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").

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.

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, and files such reports as may be required by law.

Employees of the Company become eligible to participate in the Plan on the first day of employment.

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" and "after tax" contributions may be made up to 100% of eligible pay. A Participant may change or suspend contributions at any time.

"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are deducted from taxable wages before income taxes are withheld and are not subject to income taxation until withdrawn from the Plan.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.

Under Internal Revenue Service regulations, the annual compensation limit for Plan purposes was $210,000 and $205,000 in 2005 and 2004, respectively, and the maximum "pre-tax" contribution per participant was limited to $14,000 in 2005 and $13,000 in 2004.

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 and $800 per Participant for 2005 and 2004, respectively.

The Company match was discontinued effective January 1, 2004 and was reinstated as of May 1, 2004.

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 ending December 31, 2005 and 2004 were:

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 March 2005, the Fidelity Advisor Small Cap Class A Fund, Dreyfus Premier Small Cap Value Fund and Hotchkiss & Wiley Large Cap Value Funds were added to the plans investment options to offer a more comprehensive and industry comparative 401K plan.

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.

The Plan allows the distribution of an account at the end of the Participant's career with the Company or the deferral of distribution. 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, the purchase of a primary residence, the loss of a primary residence through eviction or mortgage foreclosure or other qualified expenses. 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.

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. Interest rates on outstanding loans ranged from 5.00% to 10.98% at December 31, 2005 and 2004.

Distributions from the Plan are paid either in a lump sum cash payment or in installment cash payments over time. 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. In determining whether a Participant's account balance is greater that $5,000 for this purpose, rollover contributions made by the Participant are disregarded.

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.

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.

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, 2005 and 2004.

Merrill Lynch & Co., Inc. served as the Plan's recordkeeper for Plan years ending December 31, 2005 and 2004.

The Plan's investments at December 31, 2005 and 2004 were held in trust by Merrill Lynch Trust Company, FSB and were invested in a money market fund, mutual funds and an employer stock fund managed by various investment managers. Investments were recorded by Merrill Lynch on a trade date basis. Shares of Mutual Funds are valued at the net asset value of shares held by the Plan as of December 31, 2005 and 2004. Participant loans are valued at their outstanding balances, which approximate fair value. Common Stock is valued based on quoted market prices. Interest is recorded as earned. Dividends are recorded on the ex-dividend date.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States 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. Actual results could differ from those estimates.

Benefits are recorded when paid.

Employee contributions and employer match are recorded in the period in which the employee payroll deductions are made.

The plan provides that certain limitations may be imposed on participants' contributions in order to comply with statutory requirements. As of December 31, 2005, $19,325 has been accrued as excess contributions payable to certain Participants. Benefit payments in the statement of changes in net assets available for benefits have been adjusted for this amount. The return of excess contributions allows the Plan to comply with statutory requirements.

The plan invests in a combination of investment securities that are exposed to various risks, such as interest rate, market and credit. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of investment securities, it is at least reasonably possible that changes in risks in the near term would materially affect participants' account balances and the amounts reported in the statement of net assets available for benefits and the statement of changes in net assets available for benefits.