Edgar Filing: RAVEN INDUSTRIES INC

def14a

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )


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Raven Industries, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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205 E. 6^th Street
Sioux Falls, South Dakota
Telephone 605-336-2750

April 14, 2008

Dear Shareholder:

You are cordially invited to join us for our Annual Meeting of Shareholders to be held on Wednesday, May 21, 2008 at 9:00 a.m. (Central Daylight Time) at the Ramkota Hotel and Conference Center, 3200 W. Maple Avenue, Sioux Falls, South Dakota.

The Notice of Annual Meeting of Shareholders and the Proxy Statement that follow describe the business to be conducted at the meeting. We will also report on matters of current interest to our shareholders.

Your vote is important. Whether you own a few shares or many, it is important that your shares are represented. If you cannot attend the meeting in person, you may vote your shares as described in the following materials.

We look forward to seeing you at the meeting.

Sincerely,



Ronald M. Moquist
President and Chief Executive Officer

RAVEN INDUSTRIES, INC.
205 E. 6^th Street
P.O. Box 5107
Sioux Falls, South Dakota 57117-5107

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
MAY 21, 2008


Time		9:00 a.m. CDT on Wednesday, May 21, 2008

Place		Ramkota Hotel and Convention Center, Amphitheater II
		3200 W. Maple Avenue
		Sioux Falls, South Dakota

Items of Business		(1) To elect nine directors.
		(2) Ratification of the appointment of the Independent Registered Public Accounting Firm.
		(3) To consider such other business as may properly come before the Annual Meeting or any adjournments thereof.

Record Date		You are entitled to vote if you were a shareholder at the close of business on April 9, 2008.

Annual Meeting		If you are a shareholder, please come to the Annual Meeting and present proof of ownership of our stock at the registration table. The Annual Meeting is open to shareholders and
		those guests invited by the Company.

Voting by Proxy		Please submit a proxy as soon as possible so that your shares can be voted at the Annual
		Meeting in accordance with your instructions. You may submit your proxy:

		(1) over the Internet;
		(2) by telephone; or
		(3) by mail.

		For specific instructions, refer to page 1 of this proxy statement and the voting
		instructions on the proxy card.

THIS PROXY STATEMENT AND PROXY CARD ARE BEING DISTRIBUTED ON OR ABOUT APRIL 14, 2008.

By Order of the Board of Directors,

Thomas Iacarella
Secretary

PROXY STATEMENT TABLE OF CONTENTS


		PAGE
General		1
Voting Securities and Proxies		1
Ownership of Common Stock		2-3
Election of Directors		4
Board of Directors and Committees		5-6
Corporate Governance		7-8
Non-Management Director Compensation		9
Executive Compensation
Compensation Discussion and Analysis		10-14
Compensation Committee Report		14
Summary Compensation Table		15-16
Grants of Plan Based Awards in Fiscal 2008		17
Outstanding Equity Awards at Fiscal 2008 Year-end		18
Option Exercises in Fiscal 2008		18
Potential Payments on Termination or Change-in-Control		19-20
Independent Registered Public Accounting Firm Fees		21
Audit Committee Report		22
Other Matters		23

PROXY STATEMENT
of
RAVEN INDUSTRIES, INC.
205 E. 6^th Street
P.O. Box 5107
Sioux Falls, South Dakota 57117-5107

Annual Meeting of Shareholders to be held
May 21, 2008

GENERAL

This Proxy Statement is furnished in connection with the solicitation of proxies by the Board of Directors of Raven Industries, Inc. (the “Company” or “Raven”) to be used at the Annual Meeting (the “Meeting”) of Shareholders of the Company, which is to be held on Wednesday, May 21, 2008, at 9:00 A.M. (C.D.T.) at the Ramkota Hotel and Convention Center, Amphitheater II, 3200 West Maple Avenue, Sioux Falls, South Dakota. The approximate date on which this Proxy Statement and accompanying proxy were first sent or given to shareholders was April 14, 2008. Each shareholder who signs and returns a proxy in the form enclosed with this Proxy Statement may revoke it at any time prior to its use by giving notice of such revocation to the Company in writing or in open meeting or by such shareholder giving a valid proxy bearing a later date. Presence at the meeting by a shareholder who has signed a proxy does not alone revoke the proxy. Only shareholders of record at the close of business on April 9, 2008 (the “Record Date”) will be entitled to vote at the Meeting or any adjournments thereof.

VOTING SECURITIES AND PROXIES

The Company has outstanding only one class of voting securities, Common Stock $1.00 par value, of which 18,074,034 shares were outstanding as of the close of business on the Record Date. Shareholders representing a majority of the shares of Common Stock outstanding and entitled to vote must be present in person or represented by proxy in order to constitute a quorum to conduct business at the Meeting.

You are entitled to one vote for each share of Common Stock that you hold, except for the election of directors. If you vote for all nominees, one vote per share will be cast for each of the nine nominees. You may withhold votes from any or all nominees. Except for the votes that shareholders of record withhold from any or all nominees, the persons named in the proxy card will vote such proxy “FOR” and, if necessary, will exercise their cumulative voting rights to elect the nominees as directors of the Company. If you wish to cumulate your votes in the election of directors, you are entitled to as many votes as equal the number of shares held by you at the close of business on the Record Date, multiplied by the number of directors to be elected. You may cast, under the cumulative voting option, all of your votes for a single nominee or apportion your votes among any two or more nominees. For example, a holder of 100 shares may cast 900 votes for a single nominee, apportion 100 votes for each of nine nominees or apportion 900 votes in any other manner by so noting in the space provided on the proxy card. The cumulative voting feature for the election of directors is also available by voting in person at the Meeting; it is not available by telephone or on the internet.

In the election of directors, the nine director nominees who receive the highest number of votes will be elected as directors. The ratification of the appointment of PricewaterhouseCoopers LLP as the company’s independent registered public accounting firm for fiscal 2009 requires the affirmative vote of a majority of the votes cast. A shareholder that is present or represented by proxy at the Meeting and who “abstains” with respect to this proposal is in effect casting a negative vote, but a shareholder (including a broker) who does not give authority to a proxy to vote will not be considered present and entitled to vote on this proposal.

OWNERSHIP OF COMMON STOCK

The following table shows certain information regarding beneficial ownership of the Company’s common stock as of the Record Date by: (i) any person known by the Company to be the owner, of record or beneficially, of more than 5% of the Common Stock, (ii) each of the executive officers, directors and nominees for election to the Company’s Board of Directors, and (iii) all executive officers and directors as a group.

Name

Shares

of beneficial

Stock units

beneficially

Percent of

owner

vested

owned

class

David R. Bair

32,510

⁽¹⁾

Anthony W. Bour

2,278

51,070

⁽¹³⁾

David A. Christensen

1,192

624,168

^(2,13)

3.5

Thomas S. Everist

1,192

12,200

⁽¹³⁾

Mark E. Griffin

1,192

98,980

^(3,13)

James D. Groninger

19,377

⁽⁴⁾

Conrad J. Hoigaard

1,192

125,000

⁽¹³⁾

Thomas Iacarella

125,602

⁽⁵⁾

Kevin T. Kirby

554

10,000

⁽¹³⁾

Cynthia H. Milligan

2,278

4,941

⁽¹³⁾

Ronald M. Moquist

928,239

⁽⁶⁾

5.1

Barbara K. Ohme

32,516

⁽⁷⁾

Daniel A. Rykhus

55,104

⁽⁸⁾

Mark L. West

71,540

⁽⁹⁾

T. Rowe Price Associates, Inc.

2,384,400

⁽¹⁰⁾

13.2

100 E. Pratt Street

Baltimore, MD 21202

Neuberger Berman, Inc. LLC

1,970,190

⁽¹¹⁾

10.9

605 Third Avenue

New York, NY 10158

Royce & Associates, LLC

975,701

⁽¹²⁾

5.4

1414 Avenue of the Americas

New York , NY 10019

All executive officers, directors and nominees as a group (14 persons)

9,878

2,191,247

^(13,14)

12.0


*		Less than 1%


⁽¹⁾		Includes 9,075 shares that may be purchased within 60 days by exercise of outstanding options.

