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<SEC-DOCUMENT>0000806172-03-000005.txt : 20030709
<SEC-HEADER>0000806172-03-000005.hdr.sgml : 20030709
<ACCEPTANCE-DATETIME>20030709123955
ACCESSION NUMBER:		0000806172-03-000005
CONFORMED SUBMISSION TYPE:	DEF 14A
PUBLIC DOCUMENT COUNT:		1
CONFORMED PERIOD OF REPORT:	20030228
FILED AS OF DATE:		20030709
EFFECTIVENESS DATE:		20030709

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SONO TEK CORP
		CENTRAL INDEX KEY:			0000806172
		STANDARD INDUSTRIAL CLASSIFICATION:	MISCELLANEOUS ELECTRICAL MACHINERY, EQUIPMENT & SUPPLIES [3690]
		IRS NUMBER:				141568099
		STATE OF INCORPORATION:			NY
		FISCAL YEAR END:			0228

	FILING VALUES:
		FORM TYPE:		DEF 14A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-16035
		FILM NUMBER:		03779604

	BUSINESS ADDRESS:	
		STREET 1:		2012 RT 9W BLDG 3
		CITY:			MILTON
		STATE:			NY
		ZIP:			12547
		BUSINESS PHONE:		8457952020

	MAIL ADDRESS:	
		STREET 1:		2012 RT. 9W, BLDG. 3,
		CITY:			MILTON
		STATE:			NY
		ZIP:			12547
</SEC-HEADER>
<DOCUMENT>
<TYPE>DEF 14A
<SEQUENCE>1
<FILENAME>proxy03.txt
<DESCRIPTION>PROXY DOCUMENT
<TEXT>
                                  SCHEDULE 14A

           Proxy Statement Pursuant to Section 14(a) of the Securities
                              Exchange Act of 1934

Filed by the Registrant [x]
Filed by a Party other than the Registrant [   ]

Check appropriate box:

[ ]   Preliminary Proxy Statement
[ ]  Confidential,  for  Use  of the  Commission  Only  (as  permitted  by  Rule
     14a-6(e)(2))
[X] Definitive Proxy Statement
[ } Definitive  Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12


                              SONO-TEK CORPORATION
- --------------------------------------------------------------------------------
                (Name of Registrant as Specified in its Charter)
- --------------------------------------------------------------------------------
    (Name of Person(s) Filing Proxy Statement, if other than the Registrant)



Payment of Filing Fee (Check the appropriate box):
[x]     No fee required.
[ ] Fee computed  based on table below per Exchange  Act Rules  14a-6(i)94)  and
0-11.

1)       Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
2)       Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
3)       Per unit  price or other  underlying  value of  transaction  computed
         pursuant to Exchange Act Rule 0-11 (set forth The amount on which the
         filing fee is calculated and state how it was determined:
- --------------------------------------------------------------------------------
4)       Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
5)       Total fee paid:
- --------------------------------------------------------------------------------
[  ]     Fee paid previously with preliminary materials.

[ ] Check box if any part of the fee is offset as provided by Exchange  Act Rule
0-11(a)(2)  and  identify  the  filing  for which the  offsetting  fee was paid.
Previously.  Identify the previous filing by registration  statement  number, or
the Form or Schedule and the date of its filing.

1)       Amount Previously Paid:
- --------------------------------------------------------------------------------
2)       Form, Schedule or Registration Statement No.:

- --------------------------------------------------------------------------------
3)       Filing Party:

- --------------------------------------------------------------------------------
4)       Date Filed:

- --------------------------------------------------------------------------------

                              SONO-TEK CORPORATION
                                  2012 Route 9W
                             Milton, New York 12547

                    NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

                                  TO BE HELD ON

                                 AUGUST 21, 2003

The 2003 Annual Meeting of Shareholders of Sono-Tek  Corporation (the "Company")
will be held at the Poughkeepsie  Grand Hotel,  Poughkeepsie,  New York 12601 on
August 21, 2003 at 10:00 a.m., local time, for the following purposes:


1. To elect two (2)  Directors  of the  Company to serve  until the 2005  Annual
Meeting of  Shareholders  of the  Company  and to elect one (1)  Director of the
Company to serve until the 2004 Annual Meeting of Shareholders of the Company.

2. To consider and approve the Company's 2003 Stock Incentive Plan.

3. To  ratify  the  appointment  of  Radin,  Glass & Co.,  LLP as the  Company's
independent auditors for the fiscal year ended February 29, 2004.

4. To transact  such other  business as may properly  come before the meeting or
any adjournments thereof.

The Board of  Directors  has fixed the close of business on June 27, 2003 as the
record date for the  determination of shareholders  entitled to notice of and to
vote at the Annual Meeting or any adjournments  thereof.  A list of shareholders
entitled to vote will be available for examination by interested shareholders at
the  offices of the  Company,  2012  Route 9W,  Milton,  New York  12547  during
ordinary business hours until the meeting.


Claudine Y. Corda, Secretary


                              Dated: July 22, 2003


             YOUR VOTE IS IMPORTANT. EVEN IF YOU DESIRE TO ABSTAIN,

          PLEASE SIGN AND RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING

                             POSTAGE PAID ENVELOPE.


<PAGE>


10

                              SONO-TEK CORPORATION
                                  2012 Route 9W
                             Milton, New York 12547

                                 PROXY STATEMENT
                         ANNUAL MEETING OF SHAREHOLDERS
                                 AUGUST 21, 2003

The  accompanying  proxy is  solicited  by the Board of  Directors  of  SONO-TEK
CORPORATION,  a New York corporation (the "Company"), for use at the 2003 Annual
Meeting of Shareholders of the Company to be held on August 21, 2003.

All Proxies  that are  properly  completed,  signed and  returned to the Company
prior to the Annual Meeting,  and which have not been revoked,  will be voted in
accordance with the shareholder's  instructions  contained in such Proxy. In the
absence of contrary instructions, shares represented by such proxy will be voted
(i)  FOR  approval  of the  election  of each of the  individuals  nominated  as
Directors  set forth  herein,  (ii) FOR  approval  of the  Company's  2003 Stock
Incentive  Plan,  and (iii) FOR the  ratification  of the  appointment of Radin,
Glass & Co., LLP as the Company's  auditors for the fiscal year ending  February
29,  2004.  A  shareholder  may revoke his or her Proxy at any time before it is
exercised by filing with the  Secretary of the Company at its offices in Milton,
New York either a written  notice of revocation or a duly executed Proxy bearing
a later  date,  or by  appearing  in  person  at the  2003  Annual  Meeting  and
expressing  a desire  to vote his or her  shares  in  person.  All costs of this
solicitation are to be borne by the Company.

Abstentions  will be treated as shares  present and  entitled to vote for quorum
purposes  but as not voted for  purposes  of  determining  the  approval  of any
matters submitted to the shareholders for a vote.  Except as otherwise  provided
by law or by the Company's  certificate of incorporation or bylaws,  abstentions
will not be counted in  determining  whether a matter has received a majority of
votes  cast.  If a  broker  indicates  on  the  proxy  that  it  does  not  have
discretionary  authority as to certain  shares to vote on a  particular  matter,
those shares will not be considered as present and entitled to vote with respect
to that matter. Broker non-votes are not counted for quorum purposes.

This  Proxy  Statement  and  the  accompanying   Notice  of  Annual  Meeting  of
Shareholders, the Proxy, and the 2003 Annual Report to Shareholders are intended
to be mailed on or about July 22, 2003 to shareholders of record at the close of
business on June 27,  2003.  At said  record  date,  the  Company had  9,200,161
outstanding shares of common stock.

                          ITEM 1. ELECTION OF DIRECTORS

The Board of Directors is divided into two classes.  The Directors in each class
are to serve for a term of two years, and until their respective  successors are
duly elected and qualify. One (1) Director will be elected at the Annual Meeting
by plurality  vote to hold office  until the  Company's  2004 Annual  Meeting of
Shareholders  and until his successor  shall be duly elected and shall  qualify.
Two (2)  Directors  will be elected at the Annual  Meeting by plurality  vote to
hold office until the Company's  2005 Annual Meeting of  Shareholders  and until
their successors shall be duly elected and shall qualify.

Management  intends to vote the accompanying  Proxy FOR election as Directors of
the  Company,  the  nominees  named below,  unless the Proxy  contains  contrary
instructions.  Proxies that direct the Proxy  holders to withhold  voting in the
matter  of  electing  Directors  will not be voted as set forth  above.  Proxies
cannot be voted for a greater  number of  persons  than the  number of  nominees
named in the Proxy  Statement.  On all matters that may properly come before the
2003  Annual  Meeting,  each  share  has one vote.  Management  has no reason to
believe  that any of the  nominees  will not be a candidate or will be unable to
serve.  However,  in the event that any of the nominees  should become unable or
unwilling  to serve as a Director,  the Proxy will be voted for the  election of
such person or persons as shall be designated by the Directors.

NOMINEES FOR DIRECTORS

Nominee for election to term expiring 2004

The  following  person is  nominated  for election as Director of the Company to
hold office until the Company's 2004 Annual Meeting of Shareholders.

DR. DONALD F. MOWBRAY, 65, has been an independent consultant since August 1997.
From  September  1992 to August 1997 he was the Manager of the General  Electric
Company's Corporate Research and Development Mechanical Engineering  Laboratory.
From 1962 to 1992 he worked  for the  General  Electric  Company in a variety of
engineering  and  managerial   positions.   Dr.  Mowbray   received  a  B.S.  in
Aeronautical  Engineering  from the University of Minnesota in 1960, a Master of
Science in Engineering  Mechanics from the University of Minnesota in 1962 and a
Ph.D. from Rensselaer Polytechnic Institute in Engineering Mechanics in 1968.

