<PAGE>
As filed with the Securities and Exchange Commission on __________, 1999
Registration No. 333-__________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
Form S-8
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
___________________________
GERBER SCIENTIFIC, INC.
(Exact name of registrant as specified in its charter)
Connecticut 06-0640743
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
83 Gerber Road West
South Windsor, CT 06074
(860) 644-1551
(Address, including zip code, and telephone number
of Principal Executive Offices)
GERBER SCIENTIFIC, INC. 1992 EMPLOYEE STOCK PLAN, AS AMENDED
(Full title of the plan)
________________________________________
Richard F. Treacy, Jr., Esq.
83 Gerber Road West
South Windsor, CT 06074
(860) 644-1551
(Name, address and telephone number of agent for service)
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Proposed Proposed Amount of
Title of maximum maximum registration
securities Amount offering aggregate fee
to be to be price offering
registered registered per share(1) price(1)
<S> <C> <C> <C> <C>
Common Stock
($1 Par value) 2,000,000 shares(2)(3) $23.8125 $47,625,000 $13,240
- ----------------------------------------------------------------------------------
</TABLE>
(1) Pursuant to Rule 457(h), the proposed maximum offering price per share is
estimated solely for the purpose of calculating the registration fee and is
based upon the average of the high and low sales prices of the common stock of
the registrant as reported on the New York Stock Exchange on July 19, 1999, a
date within five business days of the date on which this registration statement
is being filed.
(2) Plus, in accordance with Rule 416 of the Securities Act of 1933, as
amended, such indeterminate number of additional shares as may become issuable
pursuant to anti-dilution provisions of the Plan.
(3) In addition to the shares registered herein, 3,000,000 shares were
previously registered under Registration Statements file nos. 33-58668 and 333-
26177, and 2,687,936 of such shares have not yet been issued and are being
carried forward. The amount of the filing fee associated with such securities
previously paid was $14,935.
<PAGE>
EXPLANATORY NOTE
This Registration Statement is being filed to register additional shares
for the Gerber Scientific, Inc. 1992 Employee Stock Plan, As Amended (the
"Plan"). Pursuant to instruction E of the General Instructions to Form S-8, the
contents of Registration Statements Nos. 33-58668 and 333-26177 in respect of
the Company's 1992 Employee Stock Plan are hereby incorporated by reference.
Pursuant to Rule 429 of the Securities Act of 1933, the prospectus covering
securities registered pursuant to this Registration Statement also relates to
the shares of the Company's Common Stock covered by Registration Statements Nos.
33-58668 and 333-26177.
PART I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
As permitted by the rules of the Securities and Exchange Commission (the
"Commission"), this Registration Statement omits the information specified in
Part I of Form S-8. The documents containing the information specified in Part I
will be delivered to the participants in the Plan as required by Securities Act
Rule 428(b). Such documents are not being filed with the Commission as part of
this Registration Statement or as prospectuses or prospectus supplements
pursuant to Rule 424.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) the Company's Annual Report on Form 10-K for the year ended April 30,
1998.
(2) the Company's Quarterly Reports on Form 10-Q for the quarters ended
July 31, 1998, October 31, 1998 and January 31, 1999.
(3) all other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the filing of the Annual Report on Form 10-K.
(4) the description of the Company's Common Stock contained in the
Registration Statement on Form 8-A filed by the Company together with all
amendments or reports filed for the purpose of updating such description.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities registered hereunder have been
sold or which deregisters all of the securities offered then remaining unsold,
shall be deemed to be incorporated herein by reference and to be a part hereof
from the date of filing of such documents.
Item 4. Description of Securities
Not Applicable.
Item 5. Interests of Named Experts and Counsel
Not Applicable.
Item 6. Indemnification of Directors and Officers
Sections 33-770 to 33-778 of the Connecticut Business Corporation Act gives
corporations the power to indemnify officers and directors under certain
circumstances. Article III of the Company's by-laws provides for indemnification
of officers and directors of the Company to the fullest extent permitted by
applicable law. Further, the Plan provides for indemnification of current and
past members of the Board of Directors or committee that administers the Plan by
the Company against any loss, cost, liability or expense that may be imposed
upon or reasonably incurred by such member in connection with or resulting from
any claim, action, suit or proceeding to which such member may be or become a
party or in which
-II-4-
<PAGE>
such member may be or become involved by reason of any action taken or failure
to act under the Plan and against any amounts paid by such member in settlement
thereof (with the Company's written approval) or paid by such member in
satisfaction of a judgment in any such action, suit or proceeding, except a
judgment in favor of the Company based upon a finding of such member's lack of
good faith. In addition, the Company maintains directors' and officers'
reimbursement and liability insurance with National Union Fire Insurance Company
pursuant to standard form policies with an aggregate limit of $25 million.
Item 7. Exemption from Registration Claimed
Not Applicable.
Item 8. Exhibits
4.1 Gerber Scientific, Inc. 1992 Employee Stock Plan, as Amended.
5.1 Opinion of Steptoe & Johnson LLP
23.1 Consent of Steptoe & Johnson LLP (included in
the opinion filed as Exhibit 5.1).
23.2 Consent of KPMG LLP
24 Power of Attorney
Item 9. Undertakings
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment hereto) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) shall not apply if
the information required to be included in a post-effective amendment by those
-II-5-
<PAGE>
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling person of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
-II-6-
<PAGE>
SIGNATURES
The Registrant. Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the Town of South Windsor, State of Connecticut, on June 18,
1999.
GERBER SCIENTIFIC, INC.
By: /s/ MICHAEL J. CHESHIRE
-----------------------
Michael J. Cheshire
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Michael J. Cheshire and Richard F. Treacy, Jr., and each of them, his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution for him in his name, place and stead, in any and all capacities,
to sign any post-effective amendments to this Registration Statement, and any
and all documents in connection therewith, and to file the same, with all
exhibits thereto, and all documents in connection therewith with the Securities
and Exchange Commission under the Securities Act of 1933, grants to said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in person, and hereby
ratifies, approves and confirms all that each of such attorneys-in-fact and
agents, or their substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ MICHAEL J. CHESHIRE Chairman of the Board June 16, 1999
- -----------------------
Michael J. Cheshire and Chief Executive Officer
(Principal Executive Officer)
/s/ GARY K. BENNETT Senior Vice President, June 16, 1999
- -----------------------
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<PAGE>
Gary K. Bennett Finance (Principal Financial
and Accounting Officer)
/s/ GEORGE M. GENTILE Director June 16, 1999
- ---------------------
George M. Gentile
/s/ A. ROBERT TOWBIN Director June 16, 1999
- --------------------
A. Robert Towbin
/s/ DAVID J. GERBER Director June 16, 1999
- -------------------
David J. Gerber
/s/ EDWARD E. HOOD, JR. Director June 16, 1999
- -----------------------
Edward E. Hood, Jr.
