<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Solicitin Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
BASSETT FURNITURE INDUSTRIES, INCORPORATED
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
BASSETT FURNITURE INDUSTRIES, INCORPORATED
BASSETT, VIRGINIA
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD FEBRUARY 21, 1996
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Bassett Furniture Industries, Incorporated (the Company) will be held at the
Company's Main Office Building, Bassett, Virginia, on Wednesday, February 21,
1996, at 10:00 a.m., Local Time, for the purpose of considering and acting upon
the following:
1. The election of eleven Directors.
2. A proposal to ratify the selection of KPMG Peat Marwick as
independent public accountants for the fiscal year ending
November 30, 1996.
3. Any and all other matters that may properly come before the
meeting or any adjournment thereof.
The Board of Directors has fixed the close of business on December 15,
1995 as the record date for determining the stockholders entitled to notice of
and to vote at the meeting and any adjournment thereof, and only holders of
Common Stock of the Company of record at such date will be entitled to notice
of or to vote at the meeting.
THE BOARD OF DIRECTORS WILL APPRECIATE THE PROMPT RETURN OF THE
ENCLOSED PROXY, DATED AND SIGNED. THE PROXY MAY BE REVOKED BY YOU AT ANY TIME
BEFORE IT IS EXERCISED AND WILL NOT BE EXERCISED IF YOU ATTEND THE MEETING AND
VOTE IN PERSON.
By Order of the Board of Directors
J. Stanley Payne
Vice President, Secretary
and General Counsel
Bassett, Virginia
January 12, 1996
<PAGE> 3
BASSETT FURNITURE INDUSTRIES, INCORPORATED
Post Office Box 626, Bassett, Virginia 24055
PROXY STATEMENT
GENERAL
This Proxy Statement is furnished in connection with the solicitation
by the Board of Directors of proxies to be used at the Annual Meeting of
Stockholders of Bassett Furniture Industries, Incorporated (the Company) to be
held at its Main Office Building, Bassett, Virginia, at 10:00 a.m., Local Time,
on Wednesday, February 21, 1996. This Proxy Statement and accompanying proxy
are being sent to the stockholders of the Company on or about January 12, 1996.
Solicitation other than by mail may be made personally and by
telephone by regularly employed officers and employees of the Company who will
not be additionally compensated therefor. The Company will request brokers,
dealers, banks or voting trustees, or their nominees, who hold stock in their
names for others or hold stock for others who have the right to give voting
instructions, to forward proxy materials to their principals and request
authority for the execution of the proxy and will reimburse such institutions
for their reasonable expenses in so doing. The total cost of soliciting
proxies will be borne by the Company.
Any proxy delivered in the accompanying form may be revoked by the
person executing the proxy at any time, before the authority thereby granted is
exercised, by written request addressed to J. Stanley Payne, Vice President,
Secretary and General Counsel, Bassett Furniture Industries, Incorporated, Post
Office Box 626, Bassett, Virginia 24055 or by attending the meeting and
electing to vote in person. Proxies received in such form will be voted as
therein set forth at the meeting or any adjournment thereof.
The only matters to be considered at the meeting, so far as known to
the Board of Directors, are the matters set forth in the Notice of Annual
Meeting of Stockholders, and routine matters incidental to the conduct of the
meeting. However, if any other matters should come before the meeting or any
adjournment thereof, it is the intention of the persons named in the
accompanying form of proxy, or their substitutes, to vote said proxy in
accordance with their judgment on such matters.
Stockholders present or represented and entitled to vote on a matter
at the meeting or any adjournment thereof will be entitled to one vote on such
matter for each share of the Common Stock of the Company held by them of record
at the close of business on December 15, 1995, which is the record date for
determining the stockholders entitled to notice of and to vote at such meeting
or any adjournment thereof. Voting on all matters, including the election of
Directors, will be by voice vote or by show of hands. The number of shares of
Common Stock of the Company outstanding on December 15, 1995 was 13,633,953.
<PAGE> 4
PRINCIPAL STOCKHOLDERS AND HOLDINGS OF MANAGEMENT
At December 15, 1995, the only person known to the Company to be a
beneficial owner of more than 5% of the $5.00 par value Common Stock of the
Company (the Common Stock) was as follows:
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME AND ADDRESS OF AND NATURE OF PERCENT OF COMMON
BENEFICIAL OWNER BENEFICIAL OWNERSHIP STOCK OUTSTANDING
- ------------------- -------------------- -----------------
<S> <C> <C>
Bassett Employee Savings/ 977,847(1) 7.09%
Retirement Plan
B. M. Brammer, Trustee
Bassett, Virginia 24055
</TABLE>
- --------------------
(1) In his capacity as Trustee, B. M. Brammer, Executive Vice
President-Finance and Treasurer of the Company, has sole voting and
dispositive power over these shares.
