##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K/A
 (AMENDMENT NO. 1)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) 
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended September 27, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) 
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from                      to                    .
 Commission File Number 1-4817
 
 WHITE ELECTRONIC DESIGNS CORPORATION
 (Exact name of registrant as specified in its charter)
 Indiana(State or other jurisdiction of 
incorporation or organization)
    
    35-0905052(I.R.S. Employer Identification No.)3601 E. University Drive 
Phoenix, Arizona(Address of principal executive offices)
    
    85034(Zip Code)
 Registrants telephone number, including area code: (602) 437-1520
 Securities registered pursuant to Section 12(b) of the Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, stated value $.10 per share

NASDAQ Global Market Securities registered pursuant to Section 12(g) of the Act: None
 o þ
 o þ
 þ o
 o
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller
    reporting
    company o  o þ
   EXPLANATORY NOTE




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TABLE OF CONTENTS  PART IIIITEM 10 DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCEITEM 11 EXECUTIVE COMPENSATIONITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERSITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONSITEM 14 PRINCIPLE ACCOUNTANT FEES AND SERVICESExhibit IndexSIGNATURESEX-10.24EX-10.25EX-31.1EX-31.2    Table of Contents  
 PART III
 
 ITEM 10   DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 Executive Officers
  Name,
Age and Title
    

Biographical
InformationRoger A. Derse (58) 
Interim Office of the President,
Vice President and Chief Financial
 Officer, Secretary and Treasurer
    
    Roger A. Dersehas been a member of
the Interim Office of the President since
August 2008 and our Vice President
and Chief Financial Officer since
March 2004. Mr. Derse has over 25
years experience in finance and
accounting. He previously served as
Consultant/Acting CFO for Vitron
Manufacturing from 2002 through
February 2004 and was Executive Vice
President and Chief Operating and
Financial Officer for Nanonics
Corporation from 1998 to 2001. He
was Chief Financial Officer for the
White Microelectronics Division of
Bowmar Instrument Corporation from
1993 to 1997. He began his finance
career at Coopers & Lybrand, working
in both audit and management
consulting from 1980 to 1989. Mr.
Derse holds a Bachelor of Science
degree in Industrial Engineering
from the University of Michigan, a
Masters degree in Accounting from
the University of Arizona, and is a
Certified Public Accountant.Dan Tarantine (55)
Interim Office of the President,
Executive Vice President,
Sales and Marketing
    
    Dan Tarantinehas been a member of
the Interim Office of the President since
August 2008 and our Executive Vice
President, Sales and Marketing since
June 2008. He served as our
Executive Vice President, Corporate
Strategic Development from July 2007
to June 2008, our Executive Vice
President, Sales and Marketing from
January 2003 to June 2007 and our
Senior Vice President of Sales from
August 1998 to January 2003. He
previously served as our Senior Vice
President Sales and Marketing from
September 1991 to August 1998 and as
Vice President of Marketing for
White Microelectronics from February
1987 to September 1991. Mr.
Tarantine holds a Bachelor of
Science degree in Electrical
Engineering from California State
University, Northridge.
 Board of Directors
  Name
and Age
    

Biographical
InformationJack A. Henry (65)
    
    Jack A. Henry has served on our Board
since January 2004 and currently
serves as the Chairman of our Audit
Committee and is a member of the
Compensation and Operations Review
Committees. He began his career with
Arthur Andersen in 1966, and in 2000
retired as the managing partner of the
Phoenix office. He then formed Sierra
Blanca Ventures LLC, a private
investment and advisory firm. He
currently serves on the Boards of
Directors of Grand Canyon University
and several private companies. He has
previously served on the Boards of
Directors of four other
public-reporting companies.
Additionally, he serves as President
of the Arizona Chapter of the National
Association of Corporate Directors.
Mr. Henry holds a Bachelors degree in
Business Administration and a Masters
degree in Business Administration from
the University of Michigan.
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##### Table of Contents



Name and Age
    
    Biographical InformationPaul D. Quadros (62)
    
    Paul D. Quadros has served on our
Board since January 2004 and currently
serves as the Chairman of the
Compensation Committee and is a member
of the Audit and Strategic
Alternatives Committees. He is a
co-founder and former Chairman of the
Board of Corautus Genetics, a
cardiovascular gene therapy company
listed on the NASDAQ. In 1995, he
co-founded GenStar Therapeutics and
served as its President and Chief
Executive Officer through a milestone
partnering agreement with Baxter
Healthcare in 1998. He also served as
Chief Financial Officer of GenStar, a
public-reporting corporation listed on
the American Stock Exchange, from
inception through 2003. Corautus was
formed through the merger of GenStar
with Vascular Genetics in 2003. He
served as the Chairman of GenStar from
1998 and of the merged Corporation
until 2004. From 1986 to 1995, he was
a General Partner of Technology
Funding, a venture capital fund. While
at Technology Funding, Mr. Quadros
assisted Crystallume, one of the
companies that merged to form White
Electronic Designs Corporation, with
its IPO. He is currently Managing
Partner of Tenex Greenhouse Ventures
Ltd., a venture capital fund. He also
serves as a director of several
private companies. He was co-founder
and served at various times from
1991-2001 as Chairman of the Board and
Audit and Compensation Committee
Chairman of Cardiac Science (NASDAQ: CSCX). Mr. Quadros holds a Bachelor of
Arts degree in Finance from California
State University, Fullerton and a
Masters degree in Business
Administration from the Anderson
School of Management at the University
of California, Los Angeles.Thomas M. Reahard (57)
    
