Letter Agreement

Change in Control

Severance Policy

 

 

 

MEMORANDUM

 

 

To: Marc T. Giles

From: Edward E. Hood, Jr., Chairman

Management Development and Compensation Committee

Re: Appointments

Gerber Scientific, Inc. (the "Company")

Date: December 7, 2001

 

On November 29, 2001, the Board of Directors of Gerber Scientific, Inc. (the "Board") appointed you President and Chief Executive Officer of the Company and a Director of the Company. Effective November 30, 2001, the Management Development and Compensation Committee of the Board (the "Committee") has set your base salary at $345,000 per year, payable in accordance with the regular payroll practices of the Company for executives, less applicable deductions. The Committee has also set your bonus target under the Company's 2000-2004 Executive Annual Incentive Bonus Plan (the "Executive Bonus Plan") at 75%. Further, the Committee, effective December 7, 2001, has awarded you options to purchase 50,000 shares of the Common Stock of the Company, pursuant to the Company's 1992 Employee Stock Plan.

For the fiscal year ending April 30, 2002, your bonus will be calculated as follows: for the period May 1, 2001 through November 30, 2001, your bonus will be based on the Gerber Technology, Inc. results and the target will be 50% of the pro rata portion of your base salary as of April 30, 2001; for the period December 1, 2001 through April 30, 2002, your bonus will be based on the results at Gerber Scientific, Inc., and the target will be 75% of the pro rata portion of your base salary as of April 30, 2002.

You will retain the title of President and CEO of Gerber Technology, Inc. until such time as a successor is appointed.

If this memorandum sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this memorandum, which will then constitute our agreement on this subject.

 

 

Edward E. Hood, Jr., Chairman

Management Development and

Compensation Committee

of the Board of Directors

Agreed this 13th day of December, 2001.

 

____________________________

Marc T. Giles

 

 

 

 

 

 

 

                                                     EXHIBIT 10.3

 

July 14, 1999

 

Subsidiary President

Gerber Scientific Domestic Subsidiary

 

Dear Subsidiary President:

 

       Gerber  Scientific,  Inc.  (the  "Company")  considers  it

essential to the best interests of its stockholders to foster the

continuous  employment  of  key management  personnel.   In  this

connection, should the Company face a possible Change in  Control

(as  defined  in  Section  2  of this  Agreement),  such  as  the

acquisition  of  a  substantial share of  the  equity  or  voting

securities of the Company, the Board of Directors of the  Company

(the  "Board") has determined that it is imperative that  it  and

the  Company be able to rely upon your continued services without

concern   that   you  might  be  distracted   by   the   personal

uncertainties  and  risks that the possibility  of  a  Change  in

Control might entail.

 

     Accordingly, the Board has determined that appropriate steps

should   be  taken  to  reinforce  and  encourage  the  continued

attention  and dedication of members of the Company's  management

to  their  assigned duties without distraction  in  the  face  of

potentially disturbing circumstances that could arise  out  of  a

possibility for a Change in Control of the Company.

 

      In  order  to  induce you to remain in the  employ  of  the

Company  and  its  subsidiaries  and  in  consideration  of  your

agreement  set  forth in Section 2(B) hereof, the Company  agrees

that  you shall receive the severance benefits set forth in  this

letter agreement ("Agreement") in the event your employment  with

the  Company and its subsidiaries is terminated subsequent  to  a

Change in Control under the circumstances described below.

 

1.    Term of Agreement

 

      This  Agreement shall commence on the date hereof and shall

continue in effect through April 30, 2002, provided, however, the

term  of  this Agreement shall automatically be extended for  one

additional  year  commencing on May 1, 2002 and  on  each  May  1

thereafter,  unless,  not later than April 30  of  the  preceding

year,  the Company shall have given notice that it does not  wish

to  extend this Agreement; provided further that, notwithstanding

any  such  notice by the Company not to extend, if  a  Change  in

Control  shall have occurred during the original or any  extended

term  of this Agreement, this Agreement shall continue in  effect

for a period of twenty-four (24) months beyond the expiration  of

the term in effect immediately before such Change in Control.

 

2.   Change in Control

 

(A)  No benefits shall be payable hereunder unless there shall

have been a Change in Control of the Company, as set forth below.

For  purposes  of  this Agreement a "Change in  Control"  of  the

Company  shall  mean the occurrence of any one  or  more  of  the

following events:

 

(i)  the Company shall (1) merge or consolidate with or into

another  corporation  or entity or enter into  a  share  exchange

between  the  Company or stockholders of the Company and  another

individual, corporation or other entity and as a result  of  such

merger,  consolidation or share exchange less than fifty  percent

(50%)  of  the outstanding voting securities of the surviving  or

resulting  corporation  or entity shall  then  be  owned  in  the

aggregate by the former stockholders of the Company; or (2) sell,

lease,  exchange or otherwise dispose of more than  2/3s  of  the

Company's  property and assets in one transaction or a series  of

related transactions to one or more individuals, corporations  or

other entities that are not subsidiaries of the Company, assuming

that  if consummation of such transaction is subject, at the time

of   such  approval  by  stockholders,  to  the  consent  of  any

government or governmental agency, such consent by the government

or   governmental  agency  is  obtained  (either  explicitly   or

implicitly by consummation of the transaction);

