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BASSETT FURNITURE INDUSTRIES, INCORPORATED
1993 STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE. This Plan is intended to provide Directors who are not
employees of the Company a sense of proprietorship and personal involvement in
the development and financial success of the Company and to encourage such
Directors to remain with and to devote their best efforts to the Company.
2. DEFINITIONS. Whenever used in the Plan, unless the context clearly
indicates otherwise, the following terms shall have the following meanings:
(a) "Award" means an award pursuant to Sections 8 through 10 of
the Plan.
(b) "Board" or "Board of Directors" means the Board of Directors
of the Company.
(c) "Common Stock" means the Common Stock, $5.00 par value, of
the Company and any other stock or securities resulting from the
adjustment thereof or substitution therefor as described in Section 11
below.
(d) "Company" means Bassett Furniture Industries, Incorporated, a
Virginia corporation, and any corporation succeeding to the Company's
rights and obligations hereunder.
(e) "Compensation" means the annual fee payable by the Company to
a Director for a year of service as a Director without reduction for
withholding taxes and exclusive of reimbursement for expenses, meeting
attendance fees and the value of any fringe benefits which the Director
receives or is entitled to receive as a Director of the Company.
(f) "Director" means a member of the Board of Directors of the
Company who is not a regular employee of the Company or its
subsidiaries.
(g) "Disability" means the condition which results when an
individual has become permanently and totally disabled within the
meaning of Section 72(m)(7) of the Internal Revenue Code of 1986.
(h) "Election" means an election to receive an Award pursuant to
Section 8 of the Plan.
(i) "Elective Award" means an award pursuant to an Election under
Section 8 of the Plan.
(j) "Elective Award Agreement" means the written agreement
between a Director and the Company evidencing the Company's agreement to
issue Common Stock
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pursuant to an Election under the Plan and setting forth or
incorporating the terms and conditions thereof.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(l) "Fair Market Value", with respect to a share of the Common
Stock on a particular date, shall be (i) if such Common Stock is listed
on a national securities exchange or a foreign securities exchange or
traded on the NASDAQ National Market System, the closing sale price of
the Common Stock on said date on the national securities exchange, the
foreign securities exchange or the NASDAQ national Market System on
which the Common Stock is principally traded, or, if no sales occur on
said date, then on the next preceding date on which there were such
sales of Common Stock, or (ii) if the Common Stock shall not be listed
on a national securities exchange or a foreign securities exchange or
traded on the NASDAQ National Market System, the mean between the
highest and lowest prices reported by the National Association of
Securities Dealers, Inc. for the over-the-counter market on said date
or, if the highest and lowest prices are not reported on said date, then
on the next preceding date on which there were such quotations, or (iii)
if at any time quotations for the Common Stock shall not be reported by
the National Association of Securities Dealers, Inc. for the
over-the-counter market and the Common Stock shall not be listed on any
national securities exchange or any foreign securities exchange or
traded on the NASDAQ National Market System, the fair market value based
on quotations for the Common Stock by market makers or other securities
dealers as determined by the Board of Directors in such manner as the
Board may deem reasonable.
(m) "Option" means a stock option granted pursuant to this Plan.
(n) "Optionee" means the person to whom an Option is granted.
(o) "Option Price" is defined in Section 6.
(p) "Payment Date" is defined in Section 10.
(q) "Plan" means this 1993 Stock Plan for Non-Employee Directors,
as in effect from time to time.
(r) "Stock Option Agreement" means the written agreement between
an Optionee and the Company evidencing the grant of an Option under the
Plan and setting forth or incorporating the terms and conditions
thereof.
3. ADMINISTRATION. The Plan shall be administered by the Board of
Directors. The Board shall have all of the powers necessary to enable it
properly to carry out its duties under the Plan, including but not limited to
the power and duty to construe and interpret the Plan and to determine all
questions that shall arise under the Plan, which interpretations and
determinations shall be conclusive and binding upon all persons. Subject to the
express provisions of the Plan,
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the Board may establish from time to time such regulations, provisions and
procedures which in its opinion may be advisable in the administration of the
Plan.
Notwithstanding the foregoing or any other provision of this Plan to the
contrary, no discretion concerning decisions regarding the Plan shall be
afforded to a person who is not a "disinterested person" (as defined in the
rules and regulations of the Securities and Exchange Commission under Section 16
of the Act, as in effect from time to time). In the event that it is necessary
for the proper administration of the Plan to exercise any such discretion, and
the Board is so precluded from exercising such discretion, the Board may
delegate any authority to exercise such discretion to a person or committee of
persons, each of whom is a "disinterested person" as so defined.
