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

SCHEDULE 14A

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

 

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Q&A FROM OUR CHAIRMAN AND CHIEF EXECUTIVE OFFICER

Why is the value of your cash and investments so high?

Holding a significant amount of cash and liquid investments helps us in important ways. First, across our business we typically compete against very large competitors with deep pockets for strategic and large contracts. Our cash and liquid investments demonstrate staying power and capability to our potential customers, balancing the perceived risk of doing business with a smaller innovative company like AeroVironment. Second, our long-term growth strategy is to secure market adoption in a number of our strategic growth initiatives. Securing market adoption and positioning us for market leadership depends on our ability to invest decisively and quickly when the opportunity arises. Preserving our cash and liquid investments for this type of deployment positions us for the greatest return on investment for our stockholders.

Why is timing of market adoption so hard to predict?

Predicting market adoption involves predicting the future, which is far from an exact science. Our more than 40 years of innovation has taught us that the timing and rate of market adoption can be influenced by factors beyond our control, such as government regulations and economic conditions, in addition to the core customer perception of increased risk of adopting and funding a totally different solution. As a result, we attempt to manage our investments carefully and strive to avoid investing too early and stranding assets or investing too late and missing the opportunity.

Why are you increasing your investment levels this year?

We manage our core business areas to secure the leading market share and growth in our current business, and concurrently cultivate growth opportunities to create new markets. Our plan to increase investments this fiscal year aims to position three of our growth opportunities for adoption and growth. These three opportunities are Switchblade tactical missile systems, commercial unmanned aircraft systems or UAS and Global Observer, a high altitude, long endurance unmanned aircraft system. We manage these investments carefully based on market data.

Are you transitioning away from being a defense contractor to a more commercial business?

We view ourselves as a technology solutions provider whose largest market is currently the global defense industry. We continue to see growth opportunities among allied military forces and within the U.S. Department of Defense, and with FAA airspace regulations expected to change next year, we anticipate a growing opportunity for our small UAS solutions in domestic and international commercial markets. Our Efficient Energy Systems or EES business remains focused primarily on commercial markets. The common thread in our two business segments is the development of innovative technology-based solutions that help customers succeed.

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You serve as both Chairman and Chief Executive Officer of the Company. What steps are taken to ensure independent oversight at the board level?

Our board of directors leadership structure provides independent oversight. A combined Chairman of the Board and Chief Executive Officer is only one element of our leadership structure. It also includes a Lead Independent Director, and active and strong non-employee directors and board committees led by independent directors. This structure has been effective and the board regularly reviews this and other governance issues and believes it currently serves the business and stockholders well. The board has the discretion to change this leadership structure if doing so will better serve stockholders.

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AEROVIRONMENT, INC.

NOTICE OF 2014 ANNUAL MEETING OF STOCKHOLDERS

Dear Stockholders,

We are pleased to invite you to join to the board of directors and executive team of AeroVironment, Inc. (the "company") at our 2014 annual meeting of stockholders. Important information relating to the annual meeting is detailed below:

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YOUR VOTE IS IMPORTANT

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON OCTOBER 17, 2014

This notice, the accompanying proxy statement, and our 2014 annual report to stockholders, which
includes our annual report on Form 10-K for the fiscal year ended April 30, 2014, are available on our
website at http://investor.avinc.com.

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   PROXY SUMMARY   

PROXY SUMMARY

This proxy statement is furnished to our stockholders in connection with the solicitation of proxies by the board of directors of AeroVironment, Inc. for our 2014 annual meeting of stockholders to be held on Friday, October 17, 2014, and any adjournments or postponements thereof, for the purposes set forth in the attached notice of annual meeting of stockholders. Our principal executive offices are located at 181 W. Huntington Dr., Suite 202, Monrovia, California 91016. Enclosed with this proxy statement is a copy of our 2014 annual report, which includes our Form 10-K (without exhibits) for the fiscal year ended April 30, 2014. However, the 2014 annual report is not intended to be a part of this proxy statement or a solicitation of proxies.

This summary highlights information contained elsewhere in this proxy statement. This summary does not contain all of the information that you should consider and you should read the entire proxy statement before voting. For more complete information regarding the company's 2014 performance, please review our annual report on Form 10-K for the fiscal year ended April 30, 2014. This proxy statement and the accompanying proxy card are first being distributed to stockholders on or about September 10, 2014.

VOTING AND MEETING INFORMATION

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It is important that you vote in order to impact the future of the company. Please carefully review the proxy materials for the 2014 annual meeting of stockholders, which will be held on Friday, October 17, 2014, at 10:00 a.m. local time, at the Grand Ballroom of the Courtyard by Marriott in Monrovia, 700 West Huntington Drive, Monrovia, CA 91016, and follow the instructions below to cast your vote on all of the voting matters.

Who is Eligible to Vote

You are entitled to vote at the 2014 annual meeting of stockholders if you were a stockholder of record at the close of business on August 25, 2014, the record date of the meeting. On the record date, there were 23,356,556 shares of common stock issued and outstanding and entitled to vote at the annual meeting. The holders of our common stock are entitled to one vote per share on any proposal presented at the annual meeting. We have no other voting securities outstanding.

Voting in Advance of the Meeting

Even if you plan to attend the 2014 annual meeting of stockholders in person, please vote right away using one of the following advance voting methods (see page 62 for additional details). Make sure to have your proxy card or voting instruction form in hand and follow the instructions.

