Certain biographical information relating to each of the director nominees is set forth below:

MARC H. McCONNELL, Chairman of the Board, Director. Mr. McConnell is currently the President of Bauer Corporation and the Vice Chairman of McConnell Holdings, Inc., both companies owned by J. Ward McConnell, Jr. Mr. McConnell is also the Vice President of Adamson Global Technology Corporation, a subsidiary of McConnell Holdings, Inc. Mr. McConnell further serves as the Chairman of the Board, Chairman of the Audit Committee, Chairman of the Executive Committee and member of the Asset-Liability and Loan Committees of West Town Bancorp, located in Raleigh, North Carolina, and has served as a director of West Town Bancorp since 2009. He is also the Chairman of the Board and Chairman of the Audit Committee of West Town Bank and Trust, located in Chicago, Illinois, and has served as Chairman of the Board, Chairman of the Audit Committee, chairChairman of the Executive Committee and member of the Asset-Liability and Loan Committees of Sound Bank, located in Morehead City, North Carolina. In May 2019 Mr. McConnell began serving as a director of Dogwood State Bank in Raleigh, North Carolina. Mr. McConnell has served as a director of the American Ladder Institute since 2004 and served as its President from 2006-2010.2006 to 2010. Mr. McConnell was also named a director of the Farm Equipment Manufacturers Association in October 2007, served as its President from 2013 to 2014 and served as its Treasurer from October 2015 to October 2016. Mr. McConnell was appointed to our Board in July 2001 and served as Vice Chairman of the Board from January 2008 to April 2015, at which time he became our Chairman. He is the son of our Vice Chairman and director, J. Ward McConnell, Jr., and currently resides in Kinston, North Carolina. Among other attributes, skills, and qualifications, the Board believes that Mr. McConnell’s involvement and experience in the farm equipment manufacturing industry, particularly in leadership positions with similarly situated companies, contribute to his ability to understand the challenges and opportunities facing the Company and to guide its long-term strategies.

THOMAS E. BUFFAMANTE, Director. Mr. Buffamante is a Certified Public Accountant and Director of Buffamante Whipple Buttafaro, P.C., where he has been a director and stockholder of the firm since 1981. Mr. Buffamante has been a director of the Company since 2003, was appointed to our Audit Committee in 2011, and has served as the Chairman of the Audit Committee since April 2012. He currently resides in Great Valley, New York. Among other attributes, skills, and qualifications, the Board believes that Mr. Buffamante is qualified to serve as a director in light of his ability to understand generally accepted accounting principles, internal control over financial reporting, and disclosure controls and procedures, his experience in analyzing and evaluating financial statements, and his ability to provide oversight with regard to tax filings, tax accruals, and other tax matters.

DAVID R. CASTLE, Director. Mr. Castle is the retired Director of Operations Worldwide for Avery Weigh-Tronix, LLC.  Mr. Castle also serves on the board of directors of the non-profit Peterborough Tai Chi Association. Mr. Castle previously served on the Board from 2000 to 2012, during which time he served as the Chairman of the Audit Committee and a member of the Compensation Committee. Mr. Castle rejoined the Board in January 2013 and currently serves as the Chairman of the Compensation Committee. He previously served as a member of the Audit Committee from April 2016 to April 2017. He resides in Ontario, Canada. Among other attributes, skills, and qualifications, the Board believes that Mr. Castle’s previous experience as a Director of Operations of a manufacturing company allows him to make a valuable contribution to the oversight of the Company’s operations, and enables him to identify and understand trends presented in the Company’s financial statements and results of operations.

JOSEPH R. DANCY,MATTHEW N. WESTENDORF, Director Nominee. . Mr. DancyWestendorf is the current President and director of LSGI AdvisorsWestendorf Manufacturing Co., Inc., a Dallas-based investment advisory firm that specializesmanufacturing of front-end loaders located in investments in small publicly traded companies, manyOnawa, Iowa, a position he has held since 2006. He currently serves on the board of which are indirectors of Jack Rabbit Manufacturing (since 2019 and on the energy and agricultural sectors. He has taught law atexecutive board of the University of Oklahoma College of Law Oil and Gas, Natural Resources, and Energy Center and has served as the Center’s Executive Director since December 2016. He has a Metallurgical Engineering degree from Michigan Technological University, an MBA from the University of Michigan, and a Juris Doctorate from Oklahoma City University. Mr. Dancy was appointed to our Audit Committee in January 2013 and to our Compensation Committee in April 2016.Farm Equipment Manufacturers Association (since 2014). Among other attributes, skills, and qualifications, the Board believes that Mr. Dancy makes valuable contributions asWestendorf’s experience running a director because his experience allowsmanufacturing company will allow him to analyzeprovide insight into the competitive positions of small public companies, nationalCompany’s operations and global trends in the agricultural sector, as well as legal and regulatory developments that may impact the agricultural/biofuel industries.strategic direction.

DAVID A. WHITE,, Director. Mr. White has been a general partner and the President and CEO of First Call Services LLC, a private holding company and advisory firm since May 2012. He serves on the boards of directors for Ag Growth International Inc., a Toronto Stock Exchange farm equipment manufacturer, Patient Care Logistics Solutions, a private equity sponsored company, and Avicanna Inc., a Canadian bio-tech company. He previously sat on the board of Sunrise Transportation Holdings LLC, a privately-held U.S. company.company, from 2015 to July 2018. Mr. White has held a number of senior financial and operating positions with John Labatt Limited, Lawson Mardon Group Inc., and Laidlaw Inc., and most recently was Chief Executive Officer of TransCare Inc., a medical transportation company, from 2008 to April 2012, and President and Chief Operating Officer of Student Transportation of America, a TSX-listed company, from 2005-2007.2005 to 2007. Mr. White has been a Canadian Charted Accountant since 1978, he holds a BA from the University of Western Ontario and an MBA from the University of Toronto, and in 2013 he received the ICD.D designation from the Institute of Corporate Directors. Mr. White was appointed to the Board in December 2016 and currently serves as a member of the Audit and Compensation Committees. Among other attributes, skills, and qualifications, the Board believes that Mr. White is qualified to serve as a director in light of his involvement and experience in the farm equipment manufacturing industry, board experience, his ability to understand generally accepted accounting principles, internal control over financial reporting, and disclosure controls and procedures, his experience in analyzing and evaluating financial statements, and management experience.

PROPOSAL 2

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

RATIFICATION OF What am I voting on?INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board is asking our stockholders to ratify its selection of Eide Bailly LLP as our independent registered public accounting firm for the fiscal year ending November 30, 2021.

The Board, acting on the recommendation of the Audit Committee, has selected Eide Bailly LLP as the Company’sCompany’s independent registered public accountantaccounting firm for fiscal year 2018.2021. Eide Bailly LLP has been the Company’s independent registered public accountantaccounting firm since July 2006. The firmEide Bailly LLP has advised the Company that it has no relationship to the Company except that of independent registered public accountant.accounting firm. A representative of Eide Bailly LLP is expected to be present at the 20182021 Annual Meeting. Such representative will have an opportunity to make a statement if he or shethe representative desires to do so and will be available to respond to appropriate questions regarding audit of the financial statements.

Audit Fees

The following table presents fees for professional services billed by Eide Bailly LLP to the Company for the audit of the Company’sCompany’s annual financial statements, the review of the Company’s interim financial statements, and related services for the fiscal years ended November 30, 20172020 and November 30, 2016.2019.