 

(ii)  the stockholders of the Company adopt a plan of complete

liquidation of the Company;

 

(iii)  any "person" (as such term is used in Sections 13(d) or

14(d)(2) of the Securities Exchange Act of 1934, as amended (the

"Exchange Act")) (other than the Employee, the Company, any of

the Company's subsidiaries, any employee benefit plan of the

Company and/or one or more of its subsidiaries or any person or

entity organized, appointed or established pursuant to the terms

of any such employee benefit plan) becomes the beneficial owner

(within the meaning of Rule 13d-3 under the Exchange Act) of

voting securities of the Company representing thirty percent

(30%) or more of the total number of votes eligible to be cast at

any election of directors of the Company; provided, however, that

no Change in Control shall be deemed to have occurred under this

subparagraph (iii) if such "person" becomes a holder of the

Company's securities in one or more transactions initiated or

pursued by the Company unless after such transaction(s) less than

fifty percent (50%) of the outstanding voting securities of the

Company shall be owned in the aggregate by the former

stockholders of the Company; or

 

(iv)  as a result of, or in connection with, any tender offer or

exchange offer, share exchange, merger, consolidation or other

business combination, sale, lease, exchange or other disposition

of more than 2/3s of the Company's assets, a contested election,

or any combination of the foregoing transactions, the persons who

are directors of the Company on the date hereof (the "Incumbent

Board") shall cease to constitute a majority of the Board of

Directors of the Company or any successor to the Company;

provided that any person becoming a director subsequent to the

date hereof whose election or nomination for election by the

Company's stockholders was approved by a vote of at least three-

quarters (3/4) of the directors comprising the Incumbent Board

(either by a specific vote or by approval of a proxy statement of

the Company in which such person is named as a nominee for

director without any objection to such nomination) shall be, for

purposes herein, considered as though such person were a member

of the Incumbent Board.

 

(B)  In exchange for the benefits under this Agreement, you agree

that, subject to the terms and conditions herein, in the event of

a  potential Change in Control of the Company occurring after the

date  hereof, you will not voluntarily terminate your  employment

with  the Company and its subsidiaries until the earlier  of  (i)

the  date  which  is  six  months after the  occurrence  of  such

potential Change in Control of the Company or (ii) the occurrence

of  a  Change  in  Control  of the Company.   If  more  than  one

potential  Change  in  Control occurs during  the  term  of  this

Agreement,  the  provisions of the preceding  sentence  shall  be

applicable to each potential Change in Control occurring prior to

an   actual  Change  in  Control.    For  the  purposes  of  this

Agreement,  a "potential Change in Control" of the Company  shall

be  deemed  to have occurred if: (i) the Company enters  into  an

agreement,  the  consummation  of  which  would  result  in   the

occurrence of a Change in Control; (ii) any person (including the

Company)  publicly announces an intention to take or to  consider

taking actions which if consummated would constitute a Change  in

Control;  or  (iii) the Board adopts a resolution to  the  effect

that,  for  purposes  of this Agreement, a  potential  Change  in

Control of the Company has occurred.

 

 

3.   Termination Following Change in Control

 

If  any  of  the  events  described  in  Section  2  hereof

constituting a Change in Control shall have occurred,  you  shall

be entitled to the benefits provided in Section 4 hereof upon the

subsequent  termination of your employment with the  Company  and

its subsidiaries during the term of this Agreement and within two

(2)  years  of the Change in Control, unless such termination  is

(x) a result of your death, Disability, or Retirement; (y) by you

for  other than Good Reason (as defined in Section 3(A)); or  (z)

by  the  Company or any of its subsidiaries for Cause (as defined

in Section 3(C)).  The benefits provided in Section 4 shall be in

lieu   of  any  termination,  separation,  severance  or  similar

benefits  under your employment agreement, if any, or  under  the

Company's termination, separation, severance or similar plans  or

policies,  if any (other than benefit plans of the Company  which

incidentally  provide for benefits in the event of  a  change  in

control,  as  such  term  is defined  in  such  plans).  If  your

employment is terminated as a result of your death, Disability or

Retirement,  by you for other than Good Reason or by the  Company

or  any  of  its subsidiaries for Cause, then you  shall  not  be

entitled  to  any termination, separation, severance  or  similar

benefits  under  this  Agreement, and you shall  be  entitled  to

benefits  under your employment agreement, if any,  and/or  under

the Company's termination, separation, severance or similar plans

or  policies,  if any, only in accordance with the terms  of  any

such employment agreement, plans and policies.