You can vote in advance in one of three ways:

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   PROXY SUMMARY   

Attending and Voting at the Annual Meeting

All stockholders of record may vote in person at the 2014 annual meeting of stockholders. Beneficial owners may vote in person at the meeting if they have a legal proxy, as described on page 64.

Important Note about Meeting Admission Requirements: If you plan to attend the meeting in person, you should review the important details on admission requirements on page 63.

Electronic Document Delivery

Instead of receiving future copies of our notice of annual meeting, proxy statement and the annual report on Form 10-K by mail, stockholders of record and most beneficial owners can elect to receive an email that will provide electronic links to these documents. Opting to receive our proxy materials online will save us the cost of producing and mailing documents and also will give you an electronic link to the proxy voting site.

Roadmap of Voting Matters

Stockholders are being asked to vote on the following matters at the 2014 annual meeting of stockholders:

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   PROXY SUMMARY  

QUESTIONS AND ANSWERS (PAGE 62)

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Please see the Questions and Answers section beginning on page 62 for important information about the proxy materials, voting, the annual meeting, company documents, communications and the deadlines to submit stockholder proposals for the 2015 annual meeting of stockholders. Additional questions may be directed to Investor Relations at 626 357-9983 X4245 or investorrelations@avinc.com.

GOVERNANCE – BOARD OF DIRECTORS AND COMMITTEES (PAGE 19)

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The company is committed to good corporate governance, which promotes the long-term interests of stockholders, strengthens board and management accountability and helps build public trust in the company. Highlights of our governance practices include:

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High proportion of independent directors (5 of 7)

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Director resignations required from directors elected by less than a majority of votes cast

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Lead Independent Director

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Independent Audit, Compensation and Nominating and Corporate Governance Committees

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Regular executive sessions of independent directors

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Regular board and committee self-evaluations

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Active stockholder engagement

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Anti-hedging and anti-short sale policies

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Executive compensation driven by pay-for-performance philosophy

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Share ownership guidelines and share retention policy for executives and directors

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Compensation recovery policy for executives

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   PROXY SUMMARY   

DIRECTOR NOMINEES AND OTHER DIRECTORS (PAGES 12-18)

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   PROXY SUMMARY  

FY2014 COMPENSATION (PAGE 34)

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Set forth below is the compensation of each Named Executive Officer as determined under the rules of the Securities and Exchange Commission, or the SEC, for the fiscal year ended April 30, 2014. The complete Summary Compensation Table containing the compensation of our Named Executive Officers for fiscal years 2012, 2013 and 2014, including footnotes with important disclosures and detail, appears on page 49. This summary table is not complete and you should read the Summary Compensation Table and the Executive Compensation and Other Information section in its entirey for complete information on the compensation paid to our Named Executive Officers.

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Election Process and Voting Standard

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There are no limits on the number of terms a director may serve because term limits may cause the loss of experience and expertise important to the optimal operation of our board of directors. However, to ensure that the board remains composed of high-functioning members able to keep their commitments to board service, the Nominating and Corporate Governance Committee evaluates the qualifications and considers

the performance of each incumbent director before recommending the nomination of that director for an additional term. Our Corporate Governance Guidelines provide that, in an election of directors where the number of nominees does not exceed the number of directors to be elected, each director must receive a majority of the votes cast with respect to that director. If a director is not elected by a majority of votes cast,

he or she has agreed to submit a letter of resignation to the board of directors. The Nominating and Corporate Governance Committee will make a recommendation to the board on whether to accept or reject the resignation, or whether other action should be taken. The board will act on the resignation taking into account the recommendation of the Nominating and Corporate Governance Committee and publicly disclose its decision and rationale within 100 days of the certification of the election results. The director who tenders the resignation will not participate in the decisions of the Nominating and Corporate

Governance Committee or the board that concern the resignation.

In addition, pursuant to our Corporate Governance Guidelines, a director whose job responsibilities change may be asked to submit a letter of resignation to the board. The board may request such a resignation letter if continuing service on the board by the individual is not consistent with the criteria deemed necessary for continuing service on the board.

The Nominating and Corporate Governance Committee is responsible for identifying and evaluating nominees for director and for recommending to the board a slate of nominees for the class of directors to be elected at each annual meeting of stockholders. Nominees may be suggested by directors, members of management or stockholders.

Stockholders who would like to have their recommendations for nominees for directors be considered by the Nominating and Corporate

Governance Committee should submit their recommendations in writing by mail to the Nominating and Corporate Governance Committee in care of the Office of the Corporate Secretary, AeroVironment, Inc., 181 W. Huntington Drive, Suite 202, Monrovia, California 91016 or by email to corporatesecretary@avinc.com. Recommendations by stockholders that are made in accordance with these procedures will receive the same consideration as other nominees.

DIRECTOR QUALIFICATIONS

Directors are responsible for overseeing the company's business consistent with their fiduciary duty to stockholders. This significant responsibility requires highly skilled individuals with various qualities, attributes and professional experience. The board believes that there are general requirements that are applicable to all directors and others skills and experience that only need to be represented on the

board as a whole, but not necessarily possessed by each director. The board and the Nominating and Corporate Governance Committee consider the qualifications of directors and director candidates individually and in the broader context of the board's overall composition and the company's current and future needs.