⁽²⁾		Includes 434,002 shares owned by his wife, as to which he disclaims beneficial ownership.

⁽³⁾		Includes 79,996 shares held by the John E. Griffin Trust, of which Mark E. Griffin is co-trustee, and 8,152 shares held as custodian for a minor child.

⁽⁴⁾		Includes 9,825 shares that may be purchased within 60 days by exercise of outstanding options.

⁽⁵⁾		Includes 24,375 shares that may be purchased within 60 days by exercise of outstanding options.

⁽⁶⁾		Includes 29,406 shares that may be purchased within 60 days by exercise of outstanding options. Also includes 126,000 shares held by his wife, as to which he disclaims beneficial ownership.

⁽⁷⁾		Includes 10,950 shares that may be purchased within 60 days by exercise of outstanding options.

⁽⁸⁾		Includes 21,825 shares that may be purchased within 60 days by exercise of outstanding options.

⁽⁹⁾		Includes 13,200 shares that may be purchased within 60 days by exercise of outstanding options.

⁽¹⁰⁾		Data based on Schedule 13G filed by the shareholder with the SEC on February 14, 2008, in which the shareholder stated: “These securities are owned by various individual and institutional investors, including T. Rowe Price Small Capital Value Fund, Inc. (which owns 2,144,900 shares,...) which T. Rowe Price Associates, Inc. (Price Associates) serves as investment advisor with power to direct investments and/or sole power to vote the securities. For purposes of the reporting requirements of the Securities Exchange Act of 1934, Price Associates is deemed to be a beneficial owner of such securities; however, Price Associates expressly disclaims that it is, in fact, the beneficial owner of such securities.”

⁽¹¹⁾		Data based on Schedule 13G filed by the shareholder with the SEC on February 8, 2008.

⁽¹²⁾		Data based on Schedule 13G filed by the shareholder with the SEC on January 30, 2008.

⁽¹³⁾		Does not include non-voting vested Stock Units held by the Deferred Compensation Plan for Directors.

⁽¹⁴⁾		Includes 118,656 shares that may be purchased within 60 days by exercise of outstanding options. Also includes 560,002 shares held by spouses of officers and directors, as to which beneficial ownership is disclaimed.

ELECTION OF DIRECTORS

Proposal No. 1

Nine directors are to be elected at the Meeting, each director to serve until the next Annual Meeting of Shareholders. All of the nominees listed below, except Mr. Rykhus, are now serving as directors and all of the nominees have agreed to serve. Independence has been determined according to Nasdaq listing standards. The Governance Committee of the Board of Directors has nominated the following:


	Principal Occupation, Business Experience Past	Director	Independent
Name of Nominee (Age)	Five Years and Directorships in Public Companies	Since	Director
Anthony W. Bour (70)	President and Chief Executive Officer of Showplace Wood Products, Harrisburg, SD since 1999. Director of U.S. Bank of South Dakota, Sioux Falls, SD.	1995	Yes

David A. Christensen (73)	Former President and Chief Executive Officer of the Company from 1971 to 2000. Former Director (1976-2005) of Xcel Energy, Inc. Minneapolis, MN; and Former Director (1977-2003) of Wells Fargo & Co., San Francisco, CA.	1971	Yes

Thomas S. Everist (58)	President and Chief Executive Officer of The Everist Company, Sioux Falls, SD; Former President and Chief Executive Officer, L.G. Everist, Inc., Sioux Falls, SD, 1987-2002. Director of MDU Resources, Bismarck, ND.	1996	Yes

Mark E. Griffin (57)	President and Chief Executive Officer of Lewis Drugs, Inc., Sioux Falls, SD since 1986. President and Chief Executive Officer of Griffson Realty Company, Fredin Associates and G.E.F. Associates, Sioux Falls, SD.	1987	Yes

Conrad J. Hoigaard (71)	Chairman of the Board of the Company since 1980. President and Chairman of the Board of Hoigaard’s Inc., Minneapolis, MN since 1972.	1976	Yes

Kevin T. Kirby (53)	President, Kirby Investment Corporation since 1993. Former Director (1989-2001) of Raven Industries, Inc.	2007	Yes

Cynthia H. Milligan (61)	Dean of the College of Business Administration University of Nebraska-Lincoln since 1998. Director of Wells Fargo and Co., San Francisco, CA; and Calvert Funds, Bethesda, MD.	2001	Yes

Ronald M. Moquist (62)	President and Chief Executive Officer of the Company since 2000. Executive Vice President of the Company from 1985 to 2000. Joined the Company in 1975 as Sales and Marketing Manager.	1999	No

Daniel A. Rykhus (43)	Executive Vice President of the Company and Flow Controls Division General Manager since 2004. Flow Controls Division Vice President and General Manager 2002-2004. Joined the Company in 1990 as Director of World Class Manufacturing.		No

All shares represented by proxies will be voted FOR all the previously named nominees unless a contrary choice is specified. If any director nominee should withdraw or become unavailable to serve for reasons not presently known, the proxies that would otherwise have been voted for such nominee will be voted for a substitute nominee that may be selected by the Governance Committee of the Board of Directors.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR ALL NOMINEES.

RATIFICATION OF THE APPOINTMENT OF THE INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Proposal No. 2

The Audit Committee of the Board of Directors has selected PricewaterhouseCoopers LLP to serve as the Company’s independent registered public accounting firm for the fiscal year ending January 31, 2009. While it is not required to do so, our Board is submitting the selection of PricewaterhouseCoopers LLP for ratification in order to ascertain the views of our shareholders with respect to the choice of audit firm. If the selection is not ratified, the Audit Committee will reconsider its selection. Representatives of PricewaterhouseCoopers LLP are not expected to be at the Annual Meeting.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR Proposal No. 2.

BOARD OF DIRECTORS AND COMMITTEES

The Board of Directors held four regular quarterly meetings during the last fiscal year. The Company has an Audit Committee, Personnel and Compensation Committee and a Governance Committee. All directors attended at least 75 percent of their Board and Committee meetings.


Governance Committee.
Members:		Cynthia H. Milligan (Chair)
		Anthony W. Bour
		David A. Christensen
		Thomas S. Everist
		Mark E. Griffin
		Conrad J. Hoigaard
		Kevin T. Kirby

Independence:		All of the Committee members meet the independence requirements of Nasdaq listing standards.

Responsibilities:		The Governance Committee reviews corporate governance standards and nominates candidates for the Board of Directors. It met twice in fiscal 2008. The Committee is also responsible for assessing the Board’s effectiveness. It has established policies regarding shareholder communications with the Board, nominations and related party transactions which are available on the Company’s website, www.ravenind.com.

Charter:		The Charter is available on Raven’s website, www.ravenind.com.


