Document:

Exhibit 4.2

    Exhibit
      4.2

     

    

    FIRST
      AMENDMENT TO RIGHTS AGREEMENT

    

    This
      FIRST AMENDMENT TO RIGHTS AGREEMENT effective as of December 1, 2006 (this
      “First Amendment”) is between Franklin Electric Co., Inc., an Indiana
      corporation (the “Company”) and LaSalle Bank National Association (“LaSalle
      Bank”).

    

     

    WHEREAS,
      the Company and Illinois Stock Transfer Company, an Illinois corporation
      (“Illinois Stock Transfer Company”) entered into a certain Rights Agreement,
      dated as of October 15, 1999 (the “Rights Agreement”), under which Illinois
      Stock Transfer Company was named the “Rights Agent” (as such term is defined in
      the Rights Agreement); 

     

    WHEREAS,
      pursuant to the provisions of Section 21 of the Rights Agreement, the Company
      has given notice to Illinois Stock Transfer Company that effective December
      1,
      2006, it is being removed as Rights Agent and LaSalle Bank is being appointed
      as
      the successor Rights Agent under the Rights Agreement; and

     

    WHEREAS,
      LaSalle Bank has expressed its willingness and desire to serve as such appointed
      successor Rights Agent effective as of December 1, 2006, subject to the parties
      entering into this First Amendment pursuant to the provisions of Section 27
      of
      the Rights Agreement.

     

    NOW,
      THEREFORE, it is mutually agreed between the Company and LaSalle Bank
      that:

     

    
      	1.  	
              Upon
                execution of this First Amendment, LaSalle Bank does hereby become
                a party
                to the Rights Agreement and shall be fully bound by, and subject
                to, all
                of the covenants, terms and conditions of the Rights Agreement as
                though
                an original party thereto and as “Rights Agent”
                thereunder.

            

    

    

     

    
      	2.  	
              The
                Rights Agreement shall be amended to, among other things, reflect
                the
                appointment of LaSalle Bank as
                Rights Agent, as follows:

            

    

    

     

    
      	a.  	
              The
                title page of the Rights Agreement shall be amended to replace the
                name of
                the party designated as “ILLINOIS
                STOCK TRANSFER COMPANY”
                with the name “LASALLE
                BANK NATIONAL ASSOCIATION”.

            

    

    
      
        
        

      

      
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      	b.  	
              The
                introductory paragraph of the Rights Agreement shall be amended to
                have
                the name of the Rights Agent changed from “Illinois Stock Transfer
                Company” to “LaSalle Bank National Association” and to have LaSalle Bank
                identified as a “national banking
                association”.

            

    

    

     

    
      	c.  	
              Section
                26 of the Rights Agreement shall be amended to replace the name and
                address of “Illinois Stock Transfer Company, 209 W. Jackson Boulevard,
                Suite 903, Chicago, Illinois 60606, Attention: President” with the
                following: “LaSalle Bank National Association, 135 S. LaSalle Street,
                Chicago, Illinois 60603, [Attention: Mark
                Rimkus]”.

            

    

    

     

    
      	d.  	
              Exhibit
                A of the Rights Agreement is hereby amended in its entirety and restated
                as Exhibit
                A
                attached hereto.

            

    

    

     

    
      	3.  	
              LaSalle
                Bank hereby represents and warrants to the Company that LaSalle Bank
                (a)
                is a legal business entity organized and doing business under the
                laws of
                the United States or of any state of the United States, in good standing,
                which is authorized under such laws to exercise corporate trust powers
                and
                is subject to supervision or examination by a federal or state authority
                and which has at the time of its appointment as Rights Agent a combined
                capital and surplus of at least $50,000,000, or (b) is an affiliate
                of a
                legal business entity described in the foregoing clause
                (a).

            

    

    

     

    
      	4.  	
              The
                execution and delivery of this First Amendment has been duly and
                validly
                authorized and approved by each of the parties hereto, and no other
                proceedings (corporate or otherwise) on the part of the parties hereto
                are
                necessary to authorize this First Amendment. This First Amendment
                has been
                duly and validly executed and delivered by each of the parties hereto
                and
                constitutes a valid and binding agreement of such parties, enforceable
                against each of them in accordance with its
                terms.

