Document:

ESCROW AGREEMENT

EXHIBIT 4.2

  Escrow Agreement

  

ESCROW AGREEMENT

This ESCROW AGREEMENT, dated for reference as of March 31, 2003 (the
"Agreement"), by and among Coronation Acquisition Corp., a Nevada corporation
("Coronation"), Supreme Property, Inc., a Illinois corporation ("Supreme"), and
Interstate Transfer Company, as Escrow Agent (the "Escrow Agent").

W I T N E S S E T H:

WHEREAS, Coronation and Supreme have entered into an Agreement and Plan of
Exchange and Reorganization, dated as of March 31, 2003 (the "Merger
Agreement"), whereby Supreme will merge with and into Coronation on the terms
and subject to the conditions set forth in the Merger Agreement (the "Merger");

WHEREAS, the Merger Agreement provides that each holder of Supreme Shares
will, at the Effective Time, be entitled to receive, in exchange for its Supreme
Shares, a number of Coronation Shares as determined in accordance with the
Merger Agreement (the "Merger Consideration");

WHEREAS, the parties desire (i) that 75% of the Coronation Shares issued in
the Merger, (the "Escrow Shares") be subject to the Escrow restrictions
described herein (the "Escrow"), and, (ii) at the Effective Time, the Escrow
Shares be deposited with the Escrow Agent subject to release in accordance with
the terms hereof; and

WHEREAS, the Escrow Agent is willing to act as Escrow Agent, upon the express
terms and subject to the express conditions of this Agreement.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable
consideration, the parties hereby agree as follows:

1. DEFINED TERMS. Capitalized terms used in this Agreement and not
otherwise defined herein shall have the meanings ascribed to them in the Merger
Agreement.

2. APPOINTMENT OF ESCROW AGENT. Supreme and Coronation hereby appoint
Interstate Transfer Company, of Salt Lake City, Utah, the Escrow Agent to act as
agent on their behalf pursuant to this Agreement, and the Escrow Agent hereby
consents to its appointment in such capacity on the terms and conditions of this
Agreement.

3. DEPOSIT OF ESCROW SHARES. On the Closing Date, Coronation will
deliver to the Escrow Agent (i) a list containing the name, address and number
of Escrow Shares held by each Supreme Stockholder (the "Supreme Stockholder
List"), (ii) certificates representing the Escrow Shares to be issued to each
Supreme Stockholder ("Escrow Certificates"), and (iii) any and all other
documents required from time to time by the Escrow Agent to effect transfers of
the Escrow Shares in accordance herewith.

4. Release of Escrow Shares.

4.1 Authorized Disbursements. The Escrow Agent is hereby
authorized to disburse the Escrow Shares only as follows:

(a) to the Supreme Stockholders in accordance with Section 4.2 of this
Agreement;

(b) to the Supreme Stockholders upon receipt of a written instruction signed
by Thomas Elliott and Mr. Harry Miller; or

(c) to the Supreme Stockholders in accordance with a final and binding
judgment rendered by a court of competent jurisdiction and delivered to the
Escrow Agent together with a certificate signed by Coronation (upon which
certificate the Escrow Agent shall conclusively rely and act) certifying that
said judgment represents a final adjudication by a court of competent
jurisdiction.

4.2 Expiration of Escrow; Release of Escrow Shares. Unless
released earlier pursuant to Section 4.1, the Escrow Agent shall release and
deliver 1/3rd of the Escrow Shares to the Supreme Stockholders, upon
Messrs. Elliott and Miller's written instructions, (in the denominations set
forth in the Supreme Stockholder List) that Coronation has obtained $3,000,000
in new equity or debt funding. Thereafter the Escrow agent will release and
deliver 1/3rd of the Escrow Shares to the Supreme Stockholders in
three month increments following the first release of Escrow Shares without any
further written notification from Messrs. Elliott or Miller.

5. Certain Rights of the Stockholders.

5.1 Distributions and Dividends. As of the Effective Time, each
Supreme Stockholder that complies with the exchange procedures set forth in
Section 1.10 of the Merger Agreement shall be entitled to receive directly from
Coronation all cash dividends and other distributions paid or made with respect
to the Escrow Shares.

