-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L2W7UB3jT11eRtSf4d7O6G6Ek4ua3RqMgJEede3ODOVqenuLPHMne2YisLBrmiAn 2Kq3k1FVpL9ICXwjuj5Scg== 0001144204-10-031222.txt : 20100601 0001144204-10-031222.hdr.sgml : 20100531 20100601170042 ACCESSION NUMBER: 0001144204-10-031222 CONFORMED SUBMISSION TYPE: DEF 14A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20100715 FILED AS OF DATE: 20100601 DATE AS OF CHANGE: 20100601 EFFECTIVENESS DATE: 20100601 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AEROSONIC CORP /DE/ CENTRAL INDEX KEY: 0000109471 STANDARD INDUSTRIAL CLASSIFICATION: SEARCH, DETECTION, NAVIGATION, GUIDANCE, AERONAUTICAL SYS [3812] IRS NUMBER: 741668471 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: DEF 14A SEC ACT: 1934 Act SEC FILE NUMBER: 001-11750 FILM NUMBER: 10870383 BUSINESS ADDRESS: STREET 1: 1212 N HERCULES AVE CITY: CLEARWATER STATE: FL ZIP: 33765 BUSINESS PHONE: 727-461-3000 MAIL ADDRESS: STREET 1: 1212 N HERCULES AVE CITY: CLEARWATER STATE: FL ZIP: 33765 DEF 14A 1 v186944_def14a.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
(Rule 14a-101)
 
SCHEDULE 14A INFORMATION
 
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
 
Filed by the Registrant x                            Filed by a party other than the Registrant o
 
Check the appropriate box:
 
o
Preliminary Proxy Statement
 
o
Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
 
x
Definitive Proxy Statement
 
o
Definitive Additional Materials
 
o
Soliciting Material Under Rule 14a-12
 
AEROSONIC CORPORATION
 
(Name of Registrant as Specified in its Charter)
 
 
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
 
x
No fee required
 
o
Fee computed on table below per Exchange Act Rules 14a-6(i) (1) and 0-11
 
Title of each class of securities to which transaction applies:

     
 
Aggregate number of securities to which transaction applies

     
 
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set for the amount on which the filing fee is calculated and state how it was determined):

     
 
Proposed maximum aggregate value:
 
     
 
Total fee paid:
     

o
Fee paid previously with preliminary materials.
 
o
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the form or schedule and the date of its filing.
 
Amount previously paid:
 
     
 
Form, Schedule or Registration Statement No.:
 
     
 
Date Filed:
     
     

 
 
 
 
 
 
AEROSONIC CORPORATION
(A DELAWARE CORPORATION)
1212 North Hercules Avenue
Clearwater, Florida 33765
 
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JULY 15, 2010
 
TO THE STOCKHOLDERS OF AEROSONIC CORPORATION:
 
The 2010 Annual Meeting of Stockholders of AEROSONIC CORPORATION will be held at Aerosonic Corporation, 1212 North Hercules Avenue, Clearwater, Florida 33765, on Thursday, July, 15, 2010, beginning at 10:00 A.M., EDT, for the following purposes:

 
1.
to elect one director to our Board of Directors;

 
2.
to ratify the appointment of Kirkland, Russ, Murphy & Tapp, P.A. as Aerosonic Corporation’s independent registered public accounting firm for the fiscal year ending January 31, 2011; and

 
3.
to transact such other business as may properly come before the meeting or any adjournment or postponement thereof.
 
The foregoing is more fully described in the proxy statement attached hereto and made a part of this Notice. The Board of Directors has fixed the record date for determining the stockholders entitled to notice of and to vote at the meeting and any adjournment or postponement thereof as of the close of business on May 17, 2010.
 
A complete list of the stockholders entitled to vote at the meeting shall be open to inspection by any stockholder of Aerosonic Corporation, for any lawful purpose germane to the meeting, at any time during usual business hours for a period of ten days prior to the meeting at our offices located at 1212 North Hercules Avenue, Clearwater, Florida 33765 (telephone number: 727.461.3000).

By Order of the Board of Directors,


Douglas J. Hillman,
President & Chief Executive Officer
June 1, 2010
Clearwater, Florida
 
YOUR VOTE IS IMPORTANT, REGARDLESS OF THE NUMBER OF SHARES YOU OWN. YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. HOWEVER, WE ENCOURAGE YOU TO VOTE BY PROXY SO THAT YOUR SHARES WILL BE REPRESENTED AND VOTED AT THE MEETING EVEN IF YOU CANNOT ATTEND. PLEASE SIGN, DATE AND RETURN YOUR PROXY IN THE ENCLOSED ENVELOPE. OF COURSE, YOU MAY VOTE IN PERSON AT THE MEETING IF YOU SO CHOOSE.

Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on July 15, 2010
 
The Company’s proxy statement and annual report to stockholders for the fiscal year 2010 are available at www.aerosonic.com/annualreports.html
 
Directions to attend the Annual Meeting and vote in person are available at www.aerosonic.com
 
 
AEROSONIC CORPORATION
1212 North Hercules Avenue
Clearwater, Florida 33765
 
PROXY STATEMENT
 
Annual Meeting of Stockholders to be held on July 15, 2010
 
GENERAL INFORMATION
 
The Notice of the Annual Meeting of Stockholders, this proxy statement and the accompanying proxy card (the “proxy materials”) are being mailed to you commencing on or about June 9, 2010 in connection with the solicitation of proxies by the Board of Directors (the “Board”) of Aerosonic Corporation, a Delaware corporation (“Aerosonic,” the “Company,” “we,” “us,” or “our”), to be voted at the Annual Meeting of Stockholders to be held at Aerosonic Corporation, 1212 North Hercules Avenue, Clearwater, Florida 33765, beginning at 10:00 A.M., EDT, on Thursday, July 15, 2010. A copy of the Company’s Annual Report to Stockholders for the fiscal year ended January 31, 2010 is being mailed with these proxy materials.
 
All proxies that are properly executed and delivered will be voted on all matters that properly come before the meeting for a vote. If your proxy specifies instructions with respect to the matters being voted upon, the proxy holders will act in accordance with your instructions. If no instructions are specified, your shares will be voted FOR the election of the nominee to the Board, FOR the ratification of appointment of independent registered public accounting firm and in the discretion of the proxy holders as to any other matters that may properly come before the meeting. You have the right to revoke your proxy any time prior to it being voted by (i) delivering a written revocation or duly executed proxy bearing a later date to the Corporate Secretary (at 1212 North Hercules Avenue, Clearwater, Florida 33765) or (ii) attending the meeting and voting your shares in person.
 
Whether or not you attend the meeting, your vote is important. Accordingly, regardless of the number of shares you own, you are asked to vote promptly by signing and returning the accompanying proxy card.
 
Your shares can only be voted at the meeting if you are represented by proxy or are present in person.
 
VOTING SECURITIES AND VOTING RIGHTS
 
The Board has fixed the close of business on May 17, 2010 as the record date for determining the stockholders who are entitled to notice of, and to vote at, the meeting and at any adjournment thereof. On June 1, 2010, there were 3,735,329 shares of our common stock outstanding. Each stockholder of record on the record date is entitled to one vote per share held. There are no other classes of voting stock issued and outstanding.
 
Quorum and Required Vote
 
A majority of our outstanding common stock entitled to vote at the meeting must be present in person or represented by proxy to have a quorum for the transaction of business at the meeting. Under Delaware law and our Bylaws, the affirmative vote of the holders of a plurality of the shares represented and entitled to vote at the meeting at which a quorum is present is required to elect a director. On the ratification of the appointment of Kirkland, Russ, Murphy & Tapp, P.A. as Aerosonic Corporation’s independent registered public accounting firm for the fiscal year ending January 31, 2011 and any other matters that properly come before the meeting, a majority of the shares represented and voting at the meeting is required to decide the question.
 
For purposes of determining the presence of a quorum for transacting business at the meeting, abstentions and broker “non-votes” (i.e., proxies from brokers or nominees indicating that such persons have not received instructions from the beneficial owner or other persons entitled to vote shares on a particular matter with respect to which the brokers or nominees do not have discretionary power) will be treated as shares that are present but which have not been voted. Accordingly, shares represented by proxies marked “WITHHOLD AUTHORITY FOR THE NOMINEE” and broker non-votes with regard to the election of directors will be counted for purposes of determining the presence of a quorum at the meeting, but will not be voted in the election of the director, and therefore, will have no effect on the determination of the outcome of the votes for the election of the director. Shares represented by proxies marked “ABSTAIN” with regard to the ratification of the independent registered public accounting firm will be counted for purposes of determining the presence of a quorum at the meeting, but will not be voted in the ratification of the independent registered public accounting firm, and therefore, will have no effect on the determination of the outcome of the votes for the ratification of the independent registered public accounting firm.