            

    

    

     

    
      	5.  	
              Except
                as expressly amended by this First Amendment, all terms, conditions
                and
                other provisions contained in the Rights Agreement are hereby ratified
                and
                reaffirmed. The Rights Agreement, after giving effect hereto, shall
                remain
                in full force and effect.

            

    

    
      
        
        

      

      
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      	6.  	
              Upon
                execution hereof, each reference in the Rights Agreement to “this
                Agreement,” “hereby,” “hereunder,” “herein,” “hereof,” or words of like
                import referring to the Rights Agreement shall mean and refer to
                the
                Rights Agreement, as amended by this First Amendment. In addition,
                any and
                all notices, requests, certificates and other instruments executed
                and
                delivered after the date hereof may refer to the Rights Agreement
                without
                making specific reference to this First Amendment; but nevertheless
                all
                references to the Rights Agreement shall be a reference to such document
                as amended hereby. If this First Amendment is inconsistent with (or
                affects the interpretations of) unamended portions of the Rights
                Agreement, the provisions of (or interpretations suggested by) this
                First
                Amendment shall control.

            

    

    

     

    
      	7.  	
              This
                First Amendment shall be governed by and construed in accordance
                with
                Indiana law.

            

    

    

     

    
      	8.  	
              This
                First Amendment may be executed in any number of counterparts, each
                executed counterpart constituting an original, but all together only
                one
                agreement.

            

    

    

     

    * * *

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the Company and LaSalle Bank have caused this First Amendment
      to Rights Agreement to be duly executed and their respective corporate seals
      to
      be hereunto affixed and attested, all as of this 1
      day
      of
December
      ,
      2006.

     

    

     

    
      	
              Attest:

            	
              Franklin
                Electric Co., Inc.

            
	 	 
	
              By:
                /s/ Angela M. Hughes

            	
            	
              By: 
                /s/ Thomas J. Strupp

            	
            
	
              Name:
                Angela M. Hughes

            	
              Name:
                Thomas J. Strupp

            
	
              Title:
                Corp. Governance Manager

            	
              Title:
                VP, CFO, & Secretary

            

    

     

     

    
      	
              Attest:

            	
              LaSalle
                Bank National Association

            
	 	 
	
              By:
                /s/ Arlene Kaminski

            	
            	
              By: 
                /s/ Mark F. Rimkus

            	
            
	
              Name:
                Arlene Kaminski

            	
              Name:
                Mark F. Rimkus

            
	
              Title:
                Vice President

            	
              Title:
                Vice President

            

    

    

     

    Acknowledged
      and agreed as of

     

    this
      08
      day of
      December, 2006:

     

    
      	
              Attest:

            	
              Illinois
                Stock Transfer Company

            
	 	 
	
              By:/s/
                Veronica Gall

            	
            	
              By:
                /s/
                Robert Pearson

            	
            
	
              Name:
                Veronica Gall

            	
              Name:
                Robert Pearson

            
	
              Title:
                Executive Vice President

            	
              Title:
                President and CEO

            

    

    
      
        
        

      

      
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    Exhibit
      A

     

    [Form
      of
      Rights Certificate]

    Certificate
      No. R- ________
      Rights

     

    NOT
      EXERCISABLE AFTER FEBRUARY 28, 2011, SUBJECT TO EARLIER REDEMPTION OR EXPIRATION
      PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
      THE
      OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
      AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
      ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH TERMS
      ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS
      MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE
      ARE
      OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON
      OR
      AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED
      IN
      THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
      REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
      IN
      SECTION 7(e) OF SUCH AGREEMENT.] * 

    

    

    

    

    

    

    

    

    

    

    

    

    

    
      	
              *
                The portion of the legend in brackets shall be inserted only if applicable
                and shall replace the preceding sentence.

               

            

    

    

    
      
        
        

      

      
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    Rights
      Certificate

    

    FRANKLIN
      ELECTRIC CO., INC.