6. Escrow Agent.

6.1 Duties of Escrow Agent. The Escrow Agent shall treat the
Escrow Shares with such degree of care as it treats its own similar property. It
is agreed that the duties of the Escrow Agent are only such as are herein
specifically provided, and the Escrow Agent shall have no other duties, implied
or otherwise. The Escrow Agent's duties are as a depository only, and the Escrow
Agent shall incur no responsibility or liability whatsoever, except for its
willful misconduct or gross negligence. Except where the terms of this Agreement
expressly refer thereto, the Escrow Escrow Agent shall not be bound in any way
by any of the terms of the Merger Agreement or any other agreement to which one
or more of Coronation and Supreme are parties, whether or not the Escrow Agent
has knowledge thereof, and the Escrow Agent shall not in any way be required to
determine whether or not the Merger Agreement or any other agreement has been
complied with by Coronation and Supreme or any other party thereto. In the event
that the Escrow Agent

shall be uncertain as to any of its duties or rights hereunder or shall
receive instructions, claims or demands which, in its sole judgment, are in
conflict with any of the provisions of this Agreement, it shall be entitled to
refrain from taking any action other than to keep safely all Escrow Shares held
in escrow until it shall be directed otherwise pursuant to a written notice from
and executed by Coronation, and the Escrow Agent shall not be responsible or
liable for any damages while waiting for such written notice. This Agreement
shall not create any fiduciary duty of the Escrow Agent to Coronation or any
other person or entity whatsoever nor disqualify the Escrow Escrow Agent from
representing any of such parties as transfer agent and/or registrar.

6.2 Reliance by Escrow Agent on Written Notices. The Escrow
Agent may conclusively rely and shall be fully authorized and protected in
relying upon any written notice, direction, instruction, demand, certificate,
advice, opinion or document which it, in good faith, believes to be genuine. Set
forth in Schedule 6.2 hereto is a list of the names of the persons authorized to
act for Coronation and Harry Miller under this Agreement. The Escrow Agent may
conclusively rely on and shall be authorized and fully protected in acting upon
the written, facsimile or electronically delivered instructions of Coronation
and Harry Miller.

6.3 Risk to Escrow Agent. In no event shall the Escrow Agent be
liable (i) for any consequential, punitive or special damages or (ii) for an
amount in excess of the value of the Escrow Shares, valued as of the date of
deposit. The Escrow Agent shall not incur any liability for not performing any
act or fulfilling any duty, obligation or responsibility hereunder by reason of
any occurrence beyond the control of the Escrow Agent (including but not limited
to any act or provision of any present or future law or regulation or
governmental authority, any act of God or war, or the unavailability of the
Federal Reserve Bank wire or telex or other wire or communication facility).

6.4 No Investigation by Escrow Agent. The Escrow Agent shall
not be required or bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, entitlement, order, approval or other paper or
document.

6.5 Escrow Agent's Execution of Power. The Escrow Agent may
execute any of the trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, attorneys, custodians, or nominees
appointed with due care, and shall not be responsible or liable for the acts or
omissions of any agent, attorney, custodian or nominee so appointed except for
acts that constitute willful misconduct or gross negligence.

6.6 Legal Proceedings.

(a) The Escrow Agent shall not be required to institute legal proceedings of
any kind.

(b) If at any time the Escrow Agent is served with any judicial or
administrative order, judgment, decree, writ or other form of judicial or
administrative process which in any way affects all or any portion of the Escrow
Shares (including but not limited to orders of attachment or garnishment or
other forms of levies or injunctions or stays relating to the transfer of all or
any portion of the Escrow Shares), the Escrow Agent is authorized to comply
therewith in any manner as it or legal counsel of its own choosing deems
appropriate; and if the Escrow Agent complies in good faith with any such
judicial or administrative order, judgment, decree, writ or other form of
judicial or administrative process, the Escrow Agent shall not be liable to any
of the parties hereto or to any other person or entity even though such order,
judgment, decree, writ or process may be subsequently modified or vacated or
otherwise determined to have been without legal force or effect. The Escrow
Agent shall provide Coronation with notice, in accordance with Section 7.3, of
any such orders, judgments, decrees or writs (along with copies of any related
documentation), and the Escrow Agent shall reasonably consult with Coronation
and Supreme and its counsel with respect to such legal actions.

6.7 Escrow Agent Reporting. Notwithstanding anything to the contrary
herein, except as required by law, in no event shall the Escrow Agent be under a
duty to file any reports or withhold or deduct any amounts in respect of taxes
due for payments made pursuant to this Agreement. 