Nominees for election to term expiring 2005

The following two (2) persons, currently serving as Directors, are nominated for
election as  Directors of the Company to hold office  until the  Company's  2005
Annual Meeting of Shareholders.

DR. HARVEY L. BERGER, 64, has been a Director of the Company since June 1975 and
Treasurer since June 2003. He was President of the Company from November 1981 to
September 1984 and from September 1985 until April 2001.  From September 1986 to
September 1988, he also served as Treasurer. He was Vice Chairman of the Company
from March 1981 to September  1985.  Dr.  Berger  holds a Ph.D.  in physics from
Rensselaer  Polytechnic Institute and is a member of the Marist College Advisory
Board.

DR.  CHRISTOPHER  L. COCCIO,  62, has been a Director of the Company  since June
1998.  From 1964 to 1996,  he held various  engineering,  sales,  marketing  and
management positions at General Electric Company,  with P&L responsibilities for
up to $100 million in sales and 500 people  throughout  the United  States.  His
business  experience  includes  both  domestic  and  international  markets  and
customers.  He founded a management consulting business in 1996, and worked with
the New York State Assembly's  Legislative  Commission on Science and Technology
from 1996 to 1998.  From 1998 to 2001,  he worked with  Accumetrics  Associates,
Inc., a manufacturer of digital wireless telemetry systems, as Vice President of
Business Development and member of the Board of Advisors.  Dr. Coccio received a
B.S.M.E. from Stevens Institute of Technology, a M.S.M.E. from the University of
Colorado,  and  a  Ph.D.  from  Rensselaer  Polytechnic  Institute  in  Chemical
Engineering.  He was appointed President and Chief Executive Officer of Sono-Tek
on April 30, 2001.


DIRECTOR CONTINUING AS DIRECTOR

The  following  person  named  below is  currently  serving as a Director of the
Company. His term expires at the 2004 Annual Meeting of Shareholders.

SAMUEL  SCHWARTZ,  83, has been a Director of the Company since August 1987, and
was  Chairman of the Board from  February  1993 to May 1999.  In April 2001,  he
accepted the  position as Acting  Chairman of the Board.  He became  Chairman in
August 2001. From 1959 to 1992, he was the Chairman and Chief Executive  Officer
of Krystinel Corporation,  a manufacturer of ceramic magnetic components used in
electronic  circuitry.   He  received  a  B.CH.E.  from  Rensselaer  Polytechnic
Institute in 1941 and a M.CH.E. from New York University in 1948.


DIRECTOR NOT STANDING FOR REELECTION

JEFFREY O. SPIEGEL,  44, has been a Director of the Company since November 2000.
He is the President and Chief  Executive  Officer of Randa Corp.,  a position he
has held since 1986.  Randa Corp. is an international  men's accessory  company.
Mr. Spiegel received a B.A. from Brandeis University in 1979.

Directors are presently  paid no fee for their service as directors.  Commencing
March 1,  2002,  each  non-employee  Director  is  reimbursed  $100 per Board of
Directors  meeting they attend for travel  expenses.  In May 1999, the Company's
Board of Directors adopted a program to award its non-employee  directors 10,000
stock  options  in  consideration  of each year of  service  to the  Company  to
commence  with the 1999  election  of  Directors.  On August  22,  2002,  Samuel
Schwartz and J. Duncan  Urquhart,  non-employee  directors,  were elected to the
Board of Directors. Each were granted 20,000 stock options,  exercisable at fair
market value, which vest 50% after the completion of one year of service and 50%
after  completion  of the second year of service.  On June 12,  2003,  J. Duncan
Urquhart resigned from the Board of Directors.

The Board of Directors  held five meetings in the fiscal year ended February 28,
2003.  Each  Director  attended  100% of the meetings of the Board and committee
meetings of which he was a member.

The Board of  Directors  has a nominating  committee  to research and  determine
candidates  for  nomination  as  Directors  of  the  Company  (the   "Nominating
Committee").  The Nominating Committee did not meet during the fiscal year ended
February 28, 2003. The Nominating  Committee will consider nominees  recommended
by  shareholders;  no special  procedure needs to be followed in submitting such
recommendation.

The  compensation  of  the  executive  officers  of  the  Company  is set by the
Company's Board of Directors based upon the  recommendations of the Compensation
Committee,  composed of Messrs. Schwartz and Spiegel,  non-employee Directors of
the Company.  The Compensation  Committee met two times during Fiscal Year 2003.
Compensation is set at levels believed to be competitive with executive officers
with  similar   qualifications,   experience  and  responsibilities  of  similar
businesses.  Such individuals  receive a base salary and incentive  compensation
based on the  achievement  of certain  operating  objectives.  The  Compensation
Committee serves an advisory function only.

The  Company's  Board of Directors  has an Audit  Committee  composed of Messrs.
Schwartz and Spiegel,  non-employee Directors of the Company. The charter of the
Audit  Committee  is included as Appendix 2 to this Proxy  statement.  The Audit
Committee is responsible for (i) selecting an independent  public accountant for
ratification  by the  stockholders,  (ii) reviewing  material  accounting  items
affecting  the  consolidated  financial  statements  of the  Company,  and (iii)
reporting its findings to the Board of Directors.  The Audit  Committee met four
(4) times during the fiscal year ended February 28, 2003.

REPORT OF THE AUDIT COMMITTEE

The Audit Committee's job is one of oversight as set forth in its charter. It is
not  the  duty  of the  Audit  committee  to  prepare  the  Company's  financial
statements,  to plan or  conduct  audits,  or to  determine  that the  Company's
financial  statements  are  complete and  accurate  and are in  accordance  with
generally  accepted   accounting   principles.   The  Company's   management  is
responsible for preparing the Company's financial statements and for maintaining
internal  control  and  disclosure  controls  and  procedures.  The  independent
auditors  are  responsible  for  auditing  the  financial   statements  and  for
expressing an opinion as to whether those audited  financial  statements  fairly
present the financial  position,  results of  operations,  and cash flows of the
Company in conformity with generally accepted accounting principles.

The  Audit   Committee  has  reviewed  and   discussed  the  Company's   audited
consolidated  financial  statements with management and with Radin, Glass & Co.,
LLP, the Company's independent auditors for 2003.

The Audit  Committee  has  discussed  with Radin,  Glass & Co.,  LLP the matters
required to be discussed by Statement on Auditing Standards No. 61.

The Audit  Committee  has  received  from  Radin,  Glass & Co.,  LLP the written
statements required by Independence Standards Board Standard No. 1, Independence
Discussions  with  Audit  Committees,  and has  discussed  Radin,  Glass & Co.'s
independence  with Radin,  Glass & Co., and has considered the  compatibility of
non-audit services with the auditor's independence.

Based upon the review and discussions referred to above, the Audit Committee has
recommended  to the Board of Directors that the audited  consolidated  financial
statements  be included in the  Company's  Annual  Report on Form 10-KSB for the
year  ended  February  28,  2003 for filing  with the  Securities  and  Exchange
Commission.   The  Audit   Committee  and  the  Board  of  Directors  have  also
recommended,  subject to stockholder  approval,  the selection of Radin, Glass &
Co., LLP as the Company's independent auditors for 2004.

This report of the Audit  Committee  shall not be incorporated by reference into
any  of  the  Company's  future  filings  made  under  the  Exchange  Act or the
Securities Act, and shall not be deemed to be soliciting material or to be filed
with the SEC under the Exchange Act or the Securities Act.

THE AUDIT COMMITTEE

Samuel Schwartz
Jeffrey O. Spiegel

OTHER EXECUTIVE OFFICERS

In addition to Dr.  Christopher  L. Coccio,  CEO & President  and Dr.  Harvey L.
Berger, Treasurer, the following persons are executive officers of the Company.

VINCENT F. DEMAIO,  65, has been Vice President of  Manufacturing of the Company
since March 2003. He joined the Company in August 1991 as Production Manager and
has served as Field Service Manager and Director of Operations. Prior to joining
the Company,  Mr. DeMaio was an independent  real estate  developer from 1987 to
1991.  From 1956 to 1987, Mr. DeMaio was employed by IBM  Corporation in various
manufacturing  positions,  the  last  being  Manufacturing  Supervisor  over 600
employees.


R. STEPHEN  HARSHBARGER,  35, has been Vice  President of the Company since June
2000.  He joined the Company in October  1993 as a Sales  Engineer and served in
various  sales  management  capacities  from 1997 to 2000.  Prior to joining the
Company,  Mr.  Harshbarger was the Sales and Marketing  Coordinator at Plasmaco,
Inc., a developer and manufacturer of state-of-the-art flat panel displays.
He is a graduate  of  Bentley  College,  with a major in Finance  and a minor in
Marketing.


EXECUTIVE COMPENSATION


The following table sets forth the aggregate remuneration paid or accrued by the
Company for Fiscal Years ended February 28, 2003,  2002 and 2001, for each named
officer  of  the  Company.   No  other  executive  officer  received   aggregate
remuneration  that  equaled or  exceeded  $100,000  for the Fiscal  Years  ended
February 28, 2003, 2003 and 2001.



                           SUMMARY COMPENSATION TABLE

                                                  Long Term
                          Annual Compensation     Compensation
Name and                                          Awards, Securities
Principal Position     Year  Salary ($) Bonus ($) Underlying          All Other
                                                  Options (#)  Compensation ($)1
- -------------------------------------------------------------------------------

Christopher L. Coccio  2003   $124,462   $7,500        0                $1,260
CEO, President and     2002(2) $92,354  $40,000        0                  $178
    Director

1 Dollar amounts are Company  contributions under the Company's retirement plan.
2 Dr. Coccio became an employee of the Company as of May 7, 2001.