The following table sets forth, as of December 15, 1995, information
as to the beneficial ownership of the Common Stock by all Directors and
executive officers of the Company as a group and by the named Executive
Officers who are not also nominees as Directors. Information with respect to
the beneficial ownership of the Common Stock by Robert H. Spilman, Glenn A.
Hunsucker and the other nominees for Directors is contained in the table under
"Election of Directors."
<TABLE>
<CAPTION>
NUMBER OF SHARES
NAME OF AND NATURE OF PERCENT OF COMMON
BENEFICIAL OWNER BENEFICIAL OWNERSHIP STOCK OUTSTANDING(1)
- ---------------- -------------------- --------------------
<S> <C> <C>
Directors and executive 1,685,634(2)(3) 12.21%
officers as a group
(28 persons)
B. M. Brammer 1,014,509(3)(4) 7.35%
J. C. Philpott 15,562(4) (5)
Robert H. Spilman, Jr.(6) 75,071(4) (5)
- --------------------
</TABLE>
(1) Based on the number of shares outstanding plus options held by
directors and executive officers that are currently exercisable or
that are exercisable within 60 days.
(2) Includes 166,379 shares subject to options held by directors and
executive officers that are currently exercisable or that are
exercisable within 60 days.
(3) Includes 977,847 shares of Common Stock held by the Company's Employee
Savings/Retirement Plan, for which B. M. Brammer, Executive Vice
President-Finance and Treasurer of the Company, has sole voting and
dispositive power in his capacity as Trustee. Also includes
2
<PAGE> 5
12,620 shares held in trusts of which Mr. Brammer is trustee and
shares held by Mr. Brammer's wife. Mr. Brammer disclaims beneficial
ownership of these 12,620 shares.
(4) Includes 28,938 shares subject to options that are currently
exercisable or that are exercisable within 60 days as follows: J. C.
Philpott 9,765; B. M. Brammer 8,694; and Robert H. Spilman, Jr.
10,479. Does not include shares attributable to the named Executive
Officers under the Company's Employee Savings/Retirement Plan.
(5) Less than 1% of the outstanding Common Stock.
(6) Robert H. Spilman, Jr. is the son of Robert H. Spilman, Chairman of
the Board and Chief Executive Officer of the Company.
ELECTION OF DIRECTORS
The Bylaws of the Company provide for eleven Directors. At the
meeting, eleven Directors will be elected to serve, subject to the provisions
of the Bylaws, until the 1997 Annual Meeting of Stockholders and until their
successors are duly elected and qualified. George W. Lyles, Jr., a dedicated
and loyal director, has chosen not to run for reelection to the Board of
Directors this year. Thomas W. Moss, Jr. has been nominated to fill Mr. Lyles'
position on the Board. Directors are elected by a plurality of the votes cast
by the holders of the shares entitled to vote at a meeting at which a quorum is
present. Provided a quorum is present, abstentions and shares not voted are
not taken into account in determining a plurality. A quorum consists of a
majority of votes entitled to be cast. It is the intention of the persons
named in the accompanying proxy to vote all proxies solicited by the Board of
Directors FOR the eleven nominees listed below unless authority to vote for the
nominees or any individual nominee is withheld by a stockholder in such
stockholder's proxy. If for any reason any nominee shall not become a
candidate for election as a Director at the meeting, an event not now
anticipated, the proxies will be voted for the eleven nominees including such
substitutes as shall be designated by the Board of Directors.
The eleven nominees for election as a Director are listed below. All
of the nominees were elected to their current terms, which expire in 1996, at
the Annual Meeting of Stockholders held on February 15, 1995, except for Mr.
Moss, who is a nominee for election as a director for the first time this year.
<TABLE>
<CAPTION>
PERCENT OF
SHARES OF COMMON
OFFICES WITH THE COMPANY OR COMMON STOCK STOCK
NAME AND DIRECTOR SINCE AGE OTHER OCCUPATION DURING PAST FIVE YEARS OWNED (1) OUTSTANDING(2)
----------------------- --- --------------------------------------- ------------ --------------
<S> <C> <C> <C> <C>
Peter W. Brown, M.D. 53 Partner, Virginia Surgical 2,566(3) (4)
1993 Associates of Richmond (general
surgery); Director of America's
Utility Fund (Dominion Resources,
Inc.)