In its assessment of each potential director nominee, the Nominating and Corporate Governance Committee considers the nominee's judgment, integrity, experience, independence, understanding of the company's business or related industries and such other factors as the Nominating and Corporate Governance Committee determines are pertinent in light of the current needs of the board. The Nominating and Corporate Governance Committee also takes into account the ability of a potential nominee to devote the time and effort necessary to fulfill the responsibilities of a director to the company. The board and the Nominating and Corporate Governance Committee require that each director be a recognized person of high integrity, ethics and values, have a proven record of success and demonstrate respect for corporate governance requirements and practices. Each director must also demonstrate innovative thinking and an entrepreneurial spirit; these qualities are essential to the board's ability to maintain the company's culture of innovation. In addition, the board conducts interviews of potential director candidates to assess intangible qualities, including the individual's ability to ask difficult questions while maintaining collegiality.

Specific Qualifications, Attributes, Skills and Experience to be Represented on the Board

The board has identified particular qualifications, attributes, skills and experience that are important to be represented on the board as a whole, in light of the company's current needs and the business priorities. The following bullets summarize important qualifications, attributes, skills and experience that the board believes should be represented on the board:

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experience as chief executive officer, president or executive management of a public or large private company;

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extensive knowledge of the company's business;

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aerospace and defense industry expertise;

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alternative energy, automotive or other relevant industry expertise;

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global and international experience;

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strategic development experience, including mergers, acquisitions and other strategic transactions;

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diversity of expertise and experience, including substantive matters pertaining to our business; and

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high level of financial literacy and experience.

2014 NOMINEES FOR CLASS II DIRECTORS

The board and the Nominating and Corporate Governance Committee believe that the combination of the various qualifications, skills and experience of the director nominees would contribute to an effective and well-functioning board. They also believe that the combination of the various qualifications, skills and experiences of the director nominees individually, and when combined with the other directors, will create a board possessing the necessary qualifications to provide effective oversight of the business and

strategic advice and counsel to the company's management.

Included in the biographies of the director nominees and the other directors below is an assessment of the specific qualifications, attributes, skills and experiences that such director nominees and the other members of the board provide to the board of directors and the company.

SUMMARY OF DIRECTOR NOMINEES

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The following information and graphics summarizes the qualifications of the nominees for Class II director and the other members of the board. Based on a careful assessment, the Nominating and Corporate Governance Committee and the board concluded that each nominee is qualified to serve as a director and that the collective board including the nominees for election possess the necessary qualifications, attributes, skills and experience to provide effective oversight of the business and provide strategic advice and counsel to the company's management.

All nominees and other directors exhibit:

Our director nominees and other directors bring a balance of important skills to our boardroom

The fact that an item is not highlighted for a director does not mean that the director does not possess that qualification, attribute, skill or experience.

The company's governance framework provides the board with flexibility to select the appropriate leadership structure for the company. In making leadership structure determinations, the board considers many factors including the specific needs of the business and what is in the best interests of the company's stockholders. The current leadership structure is comprised of a combined Chairman of the Board and Chief Executive Officer, an independent director serving as Lead Independent Director and strong, active independent directors. The board believes this structure provides an effective balance between strong company leadership and appropriate safeguards and oversight by independent directors.

Board Leadership Structure:

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Chairman of the Board and Chief Executive Officer: Timothy E. Conver

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Lead Independent Director: Stephen F. Page

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Committees led by independent directors

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Active engagement by all directors

The board believes this is the optimal structure to guide the company and maintain the focus required to achieve the business goals. The Chairman of the Board presides over meetings of the board, presides over meetings of stockholders and consults and advises the board and its committees on the business and affairs of the company, and performs such other duties as may be assigned by the board. The Chief Executive Officer is in general charge of the affairs of the company and its committees and subject to the powers reserved to the board.

The Lead Independent Director has the following role and responsibilities:

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presides at all meetings of the board or stockholders at which the Chairman of the Board is not present;

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serves as a liaison on board-related issues between the Chairman of the Board and the independent directors;

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reviews and provides input to the Chairman of the Board regarding the nature, scope and timeliness of information that management provides to the board;

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reviews and provides input to the Chairman of the Board regarding the agendas for board meetings and the annual schedule of board meetings;

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approves meeting schedules to help ensure that sufficient time is allocated for discussion of agenda items;

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presides at meetings of the independent directors and apprises the Chairman of the Board of the issues discussed, as appropriate; and

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performs such other duties as the board may from time to time delegate.

Each year, the board designates an independent director to serve as the Lead Independent Director on the board. The designation of a Lead Independent Director is for a one-year term and a Lead Independent Director may be eligible for re-election at the end of that term. Designation as such does not impose on the Lead Independent Director any obligation or standard greater than or different from those of the company's other directors.

Importantly, all directors play an active role in overseeing the company's business both at the board and committee levels. The 2014 director nominees consist of two Class II director nominees, both of whom are independent directors, with substantial experience as chief executive officer or chief financial officer of public companies in industries related to the company's business and as directors of major public companies.

As set forth in the company's Corporate Governance Guidelines, regularly scheduled executive sessions are held at least twice per year and at least one executive session of independent directors is held per year. These meetings allow non-employee directors to discuss issues of importance to the company, including the business and affairs of the company, as well as matters concerning management, without any member of management present. In addition, the independent directors meet in executive session several times a year at regularly scheduled board meetings. Independent directors chair all of the board committees, which are described below.

The board believes that this leadership structure – a combined Chairman of the Board and Chief Executive Officer, a Lead Independent Director, active and strong non-employee directors and committees led by independent directors – is effective and currently serves the business and our stockholders well. It provides a single leader who is understood by our employees, customers, business partners and stockholders as providing strong leadership for the company. It enhances our ability and agility to manage resources and provides the focus required to implement our complex business strategy in fast-moving and emerging markets. In addition, the board believes that Mr. Conver's interest as a significant stockholder is strongly aligned with his fiduciary duty as a director and Chairman of the Board.

