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TABLE OF CONTENTS
NOTICE OF 2010 ANNUAL MEETING OF STOCKHOLDERS			1
PROXY STATEMENT
GENERAL EXPLANATION OF MATERIALS INCLUDED			2
	Specific Items of Business		2
PROPOSAL NO. 1 – RE-ELECTION OF DIRECTOR			2
	Vote Required		3
CORPORATE GOVERNANCE PRINCIPLES AND BOARD MATTERS			3
	Board Policy Regarding Voting for Directors		3
	Board Independence		3
	Meetings of the Board and Its Committees		4
	The Company’s Director Independence Standards		4
	Board Structure and Committee Composition		5
	Audit Committee		5
	Compensation Committee		6
	Nominating Committee		7
	Stockholder Recommendations		7
	Director Qualifications		7
	Identifying and Evaluating Candidates for Directors		8
	Executive Sessions		8
	Communications with the Board		8
COMMON STOCK OWNERSHIP OF CERTAIN BENEFICIAL OWNERS   AND MANAGEMENT			9
BENEFICIAL OWNERSHIP TABLE			9
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE			10
EXECUTIVE COMPENSATION			10
	Compensation Discussion and Analysis		10
	Objectives of the Compensation Programs		10
	What the Compensation Programs are Designed to Reward		11
	Elements of the Company’s Compensation Program and Why It Pays Each Element		11
	Base Salary		11
	Incentive Compensation		12
	Stock Option Plan		13
	Other Compensation		13
	Benefits		13
	How Elements of the Compensation Program are Related to Each Other		13
	Performance Metrics		13
	Termination of Employment Payments		14
	Tax Considerations		14
	Compensation Committee Report		14
2009 SUMMARY COMPENSATION TABLE			15
2009 GRANTS OF PLAN-BASED AWARDS			16
OUTSTANDING EQUITY AWARDS AT 2009 FISCAL YEAR-END			16

NON-EMPLOYEE DIRECTOR COMPENSATION			17
	2009 Non-Employee Director Compensation Table		17
	General		17
	Equity Compensation		18
	Committee Compensation		18
	Subsidiary Board Compensation		18
	Per Diem Compensation		18
	Compensation  Committee Interlocks and Insider Participation		18
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS			18
	Review, Approval or Ratification of Transactions with Management and Others		19
	Audit Committee Report		19
PROPOSAL NO. 2 – RATIFICATION OF SELECTION OF INDEPENDENT   REGISTERED PUBLIC ACCOUNTING FIRM			20
PRINCIPAL ACCOUNTING FEES AND SERVICES			20
	Audit Fees		21
	Tax Fees		21
	All Other Fees		21
			21
QUESTIONS AND REQUESTS FOR ADDITIONAL INFORMATION			21
	Request for Multiple Copies of Proxy Materials		21
	Request for Single Copy of Proxy Materials		22
VOTING			22
	Voting Securities, Record Date		22
	Stockholder of Record		22
	Beneficial Owner		22
	Voting in Person at the Annual Meeting		22
	Voting by Submitting a Proxy or Voting Instructions		23
	Proxies and Voting Instructions Are Revocable		23
	Voting Electronically		23
	Voting Procedures		23
	Election of Directors		23
	Voting on Other Business		24
	How Shares will be Voted by Proxy of Voting Instructions		24
	Broker Non-Votes		24
	Additional Business Proposals Presented at Meeting		24
	Quorum Requirement		24
STOCKHOLDER PROPOSALS			24
	Stockholder Proposals Intended to be Included in Proxy Statement		24
	Stockholder Proposals Not Intended to be Included in Proxy Statement		25
	Stockholder Proposals for Director Candidates		25
OTHER BUSINESS			25

ARABIAN AMERICAN DEVELOPMENT COMPANY

Time and Date:		10:00 a.m. – 12:00 noon CDT, June 9, 2010
Place:		South Hampton Resources, Inc.
		7752 FM 418
		Silsbee, TX  77656
Items of Business:	(1)	To re-elect a member to the Board of Directors;
	(2)	To ratify the selection of Travis Wolff, LLP as the Company’s independent registered public accounting firm for 2010; and
	(3)	To consider and act upon such other business as may properly come before the meeting.
Adjournments and Postponements:		Any action on the items of business described above may be considered at the annual meeting at the time and on the date specified above or at any time and date to which the annual meeting may be properly adjourned or postponed.
Record Date:		You are entitled to vote only if you were an Arabian American Development Company stockholder of record as of the close of business on April 21, 2010.  Your vote is important. We encourage you to vote by proxy, even if you plan to attend the meeting.  You may vote your proxy by telephone, Internet or mail.  A toll-free telephone number and website address are included on your proxy card.
Meeting Admission:		You are entitled to attend the annual meeting only if you were an Arabian American stockholder of record as of the close of business on April 21, 2010 or hold a valid proxy for the annual meeting.  You should be prepared to present photo identification for admittance.  If you are not a stockholder of record but hold shares through a broker, trustee or nominee, you should provide proof of beneficial ownership as of the record date, such as your most recent account statement prior to April 21, 2010, a copy of the voting instruction card provided by your broker, trustee or nominee, or similar evidence of ownership.  If you do not provide photo identification and comply with the other procedures outlined above, you will not be admitted to the annual meeting.