STOCK OPTION PLAN

The Company has in effect the 1993 Stock  Incentive  Plan, as amended (the "1993
Plan").  As of June 20,  2003 there were  outstanding  options  to  purchase  an
aggregate  of 1,062,562  shares of common  stock at prices  ranging from $.09 to
$1.625 per share and  437,438  shares were  reserved  for option  grants.  After
October 12, 2003, there can be no further grants under this plan.


The following table sets forth  information  regarding option grants made during
the last completed fiscal year for each named officer of the Company.


                      Option/SAR Grants in Last Fiscal Year

                       Number of     Perrcent of total
                       Securities    options/SARs
                       Underlying    granted to
                       Options/SARs  employees in      Exercise or base
Name                 granted (#)   fiscal year price ($/Sh)   Expiration date

Christopher L. Coccio  275,000       62%              $.20            11/14/2012

The following table sets forth information regarding option exercises during the
Fiscal Years ended February 28, 2003, as well as any unexercised options held as
of February 28, 2003, by each named executive who received in excess of $100,000
in salary and bonus.


<PAGE>

Aggregate Option/SAR Exercises in Last Fiscal Year and
Fiscal Year End Option/ SAR Values

                                             Number of Securities Value of
                                             Underlying           Unexercised
                                             Unexercised Options  In-the Money
                   Shares                    at Fiscal Year       Options
                   Acquired on  Value           End (#)           At Fiscal Year
                                                                  End ($)
Name               Exercise (#) Realized ($)  Exercisable     Exercisable
                                                   Unexercisable   Unexercisable
- --------------------------------------------------------------------------------
Christopher Coccio    0          0          420,000    75,000   $1,000     $0


Description of 401 (k) Plan

Effective April 1, 2000, the Company instituted the Sono-Tek  Corporation 401(k)
Plan  ("401(k)  Plan")  for  employees  of the  Company,  its  subsidiaries  and
affiliates  pursuant  to the  Internal  Revenue  Code.  Under the 401(k) Plan an
eligible  employee  could elect to make a salary  reduction  of up to 20% of his
compensation  as defined in the plan In January  2002 the Company  instituted  a
matching of up to 1% of an employee's  compensation,  depending  upon a matching
formula.  Employee contributions for any calendar year are limited to a specific
dollar amount that is indexed to reflect inflation.



Securities Authorized for Issuance Under Equity Compensation Plans:

                          Number of      Weighted-         Number of
                          securities     average           securities
                          to be          exercise          remaining
                          issued upon    price of       available for future
                          exercise of    outstanding    issuance under equity
                          outstanding    options,        compensation plans
                          options,       warrants       (excluding securities
                          warrants       and rights        reflected in
                          and rights                        column (a))
                               (a)          (b)                 (c)
Equity compensation
plans approved by
security holders
1993 Stock Incentive Plan    1,062,562     $.33                 437,471

Equity compensation plans
not approved by security
holders:
Warrants issued to
individuals for
Monies loaned or
 services rendered             905,000     $.36                    -

Warrants issued in
conjunction with
Subordinated Mezzanine Debt  2,077,777     $.13                    -
                            ----------     ----                  -------

Total                        4,045,339     $.24                  437,471
                             =========     ====                  =======


Description of Equity Compensation Plans:


1993 Stock Incentive Plan
Under the 1993 Stock  Incentive  Plan, as amended ("1993 Plan"),  options can be
granted to officers, directors, consultants and employees of the Company and its
subsidiaries to purchase up to 1,500,000 of the Company's common shares. Options
granted under the 1993 Plan expire on various dates through 2012.

Under the 1993 Stock Incentive Plan,  option prices must be at least 100% of the
fair market value of the common stock at time of grant. For qualified employees,
except  under  certain  circumstances  specified  in the  1993  plan  or  unless
otherwise  specified at the discretion of the Board of Directors,  no option may
be exercised  prior to one year after date of grant,  with the balance  becoming
exercisable in cumulative  installments over a three year period during the term
of the option.


<PAGE>


Warrants Issued to Individuals for Monies Loaned or Services Rendered:

Warrants  were issued in Fiscal  Year  February  28,  2000 to five  individuals,
including  officers  and  directors,  who loaned  monies to the  Company and one
individual who assisted in raising funds for the Company. These warrants are for
terms of five years with  exercise  prices  ranging from $.30 per share to $1.00
per share. These warrants expire as follows; 5,000 in March 2004; 600,000 in May
2004; 225,000 in August 2004; 25,000 in January 2005; and 50,000 in May 2005.


Warrants Issued in Conjunction with Subordinated Mezzanine Debt:

Warrants were issued to Norwood Venture Corporation in conjunction with $850,000
in funding supplied to the Company. Stock purchase warrants (the "Put Warrants")
to purchase  1,100,000 shares of the Company's common stock at an exercise price
of $.30,  the fair market value of the  Company's  common stock on September 30,
1999. In connection with the  amendments,  dated December 22, 2000 and April 30,
2001,an  additional  244,444 and 733,333 warrant shares were granted at exercise
prices  of  $0.30  and $.10  per  share,  respectively.  In  connection  with an
amendment to the Norwood  Agreement,  in October  2001,  the  exercise  price of
certain  of the  warrants  was  reduced  from  $.30 to $.15 per  share.  The Put
Warrants  can be put to the Company from May 29, 2006 to May 29, 2007 as defined
by the Agreement, and they expire on September 30, 2010.


Beneficial Ownership of Shares

The  following  information  is  furnished  as of June  20,  2003,  to  indicate
beneficial  ownership of the Company's  Common Stock by each  Director,  by each
named executive officer who has a salary and bonus in excess of $100,000, by all
Directors  and  executive  officers as a group,  and by each person known to the
Company to be the beneficial owner of more than 5% of the Company's  outstanding
Common  Stock.  Such  information  has  been  furnished  to the  Company  by the
indicated owners.  Unless otherwise indicated,  the named person has sole voting
and investment power.

 Name (and address if                            Amount
   more than 5%) of                          Beneficially
   Beneficial owner                               Owned                  Percent

Directors and Officers
     *Harvey L. Berger                           386,700(1)                4.2%
     *Christopher L. Coccio                      461,000(2)                4.8%
     *Samuel Schwartz                            997,083(3)               10.6%
     *Jeffrey O. Spiegel                          98,217(4)                1.4%
                                               ---------                   ----
All Executive Officers and Directors
  as a Group (6)                               2,103,568(5)               21.0%

Additional 5% owners
     Herbert Spiegel                             513,692                   5.6%
     425 East 58th Street
     New York, NY  10022

     Norwood Venture Corporation                2,077,777(6)              18.4%
     65 Norwood Avenue
     Montclair, NJ 07043

*c/o Sono-Tek Corporation, 2012 Route 9W, Milton, NY  12547.
** Less than 1%

1 Includes  4,000  shares in the name of Dr.  Berger's  wife and 65,000  options
deemed exercisable issued under the 1993 Plan.

2 Includes 420,000 options deemed  exercisable  issued under the 1993 Plan. Does
not include 75,000 options that are not yet vested.

3 Includes 300,000 warrants deemed exercisable awarded by the Board of Directors
in May 1999 and 20,000  options deemed  exercisable  issued under the 1993 Plan.
Does not include 20,000 options that are not yet vested.

4 Includes 20,000 options deemed exercisable issued under the 1993Plan.

5  Includes  672,500  options  deemed  exercisable  issued  under the 1993 Plan,
300,000  warrants  deemed  exercisable  awarded by the Board of Directors in May
1999.  Does not  include  112,5000  options  that are not yet  vested.  Does not
include shares  beneficially owned by Dr. Donald F. Mowbray who is a nominee for
the Board of Directors as a non-employee director.

6 Includes  1,100,000  warrants deemed exercisable issued on September 30, 1999,
244,444  warrants  deemed  exercisable  issued on December 20, 2000, and 733,333
warrants deemed  exercisable issued on April 30, 2001, all in conjunction with a
loan, as amended, made to the Company.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Norwood  loans - On April  30,  2001,  in  order to  induce  the  advance  of an
additional $300,000 by Norwood,  certain of the Company's directors,  an officer
and an  affiliate  of the  Company  participated  in the amount of $216,750 in a
mezzanine  financing.  Interest  expense of $103,416.64  was paid to Norwood and
$26,371 was forwarded to these individuals during Fiscal Year 2003.

Short-term  loans - At  Fiscal  Year End  2002,  loans  from  directors,  former
officers and related parties in the amount of $286,084 plus accrued  interest of
$62,728 were  formalized  into  four-year  notes  bearing  interest at 5% on the
unpaid balance. Repayments of these notes on a monthly basis commenced March 31,
2002.  Interest  expense of $16,468 was either paid or accrued to these  parties
during this fiscal year.

Consulting agreement -
At February 28, 2003 prior years'  consulting fees of $69,076 recorded from 1993
to 1996 to the  Company's  Chairman  of the  Board  have  been  reclassified  as
long-term.  Accordingly, $4,145 in interest expense has been imputed and charged
to paid-in capital for the year then ended.


Section 16(a) Beneficial Ownership Reporting Compliance

The  Company is not aware that any reports  required  by Section  16(a) were not
filed on a timely basis.


