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EXHIBIT 10C
EXHIBIT 10C - BASSETT FURNITURE INDUSTRIES, INC.
SUPPLEMENTAL RETIREMENT INCOME PLAN
Bassett Furniture Industries, Inc., a Virginia corporation (the
"Company"), hereby establishes this Supplemental Retirement Income Plan (the
"Plan"), effective as of June 25, 1984, for the purpose of promotiong in its
Executive Employees the strongest interest in the successful operation of the
Company and increased efficiency in their work and to provide such Executive
Employees benefits upon retirement, death, disability or other termination of
employment, in consideration of services to be performed after the date of
this Agreement but prior to such Executive Employees' retirement.
1. Definitions.
a. Administrative Committee - "Administrative Committee" shall
mean the committee appointed pursuant to Section 4 of the Plan.
b. Age - "Age" shall mean the age of the person as of his last
birthdate.
c. Average Monthly Compensation - "Average Monthly Compensation"
shall be determined by dividing by sixty ( 60 ) a Participant's
Compensation for the sixty ( 60 ) months immediately preceding the
earlier of his Termination of Employment or his Normal Retirement Date.
d. Compensation - "Compensation" shall mean a participant's annual
rate of salary plus bonus paid in the past twelve ( 12 ) months prior to
any deferral under the Qualified Plan and the Executive Employee Deferred
Compensation Plan.
e. Disability - "Disability" shall mean the Participant's total
disability as determined by the Company in its complete and sole
discretion.
f. Executive Employees - "Executive Employees" shall mean all
employees of the Company who are designated as executive employees by the
Administrative Committee.
g. Final Compensation - " Final Compensation" shall mean a
Participant's Compensation in effect at the date of termination of
Employment.
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h. Normal Retirement Date - "Normal Retirement Date" shall mean
the later of ( i ) the first day of the month following the month in
which a Participant reaches age 65; or ( ii ) the first day of the month
following Termination of Employment.
i. Participant - "Participant" shall mean an Executive Employee of
the Company who has entered into a Participation Agreement with the
Company and therefore is not eligible to participate in
the Company's Plan of group term life insurance.
j. Participation Agreement - "Participation Agreement" shall mean
a written agreement between an Executive Employee and the
Company whereby the Executive Employee agrees to participate in
the Plan.
k. Retirement - "Retirement" shall mean ( I ) a Participant's
Termination of Employment after reaching his normal Retirement Date or
( ii ) a Participant's Termination of Employment if there has been a
substantial Change in Company Ownership, provided that such Termination
of Employment was not as a result of the Participant's conviction of a
felony.
l. Qualified Plan - "Qualified Plan" shall mean the Company's
Qualified Employee Savings/Retirement Plan ( including Fund C and D thereof ) ,
or any successor Retirement Pension Plan or plans maintained by the Company
which qualify under IRC S 401( a ).
m. Substantial Change in Company Ownership - "Substantial Change
in Company Ownership" shall mean any "Person" who is an "Acquiring Person"
(as such terms are defined in Article ( i) of the Company's Articles of
Incorporation as amended), becoming, after effective date of this plan, the
beneficial owner (directly or indirectly) of more than fifty percent (50%)
of the Company's common shares outstanding.
n. Termination of Employment - "Termination of Employment: shall
mean the Participant's ceasing to be employed by the Company for any reason
whatsoever, voluntary or involuntary, including by reason of death of
disability.
2. Eligibility . Each Executive Employee shall be entitled
to participate in this Plan as of the day following the later of: ( I ) his
designation as an Executive Employee; and ( ii ) the Company's execution of
the Participation Agreement.
A Participant shall cease to be a Participant at Termination of
Employment. However, the employment of a Participant shall not be deemed to be
terminated by reason of an approved leave of absence
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granted by the Company. If a Participant terminates his employment and is
subsequently re-employed by the Company, he may become a Participant in the
same manner as if his re-employment constituted his first Employment by the
Company, and all benefits hereunder shall be computed as if such re-employment
Constituted his first employment with the Company.