    Thomas M. Reahard has served on our
Board since November 1995 and
currently serves as the Lead Director
and is a member of the Corporate
Governance and Nominating,
Compensation and Operations Review
Committees. He has been the Chairman
and Chief Executive Officer of
Symmetry Software Corporation, a
computer software development company,
since 1984. He is the founder of
Scottsdale.com and a cofounder of the
Arizona Technology Council. Mr.
Reahard holds a Bachelor of Science
degree in Industrial Engineering from
Cornell University and a Masters of
Science degree in Industrial
Engineering from the University of
Missouri.Thomas J. Toy (53)
    
    Thomas J. Toy has served on our Board
since October 1998, and currently
serves as the Chairman of our
Corporate Governance and Nominating
Committee and is a member of the Audit
and Strategic Alternatives Committees.
He is Managing Director of PacRim
Venture Partners, a venture capital
firm he co-founded in 1999, and a
Partner at SmartForest Ventures, also
a venture capital firm. Previously, he
was a Partner at Technology Funding, a
venture capital firm he worked for
from 1987 to 1999. He also serves as
Lead Director of UTStarcom, a
manufacturer of wireless
communications equipment, a Director
of Solarfun Power Holdings, a producer
of solar energy cells and modules, as
well as a Director of several private
companies. Mr. Toy holds a Bachelor of
Arts degree and a Masters degree in
Management from Northwestern
University.Edward A. White (81)
    
    Edward A. White has served on our
Board since we were founded as Bowmar
in September 1951. He is currently the
Chairman of the Board and is a member
of the Corporate Governance and
Nominating and Operations Review
Committees. He previously served as
Vice Chairman of the Board from
October 1998 to August 2008 and
Chairman of the Board from September
1983 to October 1998. He founded us in
September 1951 and served as our
President and Chief Executive Officer
from June 1980 to May 1986. Mr. White
holds a Bachelor of Science degree in
Engineering from Tufts University.
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Meetings and Committees of the Board
   www.whiteedc.com
 www.whiteedc.com
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www.whiteedc.com
   Director Compensation
  Compensation of Directors
 Pension Valueand NonqualifiedFees Earned
    
    
    
    
    
    
    
    
    
    Non-Equity
    
    Deferredor Paid in
    
    Stock
    
    Option
    
    Incentive Plan
    
    Compensation
    
    All OtherCash
    
    Awards
    
    Awards
    
    Compensation
    
    Earnings
    
    Compensation
    
    TotalName
    
    ($) (1)
    
    ($) (2)
    
    ($) (3)
    
    ($)
    
    ($)
    
    ($) (4)
    
    ($)Jack A. Henry
    
    
    60,750
    
    
    
    37,161
    
    
    
    7,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    105,675Paul D. Quadros
    
    
    65,000
    
    
    
    37,161
    
    
    
    7,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    109,925Thomas M. Reahard
    
    
    57,500
    
    
    
    37,161
    
    
    
    7,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102,425Thomas J. Toy
    
    
    55,000
    
    
    
    37,161
    
    
    
    7,764
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    99,925Edward A. White
    
    
    92,000
    
    
    
    37,161
    
    
    
    7,764
    
    
    
    
    
    
    
    
    
    
    
    4,000
    
    
    
    140,925
 
 (1)
    
    This column includes quarterly retainer and meeting fees paid during fiscal 2008. 5




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(2)
    
    This column reflects the compensation cost recognized for financial statement reporting
purposes for the fiscal year ended September 27, 2008, in accordance with FAS 123(R), of
restricted stock awards issued pursuant to the 2006 Director Restricted Stock Plan, and
thus includes amounts from stock awards granted prior to fiscal 2008. For stock awards,
fair value is calculated using the closing price on the grant date as if these awards were
vested on the grant date. This fair value is then expensed over the
vesting period. The amounts shown disregard estimated forfeitures
related to service-based vesting conditions. No stock awards were forfeited by any of our
non-employee directors during the fiscal year. The grant date fair value of the stock award
granted on March 6, 2008 to each non-employee director re-elected on that date was $30,000.
For information regarding the number of stock awards held by each non-employee director as
of September 27, 2008, see the column Restricted Stock Outstanding in the table below.
These amounts reflect our accounting expense for these awards, and do not correspond to the
actual value that may be recognized by the non-employee directors.(3)
    
    This column reflects the compensation cost recognized for financial statement reporting
purposes for the fiscal year ended September 27, 2008, in accordance with FAS 123(R), of
stock option awards issued and thus includes amounts from outstanding stock option awards
granted prior to fiscal 2008. There were no stock option grants to any of our directors in
fiscal 2008. No stock options were forfeited by any of our directors during the fiscal
year. For information regarding the number of stock options held by each director as of
September 27, 2008, see the column Stock Options Outstanding in the table below. These
amounts reflect our accounting expense for these awards, and do not correspond to the
actual value that may be recognized by the non-employee directors.(4)
    