 

(A)   Good  Reason. You shall be entitled to terminate  your

employment  for Good Reason.  For the purposes of this Agreement,

"Good  Reason"  shall mean the occurrence, without  your  express

written consent, of any of the following circumstances:

 

(i)  a significant change in the nature or scope of your

authorities, duties or responsibilities from those applicable  to

you  immediately prior to the date on which a Change  in  Control

occurs;

 

(ii)  a reduction in your base annual salary from that provided to

you immediately prior to the date on which a Change in Control

occurs;

 

(iii) a diminution in your eligibility to participate in

compensation plans and employee benefits and perquisites which

provide opportunities to receive overall compensation and

benefits and perquisites from the greater of:

 

- -  the opportunities provided by the Company (including its

subsidiaries) for executives with comparable duties; or

 

- -  the opportunities under any such plans and perquisites under

which you were participating immediately prior to the date on

which a Change in Control occurs;

 

(iv)  a change in the location of your principal place of

employment  by the Company (including its subsidiaries)  by  more

than   fifty  (50)  miles  from  the  location  where  you   were

principally  employed immediately prior to the date  on  which  a

Change in Control occurs;

 

(v)  a significant increase in the frequency or duration of your

business travel; or

 

(vi) a reasonable determination by the Board of Directors of the

Company that, as a result of a Change in Control and a change in

circumstances thereafter significantly affecting your position,

you are unable to exercise the authorities, powers, functions or

duties attached to your position immediately prior to the date on

which a Change in Control occurs.

 

(B)  Disability; Retirement.

 

(i)  For purposes of this Agreement, "Disability" shall mean

permanent  and  total disability as such term  is  defined  under

Section 22(e)(3) of the Internal Revenue Code of 1986, as amended

(the   "Code").   Any  question  as  to  the  existence  of  your

Disability upon which you and the Company cannot agree  shall  be

determined by a qualified independent physician selected  by  you

(or,  if  you  are unable to make such selection, such  selection

shall  be  made by any adult member of your immediate  family  or

your  legal  representative) and approved by  the  Company,  said

approval  not to be unreasonably withheld.  The determination  of

such physician shall be made in writing to the Company and to you

and  shall  be  final  and conclusive for all  purposes  of  this

Agreement.

 

(ii) For purposes of this Agreement, "Retirement" shall mean your

voluntary termination of employment with the Company at or after

the age of 65 in accordance with the Company's retirement

policies (excluding early retirement) generally applicable to its

salaried employees or in accordance with any retirement

arrangement established with your consent with respect to you.

 

(C)  Cause.  For purposes of this Agreement, "Cause" shall mean

(a)  the  willful  and continued failure by you to  substantially

perform your duties with the Company (other than any such failure

from  your  incapacity due to physical or mental illness  or  any

such actual or anticipated failure after the issuance of a Notice

of  Termination in the manner provided for in Section 3(D) by you

for Good Reason) after written demand for substantial performance

is  delivered  to  you  by the Board, which  demand  specifically

identifies the manner in which the Board believes that  you  have

not  substantially  performed your duties,  or  (b)  the  willful

engaging  by you in conduct which is demonstrably and  materially

injurious to the Company, monetarily or otherwise.  For  purposes

of  this  Section 3(C), no act, or failure to act, on  your  part

shall be deemed "willful" unless done, or omitted to be done,  by

you  not  in good faith and without reasonable belief  that  your

action  or  omission  was in the best interest  of  the  Company.

Notwithstanding the foregoing, you shall not be  deemed  to  have

been  terminated for Cause unless and until there shall have been

delivered  to  you  a copy of a resolution duly  adopted  by  the

affirmative  vote of not less than three-quarters  (3/4)  of  the

entire  membership of the Board at a meeting of the Board  called

and held for such purpose (after reasonable notice to you and  an

opportunity  for  you, together with your counsel,  to  be  heard

before the Board), finding that, in the good faith opinion of the

Board  you were guilty of conduct set forth above in this Section

3(C) and specifying the particulars thereof.

 

(D)  Any termination of your employment by the Company or any of

its subsidiaries or by you shall be made by written notice of

termination to the other party.  Such "Notice of Termination"

shall mean a written document specifying the provision in this

Agreement being relied upon and setting forth a summary of the

facts and circumstances which provide the basis for termination

of your employment.  The "Date of Termination" shall be the date

upon which the Notice of Termination is given.

 

4.   Compensation upon Termination Following a Change in Control

 

(A)    If your employment shall be terminated for any reason

otherwise  than  (x)  as a result of your  death,  Disability  or

Retirement; (y) by you for other than Good Reason; or (z) by  the

Company  or  any  of its subsidiaries for Cause, within  two  (2)

years  following a Change in Control (as defined in  Section  2),

then you shall be entitled to the benefits provided below:

 

(i)   The Company or one of its subsidiaries shall pay you, not

later  than  the  fifth  business  day  following  the  Date   of

Termination  ("Payment Date"), the sum of your full  base  salary

through  the  Date of Termination, as earned by you but  not  yet

paid  to  you, at the salary level in effect on (x) the  Date  of

Termination or (y) the day immediately preceding the date of  the

Change in Control, whichever is higher ("full base salary"),  and

your  pro  rata share of your annual incentive bonus  payment  in

effect  on  the Date of Termination.  The Company or one  of  its

subsidiaries  shall also pay you all other amounts to  which  you

are   entitled  under  any  compensation  plan  of  the   Company

applicable  to  you,  at  the time such payments  are  due.   For

purposes  of  this  Section 4 and the other  provisions  of  this

Agreement, "your annual incentive bonus payment in effect on  the

Date  of Termination" shall mean the target amount of your annual

incentive  bonus  payment (under the Company's  Annual  Incentive

Bonus  Plan  or  any successor plan) for the year  in  which  the

Notice  of  Termination is given.  Your pro rata  share  of  your

annual  incentive  bonus  payment  in  effect  on  the  Date   of

Termination  shall  be that percentage of your  annual  incentive

bonus  payment in effect on the Date of Termination that is equal

to  the number of days in the fiscal year completed prior to  the

Date of Termination divided by 365.