4. ELIGIBILITY; OPTION GRANTS. Each Director shall automatically be
granted an option to purchase 2,500 shares upon first election to the Board and
an option to purchase 1,000 shares (subject to adjustment or substitution
pursuant to Section 11 hereof from the date hereof, irrespective of whether such
option has been granted) of the Common Stock on each of the grant dates of April
1 of each year beginning on April 1, 1994; provided, however, that such
automatic grants shall be made pro rata to all Directors if on the date of a
grant there shall not be a number of shares sufficient to make all such grants.
5. SHARES AVAILABLE. The Board of Directors shall reserve for the
purposes of the Plan, and by adoption of the Plan does hereby reserve, out of
the authorized but unissued Common Stock, a total of 75,000 shares of Common
Stock of the Company (subject to adjustment or substitution pursuant to Section
11 hereof). In the event that an Option granted or Award under the Plan to any
Director expires or is terminated unexercised or is forfeited as to any shares
covered thereby, such shares shall not thereafter be available for the granting
of Options or Awards under the Plan and the reserve for such shares shall be
terminated.
6. OPTION PRICE. The price at which each share of Common Stock (subject
to adjustment pursuant to Section 11 hereof) may be purchased upon the exercise
of an Option (the "Option Price") shall be the Fair Market Value of the shares
of Common Stock subject to the Option on the date such Option is granted.
7. EXERCISE OF OPTIONS.
(a) Each option granted under the Plan by its terms shall require
the Director granted such option to remain available to serve as a
Director of the Company for six months from the date of the grant of
such option before the right to exercise any part of such option will
accrue. A Director may thereafter exercise any or all of such option
until the expiration or termination of the option; provided, that not
less than 100 shares may be purchased at any one time unless the number
of shares purchased is the total number at such time purchasable under
the option. Subject to earlier termination as provided herein, all
options granted under this Plan shall expire ten years from the date of
grant thereof.
(b) If an optionee shall cease to be a Director of the Company
otherwise than by reason of such optionee's death or Disability or a
Change of Control (as hereinafter
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defined), then, subject to Subsection 7(a) hereof, the option shall be
exercisable at any time prior to the earlier of (i) the expiration date
of such option or (ii) that date which is three years from the date such
optionee ceases to be a Director, such three year period to include the
date on which such termination occurs. If an Optionee ceases to be a
Director of the Company as a result of such optionee's death or
Disability, then, subject to Subsection 7(a) hereof, the option shall be
exercisable at any time prior to the earlier of (i) the expiration date
of such option or (ii) that date which is one year from the date such
optionee ceases to be a Director. If an optionee ceases to be a Director
by reason of a Change of Control, then such option shall be exercisable
in full, whether or not it is exercisable on the date of such
termination, at any time prior to the earlier of (i) the expiration date
of such option or (ii) that date which is one year from the date such
optionee ceases to be a Director.
(c) Each Option granted under the Plan by its terms shall not be
transferable by the Optionee otherwise than by will, or if the Optionee
dies intestate, by the laws of descent and distribution, and such Option
shall be exercisable during such Optionee's lifetime only by such
Optionee. In the event of the death of an Optionee, then, subject to
Subsection 7(a) hereof, such Optionee's Options shall be exercisable to
the extent herein provided by the executor or personal representative of
the Optionee's estate or by any person who acquired the right to
exercise such Option by bequest under the Optionee's will or by
inheritance.
(d) Each Option shall be confirmed by a Stock Option Agreement
executed by the Company and by the Optionee to whom such Option is
granted.
(e) The Option Price for each share of Common Stock purchased
pursuant to the exercise of each Option shall, at the time of the
exercise of the Option, be paid in full in cash or equivalent. An Option
shall be deemed exercised only when written notice of such exercise,
together with payment of the Option Price, is received from the Optionee
by the Company at its principal office. No Optionee shall have any
rights as a shareholder of the Company with respect to Common Stock
issuable pursuant to such Optionee's Option until such Option is duly
exercised.
(f) To the extent that an Option is not exercised within the
period of time prescribed therefor as set forth in the Plan, the Option
shall lapse and all rights of the Optionee thereunder shall terminate.
