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                                                                   Exhibit 10.35


                                 SHELDAHL, INC.

                    RETIREMENT BENEFIT PROGRAM FOR DIRECTORS


RESOLVED, that there is hereby established a Retirement Benefit Program for
directors of this Corporation who have no vested interest in any other
retirement plan or program of this Corporation at the time of ceasing to serve
as a director subsequent to the adoption of this resolution, upon the following
terms and conditions:

     1.   The annual amount of the benefit shall be equal to the amount of the
          retainer fees (as distinct from fees paid for attendance at meetings)
          paid to directors during the full fiscal year preceding the date the
          director ceases to hold that office if the director has served in that
          capacity fifteen years or more; the amount of the benefit shall be
          reduced by 5% for each year less than fifteen, but no benefit shall be
          paid unless the director has served in that capacity at least five
          full years.

     2.   Payment of the benefit shall commence at the time the director ceases
          to serve as a director if age 65 or older, or at age 65 if the
          director ceases to serve as a director prior thereto, or at the time
          the director ceases to serve as a director in the event the director
          has become so disabled as to make continued service as a director
          impractical.

     3.   Benefits hereunder shall be payable during the lifetime of the former
          director, but not exceeding ten years. No payments shall be made in
          the event of the death of a director or former director prior to
          entitlement to payments hereunder.

     4.   Payment may be made pursuant hereto monthly, quarterly or annually as
          determined from time to time in the sole discretion of the
          Corporation.

     5.   Former directors who are being paid benefits hereunder shall agree to
          be available to the Corporation as reasonably requested for
          consultation and advice, including attendance at meetings of the Board
          of Directors or committees thereof if requested, and shall be
          reimbursed in addition for out-of-pocket expenses in connection with
          such meetings. Such former directors shall also agree not to engage in
          any substantial activity competitive with the business of the
          Corporation, except that this restriction may be removed at the
          request of the former director upon furnishing a written waiver of any
          further payments and benefits hereunder.

     6.   The directors' Retirement Benefit Program hereby established will not
          be terminated or modified adversely to the interests of a director or
          former director who is serving or has served as a director while this
          program is in effect, and the obligations of the Corporation hereunder
          shall be binding upon any successor entity or assignee of all or
          substantially all of the business and assets of the Corporation.

FURTHER RESOLVED, that any officers or employees of this Corporation are
authorized and directed to execute and deliver any instruments and documents,
and to take any action, deemed necessary or appropriate in connection with these
resolutions.