Post Employment Benefit Obligations

Management Savings Plan

May 1, 2017,

our Board of Directors, upon the recommendation of the Organization, Compensation and Nominating Committee (the “Committee”), adopted the Bassett Furniture Industries, Incorporated Management Savings Plan (the “Plan”).The Plan is an unfunded, nonqualified deferred compensation plan maintained for the benefit of certain highly compensated or management level employees.

The Plan is an account-based plan under which (i) participants

may

defer voluntarily the payment of current compensation to future years (“participant deferrals”) and (ii) the Company

may

make annual awards to participants payable in future years (“Company contributions”). The Plan permits each participant to defer up to

75%

of base salary and up to

100%

of any incentive compensation or other bonus, which amounts would be credited to a deferral account established for the participant. Such deferrals will be fully vested at the time of the deferral. Participant deferrals will be indexed to

one

or more deemed investment alternatives chosen by the participant from a range of alternatives made available under the Plan. Each participant’s account will be adjusted to reflect gains and losses based on the performance of the selected investment alternatives. A participant

may

receive distributions from the Plan: (

) upon separation from service, in either a lump sum or annual installment payments over up to a

year period, as elected by the participant, (

) upon death or disability, in a lump sum, or (

) on a date or dates specified by the participant (“scheduled distributions”) with such scheduled payments made in either a lump sum or substantially equal annual installments over a period of up to

five

years, as elected by the participant. Participant contributions will commence during the

third

quarter of fiscal

2017.

Company contributions will vest in full (

) on the

third

anniversary of the date such amounts are credited to the participant’s account, (

) the date that the participant reaches age

or (

) upon death or disability. Company contributions are subject to the same rules described above regarding the crediting of gains or losses from deemed investments and the timing of distributions. The Company plans to make a contribution to the Plan effective

February 1, 2018.

Expense associated with the planned Company contribution was

for the

three

and

six

months ended

May 27, 2017.

May 2, 2017,

we made Long Term Cash Awards (“LTC Awards”) totaling

$2,000

under the Plan to certain management employees in the amount of

$400

each. The LTC Awards vest in full on the

first

anniversary of the date of the award if the participant has reached age

by that time, or, if later, on the date the participant reaches age

63,

provided in either instance that the participant is still employed by the Company at that time. If

not

previously vested, the awards will also vest immediately upon the death or disability of the participant prior to the participant’s separation from service. The awards will be payable in

equal annual installments following the participant’s death, disability or separation from service. We are accounting for the LTC Awards as a defined benefit pension plan. Accordingly, during the

second

quarter of fiscal

2017

we recorded an initial projected benefit obligation of

$932

representing prior service cost. Our projected benefit obligation for the LTC Awards at

May 27, 2017

$950,

which is included in post employment benefit obligations in our condensed consolidated balance sheet. At

May 27, 2017,

accumulated other comprehensive loss includes unamortized prior service cost of

$558

with respect to the LTC Awards, net of the related deferred income tax benefit of

$350.

Supplemental Retirement Income Plan

We have an unfunded Supplemental Retirement Income Plan (the “Supplemental Plan”) that covers

one

current and certain former executives. The liability for the Supplemental Plan was

$11,879

and

$11,863

as of

May 27, 2017

and

November 26, 2016,

respectively.

Aggregate Pension Liability and Aggregate Net Periodic Pension Costs

The combined pension liability for the Supplemental Plan and LTC Awards is recorded as follows in the condensed consolidated balance sheets:

	May 27, 2017		November 26, 2016
Accrued compensation and benefits	$	776	$	776
Post employment benefit obligations		12,053		11,087

Total pension liability	$	12,829	$	11,863

Components of net periodic pension costs are as follows:

	Quarter Ended				Six Months Ended
	May 27, 2017		May 28, 2016		May 27, 2017		May 28, 2016
Service cost	$	49	$	36	$	87	$	73
Interest cost		114		106		222		211
Amortization of prior service costs		24		-		24		-
Amortization of transition obligation		11		11		21		21
Amortization of loss		83		81		166		162

Net periodic pension cost	$	281	$	234	$	520	$	467

The components of net periodic pension cost other than the service cost component are included in other loss, net in our condensed consolidated statements of income.

Deferred Compensation Plan

We have an unfunded Deferred Compensation Plan that covers

one

current executive and certain former executives and provides for voluntary deferral of compensation. This plan has been frozen with

additional participants or deferrals permitted. Our liability under this plan was

$1,929

and

$1,969

as of

May 27, 2017

and

November 26, 2016,

respectively.

Our combined liability for all deferred compensation arrangements, including Company contributions under the Management Savings Plan, is recorded as follows in the condensed consolidated balance sheets:

	May 27, 2017		November 26, 2016
Accrued compensation and benefits	$	296	$	296
Post employment benefit obligations		1,661		1,673

Total deferred compensation liability	$	1,957	$	1,969

We recognized expense under our deferred compensation arrangements during the

three

and

six

months ended

May 27, 2017

and

May 28, 2016

as follows:

	Quarter Ended				Six Months Ended
	May 27, 2017		May 28, 2016		May 27, 2017		May 28, 2016
Deferred compensation expense	$	82	$	57	$	136	$	114