6.8 Fees of the Escrow Agent. Coronation covenants and agrees to pay
to the Escrow Agent from time to time, and the Escrow Agent shall be entitled
to, the fees and expenses agreed to in writing between Coronation and the Escrow
Agent (which at the date hereof are set forth in Schedule 6.8 hereto) and will
further pay or reimburse the Escrow Agent upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Escrow Agent in
accordance with any of the provisions hereof or any other documents executed in
connection herewith (including the reasonable compensation and the reasonable
expenses and disbursements of its counsel and of all persons not regularly in
its employ), which related expenses, disbursements and advances shall be paid by
the requesting party, as set forth therein. The obligations of Coronation under
this Section 6.8 to compensate the Escrow Agent and to pay or reimburse the
Escrow Agent for reasonable expenses, disbursements and advances shall survive
the satisfaction and discharge of this Agreement or the earlier resignation or
removal of the Escrow Agent.

6.9 Indemnification of the Escrow Agent. Coronation agrees to
indemnify and hold the Escrow Agent and its directors, employees, officers,
agents, successors and assigns harmless from and against any and all losses,
claims, damages, liabilities and expenses, including, without limitation,
reasonable costs of investigation and reasonable counsel fees and expenses which
may be imposed on the Escrow Agent or incurred by it in connection with its
acceptance of this appointment as the Escrow Agent hereunder or the performance
of its duties hereunder, except as a result of the Escrow Agent's gross
negligence or willful misconduct. Such indemnity includes, without limitation,
all losses, damages, liabilities and expenses (including reasonable counsel fees
and expenses) incurred in connection with any litigation (whether at the trial
or appellate levels) arising from this Agreement or involving the subject matter
hereof. The indemnification provisions contained in this Section 6.9 are in
addition to any other rights any of the indemnified parties may have by law or
otherwise and shall survive the termination of this Agreement or the resignation
or removal of the Escrow Agent.

6.10 Successor to Escrow Agent. Any corporation or other entity
whatsoever into which the Escrow Agent may be merged or converted or with which
it may be consolidated, and any corporation or other entity whatsoever resulting
from any merger, conversion or consolidation to which the Escrow Agent shall be
a party or any corporation or other entity whatsoever succeeding to the business
of the Escrow Agent shall be the successor of the Escrow Agent hereunder without
the execution or filing of any paper with any party hereto except where an
instrument of transfer or assignment is required by law to effect such
succession.

6.11 Resignation of Escrow Agent. If the Escrow Agent at any time, in
its sole discretion, deems it necessary or advisable to resign as the Escrow
Agent hereunder, it may do so by giving prior written notice of such event to
Coronation, Supreme and Harry Miller and thereafter delivering the Escrow Shares
to any other agent designated by Coronation and Harry Miller as communicated to
the Escrow Agent in writing, and if no such agent shall be designated by
Coronation and Harry Miller within 60 calendar days of such written notice, then
the Escrow Agent may do so by delivering the Escrow Shares either (a) to any
bank or trust located in the State of Nevada which is willing to act as Escrow
Agent hereunder in its place (provided that the fees charged by such bank or
trust company are not in excess of the fees charged by the Escrow Agent for its
services hereunder) or (b) if no such bank or trust company can be retained
within a reasonable period after such 60 calendar day period after the delivery
by the Escrow Agent of its written notice, then the Escrow Agent shall seek the
appointment of its successor as prescribed by the clerk or other proper officer
of a court of competent jurisdiction located within the State of Nevada to the
extent permitted by law (any such successor to the Escrow Agent, whether
designated by Coronation and Harry Miller or pursuant to the clause above or
otherwise, is hereinafter referred to as the "Successor Agent"). The costs and
expenses (including reasonable attorneys' fees and expenses) incurred by the
Escrow Agent in connection with such proceeding for the appointment of a
Successor Agent shall be paid by Coronation. Coronation and Harry Miller may, at
any time after the date hereof, upon 30 calendar days prior written notice to
the Escrow Agent, appoint a Successor Agent for the resignation or removal of
the Escrow Agent, whereupon the Escrow Agent shall deliver the Escrow Shares to
such Successor Agent, as provided below. The reasonable fees of any Successor
Agent shall be borne by Coronation. Upon receipt of the identity of the
Successor Agent, the Escrow Agent shall deliver the Escrow Shares then held
hereunder to the Successor Agent. Upon delivery of the Escrow Shares to the
Successor Agent, (i) the Escrow Agent shall be discharged from any and all
responsibility or liability with respect to the Escrow Shares (except as
otherwise provided herein) and (ii) all references herein to the "Escrow Agent"
shall, where applicable, be deemed to include such Successor Agent and such
Successor Agent shall thereafter become the Escrow Agent for all purposes of
this Agreement.