3. Payment of Benefits .
3.1 Benefits Upon Retirement . Upon a Participant's Retirement, the
Company shall pay to the Participant, as compensation for services rendered
prior to such date, lifetime monthly payments in Amount equal to sixty five
percent ( 65% ) of the participant's Average Monthly Compensation, Reduced by
the sum of ( I ) , ( ii ) , and ( iii ) below:
( i ) fifty percent ( 50% ) of the amount of unreduced primary ( not
family ) retirement benefits under the United States social Security Act
that the Participant would not be eligible for if application were made as
of the date when benefits under this Plan are to commence;
( ii ) the benefit that would be payable on a life annuity basis from Fund
C, assuming the following:
( a ) balances in Fund C as of February 29, 1984, together with
any prior withdrawals from Fund C, are valued at $30 per share.
( b ) Participants contribute to date of termination the amount
necessary to receive the highest Company match under the Qualified Plan.
( c ) balances (including future Company contributions) will grow
at an annual effective rate of interest of eight percent ( 8% ) to
Termination.
( d ) if any portion of the fund balance is withdrawn prior to
Termination of Employment, this calculation shall assume the fund would
continue to grow as if it had never been withdrawn.
( iii ) The benefit that would be payable on a life annuity basis from
Fund D, assuming that balances as of February 29, 1984, plus any prior
withdrawals together with interest at an annual effective rate of interest
Of eight and one half percent ( 8 1/2% ) to February 29, 1984, grow at an
annual rate of interest of eight and one half percent ( 8 1/2% ) to
Termination. If any portion of the fund balance is withdrawn prior to
Termination of Employment, this calculation shall assume the fund would
continue to grow as if it had never been withdrawn.
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Such payments shall commence on the first day of the month coincident with
or next following Retirement shall continue on the first day of each month
thereafter for the life of the Participant.
3.2 Benefits Upon Disability . Upon a Participant's
Termination of Employment prior to the Normal Retirement Date due to
Disability, no separate provision is made for a disability benefit under this
Plan. However, Any such participant shall be considered, notwithstanding such
Termination of Employment, to continue to be a Participant in this Plan, and in
the event of such participant's death prior to the Normal Retirement Date, such
Participant's such Participant's beneficiary shall receive the Survivor's
Benefit described in Section 3.4( a ), Based upon the Participant's Final
Compensation at Termination of Employment. In the event such Participant lives
to the Normal Retirement Date, the Participant shall be entitled to receive
the Normal Retirement Benefit described in Section 3.1, above, based on the
Participant's Average Monthly Compensation at date of Termination of
Employment, payable in equal monthly installments commencing on the first day
of each month Thereafter until the Participant's death. Such benefit shall be
based upon the payment of the benefit at the Normal retirement Date in
accordance with Section 3.1, except Fund C and D will be the assumed balance at
the date of Termination of Employment and otherwise applying the formula,
offsets and assumptions described in Section 3.1.
3 .3 Benefits upon other Termination of Employment. Upon a
Participant's Termination of Employment for reasons other than death,
Disability or Retirement, the Company shall not be obligated to pay and benefit
to the participant pursuant to the Plan, and the Participant shall have no
further right to receive any benefit hereunder.
3 .4 Survivorship Benefits.
a. Prior to Termination of Employment.
If a Participant dies prior to Termination of Employment, the
Company shall pay to the participant's
Beneficiary a survivor's benefit equal to fifty percent ( 50% )
of the Participant's Final Compensation, divided by twelve
( 12 ). Payable for 120 months, commencing on the first day of
the month after the Participant's death occurs and continuing on
the first day of each month thereafter.
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b. After Retirement . If a Participant dies after
Retirement, the Company shall pay to the Participant's
beneficiary two hundred percent ( 200% ) of the
participants Final Compensation Payable in a single
payment within 60 days after the Participant's death.
