Exhibit No. 10.35

 

Description of Executive Officer Compensation

    Gerber Scientific's executive compensation program consists primarily of (1)
base salary, (2) annual incentive cash bonus opportunities and (3) long-term
equity-based incentives. This report describes the three principal elements of
compensation generally available to executives.

    Base Salary Compensation.

The committee establishes and reviews the base salaries of Gerber Scientific's
executive officers on an annual basis. The committee evaluates each executive's
salary history, scope of responsibility, prior experience, past performance and
expected contribution to Gerber Scientific's future success. In the case of all
executive officers other than the Chief Executive Officer, the committee also
considers the recommendations of the Chief Executive Officer.

    The committee compares compensation levels for its executive officers to the
compensation of executives employed by companies considered to be in Gerber
Scientific's peer group, which includes some of the companies in the peer group
reflected in the performance graph included in this proxy statement. The
committee also considers each executive officer's base pay relative to the
executive's total compensation package, including cash incentives and long-term
equity-based incentives. In making its salary decisions, the committee exercises
its discretion and judgment based upon the foregoing factors. The committee does
not apply any formula to assign particular weight to any one factor. Because of
adverse business conditions, the committee did not approve general increases in
the base salaries of Gerber Scientific's executive officers for fiscal 2004 over
prior-year levels. .

    Annual Cash Bonuses.

Gerber Scientific's bonus plan provides for annual incentive bonus payments to
be made to Gerber Scientific's executive officers upon the achievement of
pre-established performance goals which are linked to the financial performance
of Gerber Scientific and its subsidiaries. The committee establishes the
performance goals each fiscal year from a number of financial objectives defined
in the bonus plan, including cash flow and earnings before interest and taxes,
or "EBIT."

    The target bonus potential for each fiscal year is fixed by the committee as
a percentage of the executive's base salary at the close of the prior fiscal
year. Target bonus potential levels are set at the beginning of the fiscal year,
but may be increased in the event of a promotion. The maximum cash bonus payable
to any executive is two times the target bonus potential, with the amount
payable determined by the degree of achievement of the performance goals
applicable to either Gerber Scientific or a designated subsidiary where the
executive is employed. The target bonus potential levels are tied to the median
of bonus compensation paid to executives of companies considered to be in Gerber
Scientific's peer group.

    Long-Term Incentive Compensation.

A third component of an executive officer's compensation consists of awards
under Gerber Scientific's stock incentive plan pursuant to which Gerber
Scientific grants executive officers and other key employees options to purchase
shares of common stock and other equity-based awards, including restricted
shares. The committee believes that long-term equity-based incentive awards
strengthen Gerber Scientific's ability to attract, motivate and retain
executives of superior capability and more closely align the interests of
management with those of shareholders. The committee believes that such
equity-based compensation provides executives with a continuing stake in Gerber
Scientific's long-term success.

    Stock option and restricted stock grants are generally determined by the
level of responsibilities and the performance of the executive officer. Stock
options are granted with an exercise price equal to the fair market value of the
underlying common stock on the date of grant and vest in equal amounts over a
three-year period. Restricted stock awards vest according to terms established
by the committee at the time of grant. Vesting of particular awards may range
from vesting upon grant to vesting over periods of up to five years after the
grant date. Executives generally must be employed by Gerber Scientific at the
time of vesting to exercise stock options or to receive common stock underlying
grants of restricted stock free of restrictions.

    To determine the level and reasonableness of stock option grants to its
Chief Executive Officer and other most highly compensated executive officers,
the committee allocates to the Chief Executive Officer and other executive
officers a percentage of the total stock options granted annually to all
employees. The Committee determines this allocation based in part on its review
of executive stock option allocation practices of other companies considered to
be within Gerber Scientific's peer group.