EXHIBIT 10.2
GERBER SCIENTIFIC, INC.
1992 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN,
AS AMENDED AND RESTATED AS OF SEPTEMBER 12, 1997,
AND AS FURTHER AMENDED ON SEPTEMBER 25, 1998
ARTICLE 1.
DEFINITIONS
1.1 Board shall mean the Board of Directors of the Company.
1.2 Code shall mean the Internal Revenue Code of 1986, as
amended.
1.3 Common Stock shall mean the Common Stock of the Company.
1.4 Company shall mean Gerber Scientific, Inc., its Subsidiaries
and their successors and assigns.
1.5 Deferment Agreement shall mean the Gerber Scientific, Inc.
Agreement for Deferment of Directors Fees, dated October 13,
1995, as amended from time to time.
1.6 Deferred Shares Account shall mean an account for a Non-
Employee Director to which all or portions of a Non-Employee
Director's fees have been or are to be credited in the form
of shares of Common Stock.
1.7 Director Fees shall mean all directors' fees, including
annual retainer fees, regular and special meeting fees and
committee fees, paid to the Non-Employee Directors by the Company
each year.
1.8 Effective Date shall have the meaning ascribed to such
term in Section 2.2 of the Plan.
1.9 Employee shall mean any employee of the Company or any of
its 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 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 Non-Employee Director shall mean any person who is a member
of the Board, but who is not currently an Employee, nor has
been an Employee during the preceding twelve-month period.
1.13 Option shall mean the right of an Optionee to purchase
Common Stock in accordance with the provisions of this Plan.
Such options are intended to be nonqualified stock options
that are outside the scope of the provisions of Section 422
of the Code.
1.14 Option Agreement shall mean the agreement evidencing the
grant of an Option entered into between the Optionee and the
Company pursuant to Section 6.2 of the Plan.
1.15 Optionee shall mean any Non-Employee Director who satisfies
the eligibility requirements of Section 3.1 of the Plan and
is entitled to receive an Option under the Plan in
accordance with Section 6.1.
1.16 Option Price shall mean the price per share of Common Stock
to be paid by an Optionee upon exercise of an Option, as
stated in the Option Agreement.
1.17 Permanent Disability shall mean "permanent and total
disability" as provided in Section 22(e)(3) of the Code.
1.18 Plan shall mean the Gerber Scientific, Inc. 1992 Non-
Employee Director Stock Option Plan and any amendments
thereto.
1.19 Subsidiary shall mean any present or future majority-owned
United States subsidiary of the Company which meets the
definition of a "subsidiary corporation" set forth in
Section 424(f) of the Code, at the time of granting of the
Option in question.
ARTICLE 2.
PURPOSE
2.1 Purpose. The Plan is intended to provide an incentive to
Non-Employee Directors to encourage ownership of the Common
Stock of the Company and to enable the Company to attract
and retain qualified Non-Employee Directors whose services
are considered important to the success of the Company.
2.2 Effective Date. The Effective Date of the Plan shall be the
date of adoption of the Plan by the Board; provided,
however, that the Effective Date of the provisions of
Article 7 shall be the date the Board in its sole
discretion, elects to implement the provisions of Article 7.
ARTICLE 3.
ELIGIBILITY
3.1 Persons Eligible. Any member of the Board who is not an
Employee of the Company and has not been an Employee during
the preceding twelve months shall be eligible to participate
in the Plan. The selection of eligible Non-Employee
Directors is not subject to the discretion of the Company or
the Board.
ARTICLE 4.
COMMON STOCK AVAILABLE UNDER THE PLAN
4.1 Maximum Number of Shares. The aggregate number of shares of
Common Stock with respect to which Options may be granted
under the Plan shall be 175,000 shares, subject to
adjustment as provided in Section 4.3 of the Plan. The
aggregate number of shares of Common Stock which may be
purchased under this Plan shall not exceed 250,000 shares of
Common Stock.
4.2 Source of Shares. The shares to be issued upon either
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.
4.3 Adjustment to Number of Shares. 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 may thereafter be granted
under this Plan, the number of shares which may thereafter be
purchased under this Plan, and the number of shares then subject
to Options theretofore granted under this Plan and the price per
share payable by the Optionee upon exercise of such Options,
shall be adjusted proportionately so as to reflect such change.