    Mr. White received $4,000 for supplemental medical benefits.  Stock Options
    
    RestrictedStockNon-Employee Director
    
    Outstanding
    
    OutstandingJack A. Henry
    
    
    45,000
    
    
    
    15,000Paul D. Quadros
    
    
    45,000
    
    
    
    15,000Thomas M. Reahard
    
    
    90,000
    
    
    
    15,000Thomas J. Toy
    
    
    90,000
    
    
    
    15,000Edward A. White
    
    
    75,000
    
    
    
    15,000
  Code of Ethics
 www.whiteedc.com
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Shareholder Communications with the Board
  Section 16(a) Beneficial Ownership Reporting Compliance
   
 ITEM 11   EXECUTIVE COMPENSATION
 Compensation Discussion and Analysis
 Overview and Compensation Philosophy
 th th th
 Role of the Compensation Committee
    Role of Management in Executive Compensation Decisions
  7




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Executive
Compensation Components
  Base Salary
     Benchmarking and Compensation Evaluation
  8




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th
 Executive
Incentive Plans for Fiscal 2008 and 2009
 Cash Incentive Bonus Awards.
  Equity Incentive Awards
   9




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Difficulty in achieving performance targets.
 Employment and Severance Agreements
  Other Compensation
  Tax Deductibility of Executive Compensation
  10




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Compensation Committee Report (1)
   Compensation Committee
 
 (1)
    
    Pursuant to Item 407(e)(5) of Regulation S-K promulgated by the Commission, this
Compensation Committee Report shall not be deemed to be filed with the Commission for
purposes of the Exchange Act, nor shall such report be deemed to be incorporated by reference
in any past or future filing by the Corporation under the Securities Exchange Act of 1934
(Exchange Act) or the Securities Act of 1933, as amended, (Securities Act) unless the
intention to do so is expressly indicated. 11




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Additional Information on Executive Compensation
 Summary Compensation Table
  Summary Compensation Table
 Change inPension Valueand NonqualifiedNon-Equity
    
    
    DeferredStock
    
    
    Option
    
    
    Incentive Plan
    
    
    Compensation
    
    
    All OtherName and Principal
    
    
    
    
    
    Salary
    
    
    Bonus
    
    
    Awards
    
    
    Awards
    
    
    Compensation
    
    
    Earnings
    
    
    Compensation
    
    
    TotalPosition
    
    Year
    
    
    ($)
    
    
    ($)
    
    
    ($) (1)
    
    
    ($) (1)
    
    
    ($)
    
    
    ($)
    
    
    ($) (2)
    
    
    ($)Roger A. Derse,
Interim Office of
the President, Vice
President and Chief
Financial Officer
    
    
    2008
    
    
    
    225,116
    
    
    
    30,000
    
    
    
    104,465
    
    
    
    24,992
    
    
    
    
    
    
    
    
    
    
    
    13,684
    
    
    
    398,257Dan Tarantine,
Interim Office of
the President,
Executive Vice
President, Sales
and Marketing
    
    
    2008
    
    
    
    240,616
    
    
    
    30,000
    
    
    
    23,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,647
    
    
    
    310,463Hamid R.
Shokrgozar, former
President and Chief
Executive Officer
    
    
    2008
    
    
    
    469,241
    
    
    
    
    
    
    
    489,969
    
    
    
    477,485
    
    
    
    
    
    
    
    
    
    
    
    1,820,589
    
    
    
    3,257,284
 
 (1)
    
These columns reflect the compensation cost recognized for financial statement reporting
purposes for the fiscal year ended September 27, 2008, in accordance with FAS 123(R), of stock
and option awards issued and thus includes amounts from outstanding stock and option awards
granted prior to fiscal 2008. Assumptions used in the calculation of these amounts are
included in the notes to our audited consolidated financial statements for the fiscal year
ended September 27, 2008 as included in our Annual Report on Form 10-K filed with the
Securities and Exchange Commission on December 11, 2008. The amounts shown disregard estimated
forfeitures related to service-based vesting conditions. No stock or option awards were
forfeited by any of our named executive officers during the fiscal year. The amounts shown for
Mr. Shokrgozar represent the total compensation cost recognized for stock and option award
modifications in connection with his severance agreement. Mr. Shokrgozar was granted 150,000
replacement stock options, 50,000 shares of restricted stock and 100,000 performance shares in
fiscal 2008. Mr. Derse was granted 25,000 shares of restricted stock and 25,000 performance
shares in fiscal 2008. Mr. Tarantine was granted 10,000 performance shares in fiscal 2008.
These amounts reflect our accounting expense for these awards, and do not correspond to the
actual value that may be recognized by the Named Executive Officers.(2)
    
