of any agreement or understanding, express or implied, that the
Company will retain a director for any period of time.

(b) NO SHAREHOLDER RIGHTS FOR OPTIONS. An optionee shall have no rights as
a shareholder with respect to the shares covered by his or her option until the
date of the issuance to him or her of a stock certificate therefor, and no
adjustment will be made for dividends or other rights for which the record date
is prior to the date such certificate is issued.

8. ADJUSTMENT PROVISIONS.

(a) RECAPITALIZATIONS. If, through or as a result of any merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, (i) the outstanding shares of
Common Stock are increased or decreased or are exchanged for a different number
or kind of shares or other securities of the Company, or (ii) additional shares
or new or different shares or 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
maximum number and kind of shares reserved for issuance under the Plan, (y) the
number and kind of shares or other securities subject to then outstanding
options under the Plan, and (z) the price for each share subject to any then
outstanding

options under the Plan, without changing the aggregate purchase price as to
which such options remain exercisable.

(b) MERGERS. 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,
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 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 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 optionees equal to the
difference between (A) the Merger Price times the number of shares of Common
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.

9. AMENDMENT OF THE PLAN.

(a) The Board of Directors may at any time, and from time to time, in any
respect modify, amend, suspend or terminate the Plan or any portion thereof,
provided that no amendment shall be made without shareholder approval if such
approval is necessary to comply with any applicable tax, stock exchange or
regulatory requirement.

(b) The termination or any modification or amendment of the Plan or any
portion thereof shall not, without the consent of an optionee, affect his or her
rights under an option previously granted to him or her. With the consent of the
optionees affected, the Board of Directors may amend outstanding option
agreements in a manner not inconsistent with the Plan.

10. NOTICE.

Any written notice to the Company required by any of the provisions of the
Plan shall be addressed to the Chief Executive Officer of the Company and shall
become effective when it is received.

11. EFFECTIVE DATE AND DURATION OF THE PLAN.

(a) EFFECTIVE DATE. The Plan shall become effective when the Plan shall
have been approved by the Company's shareholders. Options may be granted under
the Plan at any time after the effective date and before the date fixed for
termination of the Plan.

(b) TERMINATION. Unless earlier terminated pursuant to Section 9, the Plan
shall terminate upon the earlier of (i) May 9, 2011 at 12:01 AM, or (ii) the
date on which all shares available for issuance under the Plan shall have been
issued pursuant to the exercise of options granted under the Plan. If the date
of termination is determined under (i) above, then options outstanding on such
date shall continue to have force and effect in accordance with the provisions
of the instruments evidencing such options.

12. GENERAL RESTRICTIONS.

(a) INVESTMENT REPRESENTATIONS. The Company may require any person to whom
an option is granted, as a condition of exercising such option, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Common Stock subject to the option for his or her
own account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws.

(b) COMPLIANCE WITH SECURITIES LAWS. Each 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 to such option
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 or
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
thereunder, such option may not be exercised, in whole or in part, unless such
listing, registration, qualification, consent or approval, or satisfaction of
such condition shall have been effected or obtained on conditions acceptable to
the Board of Directors. Nothing herein shall be deemed to require the Company to
apply for or to obtain such listing, registration or qualification, or to
satisfy such condition.

13. GOVERNING LAW.

The Plan and all determinations made and actions taken pursuant hereto shall
be governed by the laws of the Commonwealth of Massachusetts.

APPENDIX B

GENRAD, INC
2001 EQUITY INCENTIVE STOCK OPTION PLAN

SECTION 1 PURPOSE AND DURATION

1.1 PURPOSES. The purposes of the GenRad, Inc. 2001 Equity Incentive Plan
are to attract, retain and motivate (i) employees, consultants and advisors of
the Company and any present or future Subsidiaries of the Company, and
(ii) enable employees, consultants and advisors of the Company to participate in
the growth of the Company by providing for, or increasing, the proprietary
interests of such persons in the Company.