                ITEM 2. ADOPTION OF THE 2003 STOCK INCENTIVE PLAN

The Company currently has a Stock Incentive Plan that was adopted on October 12,
1993  (the"1993  Plan").  The 1993 Plan will  expire on October  12, 2003 and no
further stock  options can be granted under this plan.  The 1993 Plan allows the
issuance of options to purchase up to 1,500,000  shares of common stock of which
1,062,562  have been issued.  In order to facilitate the hiring and retention of
qualified  personnel the Board of Directors  believes that a new plan be adopted
by the  shareholders  (the "2003  Plan").  The Board of  Directors  has reserved
1,500,000 shares for issuance under the 2003 Plan

The 2003 Plan will cover all employees of the Company.  All regular employees of
the Company,  whether salaried or hourly,  will be eligible for awards under the
Plan.  The Board of Directors  believes  that stock  options are integral to the
hiring and  retention  of all  employees.  Additionally,  the  Company may issue
non-qualified  stock option awards to  non-employee  directors or consultants to
the Company.

This proposal must receive the  affirmative  vote of a majority of shares voting
in person or by proxy at the Annual Meeting, assuming a quorum is present.

                                  The 2003 Plan

The 2003 Plan is intended to establish a policy of encouraging  ownership of the
Company's Common Stock by employees, directors, and consultants of Sono-Tek, and
of providing  incentives for them to put forth maximum efforts for the Company's
successful  operations.  By extending to such  individuals  the  opportunity  to
acquire proprietary interests in Sono-Tek and to participate in its success, the
Company believes that the 2003 Plan benefits the Company and its shareholders by
making it  possible  for the  Company to attract  and retain the best  available
talent and by rewarding such  individuals for their part in increasing the value
of the Company's stock.

The Board of Directors  administers  the 2003 Plan. The Board has full authority
in its  discretion,  but subject to the express  provisions of the 2003 Plan, to
determine  (i) the  individuals  to whom,  and the time or times at which awards
shall be granted,  (ii) the number of shares to be covered by each award,  (iii)
the purchase price of the Common Stock covered by each option,  and (iv) whether
options shall be of the Incentive  Stock Option type,  the  Non-Qualified  Stock
Option type, or both.

Incentive  Stock  Options or  Non-Qualified  Stock Options may be granted to any
person who, at the time the award is granted,  is an employee of the Company. In
determining the employees to whom awards shall be granted,  the number of shares
of Common Stock to be covered by each award, the term of any option, and whether
any such option shall be an Incentive Stock Option, a Non-Qualified  Option,  or
both, the Board shall take into account the duties of the respective  employees,
their present and  potential  contributions  to the success of the Company,  and
such other factors as it shall deem relevant in  connection  with  accomplishing
the purpose of the 2003 Plan. An individual who has been granted an award may be
granted and hold an  additional  award or awards,  if the Board of  Directors so
determines.

Non-Qualified  Stock  Options  may be  granted  to  non-employee  directors  and
consultants to the Company.  At July 22, 2003, Mr.  Schwartz and Mr. Spiegel and
were the only non-employee directors of the Company, and if elected, Dr. Mowbray
will also be a  non-employee  director.  Upon  election  or  re-election  to the
Company's  Board  of  Directors,   non-employee  directors  are  granted  20,000
non-qualified   stock  options  at  current  market  price,  50%  of  which  are
exercisable  after a period of one year and 50% of which are exercisable after a
period of two years.

The purchase price of common stock covered by each option shall be determined by
the Board od Directors,  but shall not be less than 100% (or 110% in the case of
an Incentive  Stock  Option  granted to a ten percent  shareholder)  of the fair
market  value of the common  stock at the time the option is  granted.  The fair
market value shall mean the closing  sales price of the common stock on the date
on which the option is granted (or in the event of no trading,  the last closing
stock price available).

The term of each option shall be for such period as the Board of Directors shall
determine,  but not more than ten years (or 5 years in the case of an  Incentive
Stock Option granted to a ten percent  shareholder)  from the date of the grant,
and may be subject to earlier  termination  under certain  circumstances and may
extend beyond the termination of employment or other relationship.

The 2003 Plan provides that payment in full for shares purchased under an option
shall be made at the time or exercise in cash or certified check or by tendering
to the Company  shares of the Company's  common stock then owned by the optionee
valued at fair market  value,  or partly in cash and partly in shares.  The 2003
Plan provides for acceleration of the  exercisability of any option in the event
of a specified  tender  offer or  exchange  offer or in the event of a change in
control as defined by the 2003 Plan.

The 2003 Plan shall terminate on May 20, 2013. The Board of Directors may at any
time prior to that date  terminate  the 2003 Plan or make such  modification  or
amendment of the Plan as it shall deem  advisable,  provided,  however,  that no
amendment  may be made  without the  approval by holders of voting  stock of the
Company,  except  for  adjustments  upon  changes in the  capitalization  of the
Company,  which would (i) increase the maximum number of shares for which awards
may be granted under the 2003 Plan,  (ii) change the manner of  determining  the
minimum  option  prices,  (iii)  extend the period  during which an award may be
granted or an option  exercised,  or (iv) amend the requirements as to the class
of  persons  eligible  to  receive  awards.  No  termination,  modification,  or
amendment  of the 2003 Plan or any award  under the 2003 Plan may,  without  the
consent  of the person to whom an award  shall  theretofore  have been  granted,
adversely affect the rights of such person under such award.



Federal Tax Consequences

With respect to Non-Qualified  Options,  on exercise the difference  between the
option  exercise  price and the fair market value of the stock on the  measuring
date  (normally  the date of exercise of the option) will be taxable as ordinary
income to the optionee and will be  deductible  by the Company.  Gain or loss on
the  subsequent  sale of the stock will be  eligible  for  capital  gain or loss
treatment by the optionee and will have no federal  income tax  consequences  to
the Company.

If  payment  upon  exercise  of a  Non-Qualified  Option  is made  by  tendering
previously  owned  shares,  the  exchange  will be a  tax-free  exchange  to the
optionee  to the  extent of a like  number of new  shares,  with the new  shares
retaining the basis and holding period of the old shares.  The fair market value
of any additional shares transferred to the optionee (representing the excess of
the fair market value of all of the new shares over the fair market value of all
of the old  shares)  will  constitute  ordinary  income to the  optionee  and be
deductible by the Company. This amount then becomes the optionee's basis in such
shares.

With  respect  to  Incentive  Stock  Options,  if the  optionee  does not make a
disqualifying  disposition  of stock  acquired on exercise  of such  option,  no
income for federal  income tax purposes  will result to such  optionee  upon the
granting  or exercise  of the option  (except  that the amount by which the fair
market  value of the stock at time of exercise  exceeds the option  price may be
subject to the alternative minimum tax), and in the event of any sale thereafter
any  amount  realized  in excess of his cost will be taxed as long term  capital
gain and any loss  sustained  will be long term capital loss. In such case,  the
Company will not be entitled to a deduction  for federal  income tax purposes in
connection  with  the  issuance  or  exercise  of the  option.  A  disqualifying
disposition will occur if the optionee makes a disposition of such shares within
two years from the date of the  granting  of the option or within one year after
the transfer of such shares to him. If a disqualifying  disposition is made, the
difference  between the option price and the lesser of (i) the fair market value
of the stock at the time the option is  exercised  or (ii) the  amount  realized
upon disposition of the stock will be treated as ordinary income to the optionee
at the time of disposition and will be allowed as a deduction to the Company.

An  exchange  of Common  Stock in payment of the option  price in the case of an
Incentive Stock Option,  if the exchange is not a  disqualifying  disposition of
the stock exchanged, is considered to be tax-free. Under proposed regulations, a
number of shares received upon exercise equal to the number of shares  exchanged
will have a basis equal to the basis of the shares  exchanged  and the remaining
shares received will have a zero basis.

An exchange of statutory  option stock to acquire  other stock on exercise of an
Incentive Stock Option is a taxable recognition  transaction with respect to the
stock  disposed of if the minimum  statutory  holding  period for such statutory
option stock has not been met.  Statutory  Option stock  includes stock acquired
through  exercise of a qualified  stock option,  an Incentive  Stock  Option,  a
restricted  stock option or an option  granted under an employee  stock purchase
plan. If there is such a premature disposition, ordinary income is attributed to
the  optionee  (and will be  deductible  by the  Company)  to the  extent of his
"bargain"   purchase  on  acquisition  of  the   surrendered   stock;   and  the
post-acquisition  appreciation  in  value  of such  stock  is  taxed to him as a
short-term  gain if held  for  less  than  the  applicable  holding  period  for
long-term  capital gain, and long-term  capital gain if held for such applicable
holding period, and will not be deductible by the Company.

A portion of the excess of the amount  deductible  by the Company over the value
of options when issued may be subject to the alternative  minimum tax imposed on
corporations.

The  described  tax  consequences  are based on current  laws,  regulations  and
interpretations  thereof,  all of which are subject to change. In addition,  the
discussion  is limited to federal  income taxes and does not attempt to describe
state and local tax effects  which may accrue to  participants  or the  Company.
Each  participant  is advised to  consult  his or her own tax  advisor as to the
specific tax effects which may accrue as a result of  participation  in the 2003
Plan.  The 2003 Plan is not  qualified  under  Section  401(a)  of the  Internal
Revenue Code.

New Plan Benefits

Since the benefits of stock option grants under the new plan (the 2003 Plan) are
not determinable,  the benefits summarized below reflect the stock option grants
that were issued  during the last fiscal year under the existing  plan (the 1993
Plan).  Grants  indicated below may not be indicative of future grants under the
2003 Plan.