7. Miscellaneous.

7.1 Construction; Interpretation. The headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Article, section, schedule,
exhibit, recital and party references are to this Agreement unless otherwise
stated. No party, nor its counsel, shall be deemed the drafter of this Agreement
for purposes of construing the provisions of this Agreement, and all provisions
of this Agreement shall be construed in accordance with their fair meaning, and
not strictly for or against any party.

7.2 Amendments and Modifications. No party hereto shall be
bound by any modification, amendment, termination, cancellation, rescission or
supersession of this Agreement unless the same shall be in writing and signed by
it.

7.3 Notices. All notices and other communications hereunder shall be
in writing and shall be effective when actually received by the party to which
notice is sent as follows:

  
  	 
	 	(a) If to
      Coronation, to: 	With copies to:

      (which shall not constitute notice)
	 	 	 	 
	 	 	Thomas Elliott, President

      Supreme Realty Investment Trust, Inc.

      (the post merger name of Coronation)

      431 E. 75th Street

      Chicago, IL 60619

      (773)873-9850	Harry Miller

      P.O. Box 741

      Bellevue, Washington, 98009

      (425)453-0355
	 	 	 	 
	 	(c) If to the
      Escrow Agent, to:	 
	 	 	 	 
	 	 	6084 South 900 East, Suite 101

      Salt Lake City, UT 84121

      (801) 281-9746	 

  

or to such other address as the person to whom notice is being given may have
previously furnished to the other parties in writing in the manner set forth
above.

7.4 Assignment. Subject to Sections 6.10 and 6.11, neither this
Agreement nor any of the rights, interests or obligations hereunder shall be
assigned by any party (whether by operation of law or otherwise) without the
prior written consent of Coronation, Supreme and the Escrow Agent; provided that
Coronation may assign its rights and obligations to any affiliate, but no such
assignment shall relieve such Coronation of its obligations hereunder. This
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and permitted assigns.

7.5 Termination of Agreement. This Agreement shall terminate
when all of the Escrow Shares have been delivered according to the terms of this
Agreement.

7.6 Representation. Each of the parties hereby represents and
warrants that this Agreement has been duly authorized, executed and delivered on
its behalf and constitutes its legal, valid and binding obligation. 

7.7 Other Miscellaneous Provisions.

(a) This Agreement may be executed simultaneously in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

(b) Whenever under the terms hereof the time for giving a notice or
performing an act falls upon a Saturday, Sunday, or banking holiday, such time
shall be extended to the next day on which Escrow Agent is open for business.

(c) Each party agrees that any suit, action or proceeding with respect to
this Agreement, and the performance of the parties hereunder shall only be
brought in the courts of the State of Nevada, including any federal court
located within the State of Nevada. Accordingly, each party submits irrevocably
to the exclusive jurisdiction of such courts for the purpose of any such suit,
action or proceeding and waives irrevocably any right which it may have to bring
any such suit, action or proceeding in any forum other than a court of the State
of Nevada, or in any federal court located within the State of Nevada, and any
defense which it may have to the enforcement of this provision, whether based on
the inconvenience of the forum or otherwise.

(d) The Escrow Agent does not have any interest in the Escrow Shares
deposited hereunder but is serving as escrow holder only. Coronation agrees to
pay or reimburse the Escrow Agent upon request for any transfer taxes or other
taxes relating to the Escrow Shares incurred in connection herewith and shall
indemnify and hold harmless the Escrow Agent for any amounts that it is
obligated to pay in the way of such taxes. Any payments of income in respect of
the 

 

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Escrow Shares shall be subject to withholding regulations then in force with
respect to United States taxes. The parties hereto will provide the Escrow Agent
with appropriate forms for tax I.D. number certifications.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as
of the day and year first above written.