Thomas E. Capps 60 Chairman of the Board, President 1,712(3) (4)
1989 and Chief Executive Officer,
Dominion Resources, Inc. (electric
utility holding company); Director
of Dominion Resources, Inc.,
NationsBank Corporation and Petersburg
Long Distance, Inc.
</TABLE>
3
<PAGE> 6
<TABLE>
<CAPTION>
PERCENT OF
SHARES OF COMMON
OFFICES WITH THE COMPANY OR COMMON STOCK STOCK
NAME AND DIRECTOR SINCE AGE OTHER OCCUPATION DURING PAST FIVE YEARS OWNED (1) OUTSTANDING(2)
----------------------- --- --------------------------------------- ------------ --------------
<S> <C> <C> <C> <C>
Alan T. Dickson 64 Chairman of the Board since 1994 2,875(3) (4)
1989 and President until 1994 of Ruddick
Corporation (Diversified holding
company); Director of Lance, Inc.,
NationsBank Corporation and Sonoco
Products Company
Paul Fulton 61 Dean of the Kenan-Flagler Business 2,866(3) (4)
1993 School of the University of North
Carolina at Chapel Hill; President
of Sara Lee Corporation (packaged
food and consumer products) until
1993; Director of Sonoco Products
Company, NationsBank Corporation,
Cato Corporation and Winston Hotels,
Inc.
William H. Goodwin, 55 Chairman of the Board, AMF 16,141(3) (4)
Jr. Companies (recreation products);
1992 Director of East Coast Oil
Corporation and First Union
Corporation
Glenn A. Hunsucker 61 President and Chief Operating 24,150(5) (4)
1974 Officer of the Company; Director
of First Union National Bank of
Virginia
James W. McGlothlin 55 Chairman of the Board and Chief 1,468(3) (4)
1981 Executive Officer, The United
Company (energy, real estate,
financial services, hotel and
golf properties, retail and
industrial supplies); Director
of CSX Corporation
Thomas W. Moss, Jr. 67 Speaker of the Virginia House 0 (4)
of Delegates; Senior Partner of
the law firm Thomas W. Moss,
Jr., P.C.; Director of Star Oil
& Gas, Ltd.
Albert F. Sloan 66 Retired; Chairman of the Board, 1,387(3) (4)
1984 Lance, Inc. (snack foods) until
1991; Director of PCA International,
Inc., Richfoods Holdings, Inc. and
Cato Corporation
John W. Snow 56 Chairman of the Board, President 2,675(3) (4)
1990 and Chief Executive Officer, CSX
Corporation (rail-based international
transportation); Director of
CSX Corporation, NationsBank
Corporation, Textron, Inc. and
USX Corporation
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
PERCENT OF
SHARES OF COMMON
OFFICES WITH THE COMPANY OR COMMON STOCK STOCK
NAME AND DIRECTOR SINCE AGE OTHER OCCUPATION DURING PAST FIVE YEARS OWNED (1) OUTSTANDING(2)
----------------------- --- --------------------------------------- ------------ --------------
<S> <C> <C> <C> <C>
Robert H. Spilman(6) 68 Chairman of the Board and Chief 168,747(7) 1.22%
1961 Executive Officer of the Company;
Director of NationsBank
Corporation, Jefferson-Pilot
Corporation, Trinova Corporation,
The Pittston Company, Dominion
Resources, Inc., Dominion Energy,
Inc. and Virginia Electric & Power Co.
- ---------------------
</TABLE>
(1) Does not include shares attributable to officers of the Company as
participants in the Company's Employee Savings/Retirement Plan.
(2) Based on the number of shares outstanding plus options held by directors
and executive officers that are currently exercisable or which are
exercisable within 60 days.
(3) Includes 1,000 shares subject to an option which is currently exercisable
or exercisable within 60 days.
(4) Less than 1% of the outstanding Common Stock.
(5) Includes 15,265 shares that are subject to options which are presently
exercisable or are exercisable within 60 days.
(6) Robert H. Spilman is the father of Robert H. Spilman, Jr., Executive Vice
President of Marketing and Merchandising of the Company.
(7) Includes 29,658 shares that are subject to options which are presently
exercisable or are exercisable within 60 days. Also includes a total of
119,126 shares that are held in a trust of which Mr. Spilman is
co-trustee, shares held by Mr. Spilman's wife directly and shares held in
trusts of which Mr. Spilman's wife is trustee. Mr. Spilman disclaims
beneficial ownership of these 119,126 shares.
THE BOARD OF DIRECTORS AND ITS COMMITTEES
The Board of Directors met four times during the 1995 fiscal year.
