UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A

(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
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Exchange Act of 1934 (Amendment No.)
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þDefinitive Proxy Statement
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oSoliciting Material Pursuant to §240.14a-12
VIRCO MFG. CORPORATION
 
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Virco Mfg. Corporation
2027 Harpers Way
Torrance, California 90501
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held on June 17, 200816, 2009
     
The 20082009 Annual Meeting of Stockholders (“Annual Meeting”) of Virco Mfg. Corporation, a Delaware corporation (the Company)“Company”), will be held on Tuesday, June 17, 2008,16, 2009, at 10:00 a.m. Pacific Time at the Company’s principal executive offices located at 2027 Harpers Way, Torrance, CA 90501, for the following purposes:
     
1. To elect three directors to serve until the 20112012 Annual Meeting of Stockholders and until their successors are elected and qualified;
     
2. To ratify the appointment of Ernst & Young LLP as the Company’s independent auditors for fiscal year 2008;2009;
     
3. To transact such other business as may properly come before the Annual Meeting.
     
These items are more fully described in the following pages, which are made part of this notice.
The Board of Directors has fixed the close of business on May 5, 2008,April 24, 2009, as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting and any adjournments and postponements thereof. To ensure that your vote is recorded promptly, please vote as soon as possible, even if you plan to attend the Annual Meeting. Most stockholders have three options for submitting their vote: (1) via the Internet, (2) by phone or (3) by mail, using the paper proxy card. For further details, see your proxy card. If you have Internet access,we encourage you to record your vote on the Internet.It is convenient for you, and it also saves the Company significant postage and processing costs.
By Order of the Board of Directors
/s/Robert E. Dose
Robert E. Dose
Secretary
 
Robert E. Dose
Secretary
Torrance, California

May 19, 200818, 2009

 

TABLE OF CONTENTS
   
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
1
PROXY STATEMENT
1
GENERAL INFORMATION
1
RECORD DATE AND VOTING
1
PROPOSAL 1 ELECTION OF DIRECTORS
  2
BOARD COMMITTEES MEETINGS & COMPENSATIONMEETINGS
  3
SECURITY OWNERSHIP
  5
EXECUTIVE COMPENSATION
  7
DIRECTOR COMPENSATION
15
EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS
16
CODE OF ETHICS
1617
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
1617
REPORT OF THE AUDIT COMMITTEE
1718
RELATIONSHIP WITH INDEPENDENT AUDITORS
18
PROPOSAL 2 RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
1920

Virco Mfg. Corporation
2027 Harpers Way
Torrance, California 90501
 
PROXY STATEMENT
FOR ANNUAL MEETING OF STOCKHOLDERS, June 17, 200816, 2009
Important Notice Regarding the Availability of Proxy Materials for the Stockholder Meeting to be Held on June 16, 2009
The Proxy Statement and accompanying Annual Report to Stockholders are available at www.virco.com.
GENERAL INFORMATION
     
GENERAL INFORMATION
This Proxy Statement is being mailed to stockholders of Virco Mfg. Corporation, a Delaware corporation (the “Company”), on or about May 19, 2008,18, 2009, in connection with the solicitation by the Board of Directors of proxies to be used at the 20082009 Annual Meeting of Stockholders (the “Annual Meeting”) of the Company to be held on Tuesday, June 17, 2008,16, 2009, at 10:00 a.m. Pacific Time at the Company’s principal executive offices located at 2027 Harpers Way, Torrance, CA 90501, and any and all adjournments and postponements thereof.
     
The cost of preparing, assembling and mailing the Notice of the Annual Meeting, Proxy Statement and form of proxy and the solicitation of proxies will be paid by the Company. Proxies may be solicited in person or by telephone, telegraph,e-mail or other electronic means by personnel of the Company who will not receive any additional compensation for such solicitation. The Company will pay brokers or other persons holding stock in their names or the names of their nominees for the expenses of forwarding soliciting material to their principals.
RECORD DATE AND VOTING
     
The close of business on May 5, 2008,April 24, 2009, has been fixed as the record date for the determination of stockholders entitled to notice of and to vote at the Annual Meeting. On that date there were 14,428,66214,172,422 shares of the Company’s common stock, par value $.01 per share (“Common Stock”), outstanding. All voting rights are vested exclusively in the holders of the Company’s Common Stock. Each share of Common Stock is entitled to one vote on any matter that may be presented for consideration and action by the stockholders, except that as to the election of directors, stockholders may cumulate their votes. Because three directors are to be elected, cumulative voting means that each stockholder may cast a number of votes equal to three times the number of shares actually owned. That number of votes may be cast for one nominee, divided equally among each of the nominees or divided among the nominees in any other manner.
     
In all matters other than the election of directors, the affirmative vote of the majority of shares of Common Stock present in person or represented by proxy at the Annual Meeting and entitled to vote on the subject matter will be the act of the stockholders. Directors will be elected by a plurality of the votes of the Common Stock present in person or represented by proxy at the Annual Meeting. Abstentions will be treatedhave no effect on Proposal One, but will have the same effect as the equivalent of a negative vote for the purpose of determining whether a proposal other than the election of directors has been adopted andon Proposal Two (because abstentions will have no effect for the purpose of determining whether a director has been elected. Broker non-votes are not counted for the purpose of determining thebe considered votes cast on a proposal.cast).
     
Each proxy received will be voted for management’s nominees for election as directors and in accordance with the recommendations of the Board of Directors contained in this Proxy Statement, unless the stockholder otherwise directs in his or her proxy. Where the stockholder has appropriately directed how the proxy is to be voted, it will be voted according to his or her direction. Stockholders wishing to cumulate their votes should make an explicit statement of the intent to cumulate votes by so indicating in writing on the proxy card. Stockholders holding shares beneficially in street name who wish to cumulate votes should contact their broker, trustee or nominee. Cumulative voting applies only to the election of directors. For all other matters, each share of Common Stock outstanding as of the close of business on the record date is entitled to one vote.
     
Any stockholder has the power to revoke his or her proxy at any time before it is voted at the Annual Meeting by submitting written notice of revocation to the Secretary of the Company at the Company’s principal executive offices located at 2027 Harpers Way, Torrance, California 90501, by appearing at the Annual Meeting and voting in person or by filing a duly executed proxy bearing a later date, either in person at the Annual Meeting, via the Internet, by telephone, or by mail. Please consult the instructions included with your proxy card.

PROPOSAL 1
ELECTION OF DIRECTORS
     
The Certificate of Incorporation of the Company provides for the division of the Board of Directors into three classes as nearly equal in number as possible. In accordance with the Certificate of Incorporation, the Board of Directors has nominated Robert A. Virtue, Robert K. Montgomery, and Donald S. Friesz, Glen D. Parish, and James R. WilburnA. Patrick to serve as Class II directors on the Board of Directors with a term expiring at the 20112012 Annual Meeting.Meeting of Stockholders.
     
It is intended that the proxies solicited by this Proxy Statement will be voted in favor of the election of Messrs. Friesz, Parish,Virtue, Montgomery, and Wilburn,Patrick, unless authority to do so is withheld. Should any of such nominees be unable to serve as a director or should any additional vacancy occur before the election (which events are not anticipated), proxies may be voted for a substitute nominee selected by the Board of Directors or the authorized number of directors may be reduced. If for any reason the authorized number of directors is reduced, the proxies will be voted, in the absence of instructions to the contrary, for the election of the remaining nominees named in this Proxy Statement. In the event that any person other than the nominees named below should be nominated for election as a director, the proxies may be voted cumulatively for less than all of the nominees.
     
The following table sets forth certain information with respect to each of the nominees, as well as each of the six continuing directors.The Board of Directors recommends that you vote “FOR” the election of the Class II nominees.
           
      Director
Name
 Age 
Principal Occupation
 Since
 
Nominees for Directors Whose Terms Expire in 2011:
          
Donald S. Friesz  78  Vice President Sales and Marketing of the Company from 1982 to February 1996. Mr. Friesz has been retired since 1996.  1992 
Glen D. Parish  70  Vice President of the Company and General Manager of the Conway Division from 1999 to 2004; previously Vice President of Conway Sales and Marketing. Mr. Parish has been retired since 2004.  1999 
James R. Wilburn  75  Dean of the School of Public Policy, Pepperdine University, since September 1997; previously Dean of the School of Business and Management, Pepperdine University (1982-1994); Professor of Business Strategy, Pepperdine University (1994-1996); Board member of The Olsen Company since 1990, Independence Bank since 2004, and Electronic Sensor Tech since 2005.  1986 
Continuing Directors Whose Terms Expire in 2009:
          
Robert A. Virtue  75  Chairman of the Board and Chief Executive Officer of the Company since 1990; President of the Company since August 1982.  1956 
Robert K. Montgomery  69  Partner of Gibson, Dunn & Crutcher LLP, a law firm in which Mr. Montgomery has served as Partner from 1971 to date.  2000 
Donald A. Patrick  83  Vice President and founder of Diversified Business Resources, Inc. (mergers, acquisitions and business consultants) from 1988 to 2004.  1983 
           
Name Age Principal Occupation Director Since
Nominees for Directors Whose Terms Expire in 2012:
          
Robert A. Virtue  76  Chairman of the Board and Chief Executive Officer of the Company since 1990; President of the Company since August 1982.  1956 
Robert K. Montgomery  70  Senior counsel of Gibson, Dunn & Crutcher LLP, a law firm in which Mr. Montgomery was a Partner from 1971 to 2008.  2000 
Donald A. Patrick  84  Vice President and founder of Diversified Business Resources, Inc. (mergers, acquisitions and business consultants) from 1988 to 2004.  1983 
Continuing Directors Whose Terms Expire in 2010:
          
Douglas A. Virtue  50  Executive Vice President of the Company since December 1997; previously General Manager of the Torrance Division of the Company  1992 
Thomas J. Schulte  52  Managing Partner of RBZ, a public accounting firm from 1997 to 2007. Currently Partner-In-Charge of RBZ Audit Group since 2007.  2007 
Albert J. Moyer  65  Board member of LaserCard Corporation, Occam Networks Inc., Collectors Universe, Inc. and CALAMP Corporation; Chief Financial Officer of Allergan Inc. (1995-1998); Chief Financial Officer for QAD Inc. (1998-2000); President of the commercial division of the Profit Recovery Group International, Inc. (2000); consultant to QAD Inc. (2000-2002);  2004 
Continuing Directors Whose Terms Expire in 2011:
          
Donald S. Friesz  79  Vice President Sales and Marketing of the Company from 1982 to February 1996. Mr. Friesz has been retired since 1996.  1992 


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      Director
Name
 Age 
Principal Occupation
 Since
 
Continuing Directors Whose Terms Expire in 2010:
          
Douglas A. Virtue  49  Executive Vice President of the Company since December 1997; previously General Manager of the Torrance Division of the Company.  1992 
Thomas J. Schulte  51  Managing Partner of RBZ, a public accounting firm from 1997 to 2007. Currently Partner-In-Charge RBZ Audit Group.  2007 
Albert J. Moyer  64  Board member of LaserCard Corporation, Occam Networks Inc., Collectors Universe, Inc. and CALAMP Corporation; Chief Financial Officer for QAD Inc. (1998-2000); President of the commercial division of the Profit Recovery Group International, Inc. (2000); consultant to QAD Inc. (2000-2002); Chief Financial Officer of Allergan Inc. (1995-1998).  2004 
           