	SUPREME PROPERTY, INC.
    /s Thomas Elliott

     

    By: ____________________

    Name: Thomas Elliott

    Title: President and CEO
	CORONATION ACQUISITION CORP.
    /s/ Harry Miller

     

    By: ____________________

    Name: Harry Miller

    Title: President and CEO

 

	ESCROW AGENT:
    Interstate Transfer Company as Escrow Agent

    /s/ Janis Patterson

    By: _____________________________

    Name: Janis Patterson

    Title: PresidentEXHIBIT NO. 10.1

EXHIBIT NO. 10.1

 

GERBER SCIENTIFIC, INC.

2000-2004 EXECUTIVE ANNUAL INCENTIVE BONUS PLAN

 

1.   Purpose

The purpose of the Plan is to reward certain Designated Executives of the Company and its subsidiaries by providing annual cash bonuses based upon the achievement of Performance Goals which are to be predefined by the Committee. 

2.   Definitions

For purposes of this Plan, the following terms shall have the definitions set forth below:

	 "Board."  The Board of Directors of the Company.

	"Bonus Stock."  Shares of the Company's Common Stock acquired in lieu of a portion of the cash bonus earned under this Plan.
	 "CEO."  The Chief Executive Officer of the Company.
	"Change of Control."  A change of control as defined in the Employee Stock Plan. 

	"Code."  The Internal Revenue Code of 1986, as amended, and as it may be amended from time to time, or any corresponding federal tax statute enacted after the date this Plan is adopted by the Committee.  A reference to a specific section of the Code refers not only to such specific section but also to any corresponding provision of any federal tax statute enacted after the date this Plan is adopted by the Committee, as such specific section or corresponding provision is in effect on the date of application of the provisions of this Plan containing such reference.

	"Committee." The Management Development and Compensation Committee, as appointed from time to time by the Board and consisting solely of two or more outside directors who are not otherwise Employees of the Company or any subsidiary. 
	"Company."  Gerber Scientific, Inc.

	"Corporate Employees."  Employees of the Company (as distinguished from Employees of any subsidiary) who are not Corporate Officers.

	"Corporate Designated Executives."  Corporate Officers and other key Corporate Employees designated by the Committee as eligible to receive cash bonuses pursuant to section 6, hereof.

	"Corporate Officers."  Officers of the Company at the level of Vice President or above.  

	"Designated Executives."  Corporate Designated Executives and Subsidiary Designated Executives.

	"Employees."  Individuals employed by either the Company or one of its Subsidiaries.

	"Employee Stock Plan." The Company's 1992 Employee Stock Plan, As Amended and as it may be further amended from time to time.

	"Management."  The Chairman and the Chief Executive Officer of the Company.

	"Performance Goals." Goals based on business criteria established by the Committee in accordance with section 5, hereof, computed in accordance with the directions of the Committee.   

	"Permanent Disability."  Permanent and Total Disability as provided in Section 22(e)(3) of the Code.

	"Plan."  This 2000-2004 Executive Annual Incentive Bonus Plan, as it may be amended from time to time.

	"Regular Wages Paid." The annual salary payable by the Company (or its Subsidiary) to the plan participant on the last day of each fiscal year covered by this Plan. 
	"Retirement."  Retirement as defined in the Employee Stock Plan.

	"Restricted Stock."  Shares of Company Common Stock granted or to be granted subject to certain restrictions as provided in Sections 8.2 and 8.2.1.

	"Subsidiary" or "Subsidiaries."  The Company's existing U.S. operating subsidiaries (i.e. Gerber Scientific Products, Inc.; Gerber Technology, Inc.; and Gerber Coburn Optical, Inc.) and such other corporations which are or may become wholly owned subsidiaries of the Company and which are designated by the Committee as a subsidiary to be included within the terms of this Plan.

	"Subsidiary Designated Executives."  The President of each Subsidiary and other key employees of the Subsidiary designated by the Committee as eligible to receive cash bonuses pursuant to section 6 hereof.

	"Target Bonus Potential."  The bonus percentages as set forth in, or authorized by, section 6.1 hereof.

3.   Summary

Bonuses under the Plan are payable to the Designated Executives upon the achievement of one or more Performance Goals. The Committee will establish Performance Goals each year for the Company and for each of the Subsidiaries.  Designated Executives shall be entitled to bonuses based upon the achievement of the Performance Goals by the Company for Corporate Designated Executives or by the Subsidiary for a Subsidiary Designated Executive; provided, however, that no bonuses shall be paid until the Committee has certified in writing the achievement of the applicable Performance Goal(s). 

4.   Plan Years

This Plan shall become effective on May 1, 1999 and shall be in effect for each of the succeeding five fiscal years through April 30, 2004.

