UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

Proxy Statement Pursuant to Section 14(a) of

the Securities Exchange Act of 1934

 

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Filed by a Party other than the Registrant ☐

 

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Preliminary Proxy Statement

Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

Definitive Proxy Statement

Definitive Additional Materials

Soliciting Material Pursuant to §240.14a-12

 

ARTS-WAY MANUFACTURING CO., INC.


 

(Name of Registrant as Specified In Its Charter)

 

 


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

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ARTS-WAY MANUFACTURING CO., INC.

5556 Highway 9

Armstrong, Iowa, 50514-0288

Ph: (712) 864-3131

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD ON WEDNESDAY, APRIL 21, 2021

 

To our Stockholders:

 

The 2021 Annual Meeting of the Stockholders (the “2021 Annual Meeting”) of Art’s-Way Manufacturing Co., Inc. (the “Company”) will be held on Wednesday, April 21, 2021, at the  offices of the Company, located at 5556 Highway 9, Armstrong, Iowa, 50514-0288. Registration for the 2021 Annual Meeting will begin at 8:00 a.m. Central Daylight Time (“CDT”). The 2021 Annual Meeting will commence at approximately 9:00 a.m. CDT. The Company is also offering its stockholders the ability to attend the 2021 Annual Meeting remotely, via teleconference. To attend the 2021 Annual Meeting via teleconference, please call 1-866-895-5510 and enter a passcode of 409589. The purposes of the 2021 Annual Meeting are to:

 

 

(1)

Consider and vote upon the election of five nominees to the Company’s Board of Directors, to serve until the next annual meeting of stockholders and until such time as their successors are elected and qualified, or until their earlier resignation or removal;

 

 

(2)

Consider and vote upon the ratification of the appointment of Eide Bailly LLP as the Company’s independent registered public accounting firm for the fiscal year ending November 30, 2021;

 

 

(3)

Consider and vote upon, on a non-binding, advisory basis, named executive officer compensation.

 

Any action may be taken on any one of the foregoing proposals at the 2021 Annual Meeting on the date specified above, or on any date or dates to which the 2021 Annual Meeting may be adjourned. The Board of Directors is not aware of any other business to come before the 2021 Annual Meeting. The foregoing proposals are described more fully in the enclosed proxy statement (the “Proxy Statement”). If you have any questions regarding the information contained in the Proxy Statement or submission of your proxy for the 2021 Annual Meeting or if you would like directions to the 2021 Annual Meeting, please call the Company at (712) 864-3131.

 

Only stockholders listed on the Company’s records at the close of business on Monday, March 8, 2021, the record date set by the Board of Directors for the 2021 Annual Meeting, are entitled to notice of the 2021 Annual Meeting and to vote at the 2021 Annual Meeting and any adjournments thereof. The stock transfer books of the Company will not be closed.

 

All stockholders are cordially invited to attend the 2021 Annual Meeting in person or via teleconference. In-person voting will not be available if you attend the 2021 Annual Meeting via teleconference. Therefore, to ensure the presence of a quorum, the Board of Directors requests all stockholders of record to promptly vote your shares by proxy, whether or not you plan to attend the 2021 Annual Meeting. The proxy is revocable and will not be used if a stockholder attends and votes at the 2021 Annual Meeting in person or otherwise provide notice of revocation. You may vote by proxy over the telephone or the Internet as instructed in the accompanying proxy statement. If you received a proxy card or voting instruction card by mail, you may submit your proxy card or voting instruction card by completing, signing, dating and mailing your proxy card or voting instruction card in the envelope provided.

 

By order of the Board of Directors,

 

/s/ Marc H. McConnell

Chairman of the Board of Directors

Armstrong, Iowa

March 17, 2021

 

 

 

 

IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE THE COMPANY THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A QUORUM.

 

Proxy Statement

2021 Annual Meeting of Stockholders

Wednesday, April 21, 2021

9:00 a.m. CDT

 

This proxy statement (the “Proxy Statement”) is furnished in connection with the solicitation of proxies by the Board of Directors of Art’s-Way Manufacturing Co., Inc., a Delaware corporation (the “Company,” “we,” “us,” or “our”), for use at the 2021 Annual Meeting of Stockholders of the Company to be held on Wednesday, April 21, 2021 (the “2021 Annual Meeting”), and at any adjournment thereof. The 2021 Annual Meeting will be held at the offices of the Company, located at 5556 Highway 9, Armstrong, Iowa, 50514-0288. Registration for the 2021 Annual Meeting will begin at approximately 8:00 a.m. Central Daylight Time (“CDT”). The 2021 Annual Meeting will commence at approximately 9:00 a.m. CDT. This solicitation is being made by mail; however, the Company may also use its officers, directors, and employees (without providing them with additional compensation) to solicit proxies from stockholders in person or by telephone or letter. Distribution of this Proxy Statement and the proxy card via U.S. Mail is scheduled to begin on or about March 17, 2021.

 

Important Notice Regarding the Availability of Proxy Materials

for the Annual Meeting of Stockholders to be Held on April 21, 2021:

The Notice, Proxy Statement, Form of Proxy Card, and Annual Report on Form 10-K are available at

http://www.artsway-mfg.com/investor-relations/

 

QUESTIONS AND ANSWERS ABOUT THE 2021 ANNUAL MEETING AND VOTING

 

Q:  

Why did I receive this proxy statement?

 

 

A:

We are soliciting your proxy for the 2021 Annual Meeting because you owned of record one or more shares of common stock of the Company at the close of business on Monday, March 8, 2021, the record date for the 2021 Annual Meeting, and are therefore entitled to vote at the 2021 Annual Meeting.

 

Q: 

What is a proxy?