Name Age Principal Occupation Director Since
Glen D. Parish  71  Vice President of the Company and General Manager of the Conway Division from 1999 to 2004; previously Vice President of Conway Sales and Marketing. Mr. Parish has been retired since 2004.  1999 
James R. Wilburn  76  Dean of the School of Public Policy, Pepperdine University, since September 1997; previously Dean of the School of Business and Management, Pepperdine University (1982-1994); Professor of Business Strategy, Pepperdine University (1994-1996); Board member of The Olsen Company since 1990, Independence Bank since 2004, and Electronic Sensor Tech since 2005.  1986 
BOARD COMMITTEES MEETINGS & COMPENSATIONMEETINGS
Meetings and CompensationIndependence
Each director of the Company serving in fiscal 20072008 with the exception of Mr. Montgomery attended at least 75% of the fiscal 2007 meetings of the Board of Directors and each committeecommittees on which he served. Mr. Montgomery attended all Board of Director meetings and committee meetings on which he served during fiscal 2008 except for the meetings of the Board of Directors, Compensation Committee, and Corporate Governance/Nominating Committee on December 9, 2008, which Mr. Montgomery could not attend because he was suffering from a severe case of the flu. The Board of Directors held six meetings in fiscal 2007.2008. The Board of Directors has determined that the following directors, who constitute a majority of the Board of Directors, are “independent directors” as defined by the NASDAQ Stock ExchangeMarket listing standards: Messrs. Friesz, Moyer, Montgomery, Patrick, Wilburn,Parish, Schulte and Schulte. Directors who are also officers of the Company receive no additional compensation for their services as directors. The non-employee director compensation program provides for an annual retainer of $50,000, of which (i) 75%Wilburn. Mr. R. Virtue is paid in cash in equal quarterly installments and (ii) 25% is paid in the form of restricted stock grants, granted on the date of the Annual Meeting. In addition, each non-employee director who serves as a lead director or a chair or member of a Board Committee also receives an additional annual retainer for such services. The lead director receives $20,000 in cash per year. Retainers for committee members are as follows: Mr. D. Virtue’s father.
Audit Committee chair $7,500, Audit Committee member $4,500, Corporate Governance/Nominating Committee chair $5,000, Corporate Governance/Nominating Committee member $3,000, Compensation Committee chair $5,000, and Compensation Committee member $3,000. Directors are also reimbursed for travel and related expenses incurred for attending meetings. The Company has established a pension plan for non-employee directors who have served as such for at least 10 years, providing for a series of quarterly payments (equal to the portion paid to the non-employee director’s annual service fee) for such director’s lifetime following the date on which such director ceases to be a director for any reason other than death. Effective December 31, 2003, the Company froze all future benefit accruals under the pension plan.
Audit Committee
     
The Board of Directors has a standing Audit Committee that in fiscal 20072008 was composed of Messrs. Schulte (Chair), Friesz, Moyer and Patrick. The Audit Committee held threetwo on-site meetings and four telephonic meetings in fiscal 2007.2008. The Audit Committee acts pursuant to a written charter adopted by the Board of Directors. The functions of the Audit Committee include: reviewing the financial statements of the Company; reviewing the scope of the annual audit by the Company’s independent auditors; and reviewing the audit reports rendered by such independent auditors. Among other things, the Audit Committee is directly responsible for: the appointment, compensation, retention and oversight of the independent auditors; reviewing the independent auditors’ qualifications and independence; reviewing the plans and results of the audit engagement with the independent auditors; approving professional services provided by the independent auditors and approving financial reporting principles and policies; considering the range of audit and non-auditnon- audit fees; reviewing the adequacy of the Company’s internal accounting controls; and working to ensure the integrity of financial

3

information supplied to stockholders. The Audit Committee also has the other responsibilities enumerated in its charter, and examines and considers additional matters as it deems appropriate. The Audit Committee’s charter is available on the Company’s website at www.virco.com. Each of the Audit Committee members is an “independent director” as defined by the listing standards of the NASDAQ Stock Exchange.Market. The Board of Directors has determined that Mr. Schulte, who is the chair of the Audit Committee, qualifies as an “audit committee financial expert,” as that term is defined in Item 407(d)(5) ofRegulation S-K of the Securities Exchange Act of 1934 (the “Exchange Act”). The Board reevaluates the composition of the Audit Committee on an annual basis to ensure that its composition remains in the best interests of the Company and its stockholders.
Compensation Committee
     
The Board of Directors has a standing Compensation Committee that in fiscal 20072008 was composed of Messrs. Moyer (Chair), Patrick, Montgomery and Wilburn, all of whom are “independent directors” as defined in the listing standards of the NASDAQ Stock Exchange.Market. The function of thisCompensation Committee is, among other

3

things, toto: set the Company’s compensation policy and administer the Company’s compensation plans; make recommendations todecisions on the compensation of key Company executives (including the review and approval of merit/other compensation budgets and payouts under the Company’s incentive plans); review and approve compensation and employment agreements of the Company’s executive officers; and recommend pay levels for members of the Board regarding changesof Directors for consideration and approval by the full Board of Directors. The Compensation Committee may consult with the Chief Executive Officer and other members of senior management as it deems necessary and engage the assistance of outside consultants to assist in salariesdetermining and benefits.establishing the Company’s compensation policies. [During fiscal 2008, the Company did not engage the assistance of compensation consultants.] The Compensation Committee held twoon-site meetings in fiscal 2007.2008. The Compensation Committee acts pursuant to a written charter adopted by the Board of Directors, a copy of which is available on the Company’s website atwww.virco.com.
Corporate Governance/Nominating Committee
     
The Board of Directors has a standing Corporate Governance/Nominating Committee which is comprised of Messrs. Montgomery (Chair), Friesz, Schulte,Moyer, Patrick, MoyerParish, Schulte and Wilburn, all of whom are “independent directors” as defined in the listing standards of the NASDAQ Stock Exchange.Market. During fiscal 2007,2008, the Corporate Governance/Nominating Committee held two meetings. Each of these meetings in executive sessionswere held outside the presence of management and intends to hold at least two such meetings in fiscal 2008 as well.management.
     
The Corporate Governance/Nominating Committee’s function is to identify and recommend from time to time candidates for nomination for election as directors of the Company. Candidates may come to the attention of the Corporate Governance/Nominating Committee through members of the Board of Directors, stockholders or other persons. Consideration of new Board nominee candidates typically involves a series of internal discussions, review of information concerning candidates and interviews with selected candidates. Candidates are evaluated at regular or special meetings, and may be considered at any point during the year, depending on the Company’s needs. The Corporate Governance/Nominating Committee acts pursuant to a written charter adopted by the Board of Directors, a copy of which is available to stockholders on the Company’s website at www.virco.com. In evaluating nominations, the Corporate Governance/Nominating Committee considers a variety of criteria, including business experience and skills, independence, judgment, integrity, the ability to commit sufficient time and attention to Board of Directors activities and the absence of potential conflicts with the Company’s interests. The Corporate Governance/Nominating Committee has not established any specific minimum qualification standards for nominees to the Board of Directors, although from time to time the Corporate Governance/Nominating Committee may identify certain skills or attributes (e.g.,financial experience, business experience) as being particularly desirable to meet specific Board of Director needs that may arise. To nominaterecommend a prospective nominee for the Corporate Governance/Nominating Committee’s consideration, you may submit, in accordance with the Company’s Bylaws, a candidate’s name and qualifications to the Company’s Corporate Secretary at 2027 Harpers Way, Torrance, California 90501.
90501, Attention: Robert E. Dose.
Communications with the Board of Directors
     
Any stockholder interested in communicating with individual members of the Board of Directors, the Board of Directors as a whole, any of the committees of the Board or the independent directors as a group may send written communications to the Board of Directors, any committee of the Board of Directors or any director or directors of the Company at 2027 Harpers Way, Torrance, California 90501, Attention: Robert E. Dose, Secretary. Communications received in writing are forwarded to the Board of Directors, or the committee or individual director or directors to whom the communication is directed, unless, at his discretion, the Secretary determines that the communication is of a commercial or frivolous nature, is unduly hostile, threatening, illegal, does not reasonably relate to the Company or its business, or is otherwise inappropriate for the Board of Directors’ consideration. In such cases, such


4

correspondence may be forwarded elsewhere in the Company for review and possible response. The Secretary has the authority to discard or disregard any inappropriate communications or to take other appropriate actions with respect to any such inappropriate communications. Directors are expected to attend the Annual Meeting.Meeting of Stockholders. Last year all of the directors attended the 2008 Annual Meeting.Meeting of Stockholders. The independent directors hold two regularly scheduled executive session meetings each fiscal year outside the presence of management as well as additional meetings as are necessary. Mr. Moyer currently functions as the lead independent director. The lead independent director position rotates among the independent directors periodically as determined by the independent directors.

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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Shares Owned By Directors, Management and Principal Stockholders
     
The following table sets forth information as of May 5, 2008April 24, 2009 (unless otherwise indicated), relating to the beneficial ownership of the Company’s Common Stock (i) by each person known by the Company to own beneficially more than 5% of the outstanding shares of Common Stock of the Company, (ii) by each director or nominee of the Company, (iii) by each Named Executive Officer of the Company as named in the Summary Compensation Table and (iv) by all executive officers and directors of the Company as a group. The number of shares beneficially owned is deemed to include shares of Common Stock in which the persons named have or share either investment or voting power. Unless otherwise indicated, the mailing address of each of the persons named is c/o Virco Mfg. Corporation, 2027 Harpers Way, Torrance, California 90501.
         
  Amount and Nature  
  of Beneficial Percent of
Name of Beneficial Owner Ownership(1) Class
     
Wedbush Inc.(2)  1,759,273   12.18%
Nancy Virtue-Cutshall(3)  865,856   6.10%
David P. Cohen(4)  804,134   5.67%
Towle & Co.(5)  780,300   5.51%
Robert A. Virtue(6) (7)
Chairman of the Board of Directors, President and Chief Executive Officer		  304,807   2.15%
Douglas A. Virtue(7)
Director, Executive Vice President		  612,214   4.32%
Donald S. Friesz
Director		  72,159    (8)
Thomas J. Schulte
Director		  6,933    (8)
Albert J. Moyer
Director		  13,453    (8)
Robert K. Montgomery
Director		  24,404    (8)
Glen D. Parish
Director, Former Vice President, General Manager		  36,045    (8)
Donald A. Patrick
Director		  57,382    (8)
James R. Wilburn
Director		  24,259    (8)
Robert E. Dose
Vice President Finance, Secretary, Treasurer		  26,092    (8)
Lori L. Swafford
Vice President & Corporate Counsel		  20,186    (8)
Larry O. Wonder
Vice President, Sales		  43,108    (8)
All executive officers and directors as a group (18 persons)  1,379,117   9.67%
         