5.   Performance Goal(s)

Performance Goal(s) for each fiscal year for the Company and each Subsidiary 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 or each Subsidiary's financial statements: return on equity, return on assets, net income, cash flow, book value, earnings before interest and taxes ("EBIT"), revenues, financial return ratios, market performance of the Company, total shareholder return and/or earnings per share. Performance Goals established by the Committee may specifically provide for graduated levels of achievement by the Company, or the Subsidiary, both above and below one or more stated Performance Goal(s) and consequent preestablished bonus payment amounts as a result of the achievement of each graduated level of the Performance Goal(s). Cash bonuses to Corporate Designated Executives are determined in accordance with achievement of the Performance Goal(s) of the Company. Cash bonuses to Subsidiary Designated Executives are determined in accordance with achievement of the Performance Goal(s) of the applicable Subsidiary by which each such Subsidiary Designated Executive is employed, subject to the provisions of Section 7.1.3. The Performance Goal(s) for each fiscal year shall be established by the Committee within the first three months of that fiscal year or within such other time as may be required pursuant to Section 162(m) of the Code. 

6.   Determination of Individual Bonus Amounts 

6.1.   The Target Bonus Potential. The Target Bonus Potential for cash bonus awards for each fiscal year will be fixed by the Committee as a percentage of each participant's Regular Wages Paid.  Except for grants of Restricted Stock in accordance with section 8.2, awards shall be made under the Plan according to these targets only to the extent that the applicable Performance Goal(s) has been achieved in accordance with the term(s) of such goal. All bonus amounts payable hereunder are subject to the maximum bonus percentage and maximum bonus amount stated in section 6.2.

6.2.   Maximum Bonus Percentages and Amounts. The maximum cash bonus payable any Designated Executive is two times the Target Bonus Potential. This maximum bonus amount may be increased by up to one-sixth of the amount of such bonus by an additional award of Restricted Stock, subject to the Designated Executive's stock election pursuant to section 8.2. In no event shall any cash bonus payable to any Designated Executive under this plan exceed $1.5 Million Dollars for any fiscal year (as computed prior to any election to receive Company Stock and Restricted Stock under section 8.2). 

6.3.   Committee Authority.  The Committee shall have the sole authority to designate which Employees are classified as Corporate Officers, and Management shall have authority to designate other Corporate Designated Executives and Subsidiary Designated Executives subject to ratification by the Committee.

7.   Eligibility

Eligible Participants.  Eligibility under this Plan is limited to Designated Executives who are on the active permanent payroll on the last day of the fiscal year and who have been employed continuously by the Company or a Subsidiary for more than two (2) months. 

7.1.1.   An approved leave of absence shall not be considered a break in service for purposes of eligibility to receive bonuses under the Plan.

7.1.2.   Designated Executives who as of the last day of the fiscal year have been employed by the Company or a Subsidiary for less than two (2) months are not eligible to receive any bonus under the Plan. Designated Executives who as of April 30 have been employed continuously by the Company or a Subsidiary for more than two (2) months but less than one (1) year shall participate pro rata in the Plan.

7.1.3.   Designated Executives who transfer between participating companies but who otherwise qualify under the terms hereof, shall participate pro-rata in the Plan of each company where they were employed during the fiscal year.  Bonus amounts payable under this Plan are to be based on the respective Regular Wages Paid and applicable Target Bonus Potential at each company where the transferred Designated Executive was employed.

7.2.   Excluded Employees.  Specifically excluded from participating in the Plan are:  Employees who participate in other forms of cash incentive compensation plans (e.g., commission plans).

8.   Distribution of Incentive Bonus

8.1.   Cash Distribution.  Except as provided in this section 8 and subject to any voluntary deferral under the Company's 401(k) plan, Deferred Compensation plan or other voluntary deferral plans as the Committee may adopt, the incentive bonus shall be paid in cash to eligible Designated Executives in accordance with section 6 ("Determination of Individual Bonus Amounts").  It is expected that any distribution for each fiscal year will be made on or before July 15th following the close of each fiscal year, subject to certification by the Committee that the applicable Performance Goal(s) have been achieved.