 

 

A:

A proxy is your legal designation of another person or persons (the “proxy” or “proxies,” respectively) to vote on your behalf. By completing and returning the enclosed proxy card or by voting via the Internet or telephone, you are giving Marc H. McConnell and David R. Castle, the proxies, the authority to vote your shares of common stock at the 2021 Annual Meeting in the manner you indicate. If you sign and return your proxy card, but do not give direction with respect to any nominee or other proposal, the proxies will vote your shares as recommended by the Board of Directors. The proxies are authorized to vote in their discretion if other matters are properly submitted at the 2021 Annual Meeting or any adjournments thereof.

 

Q:   

When and where is the 2021 Annual Meeting?

 

 

A:

The 2021 Annual Meeting will be held on Wednesday, April 21, 2021, at the offices of the Company, located at 5556 Highway 9, Armstrong, Iowa, 50514-0288. Registration for the meeting will begin at approximately 8:00 a.m. CDT. The 2021 Annual Meeting will commence at approximately 9:00 a.m. CDT. The Company is also offering its stockholders the ability to attend the 221 Annual Meeting remotely, via teleconference. To attend the 2021 Annual Meeting via teleconference, please call 1-866-895-5510 and enter a passcode of 409589. In-person voting will not be available if you attend the 2021 Annual Meeting via teleconference.

 

Q:

What am I voting on?

 

 

A: 

You are voting on the following matters:

 

 

Proposal 1 — The election of the five director nominees named in this Proxy Statement;

 

Proposal 2 — The ratification of the appointment of Eide Bailly LLP as the Company’s independent registered public accounting firm for the fiscal year ending November 30, 2021 (“fiscal year 2021”);

 

Proposal 3 — The approval, on a non-binding, advisory basis, of named executive officer compensation.

 

1

 

Q:

What does the Board recommend?

 

 

A:

The Board recommends a vote:

 

 

 

FOR — the election of the five director nominees named in this Proxy Statement;

 

FOR — the ratification of the appointment of Eide Bailly LLP as the Company’s independent registered public accounting firm for fiscal year 2021;

 

FOR — the approval, on a non-binding, advisory basis, of named executive officer compensation.

 

Q: 

How many votes do I have?

 

 

A:

On any matter that may properly come before the 2021 Annual Meeting, each stockholder entitled to vote thereon will have one vote for each share of common stock owned of record by such stockholder as of the close of business on Monday, March 8, 2021.

 

Q: 

How many shares of common stock may vote at the 2021 Annual Meeting?

 

 

A:

At the close of business on Monday, March 8, 2021, there were 4,563,504 shares of common stock outstanding. This means that there may be 4,563,504 votes on any matter presented at the 2021 Annual Meeting.

 

Q: 

What vote is required to approve each of the Proposals?

 

 

A:

Proposal 1 Election of Directors — With respect to the election of directors, the five nominees receiving the greatest number of votes cast relative to the votes cast for the other nominees will be elected, regardless of whether an individual nominee receives votes from a majority of the quorum of shares represented (in person or by proxy) at the 2021 Annual Meeting and entitled to vote on the proposal. Although directors are elected by plurality vote, the presence (in person or by proxy) of stockholders representing at least a majority of the issued and outstanding shares of common stock is required to constitute a quorum for the election of directors.

 

 

Proposal 2 Independent Registered Public Accountant Firm — Provided a quorum of at least a majority of the issued and outstanding shares of common stock is present (in person or by proxy), the affirmative vote of the holders of a majority of the shares of common stock represented at the 2021 Annual Meeting (whether in person or by proxy) and entitled to vote on the proposal will result in the stockholders’ ratification of the appointment of Eide Bailly LLP as the Company’s independent registered public accounting firm for fiscal year 2021.

 

 

Proposal 3 Approval, on a Non-Binding, Advisory Basis, of Named Executive Officer Compensation — Provided a quorum of at least a majority of the issued and outstanding shares of common stock is present (in person or by proxy), the affirmative vote of the holders of a majority of the shares of common stock represented at the 2021 Annual Meeting (whether in person or by proxy) and entitled to vote on the proposal will result in the approval of the compensation of our named executive officer. However, this is an advisory vote, which means that the result of the vote is not binding on the Company, the Board of Directors or the Compensation Committee. To the extent there is any significant vote against named executive officer compensation as disclosed in this Proxy Statement, the Compensation Committee will evaluate whether any actions are necessary to address the concerns of stockholders.

 

Q:

Do stockholders have cumulative voting rights?

 

 

A:

Stockholders do not have cumulative voting rights with respect to the election of directors or any other matter, which means that stockholders will not be able to cast all of their votes for a single director nominee. The cumulative voting method would entitle a stockholder to multiply the number of shares owned of record by such stockholder by the number of director positions being voted upon and then cast a number of votes equal to such total for only one nominee. Instead, stockholders will only be able to cast one vote per share owned of record for each director nominee (up to five nominees) at the 2021 Annual Meeting. Accordingly, a holder of 100 shares will only be able to cast 100 votes for each of the five nominees (or any lesser number of nominees, as desired) and will not instead be able to cast 500 votes for a single nominee (or distribute votes in any other manner).

 

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Q:

What constitutes a quorum?

 

 

A:

Transaction of business may occur at the 2021 Annual Meeting if a quorum is present. The presence in person or by proxy of stockholders holding at least a majority of the issued and outstanding shares of common stock is required to constitute a quorum. On Monday, March 8, 2021, the Company had 4,563,504 shares of common stock issued and outstanding and, therefore, the presence of 2,281,753 shares will constitute a quorum for the transaction of business at the 2021 Annual Meeting. If you submit a proxy or vote in person at the meeting, your shares will be counted in determining whether a quorum is present at the 2021 Annual Meeting. Broker non-votes and abstentions are also counted for the purpose of determining a quorum, as discussed below.

 

Q:

What is the effect of abstentions and withhold votes?