Role in Risk Oversight

Our board of directors is responsible for overseeing our risk management. The board delegates many of these functions to the Audit Committee. Under its charter, the Audit Committee is responsible for discussing with management the company's policies with respect to risk assessment and risk management. The committee is chartered to discuss with management our significant risk exposures and the actions management has taken to limit, monitor or control such exposures. In addition to the Audit Committee's work in overseeing risk management, our full board engages in discussions of the most significant risks that we face and how these risks are being managed.

Board Meetings

Under the company's bylaws, regular meetings of the board are held at such times as the board may determine. Special meetings of the board may be called by the Chairman of the Board or the President on 48 hours' notice to each director or by the President or the Corporate Secretary after receiving a written request of two directors on 48 hours' notice.

Board Committees

The board has an Audit Committee, a Compensation Committee, a Nominating and Corporate Governance Committee and an Executive Committee. The board has adopted a written charter for each of these committees which is available on the company's

website www.avinc.com by clicking on "Investors" and then "Corporate Governance." All of the members of each of these standing committees other than the Executive Committee meet the criteria for independence prescribed by the SEC and Nasdaq. The information contained on our website is not incorporated by reference into, and does not form a part of, this proxy statement. Our board of directors may establish other committees to facilitate the management of our business. Additional information about the committees is provided below.

Audit Committee

The board has determined that Mr. Alibrandi, Mr. Muller and Mr. Page all qualify as audit committee financial experts as defined by the rules of the SEC. Our Audit Committee's main function is to oversee our accounting and financial reporting processes, internal systems of control, independent registered public accounting firm relationships and the audits of our financial statements. This committee's responsibilities include:

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selecting and hiring our independent registered public accounting firm;

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evaluating the qualifications, independence and performance of our independent registered public accounting firm;

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reviewing and approving the audit and non-audit services to be performed by our independent registered public accounting firm;

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reviewing the design, adequacy, implementation and effectiveness of our internal controls established for finance, accounting, legal compliance and ethics;

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reviewing the design, adequacy, implementation and effectiveness of our critical accounting and financial policies;

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overseeing and monitoring the integrity of our financial statements and our compliance with legal and regulatory requirements as they relate to financial statements or accounting matters;

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reviewing with management and our independent registered public accounting firm our annual and quarterly financial statements;

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reviewing with management and our independent registered public accounting firm any earnings announcements or other public announcements concerning our operating results;

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establishing procedures for the receipt, retention and treatment of complaints (including procedures for receiving and handling complaints on a confidential and anonymous basis) regarding accounting, internal accounting controls or auditing matters, including employee concerns regarding questionable accounting or auditing matters;

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preparing the audit committee report that the SEC requires in our annual proxy statements; and

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reviewing and approving any related party transactions.

The Code of Business Conduct and Ethics, or code of conduct, is our code of ethics for directors, executive officers and employees. Any amendment to the code of conduct that applies to our directors or executive officers may be made only by the board or a board committee and will be disclosed on our website. The code of conduct is available at http://investor.avinc.com. The Audit Committee charter and the code of conduct are also available in print to any stockholder who requests them.

Compensation Committee

Our Compensation Committee's purpose is to assist our board of directors in determining the development plans and compensation for our senior management and the compensation to be paid to directors for board and committee service. The Compensation Committee of our board is comprised of three independent directors. The Compensation Committee's responsibilities with respect to executive compensation are:

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to review our compensation philosophy;

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to review and recommend to the board corporate goals and objectives relating to the compensation of our Chief Executive Officer, evaluate the performance of our Chief Executive Officer in light of those goals and objectives and review and recommend to the board the compensation of our Chief Executive Officer (unless such decisions require approval by our

Compensation Committee to the extent such compensation is intended to be qualified performance-based compensation for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended, or the Code);

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to review and approve all compensation of our executive officers and all other officers subject to the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act;

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to review all executive officers' employment agreements and severance arrangements;

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to review all annual bonus, long-term incentive compensation, stock option, employee pension and welfare benefit plans;

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to review and approve the Compensation Discussion and Analysis contained in this proxy statement; and

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to review and approve executive officer indemnification and insurance matters.

In addition, the Compensation Committee is responsible for the general administration of all executive compensation plans, including:

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setting performance goals for our executive officers and reviewing their performance against these goals;

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approving all amendments to, and terminations of, all compensation plans and any awards under such plans;

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granting awards under any performance-based annual bonus, long-term incentive compensation and equity compensation plans to executive officers; and

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making recommendations to the board with respect to awards for directors under our equity incentive plans.

In addition, the Compensation Committee has the sole authority, in accordance with applicable securities laws, rules and regulations and Nasdaq listing standards, to retain and/or replace, as needed, any independent counsel, compensation and benefits consultants and other outside experts or advisors as the Compensation Committee believes to be necessary or appropriate. The Compensation Committee is responsible for the appointment, compensation and oversight of the work of any compensation advisors retained by the Compensation Committee. Subject to any exceptions under the Nasdaq listing standards, prior to selection and engagement of any compensation advisor, the

Compensation Committee will undertake an analysis of the independence of each such compensation advisor under the independence factors specified in the applicable requirements of the Exchange Act and the Nasdaq listing standards. The company will provide for appropriate funding, as determined by the Compensation Committee in its sole discretion, for payment of compensation to any compensation advisors retained by the Compensation Committee.

