Exhibit 4.3
GERBER SCIENTIFIC, INC.
2005-2006 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:
a. “Board.”
The Board of Directors of the Company.
b. “Bonus
Stock.” Shares of the Company’s Common Stock acquired
in lieu of a portion of the cash bonus earned under this
Plan.
c. “CEO.”
The Chief Executive Officer of the Company.
d. “Change
of Control.” A change of control as defined in the Employee
Stock Plan.
e. “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.
f. “Committee.”
The Management Development and Compensation Committee, as appointed
from time to time by the Board and consisting solely of three or
more outside directors who are not otherwise Employees of the
Company or any subsidiary.
g. “Company.”
Gerber Scientific, Inc.
h. “Corporate
Employees.” Employees of the Company (as distinguished from
Employees of any subsidiary) who are not Corporate
Officers.
i. “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.
j. “Corporate
Officers.” Officers of the Company at the level of Vice
President or above.
k. “Designated
Executives.” Corporate Designated Executives and Subsidiary
Designated Executives.
l. “Employees.”
Individuals employed by either the Company or one of its
Subsidiaries.
m. “Employee
Stock Plan.” The Company’s 2003 Employee Stock Option
Plan and as it may be further amended from time to time.
n. “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.
o. “Permanent
Disability.” Permanent and Total Disability as provided in
Section 22(e)(3) of the Code.
p. “Plan.”
This 2005-2006 Executive Annual Incentive Bonus Plan, as it may be
amended from time to time.
q. “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.
r. “Retirement.”
Retirement as defined in the Employee Stock Plan.
s. “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.
t. “Subsidiary”
or “Subsidiaries.” The Company’s existing U.S.
operating subsidiary, Gerber Scientific International, Inc., and
such other corporations which are or may become direct or indirect
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.
u. “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.
v. “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
Subsidiary. 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
Subject to
shareholder approval of the Plan, the Plan will be effective for
the fiscal years ending April 30, 2005 and April 30,
2006.
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
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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 $1,500,000 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
the Chief Executive Officer of the Company shall have authority to
designate other Corporate Designated Executives and Subsidiary
Designated Executives subject to ratification by the
Committee.
7. Eligibility
7.1
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.
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