  Amount and Nature
    
  of Beneficial
  Percent of
 
Name of Beneficial Owner
 Ownership(1)  Class 
 
Wedbush Inc.(2)  1,699,766   11.57%
Private Capital Management, L.P.(3)  975,826   6.76%
Nancy Virtue-Cutshall(4)  875,856   6.07%
Athena Capital Management(5)  763,534   5.29%
Robert A. Virtue(6)  290,333   2.01%
Chairman of the Board of Directors, Chief Executive Officer        
Douglas A. Virtue(7)  604,814   4.19%
Director, Executive Vice President        
Donald S. Friesz  67,067   (8)
Director        
Thomas J. Schulte  1,841   (8)
Director        
Albert J. Moyer  8,361   (8)
Director        
Robert K. Montgomery  19,312   (8)
Director        
Glen D. Parish  30,953   (8)
Director, Former Vice President, General Manager        
Donald A. Patrick  52,286   (8)
Director        
James R. Wilburn  19,167   (8)
Director        
Robert E. Dose  39,366   (8)
Vice President Finance, Secretary, Treasurer        
Lori L. Swafford  33,760   (8)
Vice President, Legal Affairs        
Larry O. Wonder  38,347   (8)
Vice President, Sales        
All executive officers and directors as a group (18 persons)  1,349,813   9.25%


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(1)Except as indicated in the footnotes to this table and pursuant to applicable community property laws, to the knowledge of the Company, the persons named in this table have sole voting and investment power with respect to all shares beneficially owned by them. For purposes of this table, a person is deemed to be the “beneficial owner” of any security if the person has the right to acquire beneficial ownership of such security within 60 days of May 5, 2008,April 24, 2009, including but not limited to, any right to acquire through the exercise of any option, warrant or right or through the conversion of a security. Amounts for Messrs. Robert Virtue, Douglas Virtue, Friesz, Schulte, Moyer, Montgomery, Parish, Patrick, Wilburn, Dose, Swafford, Wonder, and all executive officers and directors as a group, include

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5,196, 5,196, 0, 0, 0, 0, 13,930,12,100, 0, 0, 22,837, 22,837, 22,8375,196, 5,196, 5,196 and 160,47973,085 shares issuable upon exercise of options or conversion of restricted stock units, respectively, and 17,322, 16,381,28,796, 20,781, 0, 0, 0, 0, 6,278,6,675, 0, 0, 5,080, 765, 11,4095,401, 786, 20,503 and 55,27071,889 shares held under the Company’s 401(k) Plan as of May 5, 2008,April 24, 2009, respectively.
 
(2)Reflects information as of December 31, 2008 as reported in a Schedule 13G/A filing on February 15, 2008, according to public filings18, 2009 by Wedbush, Inc., Edward W. Wedbush (EWW) and Wedbush Morgan Securities, Inc. Includes the total number of shares of Common Stock and shares issuable under currently exercisable warrants, that are held by each of Wedbush, Inc., Edward W. Wedbush and Wedbush Morgan Securities, Inc. Also includes 309,580281,480 shares of Common Stock, and 61,20053,925 shares of Common Stock issuable under currently exercisable warrants, that are beneficially owned by customers of Wedbush Morgan Securities, Inc., over which Wedbush Morgan Securities, Inc. has dispositive power. The reporting persons disclaim any beneficial ownership over such shares. The reporting persons share voting power with respect to 1,423,868 shares of Common Stock and share dispositive power with respect to 1,759,273 shares of Common Stock. Business addresses of the above filers are as follows: Wedbush, Inc. — 1000 Wilshire Blvd., Los Angeles, CA90017-2457: EWW 90017-2457; Edward W. Wedbush— P.O. Box 30014, Los Angeles, CA 90030-0014; Wedbush Morgan Securities, Inc. — P.O. Box 30014, Los Angeles, CA90030-0014: Wedbush Morgan Securities — P.O. Box 30014, Los Angeles, CA90030-0014.
 
(3)Reflects information as of December 31, 2008 as reported in a Schedule 13G/A filing on February 14, 2008, according to public filings by Private Capital Management, L.P. (“PCM”). The address for PCM is 8889 Pelican Bay Blvd., Suite 500 Naples, FL 34108.
(4)10, 2009. Includes 291,023281,423 shares held by a trust of which Ms. Virtue-Cutshall is the sole trustee.
 
(5)(4)Reflects information as of May 2,December 31, 2008 according to public filingsas reported in a Schedule 13G/A filing on February 11, 2009 by David P. Cohen, Athena Capital Management.Management, Inc., and Minerva Group, LP. The address for each of David P. Cohen, Athena Capital Management, Inc. and Minerva Group, LP is 50 Monument Road, Suite 201, Bala Cynwyd, PA 19004.
 
(5)Reflects information as of December 18, 2008 as reported in a Schedule 13D filing on January 2, 2009 by Towle & Co. The address for Towle & Co. is 1610 Des Peres Road, Suite 250, St. Louis, MO 63131.
(6)Excludes 1,696,7351,704,442 shares owned beneficially by Mr. Robert Virtue’s adult children, including Mr. Douglas Virtue, as to which Mr. Robert Virtue disclaims beneficial ownership.
 
(7)Douglas A. Virtue is Robert A. Virtue’s son. The total number of shares beneficially owned by Mr. Robert A. Virtue, his brothers Raymond W. Virtue and Richard J. Virtue, his sister, Nancy Virtue-Cutshall, their children (which includes Mr. Douglas A. Virtue) and their mother, Mrs. Julian A. Virtue, aggregate 5,840,2065,727,389 shares or 40.44%40.38% of the total shares of Common Stock outstanding. Robert A. Virtue, Richard J. Virtue, Raymond W. Virtue, Nancy Virtue-Cutshall and certain of their respective spouses and children (including Douglas A. Virtue) (collectively, the “Virtue Stockholders”) and the Company have entered into an agreement with respect to certain shares of the Company’s Common Stock received by the Virtue Stockholders as gifts from the founder, Julian A. Virtue, including shares received in subsequent stock dividends in respect of such shares. Under the agreement, each Virtue Stockholder who proposes to sell any of such shares is required to provide the remaining Virtue Stockholders notice of the terms of such proposed sale. Each of the remaining Virtue Stockholders is entitled to purchase any or all of such shares on the terms set forth in the notice. The Company may purchase any shares not purchased by such remaining Virtue Stockholders on such terms. The agreement also provides for a similar right of first refusal in the event of the death or bankruptcy of a Virtue Stockholder, except that the purchase price for the shares is to be based upon the then prevailing sales price of the Company’s Common Stock on the NASDAQ StockMarket Exchange.
 
(8)Less than 1%.


6

EXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Objectives of the Compensation Program
     
The objectives of the Company’s executive compensation program are to: 1) attract, motivate and retain highly qualified executives; 2) link total compensation to stockholder returns; 3) reflect individual contributions to the performance of the Company; 4) insure appropriate balance between long-term value creation and short-term performance by including equity as part of total compensation; and 5) maintain internal fairness and morale by benchmarking executive compensation, including perquisites and non-cash benefits, against the aggregated average compensation and benefits of the Company’s top 25 managers.
     
The Compensation Committee recommends and the Board approves the base salaries, annual bonus plan, and long term incentives of the Company’s Chief Executive Officer (the “CEO”), Chief Financial Officer (the “CFO”), and the three other most highly compensated executives. Throughout this Compensation Discussion & Analysis (“CD&A”), the CEO, CFO and three other most highly compensated executives are referred to collectively as the “Named Executive Officers.”
What the Compensation Program is Designed to Reward
     
The program is designed to support annual and long-term business goals that create profitable growth and long-term value for stockholders.
Elements of Compensation Program
     
The Company’s executive compensation program consists of three main elements: 1) base salary, which is tied to individual job duties; 2) annual bonus plan cash incentives, which are mathematically linked to the Company’s Annual Operating Plan, including pre-tax profit; and 3) long-term equity incentives, the value of which are contingent upon successful execution of the Company’s multi-year strategic growth and market development initiatives. Ancillary benefits such as health insurance, retirement benefits, and an automobile allowance are also part of the executive compensation program. As with the three main elements of the program, these ancillary benefits are benchmarked against similar benefits provided to the Company’s top 25 managers.
     
The combination of base salary, annual incentive, long-term incentive, and ancillary benefits is referred to as Total Compensation. The Company has established a target of “market median” for the Total Compensation of Named Executive Officers as determined by scale-, geography- and date-adjusted national compensation surveys from Wyatt Total Reward, Wyatt CQ Survey, Mercer Manufacturing Compensation Survey, Mercer Manufacturing Industry Market View, National Assoc. of Manufacturers, and Employers Group Research Services Survey.
     
All of these surveys are given equal weighting. The Company intentionally uses a broad comparison group for executive compensation because the competition for executive talent extends beyond the Company’s direct competitors and industry. The Company believes that this breadth of executive compensation data, conservatively adjusted for firm size, geographic location and cost of living, and the age of the data, provides for the fairest and most equitable “market median.” The same method of establishing a market median total compensation target is used for the Company’s top 25 managers.
     
In determining the final Total Compensation for Named Executive Officers, the Compensation Committee of the Board of Directors attempts to balance “external equity” as defined by “market median,” with “internal equity” as defined by the aggregated average Total Compensation for the Company’s top 25 managers. It is the Company’s belief that this approach to establishing Total Compensation for Named Executive Officers results in better teamwork and morale

7

among the entire management team, thus linking executive and management compensation with short- and long-term value creation for stockholders.
Base Salary
     
Base salary is intended to reward Named Executive Officers and other employees for their roles within the Company and their performance in those roles. The Company determines the base salary range for a particular


7

position by evaluating 1) the duties, complexities and responsibilities of the position; 2) the level of experience required; and 3) the compensation for positions having similar scope and accountability within and outside the Company (through survey data as described above).
The Company did not increase base salaries for the Named Executive Officers for fiscal 2008 and does not anticipate increasing base salaries for Named Executive Officers in fiscal 2009.
Annual Incentives
     
The Named Executive Officers are eligible for annual cash incentives under the Company’s Annual Bonus Plan, which is approved by the Board of Directors at the beginning of the Company’s fiscal year as part of its Annual Operating Plan. To reward Named Executive Officers and other salaried managers for achieving the financial performance set forth in the Annual Operating Plan, the Board of Directors establishes a minimum level of financial performance and return to stockholders above which a cash bonus will be paid. For achieving the minimum threshold, the Named Executive Officers receive a cash bonus equal to 15% of their base salary. For achieving the “target” pre-tax earnings, Named Executive Officers receive a 35% cash bonus. The maximum possible cash bonus for Named Executive Officers is capped at 50% of base salary. The threshold, target and maximum bonus levels for each Named Executive Officer were determined by reference to the survey data and other factors described above.
     