/s/ WILLIAM JEROME VEREEN Director June 16, 1999
- -------------------------
William Jerome Vereen
/s/ DAVID J. LOGAN Director June 16, 1999
- ------------------
David J. Logan
/s/ DONALD P. AIKEN Director June 16, 1999
- -------------------
Donald P. Aiken
/s/ CAROLE F. ST. MARK Director June 16, 1999
- ----------------------
Carole F. St. Mark
-II-8-
<PAGE>
EXHIBIT INDEX
Exhibit Number Description of Exhibit
4.1 Gerber Scientific, Inc. 1992 Employee Stock Plan, as Amended.
5.1 Opinion of Steptoe & Johnson LLP
23.1 Consent of Steptoe & Johnson LLP (included in
the opinion filed as Exhibit 5.1).
23.2 Consent of KPMG LLP
24 Power of Attorney (included
on signature page)
<PAGE>
EXHIBIT 4.1 - GERBER SCIENTIFIC, INC.1992 EMPLOYEE STOCK PLAN, AS AMENDED
<PAGE>
GERBER SCIENTIFIC, INC.
1992 EMPLOYEE STOCK PLAN,
AS AMENDED
EXHIBIT 4.1
ARTICLE 1
DEFINITIONS
1.1 Board shall mean the Board of Directors of the Company.
1.2 Bonus Shares shall mean shares of Common Stock granted to a participant
under Article 9 of this Plan.
1.3 Change of Control shall mean (i) the acquisition by any person (including
a group within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act but excluding the Company or any of its subsidiaries or any
person who or which was the beneficial owner on August 20, 1992 (the date
the Board initially adopted this Plan), as reflected in a Schedule 13D or
a Schedule 13G filed with the Securities and Exchange Commission as of
such date, of more than 6% of the combined voting power of the Company's
then outstanding voting securities) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more
of the combined voting power of the Company's then outstanding voting
securities; (ii) the first purchase of shares of Common Stock pursuant to
a tender offer or an exchange offer, other than an offer by the Company
or any of its subsidiaries; or (iii) approval by shareholders of the
Company of a merger, consolidation, liquidation or dissolution of the
Company, or of the sale of all or substantially all of the assets of the
Company.
1.4 Code shall mean the Internal Revenue Code of 1986, as amended.
1.5 Committee shall mean those members of the Board who are appointed by the
Board to administer this Plan in accordance with the provisions of
Article 5 of this Plan.
1.6 Common Stock shall mean the Common Stock, $1.00 par value, of the
Company.
1.7 Company shall mean Gerber Scientific, Inc., its Subsidiaries and their
successors and assigns.
1.8 Effective Date shall have the meaning ascribed to such term in Section
2.2 of this Plan.
1.9 Employee shall mean any employee of the Company or any Subsidiaries.
1.10 Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
1.11 Fair Market Value shall mean, as applied to a specific date, the closing
price for the Common Stock on such date as reported in the New York Stock
Exchange-Composite Transactions by The Wall Street Journal, or if no
Common Stock was traded on such date, on the next preceding day on which
Common Stock was so traded. If the Common
<PAGE>
Stock is not listed and traded on the New York Stock Exchange, the Fair
Market Value shall mean, as applied to a specific date, the closing price
for the Common Stock on such date as reported on such other principal
United States securities exchange registered under the Exchange Act on
which the Common Stock is listed, or if the Common Stock is not listed on
any such exchange, the highest closing bid quotation with respect to a
share of Common Stock on the National Association of Securities Dealers,
Inc. Automated Quotations System.
1.12 Grant shall mean, individually or collectively, a grant under this Plan
of Nonqualified Stock Options, Incentive Stock Options, Restricted
Shares, Bonus Shares and/or Performance Units.
1.13 Grant Agreement shall mean the written agreement evidencing the grant of
an Option, Restricted Shares, Bonus Shares and/or a Performance Unit
entered into between a Participant and the Company pursuant to this Plan.
The Committee may designate any Grant Agreement evidencing only the grant
of an Option as an Option Agreement.
1.14 Grant Date shall mean, with respect to a particular Grant, the date as of
which such Grant is granted by the Committee pursuant to this Plan or, in
the case of a Reload Option, the date on which the Original Option is
exercised.
1.15 Incentive Stock Option shall mean any Option granted under this Plan
which the Committee intends (at the time it is granted) to be an
Incentive Stock Option within the meaning of Section 422 of the Code.
1.16 Insider Participant shall mean any individual who is selected by the
Committee to receive Grants under the Plan and who is subject to the
requirements of Section 16(a) of the Exchange Act, and the rules and
regulations thereunder.
1.17 Noninsider Participant shall mean any person who is selected by the
Committee to receive Grants under the Plan who is not an Insider
Participant.
1.18 Nonqualified Option shall mean any Option granted under this Plan which
is not an Incentive Stock Option.
1.19 Option shall mean the right of a Participant to purchase shares of Common
Stock in accordance with the provisions of this Plan and such term shall
include Nonqualified Options, Reload Options and Incentive Stock Options,
unless otherwise indicated.
1.20 Option Period shall have the meaning ascribed to such term in Section 6.5
of this Plan.
1.21 Option Price shall mean the price per share of Common Stock to be paid by
a Participant upon exercise of an Option, as stated in the Grant
Agreement.
1.22 Original Option shall have the meaning ascribed to such term in Section
6.9 of this Plan.
<PAGE>
1.23 Participant shall mean any Employee who satisfies the eligibility
requirements of Article 3 of this Plan and who is selected by the
Committee to receive a Grant under this Plan.
1.24 Performance Unit shall have the meaning set forth in Section 7.1 of this
Plan.
1.25 Plan shall mean the Gerber Scientific, Inc. 1992 Employee Stock Plan, As
Amended and any amendments thereto.
1.26 Reload Option shall have the meaning ascribed to such term in Section 6.9
of this Plan.
1.27 Restricted Shares shall mean shares of Common Stock granted to a
Participant under Article 8 of this Plan that are subject to restrictions
and to a risk of forfeiture.
1.28 Retirement shall mean termination of employment, for reasons other than
Permanent Disability or death: (1) at any time on or after the
Participant's fifty-fifth birthday provided that such Participant has
completed at least ten Vesting Years as that term is defined in the
Gerber Scientific, Inc. and Participating Subsidiaries Pension Plan or
any successor thereto (the "Pension Plan"), or (2) the normal retirement
age pursuant to the Pension Plan or (3) if the Company does not maintain
a pension or retirement plan, at any time on or after the Participant's
sixty-fifth birthday.
1.29 Subsidiary shall mean any corporation or other business entity in which
the Company directly or indirectly owns fifty percent or more of the
outstanding voting stock or other ownership interest.
1.30 Permanent Disability shall mean "permanent and total disability" as
provided in Section 22(e)(3) of the Code.
ARTICLE 2
PURPOSE
2.1 Purpose. The purpose of this Plan is to offer as an additional incentive
to the officers and other key Employees who are the most responsible for
the growth and success of the Company and its Subsidiaries, the
opportunity to increase their proprietary interest in the Company under
conditions which will encourage their continued employment in the service
of the Company or its Subsidiaries and to recognize and reward their
contribution to creating shareholder value.
