Note 14 - Capital Stock and Stock Compensation

12 Months Ended

Nov. 29, 2014

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

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

14. 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 income for fiscal 2014, 2013 and 2012 was as follows:

2014		2013		2012
$	951	$	728	$	636

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 29, 2014, however up to 500,000 shares associated with outstanding grants under the 1997 may become available for grant under the 2010 Plan (see below).

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.

Stock Options

There were no new grants of options made in 2014, 2013 or 2012.

Changes in the outstanding options under our plans during the year ended November 29, 2014 were as follows:

	Number of Shares			Weighted Average Exercise Price Per Share
Outstanding at November 30, 2013		735,100		$	15.08
Granted		-			-
Exercised		(32,850	)		9.65
Forfeited/Expired		(265,000	)		20.92
Outstanding at November 29, 2014		437,250			11.94
Exercisable at November 29, 2014		414,500		$	12.16

Changes in the non-vested options under our plans during the year ended November 29, 2014 were as follows:

	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Non-vested options outstanding at November 30, 2013		86,500		$	6.31
Granted		-			-
Vested		(63,750	)		5.69
Forfeited/Expired		-			-
Non-vested options outstanding at November 29, 2014		22,750		$	8.04

Unrecognized compensation cost related to these non-vested options at November 29, 2014 is $49, all of which is expected to be recognized during fiscal 2015.

Additional information regarding our outstanding stock options at November 29, 2014 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		68,000		5.6	$	4.38		68,000	$	4.38
$6.45	-	$9.67		62,750		6.5		8.03		40,000		8.03
$9.68	-	$12.90		104,000		2.9		10.60		104,000		10.60
$12.91	-	$16.13		52,500		2.4		14.73		52,500		14.89
$16.14	-	$19.35		150,000		1.6		16.96		150,000		16.96
				437,250						414,500
Aggregate intrinsic value			$	3,349					$	3,084

Additional information regarding activity in our stock options during fiscal 2014, 2013 and 2012 is as follows:

	2014		2013		2012
Total intrinsic value of options exercised	$	236	$	387	$	530
Total fair value of options vested		200		363		371
Total cash received from the exercise of options		382		413		536
Excess tax benefits recognized as additional paid-in capital upon the exercise of options		72		106		-

Restricted Shares

Changes in the outstanding non-vested restricted shares during the year ended November 29, 2014 were as follows:

	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Non-vested restricted shares outstanding at November 30, 2013		165,893		$	12.23
Granted		66,339			14.21
Vested and released		(108,495	)		9.96
Forfeited		-			-
Non-vested restricted shares outstanding at November 29, 2014		123,737		$	15.28

Restricted share awards granted in fiscal 2014 included the grant of 54,000 shares on January 15, 2014 which were subject to a performance condition as well as a service condition. The performance condition was based on a measure of the Company’s operating cash flow for 2014 and has now been satisfied. Shares will be issued on the first anniversary. They will remain subject to an additional two-year service requirement and will vest on the third anniversary of the grant. The remaining grants for 2014 consisted of 12,399 restricted shares granted to our non-employee directors on April 1, 2014 which will vest on the first anniversary of the grant.

During fiscal 2014, 108,495 restricted shares were vested and released, of which 97,200 shares had been granted to employees and 11,295 shares to directors. Of the shares released to employees, 31,234 shares were withheld by the Company to cover withholding taxes of $489. During fiscal 2013, 11,550 shares were withheld to cover withholding taxes of $202 arising from the vesting of restricted shares. Excess tax benefits of $228 and $207 were recognized during fiscal 2014 and 2013, respectively, as additional paid-in capital upon the release of vested shares. Activity related to the vesting and release of restricted shares prior to fiscal 2013 was not material.

Additional information regarding our outstanding non-vested restricted shares at November 29, 2014 is as follows:

					Remaining
	Restricted		Share Value		Restriction
Grant	Shares		at Grant Date		Period
Date	Granted		Per Share		(Years)
July 13, 2012		1,398	$	11.69		0.6
July 17, 2013		56,000		16.64		3.6
January 15, 2014		54,000		14.12		2.1
April 1, 2014		12,339		14.59		0.3
		123,737

Unrecognized compensation cost related to these non-vested restricted shares at November 29, 2014 is $1,403, expected to be recognized over approximately a three 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 25,677, 38,206 and 42,211 shares to employees in fiscal 2014, 2013 and 2012, respectively, which resulted in an immaterial amount of compensation expense.