     

    This
      certifies that __________________________________________, or registered
      assigns, is the registered owner of the number of Rights set forth above, each
      of which entitles the owner thereof, subject to the terms, provisions and
      conditions of the Rights Agreement, dated as of October 15, 1999, between
      Franklin Electric Co., Inc., an Indiana corporation (the “Company”) and Illinois
      Stock Transfer Company, an Illinois corporation, as amended between the Company
      and LaSalle Bank National Association, a national banking association (the
      “Rights Agent”), dated as of December 1, 2006, and as may be further amended and
      modified from time to time (the “Rights Agreement”) to purchase from the Company
      at any time prior to 5:00 P.M. (Fort Wayne, Indiana time) on February 28, 2011
      at the office or offices of the Rights Agent, or its successors as Rights Agent,
      designated for such purpose, one one-hundredth of a fully paid, non-assessable
      share of Series I Junior Participating Preference Stock of the Company (the
      “Preference Stock”), at a purchase price of $300.00 per one one-hundredth of a
      share (the “Purchase Price”), upon presentation and surrender of this Rights
      Certificate with the Form of Election to Purchase and related Certificate duly
      completed and executed. The number of Rights evidenced by this Rights
      Certificate (and the number of shares which may be purchased upon exercise
      thereof) set forth above, and the Purchase Price set forth above, are the number
      and Purchase Price as of October 15, 1999, based on the Preference Stock as
      constituted at such date. The Company reserves the right to require prior to
      the
      occurrence of a Triggering Event (as such term is defined in the Rights
      Agreement) that a number of Rights be exercised so that only whole shares of
      Preference Stock will be issued.

     

    As
      more
      fully set forth in the Rights Agreement, from and after the first occurrence
      of
      a Section 11(a)(ii) Event (as such term is defined in the Rights Agreement),
      if
      the Rights evidenced by this Rights Certificate are beneficially owned by (i)
      an
      Acquiring Person or an Affiliate or Associate of any such Acquiring Person
      (as
      such terms are defined in the Rights Agreement), (ii) a transferee of any such
      Acquiring Person, Associate or Affiliate, or (iii) under certain circumstances
      specified in the Rights Agreement, a transferee of such Acquiring Person (or
      of
      any such Affiliate or Associate) who becomes a transferee prior to or
      concurrently with such Acquiring Person becoming such, such Rights shall become
      null and void without any further action, and no holder hereof shall have any
      right with respect to such Rights from and after the occurrence of such Section
      11(a)(ii) Event.

     

    As
      provided in the Rights Agreement, the Purchase Price and the number and kind
      of
      shares of Preference Stock or other securities which may be purchased upon
      the
      exercise of the Rights evidenced by this Rights Certificate are subject to
      modification and adjustment upon the happening of certain events, including
      Triggering Events.

     

    
      
        
        

      

      
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    This
      Rights Certificate is subject to all of the terms, provisions and conditions
      of
      the Rights Agreement, which terms, provisions and conditions are hereby
      incorporated herein by reference and made a part hereof and to which Rights
      Agreement reference is hereby made for a full description of the rights,
      limitations of rights, obligations, duties and immunities hereunder of the
      Rights Agent, the Company and the holders of the Rights Certificates, which
      limitations of rights include the temporary suspension of the excercisibility
      of
      such Rights under the specific circumstances set forth in the Rights Agreement.
      Copies of the Rights Agreement are on file at the above-mentioned office of
      the
      Rights Agent and are also available upon written request to the Rights
      Agent.

     

    This
      Rights Certificate, with or without other Rights Certificates, upon surrender
      at
      the office or offices of the Rights Agent designated for such purpose, may
      be
      exchanged for another Rights Certificate or Rights Certificates of like tenor
      and date evidencing Rights entitling the holder to purchase a like aggregate
      number of one one-hundredths of a share of Preference Stock as the Rights
      evidenced by the Rights Certificate or Rights Certificates surrendered shall
      have entitled such holder to purchase. If this Rights Certificate shall be
      exercised in part, the holder shall be entitled to receive upon surrender hereof
      another Rights Certificate or Rights Certificates for the number of whole Rights
      not exercised.