Audit Committee Pre-Approval Policies and Procedures

The Audit Committee pre-approved the engagement of Eide Bailly LLP as the Company’sCompany’s principal independent registered public accountantaccounting firm to perform audit services for the Company. The Audit Committee pre-approves all auditing services and permitted non-audit services, including the fees and terms of those services, to be performed for the Company by its independent auditorregistered public accounting firm prior to engagement. One hundred percent of the services referenced above were pre-approved by our Audit Committee.

PROPOSAL 3

APPROVAL, ON ANA NON-BINDING, ADVISORY BASIS, OF NAMED EXECUTIVE OFFICER COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Exchange Act requiresrequire that the Company provide its stockholders with the opportunity to vote to approve, on a non-binding, and advisory basis, the compensation of our named executive officers as disclosed in this proxy statementProxy Statement in accordance with the compensation disclosure rules of the SEC. In accordance with the preference of our stockholders, as expressed in a non-binding, advisory vote on the frequency of advisory votes on named executive officer compensation at the 2013 annual stockholder meeting,our 2019 Annual Meeting of Stockholders, the Company haspreviously determined to hold annual advisory votes on the compensation of named executive officers.

We seek to closely align the interests of our named executive officers with the interests of our stockholders. We designed our compensation program to reward our named executive officers for individual performance and contributions to our overall business objectives and for achieving and surpassing the financial goals set by our Compensation Committee and our Board.

The vote on this resolution is not intended to address any specific element of compensation. Instead, the vote relates to the overall compensation of our named executive officers, as described in this proxy statement,Proxy Statement, in accordance with the compensation disclosure rules of the SEC.

Accordingly, we ask our stockholders to vote onapprove the following resolution at the 20182021 Annual Meeting:

“RESOLVED, that the Company’sCompany’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 20182021 Annual Meeting of Stockholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the summary compensation table and the other related tables and disclosure.”

While the Board and especially the Compensation Committee intend to carefully consider the results of the voting on this proposalvote when making future decisions regarding executive compensation, thethis vote is not binding on the Company or the Board and is advisory in nature. To the extent there is any significant vote against the compensation of our named executive officers, in this Proposal 3,the Board and the Compensation Committee will evaluate what actions may be necessary to address our stockholders’stockholders’ concerns.

OTHER INFORMATION

CORPORATE GOVERNANCE

Our Board currently has sixfive members: Thomas E. Buffamante, David R. Castle, Joseph R. Dancy, David A. White, J. Ward McConnell, Jr. and Marc H. McConnell. Pursuant to the Company’s Bylaws, the Board has set the size of the Board at five directors as of the 2021 Annual Meeting. J. Ward McConnell Jr.’s term as a director will expire at the 2021 Annual Meeting and Matthew Westendorf has been nominated for election to the Board at the 2021 Annual Meeting.

All of our current directors are “independent” within the definition provided by Nasdaq Rule 5605, with the exception of Marc McConnell and J. Ward McConnell, Jr. The Board has determined that Marc McConnell and J. Ward McConnell, Jr. are not independent due to their receipt of payments from the Company as compensation for services they providedprovide as Chairman of the Board and Vice Chairman of the Board, respectively. In considering the independence of Marc McConnell and J. Ward McConnell, Jr., the Board also considered the family relationship between Marc McConnell and J. Ward McConnell, Jr.; J. Ward McConnell, Jr.’s beneficial ownership of approximately 41.3%48% of the Company’s securities; and J. Ward McConnell, Jr.’s receipt of certain fees from the Company in connection with his guarantee of a portion of the Company’s bank debt. Should he be elected to serve as a member of the Board at the 2021 Annual Meeting, the Board has determined that Matthew Westendorf will qualify as “independent” within the definition provided by Nasdaq Rule 5605.

The Board held fivefour meetings during the fiscal year 2017.ended November 30, 2020 (“fiscal year 2020”) and four quarterly update calls. Each director attended 100% of the total number of Board meetings held while the director served during fiscal year 20172020 and the total number of meetings held by all committees of the Board on which the director served during fiscal year 2017.2020 with the exception of J. Ward McConnell who was able to attend only one meeting in January 2020. The Board encourages all directors to attend the Company’s annual meetings,meeting of stockholders but does not have a formal attendance policy. The Company’s last annual meeting of stockholders held on April 27, 201730, 2020 was attended via teleconference by all of our directors who were serving at that time.time with the exception of J. Ward McConnell, Jr.

The Board has an Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act and a Compensation Committee. The Board as a whole functions as the Company’s Nominating and Governance Committee, although director nominees are recommended by our independent directors without participation of the non-independent directors.

The Board’s’s Role in Risk Oversight

It is management’sManagement has the responsibility to manage risk and bring to the Board’s attention the most material risks to the Company. The Board has oversight responsibility of the processes established to report and monitor systems for material risks applicable to the Company. The Audit Committee provides oversight of management with respect to enterprise-wide risk management, which focuses primarily on risks relating to commodity pricing (such as steel), the Company’s ability to maintain appropriate levels of credit and insurance coverage, and financial and accounting, legal and compliance risks, including oversight of inventory accounting, revenue recognition, and other internal controls over financial reporting. In addition, the Compensation Committee considers risks related to the attraction and retention of talent and risks relating to the design of compensation programs and arrangements. The Compensation Committee reviews compensation and benefits plans affecting all employees, including the executive officers. We have determined that it is not reasonably likely that our compensation and benefit plans create risks that would have a material adverse effect on the Company. The full Board considers strategic risks and opportunities and regularly receives detailed reports from management and the committees with respect to their areas of responsibility for risk oversight.

Board Leadership Structure

We separate the roles of Chief Executive Officer and Chairman of the Board in recognition of the differences between the two roles. The Chief Executive Officer is responsible for the day to day leadership and performance of the Company, while Marc McConnell, as the Chairman of the Board, provides guidance to the Chief Executive Officer; sets the strategic direction for the Company; sets the agenda for Board meetings; and presides over meetings of the full Board. The Board has designatedWhile J. Ward McConnell, Jr., prior Chairman of the Board, currently serves as Vice Chairman of the Board,. the Board does not intend to appoint a new Vice Chair upon J. Ward McConnell, Jr.’s departure from the Board at the 2021 Annual Meeting.

Because the Board has determined that neither our Chairman of the Board nor Vice Chairman of the Boarddoes not satisfy the definition of “independence” as set forth in NASDAQNasdaq Rule 5605, the Board appointed director David Castle to serve as “presiding director” over all executive sessions of independent directors whichthat are required under Nasdaq rules.

Code of Ethics

The Company has adopted a Code of Ethics (the “Code”), which is applicable to all directors, officers and employees of the Company. The Code covers all areas of professional conduct, including customer and supplier relationships, conflicts of interest, insider trading, confidential information, accuracy of company records, public disclosures, contact with government officials, and workplace behavior. It requires strict adherence to all laws and regulations applicable to our business. Persons who are subject to the Code are required to bring any violations and suspected violations of the Code to the Company’s attention, through their supervisor, management, outside legal counsel, or confidential communication with the Chairman of the Audit Committee.

The Code of Ethics is posted to our website at http://www.artsway-mfg.com/corporate-governance/. We intend to include on our website, within the time period required by Form 8-K, any amendment to, or waiver from, a provision of our Code of Ethics that applies to our principal executive officer, principal financial officer, principal accounting officer, controller, or persons performing similar functions, that relates to any element of the Code of Ethics definition enumerated in Item 406(b) of Regulation S-K.