8. ELECTIVE GRANT OF STOCK. In addition, after approval of the Plan as
provided in Section 17 hereof, each Director may, in lieu of receiving
Compensation in accordance with the prevailing practice of the Company,
irrevocably elect each year (the "Election") to receive at least 50% of his
Compensation for the next succeeding year in the form of an Award (the "Elective
Award"). The Election must be in writing and must be delivered to the Secretary
of the Corporation on or about the date of election of the Director to serve the
ensuing one-year term. The Election shall be deemed made on the day it is
received by the Secretary of the Corporation. Further, the Director may elect to
receive any quarterly payment of the Director's annual compensation in the form
of an Elective Award to be granted on the quarterly payment date,
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provided such Election is made prior to the beginning of the quarterly payment
period (except as to the first quarterly payment period, with respect to which a
Director may make the Election on or about the date of the Director's election
serve the ensuing one-year term).
9. NUMBER OF SHARES IN ELECTIVE AWARD. The total number of shares of
Common Stock to be included in each Elective Award shall be determined by
dividing the amount of the Director's Compensation that is to be paid in Common
Stock by 90% of the Fair Market Value of a share of stock on the Payment Date.
In the event that on the Payment Date there is not a sufficient number of shares
of Common Stock available to make all of the Awards then elected, such Awards
shall be made on a pro rata basis; provided, however, in no event shall an Award
be made which, on the date of the Award, is equal to less than 50% of a
Director's Compensation for such year. In no event shall the Company be required
to issue fractional shares. Whenever under the terms of this Section 9 a
fractional share of Common Stock would otherwise be required to be issued, an
amount in lieu thereof shall be paid in cash based upon the Fair Market Value of
such fractional share on the date of the Award.
10. ELECTIVE AWARD. The Elective Award shall be granted on the April 1
following the Election, or, in the event April 1 is not a business day, on the
next business day thereafter (the "Payment Date"). On the Payment Date, the
Company shall agree to issue to the Director 1/3 of the total number of shares
subject to the Award on the first anniversary of the Payment Date, 1/3 of the
total number of shares subject to the Award on the second anniversary of the
Payment Date, and the remaining 1/3 of the total number of shares subject to the
Award on the third anniversary of the Payment Date. In event that prior to the
issuance of such shares to the Director such Director shall cease to be a member
of the Board for any reason, the total number of shares subject to the Award,
which have not yet been issued to the Director shall be issued to the Director
within 30 days of such termination. Each Elective Award under the Plan by its
terms shall not be transferable by the Director otherwise than by will, or if
such Director dies intestate, by the laws of descent and distribution. In the
event of the death of the Director who has made an Election, then any shares
issuable to such Director pursuant to such Director's Elective Award shall be
issued in the name of such Director's beneficiary designated by the Director in
accordance with the Plan, or, in the event no such beneficiary has been
designated or such designated beneficiary fails to survive such Director, such
shares shall be issued in the name of such Director's estate. Each Award shall
be confirmed by an Elective Award Agreement executed by the Company and by the
Director to whom such Award is made.
11. ADJUSTMENT OF NUMBER OF SHARES. In the event that a dividend shall
be declared upon the Common Stock payable in shares of Common Stock, the number
of shares of Common Stock then subject to any Option or Award and the number of
shares reserved for issuance pursuant to the Plan but not yet covered by an
Option or an Award shall be adjusted by adding to each such share the number of
shares which would be distributable thereon if such share had been outstanding
on the date fixed for determining the shareholders entitled to receive such
stock dividend. In the event that the outstanding shares of Common Stock
generally shall be changed into or exchanged for a different number or kind of
shares of stock or other securities of the Company or of another corporation, or
changed into or exchanged for cash or property or the right to receive cash or
property (but not including any dividend payable in cash or property other than
a liquidating distribution), whether through reorganization, recapitalization,
stock
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split-up, combination of shares, merger or consolidation, then there shall
be substituted for each share of Common Stock subject to any Option or Award,
and for each share of Common Stock reserved for issuance pursuant to the Plan
but not yet covered by an Option or an Award, the number and kind of shares of
stock or other securities or cash or property or the right to receive cash or
property into which each outstanding share of Common Stock shall be so changed
or for which each such share shall be exchanged. In the case of any such
substitution or adjustment as provided for in this Section 11, the aggregate
Option Price for each share or shares covered thereby prior to such substitution
or adjustment shall be the aggregate Option Price for all shares of stock or
other securities or cash or property or the right to receive cash or property
which shall have been substituted for such share or shares or to which such
share or shares shall have been adjusted pursuant to this Section 11. No
adjustment or substitution provided for in this Section 11 shall require the
Company in any Stock Option Agreement or Elective Award Agreement to issue a
fractional share and the total substitution or adjustment with respect to each
Stock Option Agreement or Elective Award Agreement shall be limited accordingly.