     

    Subject
      to the provisions of the Rights Agreement, the Rights evidenced by this
      Certificate may be redeemed by the Company at its option at a redemption price
      of $.01 per Right at any time prior to the earlier of (i) the close of business
      on the twentieth day following the Stock Acquisition Date, and (ii) the Final
      Expiration Date. The foregoing notwithstanding, the Rights generally may not
      be
      redeemed for one hundred eighty (180) days following a change in a majority
      of
      the Board as a result of a proxy contest, and thereafter, the decision to redeem
      shall require the concurrence of a majority of the Continuing Directors. In
      addition, under certain circumstances following the Stock Acquisition Date,
      the
      Rights may be exchanged, in whole or in part, for shares of the Common Stock,
      or
      shares of preference stock of the Company having essentially the same value
      or
      economic rights as such shares. Immediately upon the action of the Board of
      Directors of the Company authorizing any such exchange, and without any further
      action or any notice, the Rights (other than Rights which are not subject to
      such exchange) will terminate and the Rights will only enable holders to receive
      the shares issuable upon such exchange.

     

    If
      the
      Company so determines, no fractional shares of Preference Stock will be issued
      upon the exercise of any Right or Rights evidenced hereby (other than fractions
      which are integral multiples of one one-hundredth of a share of Preference
      Stock, which may, at the election of the Company, be evidenced by depositary
      receipts), but in lieu thereof, a cash payment will be made, as provided in
      the
      Rights Agreement. The Company, at its election, may require that a number of
      Rights be exercised so that only whole shares of Preference Stock would be
      issued.

     

    
      
        
        

      

      
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    No
      holder
      of this Rights Certificate, as such, shall be entitled to vote or receive
      dividends or be deemed for any purpose the holder of shares of Preference Stock
      or of any other securities of the Company which may at any time be issuable
      on
      the exercise hereof, nor shall anything contained in the Rights Agreement or
      herein be construed to confer upon the holder hereof, as such, any of the rights
      of a stockholder of the Company or any right to vote for the election of
      directors or upon any matter submitted to stockholders at any meeting thereof,
      or to give consent to or withhold consent from any corporate action, or, to
      receive notice of meetings or other actions affecting stockholders (except
      as
      provided in the Rights Agreement), or to receive dividends or subscription
      rights, or otherwise, until the Right or Rights evidenced by this Rights
      Certificate shall have been exercised as provided in the Rights
      Agreement.

     

    This
      Rights Certificate shall not be valid or obligatory for any purpose until it
      shall have been countersigned by the Rights Agent.

     

    WITNESS
      the facsimile signature of the proper officers of the Company and its corporate
      seal.

     

    Dated
      as
      of    ,          

     

    
      	
              ATTEST:

            	
              FRANKLIN
                ELECTRIC CO., INC.

            
	 	 	
              By:

            
	
              Secretary

            	
              Title:

            

    

    

     

    
      	
              Countersigned:

            
	
              LASALLE
                BANK NATIONAL ASSOCIATION

            
	
              By:

            	
            
	
              Authorized
                Signature

            

    

    
      
        
        

      

      
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    [Form
      of
      Reverse Side of Rights Certificate]

    

    FORM
      OF ASSIGNMENT

     

    (To
      be
      executed by the registered holder if such holder desires to transfer the Rights
      Certificate.)

    FOR
      VALUE
      RECEIVED      
      hereby
      sells, assigns and            

     

    transfers
      unto                    
        

                               
      (Please print name and address of transferee)

     

    this
      Rights Certificate, together with all right, title and interest herein, and
      does
      hereby irrevocably constitute and appoint      
      Attorney, to transfer the within Rights Certificate on the books of the
      within-named Company, with full power of substitution.