    Amounts in this column consist of: (i) our contributions under our 401(k) plan as follows:
Mr. Shokrgozar  $7,750; Mr. Derse  $2,544; and Mr. Tarantine  $5,528; (ii) life insurance
premiums as follows: Mr. Shokrgozar  $1,590; Mr. Derse  $940; and Mr. Tarantine  $919;
(iii) car allowance as follows: Mr. Shokrgozar  $18,196; Mr. Derse  $10,200; and Mr.
Tarantine  $10,200; (iv) unused vacation payout for Mr. Shokrgozar  $74,110; (v)
supplemental medical payment for Mr. Shokrgozar  $4,000; and (vi) a 12




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$1,600,000 cash payment
and $114,943 in other costs in connection with Mr. Shokrgozars severance agreement. Grants of Plan-Based Awards
 Equity Incentive Awards
 Employment and Severance Agreements
  
    
    The Company paid Mr. Shokrgozar a lump-sum $1,600,000 severance payment, plus any
accrued and unused vacation pay less required withholdings;
    
    The Company shall pay for eighteen (18) months of the Companys portion of Mr.
Shokrgozars COBRA premium. Following such period, until December 13, 2010, the Company
shall pay Mr. Shokrgozar an amount equal to the Companys portion of Mr. Shokrgozars COBRA
premium in order for Mr. Shokrgozar to secure health insurance of his choice; provided that
such payments shall cease if, during the COBRA period or thereafter, Mr. Shokrgozar is then
covered by reasonably equivalent or superior health insurance provided by any subsequent
employer. In addition, the Company shall continue to provide Mr. Shokrgozar with up to
$4,000 per year for unreimbursed medical expenses and with the auto allowance and the
disability and life benefits he is receiving from the Company as of the termination date
until December 13, 2010;
    
    The Company will reimburse Mr. Shokrgozar for reasonable attorneys fees incurred in
connection with the Severance Agreement, in the maximum amount of $50,000 and the Company
will provide outplacement services for Mr. Shokrgozar for a period not to exceed 18 months
in the maximum amount of $50,000;
    
    The Company and Mr. Shokrgozar agreed to the following concerning outstanding grants of
stock options, restricted stock units (RSUs) and performance shares:
 o
    
    The following vested stock options: (i) 125,000 shares granted on
November 10, 1999; (ii) 125,000 shares granted on November 10, 1999; (iii) 150,000
shares granted on May 16, 2001 and (iv) 150,000 shares granted on December 15, 2004
shall terminate, if not exercised, on their respective expiration dates (i.e.,
November 10, 2009, November 10, 2009, May 16, 2011, and December 15, 2014,
respectively);o
    
    The vested stock options to acquire 150,000 shares granted on December
3, 1998 would terminate, if not exercised, on the 90th day following the
termination date;o
    
    The vested stock options to acquire 150,000 shares granted on November
30, 2000 terminated on August 28, 2008;o
    
    The Company granted to Mr. Shokrgozar an option to acquire 150,000
shares of the Companys Common Stock at an exercise price of $7.25 per share, an
expiration date of November 30, 2010, and with such other terms as are contained in
the Companys standard form of option agreement;o
    
    The 50,000 shares of restricted stock granted to Mr. Shokrgozar
pursuant to that certain Restricted Stock Units Award Agreement dated December 12,
2007 vested on September 5, 2008;o
    
    One-half (50,000 shares) of the performance shares granted to Mr.
Shokrgozar pursuant to that certain Performance Share Award Agreement dated
December 12, 2007 vested on September 5, 2008;
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o
    
    One-half (50,000 shares) of the performance shares granted to Mr.
Shokrgozar pursuant to that certain Performance Share Award Agreement dated
December 12, 2007 shall vest if the Companys EBITDA for the fiscal year ended in
2009 equals or exceeds $9,960,000; ando
    
    Any other unvested right to receive Company stock terminated on August
28, 2008.
  14




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Outstanding
Equity Awards
 Outstanding Equity Awards At 2008 Fiscal Year-End
 Option Awards
    
    Stock AwardsEquity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity
    
    Equity IncentiveIncentive Plan
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Incentive Plan
    
    Plan Awards:Awards:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Awards:
    
    Market orNumber of
    
    
    
    
    
    
    
    
    
    Number of
    
    
    
    
    
    Number of
    
    Payout Value ofNumber of
    
    
    
    
    
    Securities
    
    
    
    
    
    
    
    
    
    Shares or
    
    Market Value
    
    Unearned
    
    UnearnedSecurities
    
    
    
    Underlying
    
    
    
    
    
    
    
    
    
    Units of
    
    of Shares or
    
    Shares, Units or
    
    Shares, Units orUnderlying
    

Number of Securities
    
    Unexercised
    
    Option
    
    
    
    
    
    Stock That
    
    Units of Stock
    
    Other Rights
    
    Other RightsUnexercised
    

Underlying Unexercised
    
    Unearned
    
    Exercise
    
    Option
    
    Have Not
    
    That Have Not
    
    That Have Not
    
    That Have NotOptions
    
    Options
    
    Options
    
    Price
    
    Expiration
    
    Vested
    
    Vested
    
    Vested
    
    VestedName
    
    Grant Date
    
    # Exercisable
    
    (#) Unexercisable (1)
    
    (#)
    
    ($)
    