 
 
 
 
There is an important change this year regarding broker non-votes and director elections. Under an amendment to New York Stock Exchange Rule 452 that is effective for this Annual Meeting of Stockholders, brokers, banks or other holders of record are no longer permitted to exercise discretionary authority to vote in the election of directors if the broker or other record holder has not received instructions from the beneficial owner. This represents a change from prior years, when brokers had discretionary voting authority in the election of directors. As noted above, if voting instructions are not provided with respect to the election of the director, the broker or other record holder can register the shares as being present at the annual meeting for purposes of determining the presence of a quorum but will not be able to vote on the election of the director. Accordingly, it is particularly important that beneficial owners instruct their brokers how they wish to vote their shares. Further, if voting instructions are not provided with respect to the ratification of the independent registered public accounting firm, the broker or other record holder will be able to exercise its discretionary authority and vote on such proposal.
 
ELECTION OF DIRECTORS
 
Proposal No. 1.—To elect one director to our Board of Directors
 
Our Bylaws provide for a classified Board, with the number of directors which shall constitute the whole Board determined by the Board, as may be fixed from time to time by action of the Board and the number of classes into which the directors shall be classified being three. Your Board currently consists of five directors in total, two of whom are designated as Class I directors with a term expiring in 2011, two of whom are designated as Class II directors with a term expiring in 2012 and one of whom is designated as a Class III director with a term expiring in 2010. At each Annual Meeting of Stockholders, directors in one class are elected for a full term of three years to succeed those directors whose terms are expiring. This year, the Class III director nominee will stand for election for a three-year term expiring at the 2013 annual meeting. The Nominating/Corporate Governance Committee of the Board has nominated Douglas J. Hillman as director to serve as a Class III director, and the Board has endorsed such nomination.
 
The persons named in the enclosed proxy will vote all properly executed proxies for the election of Douglas J. Hillman unless authority to vote is withheld. The nominee has indicated his willingness to serve, if elected. However, if the nominee should be unable to serve, the shares of common stock represented by proxies may be voted for a substitute nominee designated by the Board. Management has no reason to believe that the above-mentioned person will not serve his term as a director.
 
Set forth below is the name, age (as of June 1, 2010), principal occupation, and length of service of the individual nominated for election to your Board. The nominee was previously appointed by the Board and is currently serving as a director of the Company.
 
Nominee as Class III Director
 
Douglas J. Hillman, age 54, joined the Company in April, 2008 as our President and Chief Executive Officer. He also served as our Acting Chief Financial Officer from September 2008 until May 2009. Mr. Hillman has held various executive and management positions within the Aerospace industry for over 25 years. He joined Aerosonic from Kearfott Guidance & Navigation Corporation, a manufacturer of precision guidance components, where he served as Vice President/General Manager since 2005. From 2001 through 2005, he worked for Bird Technologies Group, a designer/manufacturer of communications equipment, holding positions ranging from Vice President/General Manager to Chief Operating Officer. Prior to Bird Technologies Group, he held numerous management positions of increasing responsibility at Moog Inc., a global designer and manufacturer of precision control systems for aerospace and industrial applications. Mr. Hillman received MBA and BSEE degrees from the State University of New York at Buffalo. He currently serves on the Dean's Council for the University's School of Engineering. In determining Mr. Hillman’s qualifications to serve on our board of directors, the Board has considered, among other things, his experience and expertise in the aerospace industry, including the operational, management, and executive positions he has held previously in other aerospace companies.
 
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE ELECTION OF THE NOMINEE TO THE BOARD OF DIRECTORS AS SET FORTH ABOVE.

 
 
 
 
DIRECTORS AND EXECUTIVE OFFICERS
  
Continuing Directors
 
Class I Directors (whose term will expire in 2011)
 
Thomas E. Whytas, age 45, has been a director since May, 2004. Mr. Whytas, a U.S. veteran, has 22 years of experience in the aerospace industry. He is currently the Chief Financial Officer of Medical Education Technologies Inc. (METI), the industry leader in medical simulation technology. Prior to METI, he served 15 years at CAE USA Inc. in positions of increasing responsibility up through the position of Chief Financial Officer and Finance Director of CAE’s U.S. operations. A Certified Public Accountant, Mr. Whytas also holds a Master’s Degree in Accounting from the University of South Florida. In determining Mr. Whytas’ qualifications to serve on our board of directors, the Board has considered, among other things, his experience and expertise in financial matters in manufacturing companies, including defense contracting.
 
Donald Russell, age 58, has been a director since February, 2006. Mr. Russell is the managing partner of Sigma Group, LLC, an executive coaching firm. Mr. Russell is also CEO and a Board member of Old UGC. Inc. He also was a director of Etrials Worldwide Inc., a publicly traded software company, until its merger with Merge in 2009. He was Vice Chairman of the Board of Directors of CEA Acquisition Corporation from 2004 through February, 2006. Mr. Russell has been Chairman of the Investment Committee for CEA Capital Partners USA, L.P. since February 1997 and a member of the Investment Committee of Seaport Capital Partners II, L.P. since its inception in February 2000. From July 1987 to June 1994, he was President of Communication Equity Associates’ New York Affiliate, CEA, Inc. and was responsible for overseeing its mergers, acquisitions and corporate financing businesses in the cable television and broadcasting industries. From 1974-1978 Mr. Russell worked for National Westminster Bank USA as a commercial lending officer. Mr. Russell has a B.A. in economics from Colgate University. In determining Mr. Russell’s qualifications to serve on our board of directors, the Board has considered, among other things, his experience and expertise in the investment banking and public company leadership.
 
Class II Directors (whose term will expire in 2012)
 
Roy Robinson, age 60, has been a director since January, 2008 when he was appointed to fill a vacancy on the Board. Mr. Robinson served as CEO of Seattle based Aviation Technologies, Inc. from 2003 until his retirement in 2007. Previously, he was President of ELDEC Corporation (“ELDEC”). Following the acquisition of ELDEC by the Crane Aerospace Group, he was appointed Chief Operating Officer of the Crane Aerospace Group of companies which included ELDEC, Hydro-Aire, Lear Romec, and Resistoflex. In determining Mr. Robinson’s qualifications to serve on our board of directors, the Board has considered, among other things, his experience and expertise in the aerospace industry, including the operational, management, and executive positions he has held previously in other aerospace companies.
 
P. Mark Perkins, age 53, joined Aerosonic as Executive Vice President of Sales and Marketing in 1998. Prior to joining Aerosonic, he was Vice President of Sales and Marketing at Gulf Aerospace, Inc. from 1992 to 1998. Previously, he served as Vice President and General Manager of National Aviation Academy. He also served as Assistant Vice President of Commercial Lending with SunTrust Bank. He has over 20 years of experience in various segments of the aviation industry including Sales, Corporate Strategy, Business and Product Development as well as Investor Relations. Mr. Perkins was elected to the Aerosonic Board of Directors in 1997 while at Gulf Aerospace. In determining Mr. Perkins’ qualifications to serve on our board of directors, the Board has considered, among other things, his experience and expertise in the aerospace and banking industries, including the operational, management, and executive positions he has held previously in other aerospace companies.
 
Please see “Compensation of Directors” for information on the compensation arrangements with our directors.
 
Non-Director Executive Officers
 
Set forth below are the names, ages (as of June 1, 2010), and positions of each of the individuals who, in addition to Messrs. Hillman and Perkins, are deemed to be our executive officers.

 
 
 
 
Thomas W. Cason, age 55, has served as the Company’s Executive Vice President and Chief Operating Officer since August 2008. Mr. Cason has held a number of senior operations roles, including Executive Vice President and Chief Operating Officer of DeMorgan Communities, an affordable housing developer, from 2006 through 2008. From 2003 to 2006, he served as Operations Director at Honeywell Aerospace, a provider of cabin management systems for the private corporate jet industry. He holds MBA, MS and BS degrees from Virginia Tech.
 
Kevin J. Purcell, age 52, has served as the Company’s Executive Vice President and Chief Financial Officer since May 2009. Before he joined the Company, he served as Vice President and Chief Financial Officer of Herley Industries, Inc., a manufacturer of microwave technology solutions, from 2006 until 2009. Prior to joining Herley, he served as Vice President Finance, Contracts and Compliance for Smiths Aerospace LLC, Customer Services Americas, a manufacturer of aircraft control and diagnostic systems, from 2002 until 2006. Other prior experience included senior financial positions including Vice President and CFO, Controller and Director as well as a number of years in the Government Contractor Advisory Services group of KPMG. He received his B.B.A. degree in financial accounting from Iona College and his M.B.A. degree from Pepperdine University. He is a Certified Public Accountant, a Certified Management Accountant, and a member of the American Institute of Certified Public Accountants, the Institute of Management Accountants the National Contract Management Association and the Financial Executives International.
 
INFORMATION REGARDING THE BOARD OF DIRECTORS AND CORPORATE GOVERNANCE
 
Independence of the Board of Directors
 
As required under the NYSE Amex listing standards, a majority of the members of a listed company’s board of directors must qualify as “independent,” as affirmatively determined by the Board. The Board consults with our counsel to ensure that the Board’s determinations are consistent with relevant securities and other laws and regulations regarding the definition of “independent,” including those set forth in pertinent listing standards of the NYSE Amex, as in effect from time to time.
 
