Share-Based Compensation

9 Months Ended

Nov. 02, 2019

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

Note 13 – 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

our

annual meeting of shareholders

held

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 to 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 November 2, 2019, 161,375 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 November 2, 2019, 1,007 unvested shares of restricted stock and options to purchase an aggregate of 376,645 shares were outstanding under the 2007 Plan and 27,527 unvested shares of restricted stock and options to purchase an aggregate of 184,650 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 47,474 RSUs and 50,148 PSUs to certain key employees.

Share-based compensation expense was recognized as follows:


	Three Months Ended				Nine Months Ended
(In thousands)	November 2, 2019		October 27, 2018		November 2, 2019		October 27, 2018
Stock Options	$	148	$	215	$	487	$	571
Restricted Stock Awards and Restricted Stock Units		371		290		1,074		757
Employee Stock Purchase Plan		6		5		15		11

Total	$	525	$	510	$	1,576	$	1,339

Stock Options

There were

stock options granted during the nine months ended November 2, 2019. The fair value of stock options granted during the nine months ended October 27, 2018 were estimated using the following assumptions:


	Nine Months Ended
	October 27, 2018
Risk Free Interest Rate		2.6	%
Expected Volatility		39.3	%
Expected Life (in years)		9.0
Dividend Yield		1.5	%

There were

stock options granted during the three month period ended October 27, 2018. The weighted average fair value per share for stock options granted was

$7.41 during

the

nine month period ended October 27, 2018.

Aggregated information regarding stock option activity for the nine months ended November

, 2019 is summarized below:


	Number of Options			Weighted Average Exercise Price
Outstanding at January 31, 2019		771,145		$	14.30
Granted		—			—
Exercised		(55,175	)		11.68
Forfeited		(8,275	)		16.72
Canceled		(400	)		6.22

Outstanding at November 2, 2019		707,295		$	14.48

Set forth below is a summary of options outstanding at November 2, 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		55,881	$	7.97		2.4		55,881	$	7.97		2.4
$ 10.01 - 15.00		414,814	$	13.62		6.1		326,794	$	13.64		5.6
$ 15.01 - 20.00		236,600	$	17.53		8.1		112,795	$	17.08		7.8

		707,295	$	14.48		6.5		495,470	$	13.78		5.8

As of November 2, 2019, there was approximately $0.9 million of unrecognized compensation expense related to stock options which is expected to be recognized over a weighted average period of approximately 1.7 years.

Restricted Stock Units (“RSUs”), Performance Based Restricted Stock Units (“PSUs”) and Restricted Stock Awards (“RSAs”)

Aggregated information regarding RSU, PSU and RSA activity for the nine months ended November 2, 2019 is summarized below:


	RSUs, PSUs & RSAs			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		(2,100	)		19.45

Outstanding at November 2, 2019		189,909		$	16.85

As of November 2, 2019, there was approximately $2.5 million of unrecognized compensation expense related to RSUs and RSAs which is expected to be recognized over a weighted average period of 0.9 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 nine months ended November 2, 2019 and October 27 2018, there were 5,441 and 3,912 shares, respectively, purchased under this plan. As of November 2, 2019, 28,412 shares remain available.