For fiscal 2007,2008, the threshold for receiving a minimum bonus was $9,000,000$10,000,000 in pre-tax earnings, after accruing an earned bonus provision of approximately $206,000 for the Named Executive Officers. No cash bonus payment was made to the Named Executive Officers under the Annual Bonus Plan for fiscal 2008 as the Company’s pre-tax earnings did not exceed this threshold.
     For fiscal 2008, the Board of Directors approved a discretionary bonus for all employees that participated in the Annual Bonus Plan, including the Named Executive Officers. The Board determined that although the Company did not meet the profit objective, the Company had met several significant objectives and had achieved these objectives in an extremely challenging economic environment. Metrics considered by the Board of Directors included:
•The Company ended the fiscal year with no bank debt for the first time in over 20 years.
•The Company successfully extended its $65 million line of credit to February 2011.
•The Company reduced inventory by $10 million and generated $11 million in operating cash flow.
•The Company anticipated the recession, and reduced inventory and expenses without incurring layoffs or restructuring charges.
•The Company successfully enhanced the Virco brand through new product launches, extensions of significant customer contracts, and expanded relationships with strategic vendor partners.
The actual discretionary bonus payout for the Named Executive Officers for 2007, achieved by reaching $12,192,000 in pre-tax earnings,fiscal 2008 was $494,863. This cash bonus payout was$64,218, equal to approximately 37%9% of each Named Executive Officers’Officers base salary for fiscal 2007.
2008. Robert A. Virtue and Douglas A. Virtue declined to accept payment of any discretionary bonus.
Long-Term Incentives
     
The Company believes that the most powerful incentive to focus Named Executive Officers on long-term value creation is long-term ownership of Company stock. Under the Company’s current long-term incentive program, Named Executive Officers and top managers receive periodic grants of Restricted Stock Units (“RSUs”). The Company uses RSUs rather than options because it has been the Company’s experience that RSUs

8

are more likely to result in a growing ownership position of Company stock and thereby align the interests of executives and stockholders. The Company did not grant RSUs to Named Executive Officers in fiscal 2008. On the date of the 2007 Annual Meeting of Stockholders and Board of Directors meeting on June 19, 2007, each Named Executive Officer was granted 15,000 RSUs, vesting ratably over a five year period. The number of RSUs granted to each Named Executive Officer in fiscal 2007 was determined by reference to historical grant levels provided to Company executives, as well as the factors described above. Each Named Executive Officer received the same number of RSUs in order to foster internal pay equity and the Company’s “one-team” management approach.
     
GrantsIf awarded, grants of RSUs are typically approved at the Board of Directors meeting immediately following the Annual Meeting.Meeting of Stockholders. The meeting dates are set well in advance and occur approximately two weeks following the release of the First Quarter results. Scheduling decisions are made without regard to anticipated earnings or other major announcements by the Company.
Other Compensation Elements
     
Perquisites— The Company provides Named Executive Officers with a Company automobile or cash allowance of $22,800 per year.year under a program available to all Officers of the Company. The Company does not provide Named Executive Officers with any other perquisites such as country club memberships and the Company does not own or lease an aircraft. Company-provided travel for executives is for business purposes only.
     
Other Benefits— Executives participate in the same health, disability and life insurance programs as are provided to other Company employees. In addition, the Named Executive Officers participate in the Company’s tax-qualified defined benefit pension plan (the Virco Mfg. Corporation EmployeeEmployees Retirement Plan) and nonqualified supplement retirement plan (the VIP RetirementVirco Important Performers (VIP) Plan). As more fully disclosed in the MD&A and Footnote 4 to the financial statements in the Company’s Annual Report onForm 10-K for the fiscal year ended January 31, 20082009 (“Form 10K”10-K”), these retirement plans were frozen effective December 31, 2003, and additional benefit accruals for all Named Executive Officers ceased on that date.


8

Post-Employment and Other Events
     
The Company does not have employment agreements with any of the Named Executive Officers, and is not obligated to provide termination pay or other severance benefits to any of its Named Executive Officers. In general, the benefits provided or available to Named Executive Officers upon retirement, death, disability or other termination of employment or upon the occurrence of achange-in-control event are the same as those provided or made available to salaried employees generally.
     
Pursuant to the Company’s 1997 and 2007 Stock Incentive Plans, vesting of all outstanding stock and option awards is accelerated upon achange-in-control. In addition, under the VIP PensionVirco Important Performers (VIP) Plan, vesting of retirement benefits is accelerated upon the occurrence of achange-in-control or the death of the participant. All Named Executive Officers are currently fully vested in all retirement programs, and would receive no additional benefit upon occurrence of a change-in-control. These benefits are provided to salaried employees generally and are intended to ensure that management remains focused on stockholder value when evaluating strategic alternatives.
Tax Deductibility of Executive Compensation
     
The Company seeks to structure its compensation arrangements to maximize the tax deductibility of all components of executive compensation unless the benefit of such deductibility is outweighed by the need for flexibility or the attainment of other corporate objectives. The Compensation Committee will continue to monitor issues concerning the deductibility of executive compensation and will take appropriate action if and when it is warranted. Since corporate objectives may not always be consistent with the requirements for full deductibility, the Compensation Committee is prepared, if it deems appropriate, to enter into compensation arrangements under which payments may not be fully deductible. Thus, deductibility will not be the sole factor used by the Compensation Committee in ascertaining appropriate levels or modes of compensation. In fiscal 2007,2008, all compensation paid to executives was fully deductible; no executive officer

9

exceeded the $1 million limit under Section 162(m) of the Internal Revenue Code with regard to non-performance-based compensation.
Impact of Prior Compensation in Setting Elements of Compensation
     
Prior compensation of the Named Executive Officers does not impact how the Company sets elements of current compensation. The Compensation Committee believes the competitive environment that the Company operates in mandates that current total compensation be set at levels sufficient to attract, motivate and retain top management, which requires the Company to set compensation amounts based on current Company and business conditions.
Executive Stock Ownership Guideline
     
The Company has not adopted any executive stock ownership guidelines. While there are no guidelines, two of the Named Executive Officers, Robert A. Virtue and Douglas A. Virtue, own 2.2% and 4.1%4.3%, respectively, of the outstanding shares of the Company’s Common Stock. Messrs. R. Virtue and D. Virtue are members of the Virtue Family and subject to the terms of the Virtue Family Agreement discussed in the “Security Ownership” section of this Proxy Statement. The Virtue Family owns approximately 40% of the Company’s outstanding Common Stock.
Impact of Restatements that Retroactively Impact Financial Goals
     
The Company has not restated or retroactively adjusted financial information that has impacted the financial statements or goals related to previous bonus or long-term award payouts. If financial results are significantly restated due to fraud or intentional misconduct, the Board will review any performance-based compensation paid to Named Executive Officers who are found to be personally responsible for the fraud or intentional misconduct that led to the restatement and may, to the extent permitted by applicable law, seek to recover amounts paid in excess of the amounts that would have been paid based on the restated financial results.
The Role of the Executives in Determining Compensation
     
While the Compensation Committee is primarily responsible for reviewing and making determinations with respect to executive compensation, the CEO and Executive Vice President provide input and views with respect to


9

compensation for the other Named Executive Officers. The Compensation Committee believes that the CEO’s and Executive Vice President’s views are critical in determining the compensation of other Named Executive Officers because the CEO and Executive Vice President have day-to-day involvement with these Named Executive Officers and are in the best position to assess their performance, abilities, and contribution to the success of the Company.
Compensation Committee Report
     
The Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis for the year ended January 31, 2008,2009, as required by Item 402(b) ofRegulation S-K under the Exchange Act of 1934 with management, and based on such review and discussions,discussion, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion & Analysis be included in this Proxy Statement.
COMPENSATION COMMITTEE
Albert J. Moyer, Chair
Donald A. Patrick
Robert K. Montgomery
Dr. James R. Wilburn

10

     
The above report of the Compensation Committee will not be deemed to be incorporated by reference into any filing by the Company under the Securities Act or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.
Compensation Committee Interlocks and Insider Participation
     
During fiscal 2007,2008, the Compensation Committee was comprised of Messrs. Moyer, Patrick, Montgomery, and Wilburn, none of whom is a current or former officer of the Company. Mr. Montgomery is a partnersenior counsel of the law firm Gibson, Dunn & Crutcher LLP, which has provided legal services to the Company. The Company expects that such law firm will continue to render legal services to the Company in the future. There are no interlocking board memberships between officers of the Company and any member of the Compensation Committee.
Summary Compensation Table for Fiscal 2008, 2007 & 2006
     
The table below sets forth the compensation awarded to, earned by, or paid to, each of the Named Executive Officers for Fiscal 2008, 2007 and 2006. The Company has no employment agreements with any of its executives. While employed, executives are entitled to base salary, participation in the executive compensation programs identified in the tables below and discussed in the CD&A and other benefits common to all employees. The performance-based conditions associated with the Bonus Plan as well as salary and bonus in proportion to total compensation are discussed in detail throughout the CD&A.
                                 
                  Non-Equity          
              Stock  Incentive Plan  Change  All Other    
Name and Position Year  Salary  Bonus  Awards  (Bonus Plan)  in Pension  Compensation  Total 
Robert A. Virtue  2008  $420,580  $—  $20,340  $—  $—  $11,156  $452,076 
President & CEO  2007   408,768   —   11,865   153,972   115,239   15,142   704,986 
   2006   427,058   —   —   159,257   93,191   23,246   702,752 
Douglas A. Virtue  2008   261,234   —   20,340   —   —   7,592   289,166 
Executive Vice President  2007   258,715   —   11,865   98,982   —   8,372   377,934 
   2006   228,371   —   —   100,404   118,663   18,498   465,936 
Robert E, Dose  2008   270,292   23,906   41,070   —       22,750   358,018 
Vice President Finance  2007   248,080   —   32,595   93,483   2,228   26,200   402,586 
   2006   225,000   —   20,730   96,131   108,112   34,780   484,753 
Lori L. Swafford  2008   230,580   21,563   41,070   —       26,168   319,381 
Vice President &  2007   224,330   —   32,595   84,318   —   29,244   370,487 
Corporate Counsel  2006   205,000   —   20,730   87,586   73,317   38,372   425,005 
Larry O. Wonder  2008   200,580   18,750   41,070   —       12,418   272,818 
Vice President Sales  2007   197,068   —   32,595   73,320   8,229   16,277   327,489 
   2006   189,630   —   20,730   77,161   116,740   24,155   428,416 
                             
        Non-Equity
      
      Stock
 Incentive Plan
 Change in
 All Other
  
Name and Position
 Year Salary Awards (Bonus Plan) Pension Compensation Total
 
Robert A. Virtue  2007  $408,768  $11.865  $153,972  $115,239  $15,142  $704,986 
President & CEO  2006   427,058       159,257   93,191   23,246   702,752 
Douglas A. Virtue  2007   258,715   11.865   98,982   —   8,372   377,934 
Executive Vice President  2006   228,371       100,404   118,663   18,498   465,936 
Robert E, Dose  2007   248,080   32,595   93,483   2,228   26,200   402,586 
Vice President Finance  2006   225,000   20,730   96,131   108,112   34,780   484,753 
Lori L. Swafford  2007   224,330   32,595   84,318   —   29,244   370,487 
Vice President & Corporate Counsel  2006   205,000   20,730   87,586   73,317   38,372   425,005 
Larry O. Wonder  2007   197,068   32,595   73,320   8,229   16,277   327,489 
Vice President Sales  2006   189,630   20,730   77,161   116,740   24,155   428,416 


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(1)ReflectsThe amounts shown in this column reflect the vestingdiscretionary bonus approved by the Board of 3,000Directors.
(2)The amounts is the compensation expense recognized by the Company in the financial statements for the applicable fiscal year pursuant to Statement of Financial Accounting Standards No. 123R (“FAS 123R”). The assumptions used to calculate these figures are described in Footnote #5 of the Company’s Form 10-K. The Value on Vesting of RSUs granted in June 2004 is calculated by multiplying the number of shares vested by the difference between the market price on grant date of $4.99 per share on the date of vesting less the $0.01 par value of the share of Common Stock that is paid by the Named Executive Officer. The Value on Vesting of RSUs granted in June 2007 is calculated by multiplying the number of shares vested by the difference between the market price on grant date of $4.92 per share on the date of vesting less the $0.01 par value of the share of Common Stock that is paid by the Named Executive Officer.