If any Option granted under the Plan shall terminate or expire,
without having been exercised in full, or be canceled as to any
shares, new Options may thereafter be granted covering such
shares.
ARTICLE 5.
ADMINISTRATION OF THE PLAN
5.1 Committee. The Plan shall be administered by the Board.
5.2 Powers. All matters concerning eligibility to participate
in the Plan, the timing and amount of Options granted, the
exercise price of such Options, the periods during which
they may be exercised, and the term of any Option shall be
determined in accordance with the provisions of the Plan,
and the Board will have no discretion as to such matters.
All other decisions relating to the administration of the
Plan shall be made by the Board. Any determination,
decision or action made or taken by the Board shall be final
and binding on all parties.
5.3 Action by Board. A majority of the members of the Board
shall constitute a quorum. All determinations of the Board
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
Board shall also have express authority to hold meetings by
means of conference telephone or similar communications
equipment by which all persons participating in the meeting
can hear each other.
5.4 Indemnification. Current and past members of the Board
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 the 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 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.
5.5 Reliance. Each member of the Board, 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 the Plan by any
appropriate person or persons. In no event shall any
current or past member of the Board, 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.
5.6 Agents. In administering the Plan, the Board 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 the Plan shall be subject to the
following terms and conditions:
6.1 Annual Grant of Options. Subject to the limitations on the
number of shares of Common Stock set forth in Section 4.1,
each person who is a Non-Employee Director on May 1 of each
year (beginning May 1, 1993) shall automatically, and
without further action by the Board, be granted an option to
purchase 1,000 (3,000 on and after May 1, 1998) shares of
Common Stock.
6.2 Option Agreement. A proper officer of the Company and each
Optionee shall execute an Option Agreement which shall set
forth the date of grant of the Option, the total number of
shares of Common Stock to which such Option Agreement
pertains, the Option Price, the time or times when the
Option is exercisable, and the duration of the exercise
period. The Option Agreement may also include such other
terms, conditions, restrictions, and privileges as the Board
in each instance shall deem appropriate, provided they are
not inconsistent with the provisions set forth in Section
5.2 regarding those matters not subject to the Board's
discretion.
6.3 Option Exercise Price. The price per share of Common Stock
subject to an Option shall be one hundred percent (100%) of
the Fair Market Value of a share of Common Stock on the date
such Option is granted.
6.4 Exercise of Option. Options granted hereunder shall be
exercisable immediately. An Option shall be exercised by
(a) written notice to the Board 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 6.7 of the Plan. The Board may also require the
Optionee to deliver a written representation as to his
investment intent, as set forth in Section 9.2 of the Plan.
6.5 Sales of Stock Underlying Options. Except in the case of
sales by an executor or administrator of the estate of a
deceased Non-Employee Director, shares of Common Stock
acquired through the exercise of an Option granted hereunder
may not be disposed of until a date at least six months
after the date of the grant of such Option as specified in
the Option Agreement, unless such disposition would not
otherwise result in liability under Section 16(b) of the
Exchange Act.
6.6 Option Period. Each Option Agreement shall specify that the
Option may be exercised not later than 10 years from the
date of grant of such Option. Subject to Section 6.8 of the
Plan, an Option may be exercised by an Optionee only while
he remains a Non-Employee Director.
6.7 Payment of Option Price. Upon the exercise of an Option,
the Option Price shall be paid in full in cash, provided,
however, that an Optionee may, at the Optionee's discretion,
in lieu of cash payment, deliver certificates and
appropriate stock powers for shares of the Company's Common
Stock that have been fully paid for and owned by the
Optionee for at least thirty (30) days by the Optionee,
valued at Fair Market Value on the date of exercise, as full
or partial payment for the exercise price of any Option.
6.8 Termination of Directorship; Exercise Period Following
Termination. A Non-Employee Director's directorship shall
be deemed to have terminated at the close of business on the
day on which he ceases to be a member of the Board for any
reason whatsoever, including resignation, removal, failure
to be re-elected, or death. In the event that the Non-
Employee Director's directorship is terminated, an Option
granted to him under the Plan and all of his rights
thereunder shall wholly and completely terminate:(a) at the
time the Non-Employee Director's directorship is terminated
as a result of his removal from the Board for cause;(b) at
the expiration of a period of five years following the
termination of the Non-Employee Director's directorship if
such termination occurs for any reason other than that
specified in Subsection (a) above, but in no event later
than the expiration date relating to such Option. In the
event of the Non-Employee Director's death or permanent
disability, an Option granted under the Plan may be
exercised by the person designated by the Non-Employee
Director or, if no such designation was made, by the proper
legal representative of the Non-Employee Director. In the
event of the death of a former Non-Employee Director within
five years following his termination, an Option granted
under the Plan 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 date of termination,
but in no event later than the expiration date relating to
such Option.