 

 

A:

You may either vote FOR or WITHHOLD authority to vote for each director nominee (Proposal 1). If you withhold authority to vote on any or all nominees, your vote will have no effect on the outcome of the election. You may vote FOR, AGAINST or ABSTAIN on the ratification of Eide Bailly LLP as the Company’s independent registered public accounting firm for fiscal year 2021 (Proposal 2), and the non-binding, advisory vote on named executive officer compensation (Proposal 3). If you abstain from voting on any of these proposals, your shares will be deemed present but will not be deemed to have voted in favor of the proposal. An abstention therefore has the same effect as a vote against the proposal.

 

If you sign and submit your proxy card without voting instructions, your shares will be voted FOR each director nominee and FOR Proposals 2, and 3.

 

Q:

What is the effect of broker non-votes?

 

 

A:

Shares that are held by brokers in “street name” may be voted by the broker on “routine” matters, such as ratification of Eide Bailly LLP as our independent registered public accounting firm for fiscal year 2021 (Proposal 2). To vote on “non-routine” matters, the broker must obtain stockholder direction. When the broker does not vote the shares, the broker’s abstention is referred to as a “broker non-vote.”

 

Broker non-votes will be considered present for quorum purposes at the 2021 Annual Meeting. Brokers do not have discretion to vote shares for the election of directors (Proposal 1), for the non-binding, advisory vote on named executive officer compensation (Proposal 3) or for any other non-routine matters that may be brought before the 2021 Annual Meeting. Accordingly, if your shares are held in street name and you do not submit voting instructions to your broker, your shares will not be voted for these proposals. Broker non-votes in connection with the election of directors are not deemed “votes cast,” and, since directors are elected by a plurality of votes cast, will have no effect on the election. The shares underlying broker non-votes in connection with the vote on named executive officer compensation will not be deemed entitled to vote and, therefore, these broker non-votes will have no effect on the outcome of this proposal.

 

If you do not provide voting instructions, brokers will have discretion to vote on the ratification of Eide Bailly LLP as the Company’s independent registered public accounting firm for fiscal year 2021.

 

For any other business matters that may be brought before the 2021 Annual Meeting, the affirmative vote of a majority of the shares of the Company’s common stock present in person or by proxy at the 2021 Annual Meeting and entitled to vote on the matter is required to pass the proposal. Broker non-votes will be counted as present for quorum purposes at the 2021 Annual Meeting but will not be considered entitled to vote on non-routine matters and will therefore not be treated as affirmative or opposing votes.

 

Q:

How do I vote my shares?

 

 

A:

If you are a stockholder of record, you may vote your shares of common stock at the 2021 Annual Meeting using any of the following methods:

 

 

By proxy card. The enclosed proxy card is a means by which a stockholder may authorize the voting of such stockholder’s shares of common stock at the 2021 Annual Meeting. The shares of common stock represented by each properly executed proxy card will be voted at the 2021 Annual Meeting in accordance with the stockholder’s directions. The Company urges you to specify your choices by marking the appropriate boxes on the enclosed proxy card. After you have marked your choices, please sign and date the proxy card and return the proxy card in the enclosed envelope. If you sign and return the proxy card without specifying your choices, your shares will be voted FOR the five director nominees (Proposal 1); FOR the ratification of the appointment of Eide Bailly LLP as the Company’s independent public accounting firm for fiscal year 2021 (Proposal 2); and FOR the approval, by a non-binding, advisory vote, of named executive officer compensation (Proposal 3).

 

3

 

 

Over the Internet. To vote by proxy over the Internet, go to http://www.proxyvote.com. Please have available the 16-Digit Control Number from the enclosed proxy card. Your vote must be received by 11:59 p.m., Eastern Time (10:59 p.m., Central Time) on April 20, 2021, to be counted. We are providing Internet proxy voting to allow you to vote your shares via proxy online, with procedures designed to ensure the authenticity and correctness of your proxy vote instructions. However, please be aware that you must bear any costs associated with your Internet access, such as usage charges from Internet access providers and telephone companies.

 

 

By telephone. To vote by proxy over the telephone, dial toll-free 1-800-690-6903 using a touch-tone phone and follow the recorded instructions. Please have available the 16-Digit Control Number from the enclosed proxy card. Your vote must be received by 11:59 p.m., Eastern Time (10:59 p.m., Central Time) on April 20, 2021, to be counted.

 

 

In person at the 2021 Annual Meeting. All stockholders of record as of Monday, March 8, 2021 may vote in person at the 2021 Annual Meeting. Even if you plan to attend the 2021 Annual Meeting, we recommend that you submit your proxy card ahead of time so that your vote can be counted if you later decide not to attend. In-person voting will not be available if you attend the 2021 Annual Meeting via teleconference.

     

 

You are a “beneficial owner” of shares held in “street name,” rather than a “stockholder of record,” if your shares are held in the name of a broker, bank, trust or other nominee as a custodian, and this Proxy Statement and the accompanying Notice were forwarded to you by that organization. As a beneficial owner, you have the right to direct your broker, bank, trust or other nominee how to vote your shares. You may vote by proxy by completing the voting instruction form provided by your custodian. Since a beneficial owner is not the stockholder of record, you may not vote your shares in person at the 2021 Annual Meeting unless you obtain a “legal proxy” from the broker, bank, trustee, or nominee that holds your shares giving you the right to vote the shares at the meeting.

 

Q:

Can I change my vote after I have mailed in my proxy card?

 

 

A:

Proxies solicited by the Board of Directors may be revoked at any time prior to the 2021 Annual Meeting. No specific form of revocation is required. You may revoke your proxy by:

 

 

 

Voting in person at the 2021 Annual Meeting;

 

Returning a later-dated signed proxy card;

 

Submitting a new vote by telephone or Internet; or

 

Giving personal or written notice of the revocation to the Company’s Chief Financial Officer, Michael Woods, at the commencement of the 2021 Annual Meeting.