8.2.   Stock Election.  Designated Executives whose Target Bonus Potential is thirty per cent (30%) or higher and who are authorized by the Committee may elect to receive up to 50 percent of their bonus in the form of Company Common Stock in lieu of cash less applicable withholding taxes.  To encourage the election of Bonus Stock, the Company shall award additional shares of the Company's Common Stock which shall equal in value (valued as of the date of purchase of the Bonus Stock without regard to any restrictions that may attach to such shares) one-third of the bonus amount elected to be received in stock before tax withholding and shall be subject to certain restrictions ("Restricted Stock").  The restrictions and other terms of such Restricted Stock award shall be determined by the Committee and set forth in separate grant agreements.  The agreement shall provide, among other things, that such Restricted Stock shall vest (and the restrictions shall lapse) in equal installments at each of the three anniversary dates following the date of payment, provided that the Restricted Stock has not been forfeited prior to any such vesting date.  In the event that all or any portion of the Bonus Stock (after deduction for taxes withheld) is sold, transferred, or otherwise disposed of by the recipient thereof during the three year period following the grant of the Restricted Stock, a proportional number of the shares of Restricted Stock not yet vested shall be forfeited.  [Example:  If a participant received 150 shares of Common Stock in lieu of a portion of his or her cash bonus, after withholding 60 shares for taxes, the participant will receive 90 shares of Bonus Stock.  The participant would then be granted 50 shares of Restricted Stock (one third of 150 shares).  If the participant then sells all 90 shares of the Bonus Stock after the first anniversary of the Restricted Stock Grant date but before the second anniversary thereof, two-thirds of the shares of Restricted Stock (33.33 shares) would be forfeited to the Company.  The restrictions as to one-third of the Shares of Restricted Stock (16.67 shares) would have lapsed after one year and those shares would no longer be Restricted Stock.] The foregoing provisions with respect to forfeiture shall not be applicable with respect to Bonus Shares which are transferred or otherwise disposed of to the Company in satisfaction of amounts due the Company incident to the exercise of stock options or other Company plans with respect to the purchase of Company stock provided, however, that shares resulting from such transaction equivalent in number to the Bonus Shares transferred or otherwise disposed of to the Company incident to such transactions are retained by the Designated Executive consistent with the terms of this Plan regarding the vesting of Restricted Shares. Upon termination of employment for any reason other than death, Permanent Disability or Retirement, all Restricted Stock not yet vested shall be forfeited.  If termination of a Designated Executive's employment is due to death, Permanent Disability or Retirement, all restrictions on the Restricted Stock issued to such Designated Executive pursuant to the Plan shall terminate upon such termination.  All restrictions on Restricted Stock issued to a Designated Executive pursuant to this Plan shall also terminate in the event of a Change of Control.

8.2.1.   Restrictions.  Restricted Stock shall be subject to such additional 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 or under circumstances as the Committee may determine on the date of election or thereafter.  Except as stated in section 8.2, a Designated Executive granted Restricted Stock 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).  Prior to vesting, Restricted Stock may not be sold, transferred, pledged, hypothecated, margined or otherwise encumbered by the Designated Executive.  Certificates representing shares of Restricted Stock may be legended to restrict transfer.

8.2.2.    Income Tax Withholding.  It shall be a condition of an Employee's right to receive a bonus under this Plan whether in the form of Bonus Stock (including Restricted Stock) or cash, that the Designated Executive consents to the withholding by the Company of any federal, state or other taxes which the Company is obligated to withhold or collect.  The Company is authorized to withhold any such federal, state or other taxes resulting from such bonus by withholding such number of shares of Company Common Stock otherwise issuable to such Employee that, based on the fair market value of the shares on the date the bonus payment is made, will satisfy such federal, state or other tax withholding.  It shall be a condition of a Designated Executive's right to receive Restricted Stock pursuant to this Plan that the Designated Executive agrees and authorizes the Company to either withhold from such Designated Executive's Regular Wages Paid or, at the Company's election, to reduce the number of shares of Restricted Stock which would otherwise be due to the Designated Executive under this Plan by an amount which, in the sole discretion of the Company, is sufficient to pay all income taxes that the Company is required to withhold or collect in connection with the Restricted Stock award.

8.2.3.  Investment Representation.  Unless the Committee otherwise determines, Participants who elect to receive Common Stock in lieu of cash must agree to take such Common Stock for investment and not for distribution.  Delivery of such representations as may be requested by the Committee shall be a condition precedent to the right of the Participant to receive any shares of Common Stock under this Plan.  Certificates representing such shares of Common Stock may be legended to restrict transfer absent compliance with the federal securities laws.

