SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
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(X) |
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES ACT OF 1934 |
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OR |
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( ) |
TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2003
Commission File Number 1-5865
Full title of the plan and the address of the plan, if different from that of the issuer name below:
Gerber Scientific, Inc. and Participating Subsidiaries
401(k) Maximum Advantage Program and Trust (the "Plan")
Gerber Scientific, Inc.
83 Gerber Road West
South Windsor, CT 06074
REQUIRED INFORMATION
The following financial statements and supplemental schedule for the Plan are being filed herewith:
The following exhibit is being filed herewith:
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Exhibit No. |
Description |
Page No. |
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23 |
Consent of Independent Auditors |
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GERBER SCIENTIFIC, INC. AND PARTICIPATING SUBSIDIARIES
401(k) MAXIMUM ADVANTAGE PROGRAM AND TRUST
Financial Statements and Schedule
December 31, 2003 and 2002
(With Report of Independent Registered Public Accounting Firm Thereon)
GERBER SCIENTIFIC, INC. AND PARTICIPATING SUBSIDIARIES
401(k) MAXIMUM ADVANTAGE PROGRAM AND TRUST
Table of Contents
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Page |
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Report of Independent Registered Public Accounting Firm |
1 |
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Statements of Net Assets Available for Plan Benefits |
2 |
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Statements of Changes in Net Assets Available for Plan Benefits |
3 |
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Notes to Financial Statements |
4 |
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Schedule |
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Schedule H, Line 4i Schedule of Assets (Held at End of Year) |
10 |
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Note: The schedules of reportable transactions, non-exempt transactions, investment assets both acquired and disposed of within the plan year, loans or fixed income obligations, and leases in default or classified as uncollectible, required by Section 103(c)(5) of the Employee Retirement Income Security Act of 1974, are not applicable. |
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Report of Independent Registered Public Accounting Firm
The Plan Administrator
Gerber Scientific, Inc. and Participating Subsidiaries
401(k) Maximum Advantage Program and Trust:
We have audited the accompanying statements of net assets available for plan benefits of Gerber Scientific, Inc. and Participating Subsidiaries 401(k) Maximum Advantage Program and Trust as of December 31, 2003 and 2002 and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the Standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of Gerber Scientific, Inc. and Participating Subsidiaries 401(k) Maximum Advantage Program and Trust as of December 31, 2003 and 2002, and the changes in net assets available for plan benefits for the years then ended in conformity with United States generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets held at end of year is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. This supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ KPMG LLP
May 14, 2004
Hartford, Connecticut
1
GERBER SCIENTIFIC, INC. AND PARTICIPATING SUBSIDIARIES
401(k) MAXIMUM ADVANTAGE PROGRAM AND TRUST
Statement of Net Assets Available for Plan Benefits
December 31, 2003 and 2002
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2003 |
2002 |
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Money Market Account: |
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Merrill Lynch Retirement Reserves Money Market Fund |
$ 9,012,638 |
$ 8,701,164 |
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Mutual Funds, at fair value: |
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BGI Standard & Poor's 500 Stock Fund |
17,489,729 |
13,509,234 |
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BGI Asset Allocation Fund |
10,876,873 |
9,639,565 |
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Dreyfus Founders Growth Fund |
5,919,791 |
4,074,996 |
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Davis NY Venture (A) Fund |
3,747,101 |
2,566,075 |
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BGI Bond Index Fund |
4,257,075 |
4,185,807 |
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Templeton Foreign (A) Fund |
1,844,475 |
1,259,483 |
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Employer Stock Fund, at fair value: |
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Gerber Scientific, Inc. Stock Fund |
1,641,413 |
1,008,513 |
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Collective Investment Fund, at fair value: |
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International Equity Fund |
1,125,841 |
715,333 |
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Loans Receivable from Plan Participants, at fair value |
1,281,871 |
