Note 12 - Capital Stock and Stock Compensation

12 Months Ended

Nov. 25, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

12. 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 2023, 2022 and 2021 was as follows:

	2023		2022		2021
Stock based compensation expense	$	849	$	538	$	158

Incentive Stock Compensation Plans

2021 Plan

On March 10, 2021, our shareholders approved the Bassett Furniture Industries, Incorporated 2021 Stock Incentive Plan (the “2021 Plan”). All present and future non-employee directors, key employees and outside consultants for the Company are eligible to receive incentive awards under the 2021 Plan. Our Organization, Compensation and Nominating Committee (the “OCN Committee”) selects eligible key employees and outside consultants to receive awards under the 2021 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 2021 Plan in its discretion. Five hundred thousand (500,000) shares of common stock are reserved for issuance under the 2021 Plan. Participants may receive the following types of incentive awards under the 2021 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. The full terms of the 2021 Plan have been filed as an exhibit to our Schedule 14A filed with the United States Securities and Exchange Commission on February 8, 2021.

2010 Plan

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 non-employee directors, key employees and outside consultants for the Company were eligible to receive incentive awards under the 2010 Plan. The 2010 Plan expired in April of 2020 and no additional grants can be awarded under the plan. All remaining unexpired options granted under the 2010 Plan were exercised during fiscal 2021.

The fair value of each option award was 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 utilized 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.

Grants of non-vested restricted shares are measured at fair value as if the shares were vested and issued on the grant date. Forfeitures are recognized as they occur. We recognize compensation cost for awards with service only conditions with a graded vesting schedule on a straight-line basis over the longest vesting period.

Stock Options

There were no new grants of options made in 2023, 2022 or 2021.

Additional information regarding activity in our stock options during fiscal 2023, 2022 and 2021 is as follows:

	2023		2022		2021
Total intrinsic value of options exercised	$	-	$	-	$	93
Total cash received from the exercise of options		-		-		42
Excess tax benefits recognized in income tax expense upon the exercise of options		-		-		18

Restricted Shares

Changes in the outstanding non-vested restricted shares during the year ended November 25, 2023 were as follows:

	Number of Shares			Weighted Average Grant Date Fair Value Per Share
Non-vested restricted shares outstanding at November 26, 2022		67,099		$	16.27
Granted		66,113			17.77
Vested		(32,899	)		16.73
Forfeited		(8,000	)		16.86
Non-vested restricted shares outstanding at November 25, 2023		92,313		$	17.13

During fiscal 2023, 32,899 restricted shares were vested and released, of which 17,100 shares had been granted to employees and 15,799 shares had been granted to directors. During fiscal 2023, 2022 and 2021, 5,985 shares, 1,225 shares and 10,850 shares, respectively, were withheld to cover withholding taxes of $109, $19 and $219, respectively, arising from the vesting of restricted shares. During fiscal 2023, 2022 and 2021, excess tax benefits (expense) of $10, $1 and $(133), respectively, were recognized within income tax expense upon the release of vested shares.

Additional information regarding our outstanding non-vested restricted shares at November 25, 2023 is as follows:

					Remaining
	Restricted		Share Value		Restriction
Grant	Shares		at Grant Date		Period
Date	Outstanding		Per Share		(Years)
January 12, 2022		31,000	$	15.82		1.1
January 11, 2023		46,200		17.55		2.1
March 8, 2023		15,113		18.53		0.3
		92,313

Unrecognized compensation cost related to these non-vested restricted shares at November 26, 2022 is $867, all of which is expected to be recognized in fiscal 2024 and 2025.

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 28,063, 30,074 and 22,547 shares to employees during fiscal 2023, 2022 and 2021, respectively, which resulted in an immaterial amount of compensation expense. There are 74,397 shares remaining available for sale under the 2017 ESPP at November 25, 2023.