Audit Committee

The principal functions of the Audit Committee are to evaluate and review the Company’sCompany’s financial reporting process and systems of internal controls. The Audit Committee evaluates the independence of the Company’s independent auditor,registered public accounting firm, recommends selection of the Company’s independent auditorregistered public accounting firm to the Board, approves fees to be paid to our independent auditor,registered public accounting firm, and reviews the Company’s financial statements with management and the independent auditor.registered public accounting firm. The Audit Committee has recommended to the Board the appointment of Eide Bailly LLP to serve as the Company’s independent auditorregistered public accounting firm for fiscal year 2018.2021.

The Audit Committee operates under a written charter, which is available on our website at http://www.artsway-mfg.com/corporategovernance/. Under the charter, the Audit Committee must be comprised of not less than three members of the Board and its composition must otherwise satisfy Nasdaq requirements applicable to audit committees. During fiscal year 2017,2020, the members of the Audit Committee were Thomas E. Buffamante (Chairman), Joseph Dancy,David R. Castle and David A. White. The same individuals will serve as members of the Audit Committee for fiscal year 2018.2021. The Board has determined that all current and proposed members of the Audit Committee are independent under the definition of “independence” provided by Nasdaq Rule 5605 and Rule 10A-3 of the Securities Exchange Act of 1934. The Board has also determined that Mr. Buffamante and Mr. White are each an “audit committee financial expert” as defined by applicable SEC regulations, and that all members of the Audit Committee are financially literate as required by Nasdaq Rule 5605. The Audit Committee held five meetings during fiscal year 2017.2020 including a pre audit planning meeting.

Report of the Audit Committee

The following report of the Audit Committee shall not be deemed to be filed with the SEC or incorporated by reference in any previous or future documents filed by the Company with the SEC under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates the reference in any such document.

The Audit Committee reviews the Company’sCompany’s financial reporting process on behalf of the Board. Management has the primary responsibility for the financial statements and the reporting process. The Company’s independent registered public accountant is responsible for performing an independent audit of the Company’s financial statements and expressing an opinion on the conformity of the audited financial statements to generally accepted accounting principles.

The members of the Audit Committee have reviewed and discussed with management the Company’sCompany’s audited financial statements as of and for the fiscal year ended November 30, 2017.2020. The members of the Audit Committee have discussed with Eide Bailly LLP, the Company’s independent auditor,registered public accounting firm, the matters required to be discussed by the statement on Auditing Standards No. 1301, as amended.applicable requirements of the Public Company Accounting Oversight Board and the Securities and Exchange Commission. The members of the Audit Committee have received and reviewed the written disclosures and the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding communications with the audit committee concerning independence, and the members of the Audit Committee have discussed with Eide Bailly LLP their independence from management and the Company. The members of the Audit Committee have considered whether the provision of services by Eide Bailly LLP referred to above not related to the audit of the financial statements and the reviews of the interim financial statements included in the Company’s Forms 10-Q are compatible with maintaining Eide Bailly LLP’s independence, and have determined that they are compatible and do not impact Eide Bailly LLP’s independence.

Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board that the audited financial statements referred to above should be included in our Annual Report on Form 10-K accompanying this Proxy Statement and filed with the SEC for the fiscal year ended November 30, 2017.2020.

Audit Committee

Thomas E. Buffamante, Chairman

JosephDavid R. DancyCastle

David A. White

Compensation Committee

During fiscalfiscal year 2017,2020, the members of the Compensation Committee were David R. Castle (Chairman), Joseph DancyThomas E. Buffamante and David A. White. The same individuals will serve as members of the Compensation Committee for fiscal year 2018.2021. The Board has determined that all current and proposed members of the Compensation Committee are independent within the definition of “independence” provided by Nasdaq Rule 5605 and Rule 10C-1 of the Securities Exchange Act of 1934. The Compensation Committee operates under a written charter, which is available on our website at http://www.artsway-mfg.com/corporate-govemance/. Under the charter, the Compensation Committee must consist of two or more members of the Board, and each member must meet applicable Nasdaq independence standards.

The Board has authorized the Compensation Committee to review and advise management on a broad range of compensation policies, such as salary ranges and incentive programs for employees, although the Company’sCompany’s Chief Executive Officer is responsible for establishing specific terms of compensation for Company employees who are not subject to Section 16 of the Securities Exchange Act of 1934.1934, as amended. The Compensation Committee reviews and makes recommendations to the Board as to the compensation of those Company employees who are subject to Section 16 of the Securities Exchange Act of 1934, as amended, which includes the Chief Executive Officer and Chief Financial Officer. The Board retains the authority to set director compensation, each based on the Compensation Committee’s recommendations. Neither Marc McConnell and J. Ward McConnell, Jr. participate in the discussion or approval of the payments they receive from the Company as compensation for services they provide as Chairman of the Board and Vice Chairman of the Board, respectively.

Although the Board administers the Company’s 2011 Equity Incentive Plan,equity incentive plans, the Compensation Committee remains responsible for recommending to the Board any equity awards to the Company’s Chief Executive Officer and the Chief Financial Officer, and the Board may delegate to the Compensation Committee additional administrative duties for the 2011 Equity Incentive Planequity incentive plans in the future. Neither the Compensation Committee nor the Board engages compensation consultants to assist in determining or recommending the amount or form of compensation for executive officers or directors. Executive officers do not have any role in determining or recommending the amount or form of executive officer or director compensation. The Compensation Committee may delegate its responsibilities to subcommittees to the extent permitted by applicable laws and regulations; however, such subcommittees are not permitted to have decision-making authority and are required to report regularly to the full Compensation Committee. The Compensation Committee had two meetingsone meeting during fiscal year 2017.2020.

Nominating and Governance Committee

The Board as a whole performs the functions of a Nominating and Governance Committee. The Board has determined that each of our directors is independent under the definition of “independence” provided by Nasdaq Rule 5605, with the exception of Marc McConnell and J. Ward McConnell, Jr. for the reasons identified above. Because the Board consists solely of persons who are neither employees nor officers of the Company and a majority of our directors are independent, the Board does not deem it necessary to have a separate Nominating and Governance Committee. In accordance with Nasdaq requirements, all sixfive of the director nominees for the 20182021 Annual Meeting were recommended by a majority of the independent directors without participation of the non-independent directors. The Board met once during fiscal year 20172020 for the purpose of evaluating candidates for director nominees.

The principal purpose of the Board, acting as the Nominating and Governance Committee, is to identify and evaluate qualified individuals for membership on the Board. The Board annually considers the size, composition and needs of the Board in evaluating director candidates and recommends director nominees for election at each annual meeting of stockholders. The Board operates as the Nominating and Governance Committee pursuant to a written charter, which is available on our website at http://www.artsway-mfg.com/corporate-governance/.

Selection of Director Nominees

In selecting nominees for directors, the Board, acting as the Company’s Nominating and Governance Committee, will consider all candidates submitted, including incumbent Board members, based upon the qualifications of the candidates, the business and financial experience of the candidates, the experience of the candidates serving on public company boards of directors, and other skill sets deemed appropriate by the Board to enact the mission and business purposes of the Company. Our Criteria and Policies for Director Nominations (the “Nominations Policies”) were adopted by the Board, acting as the Company’s Nominating and Governance Committee, on July 28, 2009 and are attached as Annex A to the Nominating and Governance Committee Charter. The Nominations Policies specify that directors must have certain minimum qualifications, including the ability to read and understand basic financial statements, familiarity with the Company’s business and industry, high moral character and mature judgment and the ability to work collegially with others.

Diversity is also a factor in evaluating director nominees. The Nominations Policies do not restrict the criteria that the Board may consider when evaluating diversity. The Board typically considers diversity of experience, skill, geographic representation and background as factors in the selection of new director nominees, with the goal of assembling a board of directors with complementary skill sets and viewpoints. The Board has not adopted a standalone diversity policy at this time. Nominees are not discriminated against on the basis of race, religion, national origin, sexual orientation, disability or any other basis proscribed by law.