    Dated:   ,      

    

                                                        

    Signature

     

    Signature
      Medallion Guaranteed:

     

    
      
        
        

      

      
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    Certificate

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1) this
      Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by
      or
      on behalf of a Person who is or was an Acquiring Person or an Affiliate or
      Associate of any such Acquiring Person (as such terms are defined in the Rights
      Agreement);

     

    (2) after
      due
      inquiry and to the best knowledge of the undersigned, the undersigned [ ] did
      [
      ] did not acquire the Rights evidenced by this Rights Certificate from any
      Person who is, was or subsequently became an Acquiring Person or an Affiliate
      or
      Associate of an Acquiring Person.

     

    
      Dated:   ,      

      

                                                          

      Signature

    

     

    Signature
      Medallion Guaranteed:

    
      
        
        

      

      
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    NOTICE

     

    The
      signature(s) to the foregoing Assignment and Certificate must correspond to
      the
      name as written upon the face of this Rights Certificate in every particular,
      without alteration or enlargement or any change whatsoever.

     

    
      
        
        

      

      
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    FORM
      OF ELECTION TO PURCHASE

     

    (To
      be
      executed if holder desires to exercise Rights represented by the Rights
      Certificate.)

     

    To
      FRANKLIN ELECTRIC CO., INC.

     

    The
      undersigned hereby irrevocably elects to exercise __________ Rights represented
      by this Rights Certificate to purchase the shares of Preference Stock issuable
      upon the exercise of the Rights (or such other securities of the Company or
      of
      any other Person which may be issuable or such other assets which may be
      deliverable upon the exercise of the Rights) and requests that certificates
      for
      any such shares or securities be issued in the name of and delivered
      to:

     

    (Please
      print name and address)

     

    Please
      insert social security

    or
      other
      identifying number:

     

    If
      such
      number of Rights shall not be all the Rights evidenced by this Rights
      Certificate, a new Rights Certificate for the balance of such Rights shall
      be
      registered in the name of and delivered to:

     

    (Please
      print name and address)

    

    

    

    

    Please
      insert social security

    or
      other
      identifying number:

     

    
      Dated:   ,      

      

                                                          

      Signature

       
Signature
      Medallion Guaranteed:

    
      
        
        

      

      
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    Certificate

     

    The
      undersigned hereby certifies by checking the appropriate boxes
      that:

     

    (1) the
      Rights evidenced by this Rights Certificate [ ] are [ ] are not being exercised
      by or on behalf of a Person who is or was an Acquiring Person or an Affiliate
      or
      Associate of any such Acquiring Person (as such terms are defined in the Rights
      Agreement);

     

    (2) after
      due
      inquiry and to the best knowledge of the undersigned, the
      undersigned

     

    [
      ] did [
      ] did not acquire the Rights evidenced by this Rights Certificate from any
      Person who is, was or became an Acquiring Person or an Affiliate or Associate
      of
      an Acquiring Person.

     

    
      Dated:   ,      

      

                                                          

      Signature

    

    

    Signature
      Medallion Guaranteed:

    
      
        
        

      

      
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    NOTICE

     

    The
      signature to the foregoing Election to Purchase and Certificate must correspond
      to the name as written upon the face of this Rights Certificate in every
      particular, without alteration or enlargement or any change whatsoever
      .

     

    

    

    

    

    
      
        
        

      

      
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          18
          -Exhibit

Exhibit 10.1

 

GERBER SCIENTIFIC, INC.

NON-EMPLOYEE DIRECTOR'S STOCK GRANT PLAN

AMENDED AND RESTATED SEPTEMBER 21, 2006
 

            By resolutions of the Board of Directors (the "Board") of Gerber Scientific, Inc. (the "Company"), the Gerber Scientific, Inc. Non-Employee Director's Stock Grant Plan (the "Plan") was approved effective October 1, 1999. The purpose of the Plan is to increase the ownership interest in the Company of non-employee Directors whose services are considered essential to the Company's growth and progress and to provide a further incentive to serve as a Director of the Company.   

            The Plan was amended and restated, effective January 1, 2005, to reflect, among other things, the provisions of new Section 409A of the Internal Revenue Code (the "Code").  All amounts deferred under the Plan that are not earned and vested as of January 1, 2005, and the earnings on such amounts, are referred to as "Non-Grandfathered Amounts."  All amounts deferred under the Plan that are earned and vested as of January 1, 2005, and the earnings on such amounts, are referred to as "Grandfathered Amounts."  Grandfathered Amounts and Non-Grandfathered Amounts shall be separately accounted for under the Plan.

