and

Item 7.01 Regulation FD Disclosure

On March 12, 2009, Aldila, Inc. (the "Company") reported its results of operations for its fourth quarter and year ended December 31, 2008. A copy of the press release issued by the Company concerning the foregoing results is furnished herewith as Exhibit 99.1 and is incorporated herein by reference.

The information in this Form 8-K, including the accompanying exhibit, is being furnished under Item 2.02 and shall not be deemed to be "filed" for the purposes of Section 18 of the Securities Exchange Act of 1934 (the "Exchange Act"), or otherwise subject to the liability of such section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act, regardless of the general incorporation language of such filing, except as shall be expressly set forth by specific reference in such filing.

and

Item 5.02 Compensatory Arrangements of Certain Officers

and

Item 7.01 Regulation FD Disclosure

I. New Compensation Arrangements

At a meeting of the Board of Directors ("Board") of the Company held March 11, 2009 the Board adopted certain recommendations of the Board's Compensation Committee and took other actions following a review of the Company's compensation policies and arrangements for officers and directors.

At this meeting, the Board adopted the following new plans or arrangements:

1. 2009 Aldila Inc. Executive Bonus Plan.

This new bonus plan replaces the Company's 1994 Aldila Inc. Executive Bonus Plan, as amended. The Company has annually established goals under the old plan, but has not met the goals, nor paid any bonuses under that plan, since 2005.

The new plan provides for bonuses to participating key employees, which may include Named Executive Officers.

The Compensation Committee will annually establish a minimum Corporate Gate level of Operating Income, after consideration of the projected levels of Operating Income, free cash flow and the terms and conditions of any debt covenants. The minimum Corporate Gate amount must be met before any bonus award is paid under the plan.

The Compensation Committee will annually establish Threshold, Target and Stretch Financial Performance Objectives. Objectives will be based on Operating Income and Revenue, as determined for the applicable plan year according to generally accepted accounting principles. A Threshold Award is equal to 20% of the Base Salary of the CEO and 12.5% of the Base Salary of all other participants; a Target Award is equal to 40% of the CEO's Base Salary and 25% of the Base Salary for all other participants; and Stretch Award is equal to 120% of the CEO's Base Salary and 75% of the Base Salary of all other participants. Base Salary is the actual, regular salary for the plan year, pro rated if an employee becomes a participant part way through the plan year.

Awards are paid if the Company achieves the Corporate Gate and either the Operating Income or Revenue Objectives. Each participant is eligible to receive an award equal to 37.5% of the Threshold Award if the Operating Income Threshold Objective is met, and 37.5% of the Threshold Award if the Revenue Threshold Objective is met. Similarly, each participant is eligible to receive an award equal to 37.5% of the Target Award for each of the Target Operating Income and Target Revenue Objectives, and each participant may receive 37.5% of the Stretch Award for each of the Stretch Operating Income and Stretch Revenue Objectives. This results in a potential 75% award based on these objectives. Results between the Threshold, Target and Stretch Objectives will be pro-rated.

The remaining 25% of the potential award amount is a discretionary award made by the Compensation Committee. The Compensation Committee will consult with the CEO for discretionary awards to participants other than the CEO.

Awards will be calculated on or about completion of the Company's annual audit. If a participant's employment is terminated part way through a plan year, the Committee may adjust the amount of awards under the plan.

The foregoing is a summary of certain terms of the new plan. Reference is hereby made to the complete terms of the plan, attached hereto as an exhibit. The Company

does not anticipate seeking shareholder approval of the new plan. The Company has not yet established the various financial objectives under the new plan, and when it does so it anticipates that such objectives will be confidential and not publicly disclosed.

2. 2009 Equity Incentive Plan

The Company currently has a 1994 Stock Incentive Plan (as amended). The 1994 Plan was last amended by the shareholders approximately 9 years ago.

The new equity incentive plan will be submitted to the Company's shareholders for approval at the next annual meeting of shareholders. If it is approved it will be registered with the SEC and used for new awards of equity to directors, officers, employees and consultants. The 1994 plan will continue to exist so long as awards made under them remain outstanding.

The new plan will be administered by the Board or the Compensation Committee. The new plan permits awards of stock options (incentive or non-statutory), stock appreciation rights, restricted stock, restricted stock units, performance units or performance shares.