 

 

If your shares are held in “street name” through a broker, bank, trustee, or other nominee, you will need to contact that custodian if you wish to change your voting instructions.

 

Q:

How will my shares be voted if I do not specify how they should be voted or if I vote for too few or too many choices on the proxy card?

 

A:

If you are a record holder and do not mark any choices for the election of directors on the proxy card, then the proxies solicited by the Board of Directors will be voted FOR the five nominees recommended for election by the Board of Directors. You may wish to vote for less than five director nominees. In such case, your shares will only be voted for the director nominee(s) you have selected. If you mark contradicting choices on the proxy card, such as both FOR and WITHHOLD for a director nominee, your shares will not be voted with respect to the director nominee for which you marked contradicting choices.

 

If you are a record holder and do not mark a choice with respect to the approval of any proposal other than the election of directors, then the proxies solicited by the Board of Directors will be voted FOR the ratification of the appointment of Eide Bailly LLP as the Company’s independent public accounting firm for fiscal year 2021 (Proposal 2), and FOR the approval, by a non-binding, advisory vote, of named executive officer compensation (Proposal 3). If you mark contradicting choices on your proxy card, such as a mark both FOR and AGAINST the approval of a proposal, then your shares will not be counted either for or against the proposal for which you have marked contradicting choices.

 

4

 

  If you are a street name holder and do not submit specific voting instructions to your broker, the organization that holds your shares may generally vote your shares with respect to “routine” items, but not with respect to “non-routine” items. On non-routine items for which you do not submit specific voting instructions to your broker, the shares will be treated as “broker non-votes.” Broker non-votes will be counted for purposes of determining whether a quorum is present. The proposal to ratify the appointment of Eide Bailly LLP as our independent registered public accounting firm (Proposal 2) is considered routine and therefore may be voted upon by your broker if you do not give instructions to your broker. However, brokers will not have discretion to vote your shares on the election of directors (Proposal 1), or on the non-binding, advisory vote on named executive officer compensation (Proposal 3). Accordingly, if your shares are held in street name and you do not submit voting instructions to your broker, the broker non-votes will not be considered “votes cast” for purposes of determining the outcome of the election of director nominees and will have no effect on the outcome of the election. Similarly, the shares underlying broker non-votes on Proposal 3 will not be considered entitled to vote and will have no effect on the outcome of these proposals.

 

Q:

Who can attend the 2021 Annual Meeting?

 

 

A:

All stockholders of record as of the close of business on Monday, March 8, 2021, may attend the 2021 Annual Meeting. If you are not a stockholder of record but hold shares through a broker, bank, trustee, or other nominee as custodian (i.e., in “street name”), we may request proof of your beneficial ownership as of the record date, such as an account statement, a copy of the voting instruction card provided by your custodian, a “legal proxy” provided by your custodian, or other similar evidence of ownership.

 

Q:

What is the record date for the 2021 Annual Meeting?

 

 

A:

The Board of Directors has fixed Monday, March 8, 2021, as the record date.

 

Q:

Who will count the votes?

 

 

A:

All proxies submitted to the Company will be tabulated by our stock transfer agent, American Stock Transfer and Trust Company. All shares voted by stockholders of record present in person at the 2021 Annual Meeting will be tabulated by our Chief Financial Officer.

 

Q:

Who is paying for this proxy solicitation?

 

 

A:

The entire cost of this proxy solicitation will be borne by the Company. The cost will include the cost of supplying necessary additional copies of the solicitation materials for beneficial owners of shares held of record by brokers, dealers, banks and voting trustees and their nominees and, upon request, the reasonable expenses of such record holders for completing the mailing of such materials to such beneficial owners. Our directors, executive officers and employees may, without compensation other than their regular remuneration, solicit proxies personally or by telephone.

 

Q:

How do I nominate a candidate for election as a director at next years annual meeting?

 

 

A:

You may recommend a candidate for nomination by the Board of Directors at next year’s annual meeting by following the procedures explained below in this Proxy Statement under the caption “CORPORATE GOVERNANCE – Selection of Director Nominees” and contained in the rules and regulations of the Securities and Exchange Commission (the “SEC”). You may directly nominate a candidate for election at next year’s annual meeting by following the procedures explained below in response to the question “When are stockholder proposals and director nominations due for next year’s annual meeting?”

 

Q:

What is a stockholder proposal?

 

 

A:

A stockholder proposal is your recommendation or requirement that the Company and/or the Board of Directors take action, which you intend to present at a meeting of the stockholders. Your proposal should state as clearly as possible the course of action that you believe the Company should follow. If your proposal is included in the Company’s proxy statement, then the Company must also provide the means for stockholders to vote on the matter via the proxy card. The deadlines and procedures for submitting stockholder proposals for next year’s annual meeting are explained in the following question and answer. 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.

 

5

 

Q:

When are stockholder proposals and director nominations due for the next years annual meeting?

 

 

A:

In order to be considered for inclusion in next year’s proxy statement, stockholder proposals must be submitted in writing to the Company no later than November 19, 2021 (approximately 120 days prior to the one-year anniversary of the mailing of this Proxy Statement). The Company suggests that proposals for next year’s annual meeting be submitted by certified mail, return receipt requested. The proposal must be in accordance with the provisions of Rule 14a-8 promulgated by the SEC under the Securities Exchange Act of 1934, as amended.

 

 

Stockholders who intend to present a proposal or director nomination at next year’s annual meeting without including such proposal or nomination in the Company’s proxy statement must, pursuant to the Company’s Bylaws, deliver to the Company notice of such proposal no earlier than January 21, 2022 (approximately 90 days prior to the one year anniversary of the 2021 Annual Meeting) and no later than February 20, 2022 (approximately 60 days prior to the one year anniversary of 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.

