(

)

Equity Incentive Plan

November 30, 2019,

the Company had

one

equity incentive plan, the

2011

Plan, which is described below. The compensation cost charged against income was

$195,416

and

$197,243

for the

2019

and

2018

fiscal years, respectively, for all awards granted under the

2011

Plan during such years. The total income tax deductions for share-based compensation arrangements were

$122,022

and

$157,529

for the

2019

and

2018

fiscal years, respectively.

compensation cost was capitalized as part of inventory or fixed assets.

January 27, 2011,

the Board of Directors of the Company authorized and approved the Art’s-Way Manufacturing Co., Inc.

2011

Equity Incentive Plan (the

“2011

Plan”), subject to approval by the stockholders on or before

January 27, 2012.

The

2011

Plan was approved by the stockholders on

April 28, 2011.

It replaced the Employee Stock Option Plan and the Directors’ Stock Option Plan (collectively, the “Prior Plans”), and

further stock options will be awarded under the Prior Plans. Awards to directors and executive officers under the

2011

Plan are governed by the forms of agreement approved by the Board of Directors.

The

2011

Plan permits the plan administrator to award nonqualified stock options, incentive stock options, restricted stock awards, restricted stock units, performance awards, and stock appreciation rights to employees (including officers), directors, and consultants. The Board of Directors has approved a director compensation policy pursuant to which non-employee directors are automatically granted restricted stock awards of

1,000

shares of fully-vested common stock annually upon their election to the Board and another

1,000

shares of fully-vested common stock on the last business day of each fiscal quarter. Additionally, directors can elect to receive their board compensation as restricted stock. During the

2019

fiscal year, restricted stock awards of

56,750

shares were issued to various employees, directors, and consultants, which vest over the next

three

years, restricted stock awards of

9,000

shares were issued to various employees, which vested immediately upon grant, and restricted stock awards of

31,687

shares were issued to directors as part of the compensation policy, which vested immediately upon grant. During

2019

fiscal year,

32,600

shares of restricted stock became unrestricted,

1,400

shares of restricted stock were forfeited, and the Company bought

9,556

shares back as treasury stock from employees to pay payroll tax on vested shares. During the

2018

fiscal year, the Company issued

88,298

shares of restricted stock,

33,150

shares of restricted stock became unrestricted,

22,000

shares of restricted stock were forfeited, and the Company bought

7,332

shares back as treasury stock from employees to pay payroll tax on vested shares

Stock options granted prior to

January 27, 2011

are governed by the applicable Prior Plan and the forms of agreement adopted thereunder.

The fair value of each option award is estimated on the date of grant using the Black Scholes option-pricing model. Expected volatility is based on historical volatility of the Company’s stock and other factors. The Company uses historical option exercise and termination data to estimate the expected term the options are expected to be outstanding. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The expected dividend yield is calculated using historical dividend amounts and the stock price at the option issuance date.

	201 9		201 8
Expected Volatility		-		-
Expected Dividend Yield		-		-
Expected Term (in years)		-		-
Risk-Free Rate		-		-

The following is a summary of activity under the plans as of

November 30, 2019

and

2018,

and changes during the years then ended:

2019 Option Activity
Options	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options O/S at beginning of period		59,000	$	6.07
Granted		-	$	-
Exercised		-	$	-				-
Options Expired or Forfeited		-	$	-
Options O/S at end of period		59,000	$	6.07		2.86		-
Options Exercisable at end of the period		59,000	$	6.07		2.86		-

2018 Option Activity
Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options O/S at beginning of period		96,000		$	7.77
Granted		-		$	-
Exercised		-		$	-				-
Options Expired or Forfeited		(37,000	)	$	10.37
Options O/S at end of period		59,000		$	6.07		3.86		-
Options Exercisable at end of the period		59,000		$	6.07		3.86		-

options were granted during the

2019

2018

fiscal years. As of both

November 30, 2019

and

November 30, 2018,

there were

non-vested options. As of

November 30, 2019,

there was

unrecognized compensation cost related to non-vested share-based compensation arrangements under the plan related to stock options.

options vested during the

2019

2018

fiscal years.

The Company received

cash from the exercise of options during the

2019

2018

fiscal years.