Astronics Corp

This non-binding proposal asks shareholders to approve the Company’s executive compensation as disclosed in the proxy (the ‘‘say-on-pay’’ vote). Management is seeking shareholder endorsement to affirm its compensation framework, which includes base salary, annual cash incentives, and long-term equity awards (stock options, PSUs and RSUs) designed to align pay with performance and retention. The Company emphasizes that a significant portion of NEO pay is at risk and tied to multi-year performance metrics, particularly PSUs measured versus Adjusted EBITDA as a percent of revenue, and that compensation decisions incorporate market data and peer practices. The Board and Compensation Committee contend that the structure incentivizes long-term shareholder value creation while providing competitive pay to attract and retain talent. The proposal is advisory only and not binding on the Board, but the Compensation Committee will review the vote results and consider adjustments as appropriate. Company disclosure also highlights governance safeguards such as a clawback policy, stock ownership expectations, and limits on hedging, which management cites to bolster the case for approval. Historical context — including a 91% favorable say-on-pay vote in 2023 — factors into management’s view that the current program has shareholder support. A vote FOR signals shareholder alignment with the Company’s pay philosophy; a vote AGAINST could prompt shareholder engagement and potential changes to plan design or disclosure.

Proposal 4 asks shareholders to approve a new equity plan—the 2026 LTIP—that would replace the existing 2017 LTIP and add a net new reserve of 1,649,872 shares for a total plan pool of 2,250,000 shares. Management and the Compensation Committee frame the plan as necessary to maintain a competitive equity program that supports recruitment, retention and long-term alignment of executives, directors and employees through a mix of options, SARs, RSUs, PSUs and other stock-based awards. The filing discloses governance-oriented guardrails the Board prioritized in the plan design—no evergreen provision, no reloads, restricted dividend equivalents, transfer restrictions, clawback policy, limits on non-employee director awards, and anti-repricing protections—to mitigate shareholder concerns about dilution and opportunistic grant practices. Astronics quantifies historic burn rate and overhang, and estimates the proposed share reserve would increase overhang from roughly 6.9% to about 10.6% at the end of 2025, highlighting the dilution tradeoff inherent to the proposal. The plan also preserves the Committee’s flexibility to use performance-based awards (e.g., PSUs tied to Adjusted EBITDA metrics) and other long-term incentive structures central to the Company’s pay-for-performance philosophy. If shareholders do not approve the 2026 LTIP, Astronics would continue to operate under the 2017 LTIP only until its expiration in May 2027, at which point Astronics says it would face competitive disadvantages in granting equity. The Board recommends FOR based on its view that the plan strikes a balance between delivering competitive equity compensation and incorporating structural protections to limit abuse and excessive dilution. Key risks for investors include the potential for the additional share reserve to create incremental dilution and shareholder value transfer if awards are granted liberally rather than tied to credible performance conditions.

Proposal 5 asks shareholders to approve a new employee stock purchase plan that would reserve 500,000 shares for employee purchases and replace the Existing ESPP effective for offerings starting October 1, 2026. The new plan is presented as a standard Section 423-style ESPP for U.S. employees (with a Non-423 component for non-U.S. jurisdictions), featuring customary mechanics including payroll deduction contributions, an 85% lookback/discount at the Committee’s discretion, and offering periods up to two years. Management’s rationale centers on employee ownership as a retention and recruitment tool, citing historical participation and annual dilution statistics for the Existing ESPP. The Compensation Committee retains administrative flexibility to tailor offerings for non-U.S. jurisdictions, and the plan contains adjustment and change-in-control provisions. The principal investor considerations are modest dilution (historical ESPP dilution has been under ~1% annually) versus the potential benefits of broader employee alignment with shareholder interests. The Board’s recommendation FOR reflects the view that the ESPP supports compensation strategy and employee engagement while including customary protections and limits. If shareholders do not approve, the Existing ESPP will remain in effect through September 30, 2026, after which new offerings would not commence under a replacement plan without approval.

This is a procedural, catch-all agenda item authorizing shareholders to consider any additional matters properly presented at the Annual Meeting or at any adjournments. It does not specify substantive actions; rather, it permits the meeting to address unforeseen or procedural items, ministerial motions, or business that arises after the proxy materials were finalized. The Board recommends voting FOR proxies on this item to confer appropriate discretion on the designated proxy holders to vote on any such matters in the best interests of the Company and its shareholders. Practically, this item is rarely controversial; if substantive proposals are presented at the meeting, the proxies will exercise their judgment in accordance with the voting guidelines and fiduciary duties described in the proxy. Note that brokers typically lack discretion to vote on non-routine matters in the absence of beneficial owner instructions, so shareholder engagement may be required for materially new proposals introduced at the meeting. A vote FOR simply enables orderly consideration of any additional properly presented business without pre-approving any specific outcome.