1.2 EFFECTIVE DATE. The Plan is effective as of the date of its adoption
by the shareholders.

1.3 EXPIRATION DATE. The Plan shall expire one day less than ten years
from the date of the adoption of the Plan by the Board. In no event shall any
Awards be made under the Plan after such expiration date, but Awards previously
granted may extend beyond such date.

SECTION 2 DEFINITIONS

As used in the Plan, the following capitalized words shall have the meanings
indicated:

"Award" means, individually or collectively, a grant under the Plan of
Options, SARs, Performance Shares, Restricted Stock or Stock Units.

"Award Agreement" means the written agreement setting forth the terms and
provisions applicable to an Award granted under the Plan.

"Board" means the Board of Directors of the Company.

"Code" means the Internal Revenue Code of 1986, as amended.

"Committee" means the committee of the Board appointed by the Board to
administer the Plan in accordance with Section 3.1.

"Company" means GenRad, Inc., a Massachusetts corporation, or any successor
thereto.

"Director" means any individual who is a member of the Board.

"Exchange Act" means the Securities Exchange Act of 1934, as amended.

"Fair Market Value" means, with respect to a Share, the fair market thereof
as of the relevant date of determination, as determined in accordance with a
valuation methodology approved by the Board in good faith; provided that if
Shares are traded on an exchange or quoted on The Nasdaq National Market, Fair
Market Value shall mean, on the relevant date of determination, the closing
price of a Share traded on the principal exchange for the Shares or, if the
Shares are so traded, the closing or last price quoted on The Nasdaq National
Market.

"Grant Date" means the effective date of an Award as specified by the Board
and set forth in the applicable Award Agreement.

"Incentive Stock Option" or "ISO" means an option to purchase Shares awarded
to a Participant under Section 6 of the Plan that is intended to meet the
requirements of Section 422 of the Code.

"Non-Employee Director" means a "non-employee director" as that term is
defined in Rule 16b-3 promulgated under the Exchange Act.

"Nonqualified Stock Option" or "NQO" means an option to purchase Shares
awarded to a Participant under Section 6 of the Plan that is not intended to be
an ISO.

"Option" means an ISO or an NQO.

"Participant" means an individual who has been selected by the Board to
receive an Award under the Plan.

"Performance Cycle" means the period of time selected by the Board during
which performance is measured for the purpose of determining the extent to which
an Award of Performance Shares has been earned. More than one Performance Cycle
may be in progress at any one time and the duration of Performance Cycles may
differ.

"Performance Share" means a Share awarded to a Participant under Section 8
of the Plan that entitles the Participant to acquire Shares upon the attainment
of specified performance goals.

"Plan" means the GenRad, Inc. 2001 Equity Incentive Plan set forth in this
document and as hereafter amended from time to time in accordance with
Section 13.

"Restricted Period" means the period of time selected by the Board during
which Shares of Restricted Stock are subject to forfeiture and/or restrictions
on transferability.

"Restricted Stock" means Shares awarded to a Participant under Section 9 of
the Plan pursuant to an Award that entitles the Participant to acquire Shares
for a purchase price (which may be zero), subject to such conditions, including
a Company right during a specified period or periods to repurchase the Shares at
their original purchase price (or to require forfeiture of the Shares if the
purchase price was zero) upon the Participant's termination of employment.

"SAR" or "Stock Appreciation Right" means an Award that is designated as an
SAR pursuant to Section 7 of the Plan, granted alone or in connection with a
related Award, entitling a Participant to receive an amount in cash or Shares or
a combination thereof having a value equal to (or if the Board shall so
determine at time of grant, less than) the excess of the Fair Market Value of a
Share on the date of exercise over the Fair Market Value of a Share on the Grant
Date (or over the Option exercise price, if the Stock Appreciation Right was
granted in tandem with an Option) multiplied by the number of Shares with
respect to which the Stock Appreciation Right is exercised.

"Securities Act" means the Securities Act of 1933, as amended.

"Shares" means shares of the Company's common stock.

"Stock Unit" means an Award of a Share or a unit valued in whole or in part
by reference to, or otherwise based on, the value of a Share, granted to a
Participant under Section 10 of the Plan.