 

(ii) On the Payment Date the Company shall also pay you a

severance payment equal to two and one half (2 1/2) times the sum

of (x) your full base salary and (y) your annual incentive bonus

payment in effect on the Date of Termination.

 

(iii)  The Company shall cause (x) all unvested stock options

or other stock grants held by you on the Date of Termination

immediately to vest and be fully exercisable as of the Date of

Termination, (y) any restrictions on all restricted stock held by

you on the Date of Termination immediately to lapse and all

shares of such stock to fully vest as of the Date of Termination,

and (z) any accrued benefit or deferred arrangement of the

Company that you otherwise would become entitled to if you

continued employment with the Company immediately to vest as of

the Date of Termination.

 

(iv) The Company shall maintain in full force for two and one

half  (2  1/2)  year(s) following the Date  of  Termination  (the

"Benefit  Period")  all  life  insurance,  health  (medical   and

dental),   accidental  death  and  dismemberment,   pension   and

disability  plans  and  programs in which  you  are  entitled  to

participate immediately prior to the Date of Termination,  or  if

your  continued participation is not possible under  the  general

terms  and  provisions of such plans and programs,   the  Company

shall  provide you with benefits equivalent to those provided  by

such  plans and programs, provided that the Company will  not  be

required  to maintain these plans and programs, or the equivalent

thereof, beyond your reaching the age of 65 or upon your securing

new  full time employment which makes such benefits available  to

you.   Additional  years of service equal to the  length  of  the

Benefit   Period  will  be  credited  to  you  for  purposes   of

calculating  your benefits under the Company's Pension  Plans  at

the  rate  of  your full base salary and annual  incentive  bonus

payment  in  effect  on the Date of Termination  (as  defined  in

Section 4(A)(i) hereof).

 

(v)  The Company shall make available to you, at the Company's

expense, outplacement counseling services.  You may select the

organization that will provide you with such services, provided

that the Company shall not be required to pay more than $50,000

for any such services.

 

(B)  There shall be no limit on the amount of payments due you

under  Section 4(A) unless (i) your net income from the  payments

made  under Section 4(A) would be maximized, in consideration  of

federal,  state and local income and excise taxes, from  limiting

the  sum  of  payments (the "Total Lump Sum Payment") in  Section

4(A)  to  2.99  times your prior five years' average  income,  or

"base  amount" as defined in Section 280G of the Internal Revenue

Code,  as  amended  (the "Code"), and (ii)  the  Total  Lump  Sum

Payment  due to you is more than 2.99 times your base amount  but

not  more  than 3.5 times your base amount.  In such  case,  your

Total  Lump Sum Payment will be reduced to 2.99 times  your  base

amount.

 

(C)  In the event that any payment or benefit received or to be

received by you pursuant to the terms of this Agreement (the

"Contract Payments") or in connection with your termination of

employment or contingent upon a Change in Control of the Company

pursuant to any plan or arrangement or other agreement with the

Company (or any affiliate) ("Other Payments" and, together with

the Contract Payments, the "Payments") would be subject to the

excise tax (the "Excise Tax") imposed by Section 4999 of the

Code, as determined as provided below, and has not been subject

to the modified cap described in Section 4(B), the Company shall

pay to you, at the time specified in Section 4(C)(iii) below, an

additional amount (the "Gross-Up Payment") such that the net

amount retained by you, after deduction of the Excise Tax on

Contract Payments and Other Payments and any federal, state and

local income tax and Excise Tax upon the payment provided for by

this Section 4(C), and any interest, penalties or additions to

tax payable by you with respect thereto, shall be equal to the

total present value of the Contract Payments and Other Payments

at the time such Payments are to be made.

 

(i)  For purposes of determining whether any of the Payments will

be subject to the Excise Tax and the amounts of such Excise Tax,

 

- -   the total amount of the Payments shall be treated as

"parachute payments" within the meaning of Section 280G(b)(2)  of

the  Code, and all "excess parachute payments" within the meaning

of  Section 280G(b)(1) of the Code shall be treated as subject to

the  Excise  Tax, except to the extent that, in  the  opinion  of

independent  tax  counsel retained by the  Company's  independent

auditors  and  reasonably acceptable to you  ("Tax  Counsel"),  a

Payment  (in  whole or in part) does not constitute a  "parachute

payment" within the meaning of Section 280G(b)(2) of the Code, or

such  "excess parachute payments" (in whole or in part)  are  not

subject to the Excise Tax;

 

- -   the amount of the Payments that shall be treated as subject

to the Excise Tax shall be equal to the lesser of (A) the total

amount of the Payments or (B) the amount of "excess parachute

payments" within the meaning of Section 280G(b)(1) of the Code

(after applying the previous clause); and

 

- -    the value of any noncash benefits or any deferred payment or

benefit shall be determined by Tax Counsel in accordance with the

principles of Sections 280G(d)(3) and (4) of the Code.