1,407,804 |
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57,196,807 |
47,067,974 |
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Less: Payable to recordkeeper (note D) |
(8,054) |
(8,011) |
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Net assets available for plan benefits |
$57,188,753 |
$47,059,963 |
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========= |
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See accompanying notes to financial statements. |
2
GERBER SCIENTIFIC, INC. AND PARTICIPATING SUBSIDIARIES
401(k) MAXIMUM ADVANTAGE PROGRAM AND TRUST
Statement of Changes in Net Assets Available for Plan Benefits
For the Years Ended December 31, 2003 and 2002
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2003 |
2002 |
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Investment income (loss): |
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Net appreciation (depreciation) in fair value of investments |
$ 8,605,797 |
$(9,379,346) |
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Interest and dividends |
822,913 |
779,818 |
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Interest on participant loans |
94,886 |
123,257 |
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9,523,596 |
(8,476,271) |
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Contributions: |
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Plan participants |
3,783,071 |
4,165,199 |
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Employer |
829,989 |
888,953 |
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Total investment income (loss) and contributions |
14,136,656 |
(3,422,119) |
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Benefits paid to participants |
(3,986,906) |
(6,556,435) |
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Administrative fees |
(20,960) |
(23,280) |
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Total benefits and expenses |
(4,007,866) |
(6,579,715) |
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Net increase (decrease) in net assets |
10,128,790 |
(10,001,834) |
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Net assets available for plan benefits at beginning of year |
47,059,963 |
57,061,797 |
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Net assets available for plan benefits at end of year |
$57,188,753 |
$47,059,963 |
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========= |
========= |
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See accompanying notes to financial statements. |
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3
GERBER SCIENTIFIC, INC. AND PARTICIPATING SUBSIDIARIES
401(k) MAXIMUM ADVANTAGE PROGRAM AND TRUST
Notes to Financial Statements
December 31, 2003 and 2002
(A) Description of the Plan
The following brief description of the Gerber Scientific, Inc. and Participating Subsidiaries 401(k) Maximum Advantage Program and Trust (the "Plan") is provided for general information purposes only and reflects the Plan's provisions as of the date of the financial statements. Participants should refer to the Plan documents for more complete information on the Plan's provisions.
(1) General
The Plan is a defined contribution plan sponsored by Gerber Scientific, Inc. and Participating Subsidiaries (the "Company") and was established effective January 1, 1985. It is intended that the Plan be qualified and exempt under Sections 401(a) and 501(a) of the Internal Revenue Code of 1986 (the "Code"), as amended from time to time, and meet the requirements of Section 401(k) of the Code. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA").
(2) Purpose
The purpose of the Plan is to encourage employee savings and to provide a facility for accumulation of funds to be used to provide benefits upon an employee's retirement, death, disability, termination of employment, or certain other circumstances.
(3) Administration
The Board of Directors of Gerber Scientific, Inc., which has the authority to administer the Plan, has delegated the duties of Plan Administrator to a Committee consisting of Company employees. The Committee interprets and applies Plan provisions, makes final determinations concerning eligibility, benefits, and rights under the Plan, furnishes individual benefits statements to Participants, and files such reports as may be required by law.
(4) Eligibility
Employees of the Company become eligible to participate in the Plan on the first day of employment.
(5) Employee Contributions
An eligible employee becomes a Participant by authorizing the Company to reduce the Participant's eligible pay and make a corresponding "pre-tax" or "after-tax" contribution to the Plan. Eligible pay is defined as base pay, overtime pay, commissions, and bonus pay. "Pre-tax" contributions may range from 2% to 100% of eligible pay and "after-tax" contributions may range from 1% to 100% of eligible pay. A Participant may change or suspend contributions by providing written notice to the Company.
"Pre-tax" contributions are deducted from taxable wages before income taxes are withheld and are not subject to income taxation until withdrawn from the Plan. "After-tax" contributions do not reduce taxable wages and thus are subject to current income taxation.