"Subsidiary" means a "subsidiary corporation" as that term is defined in
Section 424 of the Code.

SECTION 3 ADMINISTRATION OF THE PLAN

3.1 THE BOARD. The Plan shall be administered by the Board. The Board may,
in its discretion, delegate some or all of its powers with respect to the Plan
to the Committee, in which event all references in the Plan to the Board (except
references in Section 13.1) shall be deemed to refer to the Committee. The
Committee, if one is appointed, shall consist of solely two or more Non-Employee
Directors provided that the failure to meet such condition shall not invalidate
any actions of the Committee.

3.2 AUTHORITY OF THE BOARD. The Board shall have the authority to adopt,
alter and repeal such administrative rules, guidelines and practices governing
the operation of the Plan as it shall consider advisable from time to time, to
interpret the provisions of the Plan and any Award and to decide all disputes
arising in connection with the Plan. The Board's decisions and interpretations
shall be final and binding.

SECTION 4 ELIGIBILITY OF PARTICIPANTS

The persons eligible to receive Awards under the Plan shall be all executive
officers of the Company, any Subsidiaries, and other employees, consultants and
advisers who, in the opinion of the Board, are in a position to make a
significant contribution to the success of the Company and any Subsidiaries.
Directors, including directors who are not employees, of the Company and any
Subsidiaries shall be eligible to receive Awards under the Plan.

SECTION 5 STOCK AVAILABLE FOR AWARDS

5.1 NUMBER OF SHARES. Awards may be made under the Plan for up to
2,098,453 Shares. Shares issued under the Plan may consist in whole or in part
of authorized but unissued Shares or treasury Shares.

5.2 LAPSED, FORFEITED OR EXPIRED AWARDS. If any Award in respect of Shares
expires or is terminated before exercise or is forfeited for any reason, the
Shares subject to such Award, to the extent of such expiration, termination or
forfeiture, shall again be available for award under the Plan.

5.3 MAXIMUM NUMBER OF SHARES TO A SINGLE PARTICIPANT IN ANY CALENDAR
YEAR. In no event shall any Participant receive in any calendar year Awards
under the Plan and any other grants for more than five hundred thousand
(500,000) Shares.

SECTION 6 STOCK OPTIONS

6.1 GRANT OF OPTIONS. Subject to the terms and provisions of the Plan, the
Board may award Options and determine the number of shares to be covered by each
Option, the exercise price therefor, the term of the Option, and any other
conditions and limitations applicable to the exercise of the Option. The Board
may grant ISOs, NQOs or a combination thereof.

6.2 EXERCISE PRICE. Subject to the provisions of this Section 6, the
exercise price for each Option shall be determined by the Board in its sole
discretion; provided however that (i) the exercise price shall not be less than
eighty-five percent (85%) of the Fair Market Value of the Shares subject to the
Option on the Grant Date and (ii) the exercise price shall not be less than the
par value of the Shares subject to the Option.

6.3 RESTRICTIONS ON OPTION TRANSFERABILITY AND EXERCISABILITY. No Option
shall be transferable by the Participant other than by will or the laws of
descent and distribution, and all Options shall be exercisable, during the
Participant's lifetime, only by the Participant; provided, however, that the
Board may provide that an Option is transferable by the Participant and
exercisable by persons other than the Participant upon such terms and conditions
as the Board shall determine.

6.4 CERTAIN ADDITIONAL PROVISIONS FOR INCENTIVE STOCK OPTIONS

6.4.1 EXERCISE PRICE. In the case of an ISO, the exercise price shall
be not less than one hundred percent (100%) of the Fair Market Value on the
Grant Date of the Shares subject to the Option; provided, however, that if
on the Grant Date the Participant (together with persons whose stock
ownership is attributed to the Participant pursuant to Section 424(d) of the
Code) owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, its Parent (if
any) or any Subsidiaries, the exercise price shall be not less than one
hundred and ten percent (110%) of the Fair Market Value on the Grant Date of
the Shares subject to the Option.

