Note 13 - Capital Stock and Stock Compensation

12 Months Ended

Nov. 30, 2019

Notes to Financial Statements

Share-based Payment Arrangement [Text Block]

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 operations for fiscal 2019, 2018 and 2017 was as follows:

	2019		2018		2017
Stock based compensation expense	$	958	$	1,133	$	1,028

Incentive Stock Compensation Plans

On April 14, 2010, our shareholders approved the Bassett Furniture Industries, Incorporated 2010 Stock Incentive Plan which was amended and restated effective January 13, 2016 (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. 1,250,000 shares of common stock are reserved for issuance under the 2010 Plan as amended. 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. Forfeitures are recognized as they occur. 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 2019, 2018 or 2017.

Changes in the outstanding options under our plans during the year ended November 30, 2019 were as follows:

	Number of Shares			Weighted Average Exercise Price Per Share
Outstanding at November 24, 2018		8,350		$	8.02
Granted		-			-
Exercised		(3,100	)		8.02
Forfeited/Expired		-			-
Outstanding at November 30, 2019		5,250			8.02
Exercisable at November 30, 2019		5,250		$	8.02

All remaining options outstanding at November 30, 2019 are exercisable at $8.02 per share with a remaining contractual life of 1.6 years and an aggregate intrinsic value of $38. There were no non-vested options outstanding under our plans during the year ended November 30, 2019.

Additional information regarding activity in our stock options during fiscal 2019, 2018 and 2017 is as follows:

	2019		2018		2017
Total intrinsic value of options exercised	$	34	$	75	$	564
Total cash received from the exercise of options		25		27		310
Excess tax benefits recognized in income tax expense upon the exercise of options		6		16		188

Restricted Shares

Changes in the outstanding non-vested restricted shares during the year ended November 30, 2019 were as follows:

	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Non-vested restricted shares outstanding at November 24, 2018		81,036		$	32.03
Granted		18,153			15.81
Vested		(6,036	)		33.07
Forfeited		(3,000	)		20.97
Non-vested restricted shares outstanding at November 30, 2019		90,153		$	32.03

Restricted share awards granted in fiscal 2019 consisted of 9,653 restricted shares granted to our non-employee directors on March 6, 2019 which will vest on the first anniversary of the grant, and 5,000 and 3,500 restricted shares granted to employees on July 23, 2019 and October 9, 2019, respectively, which will vest on the third anniversary of each grant.

During fiscal 2019, 6,036 restricted shares were vested and released, all of which had been granted to directors. During fiscal 2018 and 2017, 19,810 shares and 21,210 shares, respectively, were withheld to cover withholding taxes of $674 and $641, respectively, arising from the vesting of restricted shares. During fiscal 2019, 2018 and 2017, excess tax benefits of $0, $207 and $366, respectively, were recognized within income tax expense upon the release of vested shares.

Additional information regarding our outstanding non-vested restricted shares at November 30, 2019 is as follows:

					Remaining
	Restricted		Share Value		Restriction
Grant	Shares		at Grant Date		Period
Date	Outstanding		Per Share		(Years)
January 10, 2017		36,000	$	29.05		0.1
January 11, 2018		36,000		35.75		1.1
March 6, 2019		9,653		18.13		0.3
July 23, 2019		5,000		12.34		2.6
October 9, 2019		3,500		14.37		2.9
		90,153

Unrecognized compensation cost related to these non-vested restricted shares at November 30, 2019 is $594, of which $525 is expected to be recognized in fiscal 2020 with the remainder to be recognized over the following two fiscal years.

Employee Stock Purchase Plan

In March of 2017 we adopted and implemented the 2017 Employee Stock Purchase Plan (“2017 ESPP”) that allows eligible employees to purchase a limited number of shares of our stock at 85% of market value. Under the 2017 ESPP we sold 23,460, 14,967 and 6,275 shares to employees during fiscal 2019, 2018 and 2017, respectively, which resulted in an immaterial amount of compensation expense. There are 205,298 shares remaining available for sale under the 2017 ESPP at November 30, 2019.