11

(3)The amounts shown in this column are based on the same assumptions used in the preparation of the Company’s fiscal 2008 financial statements, which are described in the MD&A and Footnote #4 to the Company’s Form 10-K. The Pension Plans that Executive Officers participate in were frozen in 2003. The Executive Officers did not accrue any additional benefits during fiscal 2008. The Change in Pension amount includes the effect of a change in discount rate from 6.00% in fiscal 2007 to 6.75% in fiscal 2008, and the decrease in the discount period. Due to the change in discount rates, the change in pension value for Robert A. Virtue decreased by $310,578, Douglas A. Virtue decreased by $37,957, Robert E. Dose decreased by $30,391, Lori Swafford decreased by $34,404, and Larry O. Wonder decreased by $22,228.
(4)The amounts in this column include automobile allowances, the value of personal use of a Company provided vehicle, payments under a mortgage assistance plan that was terminated in May 2007, and medical insurance for domestic partners
Grants of Plan-Based Awards for Fiscal 2008
     The table below sets forth the grants of plan-based awards to the Named Executive Officers during fiscal 2008 under the Bonus Plan. Such awards include monetary compensation under the Bonus Plan.
               
    Estimated Future Payouts Under 
  Grant Non-Equity Incentive Plan Awards 
Name and Position Date Threshold ($)  Target ($)  Maximum($) 
Robert A. Virtue
President & CEO		 N/A  63,000   147,000   210,000 
Douglas A. Virtue
Executive Vice President		 N/A  40,500   94,500   135,000 
Robert E, Dose
Vice President Finance		 N/A  38,250   89,250   127,500 
Lori L. Swafford
Vice President & Corporate Counsel		 N/A  34,500   80,500   115,000 
Larry O. Wonder
Vice President Sales		 N/A  30,000   70,000   100,000 
(1)Cash amounts in this table pertain the Bonus Plan described under “Annual Incentives” in the CD&A.
Outstanding Equity Awards at Fiscal Year-End 2008
     The following table sets forth the Named Executive Officers’ outstanding equity awards as of the end of fiscal 2008. All outstanding stock option awards reported in this table expire 10 years from the date of grant. All outstanding grants of RSUs vest over a five year period from the grant date.
                     
  Stock Awards
              Shares or Units Market Value of
  Year Option Option of Stock That Shares or Units of
  of Exercise Expiration Have Not Stock That Have
Name and Title Award Price ($) Date Vested (#) Not Vested ($)
Robert A. Virtue  2007   11.06   07/23/2009   12,000   25,080 
President & CEO                    

12

                     
  Stock Awards
              Shares or Units Market Value of
  Year Option Option of Stock That Shares or Units of
  of Exercise Expiration Have Not Stock That Have
Name and Title Award Price ($) Date Vested (#) Not Vested ($)
Douglas A. Virtue  2007   11.06   07/23/2009   12,000   25,080 
Executive Vice President                    
Robert E. Dose  2004   11.06   07/23/2009   3,000   6,270 
Vice President Finance  2007           12,000   25,080 
Lori L. Swafford  2004   11.06   07/23/2009   3,000   6,270 
Vice President & Corporate Counsel  2007           12,000   25,080 
Larry O. Wonder  2004   11.06   07/23/2009   3,000   6,270 
Vice President Sales  2007           12,000   25,080 
(1)All RSUs vest at 20% per year for five years from the grant date. All outstanding options are fully vested. For the 3,000 RSUs remaining from June 30, 2004 RSU award included in this table there is one remaining vesting date: June 30, 2009. For the 12,000 RSUs remaining from the June 17, 2007 RSU award there are four remaining vesting dates: June 17, 2009, June 17, 2010, June 17, 2011, and June 17, 2012.
(2)All year-end dollar values were computed based on the fiscal year-end closing price of RSUs in June 2007. $2.10 per share of common stock less the $0.01 par value of the share of Common Stock that is paid by the Named Executive Officer.
Option Exercises and Stock Vested for Fiscal 2008
     The following table sets forth information concerning the Named Executive Officers’ exercise of stock options and vesting of RSUs during fiscal 2008.
         
  Number of Shares Value Realized on
  Acquired on Vesting Vesting
Name and Position (#) ($)
Robert A. Virtue  3,000   14,760(1)
President & CEO        
Douglas A. Virtue  3,000   14,760(1)
Executive Vice President        
Robert E, Dose  3,000   14,760(1)
Vice President Finance  3,000   14,970(2)
Lori L. Swafford  3,000   14,760(1)
Vice President & Corporate Counsel  3,000   14,970(2)
Larry O. Wonder  3,000   14,760(1)
Vice President Sales  3,000   14,970(2)
(1)The valueValue Realized on vestingVesting of RSUs is calculated by multiplying the number of shares vested by the difference between the closing market price of $4.92 per share on the date of vesting less the $0.01 par value of the share of Common Stock that is paid by the Named Executive Officer.
 
(2)The amounts shown in this column are basedValue Realized on the same assumptions used in the preparation of the Company’s 2007 financial statements, which are described in the MD&A and Footnote 4 to the financial statements contained in the Company’sForm 10-K. The Pension Plans that Named Executive Officers participate in were frozen in 2003. The Named Executive Officers did not accrue any additional benefits during fiscal 2007. The change in pension amount includes the effect of a change in discount rate from 5.75% in fiscal 2006 to 6.00% in fiscal 2007, utilization of an updated table for receiving an undiscounted benefit, and the decrease in the discount period. For Robert A. Virtue, change in pension reflects adjustments to current and prior year balances to reflect retirement age greater than age 65. Due to the change in discount rates, the change in pension value for Doug Virtue decreased by $154 and the change in pension value for Lori Swafford decreased by $4,372.
(3)The amounts shown in this column include automobile allowances, the value of personal use of a Company-provided vehicle, payments under a mortgage assistance plan that was terminated in May 2007, and medical insurance for domestic partners.
Grants of Plan-Based Awards for Fiscal 2007
The table below sets forth the grants of plan-based awards to the Named Executive Officers during fiscal 2007 under the Bonus Plan. Such awards include monetary compensation under the Bonus Plan and grants of RSUs in June 2007.
                                         
                    Exercise or
  Estimated Future Payouts Under
 Estimated Future Payouts Under Equity
 Number
   Base Price
  Non-Equity Incentive Plan Awards Incentive Plan Awards of Share
 Number of
 of Option
  Grant
 Threshold
 Target
 Maximum
 Threshold
 Target
 Maximum
 or Units
 Securities
 Awards
Name and Position
 Date ($) ($) ($) (#) (#) (#) (#) (#) ($/Sh)
 
Robert A. Virtue  N/A   63,000   147,000   210,000   N/A   N/A   N/A   15,000   N/A   N/A 
President & CEO                                        
Douglas A. Virtue  N/A   40,500   94,500   135,000   N/A   N/A   N/A   15,000   N/A   N/A 
Executive Vice President                                        
Robert E. Dose  N/A   38,250   89,250   127,500   N/A   N/A   N/A   15,000   N/A   N/A 
Vice President Finance                                        
Lori L. Swafford  N/A   34,500   80,500   115,000   N/A   N/A   N/A   15,000   N/A   N/A 
Vice President & Corporate Counsel                                        
Larry O. Wonder  N/A   30,000   70,000   100,000   N/A   N/A   N/A   15,000   N/A   N/A 
Vice President Sales                                        
(1)Cash amounts in this table pertain to the Bonus Plan described under “Annual Incentives” in the CD&A. Shares or units in this table pertain to RSUs described under “Long Term Incentives” in the CD&A.


11

Outstanding Equity Awards at Fiscal Year-end 2007
The following table sets forth the Named Executive Officers’ outstanding equity awards as of the end of fiscal 2007. All outstanding stock option awards reported in this table vest in five years and expire 10 years from the date of grant. All outstanding grants of RSUs vest over a five year period.
                                     
            Stock Awards
                  Equity
                Equity
 Incentive
  Option Awards     Incentive
 Plan
      Equity
         Plan
 Awards
      Incentive
         Awards
 Market
      Plan
       Market
 Number of
 Value
      Awards:
       Value of
 Unearned
 Unearned
  Number of
 Number of
 Number of
       Shares or
 Shares,
 Shares,
  Securities
 Securities
 Securities
     Shares or
 Units of
 Units, or
 Units, or
  Underlying
 Underlying
 Underlying
 Option
   Units of
 Stock
 Other
 Other
  Options
 Options
 Unexercised
 Exercise
 Option
 Stock That
 That Have
 Rights
 Rights That
  Exercisable
 Unexercisable
 Unearned
 Price
 Expiration
 Have Not
 Not
 That Have
 Have Not
Name and Title
 (#) (#) Options (#) ($) Date Vested (#) Vested ($) Vested (#) Vested ($)
 
Robert A. Virtue  2,196           11.06   07/23/2009                 
President & CEO                      15,000   95,400         
Douglas A. Virtue  2,196           11.06   07/23/2009                 
Executive Vice President                      15,000   95,400         
Robert E. Dose  14,641           12.64   10/13/2008                 
Vice President  2,196           11.06   07/23/2009                 
Finance                      6,000   38,160         
                       15,000   95,400         
Lori L. Swafford  14,641           12.64   10/13/2008                 
Vice President &  2,196           11.06   07/23/2009                 
Corporate Counsel                      6,000   38,160         
                       15,000   95,400         
Larry O. Wonder  14,641           12.64   10/13/2008                 
Vice President Sales  2,196           11.06   07/23/2009   6,000   38,160         
                       15,000   95,400         
(1)All stock options and RSUs vest at 20% per year for five years from the grant date. All outstanding options are fully vested. For the 6,000 RSUs remaining from the June 30, 2004, RSU award included in this table there are two remaining vesting dates: June 30, 2008, and June 30, 2009. For the grant of 15,000 RSUs on June 17, 2007 to all Named Executive Officers, there are five remaining vesting dates: June 19, 2008, June 19, 2009, June 19, 2010, June 19, 2011, and June 19, 2012.
(2)The amounts reported in this column were computed based on the fiscal year-end closing price of $6.37 per share of common stock less the $0.01 par value of the share of Common Stock that is paid by the Named Executive Officer.


12

Option Exercises and Stock Vested for Fiscal 2007
The following table sets forth information concerning the Named Executive Officers’ exercise of stock options and vesting of RSUs during fiscal 2007.
                 
  Option Awards Stock Awards
  Number of
   Number of
  
  Shares Acquired
 Value Realized
 Shares Acquired
 Value Realized
Name and Position
 on Exercise (#) on Exercise ($) on Vesting (#) on Vesting ($)
 
Robert A. Virtue  —   —   —   — 
President & CEO                
Douglas A. Virtue  —   —   —   — 
Executive Vice President                
Robert E. Dose  —   —   3,000   19,710 
Vice President Finance                
Lori L. Swafford  —   —   3,000   19,710 
Vice President & Corporate Counsel                
Larry O. Wonder  —   —   3,000   19,710 
Vice President Sales                
(1)The value realized on vestingVesting of RSUs is calculated by multiplying the number of shares vested by the difference between the closing market price of $6.58$4.99 per share on the date of vesting less the $0.01 par value of the share of Common Stock that is paid by the Named Executive Officer.

