Note 15 - Capital Stock and Stock Compensation

12 Months Ended

Nov. 24, 2012

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

15. Capital Stock and Stock Compensation

We account for our stock-based employee and director compensation plans in accordance with ASC 718, Compensation – Stock Compensation.  ASC 718 requires recognition of the cost of employee services received in exchange for an award of equity instruments in the financial statements over the period the employee is required to perform the services in exchange for the award (presumptively the vesting period) which we recognize on a straight-line basis.  Compensation expense related to restricted stock and stock options included in selling, general and administrative expenses in our consolidated statements of operations for fiscal 2012, 2011 and 2010 was as follows:

2012		2011		2010
$	636	$	426	$	376

Stock Option Plans

In 1997, we adopted an Employee Stock Plan (the “1997 Plan”), and reserved for issuance 950,000 shares of common stock. An additional 500,000 shares of common stock were authorized for issuance in 2000. In addition, the terms of the 1997 Plan allow for the re-issuance of any stock options which have been forfeited before being exercised. Options granted under the 1997 Plan may be for such terms and exercised at such times as determined by the Organization, Compensation, and Nominating Committee of the Board of Directors. Vesting periods typically range from one to three years.  There are no shares available for grant under the 1997 Plan at November 24, 2012, however up to 500,000 shares associated with outstanding grants under the 1997 may become available for grant under the 2010 Plan (see below).

In 2005, we adopted a Non-Employee Directors Stock Incentive Plan (the “Incentive Plan”) and reserved 100,000 shares of common stock for grant. The Incentive Plan authorized incentive awards in the form of restricted stock or stock grants. All Directors of the Company who are not full-time employees of the Company are eligible to receive incentive awards under the Incentive Plan. There were no shares available for grant under the Incentive Plan at November 24, 2012 and 10,087 available at November 26, 2011.

On April 14, 2010, our shareholders approved the Bassett Furniture Industries, Incorporated 2010 Stock Incentive Plan (the “2010 Plan”).  All present and future non-employee directors, key employees and outside consultants for the Company are eligible to receive incentive awards under the 2010 Plan. Our Organization, Compensation and Nominating Committee (the “Compensation Committee”) selects eligible key employees and outside consultants to receive awards under the 2010 Plan in its discretion. Our Board of Directors or any committee designated by the Board of Directors selects eligible non-employee directors to receive awards under the 2010 Plan in its discretion. Five hundred thousand (500,000) shares of common stock are reserved for issuance under the 2010 Plan. In addition, up to 500,000 shares that are represented by outstanding awards under the 1997 Employee Stock Plan which are forfeited, expire or are canceled after the effective date of the 2010 Plan will be added to the reserve and may be used for new awards under the 2010 Plan. Participants may receive the following types of incentive awards under the 2010 Plan: stock options, stock appreciation rights, payment shares, restricted stock, restricted stock units and performance shares. Stock options may be incentive stock options or non-qualified stock options. Stock appreciation rights may be granted in tandem with stock options or as a freestanding award. Non-employee directors and outside consultants are eligible to receive restricted stock and restricted stock units only.  We expect to issue new common stock upon the exercise of options.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The risk free rate is based on the U.S. Treasury rate for the expected life at the time of grant, volatility is based on the average long-term implied volatilities of peer companies, the expected life is based on the estimated average of the life of options using the simplified method, and forfeitures are estimated on the date of grant based on certain historical data.  We utilize the simplified method to determine the expected life of our options due to insufficient exercise activity during recent years as a basis from which to estimate future exercise patterns.  During fiscal 2011 and 2010, our Compensation Committee authorized the issuance of 91,000 and 172,000 stock options, respectively, from the 2010 Plan to certain of our key employees. The stock options vest ratably over a four-year period and have 10-year contractual terms.  The following table sets forth the weighted average fair value of options granted during 2011 and 2010 and the weighted average assumptions used for such grants (there were no grants made in 2012):

	2011				2010
Weighted average fair value of options on grant date			$4.19			$2.55
Expected life of options in years			6.25			6.25
Risk-free interest rate		2.19%	-	2.49%		2.5%
Expected volatility			60.0%			60.0%
Dividend yield		0.0%	-	1.5%		0.0%

Changes in the outstanding options under our plans during the year ended November 24, 2012 were as follows:

	Number of  Shares			Weighted Average  Exercise Price  Per Share
Outstanding at November 26, 2011		1,075,464		$	13.95
Granted		-			-
Exercised		(87,400	)		6.59
Forfeited/Expired		(202,964	)		14.79
Outstanding at November 24, 2012		785,100			14.55
Exercisable at November 24, 2012		630,850		$	16.66

Changes in the non-vested options under our plans during the year ended November 24, 2012 were as follows:

	Number of Shares			Weighted  Average Grant  Date Fair Value Per Share
Non-vested options outstanding at November 26, 2011		220,000		$	5.90
Granted		-			-
Vested		(65,750	)		5.65
Forfeited/Expired		-			-
Non-vested options outstanding at November 24, 2012		154,250			6.00

Unrecognized compensation cost related to these non-vested options at November 24, 2012 is $422, expected to be recognized over approximately a two year period.

Additional information regarding our outstanding stock options at November 24, 2012 is as follows:

				Options Outstanding						Options Exercisable
Range of Exercise Prices				Shares		Weighted Average  Remaining  Contractual Life  (Years)		Weighted Average Exercise Price		Shares		Weighted Average Exercise Price
$	3.23	-	$6.45		102,350		7.6	$	4.38		16,350	$	4.38
$	6.45	-	$9.67		72,250		8.6		8.02		4,000		8.02
$	9.68	-	$12.90		138,000		4.8		10.60		138,000		10.60
$	12.91	-	$16.13		67,500		3.9		14.89		67,500		14.89
$	16.14	-	$19.35		150,000		3.6		16.96		150,000		16.96
$	19.36	-	$22.58		255,000		1.3		21.12		255,000		21.12
					785,100						630,850
Aggregate  intrinsic value				$	1,025					$	215

Additional information regarding activity in our stock options during fiscal 2012, 2011 and 2010 is as follows:

	2012		2011		2010
Total intrinsic value of options exercised	$	530	$	74	$	-
Total fair value of options vested		371		110		242
Total cash received from the exercise of options		536		81		-

The following restricted stock awards were granted during fiscal 2012, 2011 and 2010:

	Grant Date	Restricted Shares Granted		Share Value at Grant Date Per Share		Restriction Period (Years)
Grants during fiscal 2010	May 3, 2010		17,528	$	5.99		1
	July 14, 2010		43,000	$	4.38		3
Grants during fiscal 2011	March 7, 2011		4,000	$	8.15		3
	May 2, 2011		11,760	$	8.93		1
	July 13, 2011		4,200	$	8.02		1
	July 13, 2011		75,000	$	8.02		3
Grants during fiscal 2012	May 1, 2012		11,184	$	10.73		1
	July 13, 2012		1,398	$	11.69		1

At November 24, 2012, non-vested restricted stock grants totaling 138,782 shares remain outstanding. Unrecognized compensation cost related to these non-vested restricted shares at November 24, 2012 is $439, expected to be recognized over approximately a two and one-half year period.

Employee Stock Purchase Plan

In 2000, we adopted and implemented an Employee Stock Purchase Plan (“ESPP”) that allows eligible employees to purchase a limited number of shares of our stock at 85% of market value. Under the ESPP we sold 42,211, 39,618 and 43,730 shares to employees in fiscal 2012, 2012 and 2010, respectively, which resulted in an immaterial amount of compensation expense.