                                NEW PLAN BENEFITS
                            2003 Stock Incentive Plan
Name and Position                           Dollar Value ($)    Number of Shares
- -----------------                           ----------------    ----------------

Christopher L. Coccio, CEO & President      $43,528                   275,000
Harvey L. Berger, Treasurer                   2,360                    20,000
R. Stephen Harshbarger, Vice President        2,360                    20,000
Vincent F. DeMaio, Vice President             2,360                    20,000
                                             ------                    ------
Executive Group                             $50,608                   335,000
Non-Executive Director Group                $11,583                    40,000
Non-Executive Officer Employee Group        $10,526                    70,000

THE BOARD OF DIRECTORS RECOMMENDS THAT THE SHAREHOLDERS VOTE FOR THE APPROVAL OF
THE 2003  STOCK  INCENTIVE  PLAN AND  AUTHORIZING  1,500,000  COMMON  SHARES FOR
ISSUANCE THEREUNDER.


<PAGE>



                 ITEM 3. RATIFICATION OF APPOINTMENT OF AUDITORS

The Board of Directors has appointed Radin,  Glass & Co., LLP,  Certified Public
Accountants,  to audit the books of account and other records of the Company for
the fiscal year ending  February 28, 2004. In the event of a negative  vote, the
Board of  Directors  will  reconsider  its  election.  For the fiscal year ended
February 28, 2003 the Company paid or accrued fees of approximately  $29,000 for
services  rendered by Radin Glass & Co., LLP, its  independent  auditors.  These
fees included audit services and tax return preparation.  The Audit Committee of
the Company's  Board of Directors  determined the  independence of the Company's
auditors.

A  representative  of Radin,  Glass & Co.,  LLP is expected to be present at our
Annual Meeting,  will have an opportunity to make a statement if he desires, and
will be available to respond to appropriate questions.

THE  BOARD  OF  DIRECTORS   RECOMMENDS  THAT  THE  SHAREHOLDERS   VOTE  FOR  THE
RATIFICATION OF THE APPOINTMENT OF RADIN, GLASS & CO., LLP.

                              ITEM 4. OTHER MATTERS

The Board of  Directors  is not aware of any  business  to be  presented  at the
Annual  Meeting except the matters set forth in the Notice and described in this
Proxy Statement.  Unless otherwise  directed,  all shares represented by Proxies
will be voted in favor of the  proposals of the Board of Directors  described in
this Proxy Statement.  If any other matters come before the Annual Meeting,  the
persons named in the accompanying  Proxy will vote on those matters according to
their best judgment.

Expenses

The entire  cost of  preparing,  assembling,  printing  and  mailing  this Proxy
Statement,  the enclosed Proxy and other  materials,  and the cost of soliciting
Proxies  with respect to the Annual  Meeting  will be borne by the Company.  The
Company  will  request  banks  and  brokers  to  solicit  their   customers  who
beneficially  own  shares  listed  of  record  in  names of  nominees,  and will
reimburse  those banks and brokers for the reasonable  out-of-pocket  expense of
such  solicitations.  The  original  solicitation  of  Proxies  by  mail  may be
supplemented by telephone and facsimile by officers and other regular  employees
of the Company but no additional compensation will be paid to such individuals.

Future Shareholders Proposals

Proposals of  shareholders  intended to be presented at the next annual  meeting
(expected  to be held in August  2004)  under SEC Rule 14a-8 must be received by
the Company for  inclusion in the  Company's  proxy  statement and form of proxy
relating to that meeting (expected to be mailed in mid-July 2004) not later than
March 15, 2004.

Notice of  shareholder  matters  intended  to be  submitted  at the next  annual
meeting  outside the processes of Rule 14a-8 will be considered  untimely if not
received by the Company by June 8, 2004. The discretionary  authority  described
above with respect to other matters  coming before the meeting will be conferred
with respect to any such untimely matters.

Signed:


/s/Claudine Y. Corda
Claudine Y. Corda

July 22, 2003


<PAGE>



FORM OF PROXY CARD                                  Please mark your
                                                    votes as in this
                                                    example        [ ]

                             FOR all nominees   WITHHOLD AUTHORITY
                             listed at right    to vote for
                             (except as marked) nominees listed at right

                                                     Nominees:
1. The election of three (3)      [ ]           [ ]  Dr. Harvey Berger
   Directors of the Company.                    [ ]  Dr. Christopher L. Coccio
                                                [ ]  Dr. Donald F. Mowbray

(INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list to the right)

                                                  FOR       AGAINST      ABSTAIN
2.  Approval of the 2003 Stock Incentive Plan
    and authorizing  1,500,000  common
    shares for issuance thereunder.               [ ]         [ ]         [ ]


                                                  FOR       AGAINST      ABSTAIN
3.  Ratification of the appointment of
    Radin, Glass & Co., LLP as the Company's
    independent auditors.                          [ ]         [ ]        [  ]

In their discretion, the Proxies are authorized to vote upon such other business
as may properly come before the meeting.  This proxy,  when  properly  executed,
will be voted in the manner directed herein by the undersigned shareholder.

If no direction is made, this proxy will be voted FOR Proposals 1, 2 and 3.

PLEASE SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY,
USING THE ENCLOSED ENVELOPE.

Your signature on this proxy is your  acknowledgment of receipt of the Notice of
Meeting and Proxy Statement, both dated July 22, 2003.

SIGNATURE(S): __________________________ Date: ___________
                                         (Signature)

SIGNATURE(S): __________________________ Date: ___________
                                  (Signature if held jointly)

NOTE:  Please sign exactly as name appears above.  When shares are held by joint
tenants,  both should sign. When signing as attorney,  executor,  administrator,
trustee,  or  guardian,   please  give  title  as  such.  If  stockholder  is  a
corporation, please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by authorized person.


<PAGE>



                              SONO-TEK CORPORATION
                      2012 Route 9W, Milton, New York 12547
           This Proxy is solicited on behalf of the Board of Directors

The undersigned  shareholder(s) of Sono-Tek Corporation, a corporation organized
under the laws of the State of New York,  hereby appoints  Claudine Y. Corda and
Samuel  Schwartz  and as my (our)  proxies,  each  with the  power to  appoint a
substitute,  and  hereby  authorizes  them,  and each of them  individually,  to
represent  and to vote,  as  designated  on the reverse side hereof,  all of the
shares of Sono-Tek  Corporation,  which the undersigned is or may be entitled to
vote at the Annual Meeting of Shareholders to be held at The Poughkeepsie  Grand
Hotel, 40 Civic Center Plaza,  Poughkeepsie,  New York 12601, at 10:00 A.M., New
York  time,  on  August  21,  2003,  or any  adjournment  thereof.  The Board of
Directors recommends a vote FOR the proposals on the reverse side.

                  IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE





<PAGE>


Appendix 1

                 SONO-TEK CORPORATION 2003 STOCK INCENTIVE PLAN
                                  MAY 20, 2003

1.       OBJECTIVE OF THE PLAN.

The purpose of this 2003 Stock Incentive Plan [the "Plan"] is to enable Sono-Tek
Corporation [the "Company" or "Sono-Tek"] to compete successfully in attracting,
motivating, and retaining employees, directors, and consultants with outstanding
abilities by making it possible for them to purchase shares of Sono-Tek's Common
Stock on terms which will give them a more direct and continuing interest in the
future success of the Company's business.

This Plan is intended  to  establish a policy of  encouraging  ownership  of the
Company's Common Stock by employees,  directors, and consultants of Sono-Tek and
providing  incentives  for them to put forth maximum  efforts for its successful
operations.  By  extending  to  such  individuals  the  opportunity  to  acquire
proprietary  interests in Sono-Tek and to participate  in its success,  the Plan
may be expected to benefit  Sono-Tek and its  shareholders by making it possible
for  Sono-Tek to attract and retain the best  available  talent and by rewarding
such individuals for their part in increasing the value of the Company's stock.

2.       DEFINITIONS.

As used herein,  the  following  terms have the meanings  hereinafter  set forth
unless the context clearly indicates to the contrary:

2.1 "Award" shall mean Options granted pursuant to this Plan.

2.2 "Award  Agreement" shall mean the agreement  between the Award Recipient and
Sono-Tek setting forth the terms and conditions of an Award.

2.3 "Award Recipient" shall mean an individual who receives an Award pursuant to
this Plan.

2.4  "Board"  and  "Board of  Directors"  shall mean the board of  directors  of
Sono-Tek.

2.5 "Code" shall mean the Internal Revenue Code of 1986, as amended.

2.6 "Common  Stock" shall mean shares of the common stock of Sono-Tek with a par
value of $.0l.

2.7  "Company"  means  Sono-Tek  Corporation,  a New York  corporation  with its
principal offices at 2012 Route 9W, Bldg. 3, Milton, New York 12547.

2.8  "Continuous   Employment"  shall  mean  continuous  regular  employment  by
Sono-Tek.  A leave of  absence  granted  in  accordance  with  Sono-Tek's  usual
procedure  which does not operate to interrupt  continuous  employment for other
benefits granted by Sono-Tek shall not be considered a termination of employment
nor an interruption of Continuous Employment  hereunder,  and an employee who is
granted such a leave of absence shall be considered to be continuously  employed
during the period of such leave; provided, that if regulations under the Code or
an amendment to the Code shall  establish a more  restrictive  definition,  of a
leave of absence, such definition shall be substituted herein.

2.9  "Non-Employee  Director"  shall mean any director who is not an employee of
the Company.

2.10  "Consultant"  shall mean any  individual or  organization  retained by the
Company to provide consulting services.