6.4.2 EXERCISABILITY. Subject to Section 12.3 and Section 12.4, the
aggregate Fair Market Value (determined on the Grant Date(s)) of the Shares
with respect to which ISOs are exercisable for the first time by any
Participant during any calendar year (under all plans of the Company, its
Parent (if any) and any Subsidiaries) shall not exceed $100,000.

6.4.3 ELIGIBILITY. ISOs may be granted only to persons who are
employees of the Company or any Subsidiaries on the Grant Date.

6.4.4 EXPIRATION. No ISO may be exercised after the expiration of one
day less than ten (10) years from the Grant Date; provided, however, that if
the Option is granted to a Participant who, together with persons whose
stock ownership is attributed to the Participant pursuant to Section 424(d)
of the Code, owns stock possessing more than ten percent (10%) of the total
combined voting power of all classes of stock of the Company, its Parent (if
any) or any Subsidiaries, the ISO may not be exercised after the expiration
of one day less than five (5) years from the Grant Date.

6.4.5 COMPLIANCE WITH SECTION 422 OF THE CODE. The terms and
conditions of ISOs shall be subject to and comply with Section 422 of the
Code or any successor provision.

6.4.6 NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. Each Participant
who receives an ISO agrees to notify the Company in writing immediately
after the Participant makes a Disqualifying Disposition of any Shares
received pursuant to the exercise of an ISO. The term "Disqualifying
Disposition" means any disposition (including any sale) of Shares before the
later of (a) two years after the Participant was granted the ISO under which
the Participant acquired such Shares, or (b) one year after the Participant
acquired the Shares by exercising the ISO.

6.4.7 SUBSTITUTE OPTIONS. Notwithstanding the provisions of
Section 6.4.1, in the event that the Company or any Subsidiary of the
Company consummates a transaction described in Section 424(a) of the Code
(relating to the acquisition of property or stock from an unrelated
corporation), individuals who become employees of the Company or any
Subsidiary of the Company on account of such transaction may be granted ISOs
in substitution for options granted by their former employer. The Board, in
its sole discretion and consistent with Section 424(a) of the Code, shall
determine the exercise price of such substitute Options.

6.5 NQO PRESUMPTION. Options granted pursuant to the Plan shall be
presumed to be NQOs unless expressly designated ISOs in the Award Agreements, or
it can otherwise be determined that the Options were intended to be ISOs.

6.6 NO REPRICING. Once an Option is Awarded, the price per share of the
Common Stock purchasable under the Option shall not be reduced without the
approval of the shareholders of the Company.

SECTION 7 GRANT OF STOCK APPRECIATION RIGHTS

Subject to the terms and provisions of the Plan, the Board may award SARs in
tandem with another Award (at or after the Grant Date of the other Award), or
alone and unrelated to another Award, and may determine the terms and conditions
applicable thereto, including the form of payment.

SECTION 8 PERFORMANCE SHARES

8.1 GRANT OF PERFORMANCE SHARES. The Board may award Performance Shares to
Participants and determine the performance goals applicable to each such Award,
the number of Shares for each Performance Cycle, the duration of each
Performance Cycle and all other limitations and conditions applicable to the
awarded Performance Shares. The payment value of each Performance Share shall be
equal to the Fair Market Value of one Share on the date the Performance Share is
earned or, in the discretion of the Board, on the date the Board determines that
the Performance Share has been earned.

8.2 ADJUSTMENT OF PERFORMANCE GOALS. Except as provided in an Award,
during any Performance Cycle, the Board may adjust the performance goals for the
Performance Cycle as it deems equitable in recognition of unusual or
non-recurring events affecting the Company or its Shares, changes in applicable
tax laws or accounting principles, or such other factors as the Board shall
determine.

8.3 WRITTEN CERTIFICATION. As soon as practical after the end of a
Performance Cycle, the Board shall certify in writing the extent to which the
performance goals applicable to each Participant for the Performance Cycle were
achieved or exceeded and the number of Performance Shares which have been earned
on the basis of performance in relation to the established performance goals.