 

(ii)  For purposes of determining the amount of the Gross-Up

Payment,  you shall be deemed to pay federal income  tax  at  the

highest  marginal rates of federal income taxation applicable  to

individuals in the calendar year in which the Gross-Up Payment is

to  be  made  and  state and local income taxes  at  the  highest

marginal  rates of taxation applicable to individuals as  are  in

effect  in  the  state  and locality of your  residence  for  tax

purposes in the calendar year in which the Gross-Up Payment is to

be  made,  net  of the maximum reduction in federal income  taxes

that  can  be  obtained from deduction of such  state  and  local

taxes,   taking  into  account  any  limitations  applicable   to

individuals subject to federal income tax at the highest marginal

rates.

 

(iii)  The Gross-Up Payments provided for in this Section 4(C)

hereof shall be made upon the earlier of (x) the payment to you

of any Contract Payment or Other Payment or (y) the imposition

upon you or payment by you of any Excise Tax.

 

(iv) If it is established pursuant to a final determination of a

court or an Internal Revenue Service proceeding or the opinion of

Tax Counsel that the Excise Tax is less than the amount taken

into account under this Section 4(C), you shall repay to the

Company within five (5) business days of your receipt of notice

of such final determination or opinion the portion of the Gross-

Up Payment attributable to such reduction (plus the portion of

the Gross-Up Payment attributable to the Excise Tax and federal,

state and local income tax imposed on the Gross-Up Payment being

repaid by you if such repayment results in a reduction in Excise

Tax or a federal, state and local income tax deduction) plus any

interest received by you on the amount of such repayment.  If it

is established pursuant to a final determination of a court or an

Internal Revenue Service proceeding or the opinion of Tax Counsel

that the Excise Tax exceeds the amount taken into account

hereunder (including by reason of any payment the existence or

amount of which cannot be determined at the time of the Gross-Up

Payment), the Company shall make an additional Gross-Up Payment

in respect of such excess within five (5) business days of the

Company's receipt of notice of such final determination or

opinion.

 

(D)  The  Company shall also pay to you all legal fees  and

expenses,  if any, reasonably incurred by you in connection  with

seeking  to  obtain or enforce any right or benefit  provided  by

this Agreement.

 

(E)  You shall not be required to mitigate the amount of any

payment provided for in this Section 4 by seeking other

employment or otherwise, nor shall the amount of any payment or

benefit provided for in this Section 4 be reduced by any

compensation earned by you as the result of employment by another

employer or by retirement benefits received after the Date of

Termination or otherwise.

 

5.   Successors; Binding Agreement

 

(A)  The Company will require any successor (whether direct or

indirect, by purchase, merger, consolidation or otherwise) to all

or substantially all of the business and/or assets of the Company

to  expressly assume and agree to perform this Agreement  in  the

same  manner  and  to the same extent that the Company  would  be

required to perform it if no succession had taken place.  Failure

of  the  Company  to obtain such assumption and agreement  within

thirty  days  following the effectiveness of any such  succession

shall  be  a  breach of this Agreement and shall entitle  you  to

compensation from the Company in the same amount and on the  same

terms  as  you would be entitled hereunder if you had  terminated

your  employment for Good Reason following a Change  in  Control,

except that for purposes of implementing the foregoing, the  date

on  which  any such succession becomes effective shall be  deemed

the  Date  of Termination.  As used in this Agreement,  "Company"

shall  mean the Company as hereinbefore defined and any successor

to  its  business  and/or assets as aforesaid which  assumes  and

agrees  to  perform  this  Agreement  by  operation  of  law,  or

otherwise.

 

(B)  This Agreement shall inure to the benefit of and be

enforceable by your personal or legal representatives, executors,

administrators, successors, heirs, distributees, devisees and

legatees.  If you should die while any amount would still be

payable to you hereunder if you had continued to live, all such

amounts, unless otherwise provided herein, shall be paid in

accordance with the terms of this Agreement to your devisee,

legatee or other designee or, if there is no such designee, to

your estate.

 

6.   Confidential Information

 

      You shall hold in fiduciary capacity for the benefit of the

Company   or   its   subsidiaries  all  secret  or   confidential

information,  knowledge  or data relating  to  the  Company,  the

subsidiaries  and their respective businesses, which  shall  have

been  obtained  during  your employment by  the  Company  or  its

subsidiary  and which shall  not be public knowledge (other  than

by  acts  by  you  or your representatives in violation  of  this

Agreement). After termination of your employment with the Company

or its subsidiaries, you shall not, without prior written consent

of  the  Company or its subsidiaries, communicate or divulge  any

such  information,  knowledge or data to anyone  other  than  the

Company  or  its subsidiaries or those designated by  them.   The

preceding  two  sentences shall not apply  with  respect  to  any

information you are required to disclose pursuant to a valid  and

effective  subpoena  or  order issued by  a  court  of  competent

jurisdiction  or  with  respect  to  any  information   you   are

reasonably  required to disclose in enforcing the terms  of  this

Agreement.   In  no  event shall an asserted  violation  of  this

Section  6  constitute a basis for deferring or  withholding  any

amounts  otherwise payable to you under this Agreement, nor  will

any  asserted  violation of this Section 6 relieve  you  of  your

responsibilities under this Agreement.