Currently, the Company does not engage any third parties, for a fee or otherwise, to identify or evaluate potential nominees. The Board will consider director candidates recommended by holders of the Company’sCompany’s common stock on the same basis as any other candidate submitted for consideration as a nominee. No nominations for candidates were received from any holders of common stock for the 20182021 Annual Meeting.

In order for a candidate to be considered for nomination by the Board, a stockholder must submit to the attention of the Chief Executive Officer of the Company a written recommendation that contains the following information:

Additionally, any holder of common stock nominating a candidate is encouraged to set forth any other qualifications which he or shesuch stockholder believes the candidate has to serve as director of the Company and the reasons why the holderstockholder believes the candidate should be elected to the Board. The Board may require the stockholder or nominee to furnish additional information to evaluate the nominee’snominee’s suitability. In the event a stockholder does not comply with the nomination process described in this Proxy Statement, the proposed nomination may be declared defective and disregarded.

Pursuant to the Company’sCompany’s Bylaws, stockholders who intend to present a floor proposal or director nomination at the 20182022 Annual Meeting of Stockholders without including such proposal or nomination in the Company’s proxy statement must deliver to the Company notice of such proposal no earlier than January 25, 201921, 2022 (approximately 90 days prior to the one year anniversary of this year’s meeting)the 2021 Annual Meeting) and no later than February 25, 201920, 2022 (approximately 60 days prior to the one year anniversary of this year’s meeting)the 2021 Annual Meeting). The Company reserves the right to reject, rule out of order, or take appropriate action with respect to any proposal that does not comply with these and other applicable requirements.

SECURITY HOLDER COMMUNICATIONS TO THE BOARD OF DIRECTORS

Any holder of common stock wishing to communicate with the Board about any matter involving the business or operations of the Company should send the communication, in written form, to the Chief Executive Officer of the Company at the Company’sCompany’s principal place of business at 5556 Highway 9, Armstrong, Iowa, 50514-0288. The Chief Executive Officer of the Company will promptly send the communication to each member of the Board or, if applicable, specified individual directors.

SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICES AND PRINCIPAL STOCKHOLDERS

The following table sets forthshows certain information with respect to the Company’s common stock beneficially owned by current directors, director nominees, and executive officers of the Company as of March 8, 2021, as well as the name and address of the persons known to the Company who beneficially own more than 5% of the issued and outstanding shares of common stock of the Company as of March 13, 2018.

SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT

The following table shows certain information with respect to the Company’s common stock beneficially owned by current directors, director nominees, and executive officers of the Company as of March 13, 2018.8, 2021. The shares shown as beneficially owned include shares whichthat executive officers, directors, and director nominees are entitled to acquire pursuant to outstanding stock options exercisable within 60 days of March 13, 2018.8, 2021. Unless otherwise provided, the address of each of the executive officers, directors, and director nominees listed below is c/o Art’s-Way Manufacturing Co., Inc., 5556 Highway 9, Armstrong, Iowa, 50514-0288.

* Less than 1%

EXECUTIVE OFFICERS

Carrie Gunnerson,David A. King, age 42,49, is currently serving as our President and Chief Executive Officer. Ms. GunnersonOfficer, a position he has held since July 21, 2020. Mr. King joined the Company as Executive Vice President on March 23, 2020 in April 2004 and was appointed Chief Financial Officer in July 2004,connection with a position she held until January 2012. Ms. Gunnerson was appointed to the additional rolesplanned transition of President and Chief Executive Officer on October 18, 2007 and to the role of interim Chief Financial Officer in September 2012. She held this interim position until January 22, 2015 when the Company appointed Amber Murra its Chief FinancialExecutive Officer. Prior to joiningemployment with the Company, Ms. GunnersonMr. King was responsible for allmost recently the Executive Vice President of the functionsSales and Marketing at VES Environmental Solutions, LLC, a designer and manufacturer of energy-efficient agricultural ventilation and lighting systems, a controllerposition he held from November 2019 until March 2020. He was previously Vice President of Sales and Marketing at Tyco Plastics of Fairmont, Minnesota. Ms. Gunnerson was namedSalford Group from June 2013 to November 2019, and he held roles in operations, marketing and international business development at Ag Leader Technology from 1996 to June 2013. Mr. King holds a director of the Farm Equipment Manufacturers Association, effectiveB.S. in November 2016.Business Administration from Iowa State University and an M.B.A. from Drake University.

Amber Murra,Michael Woods, age 39,34, is currently serving as our Chief Financial Officer. Ms. MurraOfficer, a position he has held since February 1, 2020. Mr. Woods joined the Company in April 2016 and served as a Senior Staff Accountant and as the Company’s DirectorController until his promotion to Vice President of Finance from May 27, 2014 until she accepted the rolein January 2019. Mr. Woods began his career in 2012 with Brinkman & Reed, CPAs in Estherville, IA as a Staff Accountant where he performed compilations, reviews, audits and tax consulting services. After three years in public accounting, he spent a year and a half as a Senior Staff Accountant with XPO Logistics (formerly Norbert Dentressangle) in Clive, Iowa. Mr. Woods received Bachelor of Chief Financial Officer on January 22, 2015. She previously served as the Company’s Director ofScience Degrees in Accounting and Finance from April 2007 until December 2010. During her absence from the Company, Ms. Murra worked for Winnebago Industries, Inc.,Iowa State University and has been a recreational vehicle manufacturer, as Finance Manager. Over the years, Ms. Murra’s responsibilities have included developing accounting processes and procedures, staff development, budgeting, forecasting, cost analysis, financial statement preparation and presentation, capital planning, and cash management. On March 15, 2018, Ms. Murra notified the CompanyCertified Public Accountant since October of her resignation as Chief Financial Officer. Ms. Murra’s resignation is expected to be effective as of June 1, 2018 and a transition plan is currently being determined. The Company expects that Ms. Murra’s duties will be assumed on an interim basis by Ms. Gunnerson.2013.

EXECUTIVE COMPENSATION

The compensation philosophy of the Company is to provide a compensation package to executive officers that will maximize long-term stockholder value. The components of executive officer compensation, including that of Carrie Gunnerson, who serves as President and Chief Executive Officer, and Amber Murra, who serves as Chief Financial Officer,compensation are base salary, cash incentive compensation and equity awards.

The Company’sCompany’s policy is to pay base salaries that are at, or near, the average base salary for similar companies. The Compensation Committee annually determines whether to recommend to the Board salary increases for the Company’s executive officers, which recommendation is based on current salaries and individual and Company performance during the past year. Other components of officer compensation are generally also reviewed annually.

Beginning in fiscal year 2012, theThe Board adoptedhas an incentive compensation pool and incentive compensation plans for the Chairman of the Board, Vice Chairman of the Board, Chief Executive Officer, Chief Financial Officer, and certain other key employees. The objectives and the target incentive compensation thresholds and gradations pursuant to the pool and plans are based on an analysis of market data conducted by the Compensation Committee, along with consideration of the Company’s circumstances and opportunities. They reflect the belief of the Board and Compensation Committee that defined annual incentives should be closely aligned with financial performance and opportunities for long-term growth.