SECTION 9 RESTRICTED STOCK

9.1 GRANT OF RESTRICTED STOCK. The Board may award Shares of Restricted
Stock and determine the purchase price, if any, therefor, the duration of the
Restricted Period, the conditions under which the Shares may be forfeited to or
repurchased by the Company and any other terms and conditions of the Awards. The
Board may modify or waive any restrictions, terms and conditions with respect to
any Restricted Stock. Shares of Restricted Stock may be issued for whatever
consideration is determined by the Board, subject to applicable law.

9.2 TRANSFERABILITY. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered, except as permitted by the Board,
during the Restricted Period.

9.3 EVIDENCE OF AWARD. Shares of Restricted Stock shall be evidenced in
such manner as the Board may determine. Any certificates issued in respect of
Shares of Restricted Stock shall be registered in the name of the Participant
and, unless otherwise determined by the Board, deposited by the Participant,
together with a stock power endorsed in blank, with the Company. At the
expiration of the Restricted Period, the Company shall deliver the certificates
and stock power to the Participant.

9.4 SHAREHOLDER RIGHTS. A Participant shall have all the rights of a
shareholder with respect to Restricted Stock awarded, including voting and
dividend rights, unless otherwise provided in the Award Agreement.

SECTION 10 STOCK UNITS

10.1 GRANT OF STOCK UNITS. Subject to the terms and provisions of the
Plan, the Board may award Stock Units subject to such terms, restrictions,
conditions, performance criteria, vesting requirements and payment rules as the
Board shall determine.

10.2 CONSIDERATION. Shares awarded in connection with a Stock Unit may be
issued for whatever consideration is determined by the Board, subject to
applicable law.

SECTION 11 GRANT OF OTHER AWARDS

The Board shall have the authority to specify the terms and provisions of
other forms of equity-based or equity-related Awards not described above which
the Board determines to be consistent with the purposes of the Plan and the
interests of the Company, which Awards may provide for cash payments based in
whole or in part on the value or future value of Shares, for the acquisition or
future acquisition of Shares, or any combination thereof. Other Awards may also
include cash payments (including the cash payment of dividend equivalents) under
the Plan which may be based on one or more criteria determined by the Board that
are unrelated to the value of the Shares and that may be granted in tandem with,
or independent of, other Awards under the Plan.

SECTION 12 GENERAL PROVISIONS APPLICABLE TO AWARDS

12.1 LEGAL AND REGULATORY MATTERS. The delivery of Shares shall be subject
to compliance with (i) applicable federal and state laws and regulations,
(ii) if the outstanding Shares are listed at the time on any stock exchange, the
listing requirements of such exchange, and (iii) the Company's counsel's
approval of all other legal matters in connection with the issuance and delivery
of the Shares. If the sale of the Shares has not been registered under the
Securities Act, the Company may require, as a condition to delivery of the
Shares, such representations or agreements as counsel for the Company may
consider

appropriate to avoid violation of the Securities Act and may require that the
certificates evidencing the Shares bear an appropriate legend restricting
transfer.

12.2 WRITTEN AWARD AGREEMENT. The terms and provisions of an Award shall
be set forth in an Award Agreement approved by the Board and delivered or made
available to the Participant as soon as practicable following the Grant Date.

12.3 DETERMINATION OF RESTRICTIONS ON THE AWARD. The vesting,
exercisability, payment and other restrictions applicable to an Award (which may
include, without limitation, restrictions on transferability or provision for
mandatory resale to the Company) shall be determined by the Board and set forth
in the applicable Award Agreement. Notwithstanding the foregoing, the Board may
accelerate (i) the vesting or payment of any Award (including an ISO), (ii) the
lapse of restrictions on any Award (including an Award of Restricted Stock) and
(iii) the date on which any Option or SAR first becomes exercisable.