 

 

 

If a stockholder proposal intended to be submitted at next year’s annual meeting does not comply, as determined in the Chairman’s discretion, with the timeframes and other procedures established by the Company’s Bylaws, the proposal will be disregarded.

 

6

 

PROPOSALS TO BE VOTED UPON

 

PROPOSAL 1

 

ELECTION OF DIRECTORS

 

What am I voting on? The Board is asking our stockholders to elect each of the five director nominees named in this Proxy Statement to hold office until the 2022 Annual Meeting of Stockholders and until their successors are elected and qualified or until their earlier resignation or removal.

 

Board Recommendation: FOR the election of each of the five director nominees.

 

Required Vote: The five director nominees with the greatest number of shares voted FOR the director nominee will be elected.

 

Voting procedures and the method by which votes will be counted, including the treatment and effect of abstentions and broker non-votes, are more fully described above in the section titled “QUESTIONS AND ANSWERS ABOUT THE 2021 ANNUAL MEETING AND VOTING.”

 

Five members of the Board of Directors (the “Board”) will be elected at the 2021 Annual Meeting to hold office until the 2022 Annual Meeting of Stockholders and until their successors are elected and qualified or until their earlier resignation or removal. Other than Matthew Westendorf, each of the five nominees listed below is currently a member of the Board and the Company has no reason to believe that any of the director nominees named below will be unable or unwilling to serve as director if elected. In addition to the nominees listed below, Mr. J. 89, McConnell, Jr. also currently serves as a member of the Board. Mr. McConnell’s term as a director will expire at the 2021 Annual Meeting.

 

The five nominees receiving the greatest number of affirmative votes cast will be elected as directors. Proxies cannot be voted for a greater number of persons than the number of nominees named. Except as otherwise directed on the proxy cards, the proxies will vote all valid proxies for the five nominees identified below. If for any reason any nominee withdraws or is unable to serve as director (neither of which is expected at this time), the shares represented by all valid proxies will be voted for the election of a substitute nominee recommended by the Board or the Board may reduce the size of the Board.

 

Nominees for Election as Directors at the 2021 Annual Meeting

 

The Board has recommended the following persons as nominees for election as directors at the 2021 Annual Meeting:

 

 

Nominee Name

Age (as of

Annual Meeting)

Year First Became

a Director

Marc H. McConnell

41

2001

Thomas E. Buffamante

68

2003

David R. Castle

71

2000

Matthew N. Westendorf

50

N/A

David A. White

67

2016

 

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 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, Chairman of the Executive Committee 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 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.

 

7

 

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 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 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.

 

MATTHEW N. WESTENDORF, Director Nominee. Mr. Westendorf is the current President of Westendorf Manufacturing Co., Inc., a manufacturing of front-end loaders located in Onawa, Iowa, a position he has held since 2006. He currently serves on the board of directors of Jack Rabbit Manufacturing (since 2019 and on the executive board of the Farm Equipment Manufacturers Association (since 2014). Among other attributes, skills, and qualifications, the Board believes that Mr. Westendorf’s experience running a manufacturing company will allow him to provide insight into the Company’s operations and 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, 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 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.

 

8

 

PROPOSAL 2

 

RATIFICATION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

What am I voting on? 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.

 

Voting Recommendation: FOR the ratification of our independent registered public accounting firm.

 

Vote Required: Ratification requires an affirmative vote of the majority of shares present in person or represented by proxy and entitled to vote.

 

Voting procedures and the method by which votes will be counted, including the treatment and effect of abstentions and broker non-votes, are more fully described above in the section titled “QUESTIONS AND ANSWERS ABOUT THE 2021 ANNUAL MEETING AND VOTING.”

 

The Board, acting on the recommendation of the Audit Committee, has selected Eide Bailly LLP as the Company’s independent registered public accounting firm for fiscal year 2021. Eide Bailly LLP has been the Company’s independent registered public accounting firm since July 2006. Eide Bailly LLP has advised the Company that it has no relationship to the Company except that of independent registered public accounting firm. A representative of Eide Bailly LLP is expected to be present at the 2021 Annual Meeting. Such representative will have an opportunity to make a statement if the 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’s annual financial statements, the review of the Company’s interim financial statements, and related services for the fiscal years ended November 30, 2020 and November 30, 2019.

 

Category

Fiscal Year

Fees ($)

Audit Fees (1)

2020

106,139

 

2019

107,351

Audit-Related Fees (2)

2020

-

 

2019

-

Tax Fees (3)

2020

22,500

 

2019

22,500

All Other Fees

2020

-

 

2019

-

 

(1)

Audit fees represent fees billed for each of the last two fiscal years for professional services provided for the audit of the Company’s annual financial statements and review of the Company’s quarterly financial statements in connection with the filing of current and periodic reports.

 

(2)

Audit-related fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements.

 

(3)

Tax fees represent fees billed for each of the last two fiscal years for tax compliance, tax advice and tax planning, which included preparation of tax returns.

 

Audit Committee Pre-Approval Policies and Procedures

 

The Audit Committee pre-approved the engagement of Eide Bailly LLP as the Company’s principal independent registered public accounting 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 registered public accounting firm prior to engagement. One hundred percent of the services referenced above were pre-approved by our Audit Committee.

 

9

 

PROPOSAL 3

 

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

 

What am I voting on? The Board is asking our stockholders to approve, on a non-binding, advisory basis, the compensation of the named executive officers disclosed in this Proxy Statement.

 

Voting Recommendation: FOR the approval of the compensation of the named executive officers.

 

Vote Required: Approval requires an affirmative vote of the majority of shares present in person or represented by proxy and entitled to vote.

 

Voting procedures and the method by which votes will be counted, including the treatment and effect of abstentions and broker non-votes, are more fully described above in the section titled “QUESTIONS AND ANSWERS ABOUT THE 2021 ANNUAL MEETING AND VOTING.”

