UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No. )

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HOOKER FURNISHINGS CORPORATION

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement if other than the Registrant)

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Hooker Furnishings Corporation

440 East Commonwealth Boulevard

Martinsville, Virginia 24112

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

To be held June 4, 2024

NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Hooker Furnishings Corporation (the “Company”) will be held at the Company’s Corporate Office at 440 East Commonwealth Boulevard, Martinsville, Virginia, on Tuesday, June 4, 2024, at 1:00 p.m., for the following purposes:

| ■ | To elect as directors the seven nominees named in the attached proxy statement to serve a one-year term on the Company’s Board of Directors;

| ■ | To approve the 2024 amendment and restatement of the Hooker Furnishings Corporation Stock Incentive Plan;

| ■ | To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 2, 2025;

| ■ | To cast an advisory vote to approve the compensation of the Company’s named executive officers, as disclosed in the attached proxy statement; and

| ■ | To transact such other business as may properly be brought before the meeting or any adjournment of the meeting.

The shareholders of record of the Company’s Common Stock at the close of business on April 8, 2024 are entitled to notice of and to vote at this Annual Meeting or any adjournment of the meeting.

Even if you plan to attend the meeting in person, we request that you mark, date, sign and return your proxy in the enclosed self-addressed envelope as soon as possible so that you may be certain that your shares are represented and voted at the meeting. Any proxy given by a shareholder may be revoked by that shareholder at any time before the voting of the proxy.

| By Order of the Board of Directors,
| C. Earl Armstrong III
| Secretary

May 3, 2024

Important Notice Regarding the Availability of Proxy Materials for the
Annual Meeting of Shareholders to be Held on June 4, 2024

The proxy statement and annual report to shareholders are available at: http://www.astproxyportal.com/ast/25490

Hooker Furnishings Corporation

440 East Commonwealth Boulevard

Martinsville, Virginia 24112

PROXY STATEMENT

ANNUAL MEETING OF SHAREHOLDERS

June 4, 2024

The enclosed proxy is solicited by and on behalf of the Board of Directors (the “Board”) of Hooker Furnishings Corporation (the “Company”) for use at the Annual Meeting of Shareholders to be held on Tuesday, June 4, 2024, at 1:00 p.m., at the Company’s Corporate Office at 440 East Commonwealth Boulevard, Martinsville, Virginia, 24112 and any adjournment of the meeting. The matters to be considered and acted upon at the meeting are described in the notice of the meeting and this proxy statement. This proxy statement and the related form of proxy are being mailed on or about May 3, 2024 to all holders of record on April 8, 2024 of the Company’s common stock, no par value (the “Common Stock”). Shares of the Common Stock represented in person or by proxy will be voted as described in this proxy statement or as otherwise specified by the shareholder. Any proxy given by a shareholder may be revoked by that shareholder at any time before the voting of the proxy by:

| ■ | delivering a written notice to the Secretary of the Company;

| ■ | executing and delivering a later-dated proxy; or

| ■ | attending the meeting and voting in person.

The cost of preparing, assembling, and mailing the proxy, this proxy statement, and any other material enclosed, and all clerical and other expenses of solicitations will be borne by the Company. In addition to the solicitation of proxies by use of the mail, directors, officers, and employees of the Company may solicit proxies by telephone or personal interview. These people will receive no additional compensation for these services but will be reimbursed for any expenses incurred by them in connection with these services. The Company also will request brokerage houses and other custodians, nominees, and fiduciaries to forward soliciting material to the beneficial owners of Common Stock held of record by those parties and will reimburse those parties for their expenses in forwarding soliciting material.

Voting Rights

On April 8, 2024, the record date for the Annual Meeting, there were 10,691,020 shares of Common Stock outstanding and entitled to vote. Each share of Common Stock entitles the holder of that share to one vote on each matter presented.

Voting Procedures

Votes will be tabulated by one or more Inspectors of Elections. A majority of the total votes entitled to be cast on matters to be considered at the Annual Meeting constitutes a quorum. Once a share is represented for any purpose at the Annual Meeting, it is deemed to be present for quorum purposes for the remainder of the meeting. Abstentions and shares held of record by a broker or its nominee (“broker shares”) that are voted on any matter are included in determining the number of votes present or represented at the Annual Meeting. However, broker shares that are not voted on any matter at the Annual Meeting will not be included in determining whether a quorum is present at the meeting.

In the election of directors, the seven nominees receiving the greatest number of votes cast in the election of directors will be elected. Votes that are withheld and broker shares that are not voted in the election of directors are not considered votes cast on the election of directors and, therefore, will have no effect on the election of directors.

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Actions on all other matters to come before the meeting, including approval of the amendment and restatement of the stock incentive plan, ratification of the selection of the Company’s independent registered public accounting firm and the advisory vote on executive compensation will be approved if the votes cast in favor of the action exceed the votes cast against it. Abstentions and broker shares that are not voted on a matter are not considered cast either for or against that matter and, therefore, will have no effect on the outcome of that matter.

The shares represented by proxies will be voted as specified by the shareholder. If the shareholder does not specify their choice, the shares will be voted:

| ■ | “FOR” the election of the seven director nominees listed on the proxy card;

| ■ | “FOR” the approval of the 2024 Amendment and Restatement of the Hooker Furnishings Corporation Stock Incentive Plan;

| ■ | “FOR” the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 2, 2025;

| ■ | “FOR” the approval, on an advisory basis, of the compensation of certain of the Company’s named executive officers as disclosed in this proxy statement; and

| ■ | In the discretion of the persons named in the proxies upon any other matter(s) that may properly come before the meeting or any adjournment of the meeting.

PROPOSAL ONE

ELECTION OF DIRECTORS

The Company proposes the election of W. Christopher Beeler, Jr., Maria C. Duey, Paulette Garafalo, Christopher L. Henson, Jeremy R. Hoff, Tonya H. Jackson, and Ellen C. Taaffe to hold office until the next Annual Meeting of Shareholders is held and their successors are elected. Each director nominee has consented to being named as a nominee for election at the Annual Meeting. The Board of Directors of the Company presently consists of these seven directors whose terms expire at the time of the 2024 Annual Meeting upon election of their successors.

The shares represented by proxies will be voted as specified by the shareholder. If the shareholder returns a properly executed proxy card but does not specify their choice, the shares will be voted in favor of the election of the nominees listed on the proxy card. If any nominee should not continue to be available for election, the shares represented by those proxies will be voted for the election of such other person as the Board of Directors may recommend. As of the date of this proxy statement, the Board of Directors has no reason to believe that any of the nominees named below will be unable or unwilling to serve.

Board Matrix

The matrix below summarizes as of the date of this proxy statement certain of the key experiences, qualifications, skills, and attributes that the directors proposed for election bring to the Board to enable effective oversight. This matrix is intended to provide a summary of the directors’ qualifications and is not a complete list of each director’s strengths or contributions to the Board. Additional details on each director’s experiences, qualifications, skills, and attributes are set forth in their biographies that follow. In addition, none of the directors self-identified LGBTQ+ status or any additional racial or ethnic demographic background other than the backgrounds shown in the matrix below.

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Board Matrix For Directors Proposed for Election
| Beeler | Duey | Garafalo | Henson | Hoff | Jackson | Taaffe
Knowledge, Skills and Experience |  |  |  |  |  |  |
Industry Experience | Manufacturing | Home Durables | Fashion/ Apparel/ Retail | Finance | Home Durables | Technology / Manufacturing | Home Durables
Public Company Executive Experience |  | ● | ● | ● | ● | ● | ●
Corporate Governance | ● | ● | ● | ● | ● | ● | ●
Finance/Accounting | ● | ● |  | ● |  |  |
Marketing / Product Development |  |  | ● |  | ● |  | ●
Mergers and Acquisitions | ● | ● |  | ● | ● |  | ●
Manufacturing / Operations | ● |  | ● |  |  | ● |
Retail / Consumer |  |  | ● | ● | ● |  | ●
Supply Chain |  |  |  |  |  | ● |
Risk Management |  |  | ● | ● |  | ● |
Strategic Planning | ● | ● | ● | ● | ● | ● | ●
Technology / Digital / Cybersecurity |  |  |  |  |  | ● |
Demographics * |  |  |  |  |  |  |
Race/Ethnicity |  |  |  |  |  |  |
African American |  |  |  |  |  | ● |
White / Caucasian | ● | ● | ● | ● | ● |  | ●
Gender |  |  |  |  |  |  |
Female |  | ● | ● |  |  | ● | ●
Male | ● |  |  | ● | ● |  |
Board Tenure |  |  |  |  |  |  |
1 - 5 years |  | ● |  | ● | ● |  |
6 - 10 years |  |  | ● |  |  | ● | ●
> 10 years | ● |  |  |  |  |  |

* The Demographic disclosures are based on self-identified reporting by each director.

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W. Christopher Beeler, Jr., 72, has been board chair since June 2023, a director since 1993 and served as lead director from 2011 until June 2016. He was a director since 1986 of Virginia Mirror Company, Inc. and Virginia Glass Products Corporation, both of which manufacture and fabricate architectural glass products, and was Chairman of both from 2000 until their sale in late 2022. He also served as President of those companies from 1988 until August 2011 and as CEO of those companies from 1997 until August 2011. In addition, he served on the board of directors and as a member of the audit committee of BB&T of Virginia (a wholly owned subsidiary of Truist Financial Corporation, formerly BB&T Corporation) from 1999-2006 and is a certified public accountant licensed in the Commonwealth of Virginia. Mr. Beeler currently serves as the board chair and a member of the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee. Mr. Beeler served as chair of the Audit Committee from 2000 until 2005 and from 2016 until 2023 and chair of the Nominating and Corporate Governance Committee from 2006 until 2011 and lead director from 2011 until 2016. Mr. Beeler’s executive experience, which encompasses traditional corporate management functions such as accounting, treasury and cash management, sales, information technology, manufacturing, distribution, and human resources, including his financial oversight responsibilities, which complement Mr. Hoff’s experience, as well as short-range and long-range planning well qualifies him to serve as a director and the board chair.

Maria C. Duey, 61, joined the board in March 2021. Since 2018, Ms. Duey has served as Chief Executive Officer of Leonine Advisory and Support Services, a consulting firm specializing in strategic planning and mergers and acquisitions serving private equity firms, family offices and small businesses. From 2015-2017, Ms. Duey served as Vice-President of Corporate Development and Investor Relations at Horizon Global, a manufacturer of towing and trailering products serving the automotive aftermarket, retail and original equipment (OE) channels. From 1996-2014, she was employed by Masco Corporation, one of the leading manufacturers of branded home improvement and building products, serving as Vice-President-Investor Relations and Corporate Communications from 2005-2014. Ms. Duey serves as chair of the Compensation Committee and a member of the Nominating and Corporate Governance Committee and the Audit Committee. In 2023, Ms. Duey was named a Certified Corporate Director with the National Association of Corporate Directors. The knowledge and experience that Ms. Duey has in the areas of mergers and acquisitions, strategic planning, investor relations and corporate communications, as well as her executive experience, well qualifies her to serve as a director.

Paulette Garafalo, 67, has been director since 2017. She has been Executive Chairman of Paul Stuart, a men’s and women’s classic apparel retailer and wholly owned subsidiary of Mitsui, Inc., since July 2022. She served as Chief Executive Officer and President of Paul Stuart from 2016 to July 2022. She served as President of Brooks Brothers, a men’s and women’s apparel retailer, from 2010 to 2016. Ms. Garafalo serves as a member of the Compensation Committee, the Nominating and Corporate Governance Committee and the Audit Committee and served as Compensation Committee Chair from 2017 until 2023. Ms. Garafalo’s executive experience, which encompasses traditional corporate management functions, and her extensive experience in retail and luxury consumer brands well qualifies her to serve as a director. The knowledge and experience Ms. Garafalo has gained as CEO of Paul Stuart further broadens her experience and qualifications to serve as a director.

Christopher L. Henson, 62, joined the board in October 2022. Mr. Henson served as the Head of Banking and Insurance of Truist Bank from 2019 until his retirement in September 2021. He joined Truist Financial Corporation’s predecessor BB&T’s executive management team in 2004 and served various executive positions including City Executive, Regional President, State President, Chief Financial Officer, and Chief Operating Officer before being promoted to President and Chief Operating Officer from 2016 to 2019. He also serves as Chair of the Board of Trustees of High Point University. Mr. Henson serves as chair of the Audit Committee and a member of the Compensation Committee and the Nominating and Corporate Governance Committee. Mr. Henson’s extensive knowledge of finance and banking as well as experience in a wide variety of leadership roles well qualify him to serve as a director.

Jeremy R. Hoff, 50, has been a director and Chief Executive Officer since February 1, 2021. He was President of Hooker Legacy Brands from February 2020 through January 2021 and served as President of the Hooker Branded Segment from April 2018 to January 2020. Mr. Hoff joined the Company in August of 2017 as President of Hooker Upholstery. Prior to that, Mr. Hoff served as President of Theodore Alexander USA from December 2015 to August 2017 and Senior Vice President of sales at A.R.T. Furniture Inc. from April 2015 to November 2015 and Vice-President of Sales from March 2011 to April 2015. Mr. Hoff’s role as the Chief Executive Officer as well as his extensive background in the furnishings industry, including his various former positions at the Company, well qualifies him to serve as a director.

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Tonya H. Jackson, 60, has been a director since 2017. She has served as Senior Vice President and Chief People Officer for Lexmark, a global imaging and IoT solutions provider since 2023. In this role, she is responsible for talent acquisition and development, strategic internal communications, compensation and benefits, workforce analytics, and diversity, equity and inclusion. She served as Senior Vice President and Chief Product Delivery Officer for Lexmark from 2020 - 2023. She served as Senior Vice President and Chief Supply Chain Officer from 2016 until 2020, Vice-President of Supply Chain Operations at Lexmark from 2015 until 2016 and Vice President of Worldwide Supplies Operations from 2013 until 2015. Ms. Jackson serves as a member of the Compensation Committee and Audit Committee and is Chair of the Nominating and Governance Committee. In 2021, Ms. Jackson was named a Certified Corporate Director with the National Association of Corporate Directors (NACD). In 2022, Ms. Jackson earned the CERT Certificate in Cybersecurity Oversight from Carnegie Mellon University. Ms. Jackson’s senior executive experience at a large, global corporation and her extensive experience in operations and supply chain management well qualifies her to serve as a director.

Ellen C. Taaffe, 62, has been a director since July 2015. Ms. Taaffe serves as a member of the Nominating and Corporate Governance, Audit, and Compensation Committees. Ms. Taaffe served as chair of the Nominating and Corporate Governance Committee from 2017 until 2023. She currently is a Clinical Professor of Management and Organizations at Northwestern University's Kellogg School of Management, where she is also Director of the Women's Leadership Program since 2016. She has been a Consultant, Speaker, and Executive Leadership Coach since 2015 and was President of Ravel, formerly Smith-Dahmer Associates LLC, a brand and product strategy consulting firm from 2010-2015. Prior to that, Ms. Taaffe was a senior brand management executive at the Whirlpool Corporation, Royal Caribbean Cruises Ltd., and PepsiCo. She has served on the board of directors of John B. Sanfilippo & Son Inc., a Chicago- based baking and snack nut, and snack bars processor, distributor, and marketer, since 2011 where she is Lead Director, Chair of the Compensation and Human Resources Committee, and a member of the Audit and Nominating and Governance Committees. In 2021, Ms. Taaffe was named a Certified Corporate Director with the NACD. In 2023, her book, The Mirrored Door: Break Through the Hidden Barriers that Lock Successful Women in Place won the NYC Big Book Award. Her executive experience at various public companies, her current governance leadership of a public-company board of directors and expertise in and knowledge of go to market strategies and traditional and marketing best practices in high-ticket consumer durables, well qualifies her to serve as a director of the Company.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR EACH OF THESE NOMINEES.

CORPORATE GOVERNANCE

The Board of Directors is currently comprised of:

| ■ | the Independent Chair of the Board of Directors;

| ■ | the Company’s Chief Executive Officer;

| ■ | five other independent directors, as determined by the Board of Directors upon the recommendation of the Nominating and Corporate Governance Committee; and

| ■ | a Nominating and Corporate Governance Committee, a Compensation Committee, and an Audit Committee.

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The following table shows the Company’s current Board of Directors composition. Mr. Hoff, the Company’s Chief Executive Officer, does not serve on any of the Committees.

Current Composition of the Board of Directors
| Beeler | Duey | Garafalo | Henson | Jackson | Taaffe
Independent Director | Independent Board Chair | ● | ● | ● | ● | ●
Audit Committee | ● | ● | ● | Chair | ● | ●
Compensation Committee | ● | Chair | ● | ● | ● | ●
NCG Committee | ● | ● | ● | ● | Chair | ●

The Board believes that this leadership structure provides an effective balance between the Board Chair, independent directors and the Chief Executive Officer. Consequently, the Board of Directors believes the current leadership structure is in the best interests of the Company and its shareholders.

The Board of Directors typically holds five to six meetings per year. In the fiscal year beginning January 30, 2023 through January 28, 2024 (“fiscal 2024”), it held five meetings. During fiscal 2024, the Nominating and Corporate Governance Committee met five times and the Compensation Committee and the Audit Committee both met four times. Each incumbent director attended at least 75% of the fiscal 2024 Board meetings and committee meetings held during the period that they were a member of the Board and/or those committees. The Nominating and Corporate Governance Committee and the Board of Directors have each determined that each of the following directors is independent as defined by applicable NASDAQ listing standards: W. Christopher Beeler, Jr., Maria C. Duey, Paulette Garafalo, Christopher L, Henson, Tonya H. Jackson, and Ellen C. Taaffe. At each Board meeting the independent directors conduct a part of the meeting in executive session, at which only independent directors are present. It is the Company’s policy that each of the directors is expected to attend the Company’s Annual Meeting. All directors, who were directors on the date of last year’s annual meeting of shareholders, attended last year’s annual meeting of shareholders.

In 2011, the Board determined that it was in the best interests of the Company and its shareholders that all independent directors serve on all committees of the Board. The Board believed this “Committees of the Whole” approach was more efficient given its modest size, since all independent directors have input into committee actions and that the need for committees reporting at Board meetings would be greatly reduced. Mr. Hoff, the Company’s current Chief Executive Officer, does not serve on any Board Committees.

Corporate Governance Guidelines

The Board of Directors has adopted Corporate Governance Guidelines, which set forth its policies with respect to certain governance issues and, together with the Company’s articles and bylaws, provide a framework for the effective governance of the Company and are intended to support the Board in overseeing the business and affairs of the Company on behalf of the Company’s shareholders. A copy of the Corporate Governance Guidelines is available on the Company’s website at investors.hookerfurnishings.com.