8.2.4.    Issuance of Bonus Stock and Restricted Stock.  Company Common Stock received by Designated Executives in lieu of cash may, in the sole discretion of the Committee, be issued by the Company, purchased in the open market using the applicable portion of the Designated Executive's cash bonus amount, or issued under the Employee Stock Plan.  In the Committee's discretion, Restricted Stock may be issued as Restricted Shares under this Plan or under the Employee Stock Plan.

8.3  The maximum number of Company shares which may be purchased under this Plan shall not exceed 150,000 shares and in addition, the corresponding maximum number of restricted shares to be issued shall not exceed 50,000 shares subject to section 10.5 below.

9.   Termination of Participation in Gerber Scientific, Inc. 1999-2001 Annual Incentive Bonus Plan

Pursuant to the rights of the Committee under the terms of section 9.3 of the Gerber Scientific, Inc. 1999-2001 Annual Incentive Bonus Plan approved by shareholders on or about September 25, 1998, upon shareholder approval of this Plan the Committee has, and does hereby, terminate the right of Designated Executives included as participants under this Plan to receive any payment of any cash or other bonuses under the Gerber Scientific, Inc. 1999-2001 Annual Incentive Bonus Plan effective on the date of approval of this Plan by shareholders of the Company at its Annual Meeting of Shareholders presently scheduled for September 15, 1999. On request of the Company and as a condition of receiving any bonus under the terms of this Plan, the Committee may require any Designated Executive to acknowledge, in writing, that such Designated Executive is not entitled to any bonus under the terms of the Gerber Scientific, Inc. 1999-2001 Annual Incentive Bonus Plan. 

10. Miscellaneous

10.1  Transferability.  A Designated Executive's rights and interests under the Plan may not be assigned or transferred.  In the event of a Designated Executive's death after the end of a fiscal year but prior to the bonus payment date, the Company shall pay any bonus amounts due under the Plan to the employee's designated beneficiary, or in the absence of such designation, by will or the laws of descent and distribution.

10.2 Administration of Plan.  The Plan shall be administered by the Committee.  The Committee shall have the authority to interpret the Plan, to adopt plans whereby the bonus payments otherwise payable under the Plan may be voluntarily deferred, at the participant's election, to establish and revise rules, amounts and regulations relating to the Plan, and to make any other determinations that it believes necessary or advisable for the administration of the Plan.  Decisions of the Committee shall be final, conclusive, and binding upon all parties, including the Company, Subsidiaries, shareholders, and Designated Executives. The Committee shall, in the exercise of its sole discretion, determine any and all issues relating to the manner by which Performance Goals are to be calculated and certified and upon whom it shall rely in the determination of achievement and certification of Performance Goals or computation of any and all compensation due hereunder including bonus amounts payable under the Plan. 

10.3 Amendment and Termination.  The Committee reserves the right to modify, suspend or terminate the Plan in whole or in part at any time; provided, however, that no modification of the Plan by the Committee without approval of the shareholders will materially increase the maximum amount allocated to the CEO and the four most highly compensated Employees or render any member of the Committee eligible for a bonus award.  Any modification to material terms of the Plan (i.e., employees eligible, business criteria on which the performance goal is based, or maximum amount of compensation payable) shall require shareholder approval prior to the payment of any benefit.

10.4  No Agreement to Employ.  Nothing in the Plan shall be construed to constitute or evidence an agreement or understanding, express or implied, by the Company to employ or retain any Designated Executive for any specific period of time.

10.5  In the event that the number of the outstanding shares of Common Stock is changed by reason of stock dividend or stock split or other combination or circumstance which results in the issuance of additional shares of Common Stock to existing shareholders, the number of shares which may thereafter be purchased under this Plan and the number of shares that may be issued as Restricted Stock under this Plan shall be adjusted proportionately so as to reflect such change.  If any shares of Restricted Stock are forfeited, such shares shall thereafter be available for reissuance under this Plan.

10.6 Certification That Terms Have Been Satisfied.  Prior to payment of any bonus amount under the Plan, the Committee shall certify in writing that the Performance Goal(s) and all other material terms stated herein have been attained.  For this purpose, the approved minutes of a Committee meeting in which a certification is made shall be treated as a written certification.

10.7 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 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.

10.8 Governing Law.  This Plan shall be governed by the laws of the State of Connecticut.

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