 

The Dodd-Frank Wall Street Reform and Consumer Protection Act and Section 14A of the Exchange Act require that the Company provide its stockholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of our named executive officers as disclosed in this Proxy 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 votes on named executive officer compensation at our 2019 Annual Meeting of Stockholders, the Company previously determined to hold annual 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, in accordance with the compensation disclosure rules of the SEC.

 

Accordingly, we ask our stockholders to approve the following resolution at the 2021 Annual Meeting:

 

“RESOLVED, that the Company’s stockholders approve, on an advisory basis, the compensation of the named executive officers, as disclosed in the Company’s Proxy Statement for the 2021 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 the Compensation Committee intend to carefully consider the results of this vote when making future decisions regarding executive compensation, this 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, the Board and the Compensation Committee will evaluate what actions may be necessary to address our stockholders’ concerns.

 

10

 

OTHER INFORMATION

 

CORPORATE GOVERNANCE

 

Our Board currently has five members: Thomas E. Buffamante, David R. Castle, 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 provide 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 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 four meetings during the fiscal year 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 2020 and the total number of meetings held by all committees of the Board on which the director served during fiscal year 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 meeting of stockholders but does not have a formal attendance policy. The Company’s last annual meeting of stockholders held on April 30, 2020 was attended via teleconference by all of our directors who were serving at that time with the exception of J. Ward McConnell, Jr.

 

The Board has an Audit Committee 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 Boards Role in Risk Oversight

 

Management 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. While J. Ward McConnell, Jr. 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.

 

11

 

Because the Board has determined that our Chairman of the Board does not satisfy the definition of “independence” as set forth in Nasdaq Rule 5605, the Board appointed David Castle to serve as “presiding director” over all executive sessions of independent directors that 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’s financial reporting process and systems of internal controls. The Audit Committee evaluates the independence of the Company’s independent registered public accounting firm, recommends selection of the Company’s independent registered public accounting firm to the Board, approves fees to be paid to our independent registered public accounting firm, and reviews the Company’s financial statements with management and the independent 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 registered public accounting firm for fiscal year 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 2020, the members of the Audit Committee were Thomas E. Buffamante (Chairman), David R. Castle and David A. White. The same individuals will serve as members of the Audit Committee for fiscal year 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 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’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’s audited financial statements as of and for the fiscal year ended November 30, 2020. The members of the Audit Committee have discussed with Eide Bailly LLP, the Company’s independent registered public accounting firm, the matters required to be discussed by the 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.

 

12

 

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, 2020.

 

Audit Committee

 

Thomas E. Buffamante, Chairman

David R. Castle

David A. White

 

Compensation Committee

 

During fiscal year 2020, the members of the Compensation Committee were David R. Castle (Chairman), Thomas E. Buffamante and David A. White. The same individuals will serve as members of the Compensation Committee for fiscal year 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’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, 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 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 equity 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 one meeting during fiscal year 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 five of the director nominees for the 2021 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 2020 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/.

 

13

 

Selection of Director Nominees

 

In selecting nominees for directors, the Board, acting as the 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 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’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 2021 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:

 

 

(1)

the full name and address of the stockholder or group submitting the recommendation;

 

(2)

the number of shares of common stock of the Company owned by the stockholder or group submitting the recommendation, and the date such shares were acquired;

 

(3)

the full name and address of the director nominee;

 

(4)

the age of the director nominee;

 

(5)

a five-year business history of the director nominee;

 

(6)

the amount of common stock of the Company owned by the director nominee;

 

(7)

whether the director nominee can read and understand basic financial statements;

 

(8)

the director nominee’s other board memberships, if any;

 

(9)

any family relationships between the director nominee and any executive officer or current director of the Company;

 

(10)

any business transactions between the director nominee or the candidate’s business and the Company;

 

(11)

a written consent of the director nominee to be named in the Company’s proxy statement and to serve as a director if elected; and

 

(12)

a written consent of the stockholder or group to be named in the Company’s proxy statement.

 

Additionally, any holder of common stock nominating a candidate is encouraged to set forth any other qualifications which such stockholder believes the candidate has to serve as director of the Company and the reasons why the stockholder 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’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’s Bylaws, stockholders who intend to present a floor proposal or director nomination at the 2022 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 21, 2022 (approximately 90 days prior to the one year anniversary of the 2021 Annual Meeting) and no later than February 20, 2022 (approximately 60 days prior to the one year anniversary of 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.

 

14

 

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’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 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 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 8, 2021. The shares shown as beneficially owned include shares that executive officers, directors, and director nominees are entitled to acquire pursuant to outstanding stock options exercisable within 60 days of March 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.

 

 

Name of Beneficial Owner

 

Position

Amount and Nature of

Beneficial Ownership (1)

Percent of

Class (2)

Thomas E. Buffamante

Director

43,000 shares (3)

*

David R. Castle

Director

36,000 shares (4)

*

J. Ward McConnell, Jr.

Vice Chairman of the Board and Director

2,159,819 shares (5)

47.2%

Marc H. McConnell

Chairman of the Board and Director

135,330 shares (6)

3.0%

Matthew N. Westendorf

Director Nominee

1,000 shares

*

David A. White

Director

20,000 shares

*

Carrie L. Gunnerson

Former President and Chief Executive Officer

40,398 shares (7)

*

David A. King

President and Chief Executive Officer

100,000 shares (8)

2.2%

Michael Woods

Chief Financial Officer

16,968 shares (9)

*

 

 

 

 

Directors and Executive Officers as a Group (7 individuals)  

2,512,117 shares (10)

55.9%

* Less than 1%

 

(1)

Beneficial ownership is determined in accordance with SEC rules and generally includes holding, voting and investment power with respect to the securities. Unless otherwise noted, the stockholders listed in the table have sole voting and investment power with respect to the shares indicated.