6.9 No Rights as Shareholder. No Optionee 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.
6.10 Nontransferability of Options. Options granted under the
Plan shall not be transferable other than by will or by the
laws of descent and distribution; provided, however, that
the designation of a beneficiary shall not constitute a
transfer. During the lifetime of the Optionee, an Option
shall be exercisable only by such Optionee or, if the
Optionee is legally incompetent, by the Optionee's guardian
or legal representative.
ARTICLE 7.
DIRECTOR FEES
This Article 7, and all the rights and obligations provided
herein, shall be effective only if and when the Board elects to
implement all of any portion of the provisions of this Article.
7.1 Election to Receive Director Fees in Shares of Common Stock
in Lieu of Cash. Subject to the terms and conditions of
this Plan, a Non-Employee Director may elect at any time to
receive shares of Common Stock in lieu of all or a portion
of the Director Fees that would otherwise be payable in
cash. The election to receive stock in lieu of cash must be
made prior to the calendar quarter in which the Non-Employee
Director earns Director Fees. The number of shares (rounded
to the nearest one-hundredth of a share) to be paid in lieu
of cash shall be the quotient that results from the division
of the dollar value of the Director Fees, or portion
thereof, by the Fair Market Value of shares of Common Stock
as of the date the fee is due and payable to the director.
Except with respect to any shares the director has elected
to defer pursuant to Section 7.2, certificates representing
shares payable hereunder shall be delivered to the Non-
Employee Director as soon as practicable after the Director
Fees are due.
7.2 Deferrals of Director Fees. Subject to the terms and
conditions of this Plan and the Deferment Agreement, a Non-
Employee Director may elect to defer all or a portion of the
Director Fees to be payable, in accordance with such
election, in the form of shares of Common Stock. Such
elections shall be made prior to January 1 of the year in
which the Director Xxxx would be payable absent the election
to defer in accordance with the terms of the Deferment
Agreement.
7.3 Credit of Deferrals. A Non-Employee Director who has
elected to defer shares under Section 7.2 shall receive a
credit to his Deferred Shares Account for the number of
shares payable in accordance with Sections 7.1 and 7.2. The
timing of each credit under this section shall be as of the
date the fee to which the credit relates would have become
due and payable to the director had it not been for his
election or elections hereunder.
7.4 Dividends. Each time a cash dividend is paid on the shares,
a Non-Employee Director who has shares credited to his
Deferred Shares Account shall receive a credit for such
dividends on the dividend payment date to such Non-Employee
Director's Deferred Shares Account. The amount of the
dividend credit shall be the number of shares (rounded to
the nearest one-hundredth of a share) determined by
multiplying the dividend amount per share by the number of
shares credited to such director's Deferred Shares Account
as of the record date for the dividend and dividing the
product by the Fair Market Value per share on the dividend
payment date.
7.5 Payouts. Deferred Shares Accounts shall be paid out in full
shares, provided, however, that, on the occasion of the
payment of the final installment of shares to be made out of
a Deferred Shares Account, fractional shares totaling less
than a full share shall be rounded upwards to the next full
share. Certificates representing shares credited to a
Deferred Shares Account shall be delivered to the Non-
Employee Director as soon as practicable following the
termination of the deferral in accordance with the terms of
the Deferment Agreement.
7.6 No Stock Rights. The deferral of shares into a Deferred
Shares Account shall confer no rights upon the Non-Employee
Director in whose name such account exists, as a shareholder
of the Company or otherwise, with respect to the shares held
in such Deferred Shares Account, but shall confer only the
right to receive such shares credited as and when provided
under the terms of the Deferment Agreement.
ARTICLE 8.