Consistent with these considerations, after review of all relevant transactions or relationships between each director, or any of his or her family members, and us, our senior management and our independent auditors, the Board has affirmatively determined that the following directors are independent directors within the meaning of the applicable NYSE Amex listing standards: Messrs. Robinson, Russell and Whytas. In making this determination, the Board found that none of these directors had a material or other disqualifying relationship with us. Mr. Hillman, our President and Chief Executive Officer, and Mr. Perkins, our Executive Vice President of Sales and Marketing, are not independent directors by virtue of their employment with us.
 
Meetings and Committees of the Board of Directors
 
During the year ended January 31, 2010 (“fiscal year 2010”), the Board held eight meetings. During fiscal year 2010, each of the then-directors attended at least 75% of the aggregate number of meetings of the Board and meetings of committees thereof on which he served. We encourage all directors to attend the Annual Meeting of Stockholders, in person. In 2009, all of the then-current directors attended the Annual Meeting of Stockholders.
 
The Board currently has, and appoints members of, a standing Audit Committee, Compensation Committee, and Nominating/Corporate Governance Committee.
 
Audit Committee. The Audit Committee is composed entirely of “independent directors” as determined by the “audit committee” independent director standards of the NYSE Amex. Its members are Thomas E. Whytas (chairman), Roy Robinson and Donald Russell. The Board has determined that Mr. Whytas is the Audit Committee’s designated “financial expert.” The Audit Committee met five times during fiscal year 2010. The functions performed by the Audit Committee are described in the Audit Committee Report, set forth below, and in the Audit Committee Charter adopted by the Board, a copy of which is available on our website at www.aerosonic.com.
 
Compensation Committee. The Compensation Committee members are Donald Russell (chairman), Roy Robinson and Thomas E. Whytas, each of whom is an “independent” director as determined by standards established by the NYSE Amex for compensation committees. The Compensation Committee, which met one time during fiscal year 2010, reviews and approves our employee benefit plans, administers our executive compensation plans, and reviews and makes recommendations to the Board with respect to compensation of outside directors, as set forth in its Charter, a copy of which is available on our website at www.aerosonic.com.

 
 
 
 
Nominating/Corporate Governance Committee. The Nominating/Corporate Governance Committee members are Roy Robinson (chairman), Donald Russell and Thomas E. Whytas, each of whom is an “independent director” as determined by standards established by the NYSE Amex for nominating committees. The Nominating Committee reviews and assesses the composition of the Board, assists in identifying potential new candidates as directors, and submits its recommendations for nomination of directors to the Board. The Nominating Committee also regularly reviews the size and composition of the Board, individual director performance and recommends to the Board any changes it deems appropriate. The policies and function of the Nomination Committee are detailed in its Charter, which is currently available on our website at www.aerosonic.com. The Nominating Committee met two times during fiscal year 2010.
 
Our Bylaws provide that stockholders may make nominations for election to the Board and the Nominating Committee will consider those nominees. To recommend a prospective nominee to the Nominating Committee for consideration at an annual meeting, stockholders must submit the prospective nominee’s name and qualifications to the Corporate Secretary, in writing, by delivering or sending such recommendation not less than 90 days nor more than 120 days prior to the anniversary of the preceding year’s annual meeting to the following address: Aerosonic Corporation, 1212 North Hercules Avenue, Clearwater, Florida, 33765, Attention: Corporate Secretary. Stockholders are urged to assure delivery of their recommendations by arranging for some form of delivery receipt. The Nominating Committee did not receive any nominations during the required time period for consideration at this year’s annual meeting.
 
The Nominating Committee’s policy regarding the consideration and selection of director candidates (whether recommended by directors, members of management, stockholders, or any other persons) is to seek candidates who have a demonstrable record of personal and professional ethics and integrity, business and professional experience, knowledge of our industry, academic achievements, service on other boards of directors, and civic involvement. The Nominating Committee has not set any objective minimum qualifications that must be met by a nominee, but rather seeks to identify candidates with outstanding backgrounds and experience as measured by the above selection criteria.
 
The Nominating Committee’s process for identifying and evaluating director nominees includes active solicitation of suggestions from our management, as well as engaging in an active dialogue with executives and directors within our industry and in related industries. The Nominating Committee also considers nominations submitted by stockholders as discussed above. Although the Nominating Committee does not have a formal policy regarding diversity, the Nominating Committee considers the diversity of viewpoints, backgrounds and experiences, as well as other various factors relevant to any particular nominee in identifying nominees for a directorship. The Nominating Committee requires a background check by an independent contractor of any candidate it deems as an appropriate nominee, before making a recommendation of that person to the Board. The Company has not paid any fees to third parties to identify or evaluate or assist in identifying or evaluating potential nominees, but may consider the use of such third parties in the future.
 
Board Leadership Structure
 
The Board currently includes three independent directors and two employee directors. The Company does not have an official Chairman of Board position, however, the Company’s Bylaws direct the President and CEO to organize and preside over meetings of the Board of Directors. We have also implemented a lead independent director position (“Lead Director”) which is currently filled by Mr. Russell.
 
The Lead Director must be an independent director and has several defined duties which are designed to enhance effective governance and coordination. These include providing a focal point for communication between management and the outside directors; review and approve Board agendas as proposed by the President and CEO; provide for Board development; and coordinate oversight of Board activities.
 
We believe that our current board leadership structure is appropriate as the majority of the members of our board of directors are independent directors, and all significant committees are led and staffed by our independent directors.
 
The Board’s Role in Risk Oversight
 
It is management’s responsibility to manage risk and bring to the Board’s attention any material risks to the Company. The Board has oversight responsibility through its Audit Committee, which oversees the Company’s risk policies and processes relating to the financial statements and financial reporting processes and the guidelines, policies and processes for mitigating those risks. The Audit Committee holds regular meetings with management to review the inherent risks associated with the financial reporting process.

 
 
 
 
The Board is actively involved in oversight of risks that could affect the Company. This oversight is conducted primarily through committees of the Board as disclosed in the descriptions of each of the committees above and coordinated by the Lead Director with the full board of directors retaining responsibility for general oversight of risks. The Board satisfies this responsibility through full reports by each committee chairman regarding the committee's considerations and actions.
 
Code of Conduct
 
We have adopted a Code of Conduct that includes a code of ethics that applies to all of our employees and directors (including our principal executive officer and our principal finance and accounting officer). This Code of Conduct is posted on our website and is available for review at www.aerosonic.com/codeofconduct.html.
 
Communications to the Board from Stockholders
 
The Board welcomes communications from our stockholders and requests that all such communications be sent to Aerosonic Corporation, 1212 North Hercules Avenue, Clearwater, Florida 33765, Attention: Corporate Secretary. All communications that relate to matters that are within the scope of responsibilities of the Board or its committees will be forwarded to the appropriate directors by the Corporate Secretary. Communications also may be addressed to one or more directors, or to the entire Board. If a stockholder requests that any such communication be treated as confidential and delivered only to one or more directors, it may be submitted in a sealed envelope with a request that the communication be treated as a confidential matter for immediate delivery to the intended recipient(s).

 
 
 
 
COMPENSATION OF DIRECTORS
 
Each independent director receives annual cash compensation of $20,000 plus an annual grant of shares of our common stock, valued at $20,000, rounded to the next whole share. Effective for the fourth quarter of fiscal year 2010, Mr. Russell receives an additional $10,000 annually for his role as Lead Director. Awards of 31,178 shares of our common stock for the fiscal year 2010 were made to Messrs. Robinson, Russell and Whytas. The directors also earned an additional 3,807 shares of our common stock for services provided in the fiscal fourth quarter ended January 31, 2010, and for which the common stock was issued in fiscal year 2011.
 
DIRECTOR COMPENSATION TABLE
 
The following table shows for our non-executive directors all compensation paid in fiscal year 2010 on account of fees, whether paid in cash or stock of the Company.

                           
Change in
              
                           
pension
              
                           
value and
              
                           
nonqualified
              
         
(*)
          
Non-equity
    
deferred
              
   
Fees paid
    
Stock
    
Option
    
incentive plan
    
compensation
    
All other
        
   
in cash
    
awards
    
awards
    
compensation
    
earnings
    
compensation
    
Total
  
Name
  
($)
    
($) (1)
    
($)
    
($)
    
($)
    
($)
    
($)
  
                                             
Roy Robinson
   $ 20,000     $ 20,000     $ -     $ -     $ -     $ -     $ 40,000  
Donald Russell
   $ 20,000     $ 20,000     $ -     $ -     $ -     $ -     $ 40,000  
Thomas E. Whytas
   $ 20,000     $ 20,000     $ -     $ -     $ -     $ -     $ 40,000  

(*)
Amounts shown reflect grant date fair value computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). See footnote 12 of our notes to the Consolidated Financial Statements in our Form 10-K for the fiscal year ended January 31, 2010, for a discussion of the assumptions used to compute grant date fair value.
 
(1)
Amounts do not include outstanding awards granted to the above named directors consisting of 1,269 shares of common stock each, totaling 3,807 shares, for services provided for the forth quarter of fiscal year 2010.
 