(2)

Based on 4,563,504 shares issued and outstanding as of March 8, 2021.

(3)

Includes 10,000 shares underlying stock options that can be exercised within 60 days of March 8, 2021.

(4)

Includes 6,000 shares underlying stock options that can be exercised within 60 days of March 8, 2021.

(5)

Includes 2,149,819 shares held in the J. Ward McConnell, Jr. Living Trust, of which J. Ward McConnell, Jr. has sole investment and voting power, and 10,000 shares underlying stock options that can be exercised within 60 days of March 8, 2021. Shares are pledged as collateral to secure a line of credit.

(6)

Includes 4,250 shares held indirectly by Mr. McConnell’s spouse, over which Mr. McConnell has shared voting and investment power; 10,000 shares held indirectly by Mr. McConnell’s children; 5,580 shares held in individual retirement accounts, over which Mr. McConnell has voting and dispositive power; 10,000 shares underlying stock options that can be exercised within 60 days of March 8, 2021; 4,000 shares of restricted stock for which risks of forfeiture lapse on January 31, 2022; 8,334 shares of restricted stock for which risks of forfeiture lapse as to 4,167 shares on each of January 30, 2022 and January 30, 2023; and 20,000 shares of restricted stock for which risks of forfeiture lapse as to 6,667 shares on each of January 19, 2022 and January 19, 2023 and as to 6,666 shares on January 19, 2024.

(7)

Reflects Ms. Gunnerson’s ownership as of July 21, 2020, her last day as our President and Chief Executive Officer.

(8)

Includes 60,000 shares of restricted stock for which risks of forfeiture lapse as to 20,000 shares on each of March 30, 2021, March 30, 2022 and March 30, 2023; and 20,000 shares of restricted stock for which risks of forfeiture lapse as to 6,667 shares on each of January 19, 2022 and January 19, 2023 and as to 6,666 shares on January 19, 2024.

(9)

Includes 3,333 shares of restricted stock for which risks of forfeiture lapse as to 1,667 shares on January 30, 2022 and as to 1,666 shares on January 30, 2023; 1,666 shares of restricted stock for which risks of forfeiture lapse on January 31, 2022; and 7,000 shares of restricted stock for which risks of forfeiture lapse as to 2,334 shares on January 19, 2022 and as to 2,233 shares on each of January 19, 2023 and January 19, 2024.

(10)

Includes 36,000 shares underlying stock options that can be exercised within 60 days of March 8, 2021 and 124,333 shares of restricted stock for which risks of forfeiture lapse as described above in footnotes 6, 8 and 9.

 

15

 

EXECUTIVE OFFICERS

 

David A. King, age 49, is currently serving as our President and Chief Executive Officer, a position he has held since July 21, 2020. Mr. King joined the Company as Executive Vice President on March 23, 2020 in connection with a planned transition of the role of Chief Executive Officer. Prior to employment with the Company, Mr. King was most recently the Executive Vice President of Sales and Marketing at VES Environmental Solutions, LLC, a designer and manufacturer of energy-efficient agricultural ventilation and lighting systems, a position he held from November 2019 until March 2020. He was previously Vice President of Sales and Marketing at Salford 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 B.S. in Business Administration from Iowa State University and an M.B.A. from Drake University.

 

Michael Woods, age 34, is currently serving as our Chief Financial Officer, 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 Controller until his promotion to Vice President of Finance in 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 Science Degrees in Accounting and Finance from Iowa State University and has been a Certified Public Accountant since October of 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 are base salary, cash incentive compensation and equity awards.

 

The Company’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.

 

The Board has 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 2020 were as follows: Marc McConnell, $200,812 (75% of annual base retainer); J. Ward McConnell, Jr., $58,012 (65% of annual base retainer); David King, $172,250 (65% of annual base salary); Carrie Gunnerson, $111,793 (65% of annual base salary); Michael Woods, $40,000 (40% of annual base salary). The relevant objectives for fiscal year 2020 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 2021 and, if threshold growth is 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 2021 pertaining to the Chief Executive Officer and Chief Financial Officer are threshold operating income growth for fiscal year 2021 and, if threshold growth is achieved, the following additional objectives: earnings per share, reduction of debt, improvements in delivery, growth of the Company’s Scientific and Tools segments. Achievement of the objectives shall be as determined in the Board’s discretion following the conclusion of fiscal year 2021.

 

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Equity awards have historically been the third component of the Company’s compensation package for executive officers. Equity awards such as 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 that 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’ salary deferrals. The Company typically matches 25% of a participant’s contribution for every 1% that the participant contributes, up to 1% of the participant’s salary. Management of the 401(k) Savings Plan assets is currently vested with Transamerica. Vesting of participants is 20% per year of employment until 100% vested after six years.

 

Employment of Mr. King

 

Mr. King’s employment is governed by an employment agreement entered into effective March 30, 2020. His employment agreement provides for an annual base salary of $265,000. Mr. King is also eligible to receive 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). Mr. 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.

 

Mr. 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), the Company may be required to pay up to 8 weeks of compensation and benefits to Mr. Woods, 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 January 30, 2020, the Board granted Mr. Woods 5,000 shares of restricted stock, for which risks of forfeiture lapsed as to 1,667 shares on January 30, 2021 and will lapse as to 1,666 shares on each of January 30, 2022 and January 30, 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.

 

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Employment of Ms. Gunnerson

 

On February 26, 2019, the Company entered into an employment agreement with Ms. Gunnerson, which superseded her prior employment agreement. The agreement provided for at-will employment and a base salary to be determined by the Board (or a committee authorized by the Board). Ms. Gunnerson 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. The agreement also contained severance provisions, as well as confidentiality and assignment of inventions provisions that survive the termination of the agreement for an indefinite period.