(1)	The re-election of directors and

(2)	The ratification of selection of independent registered public accounting firm.

PROPOSAL NO. 1

RE-ELECTION OF DIRECTOR

Ghazi Sultan Director since 1993 Age 74

Mr. Ghazi Sultan, a Saudi citizen, holds a MSc. Degree in Geology from the University of Texas.  Mr. Sultan served as the Saudi Deputy Minister of Petroleum and Mineral Resources 1965-1988 and was responsible for the massive expansion of the mineral resources section of the Ministry.  Mr. Sultan is also a member of the Board of Al Masane Al Kobra Mining Company.

(1)

The director is, or has been in the past three years, an employee of the Company or an employee of any parent or subsidiary of the Company;

(2)

The director has accepted, or has a family member who has accepted during any twelve-month period within the last three years, more than $60,000 in compensation from the Company, other than compensation for Board or Board Committee service, compensation received by the director’s immediate family member for service as a non-executive employee of the Company, and benefits under a tax-qualified retirement plan, or non-discretionary compensation.

(3)

The director is a family member of an individual who is, or at any time during the past three years was, employed by the Company as an executive officer;

(4)

The director is, or has a family member who is, a partner in, or a controlling shareholder or an executive officer of, any organization to which the company made, or from which the company received, payments for property or services in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenues for that year, or $200,000, whichever is more, other than (i) payments arising solely from investments in the company’s securities; or (ii) payments under non-discretionary charitable contribution matching programs;

(5)

The director is, or has an immediate family member who is, employed as an executive officer of another entity where at any time during the past three years any of the executive officers of the Company serve on the compensation committee of such other entity; or

(6)

The director is, or has a family member who is, a current partner of the Company’s outside auditor, or was a partner or employee of the Company’s outside auditor who worked on the Company’s audit at any time during any of the past three years.

Name of Director	Audit	Compensation	Nominating
Non-Employee Directors:
Ghazi Sultan1	Member	Member	Chair
Robert E. Kennedy2	Chair	Member	Member
Mohammed O. Al Omair3	Member	Member	Member
Charles W. Goehringer, Jr.4
Allen P. McKee5	Member	Chair	Member
Employee Directors:
Hatem El Khalidi
Nicholas N. Carter
Number of Meetings in Fiscal 2009	4	1	1

1	Mr. Sultan was elected to the Board in September 1993.  He joined the Audit and Compensation Committees in 1994 and became the Chair of the Nominating Committee in April 2007.

2	Mr. Kennedy was elected to the Board on January 13, 2007.  He joined the Nominating Committee in April 2007, and became the Chair of the Audit Committee in January 2007.  He also became the lead independent director in March 2007.

3	Mr. Al Omair was elected to the Board on October 23, 2007.  He joined the Nominating and Audit Committees on October 23, 2007, and the Compensation Committee on December 31, 2007.

4

Mr. Goehringer was elected to the Board on October 23, 2007.  He joined the Nominating and Audit Committees on October 23, 2007, and the Compensation Committee on December 31, 2007.  He resigned from the Audit Committee in February 2008.  He resigned from the Compensation and Nominating Committees in January 2009.

5	Mr. McKee was elected to the Board on April 28, 2009.  He joined the Nominating, Audit and Compensation Committees on April 28, 2009.  He became the Chair of the Compensation Committee in February 2010.

(1)

Company directors and nominees, each of the named executive officers, and all individuals owning more than 5% of the Company’s outstanding Common Stock, set forth in the Summary Compensation Table on page 15; and

(2)

Current directors and Company executive officers as a group.

Name of Beneficial Owner	Amount and Nature of  Beneficial Ownership1	Percent of Class
Current Directors and Nominees:
Ghazi Sultan3	10,000	0.0%
Robert E. Kennedy3	20,000	0.1%
Allen P. McKee	20,000	0.1%
Charles W. Goehringer, Jr. 3	42,967	0.2%
Mohammed O. Al Omair3	11,667	0.0%
Hatem El Khalidi2	60,000	0.3%
Current Director, Nominee or Named Executive Officer:
Nicholas N. Carter	220,775	0.9%
Connie Cook	32,850	0.1%
Mark Williamson	20,000	0.1%
All current directors and executive officers as a group (9 persons)4	438,259	1.8%
Individuals with beneficial ownership of more than 5% of outstanding Common Stock
Fahad Mohammed Saleh Al Athel	3,898,851	16.4%
Mohammad Salem ben Mahfouz	1,500,000	6.3%
Estate of Harb S. Al Zuhair	1,423,750	6.0%
Prince Talal Bin Abdul Aziz	1,272,680	5.4%

 

 

 

 

·	Managed successful completion of the derivative situation which occurred in 2008;

·	Entered into a compromise agreement with Saudi shareholders settling the capital structure of AMAK;

·	Produced an EBITDA from continuing operations of approximately $15.0 million for 2009 compared to $12.5 million for 2005;

·	Managed a 12% increase in total volume sold for 2009 during a global/US recession period, when most US companies volumes were down;

·	Utilized 20% of the new/additional capacity that was added in the fourth quarter of 2008;

·	Established an International Sales and Marketing office in Madrid Spain for continued development of International markets and opportunities, along with addressing the EU REACH Program;

·	Added an additional Account Manager to assume domestic responsibilities vacated by representative sent  overseas to open International S&M office; and

·	Established a Risk Management Policy and Procedures Manual.