Each Director attended at least 75% of the meetings of the Board of Directors
and Committees on which he served. The Company has an Audit Committee and an
Organization and Compensation Committee. The Board of Directors does not have
a Nominating Committee.
The Audit Committee is composed of Messrs. Brown, Capps, Dickson,
Fulton, Lyles and Sloan and is responsible for monitoring the performance of
the independent auditors for the Company, recommending their engagement or
dismissal to the Board of Directors, approving all audit and related fees and
reviewing and evaluating the internal auditor's audit schedule. The Audit
Committee met two times during the fiscal year.
The Organization and Compensation Committee is composed of Messrs.
Dickson, Goodwin, McGlothlin, Sloan and Snow and reviews and makes
recommendations to the Board of Directors with
5
<PAGE> 8
respect to executive and officer compensation and establishes, reviews
and recommends changes to the organizational structure of the Company so as to
utilize the management resources to best respond to the changing demands of the
marketplace. The Organization and Compensation Committee met once during the
fiscal year.
ORGANIZATION AND COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Organization and Compensation Committee is composed of Messrs.
Dickson, Goodwin, McGlothlin, Sloan and Snow. Mr. McGlothlin is Chairman of
the Board and Chief Executive Officer of The United Company. In 1993, a
subsidiary of The United Company, United Central Industrial Supply Company,
purchased the assets of Blue Ridge Industrial Supply Company. United Central
Industrial Supply Company has operated mining, mill and industrial supply
stores for the past 20 years. Blue Ridge Industrial Supply Company conducted
business with the Company prior to such acquisition and has continued to do
business with the Company. Blue Ridge Industrial Supply Company had sales of
approximately $1,725,000 to the Company in the 1995 fiscal year. The prices
charged by Blue Ridge Industrial Supply Company were negotiated on an
arms-length basis and the Company believes such prices are at or below the
prices charged for comparable products by other companies in the area.
ORGANIZATION AND COMPENSATION COMMITTEE REPORT
The Organization and Compensation Committee of the Board of Directors
has assisted the Company in developing and implementing compensation policies
and programs which seek to improve the profitability of the Company and to
maximize stockholder value over time. To accomplish this, the five outside
directors who compose the Organization and Compensation Committee have
developed executive compensation policies which are consistent with, and
directly linked to, the Company's business objectives. These business
objectives represent a composite of factors that are considered important for
the future success of the Company. These factors attempt to balance long and
short-term performance, including the continued maintenance of a strong
balance sheet, growth of pre-tax profitability and earnings per share, control
of costs, market growth and diversification and other criteria which may be
introduced over time as a result of changes in the household furniture
environment. The members of the Organization and Compensation Committee
deliberate on matters affecting executive compensation. The decisions are
reviewed by the full Board, with the exception of decisions on stock or option
awards which are made by the Organization and Compensation Committee to satisfy
tax and securities law requirements.
The key principles which the Organization and Compensation Committee
emphasizes in developing compensation programs affecting senior executives are:
- Paying for performance that emphasizes corporate, business unit
and individual achievement.
- Motivating senior executives to the achievement of strategic and
tactical business goals and objectives and rewarding outstanding
achievement.
- Linking the interests of senior executives with the long-term
interests of the stockholders through ownership of the Common
Stock.
As the level of responsibility increases, an executive's compensation
will be proportionately at greater risk, reflecting the rewards earned as a
result of goal attainment. As responsibility increases, the compensation mix
will rely increasingly on the value of stock awards.
The four components of executive compensation are:
Base Salary. Base salaries are generally competitive with
high-performing, similar-sized companies in the industry. However, in recent
years the base salaries have been kept at a relatively
6
<PAGE> 9
fixed rate to reflect the general economic conditions of the industry
and to keep fixed costs under control. Significant increases in base salary
have been the result of increased responsibilities assumed by an executive
officer and the continued profitability of the Company in an increasingly
competitive industry. The Organization and Compensation Committee emphasizes
rewards in the total compensation context, rather than increasing base salary.
Annual Incentive Bonuses. Target annual incentives are established
for each executive in the form of a percentage of base salary. Discretionary
adjustments to targets are made based on performance criteria, subjectively
applied, which include the continued maintenance of a strong balance sheet,
growth of pre-tax profitability and earnings per share, control of costs,
market growth and diversification and other criteria which may be introduced
over time as a result of changes in the household furniture environment.
Annual bonuses are considered part of the total compensation package and
represent a targeted portion of such total compensation. There were
approximately 400 participants in the executive and management incentive plans
for the years covered by this report.