Under the approved incentive arrangements, the applicable possible maximum cash incentives for fiscal year 20172020 were as follows: Marc McConnell, $200,812 (75% of annual base retainer); J. Ward McConnell, Jr., $58,012 (65% of annual base retainer); Carrie Gunnerson, $107,494David King, $172,250 (65% of annual base salary); and Amber Murra $51,975 (45%Carrie Gunnerson, $111,793 (65% of annual base salary); Michael Woods, $40,000 (40% of annual base salary). The relevant objectives for fiscal year 20172020 pertaining to the Chairman and Vice Chairman were achievement of EBITDA targets for fiscal year 2020 and, if such targets were achieved, the following additional objectives: earnings per share, reduction of term debt, and successful oversight of other business development activities. The relevant objectives for fiscal year 2020 pertaining to the Chief Executive Officer and Chief Financial Officer were achievement of EBITDA targets for fiscal year 2021 and, if such targets were achieved, the following additional objectives: earnings per share, reduction of debt, reduction of inventory and results of the annual audit. No incentive compensation payouts were made for fiscal year 2020 performance, but the Board did approve discretionary bonuses to Marc McConnell ($26,750), in recognition of the strategic development of the Company, and to each of David King ($19,875) and Michael Woods ($10,000), in recognition of operations improvements and individual contributions.

The maximum possible cash incentives for fiscal year 2021 are as follows: Marc McConnell, $200,812 (75% of annual base retainer); David King, $172,250 (65% of annual base salary); and Michael Woods $42,400 (40% of annual base salary). The relevant objectives for fiscal year 2021 pertaining to the Chairman are threshold operating income growth for fiscal year 20172021 and, if threshold growth wasis achieved, the following additional objectives: earnings per share, increased revenue at the Company’s Scientific and Tools segments, reduction of term debt, and successful oversight of other business development activities. The relevant objectives for fiscal year 2017 pertaining to the Chief Executive Officer and Chief Financial Officer were achievement of threshold operating income growth for fiscal year 2017 and, if threshold growth was achieved, the following additional objectives: earnings per share, on-time and quality reporting of financial and board information, reduction of debt, and maintenance of banking relationships.

The maximum possible cash incentives for fiscal year 2018 are as follows: Marc McConnell, $200,812 (75% of annual base retainer); J. Ward McConnell, Jr., $58,012 (65% of annual base retainer); Carrie Gunnerson, $111,793 (65% of annual base salary); and Amber Murra $56,754 (45% of annual base salary). The relevant objectives for fiscal year 2018 pertaining to the Chairman and Vice Chairman are achievement of threshold operating income growth for fiscal year 2018 and, if threshold growth is achieved, the following additional objectives: reduction of debt, product line development and rationalization, new products, strategic vision for the Tools segment, achievement of minimum acceptable volume for the Scientific segment and an additional dealer for the Manufacturing segment. The relevant objectives for fiscal year 20182021 pertaining to the Chief Executive Officer and Chief Financial Officer are achievement of threshold operating income growth for fiscal year 20182021 and, if threshold growth is achieved, the following additional objectives: efficiency implementation,earnings per share, reduction of inventory, profitable operationsdebt, improvements in all three segments, staff development indelivery, growth of the Company’s ArmstrongScientific and Monona locations and disposal of buildings for sale.Tools segments. Achievement of the objectives shall be as determined in the Board’s discretion following the conclusion of fiscal year 2018 and in accordance with the 2018 Bonus Plan recommended by the Compensation Committee.2021.

Equity awards have historically been the third component of the Company’sCompany’s compensation package for executive officers. Equity awards such as stock options and restricted stock are awarded to provide long-term incentives to align the objectives of executive officers with the interests of stockholders in maximizing long-term growth.

The Company also has a 401(k) Savings Plan whichthat covers substantially all full-time employees, including executive officers. Participating employees contribute to the 401(k) Savings Plan through salary reductions. The Company contributes a discretionary percentage of the 401(k) Savings Plan participants’participants’ salary deferrals. The Company typically matches 25% of a participant’s contribution for every 1% that he or shethe participant contributes, up to 1% of the participant’s salary. Management of the 401(k) Savings Plan assets is currently vested with Security National Bank of Sioux City, Iowa.Transamerica. Vesting of participants is 20% per year of employment until 100% vested after six years.

The CompanyEmployment of Mr. King

Mr. King’s employment is governed by an employment agreement entered into a writteneffective March 30, 2020. His employment agreement with Ms. Gunnerson in December 2011, which was amended in February 2012 to reflect her current title of “President and Chief Executive Officer.” The provisions of Ms. Gunnerson’s employment agreement are consistent with the Company’s compensation philosophy. The agreement provides for at-will employment and aan annual base salary of $265,000. Mr. King is also eligible to be determinedreceive annual cash incentive compensation of up to 75% of his base salary based on the Company’s achievement of annual financial objectives and to receive annual equity awards, each as granted by the Board (or a committee authorized by the Board). Ms. GunnersonMr. King is eligible to participate in any and all other employee benefit plans that are generally available to the Company’s employees.

Mr. King’s employment agreement may be terminated at any time by either party. If the agreement is terminated by the Company without cause (as defined in the Agreement), the Company may be required to pay up to 12 weeks of compensation and benefits to Mr. King, in exchange for his release of any and all claims against the Company and his compliance with the non-competition and non-solicitation provisions of the agreement. The agreement also contains confidentiality and assignment of inventions provisions that survive the termination of the agreement for an indefinite period.

On March 30, 2020, the Board granted Mr. King 80,000 shares of restricted stock for which risks of forfeiture lapsed as to 20,000 shares on March 30, 2020 and will lapse as to 20,000 shares on each of March 30, 2021, March 30, 2022 and March 30, 2023. Mr. King’s restricted stock awards are governed by the 2011 Equity Incentive Plan and the Company’s form of restricted stock award agreement.

Employment of Mr. Woods

Mr. Woods’s employment as Chief Financial Officer is governed by an employment agreement entered into as of February 1, 2020. His employment agreement provides for an annual base salary of $100,000, which was increased to $106,000 in January 2021. Mr. Woods is also eligible to receive incentive compensation, including cash bonuses and equity awards, in the exclusive discretion of the Board (or a committee authorized by the Board), and to participate in any and all other employee benefit plans that are generally available to the Company’s employees.

Upon signing the agreement, as consideration for her agreement not to compete with the Company or solicit the Company’s employees or customers during the term of her employment with the Company or for one year thereafter, Ms. Gunnerson received a restricted stock award for 2,000 shares of Company common stock, which was issued under the Company’s 2011 Equity Incentive Plan and for which risks of forfeiture have fully lapsed.

Ms. Gunnerson’sMr. Woods’s employment agreement may be terminated at any time by either party. If the agreement is terminated by the Company without cause (as defined in the agreement)Agreement), the Company may be required to pay up to 128 weeks of compensation and benefits to Ms. Gunnerson,Mr. Woods, in exchange for herhis release of any and all claims against the Company and herhis compliance with the non-competition and non-solicitation provisions of the agreement. The agreement also contains confidentiality and assignment of inventions provisions that survive the termination of the agreement for an indefinite period.