 

7.   Agreement Not to Compete

 

      You  agree that for a period of one year following the Date

of  Termination,  you  will not engage, directly  or  indirectly,

whether  as  a  principal,  agent,  distributor,  representative,

consultant,  employee, partner, stockholder, limited  partner  or

other  investor (other than an investment of not  more  than  two

percent  (2%)  of  the  stock or equity of  any  corporation  the

capital stock of which is publicly traded) or otherwise,  in  the

same  or  a substantially similar business as that conducted  and

carried  on by the Company or any of its subsidiaries  and  being

directly  competitive with the Company or any of its subsidiaries

on  the  Date of Termination or at any time during such  one-year

period.

 

8.   Notice

 

      For  the  purpose of this Agreement, notices and all  other

communications provided for in this Agreement shall be in writing

and  shall  be  deemed to have been duly given when delivered  or

mailed   by   United  States  registered  mail,  return   receipt

requested, postage prepaid, addressed to the address set forth on

the  first page of this Agreement with respect to the Company and

on  the  signature  page with respect to you, provided  that  all

notices to the Company shall be directed to the attention of  the

President  of  the  Company, or to such other address  as  either

party  may  have furnished to the other in writing in  accordance

herewith,  except  that  notice of change  of  address  shall  be

effective only upon receipt.

 

9.   Miscellaneous

 

      No  provision of this Agreement may be modified, waived  or

discharged  unless  such  modification, waiver  or  discharge  is

agreed to in writing and signed by you and such officer as may be

specifically designated by the Board.  No waiver by either  party

hereto at any time of any breach by the other party hereto of, or

compliance with, any conditions or provision of this Agreement to

be  performed  by such other party shall be deemed  a  waiver  of

similar or dissimilar provisions or conditions at the same or  at

any  prior or subsequent time.  No agreements or representations,

oral  or  otherwise,  express or implied,  with  respect  to  the

subject  matter hereof have been made by either party  which  are

not   expressly  set  forth  in  this  Agreement.   Further,  the

validity,  interpretation, construction and performance  of  this

Agreement  shall  be  governed  by  the  laws  of  the  State  of

Connecticut.  All references to sections of the Code or  Exchange

Act shall be deemed also to refer to any successor provisions  to

such sections.  Any payments provided for hereunder shall be paid

net  of any applicable withholding required under federal,  state

or local law.

 

10.  Validity

 

      The invalidity or unenforceability of any provision of this

Agreement shall not affect the validity or enforceability of  any

other  provision of this Agreement, which shall  remain  in  full

force and effect.

 

11.  Counterparts

 

     This Agreement may be executed in several counterparts, each

of  which  shall  be deemed to be an original but  all  of  which

together will constitute one and the same instrument.

 

      If  this  letter sets forth our agreement  on  the  subject

matter hereof, kindly sign and return the original to me and make

a  copy for your records.  When executed and returned this letter

shall constitute the entire Agreement on this subject between you

and the Company.

 

                                        Sincerely,

                                        GERBER SCIENTIFIC, INC.

 

 

                                        By:    _________________

                                        Name:  Becket Q. McNab

                                        Title: Vice President

                                               Human Resources

 

 

AGREED TO THIS ____ DAY OF __________, 1999

 

 

 

By:  ________________________________

     Subsidiary President

 

 

    ________________________________

     Mailing Address

 

    ________________________________

 

 

EX-10.12 5 exhibit10_12.htm EXHIBIT 10.12

Exhibit 10.12

SEVERANCE POLICY FOR SENIOR OFFICERS OF
GERBER SCIENTIFIC, INC.,
AS AMENDED AND RESTATED EFFECTIVE SEPTEMBER 21, 2006
(the "Severance Policy")


            The purpose of this Severance Policy is to grant severance benefits to senior officers of Gerber Scientific, Inc. who are terminated under the circumstances specified below.

            This Severance Policy shall be effective September 21, 2006, and shall continue thereafter unless or until amended, suspended, or terminated by the Management Development and Compensation Committee. All prior existing severance policies, plans, programs, or practices for senior officers of Gerber Scientific, Inc. and its domestic subsidiaries, whether formal or informal, are hereby revoked and terminated, except for individualized written agreements between the Company and an executive/employee.

A.        Definitions.

            The capitalized terms used in this document shall have the following meanings:

            "Board" shall mean the Board of Directors of Gerber Scientific, Inc.

            "Cause" shall mean (a) the willful and continued failure by the Covered Officer substantially to perform the Covered Officer's duties with the Company (other than such failure resulting from the Covered Officer's incapacity due to physical or mental illness) or (b) the willful engaging by the Covered Officer in conduct that is demonstrably and materially injurious to the Company, monetarily or otherwise, as determined in the Company's sole discretion.

            "Chief Executive Officer" shall mean the Chief Executive Officer of Gerber Scientific, Inc.