Cash Based Compensation. In fiscal year 2010, non-executive directors received cash compensation of $20,000 each. Starting in the fourth quarter on FY 2010, an additional $10,000 will be paid annually for the role of lead director. The Company does not pay additional fees (in cash or otherwise) for attending board or committee meetings. Normally each non-executive director is paid cash compensation of $5,000 per quarter or $20,000 annually, on the last day of January, April, July and October. The Company also reimburses non-executive directors for actual travel and out-of-pocket expenses incurred in connection with their service to the Company.
 
Stock-Based Compensation. In fiscal year 2010, each non-executive director also received stock-based compensation of $20,000. All stock-based compensation is accrued quarterly and valued as of the last day of each fiscal quarter. The number of shares issued at each of these dates is determined by the stock price at the close of business on those dates.
 
Section 16(a) Beneficial Ownership Reporting Compliance
 
Section 16(a) of the Securities Exchange Act of 1934 (the “Act”), as amended, requires our directors and specified officers to file reports on Forms 3, 4 and 5 with respect to their ownership and changes in ownership of our equity securities with the Securities and Exchange Commission (the “SEC”) and the NYSE Amex and to furnish us with copies of these reports.
 
Based solely upon a review of the copies of these Form 3, 4, and 5 reports and amendments thereto that we received, and certain written representations that we received from these persons, we believe that all applicable filing requirements were complied with for fiscal year 2010 and do not know of any persons who may have failed to file on a timely basis any required form, except as follows:
 
Douglas J. Hillman was granted stock options on February 27, 2009, and the Form 4 reporting the transaction was filed on March 6, 2009.

 
 
 
 
P. Mark Perkins was granted stock options on April 22, 2008 and February 27, 2009, and the Form 4 reporting these transactions was filed on March 6, 2009.
 
Thomas W. Cason was granted stock options on August 26, 2008, and the Form 4A reporting the transaction was filed on March 6, 2009.
 
Thomas W. Cason was granted stock options on February 27, 2009, and the Form 4 reporting the transaction was filed on March 6, 2009.
 
Donald Russell, Roy Robinson and Thomas E. Whytas were each issued stock on July 31, 2009, and the respective Form 4’s reporting the transactions were filed on August 5, 2009.
 
Douglas J. Hillman purchased common stock of the Company on September 23, 2009, and the Form 4 reporting the transaction was filed on September 28, 2009.
 
Review of Related Person Transactions
 
We do not have a formal written policy for the review and approval of transactions with related parties. However, our Code of Conduct provides guidelines for reviewing any "related party transaction." In particular, our Code of Conduct prohibits conflicts of interest and provides non-exclusive examples of conduct that would violate the prohibition. If any of our employees are unsure as to whether a conflict of interest exists, the employee is instructed that he or she should consult with the law department or the Chief Executive Officer or in the case of a director, to the Audit Committee of the Board of Directors of Aerosonic, and must comply with any actions the Audit Committee decides is necessary to protect against the conflict of interest.
 
We annually require each of our directors and executive officers to complete a directors' and officers' questionnaire that elicits information about related party transactions. Our Board and outside legal counsel annually review all transactions and relationships disclosed in the directors' and officers' questionnaires, and the Board makes a formal determination regarding each director's independence. If a director is determined to no longer be independent, such director, if he or she serves on any of the Audit Committee, the Corporate Governance and Nominating Committee, or the Compensation Committee, will be removed from such committee prior to (or otherwise will not participate in) any future meetings of the committee. If the transaction presents a conflict of interest, the Board will determine the appropriate response.
 
For the fiscal year ended January 31, 2010, there were no material related party transactions involving employees or directors of the Company.

 
 
 

OWNERSHIP OF SECURITIES
 
Based on a review of filings with the SEC, as well as information available to us, the following table sets forth information as of June 1, 2010 (except as noted below) as to our common stock owned by (a) each of our directors, (b) each of our named executive officers, (c) all of our current directors and executive officers as a group and (d) each person who, to our knowledge, beneficially owned more than 5% of our common stock. As of June 1, 2010, we had 4,169,903 of our common shares issued and 3,739,136 common shares outstanding, of which 3,807 common shares have not been issued, but will be issued to certain individuals within sixty days:
 
Name of Beneficial Owner (and address of Owners of More than 5%)
  
Amount of
Shares
Beneficially
Owned (1)
      
Percent
of
Class
  
Douglas J. Hillman
     79,972
(2)
       2.14 %
                   
Kevin J. Purcell
     11,528
(3)
       *  
                   
Thomas W. Cason
     14,250
(4)
       *  
                   
P. Mark Perkins
     50,334
(5)
       1.35 %
                   
Roy Robinson
     27,150
(6)
       *  
                   
Thomas E. Whytas
     33,112
(7)
       *  
                   
Donald Russell
     110,834
(8)
       2.96 %
                   
All current directors and executive officers as a group (7persons)
     327,180         8.75 %
                   
Electro Technik Industries, Inc.
12449 Enterprise Boulevard
Largo, FL 33773
     486,000
(9)
       13.00 %
Bruce Stone
28 Villa Lane
Boynton Beach, FL 33436
     241,774
(10)
       6.47 %
Martin Finan
103 S. Stough Street
Hinsdale, IL 60521
     209,925
(11)
       5.61 %
Athena Capital Management, Inc.
Minerva Group, LP
David P. Cohen
50 Monument Road, Suite 201
Bala Cynwyd, PA 19004
     284,548
(12)
       7.61 %
 
*
Less than 1%
(1)
The directors, executive officers, and groups named in the table above have sole or shared voting power or investment power with respect to the shares listed in the table, unless otherwise indicated herein. The share amounts listed include shares of our common stock that the following persons have the right to acquire within 60 days from June 1, 2010.
(2)
Mr. Hillman currently holds 13,972 shares of common stock, 66,000 exercisable options and 57,000 unvested options.
(3)
Mr. Purcell was hired as our Chief Financial Officer in May 2009. He currently holds 3,195 shares of common stock, 8,333 exercisable options and 16,667 unvested options.
(4)
Mr. Cason currently holds 14,250 exercisable options and 34,750 unvested options.
(5)
Mr. Perkins currently holds 10,000 shares of common stock, 40,334 exercisable options and 25,666 unvested options.
(6)
Includes accrued compensation to be paid in the Company’s common stock for the first quarter of fiscal year 2011 of 1,269 shares of common stock.
(7)
Includes accrued compensation to be paid in the Company’s common stock for the first quarter of fiscal year 2011 of 1,269 shares of common stock.

 
 
 

(8)
Of this amount, 2,500 shares are held by Mr. Russell’s spouse, and 2,000 shares are held in trusts for Mr. Russell’s children. Also, includes accrued compensation to be paid in the Company’s common stock for the first quarter of fiscal year 2011 of 1,269 shares of common stock.
(9)
The information for Electro Technik Industries, Inc. (ETI) is derived from a Schedule 13D, dated December 31, 2008, filed with the SEC, which states that, as of December 24, 2008, ETI beneficially owned 486,000 shares with sole power to vote and dispose of such shares.
(10)
The information for Bruce Stone is derived from a Schedule 13G, dated March 30, 2010, filed with the SEC, which states that, as of March 23, 2010, he beneficially owned 141,774 shares of the Company’s outstanding common stock. He also holds 100,000 stock warrants issued to him pursuant to the terms of a loan agreement between the Company and him. Each warrant entitles him to purchase in whole or part one common share at $0.64 per warrant. These warrants vested on May 21, 2010. For purposes of beneficial ownership, he holds a total of 241,774 common shares with sole power to vote and dispose of such shares.
(11)
The information for Martin Finan is derived from a Schedule 13G, filed on February 1, 2010, with the SEC, which states that, as of December 21, 2009, that he beneficially owned 209,925 shares. Of those shares, he holds 196,536 shares having sole power to vote and dispose of such shares, with him having 13,389 shares with shared power to vote and dispose of such shares.
(12)
The information for Athena Capital Management, Inc., Minerva Group, LP and David P. Cohen is derived from a Schedule 13G/A, dated and filed with the SEC on February 3, 2010, which states that, as of December 31, 2009, 115,600 shares were owned by Athena Capital Management, Inc.; and 168,948 shares were owned by Minerva Group, LP. David P. Cohen beneficially owned 284,548 of which he has 168,948 shares with the sole power to vote and dispose of such shares, and 115,600 shares with the shared power to vote and dispose of such shares
 
 
 
 
 
COMPENSATION DISCUSSION AND ANALYSIS
 
The Compensation Committee has the responsibility to review, approve and recommend for the approval of the full Board our compensation program and the annual compensation levels for our executive officers: the president and chief executive officer, the executive vice president-chief financial officer, the executive vice president-sales and marketing and the executive vice president-chief operating officer.
 
Compensation Objectives
 
The primary goals of our executive compensation program are to incentivize and reward superior executive performance and encourage excellent leadership, hard work and dedication. Our compensation programs are designed to enable us to achieve the following objectives:
 
 
•
to attract, engage and retain top talent that ensures the achievement of business goals, strategies and objectives;
 
 
•
to reward officers for long-term strategic management, which includes, among other things, the implementation of performance enhancing strategies and retention of key customers; and
 
 
•
to reward superior executive performance that results in increased value for our stockholders.
 