2.2 Effective Date. This Plan initially became effective August 20, 1992. No
Incentive Stock Options, Nonqualified Options (other than Reload Options
automatically granted pursuant to the Committee's specification made in
accordance with Section 6.9 prior to August 20, 2002), Restricted Shares
or Bonus Shares shall be granted under this Plan after August 19, 2002.
<PAGE>
ARTICLE 3
ELIGIBILITY
3.1 Persons Eligible. Grants may be made only to Employees who are key
Employees (which term shall be deemed to include officers) who on the
grant date (i) are employed by the Company or any of its Subsidiaries and
(ii) have managerial, supervisory, professional, scientific, engineering
or similar responsibilities. A Director of the Company or any Subsidiary
who is not also an Employee shall not be eligible to receive a Grant.
During the term of this Plan, Grants may be made to eligible Employees
whether or not they hold or have held Grants under this Plan or Options
under previously adopted plans.
The Committee shall determine, in its sole discretion, who is a key
Employee and its decision shall be final, binding and conclusive.
ARTICLE 4
COMMON STOCK COVERED BY THE PLAN
4.1 Plan Maximums. Subject to adjustment as provided in Section 4.4 of this
Plan, the aggregate number of shares of Common Stock with respect to
which Options, Restricted Shares and Bonus Shares may be granted under
this Plan shall be 5,000,000 shares and the aggregate number of
Restricted Shares or Bonus Shares which may be granted under this Plan
shall be 200,000. In addition, if any Restricted Share, Bonus Share or
Option expires, is terminated unexercised, is forfeited, or is
surrendered or is otherwise withheld to pay the exercise price of options
or other awards issued under this Plan or to satisfy the tax withholding
obligations under these awards, then such Restricted Share, Bonus Share
and/or the number of shares of Common Stock covered by such Option shall
again be available for grant under this Plan.
The aggregate number of Performance Units that may be granted under this
Plan shall be 2,000,000, subject to adjustment as provided in Section 4.4
of this Plan. The payment of cash under any Performance Unit shall not be
deemed to result in the issuance of any shares of Common Stock.
4.2 Limitation on Grants Per Participant. The maximum number of shares of
Common Stock with respect to which Options, Restricted Shares and Bonus
Shares may be granted under this Plan to any Participant shall not exceed
300,000 shares in any two-year period, subject to adjustment as provided
in Section 4.4 hereunder.
4.3 Source of Shares. The shares to be issued upon exercise of Options
granted under this Plan shall be made available, at the discretion of the
Board, either from the authorized but unissued shares of Common Stock or
from shares of Common Stock reacquired by the Company, including shares
purchased in the open market.
<PAGE>
4.4 Adjustments to Grants. In the event that the number of outstanding shares
of Common Stock is changed by reason of a split-up or combination or an
exchange of shares or recapitalization or by reason of a stock dividend,
merger, consolidation, reorganization, liquidation or the like, the
number of shares for which Options, Restricted Shares and Bonus Shares
may thereafter be granted under this Plan, the number of shares then
subject to Options theretofore granted under this Plan, the price per
share payable by the Participant upon exercise of such Options, the
number of Performance Units which may thereafter be granted under this
Plan, the number of Performance Units then granted under this Plan and
the amount of cash payable by the Company pursuant to a Performance Unit
and the number of Restricted Shares and Bonus Shares theretofore granted
under this Plan, shall be adjusted proportionately so as to reflect such
change.
ARTICLE 5
ADMINISTRATION OF THE PLAN
5.1 Committee. The Plan shall be administered by the Committee, which shall
be composed of not less than two members of the Board appointed by the
Board and serving at the Board's discretion.
5.2 Powers of Committee. The Committee may interpret this Plan, prescribe,
amend, and rescind any rules and regulations necessary or appropriate for
the administration of this Plan, and make such other determinations
under, and interpretations of, this Plan, and take such other action, as
it deems necessary or advisable. Any interpretation, determination or
other action made or taken by the Committee shall be final, binding and
conclusive upon all parties.
5.3 Action by Committee. A majority of the members of the Committee shall
constitute a quorum. All determinations of the Committee shall be made by
a majority of its members. Any decision or determination reduced to
writing and signed by all of the members shall be fully as effective as
if it had been made by a majority vote at a meeting duly called and held.
The Committee shall also have express authority to hold Committee
meetings by means of conference telephone or similar communications
equipment by which all persons participating in the meeting can hear each
other.
5.4 Discretion to Determine Grants. Subject to the provisions of this Plan,
the Committee shall have the authority in its sole discretion from time
to time to:
(a) determine and designate those key Employees to whom Grants are to be
made;
(b) authorize and make Grants;
(c) determine the number of Options granted pursuant to any Grant
Agreement and the number of shares of Common Stock subject to each
Option, the Option Price thereof, and whether the Options covered thereby
are Incentive Stock Options or Nonqualified Stock Options; provided,
however, that the Committee shall not have the authority to reduce the
Option Price of any Option once such Option is granted under this Plan;
<PAGE>
(d) determine the number of Performance Units granted to any
Participant;
(e) determine the number of Restricted Shares granted to any
Participant;
(f) determine the number of Bonus Shares granted to any Participant; and
(g) determine the time or times when and the manner in which each Option
shall be exercisable;
(h) determine the time or times when, and the conditions to and the
manner in which, each Performance Unit shall be paid;
(i) establish the criteria, including but not limited to performance-
based criteria, for the vesting and/or acceleration of the vesting of
Grants;
(j) determine the duration of the Option Period for each Option and the
duration of each Performance Unit;
(k) determine the terms, conditions and restrictions on Restricted
Shares including terms and conditions relating to the disposition or
transfer of such Restricted Shares and the forfeitability of such
Restricted Shares;
(l) determine the terms, conditions and restrictions, if any, on Bonus
Shares; and
(m) make all other determinations deemed necessary or advisable for the
administration of this Plan. In making these determinations, the
Committee may take into account the nature of the services rendered by
respective Employees, their present and potential contributions to the
success of the Company and such other factors as the Committee in its
discretion shall deem relevant.
The Committee may, in its discretion, treat all or any portion of any
period during which a Participant is on military or on an approved leave
of absence from the Company as a period of employment of such Participant
by the Company, for purposes of accrual of his rights under his Grants.
5.5 Indemnification. Current and past members of the Board or Committee shall
be indemnified and held harmless by the Company against and from any and
all loss, cost, liability or expense that may be imposed upon or
reasonably incurred by such member in connection with or resulting from
any claim, action, suit or proceeding to which such member may be or
become a party or in which such member may be or become involved by
reason of any action taken or failure to act under this Plan and against
and from any and all amounts paid by such member in settlement thereof
(with the Company's written approval) or paid by such member in
satisfaction of a judgment in any such action, suit or proceeding, except
a judgment in favor of the Company based upon a finding of such member's
lack of good faith. Indemnification pursuant to this provision is subject
to the condition that, upon the institution of any claim, action, suit or
proceeding against such member, such member shall in writing give the
Company an opportunity, at its own expense, to handle and defend the same
before such member undertakes to handle and
<PAGE>
defend it on such member's behalf. The foregoing right of indemnification
shall not be exclusive of any other right to which such member may be
entitled as a matter of law or otherwise, or any power that the Company
may have to indemnify or hold such member harmless.
