(

)

Equity Incentive Plan

November 30, 2018,

the Company had

one

equity incentive plan, the

2011

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

$197,243

and

$113,039

for the

2018

and

2017

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

$157,529

and

$68,886

for the

2018

and

2017

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

2018

fiscal year, restricted stock awards of

51,200

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

three

years, and restricted stock awards of

37,098

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

2018

fiscal year,

22,000

shares of restricted stock were forfeited upon the departure of certain employees.

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 8		201 7
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, 2018

and

2017,

and changes during the years then ended:

2018

Option Activity

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options Outstanding at the Beginning of the Period		96,000		$	7.77
Granted		-			-
Exercised		-			-				-
Options Expired or Forfeited		(37,000	)		10.37
Options Outstanding at the End of the Period		59,000			6.07		3.86		-
Options Exercisable at the End of the Period		59,000			6.07		3.86		-

2017

Option Activity

Options	Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term		Aggregate Intrinsic Value
Options Outstanding at the Beginning of the Period		143,500		$	8.78
Granted		-			-
Exercised		-			-				-
Options Expired or Forfeited		(47,500	)		10.84
Options Outstanding at the End of the Period		96,000			7.77		3.55		-
Options Exercisable at the End of the Period		96,000			7.77		3.55		-

options were granted during the

2018

2017

fiscal years. As of both

November 30, 2018

and

November 30, 2017,

there were

non-vested options. As of

November 30, 2018,

there was

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

options vested during the

2018

2017

fiscal years.

The Company received

cash from the exercise of options during the

2018

2017

fiscal years.

During the

2018

fiscal year, the Company issued

88,298

shares of restricted stock,

26,150

shares of restricted stock became unrestricted and

22,000

shares of restricted stock forfeited. During the

2017

fiscal year, the Company issued

53,700

shares of restricted stock,

22,550

shares of restricted stock became unrestricted and

4,000

shares of restricted stock were forfeited.