During fiscal year 2017, Ms. Gunnerson earned an annual base salary of $165,375 from December 2017 through October 2017. On October 20, 2017, Ms. Gunnerson’s annual base salary was increased to $171,990. Ms. Gunnerson did not receive any payout of cash incentive compensation relating to fiscal year 2016 or fiscal year 2017 performance. On January 29, 2016,30, 2020, the Board granted Ms. Gunnerson 7,500Mr. Woods 5,000 shares of restricted stock, for which risks of forfeiture lapsed as to 2,5001,667 shares on January 29, 2017 and January 29, 201830, 2021 and will lapse as to 2,500 shares on January 29, 2019, provided that Ms. Gunnerson remains employed by the Company on that date. On January 27, 2017, the Board granted Ms. Gunnerson 10,500 shares of restricted stock, for which risks of forfeiture lapsed as to 3,500 shares on January 27, 2018 and will lapse as to 3,5001,666 shares on each of January 27, 201930, 2022 and January 27, 2020, provided that Ms. Gunnerson remains employed by the Company on those dates. On February 5, 2018, the Board granted Ms. Gunnerson 10,500 shares of restricted stock, for which risks of forfeiture lapse as to 3,500 shares on each of February 5, 2019, February 5, 2020 and February 5, 2021, provided that Ms. Gunnerson remains employed by the Company on those dates. Ms. Gunnerson’s30, 2023. Mr. Woods’s restricted stock awards are governed by the 2011 Equity Incentive Plan and the Company’s form of restricted stock award agreement.

TheEmployment of Ms. Gunnerson

On February 26, 2019, the Company entered into a writtenan employment agreement with Ms. Murra on May 1, 2014, pursuant toGunnerson, which Ms. Murra was employed by the Company as its Director of Finance until January 22, 2015. On January 27, 2015, the Company amended itssuperseded her prior employment agreement with Ms. Murra due to her promotion to the position of Chief Financial Officer, effective January 22, 2015. The provisions of the agreement are consistent with the Company’s compensation philosophy.agreement. The agreement which was deemed effective as of January 27, 2015, providesprovided for at-will employment and a base salary of $115,500, which is subject to upward or downward adjustmentbe determined by the recommendations ofBoard (or a committee authorized by the Chief Executive Officer, Chairman of the Board and Vice Chairman of the Board, the Compensation Committee and the final approval of the Board.Board). Ms. Murra isGunnerson was also eligible to receive incentive compensation, including cash bonuses and equity awards, in the exclusive discretion of the Board (or a committee authorized by the Board), and to participate in any and all other employee benefit plans that are generally available to the Company’s employees. On October 20, 2017, Ms. Murra’s annual base salary was increased to $120,120The agreement also contained severance provisions, as well as confidentiality and on February 1, 2018, Ms. Murra’s annual base salary was increased to $126,120.assignment of inventions provisions that survive the termination of the agreement for an indefinite period.

AsUpon signing the new employment agreement, as consideration for her agreement not to compete with the Company or solicit the Company’sCompany’s employees or customers during the term of her employment with the Company or for one year thereafter, on February 13, 2015, Ms. MurraGunnerson received a fully-vested restricted stock award for 2,0001,000 shares of Company common stock, which was issued under the Company’s 2011 Equity Incentive Plan and for which risks of forfeiture have fully lapsed.

Ms. Murra’s employment agreement may be terminated at any time by either party. If the agreement is terminated by the Company without cause (as defined in the agreement), the Company may be required to pay up to 6 weeks of compensation and benefits to Ms. Murra, in exchange for her release of any and all claims against the Company and her compliance with the non-competition and non-solicitation provisions of the agreement. The agreement also contains confidentiality and assignment of inventions provisions that survive the termination of the agreement for an indefinite period.Plan.

On January 29, 2016,July 21, 2020, Ms. Gunnerson resigned from her position as President and Chief Executive Officer in connection with a planned transition. On July 22, 2020, the Board grantedCompany entered into a written consulting agreement with Ms. Murra 6,000 shares of restricted stock,Gunnerson. The agreement provides for periodic consulting by Ms. Gunnerson for which risks of forfeiture lapsed as to 2,000 shares on January 29, 2017 and January 29, 2018the Company will compensate her at a reasonable rate and will lapse asalso reimburse any travel expenses related to 2,000 shares on January 29, 2019, provided that Ms. Murra remains employed by the Company on that date. On January 27, 2017, the Board granted Ms. Murra 9,000 shares of restricted stock, for which risks of forfeiture lapsed as to 3,000 shares on January 27, 2018 and will lapse as to 3,000 shares on each of January 27, 2019 and January 27, 2020, provided that Ms. Murra remains employed by the Company on those dates. On February 5, 2018, the Board granted Ms. Murra 9,000 shares of restricted stock, for which risks of forfeiture lapse as to 3,000 shares on each of February 5, 2019, February 5, 2020 and February 5, 2021, provided that Ms. Murra remains employed by the Company on those dates. Ms. Murra’s restricted stock awards are governed by the 2011 Equity Incentive Plan and the Company’s form of restricted stock award agreement. Ms. Murra did not receive any payout of cash incentive compensation relating to fiscal 2016 or fiscal 2017 performance. On October 20, 2017, Ms. Murra received a discretionary bonus in the amount of $20,000 in recognition of her exceptional efforts in obtaining for the Company a new credit facility with Bank Midwest.consulting.

20172020 Say on Pay Results

At our Annual Meeting held on April 27, 2017,30, 2020, our stockholders had the opportunity to cast a non-binding advisory vote on the compensation of our named executive officers and 94.6%96.0% of the shares present and entitled to vote on the proposal approved our named executive officers’ compensation. The Board and the Compensation Committee welcomed this feedback and intend to continue their practice of linking Company performance with executive compensation decisions in order to maximize long-term stockholder value.

Summary Compensation Table

The following table sets forth all compensation paid or payable by the Company during the last two fiscal years to Carrie Gunnerson, President and Chief Executive Officer, and Amber Murra, Chief Financial Officer. As of the end of our fiscal year ended November 30, 2017, the Company had no otherCompany’s named executive officers for whom compensation disclosure is required.officers.

Name and Position	Fiscal Year	Salary ($)	Bonus ($)	Stock Awards ($) (1)	Total ($)
Carrie Gunnerson,	2017	165,884	-	33,915	199,799
President and CEO	2016	165,375	-	21,075	186,450
Amber Murra	2017	115,855	20,000 (2)	29,070	164,925
CFO	2016	115,500	-	16,860	132,360

Name and Position	Fiscal Year	Salary ($)	Bonus ($) (1)	Stock Awards ($) (2)	All Other Compensation	Total ($)
David King (3)	2020	170,317	19,875	165,600	1,293	357,085
President and Chief Executive Officer
Michael Woods (4)	2020	89,816	10,000	9,500	898	110,214
Chief Financial Officer
Carrie Gunnerson,	2020	113,627	21,499	-	1,136	136,262
Former President and Chief Executive Officer (5)	2019	171,990	9,000	19,950	1,588	202,528

 

(1)	Represents discretionary bonuses.
(2)	Represents the grant date fair value of restricted stock awarded during the fiscal years ended November 30, 20162019 and November 30, 2017,2020, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation, under the 2011 Equity Incentive Plan.Compensation. Please refer to Note 1312 of the financial statements included in our 2017 Annual Report on Form 10-K for fiscal year 2020 for a discussion of the assumptions made in the valuation of this restricted stock award.awards.
(2)(3)	Represents a one-time discretionary bonus grantedMr. King joined the Company as Executive Vice President on March 23, 2020 and became President and Chief Executive Officer on July 21, 2020 in connection with Ms. Gunnerson’s resignation.
(4)	Mr. Woods has been the Company’s Chief Financial Officer since February 1, 2020.
(5)	Ms. Gunnerson also served as the Company’s Interim Chief Financial Officer from May 31, 2018 until Mr. Woods’s appointment as Chief Financial Officer on February 1, 2020. On July 21, 2020, Ms. Gunnerson resigned from her position as President and Chief Executive Officer. Ms. Gunnerson provided interim consulting services to Ms. Murra in recognition of her exceptional efforts in obtainingthe Company for the Company a new credit facility with Bank Midwest.remainder of fiscal year 2020.