5.6 Reliance. Each member of the Board or of the Committee, and each officer
and Employee of the Company, shall be fully justified in relying or
acting in good faith upon any information furnished in connection with
the administration of this Plan by any appropriate person or persons. In
no event shall any current or past member of the Board or Committee, or
an officer or Employee of the Company, be held liable for any
determination made or other action taken or any omission to act in
reliance upon any such information, or for any action (including the
furnishing of information) taken or any failure to act, if in good faith.
5.7 Agents. In administering this Plan, the Committee may employ accountants
and counsel (who may be the independent auditors and outside counsel for
the Company) and other persons to assist or render advice to it, all at
the expense of the Company.
ARTICLE 6
TERMS AND CONDITIONS OF OPTIONS
Each Option granted under this Plan shall be subject to the following
terms and conditions:
6.1 Grant Agreement. A proper officer of the Company and each Participant
shall execute a Grant Agreement which shall set forth the Grant Date of
the Option (unless it is a Reload Option in which case the Grant Date
shall be the date on which the Original Option is exercised), the total
number of shares of Common Stock subject to Option to which such Grant
Agreement pertains, the Option Price, whether it is a Nonqualified Option
or an Incentive Stock Option, the time or times when the Option vests and
becomes exercisable, the duration of the Option Period, and such other
terms, conditions, restrictions, and privileges as the Committee in each
instance shall deem appropriate, provided they are not inconsistent with
the terms, conditions, and provisions of this Plan.
6.2 Option Price.
(a) Incentive Stock Options. The price per share of Common Stock
subject to an Incentive Stock Option shall be no less than one hundred
percent (100%) of the Fair Market Value of a share of Common Stock on the
Grant Date of such Incentive Stock Option, except as provided in Section
6.10(c) below.
(b) Nonqualified Options. The price per share of Common Stock subject
to a Nonqualified Option shall be no less than one hundred percent (100%)
of the Fair Market Value of the Company's Common Stock on the Grant Date
of such Nonqualified Option.
<PAGE>
6.3 Vesting and Exercise of Options. (a) Except as otherwise provided in this
Article 6 of this Plan, an Option granted hereunder shall vest and become
exercisable at such times, under such conditions, and in such manner as
the Committee shall determine and specify in the Grant Agreement.
Pursuant to the terms of the Grant Agreement or otherwise, the Committee
may exercise discretion to change the date on which an outstanding Option
vests and becomes exercisable; provided, however, that a vesting date
-------- -------
designated in a Grant Agreement may not be changed to a later date
without the consent of the Participant.
(b) Upon vesting of an Option, the Option may be exercised in whole or
in part, but only with respect to whole shares of Common Stock, during
the Option Period determined in accordance with Sections 6.5 through 6.7.
An Option shall be exercised by (a) written notice to the Committee of
the intent to exercise the Option with respect to a specified number of
shares of Common Stock and (b) payment for such shares as specified in
Section 6.8 of this Plan.
6.4 Sales of Stock Underlying Options. Notwithstanding anything in the Plan
to the contrary, except in the case of sales by an executor or
administrator of the estate of a deceased Insider Participant, shares of
Common Stock acquired through the exercise of an Option granted hereunder
to an Insider Participant may not be disposed of until a date at least
six months after the Grant Date of such Option as specified in the Grant
Agreement, unless such disposition would not otherwise result in
liability under Section 16(b) of the Exchange Act.
6.5 Option Period. Each Grant Agreement shall specify the period during which
an Option may be exercised (the "Option Period") and shall provide that
the Option shall expire at the end of such Option Period. However, in no
event shall an Option granted under this Plan be exercisable later than
ten (10) years from the Grant Date. Subject to the terms of Section 6.7
of this Plan, an Option granted pursuant hereto may be exercised only
while a Participant remains employed by the Company or its Subsidiaries.
6.6 Accelerated Vesting in the Event of Death, Permanent Disability,
Retirement, or Change of Control.
(a) An Option granted under this Plan that is not fully vested and
exercisable as of the date the Participant terminates his employment with
the Company because of his death or Permanent Disability shall become
fully vested and immediately exercisable on such date and may be
exercised as provided in Section 6.7.
(b) In the event of termination of employment due to Retirement, an
Option or part thereof, to the extent it would vest and become
exercisable within two years from the date of Retirement, without regard
to any provisions in the Grant Agreement relating to accelerated vesting
upon attainment of performance goals, shall vest and become immediately
exercisable upon the Participant's termination of employment and may be
exercised by the Participant as provided in Section 6.7. In addition, in
the event a Grant Agreement includes provisions with respect to
accelerated vesting upon attainment of performance goals, and as of the
date of such Participant's termination of employment
<PAGE>
due to Retirement the Company has completed a performance period and
attained the applicable performance goals relating to such performance
period as described in the Grant Agreement, but the Committee has not yet
certified the attainment of such performance goals, then the Participant
shall become vested upon such certification in such Options as have
become vested upon the attainment of such performance goals (as
determined under the terms of the Grant Agreement), and such Options may
be exercised by the Participant as provided in Section 6.7.
(c) In the event of a Change of Control of the Company, as defined in
Section 1.3, all unexercised outstanding Options under this Plan shall
vest and become immediately exercisable in full and may be exercised at
any time on and after the first day following the date of public
disclosure of a Change of Control, provided the Option is exercised
within the option period determined in accordance with Sections 6.5 and
6.7 of this Plan, except that in the case of a Change of Control by
reason of merger, consolidation, liquidation, dissolution or sale of all
or substantially all of the assets of the Company, such Options shall
become exercisable and may be exercised as of the effective date of such
merger, consolidation, liquidation, dissolution or sale of all or
substantially all assets and, if not exercised, shall expire on such
date. Notwithstanding the foregoing, in the event of a merger,
consolidation, liquidation, dissolution or sale of all or substantially
all of the assets of the Company, the expiration of an unexercised Option
as of the effective date of such event shall occur only if the
Participant has received notice by registered or certified mail, return
receipt requested, of such proposed event not less than twenty (20)
business days in advance of the effective date of the proposed event.
6.7 Exercise in the Event of Death, Permanent Disability, Retirement, or
Termination of Employment.
(a) Death or Permanent Disability. In the event of termination of
employment due to death or Permanent Disability, an Option or part
thereof may be exercised within five years following the date of death or
Permanent Disability, as the case may be, but in no event any later than
the expiration date of the Option determined under Section 6.5. In the
event of the Participant's death within five years following termination
of employment by reason of Retirement or Permanent Disability, the Option
may be exercised within the greater of (i) one year following the date of
death or (ii) the remainder of the five-year period following the
Participant's date of Retirement or Permanent Disability, but in no event
any later than the expiration date of the Option determined under Section
6.5.