Name and Principal Position	Year		Salary ($)				Bonus ($)(1)				Restricted Stock Award(s) ($)				Option Award(s) ($)(2)				All Other Compensation ($) (3)(4)(5)				Total ($)
Hatem El Khalidi President and Chief Executive Officer until June 30, 2009, Director	2009		$	36,000			$	31,500				--			$	186,288			$	40,000			$	293,788
	2008		$	72,000				--				--				--			$	8,000			$	80,000
	2007		$	72,000				--				--				--			$	8,000			$	80,000
Nicholas N. Carter President and Chief Executive Officer since July 1, 2009; previously Executive Vice President and Chief Operating Officer	2009		$	234,837			$	42,552				--				--			$	14,090			$	291,479
	2008		$	209,918			$	78,665			$	99,800				--			$	12,595			$	400,978
	2007		$	172,059			$	96,506			$	66,000				--			$	10,324			$	344,889
Connie J. Cook Chief Accounting Officer	2009		$	142,208			$	32,715				--				--			$	8,533			$	183,456
	2008		$	133,009			$	51,143			$	49,900				--			$	7,981			$	242,033
	2007		$	108,500			$	70,085			$	33,000				--			$	6,510			$	218,095
Mark D. Williamson Vice President of Marketing, Petrochemical Company	2009		$	227,500			$	32,652				--				--			$	13,650			$	273,802
	2008		$	240,705			$	51,143			$	49,900				--			$	14,442			$	356,190
	2007		$	190,393			$	70,023				--				--			$	11,424			$	271,840
Gerardo Maldonado Account Representative, Petrochemical Company	2009		$	192,543			$	24,437				--				--			$	11,553			$	228,533
	2008		$	134,358			$	14,640				--				--			$	10,749			$	159,747
	2007		$	142,443			$	24,327				--				--			$	8,546			$	175,316
Marvin Kaufman Manager of Manufacturing, Petrochemical Company	2009		$	130,532			$	21,910				--				--			$	7,832			$	160,274
	2008		$	122,603			$	13,110				--				--			$	7,356			$	143,069
	2007		$	112,534			$	21,526				--				--			$	6,752			$	140,812

 

 

 

 

 

 

 

 

Estimated Future Payouts Under Non-Equity Incentive Plan Awards

Estimated Future Payouts under Equity Incentive Plan Awards

Name

Grant Date

Threshold ($)

Target ($)

Maximum ($)

Threshold (#)

Target (#)

Maximum (#)

All Other Stock Awards:  Number of Shares of Stock or  Units (#)

All Other Options Awards: Number of Securities (#)(1)

Exercise Price of Options ($/sh)

Closing Market Price on Date of Option Grant ($/sh)

Grant Date Fair Value of Stock Awards

Hatem El Khalidi

07/02/09

200,000

$

3.40

$

3.40

Hatem El Khalidi

07/02/09

200,000

$

3.40

$

3.40

 

 

Option awards

Stock awards

Name

Number of Securities Underlying Unexercised Options (#) Exercisable

Number of Securities Underlying Unexercised Options  (#) Unexercisable

Equity incentive plan awards: number of securities underlying unexercised unearned options (#)

Option exercise price ($)

Option Expiration date

Number of Shares or units of stock that have not vested (#)

Market value of shares or unites of stock that have not vested (#)

Equity incentive plan awards: number of unearned shares, units or other rights that have not vested (#)

Equity incentive plan awards: market or payout value of unearned shares, units or other rights that have not vested ($)

Hatem El Khalidi

--

200,000

--

$

3.40

06/30/12

Hatem El Khalidi

--

200,000

--

$

3.40

06/30/19

Name		Fees Earned or Paid in Cash ($)(1)				Stock Awards ($)(2)				Option Awards ($)(3)				Total ($)
Robert E. Kennedy		$	74,000			$	10,200			$	9,730			$	93,930
Ghazi Sultan			10,000				10,200				9,730				29,930
Mohammed O. Al Omair			25,000				10,200				9,730				44,930
Ibrahim Al-Moneef (resigned April 2009)			--				--				9,730				9,730
Charles W. Goehringer, Jr.			10,000				10,200				9,730				29,930
Allen P. McKee (appointed April 2009)			2,500				--				--				2,500

 

 

 

 

 

PROPOSAL NO. 2

RATIFICATION OF SELECTION OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

		2009				2008
Audit Fees		$	258,477			$	335,173
Audit –Related Fees			--				--
Tax Fees			41,884				33,545
All Other Fees			45,232				--