The maximum total of authorized shares permitted to be awarded under the new plan will be 860,000, plus any awards outstanding under the 1994 Plan that expire or otherwise terminate without being exercised, up to a maximum of 212,853 shares. Awards that expire without exercise will return to the new plan and may be used to issue new awards. Shares that are used for a cash-less exercise or to pay tax withholding amounts are not available for re-issue.

The maximum number of shares that may be granted subject to a stock option is 25,000, except that an additional 50,000 shares may be the subject of an initial award to an employee joining the Company. The minimum exercise price for options shall be the fair market value of the Company's stock on the date of grant, and may be higher in certain circumstances. The maximum term of any option granted under the new plan will be established in the specific award agreement, provided, however, it may not exceed 7 years, except for options granted to greater than 10% shareholders, for whom the maximum term shall be 5 years. In the event of the death or disability of an option holder, the option will remain exercisable for no more than 12 months after the date of death. In the event of the termination of employment or other relationship with the Company of an option holder for other reason, the option will remain exercisable for no more than 3 months after such termination.

Stock appreciation right awards shall also be subject to a 25,000 share maximum, except that an additional 50,000 shares may be the subject of an initial award to an employee joining the Company. Such awards shall not be for less than the fair market value on the date of grant except as permitted by applicable laws and regulations. The maximum term of any award of stock appreciation rights granted

under the new plan will be established in the specific award agreement, provided, however, it may not exceed 7 years, subject to the same early termination provisions for death, disability and termination of relationship with the Company as stock options.

Awards of restricted stock, restricted stock units, performance units and performance shares may be subject to certain limits in the event such awards are intended to be "performance-based compensation" under IRC 162(m).

The number of shares authorized under the plan, under any outstanding award under the plan, and any limits to awards under the plan, may be adjusted in the event of dividends, stock splits and certain other events. In the event of a change of control, the Administrator may provide for the assumption of awards, the grant of equivalent awards, the termination of awards, the acceleration of vesting of awards, the payment of cash and/or property in exchange for the termination of awards, or any combination of the foregoing. If a successor to the Company fails to assume or substitute equivalent awards, the outstanding awards shall vest and become exercisable or payable. A "change of control" is defined as (i) one person or a group of persons acting together acquires more than 50% of the total voting power of the Company (but not the acquisition of additional stock by a person who already controls more than 50% of the total voting power of the Company), (ii) a majority of the Board is replaced within 12 months if the new directors are not nominated or endorsed by a majority of the existing board, or (iii) the acquisition by one person or a group of persons acting together if the total gross fair market value of such assets is equal to or more than 50% of the total gross fair market value of all of the assets of the Company (subject to certain exceptions).

The Company anticipates using stock option award agreements and restricted stock award agreements substantially similar to those it currently uses, with appropriate changes to reference the new plan, and accordingly is not filing copies of new award agreements.

The foregoing is a summary of certain terms of the 2009 Equity Incentive Plan. Reference is hereby made to the complete terms of the 2009 Equity Incentive Plan, attached hereto as an exhibit. A form of the agreement to be used for restricted stock grants under the 2009 Equity Incentive Plan is also attached as an exhibit.

3. 2009 Aldila Inc. Outside Director Equity Plan

The Company's 1994 Stock Incentive Plan provides for automatic grants of stock options to the Company's non-employee (i.e., "outside") directors; an initial . . .

(d) Exhibits

99.1    Press Release dated March 12, 2009
99.2    2009 Aldila Inc. Executive Bonus Plan
99.3    2009 Aldila Inc. Equity Incentive Plan
99.4    Form of Restricted Stock Award Agreement under 2009 Aldila Inc. Equity
        Incentive Plan
99.5    2009 Aldila Inc. Outside Director Equity Plan
99.6    Form of Restricted Stock Award Agreement under 2009 Aldila Inc. Outside
        Director Equity Plan
99.7    2009 Change of Control Retention Agreement by and between the Company and
        Peter Mathewson
99.8    Form of 2009 Officer Change of Control Retention Agreement by and between
        the Company and non-CEO executive officers.
99.9    Form of Director and Officer Indemnification Agreement by and between the
        Company and its directors and officers
99.10   Loan Modification Agreement by and between the Company and Key Bank of
        Ohio, effective as of December 31, 2008 entered into on February 9, 2009