            From and after May 1, 2006, the Plan provides an annual grant of five thousand (5,000) shares of the Company's common stock ("Shares") to non-employee members of the Board of Directors of the Company.  Shares will be credited quarterly.  Receipt of the Shares will be deferred in accordance with the provisions of this Plan.

             Eligibility.  Any member of the Board who is not an employee of the Company and has not been an employee during the preceding twelve (12) months shall participate in the Plan. 

            Accounting.  The Company will establish a deferred Shares account ("Deferred Shares Account") for each non-employee Director and will furnish each non-employee Director with quarterly statements of the Shares credited to his/her Deferred Shares Account. 

            Shares and dividends credited to a Deferred Shares Account will be recorded by the Company as current operating expenses and an unfunded liability for such amounts will be accrued. The amounts credited to a Deferred Shares Account will not be deductible on the Company's income tax returns in the year accrued. The Company may deduct the amount credited to a Deferred Shares Account in the year in which it is distributed from the Deferred Shares Account and includable in the recipient's gross income. 

            Credited Shares.  From and after May 1, 2006, one thousand two hundred fifty (1,250) Shares will be credited quarterly on the last business day of March, June, September, and December to the non-employee Director's Deferred Shares Account.  The number of Shares issuable for the quarter ended June 30, 2006 shall be calculated for April 2006 based on the Share grant formula in effect prior to May 1, 2006 and for May and June 2006 based on the Share grant formula set forth in the immediately preceding sentence.  Non-employee Directors must pay the aggregate par value for the credited Shares, which payment shall be deemed made by services previously rendered by the Directors.

            Credited Dividends.  A non-employee Director's Deferred Shares Account will be credited with dividends on the dividend payment date and converted to additional Deferred Shares based on the then Fair Market Value. The amount of the dividend credit shall be the number of Shares (rounded to the nearest one-hundredth of a Share) determined by multiplying the dividend amount per Share by the number of Shares credited to the Deferred Shares Account as of the record date and dividing the product by the Fair Market Value per Share on the dividend payment date. 

            Shares Subject to the Plan.  From and after September 21, 2006, beginning with the Shares issuable for the quarter ended September 30, 2006, all Shares issued as grants under the Plan shall be issued pursuant to the Gerber Scientific, Inc. 2006 Omnibus Incentive Plan (the "Omnibus Plan") from shares of the Company's common stock authorized for issuance pursuant to the Omnibus Plan.  In no event shall the Company be required to issue fractional Shares under the Plan. Whenever under the terms of the Plan a fractional Share would otherwise be required to be issued, there shall be paid in lieu thereof one full Share. 

            Adjustments.  In the event of any change in the Shares through merger, consolidation, stock split, stock dividend, reverse stock split, recapitalization, combination, exchange of Shares, liquidation, split-up, split-off, or the like, an appropriate adjustment shall be made in the Shares held in the non-employee Director's Deferred Shares Account and in the total number of Shares available for issuance under the Plan. 

            Shareholder Rights.  Except as expressly provided herein, the Shares credited to the non-employee Director's Deferred Shares Account(s) shall confer no voting or other rights upon the non-employee Director as a shareholder of the Company or otherwise, with respect to such Shares, but shall confer only the right to receive such credited Shares as and when provided under the terms of this Plan. 

            Restrictions on Transfer.  Except to the extent Shares are issued pursuant to an effective registration statement under the Securities Act of 1933, as amended ("Registered Shares"), Shares acquired under the Plan may not be sold or otherwise disposed of except pursuant to an effective registration statement under the Securities Act of 1933, as amended, or except in a transaction which, in the opinion of counsel acceptable to the Company, is exempt from registration under said Act.  All certificates evidencing Shares issued pursuant to the Plan may bear an appropriate legend evidencing any such transfer restriction.  The Company may require each person receiving Shares under the Plan that are not Registered Shares to represent in writing that such person is acquiring the Shares for his or her own account for investment purposes only and without a view to the distribution thereof. 