12.4 MERGERS, ETC. Notwithstanding any other provisions of the Plan, in
the event that a transaction occurs that results or will result in the Common
Stock not being registered under Section 12 of the Exchange Act, all Awards
shall terminate upon the completion of the transaction. If the transaction is
intended to be treated as a pooling of interests for accounting purposes, the
Board shall cause the acquiring or surviving corporation or one of its
affiliates to grant replacement Awards to Participants. In all other
transactions, the Board may either arrange for replacement Awards, accelerate
the exercisability of all outstanding Awards (subject to completion of the
transaction) or terminate all Awards in exchange for a cash payment. Replacement
Awards for ISOs shall satisfy any applicable requirements of the Code.

12.5 TERMINATION OF EMPLOYMENT. For purposes of the Plan, the following
events shall not be deemed a termination of employment of a Participant: (i) a
transfer to the employment of the Company from a Subsidiary of the Company, or
from the Company to a Subsidiary of the Company, or from one Subsidiary of the
Company to another; or (ii) an approved leave of absence for military service or
sickness, or for any other purpose approved by the Company, if the Participant's
right to employment is guaranteed either by a statute or by contract or under
the policy pursuant to which the leave of absence was granted or if the Board
otherwise so provides in writing. For purposes of the Plan, employees of a
Subsidiary of the Company shall be deemed to have terminated their employment on
the date on which such Subsidiary of the Company ceases to be a Subsidiary of
the Company, as the case may be.

12.6 DATE OF AND EFFECT OF TERMINATION OF EMPLOYMENT. The date of a
Participant's termination of employment for any reason shall be determined in
the sole discretion of the Board. The Board shall have full authority to
determine and specify in the applicable Award Agreement the effect, if any, that
a Participant's termination of employment for any reason will have on the
vesting, exercisability, payment or lapse of restrictions applicable to an
outstanding Award.

12.7 GRANT OF AWARDS. Each Award may be made alone, in addition to or in
relation to any other Award. The terms of each Award need not be identical, and
the Board need not treat Participants uniformly.

12.8 SETTLEMENT OF AWARDS. No Shares shall be delivered pursuant to any
exercise of an Award until payment in full of the price therefor, if any, is
received by the Company. Such payment may be made in whole or in part in cash or
by certified or bank check or, to the extent permitted by the Board at or after
the Grant Date, by delivery of a note or Shares, including Restricted Stock,
valued at their Fair Market Value on the date of delivery, or by having the
Company hold back from the Shares to be delivered upon exercise Shares having a
Fair Market Value on the last business day preceding the date of exercise equal
to the purchase price, or 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 by any combination of the permissible forms of
payment, or by such other lawful consideration as the Board shall determine.

12.9 WITHHOLDING REQUIREMENTS AND ARRANGEMENTS. The Participant shall pay
to the Company or make provision satisfactory to the Board for payment of any
taxes required by law to be withheld in respect of Awards under the Plan no
later than the date of the event creating the tax liability. In the Board's
discretion, such tax obligations may be paid in whole or in part in Shares,
including Shares retained from the Award creating the tax obligation, valued at
their Fair Market Value on the date of delivery. The Company may, to the extent
permitted by law, deduct any such tax obligations from any payment of any kind
otherwise due to the Participant.

12.10 NO EFFECT ON EMPLOYMENT. The Plan shall not give rise to any right
on the part of any Participant to continue in the employ of the Company, its
Parent (if any) or any Subsidiary of the Company. The loss of existing or
potential profit in Awards granted under the 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 to the Participant by contract or otherwise.

12.11 NO RIGHTS AS SHAREHOLDER. Subject to the provisions of the Plan and
the applicable Award Agreement, no Participant shall have any rights as a
shareholder with respect to any Shares to be distributed under the Plan until he
or she becomes the holder thereof.

12.12 ADJUSTMENTS. Upon the happening of any of the following described
events, a Participant's rights with respect to Awards granted hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
Award Agreement.