Audit Committee.
Members:		Thomas S. Everist (Chair)
		Anthony W. Bour
		Kevin T. Kirby
		Cynthia H. Milligan

Independence and Financial Expertise:		The Board has determined that each member of this Committee meets the requirements to be named “audit committee financial experts” as defined by the SEC rules implementing Section 407 of the Sarbanes-Oxley Act of 2002. The Committee members also meet the independence requirements of Nasdaq listing standards.

Responsibilities:		The Audit Committee monitors the company’s procedures for reporting financial information to the public. It held two meetings in fiscal 2008. It is directly responsible for the appointment, compensation and oversight of the independent registered public accounting firm and has the sole authority to appoint or replace the independent registered public accounting firm. The Committee reviews the scope of the annual audit. It also reviews related reports and recommendations and preapproves any non-audit services provided by such firm. In addition, the Committee maintains through regularly scheduled meetings and quarterly conference calls with the Committee Chair, open lines of communication with the Board of Directors, Raven’s financial management and the independent registered public accounting firm. See the “Audit Committee Report” on page 22.

Charter:		The charter is available on Raven’s website, www.ravenind.com.

Personnel and Compensation Committee.
Members:		David A. Christensen (Chair)
		Mark E. Griffin
		Conrad J. Hoigaard

Independence, Insiders and Interlocks:		All of the Committee members meet the independence requirements of Nasdaq listing standards. Mr. Christensen is the former President and Chief Executive Officer of the Company and joined the Committee after his retirement. No executive officer of the Company served as a member of the Compensation Committee or Board of Directors of another entity in which one of whose executive officers served on the Company’s Compensation Committee or Board of Directors during fiscal 2008.

Responsibilities:		The Committee reviews the Company’s executive remuneration policies and practices, and makes recommendations to the Board in connection with compensation matters affecting the Company. It held three meetings in fiscal 2008. Compensation matters concerning the Chief Executive Officer and the other executives of the Company were approved by the full Board in executive session, with the Chief Executive Officer excused. See the “Compensation Committee Report” on page 14.

Charter:		The charter is available on Raven’s website, www.ravenind.com.

CORPORATE GOVERNANCE

Code of Ethics. The Board of Directors, through its Governance Committee has adopted a Code of Conduct that applies to directors, officers and all employees of the Company. The Code of Conduct is available on Raven’s website at www.ravenind.com.

Certain Relationships and Related Transactions. Mrs. Milligan is on the Board of Directors of Wells Fargo and Co., the parent company of Wells Fargo Bank, N.A., which provides transfer agent and registrar services, and borrowings to the Company under a line of credit. The terms of the services and credit line were considered by management competitive with other resources generally available to the Company. There were no borrowings under the credit line in fiscal 2008. As of April 9, 2008, Raven has no borrowings, and $1.3 million of letters of credit outstanding under the line of credit.

Raven has adopted a written policy governing related party transactions. Under this policy, before effecting or continuing any “related party transaction,” the Audit Committee of the Board must first ratify or approve of the transaction and conclude that the transaction is on terms comparable to those that the Company could reasonably expect in an arm’s length transaction with an unrelated third party. Under the policy, a “related party transaction” is any transaction with a related party other than one generally available to all Company employees or involving an amount less than $25,000. A “related party” is (i) a senior officer or a director, including members of their immediate family, (ii) a holder of more than 5% of our common stock, or (iii) an entity owned or controlled by the persons described in clauses (i) or (ii). The policy is available on Raven’s website at www.ravenind.com. The Company’s relationship with Wells Fargo is reviewed annually under this policy.

Nominations to the Board of Directors. The Governance Committee of the Board of Directors seeks to recruit highly skilled and participative candidates who have the ability to strengthen the Board of Directors. The Governance Committee will consider timely presented nominations from shareholders if candidates are qualified.

Current directors whose performance, capabilities and experience meet the Company’s expectations and needs are typically nominated for reelection. In accordance with Raven’s Corporate Governance Standards, directors are not re-nominated after they reach their 75^th birthday.

The size of the Board should be between seven and nine members, with a majority being independent members as defined by the Securities and Exchange Commission and the Nasdaq Stock Market. The Company’s lawyers, investment bankers and others with business links to the Company may not become directors. Interlocking directorships are not allowed.

Recognizing that the contribution of the Board will depend on not only the character and capabilities of the directors taken individually but also on their collective strengths, the Board should be composed of:

	•		Directors chosen with a view toward bringing to the Board diverse experiences and backgrounds relevant to the Company’s business;

	•		Directors who will form a balanced core of business executives with varied expertise;

	•		Directors who have substantial experience outside the business community — in the public, academic or scientific communities, for example; and

	•		Directors who will represent the balanced, best interests of the shareholders as a whole rather than special interest groups or constituencies.

In considering possible candidates for election as a director, the Governance Committee should be guided in general by the composition guidelines established above and, in particular, by the following:

	•		Each director should be an individual of the highest character and integrity and have an inquiring mind, vision and the ability to work well with others and exercise good judgment;

	•		Each director should be free of any conflict of interest which would violate any applicable law or regulation or interfere with the proper performance of the responsibilities of a director;

	•		Each director should possess substantial and significant experience which would be of particular importance to the Company in the performance of the duties of a director;

	•		Each director should have sufficient time available to devote to the affairs of the Company in order to carry out the responsibilities of a director; and

	•		Each director should have the capacity and desire to represent the balanced, best interests of the shareholders as a whole.

Consistent with the Company’s bylaws, and the Governance Committee Charter, the Governance Committee will review and consider for nomination any candidate for membership to the Board recommended by a shareholder of the Company, in accordance with the evaluation criteria and selection process described above. Shareholders wishing to recommend a candidate for consideration in connection with an election at a specific annual meeting should notify the Governance Committee well in advance of the meeting date to allow adequate time for the review process and preparation of the proxy statement, and in no event later than the first day of February.

Communications with the Board of Directors. The Board of Directors believes that the most efficient means for shareholders and other interested parties to raise issues and questions and to get a response is to direct such communications to the Company through the office of the Secretary of the Company. Other methods are also described in the Investor Relations section of the Company’s website, www.ravenind.com.

If, notwithstanding these methods, a shareholder or other interested party wishes to direct a communication specifically to the Board of Directors, a letter to the Board is the most appropriate method. To insure that the communication is properly directed in a timely manner, it should be clearly identified as intended for the Board:

Raven Industries, Inc.
Attention: Board Communications — (Director Name if applicable)
P.O. Box 5107
Sioux Falls, SD 57117-5107

The Corporate Secretary’s Office will collect and organize all such communications. A summary of communications received will be periodically provided to the Company’s Governance Committee, who will make the final determination regarding the disposition of any such communication.

The Board believes that the Company should speak with one voice and has empowered management to speak on the Company’s behalf subject to the Board’s oversight and guidance on specific issues. Therefore, in most circumstances the Board will not respond directly to inquiries received in this manner but may take relevant ideas, concerns and positions into consideration.

NON-MANAGEMENT DIRECTOR COMPENSATION

During fiscal 2008, directors who were not full-time employees of the Company were paid a retainer fee of $20,000 plus $1,200 for each regular board meeting and $600 for each telephonic or committee meeting. The Chairman of the Board received $1,200 per month in lieu of meeting fees. The Audit Committee Chair received $2,000 annually for quarterly audit updates and other duties.

Directors received a matching Stock Unit Award under the Deferred Compensation Plan for Directors of Raven Industries, Inc. approved by the Shareholders on May 23, 2006. Retainers may also be deferred under this plan.