(b) Retirement. In the event of termination of employment due to
Retirement, an Option or part thereof, to the extent it is exercisable or
becomes exercisable in accordance with Section 6.6(b), may be exercised
at any time prior to the earlier of (i) the expiration date of the Option
determined under Section 6.5, or (ii) five years following the date of
Retirement.
(c) Termination of Employment for Reasons Other than Death, Permanent
Disability or Retirement. In the event of the Participant's termination
from employment by reason other than death, Permanent Disability or
Retirement, an Option may be exercised, only
<PAGE>
to the extent it was exercisable on the date of such termination, at any
time prior to the earlier of (i) the expiration date of the Option
determined under Section 6.5, or (ii) thirty (30) days from the date of
such termination, unless the Participant's employment is terminated as a
result of fraud or other gross misconduct on the part of the Participant
(the existence of which shall be determined by the Committee in its sole
discretion), in which case such Option shall terminate on the date of
such termination of employment. Notwithstanding the forgoing, the
Committee, in the exercise of its discretion, may extend such 30-day
period, but in no event shall such period be extended beyond the
expiration date of the Option determined under Section 6.5.
6.8 Payment of Option Price. No shares of Common Stock shall be issued to any
Participant upon exercise of an Option until full payment of the purchase
price has been made to the Company and the Participant has remitted to
the Company the required federal and state withholding taxes, if any. A
Participant exercising an Option shall obtain no rights as a stockholder
of the Company until certificates for the shares of Common Stock
purchased under such Option are issued to the Participant. At the
election of the Participant, payment of the purchase price and/or
applicable withholding taxes, if any, may be made in whole, or in part,
in shares of Common Stock owned by the Participant for more than six
months, excluding Restricted Shares, pursuant to such terms and
conditions as may be established from time to time by the Committee
(including, without limitation, payment in accordance with a cashless
exercise program under which, if so instructed by the Participant, shares
of Common Stock may be issued directly to the Participant's broker or
dealer upon receipt of the purchase price and all applicable withholding
taxes in cash from the broker or dealer). If any such payment is made in
shares of Common Stock, such stock shall be valued at one-hundred percent
(100%) of Fair Market Value on the day a Participant exercises his or her
Option. If the Committee so determines, a Participant need not surrender
shares of Common Stock as payment and the Company may, upon the giving of
satisfactory evidence of ownership of said shares of Common Stock by
Participant, deliver the appropriate number of additional shares of
Common Stock reduced by the number of shares required to pay the purchase
price and applicable withholding taxes. Such form of evidence shall be
determined by the Committee.
6.9 Reload Options.
(a) Grant of Reload Options. The Committee shall have the authority to,
and in its sole discretion may, specify at or after the time of grant of
a Nonqualified Option (the "Original Option"), that a Participant shall
be automatically granted a Nonqualified Option (a "Reload Option") in the
event such Participant exercises all or part of an Original Option within
five (5) years of the date of grant of the Original Option, by means of,
in accordance with Section 6.8 of this Plan, (i) a cashless exercise
program under which shares of Common Stock are issued directly to the
Participant's broker or dealer upon receipt of the purchase price and any
applicable withholding taxes in cash from the broker or dealer or (ii)
surrendering to the Company shares of Common Stock owned by the
Participant for more than six months, excluding Restricted Shares, in
full or partial payment of the purchase price under the Original Option
and any applicable withholding taxes. The grant of Reload Options shall
be subject to the availability of
<PAGE>
shares of Common Stock under this Plan at the time of exercise of the
Original Option and to the limits provided for in Sections 4.1 and 4.2 of
this Plan.
(b) Terms of Reload Options. Each Reload Option shall:
(i) entitle the Participant to purchase a number of shares of Common
Stock equal to the number of shares of Common Stock directly or indirectly
surrendered (in the manner provided in Section 6.9(a) of this Plan) in
payment of the purchase price and any applicable withholding taxes, in
connection with the exercise of all or any portion of the Original Option;
(ii) have an Option Price equal to the Fair Market Value of a share of
Common Stock on the Grant Date of the Reload Option, which Grant Date shall
be the date the Original Option is exercised;
(iii) vest and become exercisable as determined by the Committee in the
exercise of its discretion; provided, however, that in the event of (a) the
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death or Permanent Disability of Participant, (b) the Participant's
Retirement or (c) a Change of Control of the Company, shares subject to
Reload Options shall vest and become exercisable by the Participant in
accordance with Sections 6.6(a), 6.6(b) and 6.6(c), respectively, hereof;
(iv) be exercisable until the expiration of the Option Period for the
Original Option, except to the extent Section 6.7 hereof, the Grant
Agreement for the Original Option, or the Committee provides for earlier
expiration; and
(v) have such other terms and conditions as the Committee may determine.
In no event shall a Reload Option be exercisable later than the expiration
date of the Original Option.
6.10 Additional Terms Applicable to Incentive Stock Options. All Options issued
under this Plan as Incentive Stock Options will be subject, in addition to
the terms detailed in Sections 6.1-6.8 above, to those contained in this
Section 6.10.
(a) Special Limitation on Incentive Stock Option Grants. Except as
provided in Section 6.10(b) of this Plan, the aggregate Fair Market Value,
determined as of the time an Incentive Stock Option is granted, of the
Common Stock (and stock of a Subsidiary) with respect to which Incentive
Stock Options granted under this Plan and stock options that satisfy the
requirements of Section 422 of the Code granted under any other stock
option plan or plans maintained by the Company (or any Subsidiary) are
exercisable for the first time by a Participant during any calendar year
shall not exceed $100,000 for such year. The foregoing limitation shall not
take into account stock options which, by their terms, provide that they
shall not be treated as incentive stock options.
(b) Special Limitation on Incentive Stock Option Treatment.
(i) In General. To the extent that, as a result of the rules described
in Section 6.6 or otherwise, the aggregate Fair Market Value of Common
Stock with respect to which Incentive Stock Options granted to a
Participant are exercisable for the first time during any calendar year
exceeds $100,000, such Options shall not be treated as Incentive Stock
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<PAGE>
Options or otherwise as stock options which satisfy the requirements of
Section 422 of the Code.
(ii) Ordering Rule. Clause (1) shall be applied by taking Incentive
Stock Options into account in the order that they were granted.
(iii) Allocation Rule. To the extent that the Fair Market Value of
Common Stock for which the Participant has been granted an Incentive Stock
Option causes the aggregate Fair Market Value of all Common Stock with
respect to which the Participant has been granted Incentive Stock Options
exercisable for the first time during any calendar year to exceed $100,000,
such Option shall be treated as not qualifying as an Incentive Stock
Option, and, unless the Company designates which Common Stock acquired by
such Option is to be treated as stock acquired pursuant to the exercise of
an Incentive Stock Option by issuing a separate certificate (or
certificates) for such stock and identifying such certificate (or
certificates) as Incentive Stock Option stock in its stock transfer
records, an equal proportion of each share of Common Stock acquired
pursuant to such Option shall be treated as if acquired pursuant to the
exercise of an option that does not satisfy the requirements of Section 422
of the Code.