12.12.1 STOCK SPLITS, ETC. In the event the Company issues any of its
Shares as a stock dividend upon or with respect to the Shares, or in the
event Shares shall be subdivided or combined into a greater or smaller
number of Shares, or if, upon a merger or consolidation (except those
described in Section 12.4), reorganization, split-up, liquidation,
combination, recapitalization or the like of the Company, Shares shall be
exchanged for other securities of the Company, securities of another entity,
cash or other property, each Participant upon exercising an Award (for the
purchase price to be paid under the Award) shall be entitled to purchase
such number of Shares, other securities of the Company, securities of such
other entity, cash or other property as the Participant would have received
if the Participant had been the holder of the Shares with respect to which
the Award is exercised at all times between the Grant Date of the Award and
the date of its exercise, and appropriate adjustments shall be made in the
purchase price per Share.

12.12.2 RESTRICTED STOCK. If any person owning Restricted Stock
receives new or additional or different shares or securities ("New
Securities") in connection with a corporate transaction described in
Section 12.12.1 or a stock dividend described in Section 12.12.1 as a result
of owning such Restricted Stock, the New Securities shall be subject to all
of the conditions and restrictions applicable to the Restricted Stock with
respect to which such New Securities were issued.

12.12.3 BOARD DETERMINATION. Notwithstanding any provision to the
contrary, no adjustments shall be made pursuant to Section 12.12.1 with
respect to ISOs, unless (i) the Board, after consulting with counsel for the
Company, determines that such adjustments would not constitute a
modification, "extension" or "renewal" of such ISOs as such terms are
defined in Section 424 of the Code, (ii) would not cause any adverse tax
consequences for the holders of such ISOs or (iii) the holders of such ISOs
consent to the adjustment. No adjustments to ISOs shall be made for
dividends paid in cash or in property other than securities of the Company.

12.12.4 FRACTIONAL SHARES. No fractional Shares shall be issued under
the Plan. Any fractional Shares which, but for this Section, would have been
issued shall be deemed to have been issued and immediately sold to the
Company for their Fair Market Value, and the Participant shall receive from
the Company cash in lieu of such fractional Shares.

12.12.5 RECAPITALIZATION. The Board may 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, acquisitions or
dispositions of stock or property, or any other event if it is determined by
the Board that such adjustment is appropriate to avoid distortion in the
operation of the Plan.

12.12.6 FURTHER ADJUSTMENT. Upon the happening of any of the events
described in Sections 12.12.1 or 12.12.5, the class and aggregate number of
Shares set forth in Sections 5.1 and 5.3 hereof that are subject to Awards
which previously have been, or subsequently may be, granted under the Plan
shall be appropriately adjusted to reflect the events described in such
Sections. The Board shall determine the specific adjustments to be made
under this Section 12.12.6.

SECTION 13 AMENDMENT, CONVERSION AND TERMINATION

13.1 AMENDMENT, SUSPENSION, TERMINATION OF THE PLAN. The Board may modify,
amend, suspend or terminate the Plan in whole or in part at any time; provided,
however, that no modification, amendment, suspension or termination of the Plan
shall be made without shareholder approval if such approval is necessary to
comply with any applicable tax or regulatory requirement; provided, further,
that such modification, amendment, suspension or termination shall not, without
the Participant's consent, affect adversely the rights of such Participant with
respect to any Award previously made.

13.2 AMENDMENT, SUSPENSION, TERMINATION OF AN AWARD. The Board may modify,
amend or terminate any outstanding Award, including, without limitation,
substituting therefor another Award of the same or a different type, changing
the date of exercise or realization and converting an ISO to a NQO; provided,
however, that the Participant's consent to such action shall be required unless
the Committee determines that the action, taking into account any related
action, would not materially and adversely affect the Participant.

SECTION 14 LEGAL CONSTRUCTION

14.1 CAPTIONS. The captions provided herein are included solely for
convenience of reference and shall not affect the meaning of any of the
provisions of the Plan or serve as a basis for interpretation or construction of
the Plan.

14.2 SEVERABILITY. In the event any provision of the Plan is held invalid
or illegal for any reason, the illegality or invalidity shall not affect the
remaining provisions of the Plan, and the Plan shall be construed and enforced
as if the illegal or invalid provision had not been included.