Annual Stock Option Grants. The Organization and Compensation
Committee may grant options to acquire shares of Company Common Stock to those
key executives who, in their judgment, have achieved goals and objectives as
described in the corporate business plans.
The performance criteria used to determine the eligibility to receive
a stock option include growth of pre-tax profitability and earnings per share,
control of costs, market growth and diversification, continued maintenance of a
strong balance sheet and other criteria which may be introduced over time as a
result of changes in the household furniture environment. The number of option
shares granted to each executive is determined by taking a percentage of the
total cash compensation and dividing that amount by the fair market value per
share at the date of grant. The percentage is set annually by the Organization
and Compensation Committee on a subjective basis, based upon individual
performance. The number of option shares granted will be reduced in the event
the executive does not own at least that number of shares of Company Common
Stock equal to the number of shares subject to the option grant. This
encourages executives to hold shares received upon the exercise of the options,
further linking their interests to those of the stockholders. Stock option
grants are considered part of the total compensation package and represent a
targeted portion of such total compensation.
Benefits. These programs are designed to provide protection against
financial catastrophe that can result from illness, disability or death.
Benefits offered to senior executives are those offered to all employees, with
certain variations, to promote tax efficiency and replacement of benefits lost
due to regulatory limitations.
The Organization and Compensation Committee believes that executive
compensation programs serve the interest of the stockholders of the Company.
Pay delivered to the senior executive is intended to emphasize the achievement
of goals and objectives of the Company. At risk, performance-based bonus
compensation averaged approximately 30% of total annual cash compensation for
the executive group during the fiscal year ended November 30, 1995. The range
of bonus compensation can be from zero to a multiple of base salary, depending
upon performance against goals and objectives for the year. The use of equity
in the form of stock option grants requires executives to invest in the company
they manage, and stockholder value creation becomes important, as with other
stockholders.
Chief Executive Officer's 1995 Compensation. Robert H. Spilman,
Chairman of the Board and Chief Executive Officer of the Company, is eligible
to participate in the same compensation programs available to other senior
executives. The Organization and Compensation Committee seeks to be
competitive with high-performing, similar-sized companies in the household
furniture industry in the context of total compensation, placing more emphasis
on at-risk incentives than on base salary. While this performance-driven
compensation may produce variable compensation over the years, it is the
7
<PAGE> 10
belief of the Organization and Compensation Committee that this approach
focuses the executive on the achievement of short and long-term goals and
objectives which enhance stockholder value.
The Organization and Compensation Committee determines, subjectively,
the emphasis and importance of the above criteria each year to reflect the
economic conditions of the household furniture industry and that of the
Company.
The base salary component of total compensation for Mr. Spilman for
fiscal year 1995 was unchanged, remaining at $450,000. Mr. Spilman's salary is
relatively competitive when compared to company size, performance and position
within the industry.
The annual bonus paid to Mr. Spilman was based upon the subjective
application of the objective performance criteria stated above. The annual
bonus for fiscal year 1995 was determined using these criteria resulting in a
payment of $225,000, which is 50% of his base salary. No stock option grants
were awarded to Mr. Spilman in 1995.
For fiscal year 1996, the Organization and Compensation Committee will
again establish performance criteria designed to enhance stockholder value.
These criteria will be consistent with financial objectives of the Company and
will be representative of the success needed to insure growth and
profitability.
James W. McGlothlin, Chairman
Alan T. Dickson
William H. Goodwin, Jr.
Albert F. Sloan
John W. Snow
8
<PAGE> 11
STOCKHOLDER RETURN PERFORMANCE GRAPH
Included below is a line graph comparing the yearly percentage change
in the cumulative total stockholder return on the Company's Common Stock
against the cumulative total return of the Standard & Poor's 500 Index and the
Company's Peer Group for the period commencing December 1, 1990 and ending
November 30, 1995, covering the Company's five fiscal years ended November 30,
1995. The Company's Peer Group consists of nine publicly-traded companies, the
Company, Ameriwood Industries International Corporation, Bush Industries, Inc.
Class A Common Stock, DMI Furniture, Inc., La-Z-Boy Chair Company, Ladd
Furniture, Inc., Masco Corp., Pulaski Furniture Corp. and Rowe Furniture Corp.,
each of which is in the household furniture industry.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN AMONG THE COMPANY,
S&P 500 INDEX AND THE PEER GROUP
[GRAPH]
This graph assumes that $100 was invested in the Company's Common Stock on
December 1, 1990, in the S&P 500 Index, and the Peer Group, and that dividends
were reinvested.