(iv) Special Definitions. For purposes of this subsection (b), stock
options granted to a Participant under any other stock option plan or plans
maintained by the Company (or any Subsidiary) that satisfy the requirements
of Section 422 of the Code shall be included within the term Incentive
Stock Options, stock of a Subsidiary shall be included within the term
Common Stock, and options which, by their terms, provide that they shall
not be treated as incentive stock options shall not be taken into account.
(c) Limits on Ten Percent Shareholders. The price at which shares of
Common Stock may be purchased upon exercise of an Incentive Stock Option
granted to an individual who, at the time such Incentive Stock Option is
granted, owns, directly or indirectly, more than ten percent (10%) of the
total combined voting power of all classes of stock issued to shareholders
of the Company or any Subsidiary, shall be no less than one hundred and ten
percent (110%) of the Fair Market Value of a share of the Common Stock of
the Company at the time of grant, and such Incentive Stock Option shall by
its terms not be exercisable after the earlier of the date determined in
accordance with Sections 6.5 through 6.7 or the expiration of five (5)
years from the Grant Date of such Incentive Stock Option.
(d) Federal Income Tax Treatment. A share of Common Stock transferred to
a Participant pursuant to his exercise of an Incentive Stock Option shall
not be treated as a share transferred pursuant to the exercise of an
Incentive Stock Option for federal income tax purposes unless (i) no
disposition of such share is made by the Participant within two (2) years
from the Grant Date of the Incentive Stock Option nor within one (1) year
after the transfer of such share to the Participant, and (ii) at all times
during the period beginning on the Grant Date of the Incentive Stock Option
and ending on the day three (3) months before the date of exercise of the
Incentive Stock Option, the Participant was an Employee of either the
Company, a parent of the Company or any Subsidiary. Notwithstanding Section
6.10(d)(ii), an Incentive Stock Option that is exercised within
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<PAGE>
twenty-four (24) months after the Participant's employment ceases as a
result of death shall continue to be treated as an Incentive Stock Option
and an Incentive Stock Option that is exercised within twelve (12) months
after the Participant's employment ceases as a result of a Permanent
Disability shall continue to be treated as an Incentive Stock Option. In
addition, Section 6.10(d)(i) shall not apply to an Incentive Stock Option
exercised after the death of the Participant.
(e) Notice of Disposition; Withholding; Escrow. A Participant shall
immediately notify the Company in writing of any sale, transfer, assignment
or other disposition (or action constituting a disqualifying disposition
within the meaning of Section 421 of the Code) of any shares of Common
Stock acquired through exercise of an Incentive Stock Option, within two
(2) years after the Grant Date of such Incentive Stock Option or within one
(1) year after the acquisition of such shares, setting forth the date and
manner of disposition, the number of shares disposed of, and the price at
which such shares were disposed of. The Company or any Subsidiary shall be
entitled to withhold from any compensation or other payments then or
thereafter due to the Participant such amounts as may be necessary to
satisfy any withholding requirements of federal or state law or regulation
and, further, to collect from the Participant any additional amounts which
may be required for such purpose. The Committee may, in its discretion,
require shares of Common Stock acquired by a Participant upon exercise of
an Incentive Stock Option to be held in an escrow arrangement for the
purpose of enabling compliance with the provisions of this Section 6.10(e).
ARTICLE 7
TERMS AND CONDITIONS OF PERFORMANCE UNITS
Each Performance Unit granted under this Plan shall be subject to the
following terms and conditions:
7.1 Granting of Performance Units. Performance Units may be granted by the
Committee in conjunction with Options granted under this Plan. The
Committee, in its sole discretion, shall determine the number of
Performance Units, if any, granted to a Participant in conjunction with
Options granted to the Participant under the Plan. Performance Units shall
relate to Options that are granted to a Participant at the same time as the
Performance Units are granted and which vest at the same time as the
Performance Units or earlier in accordance with the terms of a Grant
Agreement as more particularly described in Section 7.2 ("Related
Options"). A Performance Unit shall entitle its holder to receive from the
Company, subject to realizing certain preestablished performance goals to
be set by the Committee and in accordance with the terms of a Grant
Agreement as more particularly described in Section 7.2, an amount of cash
equal to the sum of:
(a) the Option Price of one Related Option divided by the difference
between 1.00 and the maximum combined federal and Connecticut state income
tax rate on the date the Performance Unit becomes vested in accordance with
the terms of the Grant Agreement, and
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<PAGE>
(b) (i) the Fair Market Value of one share of Common Stock on the
earlier of the date on which the Performance Unit becomes vested in
accordance with the terms of the Grant Agreement or the date on which the
Optionee first exercised a Related Option in accordance with the terms of
the Grant Agreement minus the Option Price of such Related Option (the
"Spread"), divided by the difference between 1.00 and the maximum combined
federal and Connecticut state income tax rate on the earlier of the date
the Performance Unit becomes vested or the date on which the Participant
first exercised a Related Option, minus (ii) the Spread; provided, however,
that in the case of any Performance Unit granted in conjunction with a
Related Option that is an Incentive Stock Option, the amount determined
under this Section 7.1(b) shall be deemed to be zero.
7.2 Terms of Grant Agreement Relating to Performance Units. A proper officer
of the Company and each Participant granted a Performance Unit by the
Committee shall execute a Grant Agreement (which may be the same Grant
Agreement covering related Options), which shall set forth the Grant Date
of the Performance Unit, the total number of Performance Units granted, the
performance requirements that shall apply to earning such Performance Units
and other conditions under which the Performance Units vest and become
payable, restrictions on the disposition of the Performance Units, the
conditions under which Performance Units are forfeited, and such other
terms, conditions, restrictions and privileges as the Committee in each
instance shall deem appropriate, provided they are not inconsistent with
the terms, conditions and provisions of this Plan. Each Grant Agreement
shall provide that payment under a Performance Unit is subject to the
condition that the Participant has previously exercised or simultaneously
exercises a Related Option. Subject to Section 7.5 of this Plan, a
Performance Unit granted pursuant hereto shall be paid only while a
Participant remains employed by the Company or its Subsidiaries.
7.3 Preestablished Performance Goals. A Performance Unit shall not be payable
unless a preestablished performance goal relating to such payment has been
attained and the Committee has so certified. Such performance goals shall
be established for a consecutive twelve-month or longer period (each, a
"Performance Period") by the Committee in compliance with Section 162(m) of
the Code and regulations thereunder, as amended from time to time.
Performance goals shall be determined by the Committee, but must be based
on one or more of the following business criteria, each business criteria
to be subject to such adjustments for changes in accounting principles
and/or other items that are required by generally accepted accounting
principles ("GAAP") to be separately disclosed in the Company's financial
statements as the Committee may set forth in the preestablished performance
goals: return on equity, return on assets, net income and/or earnings per
share.
7.4 Limitation on Grant of Performance Units per Participant. The maximum
number of Performance Units that may be granted to any Participant shall
not exceed 300,000 in any two-year period, subject to adjustment as
provided in Section 4.4 hereunder.