Director Compensation Table


	Fees Earned or Paid		Stock Awards		All Other		Total
	in Cash ⁽¹⁾				Compensation⁽²⁾
Name	($)		($)		($)		($)

Conrad J. Hoigaard		34,400		20,000		460		54,860
Anthony W. Bour		27,200		20,000		874		48,074
David A. Christensen		27,800		20,000		460		48,260
Thomas S. Everist		29,200		20,000		460		49,660
Mark E. Griffin		27,800		20,000		460		48,260
Kevin T. Kirby		24,800		20,000		182		44,982
Cynthia H. Milligan		27,200		20,000		874		48,074


(1)		Mr. Bour and Mrs. Milligan deferred $20,000 of their retainers into the Directors Stock Compensation Plan.


(2)		All other compensation consists of dividend earnings on Stock Units granted under the Deferred Compensation Plan for Directors of Raven Industries, Inc. Does not include perquisites and benefits which totaled less than $10,000 for each director.

EXECUTIVE COMPENSATION

COMPENSATION DISCUSSION AND ANALYSIS

Overview

Raven’s executive compensation program, developed by management and approved by the Personnel and Compensation Committee of the Board of Directors, is intended to be simple, focused on a few key performance metrics and balanced between:

	•		employees, managers and executives

	•		long-term and short-term objectives

	•		financial and stock performance

	•		cash and equity compensation

The compensation program is designed to align the interests of the executive team with those of Raven shareholders. The plan uses salary and benefits, a management incentive program and stock options to achieve these goals. Retention of top talent and achievement of corporate objectives measure the effectiveness of our compensation plan.

Raven also uses non-compensatory programs, such as annual performance reviews, employee improvement and education programs, and succession planning. We believe that these programs are more effective than compensation alone for optimizing talent utilization and executive development.

Objectives of the Company’s Executive Compensation Program

Alignment with Shareholder Interests

Our compensation program is designed to motivate and reward Raven’s executives to achieve the short and long-term goals that we believe will enhance shareholder value. The short-term goals are embodied in our annual budget. These include net income growth, productivity gains, working capital utilization and expense control. Building on these short-term objectives, the program also seeks to reward executives for enhancing shareholder value over the long-term. Raven’s long-term objectives include growing sales and net income over each three-year period by an average of 12 and 15 percent per year, respectively, and efficiently utilizing invested capital.

Retention

Retention aspects of the program are designed to take advantage of the experience of Raven executives and avoid unwanted turnover in the executive team. The executive officers identified on the Summary Compensation Table on page 15 (the “Named Executives”) average over 19 years experience with Raven. We believe that promotion from within and length of tenure at every level of the organization enhances productivity and reduces compensation cost.

Internal Equity

Raven strongly believes in internal equity. We review executive pay to prevent it from becoming disproportionately large when compared to the other key managers and employees. The practice of internal equity is difficult to maintain in today’s compensation environment if management turnover is high and we are required to recruit from outside Raven to fill key positions.

Role of Management, the Personnel and Compensation Committee and Consultants

Management hires, retains, and develops employee talent at every level of the organization. Our human resources department and Vice President of Administration obtain competitive survey information for positions and locations throughout the Company. This is the starting point for decisions on compensation. Raven tries to maintain compensation in the middle of relevant range for non-executive positions. Executive compensation is driven by taking the results for non-executive employees and extrapolating to key employees and ultimately the executive team and the Named Executives.

Our President and Chief Executive Officer presents a summary of executive compensation to the Personnel and Compensation Committee (the “Committee”) for review and approval annually. The Committee approves executive salaries, benefits and stock option grants. The Committee’s decisions regarding the compensation of our President and Chief Executive Officer are made in executive session. Management and the Committee do not use compensation consultants because we believe consultants tend to raise, rather than control, the level of compensation.

Components of the Company’s Executive Compensation Program

Base Salary

Salaries for the Named Executives are based on the scope of their responsibilities, performance, experience and potential. The salaries of their peers and subordinates inside and outside the Company are considered when setting salary levels. The primary objectives addressed by base salary in the Compensation Program are to retain and attract qualified and experienced executives into these positions. The salary indicates the basic level compensation commitment that Raven has to the Named Executives and their positions in the Company.

Salaries for all of the Named Executives were increased in fiscal 2008 over 2007 levels. The salary increases for the individual Named Executives are discussed under “Executive Compensation for the Named Executives” below.

Management Incentive Plan

The management incentive plan is intended to pay the Named Executives when they achieve the annual financial objectives of their operations, which are established before the beginning of the fiscal year through the budget process. Incentive payments for the named executives range from 50 to 70% of annual base salary, which is designed to put a sizable portion of the Named Executives’ cash income at risk if annual objectives are not achieved. For example, Mr. Moquist’s incentive payment dropped by over $100,000 in fiscal 2007 compared to 2006, due primarily to lower net income growth.

Incentive plans for the Chief Executive Officer and Chief Financial Officer are based on achieving net income, expense control and inventory turn objectives. Net income objectives are generally established as a range, such that no incentive is paid until Raven has achieved at least the bottom of the range ($25,200,000 in net income for fiscal 2008), and the maximum paid if the Company achieved the high end of the range ($28,700,000) would, in the case of Mr. Moquist, have been 58% of his base salary. Mr. Moquist was also entitled to incentive compensation of up to 7% of his base salary if the Company meets certain expense control objectives and up to 5% if inventory turn objectives were met. Mr. Moquist’s maximum payout would have been 70% of his salary. Mr. Iacarella’s incentive is based on similar criteria, and the maximum payout for 2008 was 60%.

All the other Named Executives are Division Managers. Their incentives are based on achieving objectives for their respective operating units. Objectives include: levels of operating income net of a charge for working capital utilization, inventory turns, and productivity improvements, for their respective operating units. Mr. Rykhus, as Executive Vice President could have been paid up to 52% of base salary based on income, and 4% of base salary for each of his division’s inventory and productivity objectives. Mr. Rykhus’ maximum payout would have been 60% of his base salary. Mr. Bair and Mr. Groninger, as Divisional Vice Presidents could have had a maximum payout of 50% of base salary for 2008.

Incentive payments are based on formulas defined and documented at the beginning of Raven’s fiscal year. Income based formulas are usually set so that if budgeted results are achieved, the income based incentive would pay about 60% of maximum payout levels. Achievement of other objectives would add approximately 10% to that figure. The Committee approves the incentive payments, which are usually paid in March of each year. The ranges are intended to be challenging yet achievable, with the maximum level intended to be difficult to achieve. As shown in the table included in footnote (2) to the Summary Compensation Table, for the three-year period indicated, only in 2006 did most of the Named Executives receive a payout of at least 60% of the maximum.

In fiscal 2008, the Company achieved net income of $27.8 million, resulting in Messrs. Moquist and Iacarella receiving an incentive bonus of 47% of their maximum payout level for the income based incentive. Payouts for the other Named Executives are discussed under “Executive Compensation for the Named Executives” below.

In fiscal 2007, maximum incentive plan payouts for the Named Executives were raised by approximately 10 percentage points. Management had been raising salaries for competitive reasons for key employees throughout the Company in recent years and believed executive compensation needed to keep pace. Rather than increasing the salary component, management recommended, and the Committee agreed, that increasing incentive plan maximums would be the most cost effective method to achieve the equity adjustment.