            "Committee" shall mean the Management Development and Compensation Committee of the Board of Directors of Gerber Scientific, Inc.

            "Company" shall mean Gerber Scientific, Inc. and/or its subsidiaries, including but not limited to, Gerber Technology, Inc., Gerber Scientific Products, Inc., Gerber Coburn Optical, Inc., and Spandex PLC.

            "Corporate Vice Presidents" shall mean vice presidents of Gerber Scientific, Inc. other than Senior Vice Presidents or Executive Vice Presidents.

            "Covered Officer" or "Covered Officers" shall refer to all corporate officers of Gerber Scientific, Inc. that hold positions at the level of vice president or above and such other person or persons as may be specifically designated in writing by the Committee as eligible to receive benefits in accordance with this Policy.

            "Disability" shall mean permanent and total disability as defined in Section 22(e)(3) of the Internal Revenue Code of 1986, as amended.

             "Executive Vice Presidents" shall mean Executive Vice Presidents of Gerber Scientific, Inc.

            "Retirement" shall mean a Covered Officer's voluntary termination of employment with the Company in accordance with the Company's retirement policy or retirement plans.

            "Senior Vice Presidents" shall mean Senior Vice Presidents of Gerber Scientific, Inc.

            "Severance Period" shall mean the length of the period, commencing on the Termination Date, during which severance benefits shall be payable under this Severance Policy to a Covered Officer as provided by the following table:

Covered Officer(s)

Severance
Period in Months


Chief Executive
Officer


16


Executive Vice Presidents
Senior Vice Presidents


12


Corporate Vice Presidents


8


Any other person designated by the
Committee

Such number of
months as designated
by the Committee

 

 

            "Termination Date" shall mean the date on which the Covered Officer's employment is terminated.

B.        Eligibility for severance benefits.

            (1)     Only Covered Officers are eligible for benefits under this Severance Policy. Subject to the terms and conditions of this Severance Policy, if a Covered Officer's employment shall be terminated for any reason other than:

                      (a)        as a result of the Covered Officer's death or Disability;

                      (b)        by the Covered Officer for any reason including Retirement; or,

                      (c)        by the Company for Cause,

then the Covered Officer shall be entitled to the benefits provided under this Severance Policy.

            (2)     Notwithstanding the above, no benefits shall be payable under this Severance Policy if:

                     (a)        as a result of a Covered Officer's termination, such Covered Officer is entitled to receive compensation under any Change-in-Control Agreement with the Company; or,

                     (b)        such Covered Officer is offered another position with the Company that is comparable in status and compensation to the position held by such Covered Officer on the Termination Date.

C.        Payments and benefits payable.

Subject to the terms and conditions of this Severance Policy, Gerber Scientific, Inc. will provide the following payments and benefits to any Covered Officer who is eligible to receive payments and benefits under this Severance Policy:

            (1)     The Covered Officer shall receive, within five (5) business days after the Termination Date, all salary earned by, but not yet paid to, such Covered Officer through the Termination Date and any other deferred compensation earned prior to the Termination Date. In addition, the Covered Officer shall be entitled to any annual incentive bonus payment that, on the Termination Date, has been earned by, but not yet paid to, the Covered Officer. Such amount shall be paid to the Covered Officer at the time that such amount would have been paid to the Covered Officer had he or she continued to be employed by Gerber Scientific, Inc.

            (2)     The Covered Officer shall, during the Severance Period, continue to receive:

           (i)        100% of his or her then current base salary, such amount to be payable in weekly, biweekly, or monthly installments in accordance with the Company's then normal employee payroll practices; and,

           (ii)       The pro rata portion (through the Termination Date) of the annual incentive bonus (under the Company's Annual Incentive Bonus Plan or any successor Plan) that such Covered Officer would have earned if such Covered Officer had continued his or her employment with Gerber Scientific, Inc. through the end of the fiscal year in which said Termination Date occurred. [Example: If a Covered Officer's Termination Date is at the end of the sixth month of Gerber Scientific, Inc.'s fiscal year, the Covered Officer would receive 50% of the amount of the annual incentive bonus (if any) such Covered Officer would have actually earned, had such Covered Officer's employment continued through the last day of such Fiscal Year.] Such amount shall be paid only if the Committee certifies in writing the achievement of the applicable performance goals for the Company for the fiscal year in which the Covered Officer's Termination Date occurs. Such amount shall be paid to the Covered Officer at the time that such amount would have been paid to the Covered Officer had he or she continued to be employed by Gerber Scientific, Inc.