7.5 Payment of Performance Units in the Event of Death, Permanent Disability,
or Retirement. If, as of the date a Participant terminates his employment
with the Company because of his death, Permanent Disability or Retirement,
the Company has completed a
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<PAGE>
Performance Period and attained the applicable performance goals relating
to such Performance Period, but the Committee has not yet so certified,
then any outstanding Performance Unit earned by virtue of attaining such
performance goals may be paid to the Participant or, in the event of his
death to his beneficiary, provided the Participant, or the Participant's
beneficiary in the event of the Participant's death, simultaneously
exercises or has previously exercised a Related Option.
7.6 Termination of Employment for Reasons Other than Death, Permanent
Disability or Retirement. In the event of the Participant's termination
from employment by reason other than death, Permanent Disability or
Retirement, a Participant shall forfeit any right to receive payment under
a Performance Unit that remains outstanding at the time of such termination
of employment.
7.7 Restrictions on Performance Units.
(a) No payment shall be made under any Performance Unit unless (i) the
Committee has certified that the performance goal with respect to such
Performance Unit has been met, and (ii) the holder of such Performance Unit
has previously exercised or simultaneously exercises a Related Option.
(b) Except as provided in Section 7.5 hereof, if a Participant's
employment with the Company is terminated for any reason, all Performance
Units granted to such Participant shall terminate and be of no further
force or effect.
7.8 Form of Payment for Performance Units. The Company shall make payment
under a vested Performance Unit solely in cash.
7.9 No Performance Unit grants after June 17, 1998. No Performance Units shall
be granted under this Plan after June 17, 1998.
ARTICLE 8
RESTRICTED SHARES
8.1 Restricted Shares. The Committee is authorized to grant Restricted Shares
to Participants on the following terms and conditions:
(a) Grant and Restrictions. Restricted Shares shall be subject to such
restrictions on transferability, risk of forfeiture and other restrictions,
if any, as the Committee may impose, which restrictions may lapse
separately or in combination at such times, under circumstances (including
based on achievement of performance goals and/or future service
requirements), in such installments or otherwise, as the Committee may
determine on the Grant Date or thereafter. Except to the extent restricted
under any Grant Agreement relating to the Restricted Shares, a Participant
granted Restricted Shares shall have all of the rights of a shareholder,
including the right to vote the Restricted Shares and the right to receive
dividends thereon (subject to any mandatory reinvestment or other
requirement imposed by the Committee). During the restricted period
applicable to
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<PAGE>
the Restricted Shares, the Restricted Shares may not be sold, transferred,
pledged, hypothecated, margined or otherwise encumbered by the Participant.
(b) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment during the applicable restriction period,
Restricted Shares that are at that time subject to restrictions shall be
forfeited and reacquired by the Company; provided that the Committee may,
in its discretion, in any individual case provide for waiver in whole or in
part of restrictions or forfeiture conditions relating to Restricted
Shares.
(c) Certificates for Restricted Shares. Restricted Shares granted under
this Plan may be evidenced in such manner as the Committee shall determine.
If certificates representing Restricted Shares are registered in the name
of the Participant, the Committee may require that such certificates bear
an appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Shares, that the Company retain physical
possession of the certificates, and that the Participant deliver a stock
power to the Company, endorsed in blank, relating to the Restricted Shares.
(d) Dividends and Splits. As a condition to a Grant of Restricted Shares,
the Committee may require that any cash dividends paid on a share of
Restricted Shares be automatically reinvested in additional shares of
Restricted Shares or applied to the purchase of additional Grants under
this Plan. Unless otherwise determined by the Committee, shares of Common
Stock distributed as a dividend, shall be subject to restrictions and a
risk of forfeiture to the same extent as the Restricted Shares with respect
to which such shares of Common Stock or other property has been
distributed.
(e) Effect of Change of Control. Unless the Committee shall determine
otherwise at the time of a Restricted Share Grant, any restriction periods
and restrictions imposed on Restricted Shares under this Plan shall lapse
upon a Change of Control and within ten (10) Business Days the certificates
representing the Restricted Shares, without any such restrictions, shall be
delivered to the applicable Participant.
ARTICLE 9
BONUS SHARES AND OTHER GRANTS
9.1 Bonus Shares and Grants in Lieu of Obligations. The Committee is
authorized to grant shares of Common Stock as a bonus, or to grant shares
of Common Stock or other Grants in lieu of obligations to pay cash or
deliver other property under this Plan or under other plans or compensatory
arrangements ("Bonus Shares"). Bonus Shares or Grants made hereunder shall
be subject to such other terms as shall be determined by the Committee.
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<PAGE>
ARTICLE 10
AMENDMENT AND TERMINATION
10.1 Amendment. The Committee, from time to time and without further approval
of the shareholders, may amend this Plan in such respects as the Committee
may deem advisable; provided, however, that no amendment shall become
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effective without prior approval of the shareholders which would (a)
materially increase the benefits accruing to Insider Participants; (b)
materially increase the number of securities which may be issued under
this Plan to Insider Participants; or (c) materially modify the
requirements as to eligibility for participation in this Plan to add a
class of Insider Participants; provided, further, that any increase in the
number of shares available under this Plan for grant as Incentive Stock
Options and any change in the designation of the group of Employees
eligible to receive Incentive Stock Options under this Plan shall be
subject to shareholder approval in accordance with Section 422 of the
Code. No amendment shall, without the Participant's (or beneficiary's)
consent, alter or impair any of the rights or obligations under any Grant
previously made to him under this Plan.
10.2 Termination. Unless terminated sooner, this Plan shall remain in effect
for ten (10) years ending on August 19, 2002, and subject to the
provisions of Section 2.2 hereof, thereafter for so long as Grants made
under this Plan prior to August 20, 2002 (or, on or after such date in the
case of Reload Options automatically granted pursuant to the Committee's
specification made prior to such date in accordance with Section 6.9)
remain outstanding. The Board, without further approval of the
shareholders, may terminate this Plan at any time, but no termination
shall, without the Participant's (or beneficiary's) consent, alter or
impair any of the rights under any Grant previously made to him under this
Plan.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 No Rights as Shareholder. No Participant shall have any rights as a
shareholder with respect to any shares of Common Stock subject to his
Option prior to the date of issuance to him of a certificate or
certificates for such shares. No Participant shall have any rights as a
shareholder as a result of a grant of Performance Units. Holders of
Restricted Shares, however, shall have the rights as a shareholder set
forth in Article 8 of this Plan with regard to such Restricted Shares.
11.2 No Rights to Continued Employment. Neither this Plan nor any Grant made
under this Plan shall confer upon any Participant any right with respect
to continued employment by the Company, nor shall they interfere in any
way with the right of the Company, or the right of the Participant, to
terminate the employment of the Participant at any time.