13

Pension Benefits for Fiscal 20072008
     
The following table sets forth information concerning the payments available under the Company’s VIP PensionVirco Important Performers (VIP) Plan and the Virco Mfg. Corporation EmployeeEmployees Retirement Plan, both of whose benefit accruals were frozen in 2003.
                 
      Number of     Payments
      Years of Present Value of During Last
      Credited Accumulated Fiscal Year
Name and Position Plan Name Service (#) Benefit ($) (1) (2) ($)
Robert A. Virtue Virco Important
            
President & CEO Performers (VIP) Plan
  18   1,547,800   201,539 
  Virco Mfg. Corporation
            
  Employees Retirement Plan  46   2,109,946   126,162 
Douglas A. Virtue Virco Important
            
Executive Vice President Performers (VIP) Plan
  10   —   — 
  Virco Mfg. Corporation
            
  Employees Retirement Plan  17   377,189   — 
Robert E, Dose Virco Important
            
Vice President Finance Performers (VIP) Plan
  10   —   — 
  Virco Mfg. Corporation
            
  Employees Retirement Plan  12   373,351   — 
Lori L. Swafford Virco Important
            
Vice President Legal Affairs Performers (VIP) Plan
  7   —   — 
  Virco Mfg. Corporation
            
  Employees Retirement Plan  7   219,826   — 
Larry O. Wonder Virco Important
            
Vice President Sales Performers (VIP) Plan
  13   —   — 
  Virco Mfg. Corporation
            
  Employees Retirement Plan  24   479,080   — 
               
    Number of
  Present
  Payments
 
    Years of
  Value of
  During Last
 
    Credited
  Accumulated
  Fiscal Year
 
Name and Position
 
Plan Name
 Service (#)  Benefit ($)  ($) 
 
               
Robert A. Virtue
President & CEO		 Virco Important
Performers (VIP) Plan		  21   1,794,776   117,564 
  Virco Mfg. Corporation Employees Retirement Plan  50   2,173,548   73,595 
               
Douglas A. Virtue
Executive Vice President		 Virco Important
Performers (VIP) Plan		  14   —   — 
  Virco Mfg. Corporation Employees Retirement Plan  21   415,146   — 
               
Robert E. Dose
Vice President Finance		 Virco Important
Performers (VIP) Plan		  16   —   — 
  Virco Mfg. Corporation Employees Retirement Plan  16   403,742   — 
               
Lori L. Swafford
Vice President & Corporate		 Virco Important
Performers (VIP) Plan		  11   —   — 
Counsel Virco Mfg. Corporation Employees Retirement Plan  11   254,230   — 
               
Larry O. Wonder
Vice President Sales		 Virco Important
Performers (VIP) Plan		  17   —   — 
  Virco Mfg. Corporation Employees Retirement Plan  28   501,308   — 


13

(1)The amounts shown in this column are based on the same assumptions used in the preparation of the Company’s fiscal 20072008 financial statements, which are described in the MD&A and Footnote 4#4 to the financial statements of the Company’sForm 10-K.
 
(2)The Pension Plans that the Named Executive Officers participate in werewas frozen in 2003. The Named Executive Officers did not accrue any additional benefits during 2007.fiscal 2008. The Change in Pension amount includes the effect of a change in discount rate from 5.75% in 2006 to 6.00% in fiscal 2007 utilization of an updated table for receiving an undiscounted benefit,to 6.75% in fiscal 2008, and the decrease in the discount period. The first date at which a Named Executive Officer can receive an undiscounted benefit is at age 65. Robert Virtue deferred collection of pension benefits from age 65 to age 741/2. Mr. Virtue began receiving pension benefits in July 2007.
Nonqualified Deferred Compensation for Fiscal 20072008
     
The Company does not have a deferred compensation plan.
Potential Payments upon Termination or Change-in-Control
As discussed in the CD&A above, the Company does not have employment agreements with any of the Named Executive Officers. Retirement, death, disability andchange-in-control events do not trigger the payment of compensation to the Named Executive Officers that is not available to all salaried employees (including the amounts

14

included in the “Pension Benefits for Fiscal 2007”2008” table). Named Executive Officers do not have a contractual right to receive severance benefits.
     
As noted in “Post-Employment and Other Events,” pursuant to the Company’s 1997 and 2007 Stock Incentive Plans, the vesting of all outstanding stock and options awards is accelerated upon achange-in-control. In addition, under the VIP PensionVirco Important Performers (VIP) Plan, the vesting of retirement benefits is accelerated upon the occurrence of achange-in-control or the death of the participant.Change-in-control is defined byas a party other than the members of the Virtue family accumulating 20% or more of the Company’s Common Stock. The following table quantifies compensation that would be payable to the Named Executive Officers upon a change-in-control. The tables assume that the event occurred on the last business day of fiscal 2007.
2008.
Value in Event of Change-in-Control with or without Employment Termination
         
  Stock Awards
  Number of Shares Value Realized on
  Acquired on Vesting Vesting
Name and Position (#) (1) ($)
Robert A. Virtue  12,000   25,080 
President & CEO        
Douglas A. Virtue  12,000   25,080 
Executive Vice President        
Robert E, Dose  15,000   31,350 
Vice President Finance        
Lori L. Swafford  15,000   31,350 
Vice President Legal Affairs        
Larry O. Wonder  15,000   31,350 
Vice President Sales        
         
  Stock Awards
  Number of
  
  Shares Vesting
 Value
  on Change-
 Realized
Name and Position
 in-Control (#) on Vesting ($)
 
Robert A. Virtue  15,000   95,400 
President & CEO        
Douglas A. Virtue  15,000   95,400 
Executive Vice President        
Robert E. Dose  21,000   133,560 
Vice President Finance        
Lori L. Swafford  21,000   133,560 
Vice President & Corporate Counsel        
Larry O. Wonder  21,000   133,560 
Vice President Sales        
 
(1)Represents the value of accelerating the vesting of RSUs not otherwise vested. The Value Realized on Vesting of RSUs is calculated by multiplying the number of shares vestedthat would vest upon a change-in-control by the difference between the closing market price of $2.10 per share on January 31,the last business day of fiscal 2008 of $6.37 less the $0.01 par value of the share of Common Stock that is paid by the Named Executive Officer.


14

DIRECTOR COMPENSATION
Directors who are also officers of the Company receive no additional compensation for their services as directors. The Company’s non-employee directors receive an annual retainer of $50,000$62,500 composed of 75%(i) $37,500 in the form of quarterly cash payments and 25%(ii) $25,000 in the form of a restricted stock grant, granted each year on the date of the Annual Meeting. EachMeeting of Stockholders. In addition, each non-employee director who serves as a lead director or as the Chair or member of a Board committee also receives an additional annual retainer for his or her services. The lead director receives $20,000 in cash per year. The Audit Committee Chair receives $7,500 per year, and Audit Committee members receive $4,500 per year. Chairs of the Compensation Committee and the GovernanceCorporate Governance/ Nominating Committee each receive an additional $5,000 and the members of these committees each receive $3,000 per year. Directors are also reimbursed for travel and related expenses incurred to attend meetings. The Company has also established a pension plan for non-employee directors who have served as such for at least 10 years, providing for a series of quarterly payments (equal to the portion paid to the non-employee directors’ annual service fee) for such director’s lifetime following the date on which such director ceases to be a director for any reason other than death. Effective December 31, 2003, the Company froze all future benefit accruals under the pension plan.

15

     
The Company’s Guidelines with regard to Common Stock ownership by directors is for each director to own Common Stock with a market value of three times or more the annual cash retainer.
                             
                  Change    
  Fees         Non-Equity in    
  Paid in Stock Option Incentive Plan Pension All Other  
  Cash Awards Awards Compensation Value Compensation Total
Name ($) (1) ($) (2) ($) ($) ($) (3) ($) (4) ($)
Donald S. Friesz  45,000   20,833   —   —   —   39,720   105,553 
Thomas J. Schulte  48,000   20,833   —   —   —   —   68,833 
Robert K. Montgomery  45,500   20,833   —   —   —   —   66,333 
Albert J. Moyer  70,000   20,833   —   —   —   —   90,833 
Glen D. Parish  39,000   20,833   —   —   —   64,491   124,324 
Donald A. Patrick  48,000   20,833   —   —   —   —   68,833 
Dr James R. Wilburn  43,500   20,833   —   —   —   —   64,333 
                             
           Non-Equity
          
  Fees Paid
  Stock
  Option
  Incentive Plan
  Change in
  All Other
    
  in Cash
  Awards
  Awards
  Compensation
  Pension
  Compensation
    
Name and Position
 ($)  ($)  ($)  ($)  Value ($)  ($)  Total ($) 
 
Donald S. Friesz  45,000   12,500   —   —       42,720   100,220 
Thomas J. Schulte  24,000   12,500   —   —       —   36,500 
Robert K. Montgomery  45,500   12,500   —   —   5,549   —   63,549 
Albert J. Moyer  67,500   12,500   —   —       —   80,000 
Glen D. Parish  37,500   12,500   —   —       64,491   103,904 
Donald A. Patrick  49,000   12,500   —   —       —   61,500 
Dr. James R. Wilburn  43,500   12,500   —   —       —   56,000 
 
(1)Cash feesFees include the cash portion of the annual retainer plus fees for serving as a lead director, committee chair, or committee member.
 
(2)A grant of restricted stock representing 25%with a market value of $25,000 on the annual retainergrant date is awarded each year on the day of the Annual Meeting.Meeting of Stockholders. The fair market valuecost of these RSUs are described in Footnote # 5 of the stock grant for each director was $12,500 at the date of grant. The non-employee directors have no outstanding equity awards other than this grant.Company’s Form 10K.
 
(3)The Pension PlanPlans that directorsDirectors participate in was frozen in 2003. The Directors did not accrue any additional benefits during fiscal 2007.2008. The Change in Pension valueamount includes the effect of a change in discount rate from 5.75% in 2006 to 6.00% in fiscal 2007 to 6.75% in fiscal 2008, and the decrease in the discount period. Due to the change in discount rates, the change in pension value for Donald S. Friesz decreased by $6,827,$9,094, the change in pension value for Robert K. Montgomery decreased by $15,759, the change in pension value for Donald A. Patrick decreased by $5,661,$7,076, and the change in pension value for James R. Wilburn decreased by $7,219.$10,271.
 
(4)Messrs. Friesz and Parish are former officers of the Company. Other compensation consists of pension benefits earned as an employee of the Company and paid in retirement, and, in the case of Mr. Friesz, consulting fees in the amount of $3,000.retirement.


15

EMPLOYMENT CONTRACTS AND CHANGE OF CONTROL ARRANGEMENTS
None of the Company’s Named Executive Officers have employment or severance arrangements.
Securities Authorized for Issuance Under Equity Compensation Plans
             
  Equity Compensation Plan Information 
          Number of securities 
  Number of      remaining available 
  securities to be      for future issuance 
  issued upon  Weighted-average  under equity 
  exercise of  exercise price of  compensation plans 
  outstanding  outstanding options  -excluding 
  opinions, warrants  warrants and  securities reflected 
Plan category and rights (a)  rights (b)  in column (a) ( c ) 
Equity compensation plans approved by security holders  103,000  $10.8   688,969(1)
Equity compensation plans not approved by security holders  —   —   —     
          
Total  103,000  $10.8  $688,969(1)
          
             
  Equity Compensation Plan Information 
        Number of securities
 
        remaining available for
 
        future issuance under
 
  Number of securities to
  Weighted-average
  equity compensation
 
  be issued upon exercise
  exercise price of
  plans - excluding
 
  of outstanding options,
  outstanding options
  securities reflected in
 
  warrants and rights
  warrants and rights
  column (a)
 
Plan category
 (a)  (b)  (c) 
 
Equity compensation plans approved by security holders  161,000  $11.46       — 
Equity compensation plans not approved by security holders  —   —   — 
             
Total  161,000  $11.46   — 
             
 
(1)Represents the number of shares available for issuance as of January 31, 2009 under the Company’s 2007 Stock Incentive Plan.