Stock Options

Awards of stock options are designed to promote the alignment of long-term interests between an executive and Raven shareholders as well as to assist in the retention of executives and key employees. The ultimate value of the options to the executives is directly tied to increases in the value of Raven common shares. The options are granted annually at the November Committee meeting, vest in equal installments over four years and expire in five years. The Committee and management believe that the policy of granting options annually, along with the relatively short life of the options, helps prevent option holders from benefiting from long-term increases in the stock market and more effectively ties their compensation to Raven’s success. The shorter life also reduces option expense recorded on the income statement. The Committee has never reset an option price.

The Committee grants options to executives and key employees based on the size of their base salary and their importance to Raven’s success. The number of shares covered by the option multiplied by the exercise price is intended to approximate 125% of the Named Executive’s salary.

Raven’s stock options have a retirement provision that provides for accelerated vesting if the employee retires at a time when the sum of his or her age and years of service exceeds 80. The Committee modified this provision in November 2006 to require one year of service after the grant of a stock option before the retirement provision of the option can be invoked. The Committee believes that this will encourage executives to remain with Raven or, in certain instances, give additional notice before retiring.

As a result of the amendment, we now record option expense for retirement eligible employees over 12 months rather than at the date of grant. One result of this change is that in the Summary Compensation Table, Mr. Moquist’s option award expense was lower in fiscal 2007 than in fiscal 2006 or 2008. Mr. Moquist’s age and years of service have caused him to be qualified for the retirement benefit since 2001. The Black-Scholes values of Mr. Moquist’s grants were $141,739 in fiscal 2006 and $133,126 in fiscal 2007, but because the fiscal 2007 grant contained the modified provision and was expensed over 12 months, compensation expense decreased from $141,739 in fiscal 2006 to $33,282 in fiscal 2007. Fiscal 2008 expense of $133,616 represents 9/12 of his fiscal 2007 grant and 3/12 of his fiscal 2008 grant.

Raven does not have a formal policy on the retention of shares derived from stock options. Our executives are strongly encouraged not to sell shares other than when paying taxes on option exercises. Executives have historically retained a substantial portion of their shares. The shares owned by the executive officers of the Company are listed on page 2 of this proxy statement under the caption “Ownership of Common Stock.”

All Other Compensation

We provide other benefits to executives, which we believe to be reasonable, competitive and consistent with the overall Compensation Program. Raven considers these items in conjunction with base salary in meeting the objectives of retaining and attracting qualified and experienced executives. These items are detailed in footnote 2 to the Summary Compensation Table. The retirement and profit sharing benefits are essentially the same as all other Raven employees receive. Life insurance benefits to the Chief Executive and Chief Financial Officers represent the Company’s continuing commitment under an estate-planning program we no longer make available to new executives. The Chief Executive Officer has use of a Company provided automobile. Raven also provides supplemental health and wellness benefits available to its executives to encourage a healthy lifestyle. To the extent insurance and health benefits are subject to income taxes, executives are reimbursed for this additional tax.

Post-termination Compensation and Benefits

Raven has employment agreements with each Named Executive, which provides for a 30-day notice before termination and outlines the employment benefits discussed under “All Other Compensation” above and retirement benefits. The purpose of the benefits is to attract and retain seasoned executives, rewarding their long-term commitment to Raven. Retirement benefits, available when the sum of the employee’s age and years of service exceeds 80, represent a continuation of the health and insurance benefits outlined in “All Other Compensation” above.

Raven uses dual-trigger “Change in Control” agreements to protect it from the loss of executive talent during a Change in Control. Upon a change in control, positions held by the Named Executives may be at risk. By providing a benefit of one or two times salary and incentive payments if executives are terminated, the Committee believes that, in the event of a Change in Control, the agreements would maintain stability within its executive group during what could be a potentially turbulent time.

Executive Compensation for the Named Executives

Chief Executive Officer

With more than 32 years of service at Raven, Mr. Moquist has been our President and Chief Executive Officer since fiscal 2000. His total fiscal 2008 compensation of $581,185 increased by $128,355 from fiscal 2007. The primary reasons were a change in the retirement terms of his stock option grants beginning in fiscal 2007, which caused compensation expense to be reduced by approximately $100,000 in fiscal 2007, and a higher management incentive payment because of the company’s income growth in fiscal 2008 when compared to fiscal 2007. He did not achieve objectives for expense control and inventory turns in fiscal 2008 and received no incentive payments for these items. Overall, he received 39% of the maximum payment available under his management incentive plan compared to 28% in fiscal 2007 and 91% in fiscal 2006. His base salary increased by 3.3%, which was in line with the Company-wide rate of increase. He received a grant of 11,800 stock options.

Chief Financial Officer

Mr. Iacarella is our Chief Financial Officer. His total compensation of $305,533 increased by 6.8% in fiscal 2008 due primarily to higher incentive plan payments. His objectives were similar to Mr. Moquist’s. Overall, he received 38% of the maximum payment available under his management incentive plan compared to 29% in fiscal 2007 and 83% in fiscal 2006. His base salary increased by 4.4%, which was slightly higher than the Company-wide rate of increase due to an adjustment designed to maintain internal equity. He received a grant of 6,400 stock options.

Division Management

Mr. Bair leads Raven’s Electronic Systems Division. His total compensation decreased by 18.5% in fiscal 2008. He received no incentive payment in fiscal 2008 because the division recorded lower operating results in fiscal 2008 and did not meet its other objectives under the plan. His base salary increased by 4.3% and he received 5,400 stock options.

Mr. Groninger heads the Engineered Films Division. Mr. Groninger’s total compensation decreased by 12.2%. He received a 6.0% salary increase because of growth in Engineered Films in fiscal 2007 and internal equity considerations. He received no incentive payment in fiscal 2008 because the division recorded lower operating results in fiscal 2008 and did not meet its other objectives under the plan. He received a grant of 5,900 stock options.

Mr. Rykhus is Raven’s Executive Vice President and Division Manager of the Flow Controls Division. His total compensation increased by 50.1% because he received the maximum available incentive in fiscal 2008 after receiving no payment under the management incentive plan in fiscal 2007. The incentive payment in fiscal 2008 resulted from outstanding performance by the Flow Controls Division. His base salary increased by 4.5% due to his increasing corporate responsibilities. His stock option grant was for 6,400 shares.

COMPENSATION COMMITTEE REPORT

The Personnel and Compensation Committee of the Company’s Board of Directors has reviewed and discussed the Compensation Discussion and Analysis and discussed that Analysis with management. Based on its review and discussion with management, the committee recommended to our Board of Directors that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K and the Company’s 2008 proxy statement.

Submitted by the Personnel and Compensation Committee of the Company’s Board of Directors:

David A. Christensen Mark E. Griffin Conrad J. Hoigaard

SUMMARY COMPENSATION TABLE


	Fiscal Year		Salary		Option Awards		Non-equity		All Other		Total
							Incentive Plan		Compensation
							Compensation
			($)		($)		($)		($)		($)
Name and Principal Position					⁽¹⁾		⁽²⁾		⁽³⁾

Ronald M. Moquist		2008		314,000		133,616		86,159		47,410		581,185
President and		2007		304,000		33,282		60,192		55,356		452,830
Chief Executive Officer		2006		294,000		141,739		160,524		51,601		647,864

Thomas Iacarella		2008		177,500		63,324		40,307		24,402		305,533
Vice President and		2007		170,000		55,783		29,920		30,269		285,972
Chief Financial Officer		2006		162,000		44,251		67,100		27,697		301,048

David R. Bair		2008		157,500		50,676		—		18,328		226,504
Division Vice President		2007		151,000		42,926		63,420		20,740		278,086
Electronic Systems Division		2006		145,000		31,805		53,650		17,463		247,918

James D. Groninger		2008		159,000		54,324		—		22,643		235,967
Division Vice President		2007		150,000		41,083		55,650		21,999		268,732
Engineered Films Division		2006		138,000		24,545		51,060		21,771		235,376

Daniel A. Rykhus		2008		174,500		60,557		104,700		22,156		361,913
Executive Vice President		2007		167,000		51,173		—		22,906		241,079
Flow Controls Division		2006		159,000		37,488		47,859		23,665		268,012


(1)		Option awards reflect the Black-Sholes values used for expensing options in the Company’s income statement. For additional information, see Note 10 on page 41 of the Company’s Annual Report to Shareholders. Options are expensed over the four-year vesting period or the retirement provisions associated with the option, whichever is shorter. Mr. Moquist’s options granted in fiscal 2008 and 2007 are expensed over one year due to the retirement provision. His 2006 option was expensed immediately as the retirement provision associated with that option would have allowed him to keep the option regardless of his retirement date.