Compensation Elements
 
Our executive compensation program has a primary purpose to attract, retain and motivate highly trained, experienced individuals whose technical expertise and business talents will enable us to succeed. The key components of that program during the last fiscal year were base salary, annual cash incentive awards and long-term incentives, as discussed below.
 
Base Salary. The primary element of our executive compensation is base salary. In approving or fixing base salaries, the Compensation Committee draws upon its collective business judgment and experience on what it understands to be fair, reasonable and equitable compensation in view of our requirements for recruitment and retention in a highly competitive market. In its deliberations, the Compensation Committee considers:
 
 
•
the executive’s compensation relative to other officers;
 
 
•
the executive’s compensation relative to competing organizations;
 
 
•
recent and expected performance of the executive;
 
 
•
our recent and expected overall performance; and
 
 
•
our overall budget for base salary increases.
 
We rely upon our judgment of numerous factors, and not solely upon set numerical performance data or similar guidelines. We do not use short-term changes in our stock price as a guide in determining executive compensation. Key factors affecting our judgments include the nature and scope of each executive’s responsibilities, effectiveness, productivity and growth. Of course, in order to attract and retain talented executives, our executive compensation is also calibrated by comparison to the executive compensation of executives at similarly sized and situated companies in our industry.
 
Cash Incentive Award Program. In addition to base salaries, each year we seek to reward superior executive leadership through performance based cash incentives. We believe that our structure allows us the flexibility to reward performance without creating a system where annual incentives are paid without regard to performance and are viewed as an entitlement rather than an incentive and reward. At the end of each year, the Board, upon analysis and recommendation of the Compensation Committee, determines the level of achievement for individual and corporate goals, and awards an overall grade for the achievement of agreed objectives. Final determination of incentive pay levels are then based on the achievement of these individual and corporate goals, an assessment of the Company’s overall success, and an assessment of each individual’s performance within the context of actual business conditions. In certain circumstances, subject to the recommendations of the Compensation Committee, as approved by the Board, annual incentives may include equity compensation in lieu of cash or a combination of both equity compensation and cash. Actual cash incentives are paid to the executives in the second quarter of the following year, unless other arrangements are agreed. Cash incentive awards were awarded for fiscal year 2010 to the named executive officers as discussed below.

 
 
 
 
Long-Term Incentives. We have one equity-based employee compensation plan, referred to as the Aerosonic Corporation 2004 Stock Incentive Plan, as amended and restated on July 13, 2009. Our long-term equity incentives are designed to focus management on the long-term success of the Company to be evidenced by appreciation of the Company’s stock price over several years, as a result of growth in its earnings per share and other elements. These long-term equity incentives thereby align the interests of the optionees with the interests of the stockholders. Stock options were awarded in fiscal year 2010 to Messrs Hillman, Purcell, Perkins and Cason of 48,000, 25,000, 24,000 and 24,000, respectively.
 
Management and Compensation Committee Actions for 2010
 
With respect to compensation paid in fiscal year 2010, the Compensation Committee reviewed and reported to the Board the performance of each of our executive officers for the purposes of determining the base salary of each, the amounts of any cash incentive awards and other benefits, if any, to be paid or granted in consideration for the services that were provided during fiscal year 2010.
 
The Compensation Committee analyzed several factors, both qualitative and quantitative, in determining overall compensation packages for fiscal year 2010 in order to tie financial rewards paid to our executive officers, to both our then-current and expected future financial performance. In reviewing our fiscal year 2010 performance, the Compensation Committee considered the following factors: the condition the Company was in when the executives were hired; the financial performance of the Company during the year; individual performance objectives, the challenges faced due to the strained financial condition of the Company; the effects of the August 8, 2008 fire and the actions taken by the executives in connection with the recovery and turnaround of the Company; the severely contracted lending environment; and the status of the recovery and turn-around as the fiscal year 2010 concluded. The Compensation Committee has recommended, and the Board approved the following cash incentive awards for fiscal year 2010, to be paid in fiscal year 2011: Douglas Hillman, $105,000; Kevin Purcell, $42,415; P. Mark Perkins, $54,482; and Thomas Cason, $55,440.
 
Ownership Guidelines
 
We do not have a stock ownership policy for our executives.
 
Hedging and Insider Trading Policies
 
During fiscal year 2010 the Board, adopted a policy on insider trading for officers, directors, employees and certain consultants of the Company and its subsidiaries with respect to the trading of the Company’s  securities, as well as the securities of publicly-traded companies with whom the Company and its subsidiaries have a business relationship. The policy prohibits any insider from buying and selling Aerosonic securities at all times, except during specified “window” periods. A window period begins on the third full trading day after the public release by the Company of its quarterly financial results, or prior year’s financial results in the case of the fourth quarter, and ends fifteen calendar days prior to the end of the then current quarter. Even within the designated window periods, insiders are still prohibited from buying and selling the Company’s securities if an insider possesses material information about the Company which is not publicly available. The policy generally does not apply to the exercise of options to purchase common stock of the Company or its subsidiaries.
 
We do not have a formal policy on hedging.
 
Equity Grant Practices
 
The Plan is administered by the Plan Committee. Equity based awards are granted by the Compensation Committee (and approved by the Board) and are based on the named executive officer’s individual performance and contribution to the Company.
 
Retirement Benefits
 
We have no defined benefit pension plan. We have a 401(k) Plan covering substantially all employees. The 401(k) Plan is an important factor in attracting and retaining employees as it provides an opportunity to accumulate retirement funds. Our 401(k) Plan provides for annual deferral of up to $15,500 for individuals until age 50, $20,500 for individuals 50 and older, or, as otherwise allowed by the Internal Revenue Code. At January 31, 2009, the Company had elected to discontinue matching employee contributions. Effective for the second quarter of fiscal year 2011 we will begin matching 100% of employee contributions up to 3% of the employee’s salary. Matching contributions will vest according to the following schedule:
 
Years of Service
  
Vested
Interest
  
Less than 2 years
     0 %
2 years, but less than 3 years
     33 %
3 years, but less than 4 years
     67 %
4 years or more
     100 %

 
 
 
Welfare Benefits
 
In order to attract and retain employees, we provide certain welfare benefit plans to our employees, which include medical and dental insurance benefits, group term life insurance and disability insurance. We may also, from time to time provide other benefits to executives. The Company presently does not provide any additional benefits to its executive officers. None of these benefits are provided to non-employee directors.
 
Employment Agreements; Severance Arrangements
 
Mr. Hillman’s employment agreement commenced on April 17, 2008 and he is an “at will” employee. The employment agreement is terminable by: (i) the employee on 30 days prior written notice, or immediately upon mutual agreement, (ii) the Company at any time with “cause” (as such is defined in the employment agreement), immediately upon written notice to Mr. Hillman, or (iii) the employee’s death or disability. In the event that the Company elects to terminate Mr. Hillman without cause, the employee will be entitled to receive severance payments of up to six months salary.
 
Mr. Purcell’s employment agreement commenced on May 26, 2009 and he is an “at will” employee. The employment agreement is terminable by: (i) the employee on 30 days prior written notice, or immediately upon mutual agreement, (ii) the Company at any time with “cause” (as such is defined in the employment agreement), immediately upon written notice to Mr. Purcell, or (iii) the employee’s death or disability. In the event that the Company elects to terminate Mr. Purcell without cause, the employee will be entitled to receive severance payments of up to six months salary.
 
Mr. Perkin’s amended and restated employment agreement commenced on May 28, 2010 and he is an “at will” employee. The employment agreement is terminable by: (i) the employee on 30 days prior written notice, or immediately upon mutual agreement, (ii) the Company at any time with “cause” (as such is defined in the employment agreement), immediately upon written notice to Mr. Perkins, or (iii) the employee’s death or disability. In the event that the Company elects to terminate Mr. Perkins without cause, the employee will be entitled to receive severance payments of up to six months salary.
 
Mr. Cason’s employment agreement commenced on August 26, 2008 and he is an “at will” employee. The employment agreement is terminable by: (i) the employee on 30 days prior written notice, or immediately upon mutual agreement, (ii) the Company at any time with “cause” (as such is defined in the employment agreement), immediately upon written notice to Mr. Cason, or (iii) the employee’s death or disability. In the event that the Company elects to terminate Mr. Cason without cause, the employee will be entitled to receive severance payments of six months salary.
 
As of January 31, 2010, the estimated cash value of benefits for Messrs Hillman, Purcell, Perkins and Cason are $104,000, $90,000, $86,000 and $82,500, respectively. The value of each of these estimated severance benefits is based on the amount of base salary and benefits payable from February 1, 2010 for the applicable time period. In addition, each of Messrs. Hillman, Purcell and Cason may be entitled to cash incentives continuation, subject to the recommendation of the Compensation Committee and approval of the Board.
 