14.3 GOVERNING LAW. The Plan and all rights under the Plan shall be
construed in accordance with and governed by the internal laws of the
Commonwealth of Massachusetts.

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

The GenRad Choice Investment Plan ("ChIP") provides that The Vanguard Group
of Investment Companies, as Trustee of the ChIP, will follow the voting
instructions of the ChIP participants with respect to any voting rights
pertaining to their respective interests in Shares of GenRad, Inc. Common Stock
held in ChIP Parts I and II. The enclosed Proxy identifies the number of shares
of GenRad Common Stock that you may direct the Trustee to vote.

Please complete, date and sign the Proxy and return it to Proxy Services,
Boston EquiServe, P.O. Box 9381, Boston, Massachusetts 02205-9956. All ChIP
Participants must return the completed Proxy on or before May 8, 2001 in the
envelope provided. The Trustee has provided EquiServe with a ballot executed in
blank. EquiServe will tabulate the total from the Proxies it receives and will
enter the totals on the ballot. This ballot will then be tabulated by EquiServe
with all other ballots cast at the Annual Meeting.

For ChIP Participants, the number of shares indicated on the enclosed Proxy
is the total number represented by your allocations to the GenRad Stock Fund in
ChIP Part I (Proft Sharing Trust Account) and Part II (employee contribution
account). If you have any questions about the manner in which this number was
computed, or about any other matter in this notice, please contact GenRad's
Human Resource Department at (978) 589-7331.

All ChIP Participants are cordially invited to attend the Annual Meeting.

GenRad, Inc.

By: Walter A. Shephard, CLERK

April 6, 2001

PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE
ENVELOPE PROVIDED

838-LTR-01

DETACH HERE

PROXY

GENRAD, INC.

7 Technology Park Drive, Westford, MA 01886

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS,
WHICH RECOMMENDS APPROVAL OF EACH OF THE PROPOSALS CONTAINED HEREIN

The undersigned appoints Walter A. Shephard and Lori B. Hannay, and each of them
as proxies of the undersigned with full power of substitution to vote as
designated herein all shares of stock which the undersigned would be entitled to
vote if personally present at the Annual Meeting of Shareholders of GenRad, Inc.
to be held on Wednesday, May 9, 2001 at 10:00 a.m. at the BankBoston Auditorium,
100 Federal Street, Boston, Massachusetts, and any adjournment or adjournments
thereof (the "Meeting"). The undersigned acknowledges receipt of the Company's
Proxy Statement which was mailed to shareholders herewith. The proxies are
further authorized to vote, in their discretion in accordance with applicable
law, upon such other business as may properly come before the Meeting.

Please return this card in the enclosed postage paid envelope to Boston
EquiServe, P.O. Box 9381, Boston, Massachusetts 02205-9956.

SEE REVERSE SEE REVERSE
SIDE (Continued, and to be Signed on Reverse Side) SIDE
---- ----

DETACH HERE

|x| Please mark
votes as in
this example

THIS PROXY WILL BE VOTED IN THE MANNER DIRECTED HEREIN. IF NO DIRECTION IS
MADE, THIS PROXY WILL BE VOTED FOR THE PROPOSALS SET FORTH BELOW.

1. For the election of William S. Antle III and Ed Zschau 2. For approval of the Company's FOR AGAINST ABSTAIN
to the Board of Directors to serve as Class II 2001 Directors' Stock Option Plan. |_| |_| |_|
Directors for three-year terms.

FOR WITHHELD 3. For approval of the Company's 2001 FOR AGAINST ABSTAIN
|_| |_| Equity Incentive Plan. |_| |_| |_|
.

|_|________________________________________________
For all nominees except those whose names are noted
above

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT |_|

Please sign exactly as name appears hereon. Joint owners should
each sign. When signing as attorney, executor, administrator,
trustee or guardian, please give full title as such.

Signature: ________________________ Date: __________ Signature: _____________________________ Date: ________________