Environmental, Corporate Social Responsibility and Governance (“ESG”) Initiatives

The Board of Directors has adopted a set of policies and practices addressing environmental stewardship, sustainability, corporate social responsibility, and ethics and governance that it believes create long-term value for shareholders, while investing in employees and communities and positively impacting the environment. The Board of Directors exercises oversight over these matters and discusses them at least quarterly with management. An ESG-focused employee committee called CARE (Community Action & Responsibility for the Environment) was formed to refine the Company’s ESG initiatives by reviewing current best practices, shareholder expectations and regulatory developments. An employee-led diversity council AIDE (Advancement of Inclusion, Diversity, and Equity) consisting of a diverse group of employees from all areas of the Company was formed with the mission to foster an inclusive workplace for all employees. These committees meet at least monthly and updates the Board at least quarterly on those initiatives throughout the Company. The following summarizes the efforts the Company has accomplished through fiscal 2024:

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| ■ | Environment: The Company has put in place several initiatives focused on promoting sustainability and preserving natural resources.

| o | The Company has completed a corporate-wide inventory of 2022 to 2023 Greenhouse Gas Emissions (GHG). Third-party verification of GHG data is in process and on target to be completed in calendar 2024. The Company is in the process of establishing a functional baseline to be able to measure whether future improvement initiatives reduce its carbon footprint. Going forward, each material facility will have its carbon footprint measured annually.

| o | Since 2021, the Company has started projects to reduce carbon footprint by investment in renewable energy and investment in projects to reduce energy consumption.

| ■ | The Company has purchased renewable energy from solar farms for several domestic manufacturing facilities since 2022. Sunset West is operating on 100% renewable resources; HF Custom (formerly Sam Moore) is operating on 50% renewable energy with a plan expected to achieve 100% in calendar 2024; and the Savannah distribution center is operating on 30% renewable energy. All remaining facilities are expected to participate in renewable energy programs by the end of calendar 2024.

| ■ | The multi-year project of switching to LED lighting in the manufacturing facilities and distribution centers resulted in an electrical usage reduction of 20% to 30% in the year 2021 and 2022. The Company was recognized as Appalachian Power’s 2023 Top Performer for energy efficiency in the Martinsville, Virginia area. The project is expected to be completed by 2025.

| o | The Company continued to partner with the Arbor Day Foundation, the Sustainable Furnishings Council, and the Eco Ambassador Council for their commitment to environmental responsibility and sustainability, including financial assistance, educating employees on the necessity of preserving and replenishing resources, and supporting various projects within the Dan River Basin area.

| ■ | People: The Company recognizes that its business is stronger and more successful if supported by a diverse workforce. Its goal is to maintain and promote diversity among its employees and foster an inclusive environment where differences are celebrated. The Company strives to provide a productive workplace that promotes the health and safety of all employees and one that is free from all forms of harassment, discrimination, and inequality. Along those lines, the Company:

| o | carefully evaluates the overall compensation and benefits packages regularly to ensure the economic security and safety of its employees, including;

| ■ | compensating employees competitively relative to the industry and local labor markets, and in accordance with all applicable federal, state, and local wage, work hour, overtime, and benefits laws; and

| ■ | providing affordable and comprehensive health benefits to employees focused on financial, emotional, and physical health and well-being, including a standardized process of reporting worker’s compensation claims which it believes promotes health and safety of its employees.

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| o | has maintained standardized safety procedures at all locations and established safety committees that consist of management and employee representatives, with tasks of identifying and reporting hazards and unsafe work practices, removing obstacles to accident prevention, and minimize the risks of accidents, injury and impacts on health. The Company’s current Total Recordable Incident Rate is 4.2 per 100 employees with zero fatalities. The Company is committed to implementing and improving safety measures to achieve a safe, healthy, secure, and productive workplace.

| o | is committed to employees’ professional success and growth by providing an average 28 hours of training per employee per year including on-the-job coaching, formal training sessions, and online learning resources. The Company also provides continuing education opportunities, comprehensive leadership development programs, and renewable tuition reimbursement program to children and spouses of all employees, excluding family members of current and former executive officers and board directors of the Company.

| o | is committed to creating a diverse, equitable, and inclusive space for all employees.

| ■ | the Company has partnered with Centro Latino, Bedford Adult Education Center, Veteran Centric Organizations, and Historically Black Colleges or Universities (HBCU) Partnerships to improve recruitment and retention of a diverse workforce. In 2023, the Company’s demographic composition of U.S.-based employees included 65% White, 16% Black or African American, 15% Hispanic or Latino, and other racial groups.

| ■ | in 2023, more than 40% of executive and senior level employees were female, demonstrating the Company's commitment to gender diversity. Earlier in 2023, the Company was selected by Furniture Today, a leading information source of the furniture industry, as one of the advocates for women’s empowerment in the home furnishings industry and presented with the Furniture Today “Empowering Women Award.”

| ■ | Corporate Social Responsibility:

| o | The Company maintains a Code of Business Conduct and Ethics. All employees are required to sign off on the Code at hiring and reaffirm their understanding and compliance with the Code, as well as anti-corruption and anti-bribery training on an annual basis. 100% of the Company’s current international suppliers signed the Vendor Code of Conduct. In 2024, the Company has launched the effort to have domestic suppliers to sign a Vendor Code of Conduct. The Company has also started periodic audits of its international vendors to ensure compliance and produce a scorecard that can be used in future purchasing decisions based upon their performance.

| o | The Company has a long history of direct charitable giving or gifts-in-kind regularly supports organizations in the areas of health and welfare, social equity and justice, environment, education and arts, and animal welfare. In fiscal year 2024, the Company contributed $1.5 million in monetary and in-kind donations. The Company conducts annual summer furniture sale and donates the proceeds to local organizations. In 2023, the Company raised over $100,000 and donated all proceeds to ten charities in Virginia, North Carolina and California. The Company does not use its funds for political purposes.

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| o | The Hooker Furniture division continued to partner with Susan G. Komen for the Cure, one of the leading breast cancer organizations in the world, on a licensed collection of accent furniture designed to raise funds and promote breast cancer awareness. A portion of the proceeds from each piece sold within the Susan G. Komen Collection will be donated to the organization.

Contacting the Board of Directors

Shareholders and other interested parties who desire to contact the Company’s Board of Directors or any individual director may do so by writing to: Board of Directors, c/o C. Earl Armstrong III, Secretary, Hooker Furnishings Corporation, P.O. Box 4708, Martinsville, VA 24115. The Board has instructed the Secretary to promptly forward all such communication to the specified address thereof.

Shareholders and other interested parties also may direct communications solely to the independent directors of the Company, as a group, by addressing such communications to the Independent Directors, c/o Secretary, at the address set forth above.

In addition, the Board of Directors maintains special procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters, and for the submission by employees of the Company, on a confidential and anonymous basis, of concerns regarding questionable accounting or auditing matters. Such communications may be made by writing to the Audit Committee of the Board of Directors, c/o Secretary, at the address set forth above. Any such communication marked “confidential” will be forwarded by the Secretary, unopened, to the Chair of the Audit Committee.

Nominating and Corporate Governance Committee

The Nominating and Corporate Governance Committee consists of all the Board’s independent directors. Ms. Jackson currently serves as its Chair. The Committee:

| ■ | identifies, evaluates, investigates and recommends prospective director candidates;

| ■ | assists the Board with respect to corporate governance matters applicable to the Company;

| ■ | evaluates and makes recommendations to the Board regarding the size and composition of the Board and makes recommendations about the chairs of all standing Board committees;

| ■ | develops and recommends criteria for the selection of individuals to be considered as candidates for election to the Board; and

| ■ | assists the Board in senior management succession planning.

The Board of Directors has adopted a written charter for the Nominating and Corporate Governance Committee, a current copy of which is available on the Company’s website at investors.hookerfurnishings.com. The Board of Directors has determined that each member of the Committee is independent as defined by applicable NASDAQ listing standards.

Candidates for director nominees will be assessed in the context of the current composition of the Board, the operating requirements of the Company and the long-term interests of shareholders. The Committee has not established a set of specific, minimum qualifications for director candidates, but in conducting its assessment, the Committee will consider such factors as it deems appropriate given the current needs of the Board and the Company. In general, the Committee seeks candidates who:

| ■ | possess a reputation for adhering to the highest ethical standards and have demonstrated competence, integrity and respect for others;

| ■ | have demonstrated excellence in leadership, judgment and character;

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| ■ | have diverse business backgrounds, with a wide range of relevant education, skills and professional experience that will complement and enhance the Company’s business and strategy; and

| ■ | have the time to devote to Board and Committee service and are free of potential conflicts of interest.

While the Board has no formal policy regarding diversity, the Committee considers the diversity of the Board when identifying nominees for director. Such diversity may include a variety of different personal, business and professional experiences, as well as a variety of opinions, perspectives, backgrounds and other characteristics.

In the case of incumbent directors, the Committee reviews each director’s overall service to the Company during their term as director and whether their skills are still relevant to the needs of the Board in deciding whether to re-nominate the director. The Committee also considers future Board needs considering the mandatory retirement age for outside directors of 75.

The Board does not believe that it is appropriate or necessary to limit the number of terms a director may serve. However, any outside director must retire upon reaching the age of 75, with such retirement being effective and occurring upon the completion of the term in which the director turns 75.

The Committee also facilitates the Board’s annual self-assessment.

Procedures for Shareholder Recommendations of Director Nominees

The Committee will consider a director candidate recommended by a shareholder of record for election at the 2025 Annual Meeting if, in addition to meeting other applicable requirements, the shareholder submits a notice of the recommendation in writing to the Secretary of the Company in accordance with the procedures for the nomination of directors in the Company’s bylaws (including Article III, Section 3 of the bylaws) and it is received at the Company’s principal executive offices on or before January 3, 2025. The notice must include the candidate’s name and address and a description of the candidate’s qualifications for serving as a director and contain the information conforming to the requirements outlined in our bylaws (including Article III, Section 3 of the bylaws).

The Nominating and Corporate Governance Committee may refuse to consider the recommendation of any person not made in compliance with this procedure.

Compensation Committee

The Compensation Committee consists of all the Board’s independent directors. Ms. Duey currently serves as its Chair. The Committee reviews and makes determinations regarding the compensation for the Chief Executive Officer and the Company’s other executive officers. The Committee is also responsible for recommending director compensation to the Board of Directors. The Committee annually reviews Board compensation of the Company’s peer group and periodically engages outside consultants to independently assess Board compensation.

The Board of Directors has determined that each member of the Compensation Committee is independent as defined by applicable NASDAQ listing standards.

The Board of Directors has adopted a written charter for the Compensation Committee, a current copy of which is available on the Company’s website at investors.hookerfurnishings.com. The charter delegates to the Committee specific responsibilities for establishing, reviewing, approving, monitoring, and administering executive compensation. In addition, the charter requires that each member of the Compensation Committee be a “non-employee director” under Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that each Committee member meet applicable NASDAQ director independence requirements. The Report of the Compensation Committee can be found on page 17. Under the terms of its charter, the Compensation Committee may delegate any of its duties or responsibilities to subcommittees of the Compensation Committee. In addition, the Compensation Committee may delegate certain administrative responsibilities relating to the Company’s 2020 Stock Incentive Plan (“Stock Incentive Plan”) to Company officers.

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The Compensation Committee has the authority, without any further approval from the Board, to retain advisers, as it deems appropriate, including compensation consultants. In retaining an adviser, the Compensation Committee has sole authority to approve the adviser’s fees and other retention terms and has the sole authority to terminate the adviser.

The Compensation Committee has directly engaged Pearl Meyer & Partners, LLC (“Pearl Meyer”) as its external compensation consultant. Pearl Meyer reports to and receives direction directly from the Committee, and a representative of Pearl Meyer is available to attend meetings of the Compensation Committee as its adviser when requested. Most recently in February 2024, Pearl Meyer assisted the Committee with design changes to the short-term and long-term incentive plans, which will be effective for fiscal year 2025, and provided the Compensation Committee with third-party survey information for use in setting Board compensation as well as short and long-term compensation levels for the Chief Executive Officer and the Company’s other named executives, perspective on emerging compensation issues and trends, and expertise in incentive compensation structure, terms, and design.

In considering whether to engage Pearl Meyer as the Compensation Committee’s compensation adviser, the Compensation Committee evaluates its independence from Company management and whether there are any conflicts of interest. In fiscal 2024, the Compensation Committee evaluated the fees paid by the Company to Pearl Meyer and its policies and procedures to prevent conflicts of interest, and its confirmation that there is no business or personal relationship with a member of the Compensation Committee, it does not own any stock of the Company, and there is no business or personal relationship with any executive officer of the Company. The Compensation Committee concluded that Pearl Meyer was independent of the Compensation Committee and of Company management and had no conflicts of interest in the performance of services to the Committee.

The Compensation Committee typically meets five to six times each year. During the 2024 fiscal year, it met four times. The Compensation Committee invites the executive officers to attend meetings when the Compensation Committee considers their input relevant or necessary for evaluating compensation proposals. A portion of each meeting is generally held in executive session, as the Compensation Committee deems appropriate. All Compensation Committee decisions and votes are conducted in executive session. Management does not attend these executive sessions. The Compensation Committee annually reviews the Chief Executive Officer’s compensation.

The Chief Executive Officer makes recommendations to the Compensation Committee concerning compensation for the other executive officers of the Company. Decisions regarding compensation for employees other than the executive officers are made by the Chief Executive Officer in consultation with other members of senior management. Management assists the Compensation Committee in administering various elements of the Company’s executive compensation program. The Compensation Committee has unrestricted access to management and may request the participation of management in any discussion of a particular subject at any meeting. During fiscal 2024, management provided the Compensation Committee with recommendations regarding executive officers’ compensation, as discussed further in the executive compensation discussion that begins on page 18.

Audit Committee

The Audit Committee consists of all the Board’s independent directors. Mr. Henson serves as its Chair. The Audit Committee:

| ■ | approves the appointment of an independent registered public accounting firm to audit the Company’s financial statements and internal control over financial reporting;

| ■ | negotiates fees for audit, audit-related and tax services with the Company’s independent registered public accounting firm;

| ■ | reviews and approves the scope, purpose and type of audit and non-audit services to be performed by the independent registered public accounting firm;

| ■ | reviews and discusses with management and the independent registered public accounting firm significant accounting, reporting, legal, regulatory or industry developments affecting the Company (and/or the Company’s financial statements);

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| ■ | monitors compliance with the Company’s Code of Business Conduct and Ethics, including the Company’s ethics and compliance portal / hotline;

| ■ | reviews and approves any related party transactions;

| ■ | oversees the Company’s internal audit function;

| ■ | oversees the accounting and financial reporting processes of the Company and the integrated audit of the Company’s annual financial statements and internal control over financial reporting; and

| ■ | reviews and discusses with management and the independent auditor the Company’s significant financial risk exposures and the steps management has taken to monitor and manage such exposure, including the Company’s risk assessment and risk management policies and oversight for matters related to cybersecurity risk.

The Audit Committee receives updates from the auditor and management at its quarterly Audit Committee meetings. During fiscal 2024, the auditor and management made presentations to the Committee on specific topics of interest, including:

| ■ | the auditor’s assessment of its independence;

| ■ | significant audit matters;

| ■ | management’s implementation of new accounting standards;

| ■ | management’s critical accounting policies and practices;

| ■ | the auditor’s fiscal 2024 integrated audit plan and updates on the completion of the plan;

| ■ | regulatory developments on the environmental, corporate social responsibility and governance front;

| ■ | compliance with the internal controls required under Section 404 of the Sarbanes-Oxley Act; and

| ■ | regulatory developments in cyber security and the Company’s cybersecurity practices.

The Board of Directors has adopted a written charter for the Audit Committee, a current copy of which is available on the Company’s website at investors.hookerfurnishings.com. The Board of Directors has determined that each member of the Audit Committee is independent as defined by applicable SEC rules and NASDAQ listing standards. The Company’s Board of Directors has determined that Ms. Duey and each of Messrs. Henson and Beeler is an “audit committee financial expert” for purposes of the SEC’s rules. The Report of the Audit Committee can be found on page 16.

Appointment and Evaluation of the Independent Auditor

On an annual basis, the Audit Committee reviews the audit firm’s performance as part of its consideration of whether to reappoint the firm as the Company’s independent auditor. As part of this review, the Audit Committee considers, among other things:

| ■ | the continued independence of the audit firm;

| ■ | the audit firm’s experience and fresh perspective occasioned by mandatory audit partner rotation and the rotation of other audit management;

| ■ | the length of time the audit firm has served as the Company’s independent auditors, including the benefits of having a long-tenured auditor and controls and processes that help safeguard the audit firm’s independence;

| ■ | whether the audit firm should be rotated and considers the advisability and potential of selecting a different audit firm;

| ■ | the appropriateness of the audit firm’s fees;

| ■ | evaluations of the audit firm by management;

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| ■ | the audit firm’s effectiveness of communications and working relationships with the audit committee and management; and

| ■ | the quality and depth of the audit firm and the audit team’s expertise and experience in the Company’s industry and related industries considering the breadth, complexity and global reach of the Company’s business.

Related Party Transactions

The Company’s Audit Committee is responsible under its charter for reviewing and approving any related party transactions. For this purpose, a “related party transaction” includes any transaction, arrangement or relationship involving the Company in which an executive officer, director, director nominee or 5% shareholder of the Company, or their immediate family members, has a direct or indirect material interest that would be required to be disclosed in the Company’s proxy statement under applicable rules of the SEC. There were no related party transactions in fiscal 2024.

For relationships or transactions involving a related-party which involve an officer or director, the proposed relationship or transaction must be (i) reported to the Chair of the Audit Committee, if a director or senior Company officer (including the named executive officers) is involved, (ii) reported to the Chief Financial Officer or the Chief Executive Officer, for transactions involving other officers of the Company, and (iii) reviewed and approved by the Audit Committee. While the Company does not have a standalone written policy or procedure for the review, approval, or ratification of other transactions with related persons, it is the Company’s practice that potential related person transactions are first screened by the Chief Financial Officer and then sent to the Audit Committee for review. In determining whether to approve or reject a related person transaction, the Audit Committee considers, among other factors it deems appropriate, whether the proposed transaction is on terms no less favorable than terms generally available to an unaffiliated third party under the same or similar circumstances, as well as the extent of the related person’s economic interest in the transaction.

Code of Business Conduct and Ethics

The Board of Directors has adopted a Code of Business Conduct and Ethics, which applies to all the Company’s employees and directors, including the principal executive officer, principal financial officer and principal accounting officer. A copy of the Code of Business Conduct and Ethics is available on the Company’s website at investors.hookerfurnishings.com. Amendments of and waivers from the Company’s Code of Business Conduct and Ethics will be posted to the website when permitted by applicable SEC and NASDAQ rules and regulations.

The Role of the Board of Directors in Risk Oversight

The Board of Directors, or an appropriate committee of the Board of Directors, provides oversight for Company-wide risk management and performs the Board’s oversight role in many different ways, including by reviewing:

| ■ | and approving the Company’s annual operating and capital budgets;

| ■ | the Company’s quarterly and year-to-date operating results and discussing those results with senior management;

| ■ | management’s quarterly Enterprise Risk Management reports;

| ■ | the Company’s practice for assessing, identifying and managing material risks from cybersecurity threats;

| ■ | the Company’s environmental, corporate social responsibility and governance practices;

| ■ | management reports regarding the Company’s internal control over financial reporting; and

| ■ | reports regarding the Company’s internal control over financial reporting from its independent registered public accounting firm.

The Audit Committee meets in executive session with the Company’s independent auditors to discuss topics related to the Company’s financial reporting and internal control. Additionally, the Nominating and Corporate Governance Committee and the Compensation Committee meet periodically to address governance and compensation issues, including compensation-related risks. The committees have the authority to utilize outside advisers and experts when needed. The Board committees (which consist of only independent members) also engage in discussions regarding risk management in executive session, without the participation of the Chief Executive Officer.

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Director Share Ownership Guidelines

In a prior year, the Board adopted a policy under which non-employee directors are required to hold shares with a value equal to three times their annual cash compensation. Each director is allowed six years to accumulate the required holding level. Each director that has been a director at least six years as of the end of the Company’s most recently completed fiscal year met these guidelines as of such date.

Director Compensation

The Compensation Committee is responsible for recommending director compensation to the Board of Directors. Non-employee directors are compensated based on their term of service, which typically begins with the election of directors at the Company’s Annual Meeting, and which is referred to as a “service year.”