 

Upon signing the new employment 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 fully-vested restricted stock award for 1,000 shares of Company common stock, which was issued under the Company’s 2011 Equity Incentive Plan.

 

On 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 Company entered into a written consulting agreement with Ms. Gunnerson. The agreement provides for periodic consulting by Ms. Gunnerson for which the Company will compensate her at a reasonable rate and will also reimburse any travel expenses related to the consulting.

 

2020 Say on Pay Results

 

At our Annual Meeting held on April 30, 2020, our stockholders had the opportunity to cast a non-binding advisory vote on the compensation of our named executive officers and 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 the Company’s named executive officers.

 

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, 2019 and November 30, 2020, in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation. Please refer to Note 12 of the financial statements included in our Form 10-K for fiscal year 2020 for a discussion of the assumptions made in the valuation of restricted stock awards.

(3)

Mr. 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 the Company for the remainder of fiscal year 2020.

 

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Outstanding Equity Awards at 2020 Fiscal Year-End

 

The following table sets forth the number of shares underlying outstanding equity awards as of November 30, 2020 and additional information relating to such awards:

 

 

 

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)

Risks of forfeiture for these shares of restricted stock will lapse as to 20,000 shares on each of March 30, 2021, March 30, 2022, and March 30, 2023.

(2)

Risks of forfeiture for these shares of restricted stock lapsed as to 1,667 shares on January 31, 2021 and will lapse as to 1,666 shares on January 31, 2022.

(2)

Risks of forfeiture for these shares of restricted stock lapsed as to 1,667 shares on January 30, 2021 and will lapse as to 1,667 shares on January 30, 2022 and as to 1,666 shares on January 30, 2023.

 

DIRECTOR COMPENSATION

 

The Company maintains a written director compensation plan. During fiscal year 2020, each director, other than the Chairman of the Board and the Vice Chairman of the Board, was entitled to receive a $24,000 cash retainer for service as a director during the fiscal year, with no committee or attendance fees pursuant to this plan. The Chairmen of the Audit Committee and the Compensation Committee were each entitled to receive an additional cash retainer of $4,000 per fiscal year.

 

During fiscal year 2020, the Chairman and Vice Chairman of the Board received cash retainers and were eligible for incentive compensation for the Company’s 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 2020, received 12,500 shares of restricted stock for which risks of forfeiture lapsed as to 4,166 shares on January 30, 2021 and will lapse as to 4,167 shares on each of January 30, 2022 and 2023, and was eligible to receive maximum incentive compensation of $200,812, which represented 75% of his cash retainer. J. Ward McConnell, Jr. received a cash retainer of $85,083 for fiscal year 2020 and was eligible to receive maximum incentive compensation of $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 fiscal year 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 vested restricted common stock in lieu of the aforementioned cash retainers. Any such stock shall be issued under the Company’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.

 

The Company’s director compensation plan provides for annual grants of 1,000 shares of fully vested restricted shares of Company common stock on the date of each annual meeting and for quarterly grants of 1,000 shares of fully vested restricted shares of Company common stock on the last day of each fiscal quarter. In fiscal year 2020, the annual director restricted shares grant was made on April 30, 2020 to the directors elected to the Board at the 2020 Annual Meeting of Stockholders.

 

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Director Compensation Table for Fiscal Year 2020

 

Our directors received the following compensation for fiscal year 2020:

 

 

Director Name

Fees Earned or

Paid in Cash ($)

Stock Awards

($) (1) (2)

Total ($)

Marc H. McConnell

294,500

34,560

329,060

J. Ward McConnell, Jr.

85,083

10,810

95,893

Thomas E. Buffamante

28,000

10,810

38,810

David R. Castle

28,000

10,810

38,810

David A. White

24,000

10,810

34,810

 

(1)

For all directors, represents the grant date fair value of equity-based compensation for 5,000 shares of fully-vested restricted stock granted pursuant to the Company’s director compensation plan in fiscal year 2020 at the grant date fair value of $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’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 12,500 shares of restricted stock for which risks of forfeiture lapsed as to 4,166 shares on January 30, 2021 and will lapse as to 4,167 shares on each of January 30, 2022 and 2023 at the grant date fair value of $1.90 per share, in accordance with Financial Accounting Standards Board’s Accounting Standards Codification (ASC) Topic 718 – Stock Compensation. Please refer to Note 12 of the financial statements included in our 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 2020, Marc McConnell was the only director with outstanding restricted stock awards, holding 24,500 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 2020. At the end of fiscal year 2020 the aggregate number of option awards outstanding for each director was as follows: Marc McConnell, 10,000; J. Ward McConnell, Jr., 10,000; Thomas Buffamante, 10,000; and David Castle, 6,000. All outstanding options held by directors are fully exercisable.

 

EQUITY COMPENSATION PLAN INFORMATION 

 

The following table provides information concerning the Art’s-Way Manufacturing Co., Inc. 2011 Equity Incentive Plan and the Art’s-Way Manufacturing Co., Inc. 2020 Equity Incentive Plan as of November 30, 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))

 

(a)

(b)

(c)

Equity compensation plans approved by security holders

36,000

$6.40

531,848

Equity compensation plans not approved by security holders

-

N/A

-

Totals

36,000

$6.40

531,848

 

CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS

 

Other than as described below, since the beginning of our 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 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 years 2019 and 2020, the fee paid to J. Ward McConnell, Jr. was $18,715 and $16,641, respectively.

 

OTHER INFORMATION

 

Management knows of no other matters that may be brought before the 2021 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 Form 10-K, including the Company’s financial statements and the notes thereto for the fiscal year ended November 30, 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 David King, President and Chief Executive of Arts-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 8, 2021. The Form 10-K complete with exhibits and the Proxy Statement are also available at no cost through the EDGAR database available from the SECs website (www.sec.gov) and on our website at http://www.artsway-mfg.com/investor-relations/.

 

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