(2)		The following table describes the basis for payments under the annual management incentive plan.


	Fiscal year		Income		Expense control		Inventory turns		Productivity		Total non-equity
									Improvements		incentive plan
Name											compensation

Ronald M. Moquist		2008		86,159		—		—		N/A		86,159
		2007		38,912		21,280		—		N/A		60,192
		2006		141,120		17,346		2,058		N/A		160,524

Thomas Iacarella		2008		40,307		—		—		N/A		40,307
		2007		18,020		11,900		—		N/A		29,920
		2006		58,320		8,100		680		N/A		67,100

David R. Bair		2008		—		N/A		—		N/A		—
		2007		63,420		N/A		—		—		63,420
		2006		49,300		N/A		—		4,350		53,650

James D. Groninger		2008		—		N/A		—		N/A		—
		2007		55,650		N/A		—		—		55,650
		2006		46,920		N/A		—		4,140		51,060

Daniel A. Rykhus		2008		90,740		N/A		6,980		6,980		104,700
		2007		—		N/A		—		—		—
		2006		47,859		N/A		—		—		47,859


(3)		The following table describes key components of the All Other Compensation column in the Summary Compensation Table.


	Fiscal year		Retirement		Life		Supplemental		Other fringe		Tax		Total all
			benefit and profit		insurance		health benefits		benefits		reimbursement		other
			sharing plans		premiums						on taxable fringe		compensation
											benefits
Name			(a)				(b)		(c)

Ronald M. Moquist		2008		11,801		11,515		2,223		14,785		7,086		47,410
		2007		14,611		11,515		6,643		15,362		7,225		55,356
		2006		14,990		11,515		2,369		15,475		7,252		51,601

Thomas Iacarella		2008		6,804		4,412		3,851		5,239		4,096		24,402
		2007		7,793		4,412		7,316		5,224		5,524		30,269
		2006		8,286		4,412		4,916		5,457		4,626		27,697

David R. Bair		2008		7,211		725		6,358		1,879		2,155		18,328
		2007		6,825		690		8,728		1,860		2,637		20,740
		2006		5,846		429		6,692		2,640		1,856		17,463

James D. Groninger		2008		7,017		477		9,887		1,879		3,383		22,643
		2007		6,702		443		8,681		2,688		3,485		21,999
		2006		7,180		402		8,901		2,640		2,648		21,771

Daniel A. Rykhus		2008		5,816		356		8,890		3,210		3,884		22,156
		2007		7,126		338		8,521		3,185		3,736		22,906
		2006		7,913		308		9,301		2,639		3,504		23,665


(a)		Represents 3 percent of wages eligible for the safe-harbor base contribution under the Company’s 401(k) plan. This amount is either contributed to the plan or paid as additional salary depending on IRS limitations. Also includes cash payments under the Company’s Profit Plus plan which is paid equally to every employee, regardless of salary. The amounts under this plan were $1,500 in fiscal 2006, $700 in fiscal 2007 and $600 in fiscal 2008.


(b)		Represents reimbursement for health and wellness expenses and reduced health care premiums under the Company’s Senior Executive Officer and Senior Manager Benefit policies.


(c)		Includes, for Mr. Moquist, the leased value of a Company provided automobile, approximately $9,000 per year.

GRANTS OF PLAN BASED AWARDS IN FISCAL 2008

Estimated Possible Payouts Under

All other Option

Exercise or Base

Grant

Non-Equity Incentive Plan Awards

Awards: Number

Price

Date Fair Value of

of Securities

of Option

Stock and

Underlying

Awards

Option Awards

Type of

Grant

Options

Award

Date

Threshold

Target

Maximum

($)

(#)

($/Share)

($)

Name

⁽¹⁾

⁽²⁾

Ronald M. Moquist

MIP

2/1/2007

153,860

219,800

11/19/2007

11,800

34.50

135,086

Thomas Iacarella

MIP

2/1/2007

74,550

106,500

11/19/2007

6,400

34.50

73,267

David R. Bair

MIP

2/1/2007

55,125

78,750

11/19/2007

5,400

34.50

61,819

James D. Groninger

MIP

2/1/2007

55,650

79,500

11/19/2007

5,900

34.50

67,543

Daniel A. Rykhus

MIP

2/1/2007

73,290

104,700

11/19/2007

6,400

34.50

73,267


(1)		The “target” level indicated for each individual in the annual management incentive plan is an estimated amount, based on 70% of the maximum payout. The levels for the awards are established so that the payouts based on income objectives will be at approximately 60% of the maximum level if budgeted levels are achieved. Achievement of other objectives would add approximately 10% to that figure. Total actual payments under this plan are outlined in note 2 of the Summary Compensation Table on page 15.


(2)		Option awards reflect the Black-Sholes value of $11.448 used for expensing options in the Company’s income statement. All awards vest in equal installments over 4 years and expire after 5 years. The option price may be paid in cash or by the delivery of shares of the Company’s common stock, held by the option holder for at least six months, valued at the market price on the date of the option exercise. Option grants of less than $100,000, as defined by the Internal Revenue Code of 1986 (2,898 shares as of 11/19/2007) were incentive stock options and no income tax is payable by executives unless shares are sold. However, incentive stock options are alternative minimum tax (AMT) preference items, potentially subjecting the executives to AMT liability in the year of exercise. The remaining options are considered to be non-qualified. For additional information, see Note 10 on page 41 of the Company’s Annual Report to Shareholders.

OUTSTANDING EQUITY AWARDS AT FISCAL 2008 YEAR-END


	Option Awards⁽¹⁾
	Number of Securities		Number of Securities		Option Exercise Price		Option Expiration Date
	Underlying		Underlying
	Unexercised Options		Unexercised Options
	(#)		(#)		($)
Name	Exercisable		Unexercisable

Ronald M. Moquist		7,406		—		13.50		11/21/2008
		12,000		4,000		22.00		11/19/2009
		6,500		6,500		31.05		11/18/2010
		3,500		10,500		28.01		11/20/2011
		—		11,800		34.50		11/19/2012

Thomas Iacarella		13,000		—		13.50		11/21/2008
		6,000		2,000		22.00		11/19/2009
		3,500		3,500		31.05		11/18/2010
		1,875		5,625		28.01		11/20/2011
		—		6,400		34.50		11/19/2012

David R. Bair		10,000		—		13.50		11/21/2008
		4,725		1,575		22.00		11/19/2009
		2,850		2,850		31.05		11/18/2010
		1,500		4,500		28.01		11/20/2011
		—		5,400		34.50		11/19/2012

James D. Groninger		5,100		1,700		22.00		11/19/2009
		3,100		3,100		31.05		11/18/2010
		1,625		4,875		28.01		11/20/2011
		—		5,900		34.50		11/19/2012

Daniel A. Rykhus		11,000		—		13.50		11/21/2008
		5,625		1,875		22.00		11/19/2009
		3,400		3,400		31.05		11/18/2010
		1,800		5,400		28.01		11/20/2011
		—		6,400		34.50		11/19/2012


(1)		All options vest in equal installments over 4 years and expire after 5 years.