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Under Internal Revenue Service regulations, annual compensation limit for Plan purposes was $200,000 in 2003 and 2002, and the maximum "pre-tax" contribution per Participant was limited to $12,000 in 2003 and $11,000 in 2002.
In June 2002, the Company announced that participants could no longer contribute funds to the Gerber Scientific, Inc. Stock Fund.
(6) Employer Contributions
The Company matches 50% of the first 6% of eligible pay that a Participant contributes on a "pre-tax" basis, subject to a maximum annual Company contribution of $1,200 per Participant for 2003 and 2002.
The Company match was discontinued effective January 1, 2004 and was reinstated as of May 1, 2004.
(7) Investment of Contributions and Participants' Accounts
A separate accounting is maintained in the name of each Participant, reflecting contributions by the Participant, amounts contributed by the Company under the Plan on the Participant's behalf, investment earnings or losses, loans, withdrawals, or other distributions, and expenses, if any, charged against such account. The amount of benefit available to each Participant at any point in time depends solely upon the value of the Participant's own account.
A Participant directs the investment of his/her account. These investment funds are managed by a variety of investment managers. The investment funds offered to participants during Plan years ended December 31, 2003 and 2002 were:
a. The BGI Standard & Poor's 500 Stock Fund, which is comprised of investments in common stock and attempts to achieve the same rate of return as the Standard & Poor's 500 Composite Stock Price Index. The Fund attempts to do this by holding nearly all of the 500 common stocks that the Index measures;
b. The BGI Asset Allocation Fund, which uses a computer model to allocate its investments among common stocks, U.S. Treasury bonds, and money market instruments. The computer model allocates and reallocates investments among these asset classes based upon estimates of their relative risk and rates of return;
c. The Merrill Lynch Retirement Reserves Money Market Fund, which is comprised of investments in short-term money market instruments, including U.S. Government securities, bank certificates of deposit, bankers' acceptances, commercial paper and repurchase agreements;
d. The Dreyfus Founders Growth Fund, which invests primarily in common stock and other equity securities of U.S. companies;
e. The Davis New York Venture (A) Fund, which invests primarily in common stock and other equity securities of U.S. companies and in securities of foreign issuers or securities that are principally traded in foreign markets;
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f. The BGI Bond Index Fund, which is comprised of fixed-income securities issued by the U.S. Government and investment grade corporations and attempts to achieve the same rate of return as the Lehman Brothers Government/Corporate Bond Index by holding nearly all of the 5,000 fixed-income securities that the Index measures;
g. The Templeton Foreign (A) Fund, which invests primarily in stocks and debt obligations of companies and governments outside the U.S.;
h. The Gerber Scientific, Inc. Stock Fund (offered through July 2002), is comprised primarily of the common stock of Gerber Scientific, Inc. and a nominal component of money market instruments; and
i. The International Equity Fund, which invests in securities traded outside the United States and excludes securities of U.S. companies. The Fund invests in substantially the same stocks and the same percentages as comprise the Morgan Stanley Capital International Europe, Australia, and Far East (EAFE) Index.
The Plan permits a Participant to change the investment allocation of future contributions and the investment allocation of the Participant's existing account. There is no limit on the number of changes that may be made.
In April 2004, the BGI Asset Allocation Fund was no longer offered to participants as an investment option and was replaced by the Van Kampen Equity and Income Fund.
In May 2004, the International Equity and the BGI Bond Index Funds were no longer offered to participants and were replaced by the American EuroPacific Growth Fund and the Merrill Lynch Aggregate Bond Index Fund, respectively.
(8) Vesting
A Participant is at all times 100% vested in the Participant's "pre-tax" contributions, "after-tax" contributions, "rollover" contributions, and the Company contributions on the Participant's behalf.
(9) Withdrawals and Loans
The Plan allows the distribution, or the deferral of distribution, of an account at the end of the Participant's career with the Company. However, the Plan makes provision for hardship and non-hardship withdrawals and for loans, subject to current Internal Revenue Service regulations.