In fiscal 2022, the Compensation Committee retained Pearl Meyer to review the Company’s compensation structure and positioning relative to the 16-company peer group developed in February 2022 for the executive total renumeration review, with a secondary review against All-Industry benchmarks. The Compensation Committee recommended the non-employee directors compensation components remain unchanged for the 2023-2024 service year.

Non-Employee Director Compensation for the 2023-2024 Service Year

For the 2023-2024 service year, non-employee directors received an annual board cash retainer of $55,000, the Board Chair received an additional cash stipend of $30,000, the Audit Committee Chair received an additional cash stipend of $15,000 and the Chairs of the Compensation and Nominating and Corporate Governance committees received additional cash stipends of $10,000 each. These fees were paid to directors in June 2023.

For the 2023-2024 service year, all non-employee directors also received annual grants of restricted stock under the Company’s 2020 Stock Incentive Plan. Each non-employee director received a $70,000 stock grant. The restricted stock awards were determined by dividing $70,000 by the fair market value (as defined in the 2020 Stock Incentive Plan) of the Company’s Common Stock three business days after the award date and rounding to the nearest whole share. The restricted stock will become fully vested, and the restrictions applicable to the restricted stock will lapse, on:

| ■ | the next annual meeting date after the grant date if the non-employee director remains on the Board to that date; or

| ■ | if earlier, when the director dies or is disabled or a change in control of the Company.

Under the terms of the 2020 Stock Incentive Plan, as amended, directors may defer receipt of their annual restricted stock award beyond the vesting date (generally the next annual meeting date following the grant date) to a specified date in the future, attainment of a specified age, or to the director’s termination of service as a director with the Company. Any such restricted stock award that is deferred will ultimately be delivered in shares of the Company’s Common Stock shortly after the deferral date. During the deferral period, the Company’s commitment to the director to deliver the shares remains an unsecured liability of the Company.

The Company’s anti-hedging policy applies to persons it has deemed to be “key insiders.” Key insiders include the Company’s directors, its executive officers and other persons who in the normal course of their duties receive Company-wide business and financial information before public release. The policy prohibits key insiders from engaging in certain forms of hedging or monetization transactions, specifically prohibiting zero-cost collars and forward stock sales, with respect to the Company’s Common Stock. In addition to its anti-hedging provision, the Company’s Insider Trading Policy prohibits key insiders, employees, officers, directors or certain of their family members from engaging in certain types of other transactions related to the Company’s Common Stock, including transactions in derivative securities, using margin accounts, and pledging shares as collateral.

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Directors are reimbursed for reasonable expenses incurred in connection with attending Board and committee meetings or performing their duties as directors, as well as Board-related professional education. Mr. Hoff, who serves as CEO, received no additional compensation for his role as a director. Mr. Hoff’s compensation for services rendered to the Company in his officer capacities is reported in the Summary Compensation Table following the Compensation Discussion and Analysis on page 33.

The following table sets forth non-employee director compensation paid in fiscal year 2024 for the 2023-2024 Board service year.

|  | Non-Employee Director Compensation |
Name |  | Cash Fees(1) |  |  | Stock Awards(2)(3) |  |  | Total |
W. Christopher Beeler, Jr. |  | $ | 85,000 |  |  | $ | 70,000 |  |  | $ | 155,000 |
Maria C. Duey |  |  | 65,000 |  |  |  | 70,000 |  |  | $ | 135,000 |
Paulette Garafalo |  |  | 55,000 |  |  |  | 70,000 |  |  | $ | 125,000 |
Christopher L. Henson |  |  | 70,000 |  |  |  | 70,000 |  |  | $ | 140,000 |
Tonya H. Jackson |  |  | 65,000 |  |  |  | 70,000 |  |  | $ | 135,000 |
Ellen C. Taaffe |  |  | 55,000 |  |  |  | 70,000 |  |  | $ | 125,000 |

| (1) | Includes annual retainer fee, committee chair fees and board chair fee paid to each director in June 2023, as described in greater detail above.

| (2) | These amounts are the aggregate grant date fair value of shares of restricted stock awarded to each non-employee director on June 9, 2023 under the Company’s 2020 Stock Incentive Plan. Fair value is determined in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 718. The amounts shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For a discussion of assumptions used in calculating award values, refer to note 15 of the Company’s consolidated financial statements included in the Company’s 2024 Annual Report on Form 10-K.

| (3) | As of January 28, 2024 each non-employee director had the following unvested stock awards outstanding:

Name |  | Restricted Stock(#) |
W. Christopher Beeler, Jr. |  |  | 3,966 |
Maria C. Duey |  |  | 3,966 |
Paulette Garafalo |  |  | 3,966 |
Christopher L. Henson |  |  | 3,966 |
Tonya H. Jackson |  |  | 3,966 |
Ellen C. Taaffe |  |  | 3,966 |

REPORT OF THE AUDIT COMMITTEE

The Audit Committee oversees the Company’s financial reporting process on behalf of the Board of Directors. Management has the primary responsibility for the Company’s financial statements and the reporting process, including internal control over financial reporting. In fulfilling its oversight responsibilities, the Committee reviewed and discussed the audited financial statements for the fiscal year ended January 28, 2024 with management, including a discussion of the quality and acceptability of accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

The Committee discussed with the Company’s independent registered public accounting firm, who is responsible for expressing an opinion on conformity of those audited financial statements with U.S. generally accepted accounting principles, the firm’s judgment as to the quality and acceptability of the Company’s accounting principles and such other matters as are required to be discussed with the independent registered public accounting firm under the standards of the Public Company Accounting Oversight Board. In addition, the Committee has received the written disclosures and letter from the independent registered public accounting firm to the Committee required by Public Company Accounting Oversight Board Auditing Standard 16 regarding the independent registered accounting firm’s communications with the Audit Committee concerning independence and has discussed with the independent registered accounting firm its independence from the Company. The Committee has also considered whether the non-audit-related services provided by the independent registered public accounting firm are compatible with maintaining the firm’s independence and found them to be acceptable.

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The Committee met with the Company’s independent registered public accounting firm, with and without management present, and discussed the overall scope and results of their audits, their evaluation of the Company’s internal control over financial reporting and the overall quality of the Company’s financial reporting.

In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2024 for filing with the SEC.

Christopher L. Henson, Chair

W. Christopher Beeler, Jr.

Maria C. Duey

Paulette Garafalo

Tonya H. Jackson

Ellen C. Taaffe

REPORT OF THE COMPENSATION COMMITTEE

The Committee has reviewed, and discussed with management, the Compensation Discussion and Analysis that appears below. Based on that review, and the Committee’s discussions with management, the Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this proxy statement.

Maria C. Duey, Chair

W. Christopher Beeler, Jr.

Paulette Garafalo

Christopher L. Henson

Tonya H. Jackson

Ellen C. Taaffe

Compensation Committee Interlocks and Insider Participation

The Compensation Committee is comprised entirely of the independent directors and none of the executive officers served on the compensation committee or board of any company that employed any member of the Compensation Committee or the Board of Directors as an executive officer.

Compensation Risk Assessment

As part of its oversight responsibilities, the Compensation Committee, with assistance from management, annually reviews the Company's compensation policies and practices for all employees to determine whether they are reasonably likely to present a material adverse risk to the Company. Their review includes, among other things, a consideration of the incentives that the Company’s compensation policies and practices create and factors that may affect the likelihood of excessive risk taking. Based on its most recent review, the Committee concluded that the Company’s employee compensation policies and practices are not reasonably likely to have a material adverse effect on the Company. For additional information concerning this review, see Management of Executive Compensation-Related Risk on page 30.

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COMPENSATION DISCUSSION AND ANALYSIS

EXECUTIVE COMPENSATION

Executive Summary

The Compensation Committee of the Board oversees the Company’s executive compensation program. More information concerning the composition of the Committee and its authority and responsibilities can be found under Compensation Committee on page 11. The Company’s compensation program is designed to attract and retain highly qualified executives, to maintain a stable executive management team, and to reward those senior leaders who contribute significantly to the Company’s continued financial growth and profitability in the face of rapidly changing market and global economic forces affecting the Company’s business.

The Compensation Discussion and Analysis discusses the compensation program and the compensation decisions made for fiscal 2024 (which ended January 28, 2024) with respect to the following named executive officers. These officers were the only individuals who served as an executive officer of the Company during fiscal 2024.

Name |  | Title
Jeremy R. Hoff |  | Chief Executive Officer and Director
Paul A. Huckfeldt |  | Chief Financial Officer and Senior Vice President - Finance and Accounting
Anne J. Smith |  | Chief Administrative Officer and President - Domestic Upholstery
Tod R. Phelps |  | Chief Information Officer and Senior Vice President - Operations

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COMPENSATION HIGHLIGHTS FOR FISCAL 2024

Pay Element |  | Fiscal 2024 Actions
Base Salary |  | Due to the challenging macroeconomic environment for the home furnishings industry and the adverse impact to the Company's performance, in keeping with the practice of not automatically increasing base salaries unless there were significant changes in responsibilities, the Compensation Committee determined it was in the best interests of the Company and its shareholders to recommend the base salaries of the Company's named executive officers remain unchanged.
Annual Cash Incentive |  | The Compensation Committee recommended target annual cash incentive opportunity (as a percentage of base salary) remained unchanged.
Long-term equity-based incentives |  | The Compensation Committee awarded long-term incentives to each of the named executive officers in the form of performance stock units tied to pre-established goals relating to EPS and service-based restricted stock units to support executive retention, both of which are expected to be delivered in the form of shares of the Company’s common stock. The Compensation Committee recommended target long-term incentives (as a percentage of base salary) remained unchanged.

Fiscal Year 2024 Financial Results

Fiscal 2024 consolidated net sales were $433.2 million, a decrease of $149.9 million or 25.7%, compared to the previous fiscal year. This decline was attributed to industry-wide soft demand and the exit of unprofitable product lines in the Home Meridian segment, the latter of which resulted in an approximate $21 million reduction in revenue. All three segments experienced sales declines with Home Meridian’s net sales down by $72.8 million or 33.7%, Hooker Branded’s net sales down by $49.3 million or 24.0%, and Domestic Upholstery’s net sales down by $29.9 million or 19.1%, all compared to each respective segment’s prior fiscal year sales. Despite the sales decrease, consolidated gross profit increased by $15.4 million and gross margin improved by 910 bps, compared to the prior fiscal year, due primarily to the one-time $24.4 million inventory write-down in fiscal 2023 at Home Meridian, as well as increased gross margin at Hooker Branded in fiscal 2024. The Company recorded a consolidated operating income of $12.4 million compared to an operating loss of $6.0 million in the prior fiscal year. Consolidated net income was $9.9 million, or $0.91 per diluted share, compared to a net loss of $4.3 million or ($0.37) per diluted share in the prior fiscal year.

Executive Compensation Policies and Practices

Our commitment to strong corporate governance practices extends to the compensation philosophy, programs, and policies established by the Compensation Committee, which include the following governance practices and policies:

What we do |  | What we don't do
a | Rigorous goal setting for annual and long-term performance-based compensation |  | r | No excessive perquisites
a | Pay for performance |  | r | No income tax gross ups
a | Anti-hedging/pledging policy |  | r | No discretionary bonuses
a | Claw-back policy |  | r | No adjustments to pre-established bonus targets after Board approval
a | Assessment of compensation risk |  |  |
a | Engagement with shareholders |  |  |
a | Dual trigger CIC for performance grants and Restricted Stock Unit Awards |  |  |
a | Executive Stock Ownership Guidelines |  |  |

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Compensation Philosophy of the Company

The Company’s compensation philosophy is guided by the following objectives:

| ● | Attract and retain highly qualified executives who will contribute significantly to the success and financial growth of the Company and enhance value for shareholders;

| ● | Motivate and appropriately reward executives when they achieve the Company’s financial and business goals and meet their individual performance objectives; and

| ● | Maintain a stable executive management team to ensure the Company’s profitability objectives adapt to:

| o | changing consumer preferences;

| o | evolving sourcing and distribution options; and

| o | broader market factors such as the overall performance of the U.S. economy and the relative strength of housing and home furnishings related activity.

Compensation Program

The Company’s executive compensation program employs several elements of compensation to achieve the objectives of its compensation philosophy. The primary elements of the program are base salary, an annual cash incentive, long-term incentives and supplemental retirement and life insurance benefits. As discussed on page 29 most of these elements are incorporated into the employment agreements the Company entered into with its named executive officers. These elements are structured to compensate executives over three separate timeframes:

| ■ | Base salary and short-term incentives. Base salaries are typically set for each calendar year and the annual cash incentive is set for each fiscal year. The annual cash incentive is determined based on the Company’s financial performance during the current fiscal year. The Compensation Committee sets base salaries and potential annual cash incentive amounts for each executive position based on a number of factors, including competitive market data, executive responsibilities, individual performance and the Committee members’ business judgment.

| ■ | Longer-term compensation. Long-term incentives are designed to reward executives if the Company achieves specific performance goals or growth in shareholder value over multi-year periods. The amounts payable to executives under performance incentives vary based on the extent to which the specified goals are achieved or surpassed. In general, the Company grants long-term incentives in the form of performance stock units or “PSUs” (delivered solely in shares) and restricted stock units. These awards are discussed in greater detail below beginning on page 27.

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| ■ | Full career and time-specific compensation. Supplemental retirement benefits are linked to certain executive’s continued employment with the Company to a specified age. Employment agreements and time-based restricted stock units are designed primarily to retain the covered executives for a minimum defined period.

The Committee believes the objectives of the Company’s executive compensation program can best be attained by structuring the program to provide compensation over these separate timeframes. For example, the Committee views annual and longer-term performance-based compensation as essential to encouraging executives to appropriately balance both the short-term and long-term interests of the Company and its shareholders. In addition, the Committee believes compensation tied to service over a full career or a specific period helps to promote executive retention and thereby allows the Company to maintain a stable management team.

Mix of Total Compensation. The following charts illustrate the percentage of total compensation for the CEO and the other named executive officers on average, respectively, represented by each element of compensation for the fiscal 2024.

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Mr. Huckfeldt and Ms. Smith participate in the SRIP plan. In fiscal 2024, the change in pension value was -$2,002 for Mr. Huckfeldt and $54,633 for Ms. Smith.

Process for Determining Executive Compensation

The Committee sets base salaries, determines the amount and terms of annual cash incentive opportunities, and determines long-term incentive compensation and other benefits for the Company’s executive officers. The Committee follows the processes and considers the information discussed below in setting executive compensation.

Competitive Pay Data

The Compensation Committee engaged Pearl Meyer in 2022 to review the Company’s compensation structure and positioning and to update the Company’s peer group. Pearl Meyer recommended this group because its members shared various financial and operational attributes with the Company, while not being limited to home furnishings companies. The peer group represents companies in related industries (e.g., office furniture, household/housewares, home building); of a similar size, with annual revenues ranging from 60% to 350% of the Company’s annual revenue; and similar operational complexity. The Board believes these companies represent the type of companies against which the Company competes for management talent. The peer group consists of the following companies:

| ■ | American Woodmark Corporation

| ■ | Bassett Furniture Industries, Inc.

| ■ | Cavco Industries, Inc.

| ■ | Culp, Inc.

| ■ | Dixie Group, Inc.

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| ■ | Ethan Allen Interiors, Inc.

| ■ | Flexsteel Industries, Inc.

| ■ | Hamilton Beach Brands Holding Company

| ■ | Haverty Furniture Companies, Inc.

| ■ | Kirkland’s, Inc.

| ■ | La-Z-Boy, Inc.

| ■ | Lifetime Brands, Inc.

| ■ | Lovesac Company

| ■ | Nautilus, Inc.

| ■ | PGT Innovations, Inc.

The Compensation Committee has used this peer group as one of several factors in making compensation decisions and to establish a baseline from which to set executive compensation. The Committee compared total compensation as well as the individual compensation elements for each executive officer to the peer group in fiscal 2024. The Committee will refresh the peer group and compensation study in the future, as needed. The Committee does not tie compensation for its executive officers to any particular level or target based on this comparable compensation data. Instead, the Committee considers this pay comparability data as one of many factors when determining the appropriateness of individual elements of compensation, as well as the total compensation, payable to the Company’s executive officers.

Company Performance

Each year the Committee considers which financial performance measures to use in setting annual and longer-term incentive compensation for the named executive officers. Longer-term incentives typically have been linked to the achievement of a different set of performance measures, such as earnings per share (EPS) for performance grants. Historically, the Committee has awarded long-term performance grants tied to growth in the Company’s EPS, both in absolute terms and relative to EPS growth for the peer group companies. The Committee believes that EPS and EPS growth have been appropriate performance measures for long-term compensation incentives because these metrics lend themselves, in a simple and objective manner, to year-over-year comparisons and to comparison with the financial performance of peer companies. As in prior years, our performance grants awarded during fiscal year 2024 were based on absolute EPS growth and relative EPS growth. However, as discussed on page 32, the Committee elected to replace relative EPS growth for fiscal year 2025 with total shareholder return relative to our compensation peer group.

The Committee generally selects performance measures for annual incentive compensation that correspond to financial measures used by management in making day-to-day operating decisions and in setting strategic goals. In addition, these types of measures are used by the Board in evaluating Company performance. The Committee generally consults with the Chief Executive Officer and other senior executives before setting performance levels for annual and longer-term incentive compensation. The input provided by management is one of many factors the Committee considers in establishing the applicable measures and performance levels for incentive compensation. The other factors the Committee considers include the annual operating budget which is approved by the Board. The Board’s approval of the annual budget includes its review of industry and macroeconomic trends, industry sales growth, cost containment and expected capital expenditures.

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Individual Performance

The Committee annually assesses the individual performance of each executive officer and considers it when setting a named executive officer’s base salary. The Committee may elect not to increase certain executives’ base salaries on an annual basis (e.g., due to modest increases in cost of living and/or to increase an emphasis on linking total compensation to performance-based incentives), instead using potential annual and longer-term incentive-based payments to compensate individual executives. The Committee reserves the right to adjust base salaries as it determines to be appropriate; however, the Committee does not have a practice of automatically providing for annual increases in base salaries and therefore a decision not to increase an executive’s base salary is not based on an assessment of an executive’s performance. Each executive’s performance is measured against specific personal objectives established early in the prior year. The Chief Executive Officer’s annual personal objectives are established in consultation with the Committee. Other executive officers establish their individual objectives in consultation with the Chief Executive Officer. These objectives may include both subjective and quantifiable individual and departmental performance and developmental initiatives that are within each officer’s area of operation and are consistent with the Company’s strategic plans.

The Committee’s assessment of each named executive officer’s performance with respect to these objectives is conducted primarily through conversations with the Chief Executive Officer and a review of Company performance. The Committee believes that consideration of individual performance objectives is important because it creates incentives for executive officers to make specific contributions to the Company’s financial growth based on their individual areas of responsibility, and because it allows the Company to reward those specific contributions.

Allocating Between Compensation Elements

The Committee does not have a fixed standard for determining how an executive officer’s total compensation is allocated among the various elements of the Company’s compensation program. Instead, the Committee uses a flexible approach so that it can structure the compensation elements in a manner that will, in its judgment, best achieve the specific objectives of the Company’s compensation program. However, the Committee believes that a meaningful portion of a named executive officer’s compensation should be performance-based.

Shareholder Say-on-Pay Vote

At the 2023 Annual Meeting, shareholders had the opportunity to approve, in a non-binding advisory vote, the compensation of the Company’s named executive officers. This is referred to as a “say-on-pay” proposal. Over 94% of the votes cast on the say-on-pay proposal were voted in favor of the proposal. The Committee believes this vote result reflects general approval of the Company’s overall approach to structuring the Company’s executive compensation program. Therefore, the Committee did not make any significant changes in the structure of the Company’s executive compensation program during fiscal 2024 in response to the 2023 say-on-pay vote. The Compensation Committee will continue to consider the vote results for say-on-pay proposals in future years when making compensation decisions for the Company’s named executive officers.