OPTION EXERCISES IN FISCAL 2008


	Option Awards
	Number of Shares		Value Realized on
	Acquired on Exercise		Exercise
Name	(#)		($)

Ronald M. Moquist		56,594		1,263,554
Thomas Iacarella		20,000		623,409
David R. Bair		8,000		184,800
James D. Groninger		5,000		89,700
Daniel A. Rykhus		15,000		346,400

POTENTIAL PAYMENTS ON TERMINATION OR CHANGE IN CONTROL

The following table shows the payments and benefits that the Named Executives would receive in connection with a variety of employment termination scenarios and upon a change in control of Raven. The information assumes that termination occurred on January 31, 2008. Raven would provide all of the payments. There are no assets set aside for these benefits. The Named Executives must comply with confidentiality and non-competition provisions of the agreements to retain benefits.

The table does not include amounts otherwise due to the executives, such as earned but unpaid salary, bonus and vacation pay. The table does include the value of unvested stock options, which would vest for all of Raven’s key employees.

Termination other than for a change in control is governed by employment agreements with the executives. These agreements require 30 days written notice before termination can occur. They also have retirement provisions that, if the executive’s years of employment and age added together exceed 80, allow for early retirement. Early retirement triggers post-retirement benefits under the employment agreement. Retiring executives retain health care and other insurance benefits. The retired executive will be reimbursed for health expenditures up to a percentage (10% for Mr. Moquist and Mr. Iacarella, 3.5% for others) of the executive’s highest salary and bonus over the last five years of employment. Retirement benefits continue until the last to die of the executive or spouse. In the case of Mr. Moquist and Mr. Iacarella, the benefits are “grossed-up” for income tax purposes. Only Mr. Moquist was eligible for retirement benefits at January 31, 2008. In the event of an executive’s death, the benefits available to the surviving spouse would be limited to vested retirement benefits.

Raven has Change in Control agreements with the Named Executives. A “Change in Control” includes (a) the acquisition by any person, entity or group of beneficial ownership of 25% or more of the then outstanding shares of Raven common stock; (b) certain changes in a majority of the members of our Board of Directors, or (c) approval by the shareholders of a reorganization, merger or consolidation (with certain exceptions), or of a liquidation, dissolution or sale of all or substantially all of Raven’s assets.

For the executives to obtain benefits under the Change in Control agreements, a second triggering event must occur. This would include a termination without cause or a constructive termination (an adverse change in the officer’s status or compensation). The benefits include a lump sum payment equal to the product of (A) the sum of (i) the employee’s annual base salary then in effect and (ii) 60% of the maximum target or goal amount under the Management Incentive Plan for the year in which the date of termination occurs and (B) a multiple of 2.0 for Messrs. Moquist, Iacarella and Rykhus, or 1.0 for Messrs. Bair, and Groninger. The executive also vests under the applicable retirement benefits policy; provided that the benefits (A) will not become payable until the employee reaches age 65 (unless the benefits are payable at the employee’s age at that time under the terms of the policy), and (B) will not be provided to the extent such benefits are provided by another employer at no cost to the employee.


		Lump-sum benefits						Annual Benefits (1)
		Salary		Value of		Total		Continued		Maximum		Maximum Tax		Maximum
		and		Unvested Stock		Lump-sum		Insurance		Supplemental		Reimbursement on		Annual Benefits
		Incentives		Options		Benefits		Coverage		Health Benefits		Benefits
	Type of	($)		($)		($)		($)		($)		($)		($)
Name	Separation							(2)		(3)		(3)

Ronald M. Moquist	Without Cause		26,167		53,215		79,382		11,502		45,452		24,474		81,428
	For Cause		—		53,215		53,215		—		—		—		—
	Retirement		—		53,215		53,215		11,502		45,452		24,474		81,428
	Change in Control		891,760		53,215		944,975		11,502		45,452		24,474		81,428

Thomas Iacarella	Without Cause		14,792		—		14,792		—		—		—		—
	For Cause		—		—		—		—		—		—		—
	Change in Control		482,800		27,376		510,176		10,527		22,910		12,336		45,773

David R. Bair	Without Cause		13,125		—		13,125		—		—		—		—
	For Cause		—		—		—		—		—		—		—
	Change in Control		204,750		21,707		226,457		9,295		7,505		—		16,800

James D. Groninger	Without Cause		13,250		—		13,250		—		—		—		—
	For Cause		—		—		—		—		—		—		—
	Change in Control		206,700		23,463		230,163		9,295		7,198		—		16,493

Daniel A. Rykhus	Without Cause		14,542		—		14,542		—		—		—		—
	For Cause		—		—		—		—		—		—		—
	Change in Control		474,640		25,922		500,562		9,295		9,772		—		19,067


(1)		Annual benefits would begin immediately for executives who are eligible for retirement (Mr. Moquist) and at age 65 for the other executives. They would continue until the last to die of the executive or spouse.

(2)		Based on the current cost of the benefit. The program provides that the retiree will pay no more than active executives for coverage.


(3)		Represents the annual limit for reimbursement. Actual expenses submitted to the plan may be less.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FEES

PricewaterhouseCoopers LLP served as the Company’s independent registered public accounting firm during fiscal 2008. The Company’s Audit Committee has engaged PricewaterhouseCoopers LLP to perform the annual audit and three quarterly reviews in fiscal 2009. The aggregate fees billed by PricewaterhouseCoopers LLP for fiscal 2008 and 2007 are presented in the following table:


	2008		2007
Audit ⁽¹⁾	$	328,500	$	317,500

Audit related⁽²⁾		13,500		12,500

Tax services ⁽³⁾		24,750		11,850

Other ⁽⁴⁾		1,500		1,500

Total Fees	$	368,250	$	343,350

All items included in the above fee summary were subject to Audit Committee pre-approval. Such approval was obtained from the Committee or the Chair of the Committee prior to services performed and/or billing of services.


⁽¹⁾		Total fees for the financial statement audit were in accordance with the respective engagement letters and include timely quarterly reviews. Billings for out-of-pocket expenses are not included.

⁽²⁾		Audit related billings include the audit of the company’s 401(k) plan.

⁽³⁾		Tax services include the review of corporate income tax filings, and consultation related to establishing a Canadian subsidiary as an acquisition vehicle and the implementation of Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes.

⁽⁴⁾		Other billings include a license fee for access to the accounting firm’s technical accounting research software.

AUDIT COMMITTEE REPORT

The Audit Committee of the Board of Directors of Raven Industries, Inc. (the “Audit Committee”) is composed of four independent directors and operates under a written charter. A copy of this charter is available on the Company’s website www.ravenind.com. The Audit Committee selects the independent registered public accounting firm. The Audit Committee has the authority to determine all funding and make any expenditures it deems necessary in order to carry out its responsibilities and duties.

Management is responsible for Raven’s internal controls, financial reporting process and compliance with laws and regulations and ethical business standards. The independent registered public accounting firm is responsible for performing an integrated audit of the Company’s consolidated financial statements and of its internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (the “PCAOB”). The Audit Committee is responsible for monitoring and overseeing these processes.