Options Vesting on Change in Control. Under the Plan, all outstanding options shown in the table below “Outstanding Equity Awards at Fiscal Year-End” for the Named Executive Officers will become immediately exercisable in the event that there is, with respect to us, a “change in control.” A “Change of Control” is defined by the Plan as: (i) the acquisition by a person of control of 50% or more of the combined voting securities of the Company, (ii) the merger or consolidation of the Company and any other entity where the voting securities of the Company prior to thereto do not represent more than 50% of the combined voting power of the voting securities of the Company or such surviving entity immediately after such merger or consolidation, or (iii) the stockholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets.
 
Indemnification and Insurance
 
Under our Certificate of Incorporation, indemnification is afforded our directors and executive officers to the fullest extent permitted by Delaware law and in addition, with respect to our “independent” directors pursuant to indemnification agreements entered into between the Company and each of such directors. In accordance with the terms of such indemnification agreements, indemnification for the “independent” directors also includes payment of any costs which an indemnitee incurs because of claims against the indemnitee and provides for advancement to the indemnitee of those costs, including legal fees. We are, however, not obligated to provide indemnity and costs where it is adjudicated that the indemnitee did not act in good faith in the reasonable belief that the indemnitee’s actions were in our best interests, or, in the case of a settlement of a claim, such determination is made by our Board of Directors.

 
 
 
We carry insurance providing indemnification, under certain circumstances, to directors and officers for claims against them by reason of, among other things, any act or failure to act in their capacities as directors or officers. The current annual premium for this policy is approximately $87,000.
 
No payments have been made to any of our past or present directors or officers for such indemnification or under any insurance policy.
 
Compensation Recovery Policies
 
We maintain a policy that we will evaluate in appropriate circumstances whether to seek the reimbursement of certain compensation awards paid to an executive officer, if such executive engages in misconduct that caused or partially caused a restatement of our financial results, in accordance with section 304 of the Sarbanes-Oxley Act of 2002. If circumstances warrant, we will seek to recover appropriate portions of the executive officer’s compensation for the relevant period, as provided by law.
 
Tax Deductibility of Executive Compensation
 
We review and consider the deductibility of executive non-performance based compensation under the requirements of Code Section 162(m), which provides that we may not deduct compensation of more than $1,000,000 that is paid to certain individuals, subject to certain exceptions, including an exception for performance-based compensation. We believe that compensation paid to our executives, including under our incentive plans is generally fully deductible for federal income tax purposes.

 
 
 
EXECUTIVE COMPENSATION
 
The following table provides certain summary information concerning the compensation earned in fiscal year 2010 by our Chief Executive Officer and President, Executive Vice President and Chief Financial Officer and each of our two other most highly compensated executive officers who were serving as executive officers as of January 31, 2010. We refer to the officers listed in the table below collectively as our “Named Executive Officers.”
 
2010 Summary Compensation Table
 
Name and
Principal Position
  
Year
ended
Jan
31
  
Salary
($)
    
Bonus
($)
    
Stock
Awards
($) (1)
    
Option
Awards
($) (1)
    
Non-Equity
Incentive Plan
Compensation
($)
    
Nonqualified
deferred
compensation
earnings
($)
    
All other
Compensation
($)(3)
    
Total
  
Douglas J. Hillman,
  
2010
   $ 199,353       105,000       —       33,225       —       —       19,585     $ 357,163  
President & Chief Executive Officer
  
2009
   $ 157,229       19,750       —       238,104       —       —       8,144     $ 423,227  
Kevin J. Purcell,
  
2010
   $ 119,470       42,415       —       43,960       —       —       8,836     $ 214,681  
Executive Vice President and Chief Financial Officer (2)
  
2009
   $ —       —       —       —       —       —       —     $ —  
P. Mark Perkins,
  
2010
   $ 163,183       54,482       —       16,612       —       —       9,307     $ 243,584  
Executive Vice President Sales and Marketing
  
2009
   $ 163,329       14,438       —       82,563       —       —       14,145     $ 274,475  
Thomas W. Cason,
  
2010
   $ 146,644       55,440       —       16,612       —       —       1,418     $ 220,114  
Executive Vice President & Chief Operating Officer
  
2009
   $ 67,641       12,320       —       42,750       —       —       473     $ 123,184  

(1)
Amounts shown reflect grant date fair value computed in accordance with stock-based compensation accounting rules (FASB ASC Topic 718). See footnote 12 of our notes to the Consolidated Financial Statements in our Form 10-K for the fiscal year ended January 31, 2010, for a discussion of the assumptions used to compute grant date fair value.
(2)
Hired in May, 2009.
(3)
All Other Compensation is the value of employment benefits paid by the Company on behalf of the named executive officer. The Company does not maintain a separate benefits plan for its executives. These benefits include retirement contributions, medical and dental insurances, life insurance and short-term disability.

 
 

Stock Option Information for the Year Ended January 31, 2010
 
The following table provides information regarding each unexercised stock option held by each of our Named Executive Officers as of January 31, 2010.
 
Outstanding Equity Awards at January 31, 2010
 
Name and Principal Position
  
Number of
Securities
Underlying
Unexercised
Options
(# Exercisable)
    
Number of
Securities
Underlying
Unexercised
Options
(# Unexerciseable)
    
Equity
Incentive
Plan Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
  
Option
Exercise
Price
($)
  
Option
Expiration
Date
Douglas J. Hillman,
     25,000       50,000
(1)
     —     $ 4.47  
4/22/2018
President & Chief Executive Officer
     —       48,000
(2)
           $ 1.00  
2/27/2019
Kevin J. Purcell,
     —       25,000 (3)     —     $ 2.36  
5/26/2019
Executive Vice President & Chief Financial Officer
                                  
P. Mark Perkins,
     7,500       —       —     $ 6.20  
6/27/2015
Executive Vice President Sales and
     7,500       —       —     $ 8.29  
4/06/2016
Marketing
     6,250       18,750 (4)     —     $ 4.47  
4/22/2018
      1,000       1,000 (5)     —     $ 2.25  
10/01/2018
      —       24,000 (2)     —     $ 1.00  
02/27/2019
Thomas W. Cason,
     6,250       18,750 (6)     —     $ 2.39  
8/26/2018
Executive Vice President & Chief Operating Officer
     —       24,000 (2)     —     $ 1.00  
2/27/2019
 
(1)
Mr. Hillman’s unexercised options will vest in two equal amounts on April 22, 2010 and 2011, respectively.
 
 
(2)
Messrs. Hillman’s, Perkins’ & Cason’s unexercised options will vest in three equal amounts on February 27, 2010, 2011 and 2012, respectively.
 
 
(3)
Mr. Purcell’s unexercised options will vest in three equal amounts on May 26, 2010, 2011 and 2012, respectively.
 
 
(4)
Mr. Perkins’ unexercised options will vest in three equal amounts on April 22, 2010, 2011 and 2012, respectively.
 
 
(5)
Mr. Perkins’ unexercised options will vest on October 1, 2010.
 
(6)
Mr. Cason’s unexercised options will vest in two equal amounts on August 26, 2010 and 2011, respectively.
 
Stock options were awarded in fiscal year 2010 to Messrs Hillman, Purcell, Perkins and Cason of 48,000, 25,000, 24,000 and 24,000, respectively. No option awards were exercised by any of the Named Executive Officers through June 1, 2010.

 
 
 
Potential Payments Upon Termination or Change in Control
 
 The following table sets forth potential amounts payable to our Named Executive Officers pursuant to their respective employment agreements. The table below reflects the estimated amounts payable to our Named Executive Officers assuming their employment was terminated as of January 31, 2010.

Name and Principal Position
  
Benefit
  
Termination
for other than Change
in Control*
    
Termination
Following a
Change in Control
  
Douglas J. Hillman,
  
Salary
   $ 104,000 (1)   $ 104,000  
President & Chief Executive Officer
  
Benefits
                
   
continuation
     — (1)     —  
   
Total value:
   $ 104,000 (1)   $ 104,000  
                     
Kevin J. Purcell
  
Salary
     90,000 (1)     90,000  
Executive Vice President &
  
Benefits
                
Chief Financial Officer
  
continuation
     — (1)        
   
Total value:
   $ 90,000 (1)   $ 90,000  
                     
P. Mark Perkins,
  
Salary
     86,000 (1)     86,000  
Executive Vice President
  
Benefits
                
Sales and Marketing
  
continuation
     —       —  
   
Total value:
   $ 86,000 (1)   $ 86,000  
                     
Thomas W. Cason,
  
Salary
     82,500 (1)     82,500  
Executive Vice President &
  
Benefits
                
 Chief Operating Officer
  
continuation
     —       —  
   
Total value:
   $ 82,500 (1)   $ 82,500  
 
*
Upon such termination of employment, the applicable named executive may be entitled to future cash incentive awards, subject to the Compensation Committee’s recommendation and the Board’s approval.

(1)
Estimated value if the named executive’s employment agreement had been terminated as of January 31, 2010.
 
Potential Payments Upon Termination or Change in Control
 
Please see “Employment Agreements; Severance Arrangements” above for a description of the severance arrangements with Douglas J. Hillman, Kevin J. Purcell, P. Mark Perkins and Thomas W. Cason.
 
Other Compensation
 
All of our executives are eligible to participate in our health and welfare benefit plans. These plans are available to all employees and do not discriminate in favor of executive officers. It is generally our policy to not extend significant perquisites to our executives that are not available to all of our employees. We have no current plans to make changes to levels of benefits and perquisites provided to executives.
 