Executive Compensation Decisions for Fiscal Year 2024

For the 2024 fiscal year, the primary elements of compensation for the named executive officers were:

| ■ | base salary (set on a calendar year basis),

| ■ | an annual cash incentive opportunity (based on the Company’s fiscal year financial performance),

| ■ | long-term equity-based incentives for each named executive officer, and

| ■ | supplemental retirement benefits for two of the named executive officers.

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The table below reflects calendar 2023 base salaries and fiscal 2024 annual incentive targets and long-term incentive award targets for the named executive officers approved by the Compensation Committee:

Executive Officer |  | Base Salary |  |  | Annual Incentive at Target |  |  | Long-term Incentive at Target |
Jeremy R. Hoff |  | $ | 600,000 |  |  | $ | 600,000 |  |  | $ | 600,000 |
Paul A. Huckfeldt |  |  | 375,000 |  |  |  | 225,000 |  |  |  | 225,000 |
Anne J. Smith |  |  | 330,000 |  |  |  | 198,000 |  |  |  | 198,000 |
Tod R. Phelps |  |  | 300,000 |  |  |  | 180,000 |  |  |  | 180,000 |

Base Salary

Based on Pearl Meyer’s independent analysis of the Company’s named executive officers’ compensation in 2022, the Committee determined that the base salary of the named executive officers remain unchanged for calendar year 2023. Although the study data was from the prior year, it was deemed satisfactory by the Committee, since the information was used only as a guideline, not a benchmark.

The Committee’s process for setting base salary and other compensation included an annual review of individual performance and such other relevant factors as accomplishments in the executive’s current role, changes in responsibilities, job performance and the Committee’s assessment of the market rate for these positions. The Committee does not automatically increase base pay annually, but instead bases salary increases on the preceding factors.

Annual Cash Incentive

The Committee believes it is in the best interests of the Company and its shareholders to base the annual cash incentive directly on the achievement of an objective performance metric. The Committee generally considers consolidated net income to be the appropriate performance metric for the annual cash incentive for senior management because it believes that items included in net income, such as consolidated income tax expense, discontinued operations, interest expense and other income and expense, reflect upon the appropriateness of management decision-making and therefore provide an effective tool for measuring senior management performance over the course of a fiscal year.

The Committee approved an annual cash incentive for the 2024 fiscal year. Each named executive officer had the opportunity to earn a payment, expressed as a percentage of their calendar year 2023 base salary, if the Company achieved 80% or more of its fiscal 2024 consolidated net income target. No cash bonus would be payable unless at least 80% of the consolidated net income target was met. The bonus opportunity was capped at a maximum amount if the Company reached 125% or more of its consolidated net income target for fiscal year 2024. For net income achieved at levels between the target percentages shown in the table below, a bonus percentage is interpolated such that each 1% increase in net income or operating income between the target levels results in additional bonus earned.

The annual cash incentive target is established based on budgeted net income. Budgeted net income is established by management in its annual operating budget, which is approved by the Board.

Target payouts for each named executive officer were established based on a number of factors including:

| ■ | data contained in the Pearl Meyer study discussed above;

| ■ | general business knowledge and experience of the Committee’s members;

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| ■ | other general compensation information available to the Committee, such as perceived contribution to the Company’s success, including areas outside the executive’s core functions; and

| ■ | the short-to-medium term total realizable compensation for each executive.

As discussed above, the Pearl Meyer study reflected total compensation for similar positions at similarly situated companies with which the Company would expect to compete for executive talent. The Committee evaluated each executive’s total compensation, with an emphasis on shifting a greater share of the executive’s total compensation to incentive-based pay and also considered the executives’ specific roles, responsibilities, and experience, as well as other elements of each executive’s compensation arrangement and considered the mix of short- and long-term elements in each executive’s overall compensation plan. Generally, the greater an executive’s responsibilities, the larger the potential award. For example, Mr. Hoff, the most senior executive, was awarded a larger potential incentive award than were other senior executives due to his senior standing within the Company and his larger share of responsibilities. The incentive opportunities were structured such that if consolidated net income does not meet the target, the named executive officers would receive a reduced payment or no payment, but if consolidated net income exceeded the target, incentive payments would increase at a rate greater than the increase in net income. This was designed to recognize exemplary consolidated net income achievement. In no event would an incentive payment be earned if less than 80% of the target level was attained.

The award opportunities for each executive were as follows (expressed as a percentage of 2023 calendar year base salary):

|  | If the Company Attains the following Percentages of Performance Target: |
Executive Officer |  | <80% |  |  | 80% |  |  | 90% |  |  | 100% |  |  | 110% |  |  | 125% |
Jeremy R. Hoff |  |  | 0 | % |  |  | 50 | % |  |  | 90 | % |  |  | 100 | % |  |  | 125 | % |  |  | 165 | %
Paul A. Huckfeldt |  |  | 0 | % |  |  | 30 | % |  |  | 54 | % |  |  | 60 | % |  |  | 75 | % |  |  | 99 | %
Anne J. Smith |  |  | 0 | % |  |  | 30 | % |  |  | 54 | % |  |  | 60 | % |  |  | 75 | % |  |  | 99 | %
Tod R. Phelps |  |  | 0 | % |  |  | 30 | % |  |  | 54 | % |  |  | 60 | % |  |  | 75 | % |  |  | 99 | %

Each additional percentage of net income realized between the percentages shown above is interpolated and multiplied by the officer’s bonus base, such that each additional percentage of net income realized between the threshold amounts shown above results in a larger bonus payout, as shown in the table below:

|  | Interpolation per 1% of increased earnings: |
|  | Between 80-89% of Target Net Income |  |  | Between 90-99% of Target Net Income |  |  | Between 100-109% of Target Net Income |  |  | Between 110-125% of Target Net Income |
All named executive officers |  |  | 4 | % |  |  | 1 | % |  |  | 2.50 | % |  |  | 2.67 | %

The net income target for the 2024 fiscal year was set at $17.9 million on a consolidated basis. The net income target had previously been approved by the Board in consultation with management, and after considering the Company’s profit potential, the impact of national and international economic conditions on the Company and the home furnishings industry as a whole. Based on these factors, the Committee concluded that the target and threshold levels were appropriate to motivate and appropriately reward executive officers to attain the desired level of performance for fiscal 2024.

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The 80% threshold performance level for the annual cash incentive was believed to be an achievable goal. The 100-124% target performance level was believed to be aggressive, but attainable. Performance at or above the 125% level was believed to be realizable, but only with exceptional performance.

The Company did not achieve at least the threshold level of its fiscal year 2024 consolidated net income. As a result, no named executive officer received the annual cash incentive.

Executive Officer |  | Fiscal 2024 Annual Cash Incentive Earned |
Jeremy R. Hoff |  | $ | - |
Paul A. Huckfeldt |  |  | - |
Anne J. Smith |  |  | - |
Tod R. Phelps |  |  | - |

Long-Term Incentives

During fiscal 2024, consistent with the Committee’s objective of giving greater weight to the performance-based element of total compensation, the Committee granted two types of long-term incentive awards, performance stock units (PSU) and time-based restricted stock units (RSU) to the named executive officers in April 2023 for the performance period beginning in fiscal year 2024 through fiscal year 2026. The awards were designed to directly link a significant portion of a named executive officer’s compensation to the growth in value of the Company and to further enhance existing retention incentives under the Company’s executive compensation program.

Performance-based Restricted Stock Unit

Each PSU entitles the executive officer to receive one share of the Company’s common stock based on the achievement of two specified performance targets if the executive officer remains continuously employed by the Company through the end of the three-year performance period (subject to limited exceptions). One target is based on annual average growth in the Company’s EPS over the performance period and the other target is based on EPS growth over the performance period compared to that of the peer companies described at page 22. The PSUs vest subject to the Company’s attainment of pre-established financial goals related to the sum of two amounts, (1) the Company’s absolute EPS Growth and (2) relative EPS growth, over a three-year performance period that began January 30, 2023 and ends February 1, 2026, as approved by the Committee. The payout or settlement of the PSUs shall be made in shares of the Company’s common stock (based on the fair market value of the shares of the Company’s common stock on the date of settlement or payment). The PSUs do not convey any voting rights or dividend or dividend equivalent rights to the executive officer.

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The amount set forth in the table below is based on the average annual growth of the Company’s fully diluted EPS from continuing operations over the performance period. The Company’s EPS growth must average at least 5% annually over the performance period for a payment to be made.

|  | Payout in Shares of Company Stock Based on EPS Growth (%) for Performance Period |
|  | Threshold |  |  | Target |  |  |  |  |  |  |  |  |  |  | Maximum |
Executive Officer |  | 5% |  |  | 10% |  |  | 15% |  |  | 20% |  |  | 25% |
Jeremy R. Hoff |  |  | 3,524 |  |  |  | 10,571 |  |  |  | 14,095 |  |  |  | 17,619 |  |  |  | 21,143 |
Paul A. Huckfeldt |  |  | 1,602 |  |  |  | 4,805 |  |  |  | 6,407 |  |  |  | 8,009 |  |  |  | 9,610 |
Anne J. Smith |  |  | 1,409 |  |  |  | 4,229 |  |  |  | 5,638 |  |  |  | 7,048 |  |  |  | 8,457 |
Tod R. Phelps |  |  | 1,057 |  |  |  | 3,171 |  |  |  | 4,228 |  |  |  | 5,286 |  |  |  | 6,343 |

The amount set forth in the table below is based on the average annual growth of the Company’s EPS over the performance period relative to a group of specified peer companies. However, if the Company’s EPS growth is not positive for the performance period, this payment will be capped at the amount for the 50th percentile.

|  | Payout in Shares of Company Stock Based on Relative EPS Growth for Performance Period |
|  |  |  |  |  | Threshold |  |  | Target |  |  | Maximum |
Executive Officer |  | Less than 50th percentile |  |  | 50th percentile, but less than 60th percentile |  |  | 60th percentile, but less than 80th percentile |  |  | Equal to or greater than 80th percentile |
Jeremy R. Hoff |  |  | 0 |  |  |  | 7,928 |  |  |  | 10,571 |  |  |  | 15,857 |
Paul A. Huckfeldt |  |  | 0 |  |  |  | 3,604 |  |  |  | 4,805 |  |  |  | 7,208 |
Anne J. Smith |  |  | 0 |  |  |  | 3,171 |  |  |  | 4,229 |  |  |  | 6,343 |
Tod R. Phelps |  |  | 0 |  |  |  | 2,379 |  |  |  | 3,171 |  |  |  | 4,757 |

The Committee selected EPS as the measure for the performance targets because EPS, and especially changes in EPS, directly reflect changes in the value of the Company over time, which the Committee believes best reflects the long-term interests of the shareholders. Using a simple, well-defined performance measure for these awards reduces the risk of manipulating that measure for short-term gain and reduces the risk of unintended consequences that could result from paying bonuses based on factors other than earnings, such as sales growth or non-financial measures which could misalign shareholder and management objectives. For example, a focus on sales growth or a non-financial metric such as customer satisfaction could provide an incentive to increase sales through greater discounting or create excessively generous return and allowance policies at the expense of overall profitability.

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Restricted Stock Units

The Committee also awarded to each named executive officers RSUs that will vest if the executive remains continuously employed with the Company (subject to limited exceptions) until the three-year anniversary date of each grant which is April 10, 2026. The awards may be paid in shares of Company stock, cash or a combination of both, as determined by the Committee in its discretion. They are designed to encourage retention and to provide an incentive for increasing shareholder value. The number of RSUs awarded to each executive officer is set forth in the table below:

Executive Officer |  | Number of RSUs |
Jeremy R. Hoff |  | 10,892 |
Paul A. Huckfeldt |  | 2,403 |
Anne J. Smith |  | 2,114 |
Tod R. Phelps |  | 3,267 |

Supplemental Retirement Benefits

Mr. Huckfeldt and Ms. Smith participate in the Company’s Supplemental Retirement Income Plan (“SRIP”). The SRIP is a non-qualified, unfunded supplemental retirement plan that provides a monthly benefit equal to a specified percentage of the participant’s average base salary plus annual bonus for the 60-consecutive month period preceding their termination of employment (referred to as their “Final Average Earnings”). Mr. Huckfeldt and Ms. Smith are each eligible to receive a monthly benefit equal to 25% of their Final Average Earnings. For all executives, the benefit is paid for 15 years following the participant’s retirement. As a general matter, a participant is not entitled to receive any benefit under the SRIP unless they remain continuously employed with the Company to age 60. At age 60, the participant becomes vested in 75% of their SRIP benefit and in 5% increments each following year until becoming 100% vested at age 65, assuming the participant remains continuously employed to those dates.

The objective of the SRIP is to create incentives for covered employees to remain employed with the Company over the balance of their careers, reward extended service with the Company and to balance short-term and long-term decision making, thereby enhancing the stability of the management team and allowing for predictability in succession planning. In addition, the Committee has determined that the SRIP helps mitigate compensation-related risk as discussed on page 30.

Each participant’s benefit in the SRIP will become fully vested, regardless of age, and the present value of those benefits will be paid in a lump sum upon a change in control of the Company. The Committee believes that this provision further enhances retention by providing assurance to employees that the benefits promised under the SRIP will be paid if the Company comes under new ownership or control. The amounts to which participating named executive officers would be entitled to receive under the SRIP and additional information concerning the SRIP can be found in the Pension Benefits table on page 43 and Potential Payments upon Termination or Change in Control on page 43.

Messrs. Hoff and Phelps do not participate in the SRIP. They have been provided other retention incentives under their employment agreements tailored to their specific employment circumstances.

Employment Agreements and Other Employment Terms

The Company entered into employment agreements with Messrs. Hoff, Huckfeldt and Phelps, and Ms. Smith on July 13, 2022, each of which provides for an indefinite term and sets forth the executive’s annual base salary rate subject to future adjustment to ensure consistency with the range of salaries for officers at other companies with similar responsibilities. The agreements also set forth each executive’s short-term incentive target opportunity, expressed as a percentage annual base salary, as well as each executive’s long-term incentive target opportunity, also expressed as a percentage of annual base salary. The short-term and long-term incentive programs in which these executives currently participate are further described beginning on pages 25 and 27. The agreements further provide that each executive is eligible to participate in any other benefit program offered or generally made available by the Company for its management employees.

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The terms of each of the employment agreements covering these named executive officers also include covenants relating to confidentiality, non-disclosure of work-related intellectual property, non-competition and non-solicitation of customers. Under the non-compete provision, each executive covenants that they will not compete with the Company for a period of eighteen (18) months (for Mr. Hoff; 12 months for Messrs. Huckfeldt and Phelps, and Ms. Smith) post-termination of employment in a position with duties substantially similar to their duties with the Company within the last twelve months within the United States. Similarly, each executive agrees that for a period of eighteen (18) months (for Mr. Hoff; 12 months for Messrs. Huckfeldt and Phelps, and Ms. Smith) post-termination of employment, they will not solicit for the benefit of a business in competition with the Company, any customer, employee or independent contractor, who was a customer, employee or independent contractor of the Company within the twelve months preceding the executive’s termination of employment.

For additional discussion regarding the potential payments under these employment agreements in connection with a termination of employment, see Hoff, Huckfeldt, Smith and Phelps Employment Agreements under Potential Payments upon Termination or Change in Control which begins on page 43.

Other Benefits

The Company maintains a tax-qualified 401(k) savings plan for all of its eligible employees, including the named executive officers. The plan provides for Company matching contributions, which are fully vested after two years of continuous service. The Company’s other benefit plans include health care, dental and vision insurance, group life insurance and disability insurance. The named executive officers participate in these plans on the same basis as other eligible employees.

Tax and Accounting Implications of Executive Compensation

The Compensation Committee believes that shareholder interests are best served if their discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in non-deductible compensation expenses. However, the Compensation Committee does not anticipate a shift away from variable or performance-based compensation payable to the executive officers in the future, nor anticipate applying less rigor in the process by which the Committee establish performance goals or evaluate performance against such pre-established goals, with respect to compensation paid to the NEOs. In addition, accounting considerations are one of many factors that the Compensation Committee considers in determining compensation mix and amount.

Incentive Compensation Recoupment Policy

The Board of Directors previously adopted a “clawback” policy called the Incentive Compensation Recoupment Policy, in which the Board has the authority to pursue recovery of incentive compensation in the event of:

| ● | an accounting restatement;

| ● | a material error in a compensation measure; or

| ● | fraudulent or intentional misconduct.

This policy does not limit the legal remedies the Company may seek against any employee for fraudulent or illegal activity. Further, this policy was not adopted in response to any particular concerns, but rather to align the Company’s compensation practices with observed best practices. During fiscal 2024, the Compensation Committee and the Company reviewed and updated this policy to ensure compliance with the final SEC rules under Section 954 of the Dodd-Frank Act. In accordance with the final SEC rules and applicable exchange listing standards, the updated policy applies to all incentive-based compensation received by our executive officers after the effective date of the updated policy. Specifically, in the event of a triggering accounting restatement, the Compensation Committee is tasked with recovering in a reasonably prompt timeframe all incentive-based compensation received by a covered executive officer during the applicable recovery period in excess of the compensation that would have been received had the compensation been determined using the restated amounts.

Management of Executive Compensation-Related Risk

The Company’s executive compensation program is designed to create incentives for its executives to achieve its annual and longer-term business objectives. The Committee considers how the individual elements of executive compensation, and the executive compensation program as a whole, could potentially encourage executives, either individually or as a group, to make excessively risky business decisions at the expense of long-term shareholder value. To address this potential risk, the Committee annually reviews the risk characteristics of the Company’s executive compensation programs generally and considers methods for mitigating such risk. The Committee considers the following characteristics of the Company’s executive compensation program as factors that help mitigate such risk:

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| ■ | the Committee has authority under the Company’s Incentive Compensation Recoupment, or “clawback”, policy described above;

| ■ | the Committee has the unlimited authority to reduce long-term performance grant awards or pay no award at all;

| ■ | long-term performance grants are mostly performance-based, which aligns compensation with the interests of the shareholders;

| ■ | overall compensation is balanced between fixed and variable pay, and variable pay is linked to annual performance and performance over multi-year periods;

| ■ | the fixed compensation provided under the SRIP to certain executive officers helps avoid the potential for excess leverage and allows for longer service conditions than typical variable pay arrangements, thereby enhancing retention and management continuity;

| ■ | the multi-year cliff-vesting feature of restricted stock units promotes long-term retention, helps to mitigate inappropriate short-term risk taking and helps to align management and shareholder interests;

| ■ | profitability goals, which serve as inputs for variable annual cash incentive compensation and long-term performance grants, are approved by the Board;

| ■ | the long-term performance grants have been based on cumulative absolute and relative EPS growth over multi-year periods, which helps reduce the potential for short-term focus at the expense of longer-term growth;

| ■ | a consistent compensation philosophy has been applied year-over-year and does not change significantly with short-term changes in business conditions;

| ■ | open dialogue among management, the Committee and the Board regarding executive compensation policies and practices and the appropriate incentives to use in achieving short-term and long-term performance targets; and

| ■ | other general risk mitigating factors, including:

| ■ | quarterly reviews of the Company’s results of operations and financial condition;

| ■ | quarterly review of management’s Enterprise Risk Management report;

| ■ | annual review of management’s compensation risk assessment;

| ■ | executive sessions at all committee meetings, including executive session with the Company’s independent auditor; and

| ■ | a fairly flat organizational structure, which promotes knowledge sharing and risk awareness by members of senior management.