In this context, the Audit Committee met and held discussions with management and the independent registered public accounting firm. Management represented to the Audit Committee that the consolidated financial statements were fairly presented and prepared in accordance with accounting principles generally accepted in the United States of America. Management also presented its conclusion that as of January 31, 2008, internal control over financial reporting was effective. The Audit Committee reviewed and discussed the consolidated financial statements with management and the independent registered public accounting firm. The Audit Committee also discussed with the independent registered public accounting firm matters required to be discussed by Statement on Auditing Standards No. 61, as amended, Communications with Audit Committees, and PCAOB Auditing Standard No. 5, An Audit of Internal Control Over Financial Reporting That is Integrated with An Audit of Financial Statements.

PricewaterhouseCoopers LLP provided to the Audit Committee the written disclosures required by Rule 3600T of the PCAOB and Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, and discussed the firm’s independence. The Audit Committee also reviewed the services provided by PricewaterhouseCoopers LLP (as disclosed under the caption “Independent Registered Public Accounting Firm Fees”) when considering their independence.

Based upon the Audit Committee’s discussion with management and the independent registered public accounting firm and the representations of management and the report of the independent registered public accounting firm, the Committee recommended that the Board of Directors include the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended January 31, 2008, filed with the Securities and Exchange Commission.

Submitted by the Audit Committee of the Company’s Board of Directors:

Thomas S. Everist Anthony W. Bour Kevin T. Kirby Cynthia H. Milligan

OTHER MATTERS

Compliance with Section 16(a) of the Securities Exchange Act of 1934. Section 16(a) of the Securities Exchange Act of 1934 requires the Company’s officers and directors, and persons who own more than ten percent of the Company’s Common Stock, to file reports of ownership and changes in ownership with the SEC and Nasdaq. Officers, directors and greater than ten percent shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely on review of the copies of such forms furnished to the Company, the Company believes that during the year ended January 31, 2008, all officers, directors and ten-percent shareholders complied with the filing requirements of Section 16(a).

Solicitation. The Company will bear the cost of preparing, assembling and mailing the proxy, Proxy Statement, Annual Report and other material which may be sent to the shareholders in connection with this solicitation. Brokerage houses and other custodians, nominees and fiduciaries may be requested to forward soliciting material to the beneficial owners of stock, in which case they will be reimbursed by the Company for their expenses. Proxies are being solicited primarily by mail, but, in addition, officers and regular employees of the Company, without extra compensation, may solicit proxies in person, by telephone or other means of communication.

Proposals of Shareholders. Pursuant to Rule 14a-8 under the Securities and Exchange Act of 1934, as amended, any shareholder who desires to submit a proposal for action by the shareholders at the Company’s 2009 annual meeting must submit such proposal in writing to Ronald M. Moquist, President and CEO, Raven Industries, Inc., P.O. Box 5107, Sioux Falls, South Dakota 57117-5107, by December 12, 2008. Shareholder proposals received after December 12, 2008, will not be included in the Company’s proxy statement relating to the 2009 annual meeting. Additionally, if Raven receives notice of a shareholder proposal after February 26, 2009, such proposal will be considered untimely under Rules 14a-4 and 14a-5(e), and the persons named in the proxies solicited by the Board of Directors for the Company’s 2009 Annual Meeting may exercise discretionary voting power with respect to such proposal. Due to the complexity of respective rights of the shareholders and the Company in this area, any shareholder desiring to propose such an action is advised to consult with his or her legal counsel with respect to such rights. It is suggested that any such proposal be submitted by certified mail, return receipt requested.

The Board of Directors does not intend to present at the Meeting any other matter not referred to above and does not presently know of any matter that may be presented at the Meeting by others. However, if other matters properly come before the Meeting, it is the intention of the persons named in the enclosed proxies to vote the proxy in accordance with their best judgment.

By Order of the Board of Directors

Raven Industries, Inc.
Thomas Iacarella
Secretary

RAVEN INDUSTRIES, INC.

ANNUAL MEETING OF SHAREHOLDERS

Wednesday, May 21, 2008
9:00 a.m.

Ramkota Hotel and Conference Center
3200 W. Maple Avenue
Sioux Falls, SD


		Raven Industries, Inc. Box 5107, Sioux Falls, SD 57117-5107		proxy

This proxy is solicited on behalf of the Board of Directors.

The shares of stock you hold in your account or in a dividend reinvestment account will be voted as you specify on the reverse side of this form.

If no choice is specified, the proxy will be voted “FOR” Items 1 and 2.

By signing the proxy, you hereby appoint Conrad J. Hoigaard and Ronald M. Moquist, or either of them, each with the power to appoint his substitute, to represent and to vote all the shares of common stock of RAVEN INDUSTRIES, INC. held by you on April 9, 2008, at the ANNUAL MEETING OF SHAREHOLDERS to be held on May 21, 2008, and at any adjournments thereof.

NOTE: The proxies named above may choose to exercise cumulative voting in the manner described in the accompanying Proxy Statement.

See reverse for voting instructions.



	COMPANY #

There are three ways to vote your Proxy

Your telephone or Internet vote authorizes the Named Proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.

VOTE BY PHONE — TOLL FREE — 1-800-560-1965 — QUICK ««« EASY ««« IMMEDIATE

•		Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a week, until 12:00 p.m. (CT) on May 20, 2008.

•		Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available. Follow the simple instructions the voice provides you.

VOTE BY INTERNET — http://www.eproxy.com/ravn/ — QUICK ««« EASY ««« IMMEDIATE

•		Use the Internet to vote your proxy 24 hours a day, 7 days a week, until 12:00 p.m. (CT) on May 20, 2008.

•		Please have your proxy card and the last four digits of your Social Security Number or Tax Identification Number available. Follow the simple instructions to obtain your records and create an electronic ballot.

VOTE BY MAIL

Mark, sign and date your proxy card and return it in the postage-paid envelope we’ve provided or return it to Raven Industries, Inc., c/o Shareowner Services^SM, P.O. Box 64873, St. Paul, MN 55164-0873.

If you vote by Phone or Internet, please do not mail your Proxy Card

ò Please detach here ò

The Board of Directors Recommends a Vote FOR Items 1 and 2.

1. Election of directors:

01 Anthony W. Bour

06 Kevin T. Kirby

Vote FOR all

Vote WITHHELD

02 David A. Christensen

07 Cynthia H. Milligan

nominees (Except

from all nominees

03 Thomas S. Everist

08 Ronald M. Moquist

as indicated below)

04 Mark E. Griffin

09 Daniel A. Rykhus

05 Conrad J. Hoigaard

(Instructions: To withhold authority to vote for any indicated nominee, write the
number(s) of the nominee(s) in the box provided to the right.)



If you wish to cumulate votes, please indicate your votes in the space that follows:

2. Proposal to ratifiy the appointment of PricewaterhouseCoopers LLP as the Company’s independent registered public accounting firm for the Company’s current fiscal year.

For

Against

Abstain

3. Upon such other business as may properly come before the meeting.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION IS GIVEN, WILL BE VOTED FOR EACH PROPOSAL.

Address Change? Mark Box o Indicate changes below:


Date

Signature(s) in Box
Please sign exactly as your name(s) appears on Proxy. If held in joint tenancy, all persons must sign. Trustees, administrators, etc., should include title and authority. Corporations should provide full name of corporation and title of authorized officer signing the proxy.

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