2.11 "Incentive  Stock Options" shall mean those Options  granted  hereunder as,
and intended to be,  Incentive  Stock  Options as defined in, and which by their
terms comply with, the  requirements  for such options set out in Section 422 of
the Code, and Treasury Regulations issued pursuant thereto.

2.12  "Non-Qualified  Stock Options" shall mean those Options granted  hereunder
which are not Incentive Stock Options as described in paragraph 2.11.

2.13 "Option" shall mean an option to purchase Common Stock granted  pursuant to
the provisions of this Plan.

2.14 "Ten Percent  Shareholder"  shall mean an individual  who owns,  within the
meaning of Section  422 (b) (6) of the Code,  stock  possessing  more than (10%)
percent of the total combined voting power of all classes of stock of Sono-Tek.

3.       STOCK RESERVED FOR THE PLAN.

One million,  five hundred  thousand  (1,500,000)  shares of the  authorized but
unissued  Common  Stock are  reserved  for issue and may be issued  pursuant  to
Awards under the Plan.

In lieu of such unissued shares,  Sono-Tek may, in its discretion,  transfer, on
the exercise of Options,  reacquired  shares or shares  bought in the market for
the purposes of the Plan,  provided that (subject to the provisions of paragraph
13) the total number of shares  which may be granted or sold  pursuant to Awards
granted under the Plan shall not exceed 1,500,000.

If any Awards  granted  under the Plan shall for any reason  terminate or expire
without  having been  exercised,  the Common  Stock not issued under such Awards
shall be available again for the purposes of the Plan.

4.       ADMINISTRATION OF THE PLAN.

4.1 The Board of Directors shall  administer the Plan. The Board shall have full
authority in its discretion,  but subject to the express Provisions of the Plan,
to determine:  the  individuals to whom, and the time or times at which,  Awards
shall be granted; the number of shares to be covered by each Award; the purchase
price of the Common Stock  covered by each Option;  whether  Options shall be of
the  Incentive  Stock Option type,  or the  Non-Qualified  Stock Option type, or
both; and vesting  schedule.  The Board shall further have full authority at its
discretion  to interpret  the Plan;  to  prescribe,  amend and rescind rules and
regulations relating to it; to determine the terms (which need not be identical)
of Award Agreements executed and delivered under the Plan,  including such terms
and provisions as shall be requisite in the judgement of the Board to conform to
any change in any law or regulation  applicable  thereto;  and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
The Board's determination on the foregoing matters shall be conclusive.

4.2  Notwithstanding  the provisions of paragraph 4.1, the selection of officers
and directors for participation in the Plan and decisions concerning the timing,
pricing  and  amount  of an Award  may,  at any time and from  time to time,  be
delegated  by the Board of  Directors  to a  committee  (the  "Committee").  The
Committee shall be not less than two directors and shall be comprised  solely of
Non-Employee  Directors,  as defined by Rule  16b-3(b)(3)(i)  of the  Securities
Exchange Act of 1934 ("1934 Act"),  or any successor  definition  adopted by the
Securities  Exchange  Commission,  and who shall each also qualify as an Outside
Director for purposes of Section  162(m) of the Code.  Any vacancy  occurring on
the  Committee  may be  filled by  appointment  by the  Board.  The Board at its
discretion  may  from  time  to  time  appoint   members  to  the  Committee  in
substitution  of  members  previously  appointed,  may  remove  members  of  the
Committee and may fill vacancies, however caused, in the Committee."

5.       ELIGIBILITY; FACTORS TO BE CONSIDERED IN GRANTING AWARDS.

5.1 Incentive Stock Options or Non-Qualified Stock Options may be granted to any
person who, at the time the Award is granted,  is a regular,  salaried  employee
(which term shall  include  officers and  Directors  who are  regular,  salaried
employees) of Sono-Tek. A member of the Board of Directors of the Company who is
not also a regular,  salaried  employee  of  Sono-Tek,  will not be  eligible to
receive  Incentive  Stock Options.  Further,  no Incentive  Stock Options may be
granted  hereunder  to an  individual  who,  immediately  after  such  Option is
granted, is a Ten Percent  Shareholder,  unless (i) the option price is at least
110% of the fair  market  value of such  stock on the date of grant and (ii) the
Option  may not be  exercised  more than 5 years  after  the date of  grant.  In
determining the employees to whom Awards shall be granted,  the number of shares
of Common Stock to be covered by each Award, the term of any Option, and whether
any such Option  shall be an  Incentive  Stock  Option,  a  Non-Qualified  Stock
Option,  or both,  the Board or  committee,  as the case may be, shall take into
account the duties of the  respective  employees,  their  present and  potential
contributions  to the success of Sono-Tek  and such other  factors as they shall
deem  relevant in  connection  with  accomplishing  the purpose of the Plan.  An
employee  who has been  granted an Award may be granted  and hold an  additional
Award or Awards if the Board or committee so determines.

5.2  Non-Qualified  Stock Options may be granted to  Non-Employee  Directors and
Consultants  to the Company.  In  determining  the  Non-Employee  Directors  and
Consultants  to whom  Awards  shall be  granted,  and the term and the number of
shares of Common Stock to be covered by each Award, the Board or committee shall
take into account the duties of such  individuals,  their  contributions  to the
success of the Company,  and other such  factors as they shall deem  relevant in
connection  with  accomplishing  the purpose of the Plan.  Such  individuals  or
organizations may be granted and hold an additional Award or Awards if the Board
or committee so determines.

6.       OPTION PRICES.

The purchase price of Common Stock covered by each Option shall be determined by
the Board or committee,  as the case may be, but shall not be less than 100% (or
110%  in  the  case  of an  Incentive  Stock  Option  granted  to a Ten  Percent
Shareholder) of the fair market value of the Common Stock at the time the Option
is granted.  The fair market value shall mean the simple average of the high and
low sales  prices of the Common  Stock as  reported  in the report of  composite
transactions (or other source  designated by the Board or committee) on the date
on which the Option is granted.

7.       TERM OF OPTIONS.

The term of each Option  shall be for such period as the Board shall  determine,
but not more  than ten years (or five  years in the case of an  Incentive  Stock
Option granted to a Ten Percent  Shareholder) from the date of granting thereof,
and shall be subject to earlier  termination  as  hereinafter  provided.  If the
original term of any Option is less than ten years (or five years in the case of
an Option granted to a Ten Percent  Shareholder) from the date of granting,  the
Option, prior to its expiration,  may be amended, with the approval of the Board
and the  employee,  to extend  the term so that the term as  amended is not more
than ten years (or five years in the case of an Incentive  Stock Option  granted
to a Ten Percent Shareholder) from the original date of granting of such Option.
To the  extent  not  otherwise  prohibited  by law,  such  extension  shall  not
constitute  the grant of a new Option and the purchase  price  specified in such
Option need not be increased.

8.       EXERCISE OF OPTIONS.

8.1 In the case of Awards  granted to employees,  each Option shall provide that
it may be  exercised  as to  forty-five  percent  of the total  number of shares
covered  by such  Option on or after the date on which the  employee  shall have
completed  at least  one year of  Continuous  Employment  after the  Option  was
granted,  and as to an  additional  thirty-five  percent of the total  number of
shares  covered by such Option on or after the date on which the employee  shall
have completed at least two years of Continuous  Employment after the Option was
granted,  and as to the  final  twenty  percent  of the  total  number of shares
covered  by such  Option on or after the date on which the  employee  shall have
completed  at least three years of  Continuous  Employment  after the Option was
granted, so that upon completion of the third year of such Continuous Employment
after granting the Option,  the holder will have become entitled to purchase the
entire  number of shares  covered by the Option;  provided  that the Board shall
have  authority  to vary in advance of grant and from time to time after  grant,
the period of Continuous  Employment which shall be required for the exercise of
Options granted hereunder.

8.2 In the case of Awards  granted to  Non-Employee  Directors  each such Option
shall provide that it may be exercised as to one-half the total number of shares
covered by such Option on or after the date in which the  Non-Employee  Director
shall have  completed at least one year of service  after the Option was granted
and as to the remainder of the total number of shares  covered by such option on
or after the date of which such  Non-Employee  Director  will have  completed at
least two years of  continued  service,  provided  that the Board shall have the
authority  to vary in  advance  of grant and from time to time  after  grant the
period of service  which shall be required for the  exercise of Options  granted
hereunder.

8.3 In the case of Awards granted to Consultants, each such Option shall provide
that it may be exercised as to one-half of the total number of shares covered by
such  Option one year on or after the date the Option was  granted and as to the
remainder of the total number of shares covered by such Option,  two years after
the date  the  Option  was  granted,  provided  that the  Board  shall  have the
authority  to vary in  advance  of grant and from time to time  after  grant the
exercise period of such grant.