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Other Policies and Practices

Cash Incentives. The Committee has adopted certain guidelines for administering annual cash incentive compensation. Generally, an executive must remain employed to the last day of a fiscal year to be eligible to receive an annual cash incentive payment for that fiscal year. However, executives who terminate employment during the last quarter of a fiscal year due to death or disability, or who retire after they have attained age 55 and completed 10 years of service, are entitled to receive the same payment that they would have received had they remained employed to the end of the fiscal year. Executives who meet either of these requirements and who terminate employment in the second or third quarter of a fiscal year are entitled to receive 50% or 75%, respectively, of the payment they would have received had they remained employed to the end of the fiscal year. The guidelines establish procedures for the Committee to review and approve annual cash incentive determinations after the Chief Executive Officer and Chief Financial Officer confirm whether the performance conditions for the fiscal year have been achieved and whether any other applicable conditions have been met for that fiscal year.

Stock Ownership Guidelines. The Committee adopted stock ownership requirements in April 2019 such that the CEO is required to hold at least three-times his base salary in Company stock and each other executive officer is required to hold two-times their base salary, as measured by the Company’s closing stock price as of the end of the most recently completed fiscal year. Each executive officer is allowed six years to accumulate the required number of shares.

Hedging Policy. Executive officers, along with directors and certain other “key insiders,” are prohibited from engaging in certain types of transactions related to the Common Stock of the Company, including zero-cost collars and forward stock sales, as well as transactions in derivative securities, using margin accounts and pledging shares as collateral. See the discussion on page 15 for additional details regarding prohibited transactions.

Executive Compensation Decisions for Fiscal Year 2025

As mentioned on page 23, the Committee has elected to replace relative EPS growth in its performance grants with three-year relative total shareholder return (“TSR”) for fiscal year 2025. Relative TSR was selected to focus our officers on long-term shareholder value when developing and executing our strategic plans and to reward management based on the achievement of three-year TSR levels relative to our compensation peer group.

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Summary Compensation Table

The following table sets forth the compensation for services in all capacities to the Company for the three most recent fiscal years of the persons who were the Company’s named executive officers that year.

Name and Principal Position |  | Year |  | Salary |  |  | Bonus |  |  | Stock Awards |  |  | Non-Equity Incentive Plan Compensation |  |  | Change in Pension Value and Non- Qualified Deferred Compensation Earnings |  |  | All Other Compensation |  |  | Total |
|  |  |  | ($)(1) |  |  | ($) |  |  | ($)(2) |  |  | ($)(3) |  |  | ($)(4) |  |  | ($)(5) |  |  | ($) |
Jeremy R. Hoff, CEO and Director |  | 2024 |  |  | 600,000 |  |  |  | - |  |  |  | 600,000 |  |  |  | - |  |  |  | - |  |  |  | 15,181 |  |  |  | 1,215,181 |
|  | 2023 |  |  | 575,000 |  |  |  | - |  |  |  | 600,000 |  |  |  | - |  |  |  | - |  |  |  | 11,994 |  |  |  | 1,186,994 |
|  | 2022 |  |  | 450,000 |  |  |  | - |  |  |  | 337,500 |  |  |  | - |  |  |  | - |  |  |  | 10,669 |  |  |  | 798,169 |
Paul A. Huckfeldt, CFO and Sr. VP Fin. and Acctg. |  | 2024 |  |  | 375,000 |  |  |  | - |  |  |  | 225,000 |  |  |  | - |  |  |  | - |  |  |  | 13,681 |  |  |  | 613,681 |
|  | 2023 |  |  | 362,500 |  |  |  | - |  |  |  | 225,000 |  |  |  | - |  |  |  | - |  |  |  | 11,556 |  |  |  | 599,056 |
|  | 2022 |  |  | 295,833 |  |  |  | - |  |  |  | 246,000 |  |  |  | - |  |  |  | - |  |  |  | 10,554 |  |  |  | 552,387 |
Anne J. Smith, CAO, Sr. VP Administration, President-Domestic Upholstery |  | 2024 |  |  | 330,000 |  |  |  | - |  |  |  | 198,000 |  |  |  | - |  |  |  | 54,633 |  |  |  | 13,706 |  |  |  | 596,339 |
|  | 2023 |  |  | 325,000 |  |  |  | - |  |  |  | 198,000 |  |  |  | - |  |  |  | - |  |  |  | 11,406 |  |  |  | 534,406 |
|  | 2022 |  |  | 295,833 |  |  |  | - |  |  |  | 235,000 |  |  |  | - |  |  |  | - |  |  |  | 10,554 |  |  |  | 541,387 |
Tod R. Phelps, Chief Information Officer and Sr. VP - Operations |  | 2024 |  |  | 300,000 |  |  |  | - |  |  |  | 180,000 |  |  |  | - |  |  |  | - |  |  |  | 12,506 |  |  |  | 492,506 |
|  | 2023 |  |  | 291,667 |  |  |  | - |  |  |  | 180,000 |  |  |  | - |  |  |  | - |  |  |  | 10,797 |  |  |  | 482,464 |
|  | 2022 |  |  | 250,000 |  |  |  | - |  |  |  | 150,000 |  |  |  | 78,125 |  |  |  | - |  |  |  | 9,256 |  |  |  | 487,381 |

| (1) | Amounts shown represent base salary paid during the fiscal year before any deductions into the Company’s 401(k) plan. Annual base salary adjustments generally become effective at the beginning of each calendar year and do not coincide with the beginning of a fiscal year.

| (2) | For each named executive officer, this amount is the sum of the grant date fair value of (a) the restricted stock units and (b) three-year performance grants that were awarded to the named executive officers in fiscal 2024. The value of these awards was determined in accordance with FASB ASC Topic 718. The three-year performance grants shown were computed assuming that the probable level of performance would be achieved (10% EPS growth and relative EPS growth in the 60th percentile for the performance period) and excluded the impact of estimated forfeitures related to service-based vesting conditions. For more information regarding the restricted stock units and the three-year performance grants, refer to the Grants of Plan-Based Awards table on page 40 and to the Outstanding Equity Awards at Fiscal Year-End table on page 41. The value of the PSU awards to the named executive officers assuming the maximum level of performance is achieved are as set forth in the table below. For more information regarding the calculation of restricted stock unit and performance grant values, refer to note 15 of the Company’s consolidated financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 28, 2024 (the “2024 Form 10-K”), as filed with the SEC.

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Name |  | PSU Grant Date Fair Value at Maximum Level of Performance ($) |
Jeremy R. Hoff |  |  | 693,000 |
Paul A. Huckfeldt |  |  | 315,000 |
Anne J. Smith |  |  | 277,200 |
Tod R. Phelps |  |  | 207,900 |

| (3) | This column shows amounts earned under the annual cash incentive program, if any. For more information regarding the terms of the annual cash incentives for fiscal year 2024, see the Executive Compensation discussion at page 18.

| (4) | This column shows the change in the present value of the named executive officer’s accumulated benefit under the Supplemental Retirement Income Plan (“SRIP”) at the earliest full benefit retirement age. These changes in present value are not directly in relation to final payout potential and can vary significantly year-over-year based on (i) promotions and corresponding changes in salary; (ii) other one-time adjustments to salary or other reasons; (iii) actual age versus predicted age at retirement; (iv) the discount rate used to determine the present value of benefits; and (v) other relevant factors. A decrease in the discount rate results in an increase in the present value of the accumulated benefit without any increase in the benefits payable to the NEO at retirement and an increase in the discount rate has the opposite effect. The numbers reported are pension accounting values and were not realized by the named executive officers during the relevant fiscal year. None of the named executive officers received above-market or preferential earnings on compensation that was deferred on a non-tax-qualified basis. In fiscal year 2024, the change in pension value was -$2,002 for Mr. Huckfeldt and $54,633 for Ms. Smith. In fiscal year 2023, the change in pension value was -$141,096 for Mr. Huckfeldt and -$53,784 for Ms. Smith. In fiscal year 2022, the change in pension value was -$11,090 for Mr. Huckfeldt and -$3,133 for Ms. Smith. Messrs. Hoff and Phelps do not participate in the SRIP.

| (5) | All Other Compensation for fiscal year 2024 includes amounts reimbursed for disability income insurance premiums and matching contributions to the Company’s 401(k) plan.

Name |  | Disability Income Insurance Premium Reimbursement |  |  | 401(k) Match |  |  | Total |
Jeremy R. Hoff |  | $ | 506 |  |  | $ | 14,675 |  |  | $ | 15,181 |
Paul A. Huckfeldt |  |  | 506 |  |  |  | 13,175 |  |  |  | 13,681 |
Anne J. Smith |  |  | 506 |  |  |  | 13,200 |  |  |  | 13,706 |
Tod R. Phelps |  |  | 506 |  |  |  | 12,000 |  |  |  | 12,506 |

34

Pay versus Performance

The following table shows the past four fiscal years’ total compensation for the named executive officers as set forth in the Summary Compensation Table, the total compensation actually paid (“CAP”) to the named executive officers, the Company’s total shareholder return (“TSR”), peer group’s total shareholder return over the same period, net income, and the EPS as the company-selected performance measure.

Fiscal Year 2024 Pay versus Performance Table

Year |  | Summary compensation table total for CEO(1) |  |  | Compensation actually paid to CEO(2) |  |  | Average summary compensation table total for other NEOs(1) |  |  | Average compensation actually paid to other NEOs(2) |  |  | Total shareholder return(3) |  |  | Peer group total shareholder return(3) |  |  | Net income |  |  | EPS |
|  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($, in thousands) |  |  | ($) |
2024 |  |  | 1,215,188 |  |  |  | 1,444,583 |  |  |  | 567,507 |  |  |  | 617,865 |  |  |  | 127.27 |  |  |  | 107.46 |  |  |  | 9,865 |  |  |  | 0.91 |
2023 |  |  | 1,186,994 |  |  |  | 1,067,309 |  |  |  | 538,642 |  |  |  | 462,562 |  |  |  | 102.45 |  |  |  | 79.71 |  |  |  | (4,312 | ) |  |  | (0.37 | )
2022 |  |  | 798,169 |  |  |  | 406,826 |  |  |  | 577,484 |  |  |  | 244,027 |  |  |  | 71.56 |  |  |  | 96.59 |  |  |  | 11,718 |  |  |  | 0.97 |
2021 |  |  | 923,559 |  |  |  | 463,541 |  |  |  | 534,790 |  |  |  | 585,697 |  |  |  | 126.19 |  |  |  | 123.64 |  |  |  | (10,426 | ) |  |  | (0.88 | )

(1) The principal executive officers and other named executive officers for fiscal years 2021 - 2024 are the following:

Year |  | CEO |  | Other NEOs
2024 |  | Jeremy R. Hoff |  | Paul A. Huckfeldt, Anne J. Smith, Tod R. Phelps
2023 |  | Jeremy R. Hoff |  | Paul A. Huckfeldt, Anne J. Smith, Tod R. Phelps
2022 |  | Jeremy R. Hoff |  | Paul A. Huckfeldt, Anne J. Smith, Tod R. Phelps, D. Lee Boone
2021 |  | Paul B. Toms, Jr. |  | Paul A. Huckfeldt, Anne J. Smith, D. Lee Boone, Jeremy R. Hoff, Douglas Townsend

(2) SEC rules require certain adjustments be made to the Summary Compensation Table totals to determine compensation “actually paid” as reported in the Pay versus Performance table. The following table details these adjustments:

35

Year |  | Executives |  | Summary Compensation Table Total |  |  | Deduct Reported Change in Actuarial Present Value of Pension Benefits(a) |  |  | Add Pension Benefit Adjustments(b) |  |  | Deduct Reported Value of Equity Awards(c) |  |  | Add Equity Award Adjustments(d) |  |  | Compensation Actually Paid |
|  |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |
2024 |  | CEO |  |  | 1,215,188 |  |  |  | - |  |  |  | - |  |  |  | (600,000 | ) |  |  | 829,395 |  |  |  | 1,444,583 |
|  | Other NEOs |  |  | 567,507 |  |  |  | (18,211 | ) |  |  | 16,539 |  |  |  | (200,998 | ) |  |  | 253,028 |  |  |  | 617,865 |
2023 |  | CEO |  |  | 1,186,994 |  |  |  | - |  |  |  | - |  |  |  | (600,000 | ) |  |  | 480,315 |  |  |  | 1,067,309 |
|  | Other NEOs |  |  | 538,642 |  |  |  | - |  |  |  | 38,785 |  |  |  | (201,000 | ) |  |  | 86,135 |  |  |  | 462,562 |
2022 |  | CEO |  |  | 798,169 |  |  |  | - |  |  |  | - |  |  |  | (337,500 | ) |  |  | (53,843 | ) |  |  | 406,826 |
|  | Other NEOs |  |  | 577,484 |  |  |  | - |  |  |  | 30,595 |  |  |  | (225,255 | ) |  |  | (138,797 | ) |  |  | 244,027 |
2021 |  | CEO |  |  | 923,559 |  |  |  | (150,823 | ) |  |  | - |  |  |  | (337,500 | ) |  |  | 28,305 |  |  |  | 463,541 |
|  | Other NEOs |  |  | 534,790 |  |  |  | (46,588 | ) |  |  | 23,660 |  |  |  | (174,003 | ) |  |  | 247,838 |  |  |  | 585,697 |

| (a) | The amounts in this column represent the amounts reported in the “Change in Pension Value and Non-Qualified Deferred Compensation Earnings” column of the Summary Compensation Table for each applicable year. In fiscal year 2024, the change in pension value was -$2,002 for Mr. Huckfeldt and $54,633 for Ms. Smith. In fiscal 2023, the change in pension value was -$141,096 for Mr. Huckfeldt and -$53,784 for Ms. Smith. In fiscal year 2022, the change in pension value was -$11,090 for Mr. Huckfeldt and -$3,133 for Ms. Smith.

| (b) | The amounts deducted or added in calculating the pension value adjustments are as follows:

Year |  | Executives |  | Service Cost (i) |  |  | Prior Service Cost (ii) |  |  | Total Pension Value Adjustment |
|  |  |  | ($) |  |  | ($) |  |  | ($) |
2024 |  | CEO |  |  | - |  |  |  | - |  |  |  | - |
|  | Other NEOs |  |  | 16,539 |  |  |  | - |  |  |  | 16,539 |
|  |  |  |  |  |  |  |  |  |  |  |  | - |
2023 |  | CEO |  |  | - |  |  |  | - |  |  |  | - |
|  | Other NEOs |  |  | 38,785 |  |  |  | - |  |  |  | 38,785 |
|  |  |  |  |  |  |  |  |  |  |  |  | - |
2022 |  | CEO |  |  | - |  |  |  | - |  |  |  | - |
|  | Other NEOs |  |  | 30,595 |  |  |  | - |  |  |  | 30,595 |
|  |  |  |  |  |  |  |  |  |  |  |  | - |
2021 |  | CEO |  |  | - |  |  |  | - |  |  |  | - |
|  | Other NEOs |  |  | 23,660 |  |  |  | - |  |  |  | 23,660 |

| (c) | The amounts in this column represent the grant date fair value of equity awards as reported in the “Stock Awards” column of the Summary Compensation Table for each applicable year.

| (d) | The amounts deducted or added in calculating the equity award adjustments are as follows:

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Year |  | Executive |  | Year end fair value of equity awards granted during the year |  |  | Year over year change in fair value of outstanding and unvested equity awards |  |  | Fair value as of vesting date of equity awards granted and vested in the year |  |  | Year over year change in fair value of equity awards granted in prior years that vested in the year |  |  | Fair value at the end of the prior year of equity awards that failed to meet vesting conditions in the year |  |  | Value of dividends or other earnings paid on stock or option awards not otherwise reflected in fair value or total compensation |  |  | Total equity award adjustments |
|  |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |  |  | ($) |
2024 |  | CEO |  |  | 801,490 |  |  |  | 161,469 |  |  |  | - |  |  |  | (9,439 | ) |  |  | (124,125 | ) |  |  | - |  |  |  | 829,395 |
|  | Other NEOs |  |  | 268,498 |  |  |  | 59,333 |  |  |  | - |  |  |  | (3,462 | ) |  |  | (71,341 | ) |  |  |  |  |  |  | 253,028 |
2023 |  | CEO |  |  | 674,246 |  |  |  | (6,959 | ) |  |  | - |  |  |  | (5,586 | ) |  |  | (181,386 | ) |  |  | - |  |  |  | 480,315 |
|  | Other NEOs |  |  | 225,877 |  |  |  | (3,762 | ) |  |  | - |  |  |  | (2,965 | ) |  |  | (133,015 | ) |  |  | - |  |  |  | 86,135 |
2022 |  | CEO |  |  | 190,896 |  |  |  | (135,677 | ) |  |  | - |  |  |  | 13,025 |  |  |  | (122,087 | ) |  |  | - |  |  |  | (53,843 | )
|  | Other NEOs |  |  | 89,220 |  |  |  | (110,917 | ) |  |  | - |  |  |  | (19,780 | ) |  |  | (97,320 | ) |  |  | - |  |  |  | (138,797 | )
2021 |  | CEO |  |  | 243,511 |  |  |  | (51,597 | ) |  |  | - |  |  |  | - |  |  |  | (163,610 | ) |  |  | - |  |  |  | 28,304 |
|  | Other NEOs |  |  | 298,709 |  |  |  | 17,822 |  |  |  | - |  |  |  | (10,710 | ) |  |  | (57,983 | ) |  |  | - |  |  |  | 247,838 |

(3) Total shareholder return (TSR) is determined based on the value of an initial fixed investment of $100 at the beginning of each fiscal year. The peer group TSR prepared by Zacks Investment Research, Inc. represents cumulative, weighted TSR of the same peer group under Standard Industrial Classification (SIC) Codes 2510 and 2511, which includes home furnishings companies that are publicly traded in the United States or Canada. For more information regarding the peer group TSR, refer to the performance graph that is included in the 2024 Form 10-K, as filed with the SEC.

Relationship of Pay and Performance Measures

CAP versus the Company’s TSR and peer group’s TSR

As shown in the chart below, the CEO and other NEOs’ CAP alignment with TSR varied each year. This is due in large part to the significant emphasis the Company places on long-term equity incentives, which are sensitive to changes in share price and number of shares granted. Both Mr. Hoff’s base salary and long-term incentive grant increased in fiscal 2023 because of the previously mentioned compensation study performed by Pearl Meyer. For this reason, Mr. Hoff received a larger long-term incentive grant, which coupled with his base salary increase and an increase in fiscal 2023 year-end share price as compared to the grant date share price of those awards, significantly increased his fiscal 2023 CAP. His fiscal 2024 CAP was inflated by a higher fiscal 2024 year-end share price, which was the primary driver of the higher fiscal 2024 CAP.

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CAP versus Net Income

As shown in the chart below, the Company’s net income and the CEO and other NEOs’ CAP varied significantly each year. This is due in large part to the significant emphasis the Company places on equity incentives, which are sensitive to changes in stock price. For instance, in fiscal 2023, more than 50% of Mr. Hoff’s compensation were equity-based grants, which were comprised of time-based restricted stock unit and performance stock units which are based on achievement of budgeted EPS. Mr. Hoff’s base salary was increased in fiscal 2023 because of the previously mentioned compensation study performed by Pearl Meyer. The unalignment in fiscal 2023 was due to net loss driven by the $24 million restructuring charges related to the exit of ACH brand and the repositioning of PRI brand.