Tax and Accounting Considerations
 
We have structured our compensation program to comply with Section 409A of the Internal Revenue Code of 1986, as amended, or Section 409A. If an executive is entitled to nonqualified deferred compensation benefits that are subject to Section 409A, and such benefits do not comply with Section 409A, then the benefits are taxable in the first year they are not subject to a substantial risk of forfeiture. In such case, the executive is subject to regular federal income tax, interest and an additional federal income tax of 20% of the benefit includible in income.
 
Compensation Committee Interlocks and Insider Participation
 
Our Compensation Committee currently determines the compensation levels of our executive officers as described above. None of our executive officers has served as a director or member of a compensation committee, or other committee serving an equivalent function, of any entity of which one of its executive officers served as a member of our Compensation Committee or our Board.

 
 
 
COMPENSATION COMMITTEE REPORT

The following Report of the Compensation Committee does not constitute soliciting materials and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report.
 
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.
 
THE COMPENSATION COMMITTEE
 
Donald Russell (Chairman)
Roy Robinson
Thomas E. Whytas

 
 
 
AUDIT COMMITTEE REPORT

The following Report of the Audit Committee does not constitute soliciting materials and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report.
 
In accordance with its written Charter, the Audit Committee assists the Board in fulfilling its responsibility for oversight of management and its independent auditors in respect of corporate accounting, financial reporting practices, and the quality and integrity of our financial reports.
 
Management has the primary responsibility for our financial reporting process, accounting principles, and internal controls, as well as, preparation of our financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”). The independent auditors are responsible for planning and conducting independent audits of our financial statements in accordance with the standards of the Public Company Accounting Oversight Board, United States (PCAOB) and applicable laws and regulations, and issuing reports thereon. The Audit Committee is responsible for overseeing the conduct of these activities. It is not the Audit Committee’s duty or responsibility to conduct auditing or accounting reviews or procedures or to independently verify the representations made by management and the independent auditors. The Audit Committee’s considerations and discussions with management and the independent auditors do not assure that our financial statements are presented in accordance with GAAP or that an audit of the annual financial statements has been carried out in accordance with the standards of the PCAOB, or that the independent auditors are, in fact, “independent.”
 
In this context, the Audit Committee has met and held discussions with our management and independent auditors on a regular basis. The Audit Committee plans and schedules its meetings with a view to ensuring that it devotes appropriate attention to all of its responsibilities. The Audit Committee’s meetings include, whenever appropriate, executive sessions with the independent auditors without the presence of the Company’s management. The Audit Committee has reviewed and discussed our audited financial statements with management and the independent auditors, including a discussion of the quality of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements. Management represented to the Audit Committee that our audited financial statements were prepared in accordance with GAAP and applicable laws and regulations. The audit committee has relied on this representation, without independent verification, and on the representations of the independent auditors included in their report on the consolidated financial statements.
 
The Audit Committee has discussed with our independent auditors the matters required to be discussed pursuant to Statement on Auditing Standards No. 61, as amended (AICPA, Professional Standards, Vol. 1, AU Section 380), as adopted by the Public Company Accounting Oversight Board in Rule 3200T. The independent auditors have provided to the Audit Committee the written disclosures and the letter required by the PCAOB Rule 3526, “Communication with Audit Committees Concerning Independence,” and the Audit Committee has discussed with the independent auditors their independence. The Audit Committee has also considered whether the independent auditors’ provision of other non-audit services to the Company is compatible with maintaining auditor independence. The Audit Committee has concluded that the provision of non-audit services by the independent auditors was compatible with the maintenance of independence in the conduct of their auditing functions.
 
Based upon its review and discussions with management and the independent auditors and the reports of the independent auditors, and in reliance upon such information, representations, reports and opinions, the Audit Committee recommended that the Board of Directors approve our audited financial statements for inclusion in our annual report on Form 10-K for the year ended January 31, 2010. The Board of Directors accepted the Audit Committee’s recommendations.
 
THE AUDIT COMMITTEE
 
Thomas E. Whytas (Chairman)
Donald Russell
Roy Robinson

 
 
 
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
Proposal No. 2.—Ratification of Appointment of Independent Registered Public Accounting Firm
 
Upon the recommendation of the Audit Committee, the Board of Directors has appointed Kirkland, Russ, Murphy & Tapp, P.A. as the Company’s independent registered public accounting firm for the fiscal year ending January 31, 2011.  Kirkland, Russ, Murphy & Tapp, P.A. served as our independent auditors for the years ended January 31, 2010 and 2009. McGladrey & Pullen, LLP, which acquired certain partners of our former auditor Tedder, James, Worden & Associates, P.A. (collectively, “McGladrey & Pullen”), served as our independent auditors for the first three quarters of fiscal year 2009. Representatives from Kirkland, Russ, Murphy & Tapp, P. A. are expected to be present at the meeting, will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate inquiries.
 
Before making its recommendation to the Board of Directors for appointment of Kirkland, Russ, Murphy & Tapp, P.A., the Audit Committee carefully considered that firm’s qualifications as the Company’s independent registered public accounting firm, which included a review of Kirkland, Russ, Murphy & Tapp, P.A.’s performance in the prior year, as well as its reputation for integrity and competence in the fields of accounting and auditing. The Audit Committee expressed its satisfaction with Kirkland, Russ, Murphy & Tapp, P.A. in these respects.
 
The Company is asking its stockholders to ratify the selection of Kirkland, Russ, Murphy & Tapp, P.A. as the Company’s independent registered public accounting firm. Although ratification is not required by our Bylaws or otherwise, the Board of Directors is submitting the selection of Kirkland, Russ, Murphy & Tapp, P.A. to stockholders for ratification because the Company values its stockholders’ views on the Company’s independent registered public accounting firm and as a matter of good corporate practice. If ratification is not obtained, the Audit Committee intends to continue the engagement of Kirkland, Russ, Murphy & Tapp, P.A. at least through the end of the 2011 fiscal year but will consider whether it is appropriate to select a different independent registered public accounting firm in the future. Even if the selection is ratified, the Audit Committee in its discretion may select a different independent registered public accounting firm at any time during the year if it determines that such a change would be in the best interests of the Company and its stockholders.
 
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE “FOR” THE RATIFICATION OF APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, AS SET FORTH ABOVE.
 
Changes in Registrant's Certifying Accountant
 
The information provided below was filed on Form 8-K with the SEC on February 24, 2009 and is included in this proxy statement to comply with the requirements of Item 304(a) of Regulation S-K.
 
As described below, the Company dismissed McGladrey & Pullen, LLP (the “Former Auditor”) as its independent registered public accounting firm, effective as of February 18, 2009, and has engaged Kirkland, Russ, Murphy & Tapp, P.A. (the “New Auditor”) as its new independent registered public accounting firm as of and for the year ended January 31, 2009.  As described in below, the change in independent registered public accounting firm is not the result of any disagreement with the Former Auditor.
 Previous Independent Accountants
 
(i) On February 18, 2009, the Company dismissed the Former Auditor as its independent registered public accounting firm effective on that date.
 
(ii) The report of the Former Auditor on the Company’s consolidated financial statements as of and for the year ended January 31, 2008, did not contain an adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles. The report of the Company’s consolidated financial statements as of and for the year ended January 31, 2007 was issued by Tedder, James, Worden & Associates, P.A., certain of whose partners merged with McGladrey & Pullen, LLP effective June 1, 2007, and did not contain any adverse opinion or disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope or accounting principles.
 
(iii) The Company’s Audit Committee made the decision to change independent accountants, acting under authority delegated to it by the Company’s Board of Directors and also recommended that the Board of Directors approve the change.  The Board of Directors also approved the change of the independent accountants.

 
 
 
(iv) During the two most recent fiscal years and through February 18, 2009, there have been no disagreements with the Former Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of the Former Auditor, would have caused the Former Auditor to make reference to the subject matter of such disagreements in its reports on the financial statements for such years.
 
(v) During the Company’s two most recent fiscal years and through February 18, 2009 there have been no “Reportable Events” (as defined in Regulation S-K, Item 304(a)(1)(v)), except as described below:

·
As set forth in Item 9A of the Annual Report on Form 10-K for the fiscal year ended January 31, 2008, the Company and the Former Auditor identified material weaknesses in internal controls over financial reporting and such item is incorporated herein by reference.  The Company has authorized the Former Auditor to respond fully to any inquiries by the New Auditor regarding the material weaknesses in internal controls set forth in the Annual Report on Form 10-K.

·
During the quarters ended May 2, 2008, August 31, 2008 and October 31, 2008, the material weaknesses noted above continued to exist as indicated in Item 4 of the interim filings. The Company has authorized the Former Auditor to respond fully to any inquiries by the New Auditor regarding the material weaknesses in internal controls set forth in Item 4 of the interim filings
 
(vi) We have furnished the Former Auditor with a copy of the foregoing disclosures.
 