Compensation Committee Interlocks and Insider Participation

The current members of our Compensation Committee are Arnold L. Fishman, Charles Thomas Burbage, and Edward R. Muller. During fiscal year 2014 until October 4, 2013, the date of the 2013 annual meeting of stockholders, Kenneth R. Baker and Murray Gell-Mann served as members of the Compensation Committee. None of the current or proposed members of our Compensation Committee at any time has been one of our executive officers or employees. None of our executive officers currently serves, or in the past year has served, as a member of the board of directors or Compensation Committee of any entity that has one or more executive officers serving on our board of directors or Compensation Committee.

Nominating and Corporate Governance Committee

Our Nominating and Corporate Governance Committee's purpose is to assist our board by identifying individuals qualified to become members of our board of directors, consistent with criteria set by our board, and to develop our corporate governance principles. This committee's responsibilities include:

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evaluating the composition, size and governance of our board of directors and its committees and making recommendations regarding future planning and the appointment of directors to our committees;

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administering a policy for considering stockholder nominees for election to our board of directors;

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evaluating and recommending candidates for election to our board of directors;

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overseeing our board of directors' performance and self-evaluation process; and

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reviewing our corporate governance principles and providing recommendations to the board regarding possible changes.

Our board of directors believes that it should be composed of directors with varied, complementary backgrounds and that directors should, at a minimum, have expertise that may be useful to the company. Directors should also possess the highest personal and professional ethics and should be willing and able to devote the required amount of time to our business.

When evaluating director candidates, the Nominating and Corporate Governance Committee takes into account the degree to which a candidate fulfills the criteria contained in the Corporate Governance Guidelines and other factors consistent with those guidelines, including the following:

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independence from management;

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personal and professional integrity, ethics and values;

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practical and mature business judgment;

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experience as Chief Executive Officer, President or General Manager of a public or large private company;

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extensive knowledge of the company's business or experience in one or more industries in which we compete, including aerospace and defense, alternative energy, automotive or industrials;

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global and international experience;

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strategic development activities, including mergers and acquisitions and partnerships;

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experience in marketing, engineering, technology and innovation, operations, supply chain and manufacturing, and legal;

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a high degree of financial literacy;

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experience as a board member of another publicly-held company; and

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diversity of expertise and experience in substantive matters pertaining to our business relative to other board members.

The Nominating and Corporate Governance Committee will consider candidates for director suggested by stockholders applying the criteria for candidates described above and considering the additional information referred to below. Stockholders wishing to suggest a candidate for director should write to the Corporate Secretary and include:

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a statement that the writer is a stockholder and is proposing a candidate for consideration by the committee;

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the name of and contact information for the candidate;

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a statement detailing any relationship between the candidate and any of our customers, suppliers or competitors;

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with respect to each of the proposing stockholder and the candidate, the class and number of shares of our capital stock which are, directly or indirectly, owned beneficially or of record;

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with respect to each of the proposing stockholder and the candidate, any derivative, swap or other transaction, or series of transactions, the purpose or effect of which is to give such party economic risk similar to ownership of shares of our capital stock;

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with respect to each of the proposing stockholder and the candidate, any proxy, agreement, arrangement, understanding or relationship that confers a right to vote any of our shares of capital stock;

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with respect to each of the proposing stockholder and the candidate, any agreement, arrangement, understanding or relationship engaged in, directly or indirectly, to reduce the level of risk of loss to, or increase or decrease the voting power of, such party with respect to our shares of capital stock, or which provides, directly or indirectly, the opportunity to profit from any decrease in the price or value of our shares of capital stock;

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with respect to each of the proposing stockholder and the candidate, any rights to dividends on any of our shares of capital stock owned beneficially by such party that are separated from our underlying shares of capital stock;

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with respect to each of the proposing stockholder and the candidate, opportunity to profit from, or any performance-related fees such party is entitled to based on the increase or decrease in the value of any of our shares of capital stock;

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all information relating to the proposing stockholder and the candidate that is required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies or consents for election of directors in a contested election pursuant to Section 14 of the Exchange Act (including such candidate's written consent to being named in the proxy statement as a nominee and to serving as a director if elected);

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a description of all direct and indirect compensation and other material monetary agreements,

arrangements and understandings during the past three years, and any other material relationships, between or among the proposing stockholder, on the one hand, and the candidate, his or her respective affiliates and associates, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Item 404 under Regulation S-K promulgated under the Exchange Act if such proposing stockholder were the "registrant" for purposes of such rule and the candidate were a director or executive officer of such registrant; and

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a completed and signed questionnaire, representation and agreement with respect to the candidate's background, any voting commitments or compensation arrangements and the candidate's commitment to abide by our corporate governance guidelines.

In addition, we may require any candidate to furnish such other information as may reasonably be required by us to determine the eligibility of such candidate to serve as an independent director in accordance with our Corporate Governance Guidelines or that could be material to a reasonable stockholder's understanding of the independence or lack of independence of such candidate.

Before nominating a sitting director for re-election at an annual meeting, the Nominating and Corporate Governance Committee will consider:

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the director's performance on the board of directors; and

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whether the director's re-election would be consistent with our governance guidelines.

Executive Committee

Our Executive Committee's purpose is to exercise the powers of the board of directors when the board is not in session, subject to specific restrictions as to powers retained by the full board of directors or delegated to other committees of the board of directors. Powers retained by the full board of directors include those relating to amendments to our certificate of incorporation and bylaws, mergers, consolidations and sales or exchanges involving substantially all of our assets.