AMENDMENT AND TERMINATION
8.1 Amendment. The Board, without further approval of the
shareholders, may amend the Plan in such respects as it may
deem advisable; provided, however, that no amendment shall
become effective without prior approval of the shareholders
which would (a) materially increase the benefits accruing to
the Non-Employee Directors; (b) materially increase the
number of securities which may be issued under the Plan to
the Non-Employee Directors; or (c) materially modify the
requirements as to eligibility for participation in the Plan
or (d) adversely affect the rights of participants to any
shares theretofore credited to a Deferred Shares Account.
No amendment shall, without the Optionee's consent, alter or
impair any of the rights or obligations under any Option
previously granted to him under the Plan.
8.2 Termination. Unless terminated sooner, the Plan shall
remain in effect for ten (10) years, ending on the tenth
anniversary of the Effective Date, nor shall any
compensation payable to a Non-Employee director be payable
in shares under this Plan after such anniversary. The
Board, without further approval of the shareholders, may
terminate the Plan at any time; provided, however, that
termination: (i) shall not alter or impair any rights of
Optionees under Options previously granted under the Plan
without the Optionee's (or his beneficiary's) consent; (ii)
shall not affect deferrals or elections to defer theretofore
made, unless otherwise expressly provided in this Plan or in
deferrals previously made; and (iii) shall not affect the
authority of the Board to interpret, construe, administer,
make determinations and amend the Plan. Dividends shall
continue to be credited to a Non-Employee Director's
Deferred Shares Account in accordance with Section 7.4
hereof until all shares in such account have been paid to
such Non-Employee Director, notwithstanding the prior
termination of this Plan.
ARTICLE 9.
MISCELLANEOUS PROVISIONS
9.1 Share Restrictions. The Board, in its sole discretion, may
require each Non-Employee Director to hold all shares of
Common Stock acquired pursuant to the exercise of an option
under the Plan for six months after receipt of the shares.
The Board may also impose such other restrictions on the
transfer of shares as it deems 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.
9.2 Investment Representation. Each Option Agreement shall
provide that, upon demand by the Board, the Optionee (or his
beneficiary) shall deliver to the Company at the time an
Option, or any portion of an Option, is exercised, a written
representation that the shares to be acquired upon such
exercise are to be acquired for investment and not for
resale or with a view to the distribution thereof and/or
that the Optionee will comply with such restrictions as may
be necessary to satisfy the requirements of the Federal or
state securities law. Likewise, in conjunction with each
election under Section 7.1 or 7.2 to receive or defer shares
in lieu of cash, Non-Employee Directors shall, upon Board
request, deliver to the Company a written representation
that the shares to be acquired pursuant to such election are
to be acquired for investment and not for resale or with a
view to the distribution thereof and/or that the Non-
Employee Director will comply with such restrictions as may
be necessary to satisfy the requirements of the Federal or
state securities law. Delivery of any representation
required by this section shall be a condition precedent to
the right of the Optionee, purchaser or any beneficiary to
purchase any shares of Common Stock under this Plan.
9.3 Compliance With Other Laws and Regulations. The Plan, the
grant and exercise of Options thereunder, 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 government or regulatory agency. The Company shall not
be required to issue or deliver any certificates for shares
of Common Stock under the 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.
9.4 Designation of Beneficiary. Each Non-Employee Director may,
from time to time, designate any beneficiary or
beneficiaries to whom any benefit under the Plan is to be
paid in case of his death prior to his receipt of all of
such benefits. Each designation shall revoke all prior
designations, shall be in the form prescribed by the Board,
and will be effective only when filed by the Non-Employee
Director with the Board. In the absence of any such
designation, any benefits remaining unpaid at the time of
the Non-Employee Director's death shall be paid to his
estate.
9.5 No Rights to Continued Service on the Board. Neither the
action of the Company in establishing the Plan, nor the
granting of Options pursuant to the Plan shall be construed
as (i) limiting any right which either the shareholders of
the Company or the Board may have to remove from the Board
any person to whom an Option has been granted under this
Plan, (ii) creating any obligation on the part of the Board
to nominate any Non-Employee Director for re-election, or
(iii) evidencing any agreement, express or implied, that a
Non-Employee Director has a right to continue as such for
any specified period of time or at any particular rate of
compensation.
9.6 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.
9.7 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 conflicts of laws) of the State of
Connecticut.
9.8 Pronouns. The use of the masculine gender shall be extended
to include the feminine gender wherever appropriate.