New Independent Accountants
 
On February 18, 2009, we engaged Kirkland, Russ, Murphy & Tapp, P.A. as our independent accountants for the year ended January 31, 2009.  The Audit Committee made the decision to engage the New Auditors acting under authority delegated to it by the Company’s Board of Directors and the Board of Directors approved the same.
 
The Company has not consulted with the New Auditor during our two most recent fiscal years or during any subsequent interim period prior to its appointment as New Auditor regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on our consolidated financial statements, and neither a written report was provided to us nor oral advice was provided that the New Auditor concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of disagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and the related instructions) or a reportable event (within the meaning of Item 304(a)(1)(v) of Regulation S-K).
 
We have furnished the New Auditor with a copy of the foregoing disclosures.
 
Fees for Audit and Other Related Services
 
The following table sets forth the aggregate fees billed and paid by us to Kirkland, Russ, Murphy & Tapp, P.A and McGladrey & Pullen, LLP for the years ended January 31, 2010 and 2009 for audit and other professional services.
 
   
Fiscal Years,
  
   
2010
    
2009
  
Audit Fees
   $ 174,000     $ 296,000  
Audit-Related Fees
     30,000       36,000  
Tax Fees
     36,000       4,000  
All Other Fees
     —       6,000  
                 
Total Fees
   $ 240,000     $ 342,000  
 
The terms “Audit Fees,” “Audit-Related Fees,” “Tax Fees,” and “All Other Fees” in the above table, shall have the following meanings:
 
Audit Fees. Audit Fees, which were approximately $174,000 and $296,000 for fiscal years 2010 and 2009, respectively, are fees billed to us for professional services rendered for the audit of our annual financial statements and review of financial statements included in our Forms 10-Q, and services that are normally provided by our independent registered public accounting firm in connection with statutory and regulatory filings or engagements.

 
 
 
Audit-Related Fees. Audit-Related Fees, which were approximately $30,000 and $36,000 for fiscal years 2010 and 2009, respectively, are for the audit of our 401(k) plan.
 
Tax Fees. Tax Fees, which were approximately $36,000 and $4,000 for fiscal years 2010 and 2009, respectively, are fees billed to us for professional services rendered for tax compliance, tax advice and tax planning.
 
All Other Fees. All Other Fees, which were approximately $0 and $6,000 for fiscal years 2010 and 2009, respectively, are fees billed to us for products and services provided to us not included in the foregoing categories.
 
The Audit Committee has considered whether the provision of the services identified under Audit-Related Fees, Tax Fees and All Other Fees is compatible with maintaining the independence of our principal accountants and have determined that the provision of such services is compatible with such accountants’ independence.
 
The engagement of our independent auditors and any non-audit services to be provided thereby shall be pre-approved by the Audit Committee or approved pursuant to policies and procedures established by the Audit Committee.  The Audit Committee approved all fees for non-audit services for fiscal year 2010.

 
 
 
STOCKHOLDER PROPOSALS FOR 2011 PROXY STATEMENT
 
In accordance with Rule 14a-8 of the Securities Exchange Act of 1934, as amended, any stockholder proposals intended to be included in the proxy statement and presented at the 2010 Annual Meeting of Stockholders of the Company must be received by the Company no later than February 9, 2011. The proposal should be sent to our offices and be addressed to: Corporate Secretary, Aerosonic Corporation, 1212 N. Hercules Avenue, Clearwater, FL 33765. In addition, the Company has established an advance notice procedure with regard to certain matters, including stockholder proposals not included in the Company’s proxy statement, to be brought before an annual meeting of stockholders. In order to be considered for inclusion in the annual meeting to be held in 2011, stockholder proposals must be submitted to our Corporate Secretary at our offices at 1212 N. Hercules Avenue, Clearwater, FL 33765, not less than 90 days nor more than 120 days in advance of July 15, 2011. In addition, stockholder proposals must meet other applicable criteria set forth in our Bylaws in order to be considered at the 2011 annual meeting. Your Board will review any stockholder proposals that are filed as required and will determine whether they meet applicable criteria for consideration at the 2011 annual meeting.
 
OTHER MATTERS
 
We have no information that any other matter will be brought before the meeting. If other matters are presented, it is the intention of the persons named in the accompanying form of proxy to vote the proxy in accordance with their best judgment, discretionary authority to do so being included in the proxy.
 
SOLICITATION AND EXPENSES
 
We will pay all costs associated with the solicitation of your proxy. In addition to the solicitation of proxies by mail, proxies may be solicited by our directors and officers, by personal interview, telephone, telegraph and mail. Brokerage houses, banks and other fiduciaries will be requested to forward the soliciting material to their principals and obtain authorization for the execution of proxies and will be reimbursed for their reasonable out-of-pocket expenses.
 
HOUSEHOLDING
 
"Householding" is a program, approved by the Securities and Exchange Commission (the "SEC"), which allows companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy statements and annual reports by delivering only one package of stockholder proxy material to any household at which two or more stockholders reside. If you and other residents at your mailing address own shares of our common stock in street name, your broker or bank may have notified you that your household will receive only one copy of our proxy materials. Once you have received notice from your broker that they will be "householding" materials to your address, "householding" will continue until you are notified otherwise or until you revoke your consent. If, at any time, you no longer wish to participate in "householding" and would prefer to receive a separate proxy statement, or if you are receiving multiple copies of the proxy statement and wish to receive only one, please notify your broker if your shares are held in a brokerage account. If you hold shares of our common stock in your own name as a holder of record, "householding" will not apply to your shares.
 
We will deliver promptly upon written or oral request a separate copy of our annual report and/or proxy statement to a stockholder at a shared address to which a single copy of either document was delivered. For copies of either or both documents, stockholders should write to the Corporate Secretary, Aerosonic Corporation, 1212 North Hercules Avenue, Clearwater, Florida 33765 or call 727.461.3000.
 
June 1, 2010
Clearwater, Florida

 
 
 
 AEROSONIC CORPORATION
 
1212 North Hercules Avenue
Clearwater, Florida 33765
 
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
 
The undersigned Stockholder of Aerosonic Corporation hereby acknowledges receipt of the accompanying Proxy Statement for the Annual Meeting of Stockholders, dated June 1, 2010, and hereby appoints Kevin J. Purcell as proxy, with full power of substitution, to represent and vote as designated on the reverse side, all the shares of Common Stock of Aerosonic Corporation held of record by the undersigned on May 17, 2010, at the Annual Meeting of Stockholders to be held at Aerosonic Corporation’s offices located at 1212 North Hercules Avenue, Clearwater, Florida 33765, on Thursday July 15, 2010, at 10:00 A.M., local time, or any adjournment or postponement thereof.
 
This Proxy, when properly executed, will be voted in the manner directed herein by the undersigned stockholder(s). If no direction is provided, the named proxy is authorized and directed to vote on the proposal as described in the Proxy Statement accompanying this Proxy. If the nominee shall cease to be a candidate for election for any reason, the Proxy will be voted for a substitute nominee designated by the Board of Directors.
 
(Continued and to be signed on the reverse side)

 
 
 
ANNUAL MEETING OF STOCKHOLDERS OF
 
AEROSONIC CORPORATION
 
July 15, 2010 

 
  
    PROXY VOTING INSTRUCTIONS    
  
  
 
MAIL - Sign, date and mail your proxy card in the envelope provided as soon as possible.
 
COMPANY NUMBER
  
or
 
  
ACCOUNT NUMBER
  
IN PERSON - You may vote your shares in person by attending the Annual Meeting.
  
    
 
  
    
NOTICE OF INTERNET AVAILABILITY OF PROXY MATERIALS: The Notice of Meeting, Annual Report, Proxy Statement and Proxy Card are available at www.aerosonic.com/annualreports.html.  
 
i     Please detach along perforated line and mail in the envelope  i
 
THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” THE ELECTION OF THE DIRECTOR
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE x
1.     To elect one director to the Board of Directors of the Company, to hold office until his successor has been duly elected and qualified;
  
2.   To ratify the appointment of Kirkland, Russ, Murphy & Tapp, P.A.as the independent registered public accounting firm; and
For¨ Against¨ Abstain¨
  
 3.  To transact such other business as may properly come before the Meeting or any adjournment or postponement thereof.
           
 NOMINEES:
    
  
  
  
  
¨ FOR THE NOMINEE
 
¨
WITHHOLD AUTHORITY
FOR THE NOMINEE
 
 
  
 Douglas J. Hillman    Class III Director  
 
  
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR REPRESENTATION AT THE MEETING. YOU MAY VOTE BY COMPLETING, SIGNING AND DATING THE PROXY CARD AND RETURNING IT IN THE ENCLOSED ENVELOPE. PLEASE NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE RECORD HOLDER A PROXY ISSUED IN YOUR NAME.

To change the address on your account, please check the box at right and indicate your new address in the address space above. Please note that changes to the registered name(s) on the account may not be submitted via this method.  ¨   
  
¨
  
  
  
  
 
Signature of Stockholder  
  
  
  
Date:  
  
  
  
Signature of Stockholder  
  
  
  
Date:  
  
  
 
Note:
  
Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is a partnership, please sign in partnership name by authorized person.

 
 
 
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