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CAP versus Company-selected Measure (EPS)

As shown in the chart below, the Company’s EPS and the CEO and other NEOs’ CAP varied significantly each year. This is due in large part to the significant emphasis the Company places on equity incentives, which are sensitive to changes in stock price as discussed above. EPS is measured based on the Company’s net income. The unalignment in fiscal 2023 was due to the net loss discussed above.

Company Financial Performance Measures

The items listed below represent the most important metrics used to determine CAP for fiscal year 2024 as further described in the Compensation Discussion and Analysis on page 18.

Most Important Performance Measures
Consolidated net income
Earnings per share (“EPS”)
Absolute EPS growth
Relative EPS growth

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Grants of Plan-Based Awards

The following table sets forth information concerning individual grants of awards made under the Company’s annual cash incentive plan and 2020 Stock Incentive Plan during fiscal 2024:

|  |  |  |  |  | Estimated Future Payouts Under Non- Equity Incentive Plan Awards(1) |  |  | Estimated Future Payouts Under Equity Incentive Plan Awards (2) |  |  |  |  |  |  |  |  |
Name |  | Award Type |  | Grant Date for Equity Incentive Plan and Stock Awards |  | Threshold ($) |  |  | Target ($) |  |  | Maximum ($) |  |  | Threshold (#) |  |  | Target (#) |  |  | Maximum (#) |  |  | All Other Stock Awards: Number of Units (#) (3) |  |  | Grant Date Fair Value Stock Awards ($) |
Jeremy R. Hoff |  | Annual Cash Incentive |  |  |  | $ | 300,000 |  |  | $ | 600,000 |  |  | $ | 990,000 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Performance Grant |  | 4/10/2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 11,452 |  |  |  | 21,142 |  |  |  | 37,000 |  |  |  |  |  |  | $ | 396,000 | (4)
|  | RSU Grant |  | 4/10/2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 10,892 |  |  |  | 176,341 | (5)
Paul A. Huckfeldt |  | Annual Cash Incentive |  |  |  |  | 112,500 |  |  |  | 225,000 |  |  |  | 371,250 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Performance Grant |  | 4/10/2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,206 |  |  |  | 9,610 |  |  |  | 16,818 |  |  |  |  |  |  |  | 180,000 | (4)
|  | RSU Grant |  | 4/10/2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,403 |  |  |  | 38,905 | (5)
Anne J.Smith |  | Annual Cash Incentive |  |  |  |  | 99,000 |  |  |  | 198,000 |  |  |  | 326,700 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Performance Grant |  | 4/10/2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 4,580 |  |  |  | 8,458 |  |  |  | 14,800 |  |  |  |  |  |  |  | 158,400 | (4)
|  | RSU Grant |  | 4/10/2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,114 |  |  |  | 34,226 | (5)
Tod R. Phelps |  | Annual Cash Incentive |  |  |  |  | 90,000 |  |  |  | 180,000 |  |  |  | 297,000 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Performance Grant |  | 4/10/2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,436 |  |  |  | 6,342 |  |  |  | 11,100 |  |  |  |  |  |  |  | 118,800 | (4)
|  | RSU Grant |  | 4/10/2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,267 |  |  |  | 52,893 | (5)

| (1) | Represents the estimated payouts under the annual cash incentive program for the 2024 fiscal year, as of the time those incentives were granted to the named executive officers. For additional discussion regarding annual cash incentives and the actual amounts paid to the named officers for fiscal 2024, refer to the Compensation Discussion and Analysis which begins on page 18, including Annual Cash Incentive on page 25 and the Summary Compensation table on page 33.

| (2) | Represents the estimated future payouts under the performance grants awarded to the named executive officers in fiscal 2024. For additional discussion regarding these performance grants, refer to Compensation Discussion and Analysis, which begins on page 18, including Long-Term Performance Incentive on page 27 and the Summary Compensation Table on page 33.

| (3) | This is the number of service-based RSUs granted to the named executive officer. Each RSU entitles the named executive officer to receive one share of the Company’s common stock (or, at the discretion of the Committee, cash based on the fair market value of a share of the Company’s common stock on the date payment is made or both) if they remain continuously employed with the Company through the end of three-year service period that ends April 10, 2026. In addition to the service-based vesting requirement, 100% of an executive officer’s RSUs will vest upon a change of control of the Company and a prorated number of the RSUs will vest upon the death, disability, or retirement of the executive officer.

| (4) | Represents the three-year performance grants that were awarded to the named executive officers in fiscal 2024. The three-year performance grants shown were computed assuming that the probable level of performance would be achieved (10% EPS growth and relative EPS growth at the 60th percentile for the performance period) and excluded the impact of estimated forfeitures related to service-based vesting conditions.

| (5) | The grant date fair value of each RSU is based on the market price of the Company’s common stock on the grant date, reduced by the present value of the dividends expected to be paid on the shares during the service period, discounted at the appropriate risk-free rate of return. For more information concerning the calculation of performance grant fair values, refer to note 15 of the Company’s consolidated financial statements included in the Company’s 2024 Form 10-K.

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Outstanding Equity Awards at Fiscal Year-End

The following table sets forth information concerning outstanding equity awards, which consist of performance grants and restricted stock units, held by the named executive officers at the end of fiscal 2024. There were no stock options outstanding as of the end of fiscal 2024.

Name |  | Grant Date |  | Number of Shares or Units of Stock That Have Not Vested (#) (2) |  |  | Market Value of Shares or Units of Stock That Have Not Vested ($) (2) |  |  | Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) (1) |  |  | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)(3) |
Jeremy R. Hoff |  | 4/8/2021 (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 4/8/2021 (2) |  |  | 3,024 |  |  |  | 75,660 |  |  |  |  |  |  |  |  |
|  | 4/11/2022 (1) |  |  |  |  |  |  |  |  |  |  | 21,686 |  |  |  | 542,584 |
|  | 4/11/2022 (2) |  |  | 11,172 |  |  |  | 279,523 |  |  |  |  |  |  |  |  |
|  | 4/10/2023 (1) |  |  |  |  |  |  |  |  |  |  | 21,142 |  |  |  | 528,973 |
|  | 4/10/2023 (2) |  |  | 10,892 |  |  |  | 272,518 |  |  |  |  |  |  |  |  |
Paul A. Huckfeldt |  | 4/8/2021 (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 4/8/2021 (2) |  |  | 2,742 |  |  |  | 68,605 |  |  |  |  |  |  |  |  |
|  | 4/11/2022 (1) |  |  |  |  |  |  |  |  |  |  | 9,858 |  |  |  | 246,647 |
|  | 4/11/2022 (2) |  |  | 2,464 |  |  |  | 61,649 |  |  |  |  |  |  |  |  |
|  | 4/10/2023 (1) |  |  |  |  |  |  |  |  |  |  | 9,610 |  |  |  | 240,442 |
|  | 4/10/2023 (2) |  |  | 2,403 |  |  |  | 60,123 |  |  |  |  |  |  |  |  |
Anne J. Smith |  | 4/8/2021 (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 4/8/2021 (2) |  |  | 2,446 |  |  |  | 61,199 |  |  |  |  |  |  |  |  |
|  | 4/11/2022 (1) |  |  |  |  |  |  |  |  |  |  | 8,674 |  |  |  | 217,023 |
|  | 4/11/2022 (2) |  |  | 2,169 |  |  |  | 54,268 |  |  |  |  |  |  |  |  |
|  | 4/10/2023 (1) |  |  |  |  |  |  |  |  |  |  | 8,458 |  |  |  | 211,619 |
|  | 4/10/2023 (2) |  |  | 2,114 |  |  |  | 52,892 |  |  |  |  |  |  |  |  |
Tod R. Phelps |  | 4/8/2021 (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | 4/8/2021 (2) |  |  | 1,344 |  |  |  | 33,627 |  |  |  |  |  |  |  |  |
|  | 4/11/2022 (1) |  |  |  |  |  |  |  |  |  |  | 6,506 |  |  |  | 162,780 |
|  | 4/11/2022 (2) |  |  | 3,352 |  |  |  | 83,867 |  |  |  |  |  |  |  |  |
|  | 4/10/2023 (1) |  |  |  |  |  |  |  |  |  |  | 6,342 |  |  |  | 158,677 |
|  | 4/10/2023 (2) |  |  | 3,267 |  |  |  | 81,740 |  |  |  |  |  |  |  |  |

| (1) | Performance grant awards outstanding as of January 28, 2024. Performance metrics for the grants awarded on April 8, 2021 were not met; consequently, there was no payout and there are no amounts shown in the table. Each performance grant entitles the executive officer to receive a payment based on the achievement of two specified performance conditions derived from the Company’s absolute and relative EPS growth over a three-year performance period as shown in the following table. The payout or settlement of which shall be made in shares of the Company’s common stock (based on the fair market value of the shares of the Company’s common stock on the date of settlement or payment). In all cases, the named executive officer also must remain continuously employed with the Company through the end of the performance period to be eligible for a payment, with prorated payments made due to retirement, death or disability. The performance grants provide for a lump sum cash payment to the executive officer if the Company undergoes a change of control. For additional discussion regarding the performance grants, refer to the Executive Compensation Discussion at page 18.

PSU Grant Date |  | Performance Period
4/8/2021 |  | February 1, 2021 - January 28, 2024
4/11/2022 |  | January 31, 2022 - February 2, 2025
4/10/2023 |  | January 30, 2023 - February 1, 2026

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| (2) | Restricted stock unit (“RSU”) awards outstanding at the end of the last completed fiscal year. Market value is based on the closing market price of the Company’s common stock on January 28, 2024 fiscal year. Each RSU entitles the executive officer to receive one share of common stock if they remain continuously employed with the Company through the end of a three-year service period as shown in the following table. At the discretion of the Committee, the RSUs may be paid in shares of the Company’s common stock, cash (based on the fair market value of a share of common stock on the date payment is made), or both. In addition to the service-based vesting requirement, 100% of the RSUs will vest upon a change of control of the Company and a prorated number of the RSUs will vest upon the death, disability or retirement of the executive officer.

RSU Grant Date |  | Service Period
4/8/2021 |  | April 8, 2021 - April 8, 2024
4/11/2022 |  | April 11, 2022 - April 11, 2025
4/10/2023 |  | April 10, 2023 - April 10, 2026

| (3) | Performance metrics were not met for the 2022 fiscal year performance grant awards (granted on April 8, 2021) as of the end of the 2024 fiscal year, which was the end of the award’s three-year performance period. Consequently, no amount was outstanding at the end of the 2024 fiscal year. The amount reported for the 2023 and 2024 performance grant awards is based on the level of performance achieved as of the end of the 2024 fiscal year, even though actual performance will not be measured under each of those awards until the end of their respective three-year performance periods. If the interim performance exceeded the threshold for the award, the reported value of the award was based on assumed achievement of the next higher performance measure that exceeds the actual interim measure of performance (which was the maximum performance level for both absolute and relative EPS growth). Any payments under the 2023 and 2024 performance grant awards will be determined based on actual performance through 2025 and 2026, respectively, and not on any interim measure of performance.

Option Exercised and Stock Vested Table

The following table sets forth information concerning equity awards vested during fiscal 2024:

Name (1) |  | Award Type |  | Grant Date |  | Number of Shares Earned upon Vesting |  |  | Value Realized on Vesting ($) |
Jeremy R. Hoff |  | RSU Grant |  | 4/7/2020 |  |  | 4,310 |  |  | $ | 79,002 |
Paul A. Huckfeldt |  | RSU Grant |  | 4/7/2020 |  |  | 2,371 |  |  |  | 43,460 |
Anne J. Smith |  | RSU Grant |  | 4/7/2020 |  |  | 2,371 |  |  |  | 43,460 |

| (1) | Mr. Phelps was not a named executive officer in April 2020 and did not receive the RSU grant.

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Pension Benefits

The following table sets forth information concerning benefits provided for Mr. Huckfeldt and Ms. Smith under the Company’s Supplemental Retirement Income Plan (“SRIP”). Messrs. Hoff and Phelps, do not participate in the SRIP:

Name |  | Plan Name |  | Plan Years of Service |  |  | Present Value of Accumulated Benefit($)(1) |
Paul A. Huckfeldt |  | SRIP |  |  | 18 |  |  |  | 796,534 |
Anne J. Smith |  | SRIP |  |  | 16 |  |  |  | 596,791 |

| (1) | Assumes a discount rate of 5.05%, based on the Moody’s Composite Bond Rate as of January 31, 2024 (rounded to the nearest 5 basis points).

The SRIP provides a monthly supplemental retirement benefit equal to a specified percentage of the executive’s final average monthly compensation (25% for both Mr. Huckfeldt and Ms. Smith), payable for a 15-year period following the executive’s termination of employment. Final average monthly compensation means the average monthly base salary and any annual incentive awards paid to the executive during the five-year period before their termination of employment with the Company.

An executive becomes vested in 75% of the monthly supplemental benefit if the executive remains continuously employed with the Company until reaching age 60 and is vested in additional 5% increments for each subsequent year that the executive remains continuously employed with the Company. Executives who remain continuously employed to age 65 become fully vested in their monthly supplemental benefit. The monthly retirement benefit for each participant in the plan, regardless of age, will become fully vested and the present value of all plan benefits will be paid to participants in a lump sum upon a change in control of the Company (as discussed under Potential Payments upon Termination or Change in Control, below). Additional information regarding the SRIP can be found under Executive Compensation beginning on page 18.

Potential Payments upon Termination or Change in Control

Supplemental Retirement Income Plan

Upon a change in control of the Company, each SRIP participant, regardless of age, will become fully vested and receive the present value of their entire plan benefit in a lump sum payment. A “change in control” includes, subject to certain exceptions:

| ■ | acquisition, other than from the Company, of more than 50% of the outstanding shares or the combined voting power, of the Company’s Common Stock; or

| ■ | a majority of members of the Board is replaced during a twelve-consecutive-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election.

The benefits payable under the SRIP are described further under Pension Benefits above.

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The following table provides the estimated lump sum payment each participating named executive officer would have received under the SRIP if a change in control had occurred on the last day of fiscal 2023.

Name |  | Change in Control – SRIP (1) |
Paul A. Huckfeldt |  | $ | 821,678 |
Anne J. Smith |  |  | 694,574 |

| (1) | Calculated based on historical average salary and bonus amounts for the five-year period ended January 31, 2024, and assuming a discount rate equal to 120% of the short-term (5.93%), mid-term (5.18%) or long-term (5.39%) applicable federal rate for the month of January 2024 depending on the number of years remaining to the participant’s retirement at age 65.

If a SRIP participant were to die while employed by the Company and before payment of their vested benefit begins, their beneficiary will receive a death benefit equal to the participant’s vested benefit, which would be paid in 180 equal monthly payments.

Performance Grants

Outstanding performance grants awarded to the named executive officers provide for a lump sum cash payment to the executive officer if the Company undergoes a “change of control.” The payment would be made on the date of the change of control and would assume that the named executive officer remained continuously employed through the end of the applicable performance period and that the specified target levels defined in the grant agreement had been attained for the applicable performance period. A change of control includes, subject to certain exceptions:

| ■ | acquisition, other than from the Company, of more than 50% of the combined voting power of the Company’s Common Stock; or

| ■ | a majority of the members of the Board is replaced during a twelve-consecutive-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; and

| ■ | on or after the occurrence of the change of control, the participant’s employment is terminated involuntarily or constructively terminated without cause.

For grants under the 2020 Stock Incentive Plan, the Compensation Committee (or, with respect to director awards, the Board) is permitted to provide for vesting of awards to eligible employees in connection with a change in control of the Company if there is also a termination of employment in connection with the change in control. This is often referred to as “double trigger” vesting. For these purposes, a termination is considered to be in connection with a change of control if it occurs upon or within two years after the change in control and is for one of the following two reasons: (i) an involuntary termination by the Company without “cause” or (ii) a “constructive termination” by the participant. The terms “cause” and “constructive termination” are defined in the applicable award agreements. In addition, the Committee may provide for the assumption or substitution of awards by a surviving corporation. Awards to non-employee directors may fully vest upon a change in control.

The performance grants also provide for a pro-rated lump sum payment to be made in connection with the death, disability or retirement (as defined in the 2020 Stock Incentive Plan) of the named executive officer. The payment would be made upon the completion of the applicable performance period based on the performance levels actually achieved for the applicable performance period.

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The following table provides the estimated aggregate payments to which each named executive officer would have been entitled under his respective performance grants if a change of control, or the executive’s death, disability or retirement, had occurred on the last day of fiscal 2024 (subject to certain assumptions, as specified below).

|  | Payout under Performance Grants ($)(1) |
Name |  | Change of Control |  |  | Death, Disability or Retirement |
Jeremy R. Hoff |  | $ | 792,000 |  |  | $ | 395,604 |
Paul A. Huckfeldt |  |  | 360,000 |  |  |  | 179,820 |
Anne J. Smith |  |  | 316,800 |  |  |  | 158,242 |
Tod R. Phelps |  |  | 237,600 |  |  |  | 118,681 |

| (1) | These amounts include the amounts payable under three-year performance grants awarded April 11, 2022 and April 10, 2023 which are described in the Outstanding Equity Awards at Fiscal Year-End table on page 41. Performance metrics were not met for the grants awarded on April 8, 2021 and are therefore not included in the amounts shown above. The payout amounts in connection with an executive’s death, disability or retirement assume that the probable level of performance is achieved for the applicable performance periods.

Restricted Stock Units

The Compensation Committee may provide that outstanding restricted stock units (RSUs) awarded to the named executive officers will vest earlier upon certain terminations of employment following a change of control and may also be eligible for earlier pro rata vesting in connection with a termination of employment on account of death, disability, or retirement (as defined in the 2020 Stock Incentive Plan). A “change of control” of the Company for purposes of the RSUs has the same meaning as for the performance grants described above. The RSU payment would be a lump sum paid on the date of the change of control or as soon as administratively practicable after the vesting date upon the executive’s death, disability, or retirement. The following table provides an estimate of the aggregate payments that each named executive officer would have received under the executive’s RSUs if a change of control, or the executive’s death, disability or retirement, had occurred on the last day of fiscal 2024.

|  | Payout under Restricted Stock Units Upon ($)(1) |
Name |  | Change of Control |  |  | Death, Disability or Retirement |
Jeremy R. Hoff |  | $ | 627,702 |  |  | $ | 350,077 |
Paul A. Huckfeldt |  |  | 190,377 |  |  |  | 129,134 |
Anne J. Smith |  |  | 168,360 |  |  |  | 114,471 |
Tod R. Phelps |  |  | 199,234 |  |  |  | 115,953 |

| (1) | These amounts include the amounts payable under three-year RSUs awarded April 8, 2021, April 11, 2022 and April 10, 2023 which are described in the Outstanding Equity Awards at Fiscal Year-End table on page 41 and are calculated based on the closing price of the Company’s Common Stock as of the last trading day of fiscal 2024.

Hoff, Huckfeldt, Smith and Phelps Employment Agreements

Under each of these employment agreements, the named executive officer is entitled to receive certain payments in connection with their termination of employment absent “cause,” and in the event of their death. If the executive’s employment is terminated by the Company absent “cause,” (defined below) during the term of the agreement, they would receive:

| ● | Cash severance equal to eighteen (18) months of base salary for Mr. Hoff for any termination of employment that occurs before the last day of the fiscal year; in the case of Messrs. Huckfeldt and Phelps and Ms. Smith, cash severance equal to twelve (12) months of base salary for any termination of employment;

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| ● | An annual cash incentive payment prorated for the period ending on their termination date;

| ● | a severance payment in an amount equal to two times (for Mr. Hoff) and one times (for Messrs. Huckfeldt and Phelps and Ms. Smith) the sum of the officer’s then-current base salary and a prorated annual cash incentive payment for the performance year in which the officer’s employment is terminated, if the officer’s employment is terminated for good reason or by the Company without cause and such termination date is within one year after a change of control; and

If the named executive officer’s employment is terminated on account of death, their estate would receive payment of their base salary through their termination date, and a prorated annual cash incentive payment for the period ending with their death.