 

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Outstanding Equity Awards at 20172020 Fiscal Year-End

As of the end of fiscal year 2017, Carrie Gunnerson, our President and Chief Executive Officer, held outstanding stock options to purchase a total of 17,000 shares of common stock of the Company. The options are fully vested and exercisable. These options were granted on February 1, 2008 and August 6, 2010 pursuant to the 2007 Employee Stock Option Plan. Ms. Gunnerson also held a restricted stock award for 1,000 shares of Company common stock, for which risks of forfeiture lapsed as to 1,000 shares on February 13, 2018, a restricted stock award for 5,000 shares of Company common stock, for which risks of forfeiture lapsed as to 2,500 shares on January 29, 2018 and will lapse as to 2,500 shares on January 29, 2019, and a restricted stock award for 10,500 shares of Company common stock, for which risks of forfeiture lapsed as to 3,500 shares on January 27, 2018 and will lapse as to 3,500 shares on each of January 27, 2019 and January 27, 2020, provided that Ms. Gunnerson remains employed by the Company on those dates.

As of the end of fiscal year 2017, Amber Murra, our Chief Financial Officer, held no outstanding stock options to purchase shares of common stock of the Company. Ms. Murra held a restricted stock award for 500 shares of Company common stock, for which risks of forfeiture lapsed as to 500 shares on February 13, 2018, a restricted stock award for 4,000 shares of restricted stock, for which risks of forfeiture lapsed as to 2,000 shares on January 29, 2018 and will lapse as to 2,000 shares on January 29, 2019, and a restricted stock award for 9,000 shares of Company common stock, for which risks of forfeiture lapsed as to 3,000 shares on January 27, 2018 and will lapse as to 3,000 shares on each of January 27, 2019 and January 27, 2020, provided that Ms. Murra remains employed by the Company on those dates.

 

The following table sets forth the number of shares underlying outstanding equity awards as of November 30, 20172020 and additional information relating to such awards:

 

		OPTION AWARDS			STOCK AWARDS
Name and Position	Grant Date	Number of Securities Underlying Unexercised Options  (#) Exercisable	Option Exercise Price ($)	Option Expiration Date	Number of Shares or Units of Stock that Have Not Vested (#)	Market Value of Shares or Units that Have Not Vested ($)
Carrie Gunnerson	February 1, 2008	12,000 (1)	13.38	February 1, 2018
President and CEO	August 6, 2010	5,000 (2)	5.01	August 6, 2020
	February 13, 2015	-	-	-	1,000 (3)	2,700
	January 29, 2016	-	-	-	5,000(4)	13,502
	January 27, 2017	-	-	-	10,500(5)	28,354
Amber Murra, CFO	February 13, 2015	-	-	-	500 (6)	1,350
	January 29, 2016	-	-	-	4,000 (7)	10,802
	January 27, 2017	-	-	-	9,000 (8)	24,304

		STOCK AWARDS
Name and Position	Grant Date	Number of Shares or Units of Stock that Have Not Vested (#)	Market Value of Shares or Units that Have Not Vested ($)
David King	March 30, 2020	60,000(1)	149,400
Michael Woods	January 31, 2019	3,334(2)	8,302
	January 30, 2020	5,000(2)	12,450

 

(1)	This option expired unexercised on February 1, 2018.
(2)	Fully exercisable.
(3)	Risks of forfeiture for these shares of restricted stock lapsedwill lapse as to 20,000 shares on February 13, 2018. each of March 30, 2021, March 30, 2022, and March 30, 2023.
(4)(2)	Risks of forfeiture for these shares of restricted stock lapsed as to 2,5001,667 shares on January 29, 201831, 2021 and will lapse as to 2,5001,666 shares on January 29, 2019.31, 2022.
(5)(2)	Risks of forfeiture for these shares of restricted stock lapsed as to 3,5001,667 shares on January 27, 201830, 2021 and will lapse as to 3,500 shares on each of January 27, 2019 and January 27, 2020.
(6)	Risks of forfeiture for these shares of restricted stock lapsed on February 13, 2018.
(7)	Risks of forfeiture for these shares of restricted stock lapsed as to 2,0001,667 shares on January 29, 201830, 2022 and will lapse as to 2,0001,666 shares on January 29, 2019.
(8)	Risks of forfeiture for these shares of restricted stock lapsed as to 3,000 shares on January 27, 2018 and will lapse as to 3,000 shares on each of January 27, 2019 and January 27, 2020.30, 2023.

 

DIRECTOR COMPENSATION

 

The Company maintains a written director compensation plan. During fiscal year 2017,2020, each director, other than the Chairman of the Board and the Vice Chairman of the Board, was entitled to receive a $30,000$24,000 cash retainer for his service as a director during the fiscal year, with no committee or attendance fees pursuant to this plan. The ChairpersonsChairmen of the Audit Committee and the Compensation Committee were each entitled to receive an additional cash retainer of $5,000 per fiscal year. The fees in the table below reflect that directors Thomas Buffamante, David Castle, Joseph Dancy, and David White have elected to reduce by 20% their cash retainers for service as a director and any additional cash retainer for serving as a Chairperson. The retainer reductions were voluntary and were in effect throughout fiscal year 2017.

For fiscal year 2018, the Board has formally reduced the retainers such that each director, other than the Chairman of the Board and the Vice Chairman of the Board, is entitled to receive a $24,000 cash retainer for his service as a director during the fiscal year, with no committee or attendance fees pursuant to this plan. The Chairpersons of the Audit Committee and the Compensation Committee are each entitled to receive an additional cash retainer of $4,000 per fiscal year.

 

During fiscal year 2017,2020, the Chairman and Vice Chairman of the Board received cash retainers and were eligible for incentive compensation for the Company’s 2017 fiscal year 2020 performance, as discussed above under “Executive Compensation,” and the Chairman of the Board received an equity award. Marc McConnell received a cash retainer of $267,750 for fiscal year 2017, 12,0002020, received 12,500 shares of restricted stock for which risks of forfeiture lapsed as to 4,0004,166 shares on January 27, 201830, 2021 and will lapse as to 4,0004,167 shares on each of January 27, 201930, 2022 and January 27, 2020,2023, and was eligible to receive maximum incentive compensation of $200,812, which represented 75% of his cash retainer. He also held 9,000 shares of restricted stock previously granted to him by the Board on January 29, 2016, for which risks of forfeiture lapsed as to 3,000 shares on each of January 29, 2017 and January 29, 2018 and will lapse as to 3,000 shares on January 29, 2019. J. Ward McConnell, Jr. received a cash retainer of $89,250$85,083 for fiscal year 20172020 and was eligible to receive maximum incentive compensation of $58,012,$55,304, which represented 65% of his cash retainer. The Chairman and Vice Chairman of the Board did not receive a payout of incentive compensation based on the Company’s 2017 fiscal year performance.2020 performance; however, the Chairman of the Board did receive a discretionary bonus of $26,750 in recognition of the strategic development of the Company. The retainer payable to Marc McConnell will remain the same for fiscal year 2021, while J. Ward McConnell, Jr. will no longer receive a separate retainer due to his pending departure from the Board.

 

Director retainers are paid quarterly in installments and are prorated to reflect a director who serves for less than a full fiscal year. Directors may, in accordance with certain timing parameters determined by the Board, elect to receive fully-vestedfully vested restricted common stock in lieu of the aforementioned cash retainers. Any such stock shall be issued under the Company’s 2011Company’s 2020 Equity Incentive Plan or, if determined by the Board, an applicable successor plan approved by the Company’s stockholders. In addition, each director is reimbursed for out-of-pocket expenses to attend all Board meetings and perform other services as a Board member. Director compensation is reviewed annually, and adjustments may be adopted by the Board.