3.5 Recipients of Payments: Designation of Beneficiary
All payments to be made by the Company shall be made to the Participant, if
living. Upon the death of a Participant, survivorship benefits will be paid to
the Participant's beneficiary. In the event a beneficiary dies before
receiving all the payments due to such beneficiaries pursuant to this Plan, the
then-remaining payments shall be to the legal representatives of the
beneficiary's estate. The participant shall designation with the Administrative
Committee on such form as the Administrative Committee may prescribe. The
Participant may revoke or modify said designation at any time by a further
written designation. The Participant's beneficiary designation shall be deemed
automatically revoked in the event of the death of the event of the death of
the beneficiary or, if the beneficiary is the Participant's spouse, in the
event of dissolution of marriage. If the Participant's Compensation
constitutes community property, then any beneficiary designation made by the
Participant other than a designation of such Participant's spouse shall not be
effective if any such beneficiary or beneficiaries are to receive more than
fifty percent ( 50% ) of the aggregate benefits payable hereunder unless such
spouse shall approve such designation in writing. If no designation shall be in
effect at the time when any benefits payable under this Plan shall become due,
the beneficiary shall be the spouse of the Participant, or if no spouse is then
living, to the legal representatives of the participant's estate.
In the event a benefit is payable to a minor or person declared
incompetent or to a person incapable of handling the disposition of his
property, the Administrative Committee may pay such benefit to the guardian,
legal representative or person having the care of custody of such minor,
incompetent or person. The Administrative Committee may require proof of
incompetency, minority or guardianship as it may deem appropriate prior to
discharge the Administrative Committee and the Company from all liability
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with respect to such benefit.
4. Administration and Interpretation of the Plan. The Board of
Directors of the Company shall appoint an Administrative Committee consisting
of three ( 3 ) or more persons to administer and interpret the Plan.
Interpretation by the Administrative Committee shall be final and binding upon
a Participant. The Administrative Committee may adopt rules and regulations
relating to the Plan as it may deem necessary or advisable for the
administration of the Plan.
4 . Claims Procedure. If the Participant or the Participant's
beneficiary (hereafter referred to as a "Claimant") is denied all or a portion
of an expected benefit under this Plan for any reason, he or she may file a
claim with the Administrative Committee. The Administrative Committee shall
notify the Claimant within sixty ( 60 ) days of allowance or denial of the
claim, unless the Claimant receives written notice from the Administrative
Committee prior to the end of the sixty ( 60 ) day period stating that special
circumstances require an extension of the time for decision, in which event the
Administrative Committee shall notify the Claimant of its decision within
( 60 ) days following the end of the initial committee's decision shall be in
writing, sent by mail to Claimant's last known address, and, if a denial of the
claim, must contain the following information:
a. the specific reasons for the denial;
b. specific reference to pertinent provisions of the
Plan on which the denial is based; and
c. if applicable, a description of any additional
information or material necessary to perfect the claim, an
explanation of why such information or material is necessary, and
explanation of the claims review procedure.
5 . Review Procedure.
a. A Claimant is entitled to request a review of any denial of his
claim by the Administrative Committee. The request for review must
be submitted in writing within a sixty ( 60 ) day period, the Claim
will be deemed to be conclusively denied. The Claimant or his
representative shall be entitled to review all pertinent documents,
and to submit issues and comments orally and in writing.
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b. If the request for review by a Claimant concerns the
interpretation and application of the provisions of this Plan and
the Company's obligations, then the review shall be conducted by a
separate committee consisting of three persons designated or
appointed by the Administrative Committee. The separate committee
shall afford the Claimant a hearing and the opportunity to review
all pertinent documents and submit issues and comments orally and
in writing and shall render a review decision in writing, all
within sixty ( 60 ) days upon written notice to the Claimant. The
Claimant shall receive written notice of the separate committee's
review decision, together with Specific reasons for the decision
and reference to the pertinent provisions of the Plan.
6 . Life Insurance and Funding. The Company in its discretion may
apply for and procure as owner and for its own benefit, insurance on the life
of the Participant, in such amounts and in such forms as the Company may
choose. The Participant shall have no interest whatsoever in any such policy
or policies, but at the request of the Company shall submit to medical
examinations and supply such information and execute such documents as may be
required by the insurance company or companies to whom the Company has applied
for insurance.