            Amendment.  The Board, from time to time and without the approval of the shareholders, may amend this Plan in such respects as the Board may deem advisable; provided, however, that no amendment shall become effective without prior approval of the shareholders which would (a) materially increase the number of securities which may be issued under this Plan; or (b) constitute a "material revision" of the Plan as that term is defined by Section 303A(8) of the New York Stock Exchange's Listed Company Manual. No amendment shall, without the participant's (or beneficiary's) consent, alter or impair any of the rights under any grant previously made to such participant under this Plan. 

            Administration.  The Nominating and Corporate Governance Committee of the Board (the "NCGC") shall have the authority to administer the operation of the Plan, but shall not have the authority to amend the Plan.

            Term.  The Board, without further approval of the shareholders, may terminate this Plan at any time, but unless terminated earlier, this Plan shall terminate on September 14, 2009.  No termination shall, without the participant's (or beneficiary's) consent, alter or impair any of the rights under any grant previously made to such participant under this Plan. 

            Distribution Election.
  With respect to Grandfathered Amounts only, a non-employee Director shall select the period over which Shares in the Deferred Shares Account are distributed:  (a) over a ten (10) year period; (b) over a period less than ten (10) years; or (c) in a single installment. Installment distributions will be made on an annual basis (one payment per year) and will be calculated by dividing the balance in the non-employee Director's Deferred Shares Account immediately before the distribution by the number of installments remaining to be paid.   Non-Grandfathered Amounts shall be payable solely in the form of a single lump-sum payment.  

            An election notice ("Election Notice") shall be delivered to the Chairperson of the NCGC by each non-employee Director for Grandfathered Amounts. The Election Notice will continue in effect until modified in writing by a subsequent Election Notice to the Company by the non-employee Director.  Each new Election Notice shall apply to future deferrals and any existing balances in the non-employee Director's Deferred Shares Account(s) and must be on file for twelve (12) months before it is effective.  If no Election Notice has been on file at least twelve (12) months at the time of distribution, the non-employee Director's Deferred Shares Account shall be distributed in a single installment. 

            Distribution.
  The Shares in a non-employee Director's Deferred Shares Account shall be distributed beginning the first business day of the calendar year immediately following the date a non-employee Director ceases to be a Director of the Company, in accordance with the non-employee Director's Election Notice as on file with the Company. The Deferred Shares Account will be paid out in full Shares. Fractional Shares totaling less than a full Share will be rounded upwards to the next full Share.  

            Distribution Upon Death.
  A non-employee Director shall name a beneficiary or beneficiaries to receive any undistributed Shares credited to the Director's Deferred Shares Account at the time of the non-employee Director's death. Each designation shall revoke all prior designations. Each designation shall be made on a beneficiary designation form ("Beneficiary Designation Form") filed by the non-employee Director with the Board. 

            Upon the death of a Director (or upon the death of a former Director during any distribution period) prior to the expiration of the distribution period, the remaining Deferred Shares Account shall be distributed in full on the first business day of the next calendar year following the year of death to the non-employee Director's beneficiary, or if a beneficiary shall have predeceased the non-employee Director or if a beneficiary has not been designated, to the non-employee Director's estate in accordance with the applicable laws of will and descent. 

            Distribution Upon Change in Control.  In the event of a Change in Control, each non-employee Director's Deferred Shares Account shall be distributed in full to the non-employee Director immediately prior to, and contingent upon, the occurrence of the Change in Control.  A "Change of Control" means any of the following transactions:  (a) the dissolution or liquidation of the Company; (b) a merger, consolidation or reorganization of the Company in which the Company is not the surviving corporation; (c) a sale of all or substantially all of the assets of the Company to another corporation or other entity; or (d) any other transaction (including a merger or reorganization in which the Company is the surviving corporation) that results in any "person" or "group" (within the meaning of Rule 13d-5 under the Securities Exchange Act of 1934, as amended), beneficially owning (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended) more than 50% of the combined voting power of all classes of voting securities of the Company; provided that any such transaction constitutes a "change in control event" within the meaning of Code Section 409A.