16

On January 31, 2008, there were 724,613 shares available for grant under the 2007 Employee Incentive Plan and on January 31, 2007, there were 109,000 shares available for grant under the 1997 Employee Incentive Plan.
CODE OF ETHICS
     
The Company has adopted a “Code of Ethics,” which is applicable to its chief executive officer and senior financial officers, including the principal accounting officer. The “Code of Ethics” is available on the Company’s website at www.virco.com. The Company intends to post amendments to or waivers under the Code of Ethics at this location on its website. Upon written request, the Company will provide a copy of the Code of Ethics free of charge. Requests should be directed to Virco Mfg. Corporation, 2027 Harpers Way, Torrance, California 90501, Attention: Robert E. Dose, Secretary.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
     
The Audit Committee, among its other duties and responsibilities, reviews and monitors all related party transactions and adopted the Company’s “Related Party Transaction Policies and Procedures” (the “Policy”). The Board of Directors has delegated to the Chair of the Audit Committee the authority to pre-approve or ratify (as applicable) any transaction with a related party in which the aggregate amount involved is expected to be less than $250,000. AThe Chair of the Audit Committee is required to provide to the Board of Directors for review a summary of each new transaction pre-approved by the Chair of the Audit Committee pursuant to this policy shall be provided toat the meeting of the Board of Directors for review at its next regularly scheduled meeting.following such approval or ratification. Under the Policy, the Audit Committee is responsible for reviewing and approving transactions with a related party in which the aggregate amount is expected to exceed $250,000, and both the Audit Committee and the Board of Directors are responsible for reviewing and approving transactions with a related party in which the aggregate amount is expected to equal or exceed $500,000. If advance Audit Committeeand/or Board of Directors approval is not feasible, then the transaction with the related party will be considered and, if the Audit Committeeand/or Board of Directors determines it to be appropriate, ratified at the next regularly scheduled meeting. In determining whether to approve the entry into a transaction with a related party, the Audit Committeeand/or Board of Directors as applicable will assess, among other factors it deems appropriate, whether the transaction is on terms no more favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related party’s interest in the transaction. If a transaction with a related party will be ongoing, the Audit Committeeand/or Board of Directors may establish guidelines for the Company’s management to follow in its dealings with such related party. Thereafter, the Audit Committeeand/or Board of Directors as applicable, on at least an annual basis, will review and asses the relationship with the related party to determine whether the relationship is in compliance with the Policy and remains appropriate. No director shall participate in any discussion or approval of a


16

transaction for which he or she is a related party, except that this director shall provide all material information concerning the transaction to the Audit Committeeand/or Board of Directors as applicable.
     
Robert K. Montgomery served in fiscal 20072008 as a member of the Board of Directors of the Company. Mr. Montgomery is a partnersenior counsel of the law firm Gibson, Dunn & Crutcher LLP, which has provided legal services to the Company. The Company expects that such law firm will continue to render legal services to the Company.
     
In fiscal 2007,2008, the Company paid approximately $735,000$647,500 to Hedgehog Design, LLC, which provides product design and related services to the Company. Robert Mills, the sole member of Hedgehog Design, LLC, resides with Lori L. Swafford, Vice President of Legal Affairs for the Company.
     
In keeping with the Company’s policy on Related Party Transactions, the Board and the Audit Committee have reviewed and ratified the terms and circumstances of the transactions with Mr. Mills and found them to be properly approved when initiated in 2002; in the best interests of the Company at the time, at present, and going forward; and no more favorable than terms offered and sums paid to similarly situated companies and individuals offering comparable services. As part of the review and ratification process, the product lines designed by Mr. Mills were evaluated for financial and market performance. It was determined that these product lines had and will likely continue to have a favorable impact on the Company’s results.

17

REPORT OF THE AUDIT COMMITTEE
     
The Board of Directors has adopted a written charter for the Audit Committee, which is available on the Company’s website at www.virco.com. The Audit Committee reviews the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the financial statements and the reporting process. The Company’s independent auditors are responsible for expressing an opinion on the conformity of the Company’s audited financial statements with accounting principles generally accepted in the United States.
     
In this context, the Audit Committee has reviewed and discussed the audited financial statements included in the Company’s Annual Report onForm 10-K for the fiscal year ended January 31, 2008,2009, with management and the independent auditors, including their judgment of the quality and appropriateness of accounting principles, the reasonableness of significant judgments and the clarity of the disclosures in the financial statements. In addition, the Audit Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, as amended (Communication with Audit Committees), SEC rules, and other applicable standards. In addition, the Audit Committee has received from the independent auditors the written disclosures pursuant toand letter required by the Independence Standardsapplicable requirements of the Public Company Accounting Oversight Board Standard No. 1 (Independence Discussionsregarding the independent auditor’s communication with the Audit Committees)Committee concerning independence, and has discussed with them their independence from the Company and its management.independent auditors the independent auditors’ independence. The Audit Committee has also considered whether the independent auditors’ provision of non-audit services to the Company is compatible with the auditors’ independence. The Audit Committee also reviewed and discussed with management its report on internal control over financial reporting and the related audit performed by the independent auditors which confirmed the effectiveness of the Company’s internal control over financial reporting.
     
In reliance on the reviews and discussions referred to above, the Audit Committee recommended to the Board of Directors, and the Board has approved, that the audited financial statements be incorporated by reference in the Company’s Annual Report onForm 10-K for the fiscal year ended January 31, 2008,2009, for filing with the Securities and Exchange Commission.
THE AUDIT COMMITTEE OF
THE BOARD OF DIRECTORS
Thomas J. Schulte, Chair
Donald S. Friesz
Albert J. Moyer
Donald A. Patrick


17

     
The report of the Audit Committee of the Board of Directors shall not be deemed incorporated by reference by any general statement incorporating by reference this proxy statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act, except to the extent that the Company specifically incorporates this information by reference, and shall not otherwise be deemed filed under such Acts.
RELATIONSHIP WITH INDEPENDENT AUDITORS
     
Ernst & Young LLP wasaudited the Company’s financial statements for fiscal 2008 and has been selected by the Audit Committee of the Board of Directors to audit the Company’s financial statements for fiscal 2007.2009. The Audit Committee is directly responsible for the engagement of the outside auditor. In making its determination, the Audit Committee reviewed both the audit scope and estimated audit fees for the coming year. Each professional service performed by Ernst & Young LLP during fiscal 20072008 was reviewed, and the possible effect of such service on the independence of the firm was considered, by the Audit Committee. Representatives of Ernst & Young LLP will be present at the Annual Meeting and will have an opportunity to make a statement if they desire to do so and will be available to respond to appropriate questions.

18

     
The Audit Committee has adopted policies and procedures for pre-approving all audit services, audit-related services, tax services and non-audit services performed by Ernst & Young LLP. Specifically, the Audit Committee has pre-approved the use of Ernst & Young LLP for detailed, specific types of services within the following categories: annual audits, quarterly reviews and statutory audits, preparation of certain corporate tax returns, regulatory implementation and compliance and risk assessment guidance. In each case, the Audit Committee has also set specific annual ranges or limits on the amount of each category of services which the Company would obtain from Ernst & Young LLP, which limits and amounts are established periodically by the Audit Committee. Any proposed services exceeding these levels or amounts require specific pre-approval by the Audit Committee. The Audit Committee monitors the performance of all services provided by the independent auditor, to determine whether such services are in compliance with the Company’s pre-approval policies and procedures.
Fees Paid to Ernst & Young LLP
     
The following table shows the fees that the Company paid or accrued for the audit and other services provided by Ernst & Young LLP for fiscal years 20072008 and 2006.2007. All of the services described in the following fee table were approved in conformity with the Audit Committee’s pre-approval process.
         
  2008  2007 
Audit Fees $476,125  $555,000 
Audit -Related Fees  47,000   47,000 
Tax Fees  —   43,745 
All Other Fees  —   — 
       
         
Total $523,125  $645,745 
       
     
         
  2007  2006 
 
Audit Fees $555,000  $578,650 
Audit-Related Fees  47,000   39,000 
Tax Fees  43,745   41,500 
All Other Fees  —   — 
         
         
Total $645,745  $659,150 
         
         
Audit Fees.Audit fees are the aggregate fees for services of the outside auditor for audits of the Company’s annual financial statements, the audit of internal control over financial reporting, including testing and compliance with Section 404 of the Sarbanes-Oxley Act of 2002, and review of the Company’s quarterly financial statements included in the Company’sForms 10-Q, and services that are normally provided by the independent registered public accounting firm in connection with statutory and regulatory filings or engagements for those fiscal years.
     
Audit-Related Fees.Audit-related fees are those fees for services provided by the outside auditor that are reasonably related to the performance of the audit or review of the Company’s financial statements and not included as audit fees. The services for the fees disclosed under this category include the audit of the Company’s 401(k) and Qualified Pension Plans.
     
Tax Fees.Tax fees are those fees for services provided by the outside auditor, primarily in connection with the Company’s tax compliance activities, including technical tax advice related to the preparation of tax returns.


1819

PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
     
The Company’s Audit Committee has selected Ernst & Young LLP, independent auditors, to audit its financial statements for the fiscal year ending January 31, 2009,2010, and recommends that the stockholders vote for ratification of that appointment. The Company’s Audit Committee has reviewed the professional services provided by Ernst & Young LLP, as described above, has considered the possible effect of such services on the independence of the firm, and has determined that such services have not affected Ernst & Young LLP’s independence. Notwithstanding this selection, the Audit Committee, at its discretion, may direct the appointment of new auditors at any time during the fiscal year if the Audit Committee determines that such a change would be in the best interests of the Company and its stockholders. If there is a negative vote on ratification, the Audit Committee will reconsider its selection.
     
The affirmative vote of a majority of the votes cast is required to ratify the Audit Committee’s selection. In addition, the affirmative votes must represent at least a majority of the required quorum. If the stockholders reject the selection, the Board of Directors will reconsider its selection.The Board of Directors unanimously recommends a vote “FOR” the ratification of the appointment of Ernst & Young LLP.
Other Matters
     
Section 16 (a) Beneficial Ownership Reporting Compliance.Section 16(a) of the Securities Exchange Act requires the Company’s officers, directors and persons who beneficially own more than 10% of any equity security of the Company to file reports of beneficial ownership and changes in beneficial ownership with the Securities and Exchange Commission and to furnish copies of these reports to the Company. Based solely on a review of the copies of the forms that the Company received, and other information available to it, to the best of the Company’s knowledge all such reports were timely filed.
     