 

TheThe Company’s director compensation plan provides for annual grants of 1,000 shares of fully-vestedfully vested restricted shares of Company common stock on the date of each Annual Meetingannual meeting and commencing on February 28, 2018, for quarterly grants of 1,000 shares of fully-vestedfully vested restricted shares of Company common stock on the last day of each fiscal quarter. In fiscal year 2017,2020, the annual director restricted shares grant was made on April 27, 201730, 2020 to the directors elected to the Board at the 20172020 Annual Meeting.Meeting of Stockholders.

 

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Director Compensation Table for Fiscal Year 2017 2020

 

Our directors received the following compensation for fiscal year 2017:2020:

 

Director Name	Fees Earned or Paid in Cash ($)	Stock Awards ($) (1)	Option Awards ($) (2)	Total ($)	Fees Earned or Paid in Cash ($)	Stock Awards ($) (1) (2)	Total ($)
Marc H. McConnell	267,750	42,109	-	309,859	294,500	34,560	329,060
J. Ward McConnell, Jr.	89,250	3,300	-	92,550	85,083	10,810	95,893
Thomas E. Buffamante	28,000	3,300	-	31,300	28,000	10,810	38,810
David R. Castle	28,000	3,300	-	31,300	28,000	10,810	38,810
Joseph R. Dancy	16,000	3,300	-	19,300
David A. White	16,000	3,300	-	19,300	24,000	10,810	34,810

 

(1)

For all directors, represents the grant date fair value of equity-based compensation for 1,0005,000 shares of fully-vested restricted stock granted pursuant to the Company'sCompany’s director compensation plan in fiscal year 20172020 at the grant date marketfair value of $3.30$2.07 per share for grants of 1,000 shares made February 29, 2020, $1.95 per share for grants of 1,000 shares made April 30, 2020, $1.94 per share for grants of 1,000 shares made May 31, 2020, $2.36 per share for grants of 1,000 shares made August 31, 2020, and $2.49 per share for grants of 1,000 shares made November 30, 2020, in accordance with Financial Accounting Standards Board'sBoard’s Accounting Standards Codification (ASC) Topic 718, Compensation – Stock Compensation. For Marc McConnell, also represents the grant date fair value of equity-based compensation for 12,00012,500 shares of restricted stock for which risks of forfeiture lapsed as to 4,0004,166 shares on each January 27, 201830, 2021 and will lapse as to 4,0004,167 shares on each of January 27, 201930, 2022 and January 27, 20202023 at the grant date marketfair value of $3.2341$1.90 per share, in accordance with Financial Accounting Standards Board'sBoard’s Accounting Standards Codification (ASC) Topic 718 – Stock Compensation. Please refer to Note 1312 of the financial statements included in our 2017 Annual Report on Form 10-K for fiscal year 2020 for a discussion of the assumptions made in the valuation of restricted stock awards. At the end of fiscal year end,2020, Marc McConnell was the only non-employee director with outstanding restricted stock awards, holding 18,00024,500 shares of unvested restricted stock. Risks of forfeiture lapsed for 4,166 shares on January 30, 2021, for 4,000 shares on January 31, 2021 and for 4,000 shares on February 5, 2021. Risks of forfeiture will lapse for 4,000 shares on January 31, 2022 and for 4,167 shares on each of January 30, 2022 and 2023.

(2)

No option awards were granted to directors in fiscal year 2017.2020. At the end of fiscal year end2020 the aggregate number of option awards outstanding for each non-employee director then serving as a director was as follows: Marc McConnell, 10,000; J. Ward McConnell, Jr., 10,000; Thomas Buffamante, 10,000; and David Castle, 6,000; and Joseph Dancy, 8,000.6,000. All outstanding options held by directors are fully exercisable.

 

EQUITY COMPENSATION PLAN INFORMATION

 

The following table provides information concerning the Art’s-WayArt’s-Way Manufacturing Co., Inc. 2007 Employee Stock Option2011 Equity Incentive Plan and the Art’s-Way Manufacturing Co., Inc. 2007 Non-Employee Directors’ Stock Option Plan, and the 20112020 Equity Incentive Plan as of November 30, 2017.2020.

 

	Number of securities to be issued upon exercise of outstanding options	Weighted average exercise price of outstanding options	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))	Number of securities to be issued upon exercise of outstanding options	Weighted average exercise price of outstanding options	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)	(a)	(b)	(c)
Equity compensation plans approved by security holders	96,000	$7.77	312,054	36,000	$6.40	531,848
Equity compensation plans not approved by security holders	-	N/A	-	-	N/A	-
Totals	96,000	$7.77	312,054	36,000	$6.40	531,848

 

CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS

 

Other than as described below, sincesince the beginning of our 2017 fiscal year 2019, there have been no transactions or series of transactions to which we were a participant or will be a participant in which:

 

	•	the amounts involved exceeded the lesser of $120,000 or one percent of the average of our total assets at year-end for our last two completed fiscal years; and
	•	a director, executive officer, beneficial owner of more than 5% of any class of our voting securities or any member of their immediate family had or will have a direct or indirect material interest.

 

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J. Ward McConnell, Jr., the Vice Chairman of our Board, has personally guaranteed approximately 38% of our $2,600,000$2,600,000 term loan from Bank Midwest, as required by the United States Department of Agriculture in connection with its guarantee of the same loan. In exchange, J. Ward McConnell, Jr. receives a fee of 2% of the personally guaranteed amount. For fiscal year 2017,years 2019 and 2020, the fee paid to J. Ward McConnell, Jr. was $3,408.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE$18,715 and $16,641, respectively.

 

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our officers and directors, and persons who own more than 10% of a registered class of our equity securities, to file reports of ownership and changes in ownership with the SEC. Officers, directors and greater than 10% beneficial owners are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file. To our knowledge, and based solely on a review of the copies of such reports furnished to us and written representations from our officers and directors, all directors and officers filed timely reports of ownership and changes in ownership with the SEC with the exception of the following transactions: J. Ward McConnell, Jr. filed a late Form 4 on December 6, 2017 to report the purchase of common stock of the Company on November 9, 2017 by J. Ward McConnell, Jr. Living Trust.

OTHER INFORMATION

 

Management knows of no other matters that may be brought before the 20182021 Annual Meeting. If any other matters are presented at the meeting on which a vote may properly be taken, the persons named as proxy holders on the enclosed proxy card will vote thereon in accordance with their discretion and best judgment.

 

ANNUAL REPORT AND FINANCIAL STATEMENTS

 

The Company’s Annual Report to security holders onCompany’s Form 10-K, including the Company’s financial statements and the notes thereto for the fiscal year ended November 30, 2017,2020, accompanies the delivery of this Proxy Statement.

 

We will provide a copy of exhibits to the Form 10-K upon written request and payment of specified fees. The written request for such Form 10-K and/or exhibits should be directed to Carrie Gunnerson,David King, President and Chief Executive Officer of Art’s-Way ManufactArt’urings-Way Manufacturing Co., Inc., 5556 Highway 9, Armstrong, Iowa, 50514-0288. Such request must set forth a good faith representation that the requesting party was a holder of record or a beneficial owner of common stock of the Company on March 13, 2018.8, 2021. The fiscal year 2017 Annual Report on Form 10-K complete with exhibits and the Proxy Statement are also available at no cost through the EDGAR database available from the SESEC’C’ss website (www.sec.gov) and on our website at http://www.artsway-mfg.com/investor-relations/.

 

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