The rights of the Participant, or his beneficiary, or estate, to
benefits under the Plan shall be solely those of an unsecured creditor of the
Company. Any insurance policy or other assets acquired by or held by the
Company in connection with the liabilities assumed by it pursuant to the Plan
shall not be deemed to be held under any trust for the benefit of the
Participant, his beneficiary, or his estate, or to be security for the
performance of the obligations of the Company but shall be, and remain, a
general, unpledged, and unrestricted asset of the Company.
8. Assignment of Benefits. Neither the Participant nor any
beneficiary under the Plan shall have any right to assign the right to receive
any benefits hereunder, and in the event of any attempted assignment or
transfer,
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the Company shall have no further liability hereunder.
9. Employment Not Guaranteed by Plan. Neither this Plan nor any
action taken hereunder shall be construed as giving a Participant the right to
be retained as an Executive Employee or as an employee of the Company for any
period.
10. Convenant Not to Compete. Payment of benefits pursuant to this
Plan shall be coditioned upon the Participant not acting in any similar
employment capacity for any business enterprise which competes to a substantial
degree with the Company, nor engaging in any activity involving substantial
competition with the Company, during his employment with the Company, or after
his retirement from the Company, without the Company's prior written consent.
Nothwithstanding the foregoing, in the event of a Participant's Termination of
Employment after a Substantial Change in Company Ownership, this Section 10
shall be inoperative.
11. Taxes. The Company shall deduct from all payments made
hereunder all applicable federal or state taxes required by law to be withheld
from such payments.
12. Amendment and Termination. The Board of Directors of the
Company may amend or terminate the Plan, provided, however, that the Board may
not ( I ) reduce or modify any benefit payable Retirement of such Participant
prior to such amendment or termination; or ( ii ) amend or terminate the Plan
in any respect after a Substantial Change in Company Ownership has occurred.
13. Construction. The Plan shall be construed according to the
laws of the Commonwealth of Virginia.
14. Form of Construction. Any election, application, claim notice
or other communication required or permitted to be made by a Participant to the
Administrative Committee shall be made in writing and in such form as the
Administrative Committee shall prescribe. Such communication shall be
effective upon mailing, if sent by first class mail, postage pre-paid, and
addressed to the Company's offices at Bassett, Vriginia.
15. Captions. The captions at the head of a section or a
paragraph of this Plan are designed for convenience of reference only and are
not to be resorted to for the purpose of interpreting any provision of this
Plan.
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16. Severability. The invalidity of any portion of this Plan
shall not invalidate the remainder thereof, and said remainder shall continue
in full force and effect.
17. Binding Agreement. The provisions of this Plan shall be
binding upon the participant and the Company and their successors, assigns,
heirs, executors and beneficiaries.
ADOPTED pursuant to resolution of the Board of Directors of the Company
this 25th day of June 1984.
AMEND THE SUPPLEMENTAL RETIREMENT PLAN
1. Delete: "and the participant has had 10 years of prior service
with the company upon Termination of Employment."
2. Delete: " the later of attainment of age 55."
3. Delete para. M "Substantial change in company ownership," and
insert new paragraph ( attached) with the following features:
A substantial change of ownership occurs if:
( a ) acquisition of 30% of company stock by raider
except:
( I ) a swap of a division to a shareholder for
his shares, thereby raising another
shareholder above the 30% level.
( ii ) purchase by Bassett of another company
for stock.
( iii ) adoption of an ESOP or similar.
( iv ) purchase of Bassett by another company,
after which Bassett shareholders would
control 75% of the total new company.
( b ) majority of directors are replaced and are not
classified by old directors as "incumbent."
( c ) approval by shareholders of a reorganization or
consolidation in which old Bassett shareholders
would then own less than 75% of the new voting stock.
( d ) approval by shareholders of liquidation of the
corporation or sale of substantially all of the
assets, unless to a new company which would then be at
least 75% owned by the old Bassett shareholders.