If the executive voluntarily terminates their employment, or they are terminated for “cause,” by the Company, they will not receive any post-termination payments, other than any salary or benefit due through and including the respective executive’s date of termination.

Under the terms of each of the employment agreements covering these executives, the following definitions of “cause” means the executive’s:

| ● | gross negligence in the performance of their material duties;

| ● | intentional nonperformance or mis-performance of their duties, or refusal to abide by or comply with reasonable directives of the CEO or the Company’s policies and procedures;

| ● | willful dishonesty, fraud or misconduct with respect to the business or affairs of the Company, which in the judgment of the CEO adversely affects the Company;

| ● | executive’s arrest for, conviction of, or a plea of nolo contendere to, a felony or other crime involving moral turpitude or that otherwise threatens to interfere with the Company’s interests, as determined by the sole discretion of the CEO; or

| ● | executive’s failure to report to work or unexcused absenteeism in violation of the Company’s attendance policies.

Payments upon Involuntary Termination of Employment Absent Cause

The table below describes the payments due each of the named executive officers in the event of an involuntary termination of employment absent “cause” assuming such termination occurred on January 28, 2024, the last business day of the Company’s fiscal year.

Name |  | Cash(1) |  |  | STIC(2) |  |  | LTIC(3) |  |  | Total |
Jeremy R. Hoff |  | $ | 900,000 |  |  | $ | - |  |  | $ | 746,077 |  |  | $ | 1,646,077 |
Paul A. Huckfeldt |  |  | 375,000 |  |  |  | - |  |  |  | 309,134 |  |  |  | 684,134 |
Anne J. Smith |  |  | 330,000 |  |  |  | - |  |  |  | 272,871 |  |  |  | 602,871 |
Tod R. Phelps |  |  | 300,000 |  |  |  | - |  |  |  | 234,753 |  |  |  | 534,753 |

| (1) | This represents the cash severance payment due each named executive officer under their respective employment agreements, if any, assuming a termination date of January 28, 2024.

| (2) | This represents the short-term incentive cash payment due each executive assuming a termination date of January 28, 2024.

| (3) | This represents the value of any long-term incentive award payable to each executive assuming a termination date of January 28, 2024 under each executive’s employment agreement, the vesting of any outstanding long-term incentive award is accelerated on a prorated basis based on actual performance to date.

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Pay Ratio Disclosure

In accordance with Item 402(u) of Regulation S-K, promulgated by the Dodd-Frank Wall Street Reform Act and Consumer Protection Act of 2010, the Company determined the ratio of the annual total compensation of Mr. Hoff, the Chief Executive Officer and Director, relative to the annual total compensation of our median employee.

To identify the median compensated employee, the Company selected a new median employee using 2023 W-2 wages for its U.S. employees or its equivalent for non-US employees. It identified its median employee from its employee population as of January 28, 2024, the last day of its fiscal year 2024.

The Company then determined total compensation for the median employee in the same manner as the “Total Compensation” column shown for Mr. Hoff in the Summary Compensation Table on page 33.

Pay elements that were included to determine total annual compensation for the median employee were, if applicable:

| ● | Base salary, including overtime, vacation and holiday pay;

| ● | Annual cash incentive; and

| ● | 401(k) matching contribution.

The Company then determined that the 2024 fiscal year annual total compensation of the median employee was $48,891. Mr. Hoff’s annual total compensation for the same period was $1,215,181 and the ratio of these amounts was 1-to-25.

As of the end of fiscal 2024, the Company’s total employee population consisted of 1,203 employees, of which 1,030 were located in the United States and 173 were located in Asia.

The Company believes this pay ratio is a reasonable estimate and is calculated in a manner consistent with the SEC guidance based on the payroll and employment records and the methodology described above.

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EQUITY COMPENSATION PLAN INFORMATION

The following table summarizes information about the Company’s equity compensation plans as of January 28, 2024:

Plan Category |  | Number of securities to be issued upon exercise of outstanding options, warrants and rights |  |  | Weighted-average exercise price of outstanding options, warrants and rights |  |  | Approximate number of securities remaining available for future issuance under equity compensation plans(1) |
Equity compensation plans approved by security holders |  | 0 |  |  | N/A |  |  |  | 70,000 |
Equity compensation plans not approved by security holders |  | None |  |  | None |  |  | None |
Total |  | 0 |  |  | N/A |  |  |  | 70,000 |

| (1) | Shares allocable to incentive awards granted under the Company’s 2020 Stock Incentive Plan that expire, are forfeited, lapse or are otherwise terminated or cancelled are added to the shares available for incentive awards under the plan. Any shares covered by a stock appreciation right are counted as used only to the extent shares are actually issued to a participant when the stock appreciation right is exercised. Any shares retained by the Company in satisfaction of a participant’s obligation to pay applicable withholding taxes with respect to any incentive award and any shares covered by an incentive award that is settled in cash are added to the shares available for incentive awards under the plan.

DELINQUENT SECTION 16(a) REPORTS

The Exchange Act requires the Company’s executive officers and directors, and any persons owning more than 10% of the Common Stock, to file reports of ownership and changes in ownership with the SEC. Based solely on its review of Forms 3, 4 and 5 filed during or with respect to the fiscal year ended January 28, 2024, and written representations from the Company’s directors and executive officers and certain other reporting persons that, the Company believes that all executive officers, directors and 10% shareholders complied with those filing requirements and there were no late reports.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the beneficial ownership of the Company’s Common Stock as of April 8, 2024 (unless noted otherwise below) by:

| ■ | each shareholder known by the Company to be the beneficial owner of more than 5% of its outstanding Common Stock;

| ■ | each director and director nominee;

| ■ | each named executive officer; and

| ■ | all directors and executive officers as a group.

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Name |  | Amount and Nature Of Beneficial Ownership |  |  | Percent Of Class |
Pzena Investment Management, LLC (1) |  |  | 1,426,039 | (1) |  |  | 13.3 | %
Donald Smith & Co., Inc. et al (2) |  |  | 1,145,272 | (2) |  |  | 10.7 | %
Dimensional Fund Advisors LP (3) |  |  | 895,196 | (3) |  |  | 8.4 | %
BlackRock, Inc. (4) |  |  | 859,433 | (4) |  |  | 8.0 | %
The Vanguard Group (5) |  |  | 651,058 | (5) |  |  | 6.1 | %
W. Christopher Beeler, Jr. |  |  | 52,156 | (6) |  |  | * |
Paul A. Huckfeldt |  |  | 30,706 | (7) |  |  | * |
Ellen C. Taaffe |  |  | 19,126 | (8) |  |  | * |
Tonya H. Jackson |  |  | 18,672 | (9) |  |  | * |
Paulette Garafalo |  |  | 18,565 | (10) |  |  | * |
Anne J. Smith |  |  | 15,725 | (11) |  |  | * |
Maria C. Duey |  |  | 11,589 | (12) |  |  | * |
Jeremy R. Hoff |  |  | 7,379 | (13) |  |  | * |
Christopher L. Henson |  |  | 7,228 | (14) |  |  | * |
Tod R. Phelps |  |  | 1,488 | (15) |  |  | * |
All directors and executive officers as a group (10 persons) |  |  | 182,634 |  |  |  | 1.7 | %

* Less than one percent.

| (1) | The beneficial ownership information for Pzena Investment Management, LLC is based upon a Schedule 13G filed with the SEC on February 7, 2024. The Schedule 13G indicates that Pzena Investment Management, LLC, an investment adviser, has sole voting power with respect to 1,199,462, and sole disposition power with respect to all 1,426,039 shares. The principal business address of Pzena Investment Management, LLC is 320 Park Avenue, 8th Floor, New York, New York 10022.
| (2) | The beneficial ownership information for Donald Smith & Co., Inc., DSCO Value Fund, L.P. and John Piermont is based upon a Schedule 13G filed with the SEC on February 5, 2024. The Schedule 13G indicates that Donald Smith & Co., Inc., an investment advisor, has sole voting power with respect to 1,115,594 shares and sole disposition power with respect to 1,134,694 shares, DSCO Value Fund, L.P., a partnership, has sole voting and disposition power over 8,578 shares, and Mr. Piermont, an individual, has sole voting and disposition power over 2,000 shares. The principal business address of Donald Smith & Co., Inc. is 152 West 57th Street, New York, New York 10019.
| (3) | The beneficial ownership information for Dimensional Fund Advisors LP is based upon a Schedule 13G/A filed with the SEC on February 9, 2024. The Schedule 13G/A indicates that Dimensional Fund Advisors LP, a registered investment adviser that furnishes investment advice to four registered investment companies and serves as investment manager or sub-adviser to certain other commingled funds, group trusts and separate accounts (such investment companies, trusts and accounts, collectively referred to as the “Funds”), reported holdings of the Company’s Common Stock beneficially owned by the Funds such that the reporting person had sole voting power over 882,205 shares and sole disposition power over all 895,196 shares. Dimensional Fund Advisors LP reported that either it or its subsidiaries may possess voting and/or investment power over the Company’s Common Stock owned by the Funds but disclaimed beneficial ownership of such Company Common Stock. The principal business address of Dimensional Fund Advisors LP is 6300 Bee Cave Road, Building One, Austin, Texas 78746.
| (4) | The beneficial ownership information for BlackRock, Inc. is based on a Schedule 13G filed with the SEC on January 25, 2024. The Schedule 13G indicates that BlackRock, a parent holding company or control person for certain entities disclosed in the Schedule 13G, has sole voting power over 830,792 shares and sole dispositive power over all 859,433 shares. The principal business address of BlackRock, Inc. is 50 Hudson Yards, New York, New York 10001.
| (5) | The beneficial ownership information for the Vanguard Group is based upon a Schedule 13G/A filed with the SEC on February 13, 2024. The Schedule 13G/A indicates that the Vanguard Group, an investment adviser, has no sole voting power, shared voting power with respect to 4,994 shares, sole disposition power with respect to 641,894 shares and shared disposition power with respect to 9,164 shares. The principal business address of the Vanguard Group is 100 Vanguard Blvd., Malvern Pennsylvania 19355.
| (6) | Mr. Beeler has sole voting and disposition power with respect to all 52,156 shares.

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| (7) | Mr. Huckfeldt has sole voting and disposition power with respect to 29,206 shares and has shared voting and disposition power with respect to 1,500 shares.
| (8) | Ms. Taaffe has sole voting and disposition power with respect to all 19,126 shares.
| (9) | Ms. Jackson has sole voting and disposition power with respect to all 18,672 shares.
| (10) | Ms. Garafalo has sole voting and disposition power with respect to all 18,565 shares.
| (11) | Ms. Smith has sole voting and disposition power with respect to all 15,725 shares.
| (12) | Ms. Duey has sole voting and disposition power with respect to all 11,589 shares.
| (13) | Mr. Hoff has sole voting and disposition power with respect to all 7,379 shares.
| (14) | Mr. Henson has sole voting and disposition power with respect to all 7,228 shares.
| (15) | Mr. Phelps has sole voting and disposition power with respect to all 1,488 shares.

PROPOSAL TWO

APPROVAL OF THE 2024 AMENDMENT AND RESTATEMENT

OF THE HOOKER FURNISHINGS CORPORATION STOCK INCENTIVE PLAN

The Board of Directors has adopted the 2024 Amendment and Restatement of the Hooker Furnishings Corporation Stock Incentive Plan (the “2024 Plan” or the “Plan”) and directed that it be submitted to our shareholders for approval.

Background. The Company is requesting shareholders approve the 2024 Plan, the primary purpose of which is to ensure the Company has a compensation plan going forward under which it may award equity to its executive employees and non-employee directors. The 2024 Plan will add shares to the total reserve available for issuance under the 2020 Amendment and Restatement of the Hooker Furniture Corporation Stock Incentive Plan (the “2020 Plan”), and this proposal is seeking approval of an increase in the number of available shares. Under its terms, if not sooner terminated by the Company’s Board of Directors, the 2020 Plan will terminate as of June 11, 2025, the date immediately following the fifth anniversary on which the 2020 Plan was approved by the Company’s shareholders. However, the Company expects the total share reserve available for issuance under the 2020 Plan to be depleted before then. Accordingly, the Company is requesting shareholders approve the 2024 Plan to ensure the Company has a compensation plan going forward under which it may award equity to its executive employees and non-employee directors.

Stock Incentive Plan Highlights. The Plan was originally authorized by the Company's Board of Directors in 2005 and has been approved four times by shareholders, most recently in 2020. The Plan is designed to benefit the Company and its shareholders by attracting and retaining the best executive talent, motivating management and other key service providers by aligning their interests with shareholders. The Plan also provides for grants of stock incentives to non-employee members of the Board of Directors for their services as well as to non-employee service providers. The 2024 Plan will become effective on June 4, 2024 if approved by shareholders.

| ● | The Plan authorizes a variety of equity-based and cash-based award types to provide flexibility in our compensation program. Award types are described below on page 53.
| ● | Performance grants (payable in cash or shares of Company stock) and restricted stock units are the primary historical long-term award types made to our named executive officers linking a significant portion of each named executive officers’ and certain other executives’ compensation to the Company’s growth, and fostering retention through continued employment as follows:

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| o | Performance grants are critical to our pay for performance philosophy and have been linked most recently to the Company’s earnings per share growth to fully align management with shareholder interests as discussed in the Compensation Discussion and Analysis on page 18.
| o | Restricted stock units enhance existing retention incentives for the Company’s management team, and promote continued employment through the vesting period and mitigate short-term risk taking.

| ● | Each non-employee director receives an annual restricted stock award as determined by the Compensation Committee, the value of which shall not exceed $150,000 in any grant year, and are subject to vesting, and anti-hedging requirements that align their interests with our shareholders, as described on page 15.
| ● | Executive officers are also covered by anti-hedging requirements that align their interests with our shareholders as described on page 32.
| ● | The Company’s long-term compensation program is highly selective and is an important management succession planning and retention tool.
| ● | These programs are authorized under our 2020 Plan.

New Shares Requested.

| ● | 900,000 new shares of Company common stock are being requested for the 2024 Plan. As of April 8, 2024, the number of shares that were available for issuance under the 2020 Plan was approximately 16,000.
| ● | Shares of our common stock allocable to awards (or any portions thereof) previously granted under the 2020 Plan that expire, are forfeited, or otherwise terminate unexercised after April 8, 2024 will be added to the shares reserved for issuance under the 2024 Plan and may be used for new awards under the 2024 Plan. As of April 8, 2024, approximately 375,000 shares are allocable to outstanding, unvested awards previously granted under the 2020 Plan.
| ● | The Committee estimates that the number of shares reserved under the 2024 Plan will be sufficient to make incentive awards for the next five years, though future share usage may differ from current expectations.

Key Features Retained from the 2020 Plan. Important aspects of 2020 Plan that have been retained for the 2024 Plan, and our historical award practices under the 2020 Plan, include:

| ● | Performance grants vest only upon the satisfactory achievement of performance objectives.
| ● | The Plan does not allow for discounted options, reload options, or for the re-pricing of stock options or stock appreciation rights.
| ● | The Plan imposes a minimum vesting period of one year for all awards (e.g., grants, shares, restricted stock and units).
| ● | The Plan provides for administration by the Compensation Committee.
| ● | The Plan continues the individual award limits described on page 53.
| ● | The Plan does not contain a “liberal” change of control definition.

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| ● | The Plan has a method of granting equity to non-employee directors that limits the amount of compensation they may be paid in equity; the limit set in the 2024 Plan is no more than $150,000 per year.
| ● | Annual restricted stock awards for non-employee directors do not vest unless the director remains in service to the next annual meeting following annual shareholder meeting.
| ● | Plan provision prohibiting the current payment of dividends or dividend equivalents on unearned unvested performance awards or restricted stock awards or units to named executive officers.
| ● | Awards may not become payable or accelerated merely upon the occurrence of a change of control, but rather only in connection with certain events relating to a change of control (explained below).
| ● | Awards are subject to the Company’s compensation recoupment policy, as described on page 56.
| ● | A five-year term, setting a maximum time limit for making awards under the 2024 Plan.
| ● | Ensures “double trigger” vesting so that an employee participant’s award will vest only if the participant’s employment is terminated in connection with a change of control.

Grant Practices. The Company generally makes performance-based grants in the form of restricted stock or units tied to pre-established financial metrics that vest only if such performance is achieved (payable in cash or shares), historically subject to three-year performance periods and service-based restricted stock awards or units with a minimum three-year vesting requirement. These grant practices have resulted in a conservative "burn" rate (the speed with which the Company uses its shares available for awards) and a low dilutive effect (small impact of awards of Company stock relative to total shares outstanding). We do not anticipate making any changes in our grant practices.

| ● | To date, our annualized average number of shares awarded over the life of the 2020 Plan is approximately 130,000. As of April 8, 2024, approximately 16,000 shares remain available for awards under the 2020 Plan. Over the life of the 2020 Plan, excluding grants to non-employee directors, approximately 28% of awards were performance grants, with approximately 72% awarded as restricted stock or units for retention purposes.
| ● | The Company’s average burn rate (the number of shares granted divided by the undiluted weighted average number of common shares outstanding) over the last three years was approximately 1%.
| ● | The Company’s equity overhang at the end of fiscal 2024 was approximately 4%. Our overhang is defined as the number of shares subject to outstanding equity awards plus the number available for grant of future equity awards (“available equity award shares”), divided by total common shares outstanding plus the available equity share awards.

The complete text of the 2024 Plan is set forth as Appendix A to this proxy statement. The following summary of certain provisions of the 2024 Plan is qualified by reference to the Plan’s text.

Eligibility. Participants in the 2024 Plan are those current and future employees, consultants, and non-employee directors of the Company who can make a significant impact on the growth and performance of the Company's business and to whom the Committee, in its discretion, makes an award. There are currently approximately 1,200 employees and consultants who are eligible to participate in the 2024 Plan. There are approximately 40 employees who currently participate in our 2020 Plan (most of whom are officers or senior managers) and six non-employee directors who would be eligible for awards under the 2024 Plan.

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Shares Subject to the Plan. The 2024 Plan reserves for issuance an aggregate total of 900,000 new shares of Company stock, plus any shares of Company stock that were reserved and remained available for issuance (and not subject to an outstanding award) under the 2020 Plan as of the Effective Date. As of April 8, 2024, approximately 16,000 shares remain available for awards under the 2020 Plan. Shares of our common stock allocable to awards (or any portions thereof) previously granted under the 2020 Plan that expire, are forfeited, or otherwise terminate unexercised after April 8, 2024 will be added to the shares reserved for issuance under the 2024 Plan and may be used for new awards under the 2024 Plan.

The number of shares reserved is subject to adjustment to reflect subsequent stock dividends, extraordinary cash dividends, recapitalization, mergers, consolidations, stock splits, spin-offs and similar matters. While there is no required allocation of this aggregate amount between the various types of awards, our practice has been to allocate the majority of the shares to performance grants and restricted stock awards and units.

Individual Award Limits. The maximum award authorized for any individual in any fiscal year is 75,000 shares, and the maximum cash payment that can be made to any participant during any single fiscal year under an incentive award is $500,000. The maximum value of any equity award for any outside director in any fiscal year is $150,000.

Share Usage. If an award is canceled, forfeited or otherwise terminated, then the shares subject to the award will again be available under the 2024 Plan. Shares issued through the settlement, assumption or substitution of outstanding awards or through obligations to grant future awards as a condition of the Company acquiring another entity will not reduce the maximum number available under the Plan.