            (3)     The Covered Officer shall, during the Severance Period, continue to receive from Gerber Scientific, Inc. at Gerber Scientific, Inc.'s cost, but subject to any applicable employee contributions, the health (medical and dental) insurance coverage under the health insurance plan provided to the Covered Officer immediately prior to the Termination Date, provided that (i) the Covered Officer's continued participation is possible under the general terms and provisions of such plan, (ii) Gerber Scientific, Inc. shall have the right to amend or terminate the Plan at any time with respect to all Gerber Scientific, Inc. Employees and the Covered Officer, and (iii) Gerber Scientific, Inc. will not provide this coverage to the Covered Officer after the Covered Officer's 65th birthday. Notwithstanding the foregoing, the Covered Officer's employment is terminated for all purposes on the Termination Date and the Covered Officer's rights under COBRA or any similar law shall commence on the Termination Date. Gerber Scientific, Inc. shall, for a period of thirty (30) days following the commencement of the Severance Period, continue to provide the Covered Officer with the same life insurance benefits provided to the Covered Officer immediately prior to the Termination Date, provided that such benefits shall cease at the end of such thirty day period. No short term or long term disability insurance shall be provided to the Covered Officer by Gerber Scientific, Inc. during the Severance Period and no additional years of service will be credited to the Covered Officer during the Severance Period for purposes of calculating benefits under any of the Company's pension plans. Options granted by the Company under any of Gerber Scientific, Inc.'s stock option plans will not vest after the Termination Date. Options may only be exercised after the Termination Date to the extent that the applicable stock option plan and grant agreement permit such exercise.

            (4)     If at any time during the Severance Period, a Covered Officer obtains full-time employment with a company which is not engaged in a business that is competitive to the business conducted or carried on by the Company, the Covered Officer will receive, in lieu of all severance payments and benefits which would otherwise have been payable under this Severance Policy had such employment not been obtained, a lump sum payment in an amount equal to one-half (50%) of the remaining amount of current base salary (excluding bonus) which, absent such employment, would have been payable to such Covered Officer pursuant to Section C (2) of this Severance Policy. Such lump sum payment shall be payable within thirty (30) business days after the Covered Officer notifies the President of Gerber Scientific, Inc. of the commencement of such full-time employment.

            (5)     In the event that a Covered Officer is terminated by Gerber Scientific, Inc. under circumstances that would qualify the Covered Officer to receive severance benefits under this Severance Policy but such Covered Officer dies before or while receiving the benefits, Gerber Scientific, Inc. will pay the severance benefits to the Covered Officer's estate or beneficiary, provided that the estate or beneficiary satisfies the conditions that would have been applicable to the Covered Officer.

            (6)     Any payments of benefits payable hereunder shall be reduced by the amount of any other severance or similar benefits which shall otherwise be payable by Gerber Scientific, Inc. or any subsidiary of Gerber Scientific, Inc. under any contract, agreement, plan, program, policy, or practice including but not limited to the Severance Pay Plan for Employees of Gerber Scientific, Inc. effective May 1, 2000.

D.        Forfeiture of Covered Officer's right to severance benefits.

Notwithstanding anything to the contrary in this Severance Policy, Gerber Scientific, Inc. shall have no obligation to, and shall make no severance payment to, any Covered Officer who, directly or indirectly:

           (1)     is competing or preparing to compete with the business of the Company;

           (2)     is disclosing or has disclosed to any unauthorized person or entity any secret or confidential information, knowledge, or data relating to the Company which is not public knowledge (or is, or becomes, public knowledge by reason or in consequence of such Covered Officer's unauthorized actions), including confidential information of any customers or clients of the Company;

           (3)     is appropriating or has appropriated any such information, secret, or data for his or her own use or benefit;

           (4)     is soliciting or has solicited, hired, or induced any person who is, or has been within the previous six (6) months, employed by the Company, to leave the Company;

           (5)     is soliciting or otherwise attempting to divert the business or patronage of any customer or client or any prospective customer or client of the Company;

           (6)     is engaging in or is about to engage in any other action that is found by the Committee, in the Committee's sole discretion, to be an action that is, in any way, detrimental to the Company and its stockholders; or,

           (7)     is engaged in full-time employment (except to the extent benefits are payable under Section C(4) above).

E.        Other terms and conditions of this Severance Policy.

           As a condition of receiving severance benefits under this Severance Policy, a Covered Officer shall be required to execute a written agreement with Gerber Scientific, Inc. (i) releasing the Company from and against any and all claims which the Covered Officer may have against the Company relating in any way to the Covered Officer's employment or the termination thereof including, without limitation, any and all claims of discrimination or unlawful discharge, and (ii) covenanting not to sue the Company in any state or federal court in the United States or elsewhere, or in any administrative agency which has authority to award damages, in respect of any such claim.

           The Committee has full and complete discretion to interpret this Severance Policy, and the Committee's findings shall be binding on any employee or such employee's estate or beneficiary claiming benefits hereunder.

           This Severance Policy does not contain any promise or representation concerning the duration of any Covered Officer's employment with the Company.

           This Severance Policy and these procedures do not constitute contracts between the Covered Officer and Gerber Scientific, Inc., and this Severance Policy and the policies and procedures contained therein may be terminated or altered in whole or in part by the Committee at any time in the Committee's sole discretion. However, the Committee will not change this Severance Policy without ninety (90) days' notice if the planned change would create a material diminution in the severance benefit to Covered Officers.

           Unless otherwise stated in this document, this Severance Policy shall not prevent or limit a Covered Officer's continuing or future participation in any plan, program, policy, or practice provided by the Company and for which the Covered Officer may qualify. Further, nothing in this Severance Policy will limit or otherwise affect the rights a Covered Officer may have under any contract or agreement with the Company.



September 20, 2006