8.4 Unless otherwise provided in the Award Agreement,  a holder of an Option may
purchase all or from time to time any part of, the shares for which the right to
purchase  has  accrued to him in  accordance  with the terms of this  paragraph;
provided,  however,  that an Option  shall not be  exercised as to fewer than 50
shares,  or all the remaining shares covered by the Option, if fewer than 50, at
any one time.  The  purchase  price of the shares as to which an Option shall be
exercised shall be paid in full at the time of exercise.  at the election of the
holder of an Option (i) in cash or currency of the United States of America,  or
by  certified  check  made  payable  to the  Company  in U.S.  dollars,  (ii) by
tendering to Sono-Tek shares of the Company's Common Stock,  then owned at least
six months by him,  having a fair market value equal to the cash exercise  price
applicable  to the  purchase  price of the shares as to which an Option is being
exercised,  or (iii) partly in cash or  certified  check and partly in shares of
Sono-Tek's  Common  Stock  valued at fair market  value.  Such fair market value
shall be  determined as of the close of the business day  immediately  preceding
the day on which the Option is  exercised,  in the manner set forth in paragraph
6.  Fractional  shares of Common Stock will not be issued.  Notwithstanding  the
foregoing,  the Board  shall  have the  right to  modify,  amend or  cancel  the
provisions  of clauses (ii) and (iii) above at any time upon prior notice to the
holders of Options. Except as provided in paragraphs 10 and 11 hereof, no Option
may be  exercised  at any time  unless  the  holder  thereof  is then a  regular
employee of Sono-Tek or any Subsidiary.  The holder of an Option shall have none
of the rights of a  stockholder  with  respect  to the shares  subject to option
until such shares shall have been  registered upon the exercise of the Option on
the  transfer  books  of the  Company  in the  name  of the  person  or  persons
exercising the Option.

8.5  Notwithstanding  any other  provision  of this Plan or any  Option  granted
hereunder,  any Option  granted  hereunder  and then  outstanding  shall  become
immediately  exercisable  in full (i) in the  event a tender  offer or  exchange
offer is made by any  "person"  within  the  meaning  of  Section  14 (d) of the
Securities  Exchange Act of 1934 (the "Act") or (ii) in the event of a Change in
Control;  provided  that, if in the opinion of counsel to Sono-Tek the immediate
exercisability  of such  Option,  when taken into  consideration  with all other
"parachute  payments" as defined in Section 280G of the Code, would result in an
"excess  parachute  payment" as defined in such  section,  such Option shall not
become  immediately  exercisable  except as and to the  extent  the Board in its
discretion  otherwise  determines.  For purposes of this  Section,  a "Change in
Control"  shall have occurred if (i) any "person"  within the meaning of Section
14 (d) of the Act other than a holder of any Common Stock or Preferred  Stock of
the  Company  on the  date  this  Plan is  approved  by the  Board  becomes  the
"beneficial owner" as defined in Rule 13d-3 thereunder,  directly or indirectly,
of more than 25% of Sono-Tek's  Common Stock,  (ii) during any two-year  period,
individuals  who constitute  the Board of Directors of Sono-Tek (the  "Incumbent
Board") as of the  beginning of the period cease for any reason to constitute at
least a majority  thereof,  provided  that any  person  becoming a member of the
Board of Directors  during such period whose election or nomination for election
by Sono-Tek's  stockholders was approved by a vote of at least three-quarters of
the  Incumbent  Board  (either by a specific  vote or by  approval  of the proxy
statement  of  Sono-Tek in which such person is named as a nominee for the Board
of Directors  without  objection to such  nomination)  shall be, for purposes of
this  clause  (ii),  considered  as  though  such  person  were a member  of the
Incumbent Board, or (iii) the approval by Sono-Tek's stockholders of the sale of
all or  substantially  all of the assets of  Sono-Tek.  The Board may adopt such
procedures  as to notice and  exercise as may be  necessary  to  effectuate  the
acceleration of the exercisability of Options as described above.

8.6 The  aggregate  fair market value  (determined  as of the date the Option is
granted) of the stock with  respect to which  Incentive  Stock  Options  granted
under the Plan and all other stock option plans of Sono-Tek are  exercisable for
the first time by any specific  individual  during any  calendar  year shall not
exceed $100,000.

9.       NONTRANSFERABILITY OF OPTIONS

An Option  granted under the Plan shall not be  transferable  otherwise  than by
will or the laws of descent and  distribution,  and an Option may be  exercised,
during the lifetime of the employee, only by him or her.

10.      TERMINATION OF EMPLOYMENT

10.1 If an employee  receiving an Option shall at any time not be an employee of
Sono-Tek, the Option shall at once terminate,  except as provided hereinafter in
this  paragraph.  In the event that the  employment  of an  employee  to whom an
Option  has  been  granted  under  the  Plan  shall be  terminated  (other  than
termination by the Company for cause as determined by the Board, or by reason of
retirement,  disability or death) such Option may,  subject to the provisions of
paragraphs  "8" and "11",  be  exercised,  to the extent that the  employee  was
entitled to do so at the date of  termination of his or her  employment,  at any
time within  sixty (60) days after such  termination,  but in no event after the
expiration of the term of the Option.  Options  granted under the Plan shall not
be affected by any change of duties or position so long as the holder  continues
to be an employee of Sono-Tek.

10.2 If a Non-Employee  Director awarded an Option shall at any time cease to be
a  Director  of the  Company,  the  Option  shall at once  terminate,  except as
provided hereinafter in this paragraph.  In the event the Non-Employee  Director
awarded an Option under the Plan shall be terminated  (other than termination by
the Company for cause as  determined by the Board,  or by reason of  retirement,
disability,  or death) such Option may,  subject to the provisions of paragraphs
"8" and "11", be  exercised,  to the extent that the Director was entitled to do
so at the date of  termination  of his or her  service,  at any time  within six
months after such termination,  but in no event after the expiration of the term
of the Option.

10.3 An Option  granted  to a  Consultant  may,  subject  to the  provisions  of
paragraphs  "8", and "11" be exercised,  to the extent that the  Consultant  was
entitled  to do so at the  date  of  the  termination  of his or her  consulting
services,  at any time within one year after such  termination,  but in no event
after the expiration of the term of the Option.

11.      RETIREMENT, DISABILITY OR DEATH OF EMPLOYEE.

If an employee to whom an Option has been  granted  under the Plan shall  retire
from Sono-Tek at normal retirement date pursuant to any pension plan provided by
Sono-Tek, or if such retirement is earlier than the employee's normal retirement
date,  and such  retirement  is with the prior  consent  of  Sono-Tek,  or if an
employee  is totally and  permanently  disabled,  such Option may be  exercised,
notwithstanding  the  provisions  of  paragraphs  "8" and "10"  hereof,  in full
without  regard to the  period of  Continuous  Employment  after the  Option was
granted at any time (a) in the case of an Incentive  Stock Option within 90 days
after  such  retirement  or  disability  retirement,  but in no event  after the
expiration of the term of the Option or (b) in the case of a Non-Qualified Stock
Option within 5 years after such retirement or disability retirement,  but in no
event after the expiration of the term of the Option.

If a person to whom an Option has been granted under the Plan shall die while he
or  she is  employed  by or in the  service  of  Sono-Tek,  such  Option  may be
exercised,  subject to the  provisions of paragraph "8", to the extent that such
person  was  entitled  to do so at the date of his  death,  by his  executor  or
administrator  or other  person  at the time  entitled  by law to such  person's
rights under the Option, at any time within such period,  not exceeding one year
after his or her death, as shall be prescribed in the Award Agreement, but in no
event after the expiration of the term of the Option.

12.      NO LOANS TO HOLDERS OF OPTIONS.

Neither  Sono-Tek,  nor any company with which it is affiliated  may directly or
indirectly  lend money to any person for the purpose of assisting  him or her to
acquire or carry  shares of the Common Stock issued upon the exercise of Options
granted under the Plan.

13.      ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.

Notwithstanding  any other  provision  of the Plan,  the  Award  Agreements  may
contain such  provisions as the Board shall  determine for the adjustment of the
number and class of shares covered by each outstanding  Award, the option prices
and the minimum numbers of shares as to which Awards shall be exercisable at any
one time in the event of changes in the  outstanding  Common  Stock by reason of
stock   dividends,    split-ups,    spin-offs,    recapitalizations,    mergers,
consolidations,  combinations  or exchanges of shares and the like;  and, in the
event of any such change in the outstanding  Common Stock,  the aggregate number
and class of shares available under the Plan and the maximum number of shares as
to which Awards may be granted to any employee shall be appropriately adjusted.

14.      SHARE WITHHOLDING.

With respect to any Award,  the Board may, in its discretion and subject to such
rules as the Board may adopt,  permit the  employee to  satisfy,  in whole or in
part, any withholding tax obligation which may arise in connection with an Award
by election to have  Sono-Tek  withhold  Common Stock having a fair market value
(calculated  in  accordance  with  paragraph  "6"  on the  date  the  amount  of
withholding tax is determined) equal to the amount of the withholding tax.

15.      NO RIGHT TO CONTINUED EMPLOYMENT.

Nothing in the Plan or in any Award  granted  or Award  Agreement  entered  into
pursuant to the Plan shall confer upon any employee the right to continue in the
employ of Sono-Tek or interfere  with the right of Sono-Tek to terminate  his or
her employment at any time.

16.      TIME OF GRANTING AWARDS.

Nothing  contained in the Plan or in any resolution to be adopted by the holders
of  voting  stock  of  Sono-Tek  shall  constitute  the  granting  of any  Award
hereunder. An Award pursuant to the Plan shall be deemed to have been granted on
the date on which  the name of the  recipient  and the  terms of the  Award  are
determined by the Board.

17.      TERMINATION AND AMENDMENT OF THE PLAN.

Unless the Plan shall have been  terminated as  hereinafter  provided,  no Award
shall be  granted  hereunder  after  May 20,  2013.  The Board of  Directors  of
Sono-Tek  may at any time  prior to that  date  terminate  the Plan or make such
modification  or  amendment  of the Plan as it shall deem  advisable;  provided,
however, that no amendment may be made, without the approval by the holders of a
majority of voting stock of Sono-Tek, except as provided in paragraph 13 hereof,
which would (i)  increase  the maximum  number of shares for which Awards may be
granted under the Plan, (ii) change the manner of determining the minimum option
prices,  (iii)  extend  the  period  during  which an Award may be granted or an
Option  exercised,  or (iv)  amend the  requirements  as to the class of persons
eligible to receive Awards.  No termination,  modification,  or amendment of the
Plan or of any Award under the Plan,  may,  without the consent of the person to
whom an Award shall  theretofore have been granted,  adversely affect the rights
of such person under such Award.