    Date
    
    (#) (2)
    
    ($)
    
    (#) (3)
    
    ($)Roger A. Derse,
    
    
    5/26/2004
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    6.38
    
    
    
    5/26/2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interim Office of the
    
    
    12/15/2004
    
    
    
    10,000
    
    
    
    
    
    
    
    
    
    
    
    6.45
    
    
    
    12/15/2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    President, Vice
    
    
    9/12/2006
    
    
    
    20,000
    
    
    
    20,000
    
    
    
    
    
    
    
    4.70
    
    
    
    9/12/2016
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    President and Chief
    
    
    12/12/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    130,500Financial Officer
    
    
    12/12/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,000
    
    
    
    130,500
    
    
    
    
    
    
    
    Dan Tarantine,
    
    
    12/3/1998
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    1.125
    
    
    
    12/3/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interim Office of the President,
    
    
    11/10/1999
    
    
    
    20,000
    
    
    
    
    
    
    
    
    
    
    
    2.75
    
    
    
    11/10/2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Executive Vice
    
    
    11/10/2000
    
    
    
    15,000
    
    
    
    
    
    
    
    
    
    
    
    10.625
    
    
    
    11/10/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    President, Sales and
    
    
    5/16/2001
    
    
    
    40,000
    
    
    
    
    
    
    
    
    
    
    
    3.83
    
    
    
    5/16/2011
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Marketing
    
    
    12/15/2004
    
    
    
    50,000
    
    
    
    
    
    
    
    
    
    
    
    6.45
    
    
    
    12/15/2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12/12/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,000
    
    
    
    52,200Hamid R. Shokrgozar,
    
    
    12/3/1998
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    1.125
    
    
    
    11/28/2008
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    former President and
    
    
    11/10/1999
    
    
    
    125,000
    
    
    
    
    
    
    
    
    
    
    
    2.75
    
    
    
    11/10/2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Chief Executive
    
    
    11/10/1999
    
    
    
    125,000
    
    
    
    
    
    
    
    
    
    
    
    2.75
    
    
    
    11/10/2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Officer
    
    
    5/16/2001
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    3.83
    
    
    
    5/16/2011
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12/15/2004
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    6.45
    
    
    
    12/15/2014
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12/12/2007
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    50,000
    
    
    
    261,0009/5/2008
    
    
    
    150,000
    
    
    
    
    
    
    
    
    
    
    
    7.25
    
    
    
    11/30/2010
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 (1)
    
    Options generally vest pro-rata over a four-year period beginning on the first anniversary of
the date of grant. Mr. Derses options vest at the rate of 25% after the first year and
ratably thereafter for 36 months.(2)
    
    Mr. Derses restricted stock units vest over two years, with 50% vesting on the first-year
anniversary of the date of grant and the remaining 50% vesting upon the end of the second-year
anniversary of the date of grant.(3)
    
    Performance shares vest pursuant to the plan outlined in the section entitled Compensation
Discussion and Analysis under the subheading Executive Incentive Plans for Fiscal 2008 and
2009. 15




---



##### Table of Contents



Option
Exercises and Stock Vested Table
  Option Exercises and Stock Vested Table
 Option Awards
    
    Stock AwardsNumber of Shares
    
    
    
    Number of SharesAcquired on
    
    Value Realized On
    
    Acquired on
    
    Value Realized onExercise
    
    Exercise
    
    Vesting
    
    VestingName
    

(#)(2)
    
    ($)(1)
    
    (#)(2)
    
    ($)Roger A. Derse, Interim
Office of
the President, 
Vice
President and Chief 

Financial Officer
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Dan Tarantine,  Interim
Office of
the President, 

Executive Vice
President, 

Sales and Marketing
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Hamid R. Shokrgozar,
 former
President and 
Chief
Executive Officer
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    515,000
 
 (1)
    
    If the officer executed a same-day-sale transaction, the value realized equals the difference
between the per share exercise price of the option and the per share sales price upon sale,
multiplied by the number of shares for which the option was exercised. If the employee
executed an exercise and hold transaction, the value realized equals the difference between
the per share exercise price of the option and the fair market value of a share of our common
stock on such date of exercise, multiplied by the number of shares for which the option was
exercised.(2)
    
    These awards for restricted stock and
performance shares were vested pursuant to the Severance Agreement
between Hamid R. Shokrgozar and the Company. See the subheading under
Employment and Severance Agreements for further discussion. Potential Payments upon Termination of Employment or Change in Control
 Employment
and Severance Agreements
 Date of Termination
 Price Per Share of Common Stock
 Change in Control
 16




---



##### Table of Contents



Equity Acceleration upon a Change in Control
 Medical and Other Benefits Employment and Severance Agreements
 Retirement
 Roger A. Derse
 Termination
    
    
    
    
    
    Termination for Cause,Termination
    
    Following a
    
    
    
    
    
    Disability, Death orWithout
    
    Change in
    
    Change in
    
    Voluntary Other Than forExecutive Benefits and Payments
    
    Cause
    
    Control
    
    Control
    
    Good ReasonUpon Termination
    
    ($)
    
    ($)
    
    ($)
    