Indexed\Cumulative Returns
<TABLE>
<CAPTION>
Base
Period Return Return Return Return Return
Company\Index Name Nov 1990 Nov 1991 Nov 1992 Nov 1993 Nov 1994 Nov 1995
==============================================================================================================
<S> <C> <C> <C> <C> <C> <C>
BASSETT FURNITURE INDS 100 115.69 187.02 211.24 190.47 155.17
S&P 500 INDEX 100 120.34 142.57 156.97 158.61 217.27
PEER GROUP 100 132.62 177.07 233.11 168.29 208.84
</TABLE>
PEER GROUP POPULATION
AMERIWOOD INDS INTL CP
BASSETT FURNITURE INDS
BUSH INDUSTRIES -CL A
DMI FURNITURE INC
LA-Z-BOY CHAIR CO
LADD FURNITURE INC
MASCO CORP
PULASKI FURNITURE CORP
ROWE FURNITURE CORP
9
<PAGE> 12
EXECUTIVE COMPENSATION
The table below shows the compensation paid or accrued by the Company
for the three fiscal years ended November 30, 1995, to or for the account of
the Chief Executive Officer and the Company's four other most highly
compensated officers whose total annual salary and bonus exceeded $100,000 for
the 1995 fiscal year (collectively, the named Executive Officers).
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- -------------
NAME AND OTHER ANNUAL STOCK OPTION ALL OTHER
PRINCIPAL FISCAL SALARY BONUS COMPENSATION AWARDS COMPENSATION
POSITION YEAR ($)(1) ($)(2) ($)(3) (#SH) ($)(4)
---------- ------ -------- --------- ------------- --------- --------------
<S> <C> <C> <C> <C> <C> <C>
Robert H. Spilman 1995 450,000 225,000 --- 0 9,919
Chairman of the 1994 450,000 225,000 --- 7,500 10,626
Board and Chief 1993 400,000 200,000 --- 25,000 6,834
Executive Officer
Glenn A. Hunsucker 1995 240,000 130,000 --- 0 9,919
President and Chief 1994 230,000 130,000 --- 5,000 10,626
Operating Officer 1993 200,000 120,000 --- 18,750 10,343
J. C. Philpott 1995 119,000 65,000 --- 0 10,341
Executive Vice 1994 115,000 65,000 --- 2,000 10,436
President - Manu- 1993 110,000 62,500 --- 6,250 9,585
facturing
B. M. Brammer 1995 110,000 70,000 --- 0 10,220
Executive Vice 1994 100,000 70,000 --- 2,000 10,286
President - Finance 1993 97,000 67,500 --- 6,250 9,320
and Treasurer
Robert H. Spilman, Jr. 1995 125,000 45,000 --- 0 5,865
Executive Vice 1994 100,000 40,000 --- 2,000 4,543
President - 1993 85,000 30,000 --- 6,250 2,645
Marketing and
Merchandising
- ----------------
</TABLE>
(1) The salaries shown above include deferred compensation for each named
Executive Officer under the Section 401(k) qualified, defined
contribution Employee Savings/Retirement Plan.
(2) Under the Company's incentive bonus program, executives are paid cash
awards which are directly related to their performance and contribution
to the attainment of Company objectives and individual goals. Awards are
made annually following the completion of the fiscal year.
(3) No named Executive Officer has received personal benefits during the
listed years in excess of the lesser of $50,000 or 10% of annual salary.
(4) Company matching contributions under the Company's Employee
Savings/Retirement Plan.
10
<PAGE> 13
The table below shows, on an aggregated basis, each exercise of stock
options or SARs during the fiscal year ended November 30, 1995 by the Chief
Executive Officer and each named Executive Officer and the 1995 fiscal year-end
value of unexercised in-the-money options and SARs.
AGGREGATED OPTION/SAR EXERCISES IN THE 1995 FISCAL YEAR
AND FY-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
OPTIONS/SARS AT IN-THE-MONEY OPTIONS/SARS
FY-END (#SH)(1) AT FY-END ($)(1)(2)
SHARES ACQUIRED EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE (#SH) VALUE REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------------- ------------------ -------------- -------------
<S> <C> <C> <C> <C>
Robert H. Spilman 0 0 23,225/30,704 0/0
Glenn A. Hunsucker 0 0 12,142/20,537 0/0
J. C. Philpott 0 0 7,091/4,909 0/0
B. M. Brammer 0 0 6,020/4,909 0/0
Robert H. Spilman, Jr. 0 0 7,805/4,909 0/0
- -------------------
</TABLE>
(1) No SARs were exercised in 1995 and there were no SARs outstanding at the
1995 fiscal year end.