Board Self-Evaluations

The board of directors conducts annual self-evaluations to assess the qualifications, attributes, skills and experience represented on the board and to determine whether the board and its committees are functioning effectively. During the year, the Nominating and Corporate Governance Committee receives input on the board and committee performance from directors and discusses the input with the full board. The self-assessment focuses on the board's contribution to the company and on areas in which the board believes that the board or any of its committees could improve.

Communication with the Board

The board has established a process to facilitate communication with stockholders and other interested parties. Communications can be addressed to the directors in care of the Corporate Secretary, 181 W. Huntington Drive, Suite 202, Monrovia, California 91016 or by email to corporatesecretary@avinc.com.

At the direction of the board, all mail received may be opened and screened for security purposes. The board of direcors has requested that certain items that are unrelated to the duties and responsibilities of the board of directors should be excluded, including the following: junk mail and mass mailings; product complaints; product inquiries; new product suggestions; resumes and other forms of job inquiries; surveys; and business solicitations or advertisements. In addition, material that is unduly hostile, threatening, illegal or similarly unsuitable will not be distributed, with the provision that any communication that is not distributed will be made available to any independent director upon request. Maill addressed to a particular director will be forwarded or delivered to that director. Mail addressed to "outside directors" or "non-empoyee directors" will be forwarded or delivered to the Lead Independent Director. Mail addressed to the "board of directors" will be forwarded or delivered to the Chairman of the Board.

DIRECTOR COMPENSATION

Compensation of Non-Employee Directors

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The general policy of our board of directors is that compensation for non-employee directors should be a mix of cash and equity-based compensation. We do not pay management directors for board service in addition to their regular employee compensation. Our Compensation Committee, which consists solely of independent directors, has the primary responsibility for reviewing and considering any revisions to director compensation. The board of directors reviews the Compensation Committee's recommendations and determines the amount of director compensation.

The Compensation Committee's independent compensation consultant, Compensia, Inc., a national compensation consulting firm, assisted the board of

directors in setting director compensation and revising our director compensation programs. In June 2014, Compensia provided recommendations regarding revisions to our director compensation programs based on director compensation data compiled from the annual reports and proxy statements of companies generally considered comparable to us as determined by the Compensation Committee. The fiscal year 2015 peer group consisted of the companies listed below. The peer companies had a median twelve month trailing revenue of $475 million versus our trailing twelve month revenue of $232 million and a median market capitalization of $825 million versus our market capitalization of $935 million, as calculated by Compensia in February 2014.

After reviewing the peer group compensation data, our board of directors established, effective May 1, 2014, the various components of director compensation with the goal of ensuring that the program was generally competitive with peer practices. This process resulted in setting the value of the annual equity compensation provided to non-employee directors at $110,000, as

further described below, commencing in fiscal year 2015. The retainer for the Compensation Committee Chair and the Nominating and Corporate Governance Chair were increased to $10,000 and $8,000, respectively, up from the 2013 levels of $8,000 and $5,000, respectively. The other cash retainers remain at the levels in effect for fiscal year 2014.

Annual retainer amounts are paid in four equal annual installments at the beginning of each of our fiscal quarters if the individual is still serving as a director at such time.

We also reimburse non-employee directors for out-of-pocket expenses incurred in connection with attending board or committee meetings.

Our current practice is to consider granting each newly elected or appointed non-employee director equity awards upon their initial election or appointment to the board of directors and annually, as recommended by our Compensation Committee. Under the policy in effect for fiscal year 2014, new non-employee directors were able to choose the form in which they received

their new director equity award from the following choices: (1) options to purchase 35,000 shares of the company's common stock, or (2) options to purchase 25,000 shares of common stock plus restricted stock awards representing 7,500 shares. Our non-employee directors did not receive annual grants during fiscal year 2014. Effective for fiscal year 2015, our board of directors adopted a policy whereby newly elected or appointed non-employee directors will be granted restricted stock awards with an aggregate value of $170,000 on the date of grant (measured by the fair market value per share of our common stock subject to the awards on the date of grant). In

addition, at its June 2014 meeting, the board of directors approved annual restricted stock awards of $110,000 to each non-employee director, which grants were made effective July 11, 2014. The $110,000 value was determined by the board of directors to be competitive with non-employee director annual equity awards at comparable companies based on the Compensia benchmarking data described above. All of the equity awards granted to non-employee directors vest in five equal installments, beginning on the first anniversary of the date of grant, and vesting will accelerate upon the director's death or disability.

1

The value of the equity awards equals their grant date fair value as computed in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, Topic 718 with respect to options and restricted stock awarded to directors during fiscal year 2014. For additional information regarding the valuation assumptions used in the calculation of these amounts, refer to Note 11 to the financial statements included in our annual report on Form 10-K for our 2014 fiscal year, as filed with the SEC.

2

Consists of consulting fees received by Mr. Holland. See "Certain Transactions and Relationships" below for a full description of Mr. Holland's consulting relationship.

3

Dr. Gell-Mann and Mr. Baker both retired as directors at the end of their terms and did not stand for re-election at the 2013 annual meeting on October 4, 2013. Dr. Gell-Mann and Mr. Baker did not hold any outstanding equity awards as of April 30, 2014.

1

Dr. Gell-Mann and Mr. Baker both retired as directors at the end of their terms and did not stand for re-election at the 2013 annual meeting on October 4, 2013.