Hardship withdrawals are permitted to meet a financial hardship resulting from qualifying medical expenses, educational expenses, funeral expenses, the purchase of a primary residence, or the loss of a primary residence through eviction or mortgage foreclosure. Hardship withdrawals require approval of a committee consisting of Human Resources employees. Non-hardship withdrawals may be made only from a Participant's "after-tax" contributions or "rollover" contributions and may be made for any reason.
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Loans may be drawn against a Participant's account, subject to a $500 minimum and a $50,000 maximum, and may not exceed 50% of the Participant's account balance. Loan repayments are redeposited in the Participant's account in accordance with the Participant's current investment allocation for contributions. Any outstanding loan balance not repaid at termination of employment is treated as a taxable distribution. As of December 31, 2003 interest rates on outstanding loans ranged from 4.75 % to 10.98%.
(10) Payment of Benefits
Distributions from the Plan are paid either in a lump sum cash payment or a portion paid in a lump sum and the remainder paid later. Unless a Participant elects otherwise, distributions are payable upon the termination of employment. If a Participant's total account balance is greater than $5,000, the Participant (or in the event of death, the Participant's designated beneficiary) has the right to defer the distribution.
Upon the death of a Participant, the designated beneficiary, or the Participant's estate if no beneficiary is designated, is entitled to 100% of the Participant's account.
(11) Taxation
Income taxes are deferred on "untaxed funds" in a Participant's account. Untaxed funds consist of "pre-tax" contributions, Company contributions, net investment earnings, and loan interest repaid. Upon distribution, such untaxed funds become taxable. Untaxed funds received as a loan are not subject to income taxes. "After-tax" contributions which are distributed are not taxable, but investment earnings on "after-tax" contributions are taxable when distributed.
(B) Summary of the Plan's Significant Accounting Policies
(1) Basis of Presentation
The accompanying financial statements have been prepared on the accrual basis of accounting and present the net assets available for plan benefits and the changes in net assets available for plan benefits as of and for the plan years ended December 31, 2003 and 2002.
(2) Trust Funds Held and Managed
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") served as the Plan's recordkeeper for Plan years ended December 31, 2003 and 2002.
The Plan's investments at December 31, 2003 and 2002 were held in trust by Merrill Lynch Trust Company, FSB and were invested in mutual funds, a collective investment fund and an employer stock fund managed by various investment managers. Certain investments are shares of mutual funds that are managed by Merrill Lynch. Therefore, transactions related to these companies qualify as party-in-interest transactions. Investments were recorded by Merrill Lynch on a trade date basis. For the Plan years ended December 31, 2003 and 2002, the investment in and the changes in these investment funds were reported to the Plan by Merrill Lynch as determined based on quoted market values for all assets of the funds. Interest and dividend income is recorded as earned.
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(3) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the plan administrator to make estimates and assumptions that affect the reported amounts of assets, liabilities and changes therein and the disclosure of contingent assets and liabilities.
(4) Payments of Benefits
Benefits are recorded when paid.
(C) Investments
The following presents investments that represent 5 percent or more of the Plan's net assets.
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December 31, |
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2003 |
2002 |
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Investments, at fair value: |
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BGI Standard & Poor's 500 Stock Fund |
$17,489,729 |
$13,509,234 |
BGI Asset Allocation Fund |
10,876,873 |
9,639,565 |
Merrill Lynch Retirement Reserves Money Market Fund |
9,012,638 |
8,701,164 |
Dreyfus Founders Growth Fund |
5,919,791 |
4,074,996 |
BGI Bond Index Fund |
4,257,075 |
4,185,807 |
Davis NY Venture (A) Fund |
3,747,101 |
2,566,075 |
The Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated (depreciated) in value during the years ended December 31, as follows:
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2003 |
2002 |
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Mutual funds |
$7,402,240 |
$(8,050,982) |
Common stock |
924,330 |
(1,159,369) |
Common collective trust |
279,227 |
(168,995) |
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$8,605,797 |
$(9,379,346) |
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(D) Administrative Expenses and Related Party Transactions
Costs of establishing and administering the Plan, such as legal fees, consulting fees, and salaries and fringe benefits of Company personnel, have been paid by the Company and, accordingly, are not included as administrative expenses of the Plan. Expenses which are included in the financial statements represent loan maintenance fees charged against the accounts of participants with outstanding loan balances and account maintenance fees charged to non-active participants. At December 31, 2003 and 2002, the Plan owed Merrill Lynch $8,054 and $8,011, respectively, which primarily represented loan maintenance fees and account maintenance fees not yet collected from the Plan assets.