(2) The exercise price for unexercised options is $26.25 per share for 1994
grants, $37.40 per share for 1993 grants and $28 per share for 1992
grants.
SUPPLEMENTAL RETIREMENT INCOME PLAN
The Company has a Supplemental Retirement Income Plan (the Supplemental
Plan) that covers certain senior executives to promote their long service and
dedication and to provide an additional retirement benefit. Upon retirement,
the Supplemental Plan provides for lifetime monthly payments in an amount equal
to 65% of the Participant's final average compensation under the Supplemental
Plan, which amount is reduced by (i) 50% of old age social security benefits,
(ii) the benefit that would be payable on a life annuity basis from Company
contributions to the Employee Savings/Retirement Supplemental Plan based on a
formula using maximum employee contributions, and (iii) the benefit that would
be payable on a life annuity basis from funds the Company contributed to a
Defined Benefit Plan that was terminated in 1977. There is no provision under
the Supplemental Plan for a disability benefit if a participant's employment is
terminated prior to age 65 due to disability; however, the participant,
notwithstanding the termination of employment, shall continue to be covered by
the Supplemental Plan. The death benefit is divided into (a) prior to
retirement death, which pays the beneficiary 50% of final average compensation
for a period of 120 months, and (b) post retirement death, which pays the
beneficiary 200% of final average compensation in a single payment. There are
no benefits payable as a result of a termination of employment for any reason
other than death or retirement. The Supplemental Plan contains a change of
control provision which provides for the immediate vesting and payment of the
retirement benefit under the Supplemental Plan in the event of an employment
termination resulting from a change of control. The Supplemental Plan is an
unfunded liability of the Company which is credited with an interest rate
representative of the Company's interest rate used in its major financial
transactions and fluctuates with the market. The executives covered under
this Supplemental Plan have waived participation in the Company's Group Life
Insurance Program.
Assuming no change in the rate of compensation after November 30, 1995,
the estimated annual net benefit payable on retirement at age 65 (at a later
assumed age for Mr. Spilman) for the named
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<PAGE> 14
Executive Officers was as follows: Robert H. Spilman $283,005, Glenn A.
Hunsucker $156,416, J. C. Philpott $67,994 and B. M. Brammer $60,529. Inasmuch
as the estimated annual net benefit is based on the assumption of no change in
the rate of compensation after November 30, 1995, it is projected that the net
benefit payable to Robert H. Spilman, Jr. will be covered by the benefits
calculated (using the aforementioned formula) to be payable from Company
contributions to the Employee Savings/Retirement Plan.
DIRECTOR COMPENSATION
Directors who are also employees of the Company or its subsidiaries
receive no additional compensation for serving as directors. Directors who are
not employees of the Company or its subsidiaries receive an annual retainer fee
of $15,000, plus a fee of $500 for each Board and for each Committee meeting
attended.
Under the Company's 1993 Stock Plan for Non-Employee Directors (the
Director Plan), Directors who are not regular employees of the Company are each
automatically granted an option to purchase 500 shares of Common Stock on April
1 of each year, subject to adjustment in the event of stock dividends and
splits, recapitalizations and similar transactions. On April 1, 1995, nine
Directors were each granted an option to purchase 500 shares of Common Stock at
an exercise price of $26.50 per share.
An option granted under the Director Plan is not exercisable unless the
optionee remains available to serve as a Director of the Company for six months
after the date of grant. An optionee's rights under all outstanding options
will terminate three months after his termination as a Director, unless the
termination is because of death or disability, in which case the options will
be exercisable for one year after such termination. Unless earlier terminated,
all options granted under the Director Plan expire ten years from the date of
grant.
In addition, the Director Plan provides that eligible Directors of the
Company may make an annual irrevocable election to receive up to 100% of their
annual retainer fee in the form of a stock award. The total number of shares
subject to a stock award will be determined based on the fair market value of
the Common Stock on the date the award is made. The Director may specify the
percentage of the Director's annual retainer fee subject to the election, and
the percentage of and the dates on which the shares covered by the stock award
are to be issued. In the event a Director ceases to be a member of the Board
of Directors for any reason, the total number of shares subject to the award
which have not yet been issued to the Director will be issued to the Director
within one year of his termination as a Director.
The Company also has established a planned gift program for directors
funded by life insurance policies on directors as part of its overall program
to promote charitable giving. Upon the death of a Director, the Company will
donate $500,000 to one or more qualifying charitable organizations recommended
by the individual director and subsequently be reimbursed by life insurance
proceeds. Individual directors derive no financial benefit from this program
since all charitable deductions accrue solely to the Company. The program does
not result in any material cost to the Company.