2

Mr. Burbage and Mr. Muller were both elected to the board of directors at the 2013 annual meeting on October 4, 2013 and only received 50% of the $45,000 annual retainer.

Stock Ownership Guidelines for Non-Employee Directors

In August 2013, our board of directors adopted stock ownership guidelines for our non-employee directors. Under the guidelines, each non-employee director is expected to, within five years of the later of August 6, 2013, or the date on which such person is appointed to the board, own shares of the company's common stock with a market value of no less than three times his or her current annual cash retainer for serving as a

member of the board of directors, exclusive of chairperson, committee or meeting fees. Any shares of our common stock held by a member of our board of directors in margin accounts or pledged as collateral for a loan will not be considered for purposes of satisfying the ownership guidelines described above. The table below shows each non-employee director's equity ownership in the company as a multiple of his or her cash retainer and the minimum ownership level required pursuant to these guidelines for each of our non-employee directors as of July 31, 2014:

1

For each non-employee director, calculated by dividing (a) the sum of (1) the aggregate number of shares of vested and unrestricted common stock held by such non-employee director, multiplied by the closing price of $31.49 per share of our common stock on July 31, 2014, plus (2) the amount by which the market value of the shares of common stock underlying vested stock options held by such non-employee exceeds the exercise price of such stock options, if any, by (b) the annual retainer paid to such non-employee director (excluding any annual cash retainer for committee membership or chairmanship or service as lead independent director).

2

Mr. Muller has until October 4, 2018 to satisfy the minimum ownership level required under the stock ownership guidelines for non-employee directors.

Post-Vesting Stock Retention Guidelines

The company has adopted post-vesting stock retention guidelines, which require non-employee directors to hold 50% of net after-tax shares issued upon the vesting of equity awards until their required stock ownership levels are achieved.

Insider Trading and Anti-Hedging Policies

The company's insider trading policies contain stringent restrictions on transactions in company stock by non-employee directors. All trades by non-employee

directors must be pre-cleared. Furthermore, no member of our board of directors may use any strategies or products (including derivative securities, such as put or call options, or short-selling techniques) to hedge against potential changes in the value of our common stock.

Stock ownership and retention guidelines and anti-hedging policies for our executive officers, including Mr. Conver, are described below under "Executive Compensation and Other Information – Compensation Discussion and Analysis – Stock Ownership Guidelines for Executive Officers."

Under the listing standards of The NASDAQ Stock Market LLC, or Nasdaq, and the company's Corporate Governance Guidelines, the board must consist of a majority of independent directors. In making independence determinations, the board observes Nasdaq and SEC criteria and considers all relevant facts and circumstances. Under Nasdaq listing standards, to be considered independent a director must be a person other than an executive officer or employee of the company or any other individual having a relationship which, in the opinion of the company's board, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

In evaluating director independence, the board took into consideration the consulting agreement currently in place between the company and one of our directors, General (Retired) Charles R. Holland. Pursuant to this agreement, as amended as of January 1, 2013, Mr. Holland performs consulting services for us on a general basis and with respect to particular individual projects assigned by us. During the fiscal year ended April 30, 2014, we paid to Mr. Holland approximately $96,000 in consulting fees pursuant to the terms of this agreement.

Review and Approval of Related Party Transactions.    All transactions and relationships in which the company and our directors, director nominees and executive officers or their immediate family members are participants are reviewed by our Audit Committee or another independent body of the board of directors, such as the independent and disinterested members of the board. As set forth in the Audit Committee charter, the members of the Audit Committee, all of whom are independent directors, review and approve related party transactions for which such approval is required under applicable law, including SEC and Nasdaq rules. In the course of its review and approval or ratification of a disclosable related party transaction, the Audit Committee or the independent and disinterested members of the board may consider:

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the nature of the related person's interest in the transaction;

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the material terms of the transaction, including, without limitation, the amount and type of transaction;

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the importance of the transaction to the related person;

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the importance of the transaction to the company;

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whether the transaction would impair the judgment of a director or executive officer to act in the best interest of the company; and

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any other matters the Audit Committee deems appropriate.

Reportable Related Party Transactions.    Other than the employment arrangements described elsewhere in this proxy statement and the transactions described below, since May 1, 2013, there has not been, nor is there currently proposed, any transaction or series of similar transactions to which we were or will be a party in which:

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the amount involved exceeded or will exceed $120,000; and

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a director, director nominee, executive officer, holder of five percent or more of any class of our capital stock or any member of his or her immediate family had or will have a direct or indirect material interest.

1

The background and experience of Chairman of the Board and Chief Executive Officer Conver is detailed on page 14.

Jikun Kim was appointed as Senior Vice President and Chief Financial Officer in 2010. Prior to assuming his current role, Mr. Kim served as Interim Chief Financial Officer after joining the company as Vice President and Controller in June 2009. Mr. Kim previously served with Raytheon Company, a defense contractor, for more than eight years, most recently as Chief Financial Officer of Raytheon Vision Systems. Raytheon Vision Systems is a world leader in infrared detector technology focused on design and manufacturing infrared detectors for space, tactical and airborne infrared sensors. Mr. Kim received an M.B.A. from Columbia Business School, an M.S. in electrical engineering from the University of California at Los Angeles and a B.S. in electrical engineering from the University of California at Berkeley.