11.3 Compliance With Other Laws and Regulations. The Plan, the making of
Grants, the exercise of Options and the payment under Performance Units,
and the obligation of the Company to sell and deliver shares hereunder,
shall be subject to all applicable federal and state laws, rules, and
regulations and to such approvals as may be required by any
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<PAGE>
government or regulatory agency. The Company shall not be required to issue
or deliver any certificates for shares of Common Stock under this Plan
prior to (a) the obtaining of any approval or ruling from the Securities
and Exchange Commission, the Internal Revenue Service or any other
governmental agency which the Company, in its sole discretion, shall
determine to be necessary or advisable, (b) the listing of such shares on
any stock exchange on which the Common Stock may then be listed, and (c)
the completion of any registration or qualification of such shares under
any federal or state law, or any rule or regulation of any government body
which the Company shall, in its sole discretion, determine to be necessary
or advisable.
11.4 No Right to Options, Performance Units, Restricted Shares or Bonus Shares.
The making of any Grant pursuant to this Plan shall be entirely in the
discretion of the Committee. The adoption of this Plan shall not be deemed
to give any person any right to a Grant, except to the extent and upon
such terms and conditions as may be determined by the Committee.
11.5 Withholding. It shall be a condition of a Participant's right (a) to
exercise Options granted hereunder, (b) to receive any Restricted Shares
granted hereunder, (c) to receive payment under a Performance Unit and/or
(d) to receive Bonus Shares, that the Participant shall pay, consent to
the withholding by the Company of, or make other provision satisfactory to
the Company for the payment of, any federal, state or other taxes which
the Company is obligated to withhold or collect with respect to such
exercise or otherwise with respect to such Options or as relates to such
Restricted Shares, Bonus Shares or Performance Units. The Company is
authorized, at the Participant's election, to pay any such federal, state
or other taxes resulting from the exercise of an Option or the grant of
Restricted Shares or Bonus Shares, by withholding from the number of
shares of Common Stock otherwise issuable upon such exercise and/or from
the number of shares of Restricted Shares or Bonus Shares otherwise
issuable to the Participant such number of shares that, based on the Fair
Market Value of the shares on the date the Option is exercised or the date
that Restricted Shares or Bonus Shares are granted (or with respect to
Restricted Shares, at the Company's election, based on the Fair Market
Value of shares on the date the restrictions lapse), will satisfy such
federal, state or other tax.
11.6 Nontransferability of Grants; Restrictions on Transferability of Shares.
Options granted under this Plan shall not be transferable other than by
will or by the laws of descent and distribution. Notwithstanding the
foregoing, the Committee, in its sole and absolute discretion may grant
Options that can be transferred by gift to or for the benefit of family
members of the Participants or that can be transferred without
consideration to a trust established by the Participant for his
beneficiaries; provided, however, that Options granted in conjunction with
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Performance Units shall not be transferable under any circumstances other
than by will or by the laws of descent and distribution. Performance Units
granted under the Plan shall not be transferable under any circumstances.
The designation of a beneficiary shall not constitute a transfer. During
the lifetime of the Participant, an Option shall be exercisable only by
such Participant or, if the Participant is legally incompetent, by the
Participant's guardian or legal representative, or, if
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transferred pursuant to a transfer permitted above, by the transferee of
such Participant. During the lifetime of the Participant, a vested
Performance Unit shall be payable only to such Participant or, if the
Participant is legally incompetent, to the Participant's guardian or
legal representative.
The Committee may also impose such restrictions on the transfer of any
Restricted Shares, Bonus Shares and any shares of Common Stock acquired
pursuant to the exercise of an Option under this Plan as it may deem
advisable, including, without limitation, restrictions pursuant to the
federal securities laws or any blue sky or other state securities laws,
or under the requirements of any stock exchange upon which such shares of
Common Stock are then listed.
11.7 Investment Representation. Each Option shall provide that, upon demand by
the Committee, the Participant (or his beneficiary, guardian, legal
representative or transferee, as applicable) shall deliver to the
Committee at the time any grant is made under this Plan and/or at the
time an Option, or any portion of an Option, is exercised, such written
representations with respect to the shares to be acquired upon such grant
and/or exercise as the Committee may deem necessary to satisfy the
requirements of federal or state securities law. Delivery of such
representations as may be requested by the Committee pursuant to this
Section 11.7 shall be a condition precedent to the right of the
Participant (or such other person) to receive and/or purchase any shares
of Common Stock under this Plan.
11.8 Designation of Beneficiary. Each Participant may, from time to time,
designate any beneficiary or beneficiaries to whom any benefit under the
Plan is to be paid or transferred in case of his death prior to the
distribution of all benefits due the Participant under this Plan. Such
beneficiary shall be entitled to exercise any Option that is or becomes
vested upon the death of the Participant and shall be entitled to payment
under any Performance Unit that is or becomes vested and payable
notwithstanding the death of the Participant. Each designation shall
revoke all prior designations, shall be in the form prescribed by the
Committee, and will be effective only when filed by the Participant with
the Committee. In the absence of any such designation at the time of the
Participant's death, all outstanding Grants made to the Participant under
this Plan that have not previously been transferred as permitted in
Section 11.6 above shall be transferred, and all benefits due the
Participant under this Plan shall be distributed, to his estate. With
respect to all outstanding Grants to the Participant under this Plan that
have previously been transferred as permitted in Section 11.6 above, all
benefits due the transferee under this Plan shall be distributed to such
transferee.
11.9 Headings. Any headings preceding the text of the sections of this Plan are
inserted for convenience of reference only, and shall neither constitute a
part of this Plan nor affect its meaning, construction, or effect.
11.10 Governing Law. All rights under this Plan shall be governed by and
construed in accordance with the internal laws (and not the laws relating
to the conflict of laws) of the State of Connecticut.
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11.11 Pronouns. The use of the masculine gender shall be extended to include
the feminine gender wherever appropriate.
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EXHIBIT 5
July 20, 1999
Gerber Scientific, Inc.
83 Gerber Road West
South Windsor, CT 06074
Re: Registration Statement on Form S-8
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Gentlemen:
In connection with the registration under the Securities Act of 1933, as
amended, of 2,000,000 shares of Common Stock (the "Shares") of Gerber
Scientific, Inc. (the "Company"), we have examined the Registration Statement on
Form S-8 to be filed by the Company with the Securities and Exchange Commission
(the "Registration Statement"), corporate records, certificates of public
officials, and such other documents as we deemed appropriate or necessary for
the purpose of rendering this opinion.
Based on the foregoing, it is our opinion that the Shares of the Company covered
by the Registration Statement have been duly authorized, and, when issued, will
be validly issued, fully paid and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
STEPTOE & JOHNSON LLP
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EXHIBIT 23.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Gerber Scientific, Inc.
We consent to the incorporation by reference in this Registration Statement on
Form S-8 of Gerber Scientific, Inc. of our report dated May 21, 1998, relating
to the consolidated balance sheet of Gerber Scientific, Inc. and subsidiaries as
of April 30, 1998 and 1997 and the related consolidated statements of earnings,
changes in shareholders' equity and cash flows for each of the years in the
three-year period ended April 30, 1998, which report is incorporated by
reference in the annual report of Gerber Scientific Inc. on Form 10-K for the
fiscal year ended April 30, 1998.
KPMG LLP
July 20, 1999