20092010 Stockholder Proposal.Proposals.If a stockholder wishes to submit a proposal for consideration at the 20092010 Annual Meeting of Stockholders and wants that proposal to appear in the Company’s proxy statement and form of proxy for that meeting, the proposal must be submitted in writing to the Company’s Corporate Secretary at 2027 Harpers Way, Torrance, California 90501, Attention: Robert E. Dose, no later than January 19, 2009.18, 2010 and must comply with all applicable SEC requirements. The submission of a stockholder proposal does not guarantee that it will be included in the Company’s Proxy Statement and form of proxy.
     The Company’s bylaws also establish an advance notice procedure with regard to nominations of persons for election to the Board of Directors and proposals for other business that are not submitted for inclusion in the Proxy Statement and form of proxy but that a stockholder instead wishes to present directly at an Annual Meeting of Stockholders. If a stockholder wishes to submit a proposalnominee or other business for consideration at the 20092010 Annual Meeting of Stockholders without including that nominee or proposal in the Company’s Proxy Statement and form of proxy, the Company’s bylaws require, among other things, that the stockholder tosubmission contain certain information concerning the nominee or other business, as the case may be, and other information specified in the Company’s bylaws, and that the stockholder provide the Company with written notice of such proposalnominee or business no lesslater than 120 days in advance of such meeting,February 16, 2010 provided that, if the meeting2010 Annual Meeting of Stockholders is advanced or delayed more than 40 days from the anniversary date, such nominee or proposal of other business must be submitted no later than the tenthclose of business on the later of the 120th day prior to the 2010 Annual Meeting of Stockholders or the 10th day following the first public announcement of the date of such meeting. Suchmeeting If the number of directors to be elected to the Board of Directors is increased and there is no public announcement specifying the size of increase before February 16, 2010, then a stockholder notice will be considered timely only with respect to nominees for new positions created by such increase if submitted not later than the close of business on the 10th day following the first public announcement of such increase. A stockholder notice should be sent to the Company’s Corporate Secretary at 2027 Harpers Way, Torrance, California 90501.90501, Attention: Robert E. Dose. Proposals or nominations not meeting the advance notice requirements in the Company’s bylaws will not be entertained at the 2010 Annual Meeting of Stockholders. A copy of the full text of the relevant bylaw provisions may be obtained from the Company’s filing with the SEC or by writing our Corporate Secretary at the address identified above.

20

     
Additional Matters Considered at the Annual Meeting.The Board of Directors does not know of any matters to be presented at the Annual Meeting other than as stated herein. If other matters do properly come before the Annual Meeting, the persons named on the accompanying proxy card will vote the proxies in accordance with their judgment in such matters.
     
Availability of Annual Report.The Annual Report to Stockholders of the Company for the fiscal year ended January 31, 2008,2009, is being mailed to stockholders concurrently herewith and is also available online at www.virco.com. The Company will deliver only one Proxy Statement and accompanying Annual Report to multiple stockholders sharing an address unless the Company has received contrary instructions from one or more of the stockholders. The Company will undertake to deliver promptly, upon written or oral request, a separate copy of the Proxy Statement and accompanying Annual Report to a stockholder at a shared address to which a single copy of such documents are delivered. A stockholder can notify the Company that the stockholder wishes to receive a separate copy of the Proxy Statementand/or Annual Report by contacting the Company’s Corporate Secretary at 2027 Harpers Way, Torrance, California 90501 or at(310) 553-0474. Similarly, stockholders sharing an address who are receiving multiple copies of the Proxy Statement and accompanying Annual Report may request delivery of a single copy of the Proxy Statementand/or Annual Report by contacting the Company at the address set forth above or at(310) 533-0474.


19

The Company will also provide without charge a copy of its Annual Report onForm 10-K, including financial statements and related schedules, filed with the Securities and Exchange Commission, upon written or oral request from any person who was holder of record, or who represents in good faith thathe/she was a beneficial owner, of Common Stock of the Company on May 5, 2008.April 24, 2009. Any such request shall be addressed to the Company at 2027 Harpers Way, Torrance, California 90501, Attention: CorporateRobert E. Dose, Secretary or by calling(310) 533-0474.
By Order of the Board of Directors
  
/s/Robert E. Dose
Robert E. Dose
Secretary
Robert E. Dose
Secretary
Torrance, California

May 19, 200818, 2009


2021

()
Please mark
your votes as
indicated in
this example		PROXYTHIS PROXY IS SOLICITED ON BEHALF X 

FORWITHHOLD*EXCEPTIONS
ALLFOR ALL
1. ELECTION OF THE BOARD OF DIRECTORS OFVIRCO MFG. CORPORATIONAnnual MeetingDIRECTORS:
Nominees:ccc
01 Robert A. Virtue
02 Robert K. Montgomery
03 Donald A. Patrick
(INSTRUCTIONS: To specify different instructions with regard to cumulative voting or to withhold authority to vote for any individual nominee, mark the “Exceptions” box above and write your instructions in the space provided below.)
*Exceptions

FOR		AGAINSTABSTAIN
2. Ratification of Stockholders — June 17, 2008The undersigned hereby appoints eachappointment of ROBERT A. VIRTUE, DOUGLAS A. VIRTUE and ROBERT E. DOSE,Independent Auditorsccc
THIS PROXY WILL BE VOTED AS DIRECTED, OR IF NO DIRECTION IS INDICATED, WILL BE VOTED “FOR” THE ELECTION OF ALL OF THE NOMINEES TO THE BOARD OF DIRECTORS, “FOR” PROPOSAL 2, AND “FOR” ANY OTHER BUSINESS THAT MAY PROPERLY COME BEFORE THE ANNUAL MEETING IN THE DISCRETION OF THE HOLDERS OF THE PROXY.
Mark Here for Address
Change or either of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Common Stock of Virco Mfg. Corporation (“the Company”) which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the 2008 Annual Meeting of Stockholders of the Company to be held June 17, 2008 or any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the Annual Meeting.Comments
SEE REVERSE
c


(Continued, and to be marked, dated and signed, on the other side)Signature
SignatureDate
NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.
     
 5  FOLD AND DETACH HERE  5 
WE ENCOURAGE YOU TO TAKE ADVANTAGE OF INTERNET OR TELEPHONE VOTING.
BOTH ARE AVAILABLE 24 HOURS A DAY, 7 DAYS A WEEK.
Internet and Telephone voting are available through 11:59 PM Eastern Time
the day prior to the Annual Meeting day.

VIRCO MFG. CORPORATION









Important notice regarding the Internet availability of proxy materials for the Annual Meeting of stockholders

The Proxy Statement and the 2008 Annual Report to Stockholders are available at:

http://www.virco.com

INTERNET
http://www.proxyvoting.com/virc
Use the Internet to vote your proxy. Have your proxy card in hand when you access the web site.
OR
TELEPHONE 1-866-540-5760
Use any touch-tone telephone to vote your proxy. Have your proxy card in hand when you call.
OR
MAIL
Mark, sign and date your proxy card and return it in the enclosed postage-paid envelope.
If you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.
Your Internet or telephone vote authorizes the named proxies to vote your shares in the same manner as if you marked, signed and returned your proxy card.



50446

THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
VIRCO MFG. CORPORATION

Annual Meeting of Stockholders – June 16, 2009
    The undersigned hereby appoints each of Robert A. Virtue, Douglas A. Virtue and Robert E. Dose, or either of them, with power to act without the other and with power of substitution, as proxies and attorneys-in-fact and hereby authorizes them to represent and vote, as provided on the other side, all the shares of Common Stock of Virco Mfg. Corporation (the “Company”) which the undersigned is entitled to vote, and, in their discretion, to vote upon such other business as may properly come before the 2009 Annual Meeting of Stockholders (the “Annual Meeting”) of the Company to be held June 16, 2009 or at any adjournment or postponement thereof, with all powers which the undersigned would possess if present at the Annual Meeting.

Address Change/Comments (Mark
(Mark the corresponding box on the reverse side)

sFOLD AND DETACH HERE. sYou can now access your VIRCO MFG. CORPORATION stockholder account online.Access your Virco Mfg. Corporation stockholder account online via Investor ServiceDirect® (ISD).Mellon Investor Services LLC, agent for Virco Mfg. Corporation, now makes it easy and convenient to get current information on your stockholder account. After a simple and secure process of establishing a Personal Identification Number (“PIN”), you are ready to log in and access your account to:




BNY MELLON SHAREOWNER SERVICES
P.O. BOX 3550
SOUTH HACKENSACK, NJ 07606-9250
(Continued and to be marked, dated and signed, on the other side)


     
 5  FOLD AND DETACH HERE  5 
You can now access your VIRCO MFG. CORPORATION account online.
Access your Virco Mfg. Corporation stockholder account online via Investor ServiceDirect®(ISD).
The transfer agent for Virco Mfg. Corporation now makes it easy and convenient to get current information on your shareholder account.
• View account status
• View payment history for dividends
• View certificate history
• Make address changes
• View book-entry information
• Obtain a duplicate 1099 tax form
• Establish/change your PINVisit us on the web at http://www.bnymellon.com/shareowner/isd and follow the instructions shown on this page.For Technical Assistance Call 1-877-978-7778 between 9AM-7PM (EST) Monday-FridayInvestor ServiceDirect® is a registered trademark of Mellon Investor Services LLC
Visit us on the web at http://www.bnymellon.com/shareowner/isd
For Technical Assistance Call 1-877-978-7778 between 9am-7pm
Monday-Friday Eastern Time
www.bnymellon.com/shareowner/isd

Investor ServiceDirect®

Available 24 hours per day, 7 days per week
TOLL FREE NUMBER: 1-800-370-1163


ChooseMLinkSM for fast, easy and secure 24/7 online access to your future proxy materials, investment plan statements, tax documents and more. Simply log on toInvestor ServiceDirect®atwww.bnymellon.com/shareowner/isd where step-by-step instructions will prompt you through enrollment.
50446

 

()
Mark Here for Address Change or CommentsSEE REVERSE SIDEThe Board of Directors recommends a vote FOR item 1. The Board of Directors recommends a vote FOR item 2. WITHHELDFORFOR ALLFORAGAINST ABSTAINTHIS PROXY WILL BE VOTED AS DIRECTED,1.Election of Directors2. Ratification of Appointment ofOR IF NO DIRECTION IS INDICATED, WILLNominees:Independent AuditorsBE VOTED “FOR” THE PROPOSALS AND ON 01-Donald S. FrieszANY OTHER BUSINESS THAT MAY PROPRLY02-Glen D. ParishCOME BEFORE THE ANNUAL MEETING IN03-James R. WilburnTHE DISCRETION OF THE HOLDERS OFWithheld for the nominees you list below:THIS PROXY.(Write that nominee’s name in the space provided below.)Signature Signature Date NOTE: Please sign as name appears hereon. Joint owners should each sign. When signing as attorney, executor, administrator, trustee or guardian, please give full title as such.sDetach here from proxy voting cardsVote by Internet or Telephone or Mail24 Hours a Day, 7 Days a WeekInternet and Telephone voting is available through 11:59 PM EST the day prior to Annual Meeting day.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.InternetTelephoneMail http://www.proxyvoting.com/virc1-866-540-5760Mark, sign and date your proxy Use the Internet to vote your proxy. Use any touch-tone telephone to vote card and return it in the enclosed Have your proxy card in hand when your proxy. Have your proxy card in postage-paid envelope. you access the web site.ORhand when you call.ORIf you vote your proxy by Internet or by telephone, you do NOT need to mail back your proxy card.You can view the Annual Report and Proxy Statement on the internet at: http://www.virco.com