Roy Minson was appointed as Senior Vice President and General Manager, Unmanned Aircraft Systems, in May 2012, and previously served as Vice President of Business Development and Deputy General Manager, Unmanned Aircraft Systems, since April 2010. Prior to joining the company, Mr. Minson served as Vice President and Operations Manager for a research and development business within the Tactical Systems and Solutions division of SAIC Inc., a defense contractor, for five years, where he was responsible for transitioning products and solutions. Mr. Minson received a B.S. in industrial technology from Southern Illinois University, Carbondale, and an M.B.A. from University of Redlands.

Wahid Nawabi has served as Senior Vice President and General Manager, Efficient Energy Systems since December 2011. Prior to joining the company, Mr. Nawabi served as Vice President, Global Sales of Altergy Systems, a designer and manufacturer of fuel

cell power systems, from March 2010 through November 2011, and as Vice President, Americas, and Vice President, Global Sales for C&D Technologies, a producer and marketer of electrical power storage and conversion products, from February 2009 through March 2010. Prior to joining C&D Technologies, Mr. Nawabi worked for 16 years with American Power Conversion, a provider of power protection products and services, in a succession of positions of increasing responsibility, most recently as Vice President, Enterprise Segment, North America and Canada. Mr. Nawabi has a B.S. in electrical engineering from the University of Maryland, College Park.

Doug Scott has served as Senior Vice President, General Counsel and Corporate Secretary since July 2013. Prior to joining the company, Mr. Scott held various executive positions at SAIC, Inc., a defense contractor, for 26 years, including General Counsel from 1992 through June 2010 and Corporate Secretary from 2004 until July 2013. Mr. Scott was a corporate attorney at O'Melveny & Myers LLP, a large global law firm, before joining SAIC. Mr. Scott received a B.A. in economics and an M.B.A. from the University of Illinois at Urbana-Champaign, and a J.D. from University of California, Los Angeles. He also is a certified public accountant (inactive).

Cathleen S. Cline has served as Senior Vice President of Administration since 2008 after serving as Vice President of Administration since 1991. Prior to joining the company, Ms. Cline was the Human Resources Manager at both Whittaker Electronic Resources and the law firm of O'Melveny & Myers LLP. Ms. Cline has a B.S. in psychology and a B.S. in business management from the University of Oregon.

The following table presents information regarding the beneficial ownership of our common stock as of August 25, 2014, by:

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our Named Executive Officers;

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our current directors and director nominees;

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all of our directors and executive officers as a group; and

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each stockholder known by us to be the beneficial owner of more than 5% of our common stock.

Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Unless otherwise indicated below, to our knowledge, the persons and entities named in the table have sole voting and sole investment power with respect to all

shares beneficially owned, subject to community property laws where applicable. Shares of our common stock subject to options that are currently exercisable or exercisable within 60 days of August 25, 2014 are deemed to be outstanding and to be beneficially owned by the person holding the options for the purpose of computing the percentage ownership of that person but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.

The information presented in this table is based on 23,356,556 shares of our common stock outstanding on August 25, 2014. Except as set forth in the footnotes below, the address of each beneficial owner listed on the table is c/o AeroVironment, Inc., 181 W. Huntington Dr., Suite 202, Monrovia, California 91016.

*

Less than 1%.

1

Based on a Schedule 13G/A filed by BlackRock, Inc. on January 28, 2014 with the SEC reporting beneficial ownership as of December 31, 2013. The address of BlackRock, Inc. is 40 East 52nd Street, New York, NY 10022.

2

Based on a Schedule 13G filed by The Vanguard Group on February 10, 2014 with the SEC reporting beneficial ownership as of December 31, 2013. The address of The Vanguard Group is 100 Vanguard Boulevard, Malvern, PA 19355.

3

Includes 2,285,535 shares held by the Conver Family Trust, of which Mr. Conver is one of the trustees; 470,000 shares held by the Conver Family Limited Partnership of which the general partner is The Management Trust and of which Mr. Conver is a trustee; and 108,310 shares of our common stock reserved for issuance upon exercise of stock options which currently are exercisable or will become exercisable within 60 days of August 25, 2014. Mr. Conver disclaims beneficial ownership of any securities in which he does not have a pecuniary interest.

4

Includes 18,000 shares of our common stock reserved for issuance upon exercise of stock options which currently are exercisable or will become exercisable within 60 days of August 25, 2014.

5

Includes 26,000 shares of our common stock reserved for issuance upon exercise of stock options which currently are exercisable or will become exercisable with 60 days of August 25, 2014.

6

Includes 5,000 shares of our common stock reserved for issuance upon exercise of stock options which currently are exercisable or will become exercisable within 60 days of August 25, 2014.

7

Includes 90,902 shares of our common stock reserved for issuance upon exercise of stock options that currently are exercisable or will become exercisable within 60 days of August 25, 2014.

8

Includes 8,300 shares of our common stock reserved for issuance upon exercise of stock options which currently are exercisable or will become exercisable within 60 days of August 25, 2014, and 12,367 shares held by the Alibrandi Family Trust Dated November 14, 1972, of which Mr. Alibrandi is the trustee.

9

Includes 296,322 shares of our common stock held by the Arnold Fishman Revocable Trust Arnold Fishman Trustee; 15,000 shares of our common stock reserved for issuance upon exercise of stock options which currently are exercisable or will become exercisable within 60 days of August 25, 2014, and 6,500 shares held by Mr. Fishman's wife, Judy Fishman.

10

Includes 29,075 shares of our common stock reserved for issuance upon exercise of stock options which currently are exercisable or will become exercisable within 60 days of August 25, 2014.