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Bassett Furniture Industries, Incorporated
Proposed Definition of " Change of Control"
" SUBSTANTIAL CHANGE IN COMPANY OWNERSHIP" SHALL MEAN:
( a ) the acquisition by any person, individual, entity or "group"
(within the meaning of Section 13 ( d ) ( 3 ) or 14 (d ) ( 2 ) of the
Securities Exchange Act of 1934, as amended ( the "Exchange Act"))
(collectively, " Persons") of beneficial ownership ( the phrases "beneficial
ownership," "beneficial owners" and "beneficially owned" as used herin being
within the meaning of Rule 13d-3 promulgated under the Exchange Act) of Thirty
percent ( 30% ) or more of either ( I ) the then outstanding shares of common
stock of the Corporation ( the " Outstanding Corporation common Stock") or
( ii ) the combined voting power of the then outstanding voting securities of
the Corporation entitled to vote generally in the election of directors ( the
" Outstanding Corporation Voting Securities") ; provided, however, that the
following acquisitions shall not constitute Change of Control: ( I ) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation with respect to which, following such
acquisition, more than Seventy Five percent ( 75% ) of, respectively, the then
outstanding shares of common stock of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors are then beneficially owned by all
or substantially all of the persons who were the beneficial owners,
respectively, of the Outstanding Corporation Common Stock and Outstanding
Corporation Voting Securities immediately prior to such acquisition in
substantially the same proportions as their beneficial ownership, immediately
prior to such acquisition, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities, as the case may be; or
( b ) If Directors who, as of August 2, 1989, constitute
the Board of Directors of the
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corporation ( the "Incumbent Board") cease for any reason to consontitute at
least a majority of the Board of Directors; provided, however, that any
individual who becomes a director subsequent to August 2, 1989 and whose
election, or whose nomination for election by the Corporation's shareholders,
to the Board of Directors was approved by a vote of at least A Majority of
the directors then comprising the Incumbent Board shall be considered as though
such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of either an actual or threatened election contest ( as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act),
other actual or threatened solicitation of proxies or consents or an actual or
threatened tender offer; or
( c ) Approval by the shareholders of the Corporation of the
reorganization, merger or consolidation, in each case, with respect to which
all or substantially all of the Persons who were the beneficial owners,
respectively, of the Outstanding Corporation Common Stock and Outstanding
Corporation Voting Securities immediately prior to such reorganization, merger
or consolidation do not, following such reorganization, merger or consolidation
do not, following such reorganization , merger or consolidation, beneficially
own more than Seventy Five percent ( 75% ) of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such
reorganization, merger or consolidation in substantially the same proportions
as their beneficial ownership, immediately prior to such reorganization, merger
or consolidation, of the Outstanding Corporation Common Stock and Outstanding
Corporation Voting Securities, as the case may be; or
( d ) Approval by the shareholders of the Corporation of ( I )
a complete liquidation or dissolution of the Corporation or ( ii ) the sale or
other disposition of all or substantially all of the assets of the Corporation,
other than to a corporation, with respect to which following such sale other
than a orporation, with respect to which following such sale or other
disposition, more than Seventy Five percent
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( 75% ) of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors is then beneficially owned by all or substantially all of the persons
who were the beneficial owners, respectively, of the Outstanding Corporation
Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their beneficial ownership, immediately
prior to such sale or other disposition, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities, as the case may be.
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Amendments
10. Forfeiture of Benefits. Payment of benefits pursuant to this Plan
shall be conditioned upon the participant not acting in any similar
employment capacity for any business enterprise which competes to a
substantial degree with the company, nor engaging in any activity
involving substantial competition with the Company, during his
employment with the Company or (within 5 years) after his
retirement from the Company, without the Company's prior written
consent. Any Participant who violates the foregoing condition shall
permanently forfeit any retirement or death benefit otherwise
payable from the date any such violation first occurs. Without
limiting the foregoing general language: ( 1 ) the term "any
similar employment capacity" shall include a salaried or hourly-paid
employee, an officer, an independent contractor, an agent, or a
consultant; and ( 2 ) the term "business enterprise which
competes to a substantial degree with the Company" shall include any
manufacturer of residential or office furniture or bedding.
Notwithstanding the foregoing, in the event of a Participant's
Termination of Employment after a substantial change in Company
ownership, this Section 10 shall be inoperative.