    ($)Cash Compensation:Base Salary
    
    
    240,500
    (1)
    
    
    360,750
    (4)
    
    
    
    
    
    
    Accrued, But Unused Vacation
    
    
    21,773
    (1)
    
    
    21,773
    (4)
    
    
    
    
    
    
    21,773
    (7)Medical Benefits
    
    
    10,404
    (2)
    
    
    15,606
    (5)
    
    
    
    
    
    
    Long-term Incentives:Acceleration of Unvested Stock
Options, Restricted Stock and
Performance Shares
    
    
    308,750
    (3)
    
    
    
    
    
    
    308,750
    (6)
    
    
    Total:
    
    
    581,427
    
    
    
    398,129
    
    
    
    308,750
    
    
    
    21,773
 
 (1)
    
    Mr. Derses severance payments following a termination without cause will include (i) any
accrued but unused vacation, (ii) base salary through the date of termination (to the extent
not theretofore paid) and (iii) the continuation of base salary for twelve months. The dollar
value of Mr. Derses accrued but unused vacation as of January 21, 2009 was $21,773. Mr.
Derses annual base salary is $240,500.(2)
    
    Mr. Derses severance payments following a termination without cause include COBRA
continuation premiums up to 12 months, if he elects to continue the Companys group health
plans pursuant to his rights under COBRA. The monthly cost to the Corporation to furnish Mr.
Derse with medical benefits is $867.(3)
    
    Mr. Derses severance payments following a termination without cause include the immediate
vesting of all unvested stock options, unvested restricted stock units and any other unvested
equity-based awards or grants previously granted. The amount shown represents the incremental
difference between the market value and the cost of unvested options, restricted stock and
performance shares for which vesting might be accelerated. 17




---



##### Table of Contents



(4)
    
    Mr. Derses severance payments following a termination without cause or for good reason
within one year following a change in control of the Corporation will include (i) any accrued
but unused vacation, (ii) base salary through the date of termination (to the extent not
theretofore paid) and (iii) the continuation of base salary for eighteen months. The dollar
value of Mr. Derses accrued but unused vacation as of January 21, 2009 was $21,773. Mr.
Derses annual base salary is $240,500.(5)
    
    Mr. Derses severance payments following a termination without cause or for good reason
within one year following a change in control of the Corporation include COBRA continuation
premiums up to 18 months, if he elects to continue the Companys group health plans pursuant
to his rights under COBRA. The monthly cost to the Corporation to furnish Mr. Derse with
medical benefits is $867.(6)
    
    Upon the occurrence of a change in control of the Corporation, all of Mr. Derses unvested
stock options, unvested restricted stock units and any other unvested equity-based awards or
grants previously granted will fully vest. The amount shown represents the incremental
difference between the market value and the cost of unvested options, restricted stock and
performance shares for which vesting might be accelerated.(7)
    
    Mr. Derses severance payments following a termination for cause, voluntarily for other than
good reason or as a result of death or disability will include (i) any accrued but unused
vacation and (ii) base salary through the date of termination (to the extent not theretofore
paid). The dollar value of Mr. Derses accrued but unused vacation as of January 21, 2009 was
$21,773. Dan Tarantine
 Termination
    
    
    
    
    
    Termination for Cause,Termination
    
    Following a
    
    
    
    
    
    Disability, Death orWithout
    
    Change in
    
    Change in
    
    Voluntary Other Than forExecutive Benefits and Payments
    
    Cause
    
    Control
    
    Control
    
    Good ReasonUpon Termination
    
    ($)
    
    ($)
    
    ($)
    
    ($)Cash Compensation:Base Salary
    
    
    256,000
    (1)
    
    
    384,000
    (4)
    
    
    
    
    
    
    Accrued, But Unused Vacation
    
    
    31,933
    (1)
    
    
    31,933
    (4)
    
    
    
    
    
    
    31,933
    (7)Medical Benefits
    
    
    3,960
    (2)
    
    
    5,940
    (5)
    
    
    
    
    
    
    Long-term Incentives:Acceleration of Unvested Stock
Options, Restricted Stock and
Performance Shares
    
    
    308,750
    (3)
    
    
    
    
    
    
    308,750
    (6)
    
    
    Total:
    
    
    600,643
    
    
    
    421,873
    
    
    
    308,750
    
    
    
    31,933
 
 (1)
    
    Mr. Tarantines severance payments following a termination without cause will include (i) any
accrued but unused vacation, (ii) base salary through the date of termination (to the extent
not theretofore paid) and (iii) the continuation of base salary for twelve months. The dollar
value of Mr. Tarantines accrued but unused vacation as of January 21, 2009 was $31,933. Mr.
Tarantines annual base salary is $256,000.(2)
    
    Mr. Tarantines severance payments following a termination without cause include COBRA
continuation premiums up to 12 months, if he elects to continue the Companys group health
plans pursuant to his rights under COBRA. The monthly cost to the Corporation to furnish Mr.
Tarantine with medical benefits is $330.(3)
    
    Mr. Tarantines severance payments following a termination without cause include the
immediate vesting of all unvested restricted stock units and any other unvested equity-based
awards or grants previously granted. The 18