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(E) Amendment and Termination
Although it has not expressed any intent to do so, the Company reserves the right to modify, suspend, or terminate the Plan, in whole or in part (including the provisions relating to contributions), subject to the provisions of ERISA. However, the Company has no power to modify, suspend, amend, or terminate the Plan in a manner that will cause or permit any part of the trust fund to be used for or diverted to purposes other than the exclusive benefit of Participants or their beneficiaries, or for the payment of expenses pursuant to the provisions of the Plan. Upon termination or partial termination of the Plan, the amounts credited to the accounts of members affected by such termination or partial termination shall be non-forfeitable.
(F) Federal Income Tax Status of the Plan
In September 2003, the Company adopted the Merrill Lynch non-standardized prototype defined contribution plan. As a result, the Company applied for a new tax determination letter in January 2004.
In February 2002, the Company amended the Plan to be in accordance with GUST laws and regulations. As a result, the Company applied for and received a new tax determination letter dated June 6, 2002 from the Internal Revenue Service that the Plan constitutes an employees' trust that is exempt from taxation and that the Company may deduct for income tax purposes the amounts contributed by it to the trust fund.
It is the intention of the Company that the Plan remain qualified and exempt under Sections 401(a) and 501(a) of the Code and meet the requirements of Section 401(k) of the Code. The Company may authorize any modification or amendment of the Plan that is deemed necessary or appropriate to maintain the qualification and exemption of the Plan within the requirements of Section 401(a) and 501(a) of the Code, or any other applicable provision of the Code as now in effect or hereafter amended or adopted.
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Schedule H, Line 4i GERBER SCIENTIFIC, INC. AND PARTICIPATING SUBSIDIARIES
Schedule of Assets (Held at End of Year) |
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Description of investment, |
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including maturity date, rate of |
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Identity of issue, borrower, |
interest, collateral, par, or |
Current |
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lessor, or similar party |
maturity value |
value |
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BGI Standard & Poor's 500 Stock Fund |
Mutual Fund, 129,804 shares |
$17,489,729 |
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BGI Asset Allocation Fund |
Mutual Fund, 1,165,796 shares |
10,876,873 |
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*ML Retirement Reserves MM Fund |
Money Market Fund, 9,012,638 shares |
9,012,638 |
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Dreyfus Founders Growth Fund |
Mutual Fund, 602,217 shares |
5,919,791 |
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Davis NY Venture (A) Fund |
Mutual Fund, 136,159 shares |
3,747,101 |
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BGI Bond Index Fund |
Mutual Fund, 424,858 shares |
4,257,075 |
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Templeton Foreign (A) Fund |
Mutual Fund, 173,353 shares |
1,844,475 |
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*Gerber Scientific, Inc. Stock Fund |
Employer Stock Fund, 459,780 shares |
1,641,413 |
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International Equity Fund |
Common/Collective Trust, 71,893 shares |
1,125,841 |
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*Participant Loans |
Participant Loans, 4.75% - 10.98% |
1,281,871 |
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$57,196,807 |
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*-Represents a party-in-interest. |
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See accompanying report of independent registered public accounting firm. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
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GERBER SCIENTIFIC, INC. AND |
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(Registrant) |
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Date: June 25, 2004 |
By: /s/ Anthony L. Mattacchione |
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Anthony L. Mattacchione |
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