18.      GOVERNMENT REGULATIONS.

The  Plan  and  the  granting  and  exercising  of  Awards  thereunder,  and the
obligation of Sono-Tek to issue, sell and deliver shares,  as applicable,  under
such Awards, shall be subject to all applicable laws, rules and regulations.  In
particular, and without limiting the generality of the foregoing, as a condition
to the exercise of any Award, the Company may require the holder of an Option to
deliver to the Company (i) a written  certificate of the holder (or his personal
representative,  as the case may be) to the effect  that he is  purchasing  such
shares for  investment  and not with a view to the sale or  distribution  of any
such shares and (ii) such other certificates,  representations and agreements of
the  holder  (or his  personal  representative,  as the  case  may be) as may be
required  under the Plan or as the Company  shall also require in order that the
Company may be reasonably assured that the issuance,  delivery,  and disposition
of such shares are being and will be effected in compliance  with the Securities
Act of 1933, as amended (the "Act"), the Rules and Regulations thereunder, other
applicable  law, and the rules of each stock  exchange  upon which the shares of
Common Stock are listed, if any; provided,  however,  that if the offer and sale
of shares of Common  Stock upon  exercise of Options  granted  under the Plan is
registered  under the Act,  the holder (or his personal  representative,  as the
case may be) need not furnish the  certificate  described  in clause (i) of this
sentence. Certificates evidencing shares of Common Stock issued upon exercise of
the Option may contain such legends  reflecting  any  restrictions  upon sale or
transfer as in the view of counsel to the Company may be necessary to the lawful
and proper issuance of such certificates.

19.      SHAREHOLDER APPROVAL.

The Plan shall become  effective  upon adoption by the Board.  The Plan shall be
subject to approval by the affirmative  vote of the holders of a majority of all
outstanding  shares of capital  stock of the Company  entitled  to vote  thereon
within one (1) year before or after  adoption  of the Plan by the Board.  In the
event such shareholder approval is withheld or otherwise not received within the
given  time  period,  the Plan and all  options  which  may  have  been  granted
thereunder shall become null and void.











<PAGE>


Appendix 2

                              SONO-TEK CORPORATION

                                 AUDIT COMMITTEE

                    STATEMENT OF ITS DUTIES, RESPONSIBILITIES
                                 AND ACTIVITIES
                                  (AS AMENDED)

         This  document  is  intended  to  serve  as the  charter  of the  Audit
Committee of Sono-Tek Corporation.  The primary duty of the Sono-Tek Corporation
Audit  Committee  is to  exercise  due care in assuring  itself that  management
fulfills its responsibility  that the financial  reporting process results in an
objective   portrayal  of  the  financial  condition  of  the  Corporation  (the
"Corporation"  includes  Sono-Tek and any  subsidiaries  or affiliates,  whether
directly or indirectly owned). The independent public accountants are ultimately
accountable   to  the  Board  of   Directors   and  the  Audit   Committee,   as
representatives of the stockholders.

         The  following  are the major  responsibilities  of the Sono-Tek  Audit
Committee:

1.  Annually  in advance  of the annual  meeting  of  stockholders  selects  the
independent public  accountants to audit the books,  records and accounts of the
Corporation and submits such selection to the  stockholders  for ratification or
rejection  at such  meeting,  engages the  independent  public  accountants  and
ensures that the scope of the audit is sufficiently comprehensive.

2.  Evaluates  and, when  appropriate,  recommends to the Board of Directors the
replacement of the independent public accountants.

3.  Reviews the quality  and  acceptability  of each  material  accounting  item
affecting the financial  statements of the Corporation  which, in the opinion of
the independent  public  accountants,  might receive,  under generally  accepted
accounting  principles  ("GAAP"),  treatment  varying from the proposed for such
statements  and  transmits  to the  Board of  Directors  the  Audit  Committee's
decision on such accounting items.

4. Reports to the Board on each Committee  meeting (orally through its Chairman)
and on a total year's activity in written form on an annual basis.

         In undertaking the above-mentioned responsibilities, the Sono-Tek Audit
Committee undertakes the following activities:

1. Meets with the independent  public  accountants to review their proposed plan
for  conducting  the annual audit  including its scope and degree of reliance on
internal  controls,  reviews and approves the proposed  fees for the audit,  and
approves any required special services; and

2. Obtains from the independent public accountants a formal written Statement of
Independence delineating all relationships with Sono-Tek,  actively engages in a
dialog with the  independent  public  accountants  with respect to any disclosed
relationships or services that may affect their  objectivity or independence and
takes appropriate action to ensure their independence; and

3.  Receives  reports from the  management of Sono-Tek,  which include  material
changes in accounting policy and significant changes in the substance and format
of the financial statements.

In  support  of its  primary  duty,  the Audit  Committee  also  undertakes  the
following responsibilities and activities:

1.  Oversee the  adequacy of the system of internal  accounting  controls of the
Corporation.

(a) The Committee  ensures itself that actual  implementation of the policies of
the Corporation,  together with the procedures to be followed thereunder, assure
the  safeguarding  of assets and the reliability of financial  records.  In this
regard,  the Committee reviews compliance with the Foreign Corrupt Practices Act
and The  Sarbanes  Oxley  Act.  The  Committee  also  receives  reports on audit
comments periodically from management,  and annually from the independent public
accountants,  and a report on thefts and defalcations at least annually from the
Chief Executive Officer and Chief Financial Officer of Sono-Tek.

(b) The Committee  meets  privately and  individually  with the Chief  Executive
Officer and Chief Financial  Officer and the independent  public  accountants to
determine  that,  among other items:  (i) no outstanding  differences of opinion
exist  between  the  independent  public  accountants  and  management;  (ii) no
material  changes or  modifications  of accounting  principles or practice exist
which either the independent  auditor or management wished to make and the other
resisted;  (iii)  the  internal  auditor,  if the  company  has  created  such a
function,  confirms the continued encouragement and support from management; and
(iv)  confirms that each has a right and duty of direct  communication  with the
audit committee at any time.

2. Receive a report annually on expenses reported by the top elected officers of
the corporation.

3. Review the  corporation's  annual  financial  statements and the  independent
public accountants' report thereon prior to publication of the statements.

4.  Ensures the  delivery of a report from the Audit  Committee  to the Board of
Directors (the "Audit Committee Annual Report")  disclosing whether or not, with
respect to prior fiscal year: (i) management has reviewed the audited  financial
statements  with the Audit  Committee,  including a discussion of the quality of
the accounting  principles as applied and  significant  judgments  affecting the
Corporation's financial statements; (ii) the independent public accountants have
discussed with the Audit Committee the independent public accountants' judgments
of the quality of those  principles as applied and the  judgments  referenced in
(i) above under the  circumstances;  (iii) the members of Audit  Committee  have
discussed  among  themselves,  without  management  or  the  independent  public
accountants  present, the information  disclosed to the Audit Committee,  in (i)
and (ii)  above;  and (iv) the  Audit  Committee,  in  reliance  on  review  and
discussions  conducted with  management and the independent  public  accountants
pursuant to (i) and (ii) above,  is satisfied that the  Corporation's  financial
statements are fairly presented in conformity with Generally Accepted Accounting
Principles (GAAP) in all material  respects.  Additionally,  the Audit Committee
shall  ensure that the Annual  Report of the Audit  Committee is included in the
Corporation's annual report to shareholders and Form 10-KSB Annual Report.

5.  Reviews  and  discusses  with  the  independent  public  accountants  and  a
representative   of  the  Corporation's   financial   management  the  financial
information  contained  in the  Corporation's  Form 10-QSB  Report  prior to its
filing and the Corporation's earnings announcements prior to release,  including
significant   adjustments,   management  judgments  and  accounting   estimates,
significant  new  accounting  policies and outside  auditor  disagreements  with
management.

6. Conducts  special reviews at its own discretion  within the parameters of its
basic  responsibilities  or in other areas at the request of the Chairman of the
Board or the Board of Directors.

7. Ensures the disclosure of the Audit Committee charter at least triennially in
the annual report to stockholders  and in the next annual report to shareholders
after any significant amendment to that charter.

8. Reviews and updates the Audit Committee charter as conditions dictate, but at
least triennially.

9.  Periodically  review  globalization  issues,  strategies,  related risks and
controls related to foreign offices, joint ventures and alliances abroad.

In order to  successfully  execute  its  responsibilities,  the  Sono-Tek  Audit
Committee  maintains  a high degree of  independence  both in  establishing  its
agenda and  directly  accessing  various  members  of  Sono-Tek  and  subsidiary
management.  This ensures an independent and open exchange of views and confirms
the authority and responsibility of internal and external auditors and financial
management to inform the Audit Committee,  formally and informally,  of any such
matters  within  the  duties  and  responsibilities  of  that  Committee.   Such
communication  is achieved  through both formal  reports to the  Committee and a
direct line of  communication by the Chief Financial  Officer,  General Counsel,
independent public accountants, and others in the Corporation to the Chairman of
the Committee and the Committee itself.

              By  meeting  its  clearly  delineated   responsibilities   through
informed and dynamic activity and communication  processes,  the Audit Committee
can enable the Board to fulfill its fiduciary  responsibilities  relative to the
Corporation's internal controls and financial reporting process.


</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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