13.

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 2015, 2014 and 2013 was as follows:

		2015				2014				2013
Stock based compensation expense		$	894			$	951			$	728

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 28, 2015, however up to 500,000 shares associated with outstanding grants under the 1997 Plan 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 2015, 2014 or 2013.

Changes in the outstanding options under our plans during the year ended November 28, 2015 were as follows:

	Number of Shares			Weighted Average Exercise Price Per Share

Outstanding at November 29, 2014		437,250		$	11.94
Granted		-			-
Exercised		(351,000	)		12.09
Forfeited/Expired		(2,000	)		8.02
Outstanding at November 28, 2015		84,250			11.42
Exercisable at November 28, 2015		84,250		$	11.42

Changes in the non-vested options under our plans during the year ended November 28, 2015 were as follows:

	Number of Shares			Weighted Average Grant Date Fair Value Per Share

Non-vested options outstanding at November 29, 2014		22,750		$	8.04
Granted		-			-
Vested		(20,750	)		8.05
Forfeited/Expired		(2,000	)		8.02
Non-vested options outstanding at November 28, 2015		-			-

Additional information regarding our outstanding stock options at November 28, 2015 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		1,000		4.6	$	4.38		1,000	$	4.38
$	6.45	-	$9.67		22,750		5.6		8.02		22,750		8.02
$	9.68	-	$12.90		28,000		1.9		10.60		28,000		10.60
$	12.91	-	$16.13		32,500		1.4		14.73		32,500		14.73
					84,250						84,250

Aggregate intrinsic value				$	1,714					$	1,714

Additional information regarding activity in our stock options during fiscal 2015, 2014 and 2013 is as follows:

	2015		2014		2013

Total intrinsic value of options exercised	$	5,934	$	236	$	387
Total fair value of options vested		87		200		363
Total cash received from the exercise of options		4,031		382		413
Excess tax benefits recognized as additional paid-in capital upon the exercise of options		1,899		72		106

Restricted Shares

Changes in the outstanding non-vested restricted shares during the year ended November 28, 2015 were as follows:

	Number of Shares			Weighted Average Grant Date Fair Value Per Share

Non-vested restricted shares outstanding at November 29, 2014		123,737		$	15.28
Granted		54,354			21.81
Vested		(26,337	)		15.42
Forfeited		(17,600	)		17.00
Non-vested restricted shares outstanding at November 28, 2015		134,154		$	17.68

Restricted share awards granted in fiscal 2015 included the grant of 46,000 shares on January 14, 2015 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. 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 2015 consisted of 6,354 restricted shares granted to our non-employee directors on April 1, 2015 which will vest on the first anniversary of the grant, and 2,000 shares granted to an employee on July 14, 2015 which will vest on the third anniversary of the grant.

During fiscal 2015, 26,337 restricted shares were vested and released, of which 13,998 shares had been granted to employees and 12,339 shares to directors. Of the shares released to employees, 4,836 shares were withheld by the Company to cover withholding taxes of $154. During fiscal 2014 and 2013, 31,234 shares and 11,550 shares, respectively, were withheld to cover withholding taxes of $489 and $202, respectively, arising from the vesting of restricted shares. Excess tax benefits of $99, $228 and $207 were recognized during fiscal 2015, 2014 and 2013, respectively, as additional paid-in capital upon the release of vested shares.

Additional information regarding our outstanding non-vested restricted shares at November 28, 2015 is as follows:

					Remaining
	Restricted		Share Value		Restriction
Grant	Shares		at Grant Date		Period
Date	Outstanding		Per Share		(Years)


July 17, 2013		37,800	$	16.64		2.6
January 15, 2014		48,000		14.12		1.1
January 14, 2015		40,000		20.21		2.1
April 1, 2015		6,354		28.33		0.3
July 14, 2015		2,000		38.02		2.6

		134,154

Unrecognized compensation cost related to these non-vested restricted shares at November 28, 2015 is $636, 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 19,053, 25,677 and 38,206 shares to employees in fiscal 2015, 2014 and 2013, respectively, which resulted in an immaterial amount of compensation expense.