12. CHANGE OF CONTROL.
(a) In the event of a Change of Control (as defined below) of the
Company, (i) all Stock Options then outstanding shall become fully
exercisable as of the date of the Change of Control, whether or not then
exercisable and (ii) all Awards shall be issued to a Director in full in
accordance with Section 10 above, subject to the limitation that any
Stock Option which has been outstanding less than six months on the date
of the Change of Control shall not be afforded such treatment.
(b) A "Change of Control" of the Company means, and shall be
deemed to have occurred upon any of the following events:
(i) The acquisition by any person, individual, entity or
"group" (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) (collectively, Persons) of beneficial ownership
(the phrases "beneficial ownership", "beneficial owners" and
"beneficially owned" as used herein being within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of 30% or more of
either (i) the then outstanding shares of common stock of the
Company (the Outstanding Company Common Stock) or (ii) the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors (the Outstanding Company Voting Securities); provided,
however, that the following acquisitions shall not constitute a
Change of Control: (i) any acquisition directly from the Company,
(ii) any acquisition by the Company or any of its subsidiaries,
(iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any of its
subsidiaries, (iv) any acquisition by any corporation with
respect to which, following such acquisition, more than 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 Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
acquisition in substantially the same proportions as their
beneficial ownership, immediately prior to such acquisition, of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be; or
(ii) Individuals who, as of August 2, 1989, constitute the
Board of Directors of the Company (the Incumbent Board) cease for
any reason to constitute 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 Company's shareholders, to
the
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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
(iii) Approval by the shareholders of the Company of a
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 Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such reorganization, merger or consolidation
do not, following such reorganization, merger or consolidation,
beneficially own more than 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 Company Common Stock
and Outstanding Company Voting Securities, as the case may be; or
(iv) Approval by the shareholders of the Company of (i) a
complete liquidation or dissolution of the Company or (ii) the
sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation, with respect
to which following such sale or other disposition, more than 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 Company
Common Stock and Outstanding Company 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 Company Common Stock and Outstanding Company Voting
Securities, as the case may be.
13. AMENDMENT OF PLAN. The Board of Directors shall have the right to
amend, suspend or terminate the Plan at any time; provided that, except as and
to the extent authorized and permitted by Section 11 above, (a) no amendment,
suspension or termination shall adversely affect the rights of any Optionee as
to any outstanding Option without the consent of such Optionee, subject to any
limitation on such rights set forth in the Plan or such Optionee's Stock Option
Agreement except for any amendment the Board deems necessary to preserve or
provide exemptions from the applicability of Section 16(b) of the Exchange Act
to the grant, lapse,
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disposition, cancellation or exercise of Options; and (b) no amendment relating
to the determination of the Optionees, the grant dates, the number of Options
granted to any Optionee or the Option Price, shall be made more than once every
six months, other than to comport with changes in the Internal Revenue Code of
1986, the Employee Retirement Income Security Act or the rules thereunder. In no
event shall the Board of Directors have the right to amend the Plan to provide
that discretion concerning decisions regarding the Plan shall be afforded to a
person who is not a "disinterested person" under Section 16(b) of the Exchange
Act.
14. RESALES OF SHARES. The Company may impose such restrictions on the
sale or other disposition of shares issued pursuant to the exercise of Options
or upon the payment of an Award as the Board deems necessary to comply with
applicable securities laws. Certificates for shares issued upon the exercise of
Options or the payment of Awards may bear such legends as the Company deems
necessary to give notice of such restrictions.
15. COMPLIANCE WITH LAW AND OTHER CONDITIONS. No shares shall be issued
pursuant to the exercise of any Option of the payment of any Award granted under
the Plan prior to compliance by the Company, to the satisfaction of its counsel,
with any applicable laws. The Company shall not be obligated to (but may in its
discretion) take any action under applicable federal or state securities laws
(including registration or qualification of the Plan, the Options or the Common
Stock) necessary for compliance therewith in order to permit the issuance of
shares upon the granting of Awards or upon the exercise of Options or the
immediate resale thereof by Optionees, except for actions (other than
registration or qualification) that may be taken by the Company without
unreasonable effort or expense and without the incurrence of any material
exposure to liability.
16. NONQUALIFIED OPTIONS. Options granted under the Plan will not be
treated as "incentive stock options" under Section 422 of the Internal Revenue
Code of 1986.
17. EFFECTIVE DATE AND DURATION. The Plan shall be effective on November
3, 1993, subject to approval of the Plan by the holders of a majority of the
shares presented or represented at the 1994 Annual Meeting of Shareholders. The
Plan shall terminate on October 31, 2003.