---



##### Table of Contents



amount shown represents the incremental difference between the market value and the cost of
unvested restricted stock and performance shares for which vesting might be accelerated.(4)
    
    Mr. Tarantines severance payments following a termination without cause or for good reason
within one year following a change in control of the Corporation will include (i) any accrued
but unused vacation, (ii) base salary through the date of termination (to the extent not
theretofore paid) and (iii) the continuation of base salary for eighteen months. The dollar
value of Mr. Tarantines accrued but unused vacation as of January 21, 2009 was $31,933. Mr.
Tarantines annual base salary is $256,000.(5)
    
    Mr. Tarantines severance payments following a termination without cause or for good reason
within one year following a change in control of the Corporation include COBRA continuation
premiums up to 18 months, if he elects to continue the Companys group health plans pursuant
to his rights under COBRA. The monthly cost to the Corporation to furnish Mr. Tarantine with
medical benefits is $330.(6)
    
    Upon the occurrence of a change in control of the Corporation, all of Mr. Tarantines
unvested restricted stock units and any other unvested equity-based awards or grants
previously granted will fully vest. The amount shown represents the incremental difference
between the market value and the cost of unvested restricted stock and performance shares for
which vesting might be accelerated.(7)
    
    Mr. Tarantines severance payments following a termination for cause, voluntarily for other
than good reason or as a result of death or disability will include (i) any accrued but unused
vacation and (ii) base salary through the date of termination (to the extent not theretofore
paid). The dollar value of Mr. Tarantines accrued but unused vacation as of January 21, 2009
was $31,933. Compensation Committee Interlocks and Insider Participation
  
 ITEM 12   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER
MATTERS
  19




---



##### Table of Contents



Amount and Nature ofName and Address of Beneficial Owner(1)
    
    Beneficial Ownership(2)
    
    Percent of Class(3)Roger A. Derse
    
    
    97,500
    (4)
    
    
    *Dan Tarantine
    
    
    138,500
    (5)
    
    
    *Jack A. Henry
    
    
    61,000
    (6)
    
    
    *Paul D. Quadros
    
    
    57,500
    (7)
    
    
    *Thomas M. Reahard
    
    
    127,500
    (8)
    
    
    *Thomas J. Toy
    
    
    102,500
    (9)
    
    
    *Edward A. White **
    
    
    739,666
    (10)
    
    
    3.23Executive Officers and Directors as a group (7 persons)
    
    
    1,324,166
    
    
    
    5.79Dimensional Fund Advisors LP
    
    
    1,991,613
    (11)
    
    
    8.71Royce & Associates LLC
    
    
    1,729,029
    (12)
    
    
    7.56Signia Capital Management LLC
    
    
    2,269,055
    (13)
    
    
    9.92Wynnefield Partners Small Cap Value LP, et. al.
    
    
    2,230,701
    (14)
    
    
    9.76
 
 *
    
    Represents less than 1% of the class.**
    
    Subject to a Rule 10b5-1 Plan.(1)
    
    Unless otherwise noted, the address of each listed shareholder is 3601 East University Drive,
Phoenix, Arizona 85034.(2)
    
    Unless otherwise noted, the Corporation believes that all persons named in the table have
sole voting and investment power with respect to all shares of the Common Stock that are
beneficially owned by them. A person is deemed to be the beneficial owner of securities that
can be acquired by such person within 60 days after January 15, 2009 upon the exercise of
options or other such rights.(3)
    
    Each owners percentage ownership is determined by assuming that options held by such person
(but not those held by any other person), which are exercisable within 60 days after January
15, 2009 have been exercised.(4)
    
    Shares beneficially owned by Mr. Derse include the following options that are currently
exercisable or that will become exercisable within 60 days after January 15, 2009: options to
purchase 60,000 shares of Common Stock granted under the Corporations 2000 Broad Based
Non-Qualified Stock Plan and options to purchase 25,000 shares of Common Stock granted under
the Corporations 1994 Employee Stock Option Plan.(5)
    
    Shares beneficially owned by Mr. Tarantine include the following options that are currently
exercisable or that will become exercisable within 60 days after January 15, 2009: options to
purchase 35,000 shares of Common Stock granted under the Corporations 1994 Flexible Stock
Plan and options to purchase 90,000 shares of Common Stock granted under the Corporations
2000 Broad Based Non-Qualified Stock Plan.(6)
    
    Shares beneficially owned by Mr. Henry include the following options that are currently
exercisable or that will become exercisable within 60 days after January 15, 2009: options to
purchase 45,000 shares of Common Stock granted under the Corporations 2001 Directors Stock
Option Plan. It also includes 5,000 shares of restricted stock granted under the Corporations
2006 Director Restricted Stock Plan that will vest within 60 days after January 15, 2009. 20




---



##### Table of Contents



(7)
    
    Shares beneficially owned by Mr. Quadros include the following options that are currently
exercisable or that will become exercisable within 60 days after January 15, 2009: options to
purchase 45,000 shares of Common Stock granted under the Corporations 2001 Directors Stock
Option Plan. It also includes 5,000 shares of restricted stock granted under the Corporations
2006 Director Restricted Stock Plan that will vest within 60 days after January 15, 2009.(8)
    