COMPLIANCE WITH SECTION 16(A) OF SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 (the Exchange Act)
requires the Company's Directors and executive officers and persons who own
more than 10% of the Company's Common Stock to file with the Securities and
Exchange Commission initial reports of ownership and reports of changes in
ownership of the Common Stock and other equity securities. Executive officers,
Directors and greater than 10% stockholders are required to furnish the Company
with copies of all
12
<PAGE> 15
such reports they file. To the Company's knowledge, based solely on a review
of the copies of such reports furnished to the Company and written
representations that no other reports were required, during the fiscal year
ended November 30, 1995, all Section 16(a) filing requirements applicable to its
executive officers, Directors and greater than 10% beneficial stockholders were
complied with.
RATIFICATION OF SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of the Audit Committee, the Board of Directors
has approved the selection of KPMG Peat Marwick as independent public
accountants to audit the financial statements of the Company for the fiscal
year ending November 30, 1996. This selection is being presented to the
stockholders for their ratification at the Annual Meeting of Stockholders. The
firm of KPMG Peat Marwick has audited the Company's financial statements
annually since 1990 and is considered well qualified.
Representatives of KPMG Peat Marwick are expected to be present at the
Annual Meeting of Stockholders with an opportunity to make a statement if they
desire to do so, and they are expected to be available to respond to
appropriate questions.
The Board of Directors recommends a vote FOR the ratification of the
selection of KPMG Peat Marwick as independent public accountants to audit the
financial statements of the Company for the fiscal year ending November 30,
1996, and proxies solicited by the Board of Directors will be so voted unless
stockholders specify a different choice. If the stockholders do not ratify the
selection of KPMG Peat Marwick, the selection of independent public accountants
will be reconsidered by the Board of Directors.
STOCKHOLDER PROPOSALS
Any proposal that a stockholder intends to present for action at the 1997
Annual Meeting of Stockholders, currently scheduled for February 19, 1997, must
be received by the Company no later than September 12, 1996, in order for the
proposal to be included in the proxy statement and form of proxy for the 1997
Annual Meeting of Stockholders. The proposal should be sent to J. Stanley
Payne, Vice President, Secretary and General Counsel, Bassett Furniture
Industries, Incorporated, Post Office Box 626, Bassett, Virginia 24055.
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<PAGE> 16
APPENDIX A
PROXY BASSETT FURNITURE INDUSTRIES, INCORPORATED PROXY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING TO BE HELD FEBRUARY 21, 1996
The undersigned hereby appoints Glenn A. Hunsucker and B. M. Brammer, each
or either of them, proxies, with full power of substitution, with the powers
the undersigned would possess if personally present, to vote, as designated
below, all shares of the $5.00 par value Common Stock of the undersigned in
Bassett Furniture Industries, Incorporated at the Annual Meeting of
Stockholders to be held on February 21, 1996, and at any adjournment thereof.
THIS PROXY WILL BE VOTED AS SPECIFIED HEREIN AND, UNLESS OTHERWISE
DIRECTED, WILL BE VOTED FOR THE ELECTION OF ALL NOMINEES AS DIRECTORS AND FOR
THE SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS. The Board of Directors
recommends voting FOR on each item.
1. ELECTION OF DIRECTORS: Nominees are Peter W. Brown, M.D., Thomas E.
Capps, Alan T. Dickson, Paul Fulton, William H. Goodwin, Jr., Glenn A.
Hunsucker, James W. McGlothlin, Thomas W. Moss, Jr., Albert F. Sloan, John
W. Snow and Robert H. Spilman.
[ ] FOR all listed nominees (except do not vote for the nominee(s)
whose name(s) I have written below)
______________________________________________________________________
[ ] WITHHOLD AUTHORITY to vote for the listed nominees
2. RATIFICATION OF SELECTION OF KPMG PEAT MARWICK AS INDEPENDENT PUBLIC
ACCOUNTANTS
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(continued from other side)
3. In their discretion, the proxies are authorized to vote upon such other
business as may properly come before the meeting.
Receipt of Notice of Annual Meeting of Stockholders and accompanying Proxy
Statement is hereby acknowledged. PLEASE DATE AND SIGN EXACTLY AS PRINTED
BELOW AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE PAID ENVELOPE.
Dated: ________________, 1996.
______________________________
______________________________
(When signing as attorney,
executor, administrator,
trustee, guardian, etc.,
give title as such. If joint
account, each joint owner
should sign.)