            Withholding.
  The Company retains the right to deduct and withhold from any Deferred Shares or credited dividends due hereunder all sums which it may be required to deduct or withhold pursuant to any applicable statute, law, regulation or order of any jurisdiction whatsoever. 

            Termination of Directorship.  A non-employee Director's directorship shall be deemed to have terminated at the close of business on the day on which the non-employee Director ceases to be a member of the Board for any reason including resignation, removal, failure to be re-elected, or death.  

            Notwithstanding the non-employee Director's Election Notice, the NCGC, in its sole discretion, may at any time elect to distribute the portion of the non-employee Director's Deferred Shares Account that is Grandfathered in a single installment or over a period of up to ten (10) years, if it determines that such action is in the best interests of the Company. 

            Rights Unsecured.  The right of a non-employee Director or the beneficiary or beneficiaries of the non-employee Director to receive a distribution from a Deferred Shares Account shall be an unsecured claim against the general assets of the Company, and neither the non-employee Director nor the beneficiary shall have any rights in or against any Shares credited to the non-employee Director's Deferred Shares Account or any other specific assets of the Company. Nothing contained herein shall be deemed to create a trust of any kind.  All amounts credited to a Deferred Shares Account shall constitute general assets of the Company and may be disposed of by the Company at such time and for such purposes as it may deem appropriate. The right of a non-employee Director or beneficiary to the payment of Shares in a Deferred Shares Account shall not be assigned, transferred, or pledged in whole or in part. 

            Notices.  Any notice or election required or permitted to be given shall be in writing and shall be deemed to be filed (a) on the date it is personally delivered to the Chairperson of the NCGC; (b) three (3) business days after it is sent by registered or certified mail, addressed to the Chairperson of the NCGC; or (c) on the date it is sent if by e-mail or by facsimile to the Chairperson of the NCGC. 

            Governing Law.  All rights under this Plan shall be governed by and construed in accordance with the laws of the State of Connecticut, without giving effect to the principles of conflicts or choice of law rules of any jurisdiction. 

            Expenses.  Costs of administration of the Plan shall be paid by the Company.

 

 

GERBER SCIENTIFIC, INC.

Non-Employee Director's Stock Grant Plan

(the "Plan")

Change in Distribution Election Notice

            You may change the form of payment for the Shares of Company Common Stock that were credited to your Deferred Shares Account prior to January 1, 2005 (the "Grandfathered Amounts") by making the following election:

 

            Upon the termination of my directorship, Grandfathered Amounts are to be distributed as follows (check one):

 

              _____  Over a ten (10) year period.

              _____  Over a ________ (         ) year period (must be less than ten (10) years).

              _____  In a single installment.

            Any change to your existing distribution election for your Grandfathered Amounts will apply to the entire Grandfathered Amount and must be on file for twelve (12) months before it is effective.

            Note that all shares of Common Stock credited to your Deferred Shares Account after December 31, 2004 will be paid in a single installment following the termination of your directorship.  In addition, notwithstanding your Election Notice, the Company, in its sole discretion, may at any time elect to distribute the portion of your Account that consists of Grandfathered Amounts in a single installment or over a period of up to ten (10) years, if it determines that such action is in the best interests of the Company. 

____________________________________ 

Director's Signature

Dated:_____________________________

 

GERBER SCIENTIFIC, INC.

Non-Employee Director's Stock Grant Plan

(the "Plan")

Beneficiary Designation Form

 

            The beneficiary or beneficiaries designated to receive the balance of any undistributed Shares credited to my Deferred Shares Account under the Plan in the event of my death are as follows:

Name and Address                                                Percent Allocation

____________________________________            __________________ 

____________________________________            __________________ 

____________________________________            __________________ 

 

      This Beneficiary Designation Form is revocable by me and revokes any prior Beneficiary Designation Form that may have been in effect prior to the date hereof.     

 

___________________________________

Director's Signature

Dated: _____________________________

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