    Shares beneficially owned by Mr. Reahard include the following options that are currently
exercisable or that will become exercisable within 60 days after January 15, 2009: options to
purchase 85,000 shares of Common Stock granted under the Corporations 2001 Directors Stock
Option Plan. It also includes 5,000 shares of restricted stock granted under the Corporations
2006 Director Restricted Stock Plan that will vest within 60 days after January 15, 2009.(9)
    
    Shares beneficially owned by Mr. Toy include the following options that are currently
exercisable or that will become exercisable within 60 days after January 15, 2009: options to
purchase 85,000 shares of Common Stock granted under the Corporations 2001 Directors Stock
Option Plan. It also includes 5,000 shares of restricted stock granted under the Corporations
2006 Director Restricted Stock Plan that will vest within 60 days after January 15, 2009.(10)
    
    Shares beneficially owned by Mr. White include the following options that are currently
exercisable or that will become exercisable within 60 days after January 15, 2009: options to
purchase 70,000 shares of Common Stock granted under the Corporations 2001 Directors Stock
Option Plan. It also includes 5,000 shares of restricted stock granted under the Corporations
2006 Director Restricted Stock Plan that will vest within 60 days after January 15, 2009.(11)
    
    Shares beneficially owned by Dimensional Fund Advisors LP were determined based solely on our
review of a Schedule 13G filed February 6, 2008 with the Securities and Exchange Commission.
Dimensional Fund Advisors LP is located at 1299 Ocean Avenue, 11th Floor, Santa
Monica, CA 90401.(12)
    
    Shares beneficially owned by Royce & Associates LLC were determined based solely on our
review of a Schedule 13G filed February 1, 2008 with the Securities and Exchange Commission.
Royce & Associates LLC is located at 1414 Avenue of the Americas, New York, NY 10019.(13)
    
    Shares beneficially owned by Signia Capital Management LLC were determined based solely on
our review of a Schedule 13G filed September 10, 2008 with the Securities and Exchange
Commission. Signia Capital Management LLC is located at 108 N Washington St, Suite 305,
Spokane, WA 99201.(14)
    
    Shares beneficially owned by Wynnefield Partners Small Cap Value LP, et. al. were determined
based solely on our review of a Schedule 13D/A filed December 19, 2008 with the Securities and
Exchange Commission. Wynnefield Partners Small Cap Value LP, et al. is located at One Penn
Plaza, Suite 4720, New York, NY 10119. 
 ITEM
13   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
  21




---



##### Table of Contents



ITEM14   PRINCIPLE ACCOUNTANT FEES AND SERVICES
 Audit Fees
  Audit-Related Fees
  Tax Fees
  All Other Fees
  Summary of Fees Billed to the Corporation by Grant Thornton LLP:
 FY 2008
    
    FY 2007Audit Fees
    
    $
    628,072
    
    
    $
    616,970Audit-Related Fees
    
    
    
    
    
    
    16,856Tax Fees
    
    
    
    
    
    
    15,328All Other Fees
    
    
    
    
    
    
    Total Fees
    
    $
    628,072
    
    
    $
    649,154
 Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent
Registered Public Accounting Firm
   22




---



##### Table of Contents



Audit Committee Report (1)
     Audit Committee
 
 (1)
    
    The Audit Committee Report does not constitute soliciting materials and should not be deemed
filed or incorporated by reference into any other filing by the Corporation under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, except
to the extent the Corporation specifically incorporates these committee reports information by
reference into a filing under such acts. 23




---



##### Table of Contents



Exhibit Index
 ExhibitNumber
    

Description10.24* **
    
    Employment Agreement, dated January 21, 2009, between White Electronic Designs
Corporation and Roger A. Derse.10.25* **
    
    Employment Agreement, dated January 21, 2009, between White Electronic Designs
Corporation and Dan V. Tarantine.31.1*
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.31.2*
    
    Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Filed herewith.**
    
    Management compensatory contract, plan or arrangement. 24




---



##### Table of Contents



SIGNATURES
    /s/   Roger A. Derse
    
    
    
    /s/   Dan TarantineRoger A. Derse
    
    
    
    Dan TarantineInterim Office of the President, Vice President and
    
    
    
    Interim Office of the President,Chief Financial Officer, Secretary and Treasurer
    
    
    
    Executive Vice President, Sales and MarketingDate: January 26, 2009
    
    
    
    Date: January 26, 2009
   /s/   Edward A. White
    
    
    
    /s/   Paul D. QuadrosEdward A. White
    
    
    
    Paul D. QuadrosChairman of the Board of Directors
    
    
    
    DirectorDate: January 26, 2009
    
    
    
    Date: January 26, 2009/s/   Thomas M. Reahard
    
    
    
    /s/   Thomas J. ToyThomas M. Reahard
    
    
    
    Thomas J. ToyLead Director
    
    
    
    DirectorDate: January 26, 2009
    
    
    
    Date: January 26, 2009/s/   Jack A. HenryJack A. HenryDirectorDate: January 26, 2009
 25