Share-Based Compensation

6 Months Ended

Aug. 03, 2019

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Note 13

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Share-Based Compensation

We have one equity incentive plan from which we are authorized to grant equity awards, the AstroNova, Inc. 2018 Equity Incentive Plan (the “2018 Plan”). The 2018 Plan provides for, among other things, the issuance of awards, including incentive stock options, non-qualified stock options, stock appreciation rights, time or performance-based restricted stock unit (PSUs), restricted stock units (RSUs) and restricted stock awards (RSAs). At the annual meeting of shareholders, on June 4, 2019, the 2018 Plan was amended to increase the number of shares of the Company’s common stock available for issuance by

300,000

bringing the total number of shares available for issuance under the 2018 Plan from

650,000

950,000,

plus an additional number of shares equal to the number of shares subject to awards granted under previous equity incentive plans that are forfeited, cancelled, satisfied without the issuance of stock, otherwise terminated (other than by exercise), or, for shares of stock issued pursuant to any unvested award, reacquired by the Company at not more than the grantee’s purchase price (other than by exercise). Under the 2018 Plan, all awards to employees generally have a minimum vesting period of one year. Options granted under the 2018 Plan must be issued at an exercise price of not less than the fair market value of the Company’s common stock on the date of grant and expire after ten years. As of August 3, 2019, 163,475 unvested shares of restricted stock and options to purchase an aggregate of 146,000 shares were outstanding under the 2018 Plan.

In addition to the 2018 Plan, we previously granted equity awards under our 2015 Equity Incentive Plan (the “2015 Plan”) and our 2007 Equity Incentive Plan (the “2007 Plan”). Both the 2007 Plan and the 2015 Plan have expired and no new awards may be issued under either, but outstanding awards will continue to be governed by those plans. As of August 3, 2019, 1,007 unvested shares of restricted stock and options to purchase an aggregate of 382,845 shares were outstanding under the 2007 Plan and 27,527 unvested shares of restricted stock and options to purchase an aggregate of 194,650 shares were outstanding under the 2015 Plan.

On January 31, 2019, the compensation committee of the Company’s board of directors adopted an Amended and Restated

Non-Employee

Director Annual Compensation Program (the “New Program”), which became effective as of February 1, 2019 and supersedes the prior program. Pursuant to the New Program, beginning with fiscal 2020, each

non-employee

director will automatically receive a grant of restricted stock on the date of their

re-election

to the Company’s board of directors. The number of whole shares to be granted will be equal to the number calculated by dividing the stock component of the director compensation amount determined by the compensation committee for that year by the fair market value of our stock on that day. The value of the restricted stock award for fiscal 2020 is $60,000. To account for the partial year beginning on February 1, 2019 and continuing through the 2019 annual meeting, and thereby provide for the alignment of the timing of annual grants of restricted stock under the New Program with the election of directors at the annual meeting, a total of 4,340 shares of restricted stock were granted to the non-employee directors on February 1, 2019. A total of 11,560 shares were awarded to the

non-employee

directors as

compensation

under the New Program in the second quarter of fiscal 2020. Other than the shares granted on February 1, 2019, which vested on June 1, 2019, shares of restricted stock granted under the New Program will become vested on the first anniversary of the date of grant, conditioned upon the recipient’s continued service on the Board through that date.

In March 2019, the Company granted 45,374 RSUs and 52,248 PSUs to certain key employees.

Share-based compensation expense was recognized as follows:


	Three Months Ended				Six Months Ended
(In thousands)	August 3, 2019		July 28, 2018		August 3, 2019		July 28, 2018
Stock Options	$	127	$	200	$	339	$	356
Restricted Stock Awards and Restricted Stock Units		320		263		704		467
Employee Stock Purchase Plan		4		3		9		6
Total	$	451	$	466	$	1,052	$	829

Stock Options

There were no stock options granted during the six months ended August 3, 2019. The fair value of stock options granted during the six months ended July 28, 2018 were estimated using the following assumptions:


	Six Months Ended
	July 28, 2018
Risk Free Interest Rate		2.6	%
Expected Volatility		39.4	%
Expected Life (in years)		9.0
Dividend Yield		1.5	%

The weighted average fair value per share for options granted was $7.42 and $7.41 during the three and six month periods ended July 28, 2018, respectively.

Aggregated information regarding stock option activity for the six months ended August 3, 2019 is summarized below:


	Number of Options			Weighted Average Exercise Price
Outstanding at January 31, 2019		771,145		$	14.30
Granted		—			—
Exercised		(38,975	)		11.65
Forfeited		(8,275	)		16.72
Canceled		(400	)		6.22

Outstanding at August 3, 2019		723,495		$	14.42

Set forth below is a summary of options outstanding at August 3, 2019:


Outstanding							Exercisable
Range of Exercise prices	Number of Shares		Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life		Number of Shares		Weighted- Average Exercise Price		Weighted Average Remaining Contractual Life
$ 5.00 - 10.00		62,081	$	7.94		2.5		62,081	$	7.94		2.5
$ 10.01 - 15.00		424,814	$	13.63		6.3		336,794	$	13.66		5.9
$ 15.01 - 20.00		236,600	$	17.53		8.4		112,795	$	17.08		8.1
		723,495	$	14.42		6.7		511,670	$	13.72		6.0

As of August 3, 2019, there was approximately $1.1 million of unrecognized compensation expense related to stock options which is expected to be recognized over a weighted average period of approximately 2.0 years.

Restricted Stock Units (RSUs) and Restricted Stock Awards (RSAs)

Aggregated information regarding RSU and RSA activity for the six months ended August 3, 2019 is summarized below:


	RSAs & RSUs			Weighted Average Grant Date Fair Value
Outstanding at January 31, 2019		133,667		$	13.99
Granted		113,522			20.16
Vested		(55,180	)		16.62
Forfeited		—			—

Outstanding at August 3, 2019		192,009		$	16.88

As of August 3, 2019, there was approximately $2.9 million of unrecognized compensation expense related to RSUs and RSAs which is expected to be recognized over a weighted average period of 1.9 years.

Employee Stock Purchase Plan

AstroNova has an Employee Stock Purchase Plan allowing eligible employees to purchase shares of common stock at a 15% discount from fair value on the first or last day of an offering period, whichever is less. A total of 247,500 shares were reserved for issuance under this plan. During the six months ended August 3, 2019 and July 28, 2018, there were 2,796 and 2,342 shares, respectively, purchased under this plan. As of August 3, 2019, 31,057 shares remain available.