However, any shares (i) retained or withheld to satisfy a participant’s tax withholding obligations, (ii) issued upon the exercise or vesting or distribution of an award, (iii) tendered by a participant or withheld in payment for an award, (iv) subject to a stock appreciation right that are not issued in connection with a stock settlement or exercise, and (v) acquired by the Company in the open market or otherwise using cash proceeds from the exercise of options, will be counted against the maximum number of shares available and may not be used again for any award under the 2024 Plan.

Share Price. Our common stock is traded on the NASDAQ Global Select Market under the symbol “HOFT.” The last reported sales price of our common stock on April 8, 2024 was $22.08.

Plan Term. The Plan will terminate at the close of business on June 5, 2029 (unless earlier terminated), but the termination will not affect any awards with performance or restriction periods which extend beyond such date.

Administration. The 2024 Plan is administered by our Compensation Committee (including a subcommittee) and its members must be (i) “non-employee directors” as defined under Rule 16b-3 under the Securities Exchange Act of 1934, as amended, and (ii) “independent directors”, including as members of a compensation committee under NASDAQ rules. The Committee has the authority to interpret the plan, determine awards and their terms, establish or waive any rules, and make any other determination in administering the Plan, including, but not limited to, determining the timing of when any termination of employment occurs for purposes of the Plan. The Committee’s decisions will be final and conclusive. The Committee also has the authority to appoint a subcommittee to administer the 2024 Plan.

Performance Award Types.

Performance Grants. Performance grants are the rights to receive an amount denominated in cash (but payable in cash or shares of our common stock) subject to the achievement of performance goals and other terms and conditions set by the Committee in its discretion. A performance grant is subject to a one-year minimum vesting period. A performance grant is only paid upon the determination by the Committee that the performance goals with respect to the award are met.

Performance Shares. Performance Shares are shares of our common stock that will be issued if performance goals established by the Committee are attained. Performance goals and other terms and conditions of the awards are set by the Committee in its discretion, provided that such awards are subject to a one-year minimum vesting period.

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Performance Share Units. Performance share units are rights to receive shares of our common stock (or cash in lieu of shares) subject to performance-based vesting conditions. Performance share units are similar to restricted stock except that shares of our common stock are not issued (or cash in lieu of shares not paid) until vesting conditions of the award are satisfied, as determined by the Committee. Performance share units may be settled in shares of our common stock, in cash or any combination of both.

Common Terms for Performance Grants, Performance Shares and Performance Share Units. With respect to these awards, the Committee may provide that the performance award is paid at the target level prior to the attainment of performance goals in the event of a participant’s death, disability or involuntary or constructive termination following a change of control of the Company as described beginning on page 43.

The Committee may also provide for the deferral of payments under such awards subject to the requirements of Code Section 409A. The Plan also gives the Committee the right to provide for dividend equivalents on such awards, which may not be settled or paid until and unless the underlying award to which the dividend equivalent relates vests.

Goal Setting Process under the Plan.

Threshold, Target & Maximum Performance levels. The Committee will establish a threshold, target and maximum performance goal or goals for an award at the beginning of the applicable performance period, which need not be the same for all participants. At the time it establishes the performance targets the Committee will establish the formula or other methodology for determining the performance award that will be earned based on the level of achievement of the performance target or targets, including setting any threshold or maximum payouts for any target objective in any performance period.

Payout. Prior to making a performance award payment following expiration of the performance period, the Committee will determine the level of achievement of the applicable performance goal(s) and the amount of payments to be made to each participant. Performance will be measured against the performance targets, and the Committee will determine what portion of a performance award is earned based on the established methodology, up to the stated maximum limit. Any payment of a performance award made in Company stock shall be based on the fair market value of a share of the Company’s common stock on the payment date. Fair market value shall mean the closing price per share of the Company’s common stock on the exchange on which the stock has the highest trading volume.

Performance Goals/Criteria. In determining performance goals, the Committee may establish performance criteria to which such goals relate (including levels of required achievement where appropriate), determine the number of shares of common stock to be granted, retained, vested, issued or issuable under or in settlement of, or the amount payable pursuant to an award (including any cash payment) which criteria may be based on any metric or other standards of financial performance and/or personal performance evaluations determined by the Committee.

Performance criteria may include, but are not limited to, one or more or a combination of the following: market value of the Company Stock; pre-tax profits; unit production costs; asset growth; pre-tax earnings; debt to equity ratio; earnings per share; revenues; operating income; operating costs and efficiencies; operating cash flow; net income, before or after taxes; net income before income taxes, incentive payments and accounting for minority interest; return on total capital, equity, revenue or assets; market share; unit production and sales volume; earnings before interest, taxes, depreciation, rent and amortization expenses; earnings before interest, taxes, depreciation and amortization (EBITDA); earnings before interest and taxes (EBIT); any of the prior measures or earnings before taxes and unusual or nonrecurring items as measured either against the annual budget or as a ratio to revenue or return on total capital; net earnings; profit margin; operating margin; operating income; net worth; cash flow; cash flow per share; total stockholder return; revenues; capital expenditures; improvements in capital structure; industry indices; expenses and expense ratio management; debt reduction; profitability of an identifiable business unit or product; levels of expense, cost or liability by category, operating unit or any other delineation; or any other objective or subjective measures determined by the Committee.

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Such criteria may be applied to the performance of the Company on a consolidated basis or any segment, sector, one or more customers, subsidiary, affiliate, division or business unit of the Company. The performance criteria may also be applied either individually, alternatively, or in any combination and measured on as reported (GAAP), gross, net or operating basis, on a total or continuing basis, on an annual or cumulatively over a defined period of time basis, and can be measured on an absolute, relative, growth, or per-share basis.

The performance criteria may also be measured including or excluding non-recurring, unusual items such as restructuring charges, casualty losses, insurance recoveries, and other unusual, non-recurring items, including but not limited to currency fluctuations, items excluded from the calculation of earnings publicly reported by the Company in relation to an earnings announcement, litigation or claims judgments or settlements, accruals for reorganizations and restructuring programs and the effect of changes in tax law, accounting principles or other laws or provisions affecting reported results.

The Committee may appropriately adjust any performance goal if it determines that certain non-recurring, unusual or non-operational items have materially affected the fairness of the performance goals and have unduly affected the Company’s ability to meet them.

Restricted Stock and Units (Service-Based). The Committee may also grant restricted stock or restricted stock units, which are not subject to performance objectives. An award of restricted stock is an award of actual shares of common stock subject to restrictions and forfeiture, whereas a unit represents the right to receive one share of common stock, subject to restrictions and forfeiture. Such awards may be payable in shares of common stock or cash or any combination thereof.

Holders of restricted stock may be entitled to voting rights with respect to such shares during the restriction period, in contrast to unit holders who have no voting rights. The Committee may provide for dividends and dividend equivalents on restricted stock and units, as applicable, which shall not be settled or paid until and unless the underlying award to which the dividend or dividend equivalent relates vests. The minimum vesting period for service-based restricted stock and units is one (1) year; provided, however, that the Committee may provide that such awards will vest earlier upon certain terminations of employment following a change of control (described below) and may also be eligible for earlier pro rata vesting in connection with a termination of employment on account of death, disability or retirement (as defined in the Plan).

Stock Options. The Committee may also grant stock options to participants. Under the terms of the Plan, the exercise price for stock options must be no less than the fair market value of the Company’s common stock on the date of grant and the term of any option may not exceed ten years. In addition, no incentive stock option (“ISO”) may be granted to any participant who at the time of such grant, owns more than ten-percent of the total combined voting power of all classes of stock of the Company, unless the exercise price thereof is at least 110% of the fair market value of the Company’s common stock on the date the option is granted and the term of any ISO granted to such a participant may not exceed five years. Otherwise, the Committee has discretion to determine any other terms and conditions otherwise consistent with the Plan, including the vesting period. The Plan prohibits repricing of stock options without prior shareholder approval, and also prohibits any stock option from including provisions that reload the option or extend the term of the option beyond what is specified in the Plan or grant agreement. Options granted under the Plan may be either ISOs qualifying under Code Section 422 or non-statutory options, which are not intended to qualify as ISOs (“NQSOs”). The exercise price of an option may be paid through various means acceptable to the Committee as described in the Plan.

Stock Appreciation Rights. The Committee may also grant stock appreciation rights to participants. A stock appreciation right provides the right to the monetary equivalent of the increase in the value of a specified number of the Company’s shares over a specified period of time after the right is granted. Stock appreciation rights may be paid in stock, cash or a combination thereof. Stock appreciation rights may be granted either in tandem with or as a component of other awards granted under the Plan or not in conjunction with other awards and may, but need not, relate to a specific option. Stock appreciation rights may not have a term of more than ten years and are generally subject to the same terms and limitations as options or, when granted tandem to other awards, to the same terms as those other awards. The Plan prohibits repricing of stock appreciation rights without prior shareholder approval and also prohibits any stock appreciation right from including provisions that reload the right or extend the term of the right beyond what is specified in the Plan or grant agreement.

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Non-Employee Director Awards. Each non-employee director will receive an award of restricted stock on the third business day following the Company’s annual meeting and on the third business day following each of the four annual meetings thereafter. The number of shares of restricted stock awarded to each non-employee director shall not exceed $150,000 per year and is determined by dividing the fixed amount set by the Compensation Committee, currently $70,000 by the fair market value of the Company’s common stock on the grant date, and rounding to the nearest whole share. The award will become fully vested, and the restrictions applicable to the award will lapse, (i) on the annual meeting date next following the grant date of the restricted stock award, or (ii) if earlier, the date on which the first of the following events occur: the non-employee director dies, is disabled, the annual meeting following the non-employee director’s attainment of age seventy-five, or a change of control of the Company as defined below.

No Single Trigger Vesting Upon a Change of Control for Eligible Employees

The 2024 Plan permits the Compensation Committee (or, with respect to director awards, the Board) to provide for vesting of awards to eligible employees in connection with a change of control of the Company if there is also a termination of employment in connection with the change of control. This is often referred to as “double trigger” vesting. For these purposes, a termination is considered to be in connection with a change of control if it occurs upon or within two years after the change of control and is for one of the following two reasons: (i) an involuntary termination by the company without “cause” or (ii) a “constructive termination” by the participant. The terms “cause” and “constructive termination” are defined in the applicable award agreements. In addition, the Committee may provide for the assumption or substitution of awards by a surviving corporation. Awards to non-employee directors may fully vest upon a change of control.

Amendment. The Committee may amend the Plan, except that no amendment may be made without shareholder approval if such amendment would increase the aggregate number of shares granted or securities issued under the 2024 Plan, or would, by applicable rule or law, require such approval.

Recoupment. All Incentive Awards granted under the 2024 Plan shall be subject to the Company’s compensation recoupment policy described on page 30.

Restrictive Covenants. The Committee may include in an award’s terms and conditions restrictive covenants relating to confidentiality, non-solicitation and non-competition, which if violated by the participant may result in forfeiture or cancellation of the award.

Transferability. Participants’ interests in performance grants, shares or units, incentive awards, restricted stock, restricted stock units, and stock appreciation rights are not transferable prior to payment, or exercise of the award, as the case may be. NQSOs are transferable but only to the extent provided by the Committee in the award agreement and as permitted by applicable securities laws. ISOs are not transferable except by will or the laws of descent or distribution.

Federal Income Tax Consequences. The following is a summary of certain tax consequences under U.S. federal income tax law as of the date of this proxy statement. It is not intended to be a complete discussion of all tax consequences. Participants should consult with their own tax and legal advisors. Participants will be subject to applicable statutory withholding.

Performance Grants, Performance Shares and Performance Share Units. Generally, a participant will not recognize taxable income upon the grant of performance grants, shares or units. When stock or cash is issued in settlement of performance grants, shares or units, a participant will generally recognize ordinary income equal to the fair market value of the stock and/or cash issued with respect to the performance grant, share or unit. Subject to the Code Section 162(m) deduction limitations described below, the Company generally will be entitled to a deduction equal to the ordinary income recognized by the participant in the same taxable year in which the participant recognizes ordinary income with respect to the performance grant, share or unit.

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Restricted Stock. Unless the participant makes an election under Code Section 83(b), restricted stock will not be taxable when awarded, and the Company will not be entitled to a deduction at such time. When the restrictions lapse, the participant will be treated as receiving taxable compensation in the amount equal to the difference between the fair market value of the shares (and also including any dividends credited to such award, if any) on such date and the purchase price paid for the restricted stock, if any, and, subject to the Section 162(m) deduction limitations described below, the Company will be entitled to a corresponding deduction.

Alternatively, a participant may elect, pursuant to Code Section 83(b), immediate recognition of income at the time of receipt of restricted stock (but not restricted stock units). If the election is made within thirty days of the date of grant, the participant will recognize the difference between the fair market value of the restricted stock at the time of grant and the purchase price paid for the restricted stock, if any, as income, and we will be entitled to a corresponding deduction. Any change in the value of the shares after the date of grant will be taxed as a capital gain or loss only if and when the shares are disposed of by the participant. Dividends paid with respect to these shares will not be deductible by the Company. A Section 83(b) election is irrevocable. If this tax treatment is elected, and the restricted stock is subsequently forfeited, the participant will not be entitled to any offsetting tax deduction.

Restricted Stock Units. A participant does not recognize taxable income on the grant of units, but does recognize ordinary income when shares are delivered in settlement of the units (also including any dividend equivalents credited to such award during the vesting period). The amount of this ordinary income will be the fair market value of the shares on that date of any shares delivered, plus the amount of cash paid. Subject to the deduction limitations of Section 162(m) described below, the Company will ordinarily be entitled to a deduction at the same time and in the same amounts as the compensation income recognized by the recipient of a grant of units.

Stock Options. ISOs and NQSOs are treated differently for federal income tax purposes. ISOs are intended to comply with the requirements of Code Section 422. NQSOs do not comply with such requirements.

A participant is not taxed on the grant or exercise of an ISO. The difference between the exercise price and the fair market value of the shares on the exercise date will, however, be a preference item for purposes of the alternative minimum tax. If any participant holds the shares acquired upon exercise of an ISO for at least two years following the option grant date and at least one year following exercise, the participant’s gain, if any, upon a subsequent disposition of such shares is long term capital gain. The measure of the gain is the difference between the proceeds received on disposition and the participant’s basis in the shares (which generally equals the exercise price). If a participant disposes of stock acquired pursuant to exercise of an ISO before satisfying these holding periods, the participant will recognize both ordinary income and capital gain in the year of disposition. The Company is not entitled to an income tax deduction on the grant or exercise of an ISO or on the participant’s disposition of the shares after satisfying the holding period requirement described above. If the holding periods are not satisfied, the Company will be entitled to a deduction in the year the participant disposes of the shares in an amount equal to the ordinary income recognized by the participant.

In order for an option to qualify for the tax treatment described above, the grant of the options must satisfy various other conditions more fully described in the Code. The Company does not guarantee that any option will qualify for ISO tax treatment even if the option is intended to qualify for such treatment. In the event an option intended to be an ISO fails to so qualify, it will be taxed as an NQSO described below.

A participant is not taxed on the grant of a NQSO. On exercise, the participant recognizes ordinary income equal to the difference between the option price and the fair market value of the shares acquired on the date of exercise. The Company is entitled to an income tax deduction in the year of exercise in the amount recognized by the participant as ordinary income. The participant’s gain (or loss) on subsequent disposition of the shares is long term capital gain (or loss) if the shares are held for at least one year following exercise. The Company does not receive a deduction for this gain.

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Cash Incentive Awards. A participant will have taxable income at the time an incentive award becomes payable, and if the participant has timely elected to a later date, and the applicable requirements of Code Section 409A are met at such later date. At that time, the participant will recognize ordinary income to the value of the amount then payable.

Code Section 409A. Section 409A regulates the time and form of payment of nonqualified deferred compensation. Certain awards provided under the 2024 Plan could be viewed as deferring income for participants and may, therefore, be subject to Section 409A. While it is our current intent to have awards either be exempt from or comply with the requirements of Section 409A, there can be no assurance that awards made under the 2024 Plan will satisfy those requirements. In the event that an award is subject to Section 409A, but does not satisfy the requirements of Section 409A, then the affected participant may be subject to immediate income inclusion of the deferred amounts, an additional 20% tax on amounts deferred, as well as interest on such amounts from the date when such amounts became vested.

Our Income Tax Deduction. The Company will usually be entitled to a business expense deduction at the time and in the amount that a participant recognizes ordinary income in connection with an award. As noted above, no deduction is allowed in connection with an ISO unless the participant disposes of the shares prior to the expiration of the applicable holding period. In addition, there may be circumstances in which the Company is not allowed a deduction with respect to an award, due to the application of the golden parachute rules under Code Section 280G or the $1 million compensation deduction limitation under Code Section 162(m).

Vote required for Approval. The affirmative vote of the holders of a majority of the shares of common stock represented and voting at the Annual Meeting is required to approve the 2024 Plan, provided that at least a majority of the outstanding shares vote on the matter.

New Plan Benefits. The 2024 Plan provides for annual restricted stock grants to non-employee directors in accordance with the formula described above in the section captioned “Non-Employee Director Awards.” In addition, on April 9, 2024, the Committee approved grants of an aggregate 39,643 PSUs under the 2024 Plan, which are contingent on approval of the 2024 Plan by our shareholders (the “Contingent Grants”).

We anticipate that additional awards will be granted to our executive officers and other employees if the 2024 Plan is approved by our shareholders. The amount of future awards to be received by executive officers, other employees or consultants in any particular year is not currently determinable because such awards are within the discretion of the Committee and the Committee has not determined those future awards or who might receive them. However, in recent years, the Committee has authorized long-term grants to our named executive officers in the form of performance grants and restricted stock units as described on beginning on page 27 in the compensation discussion and analysis.

The following table shows information regarding the annual restricted stock awards that automatically will be granted to our non-employee directors if the 2024 Plan is approved by shareholders, assuming those awards are granted on June 4, 2024, and the Contingent Grants.

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Benefits under the 2024 Plan

|  | Dollar Value |  |  | Number of Units or Shares |
Jeremy R. Hoff |  | $ | 527,000 |  |  |  | 24,208 |
CEO and Director (2) |  |  |  |  |  |  |  |
Paul A. Huckfeldt |  |  | 124,500 |  |  |  | 5,719 |
CFO and Sr. VP Fin. And Acctg (2) |  |  |  |  |  |  |  |
Anne J. Smith |  |  | 112,500 |  |  |  | 5,168 |
CAO, Sr. VP. Administration, President - Domestic Upholstery (2) |  |  |  |  |  |  |  |
Tod R. Phelps |  |  | 99,000 |  |  |  | 4,548 |
Chief Information Officer and Sr. VP - Operations (2) |  |  |  |  |  |  |  |
Non-Executive Director Group (1) |  |  | 420,000 |  |  |  | 19,292 |

(1) | Restricted Stock Awards for Non-employee Directors. The dollar amount shown for these restricted stock awards is set by the Compensation Committee each year and is currently $70,000. The number of shares shown for these awards is based on the closing price of our common stock on April 9, 2024, which was $21.77. The actual number of shares of restricted stock awarded to the non-employee directors will depend on the closing price of our common stock as of June 4, 2024, the date such awards will be granted.
(2) | Contingent Grants. On April 9, 2024, the Compensation Committee approved grants of an aggregate 39,643 PSUs under the 2024 Plan to our officers, which are contingent on approval of the 2024 Plan by our shareholders. The number of shares shown for these awards is based on the closing price of our common stock on April 9, 2024, which was $21.77.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE 2024 AMENDMENT AND RESTATEMENT OF THE HOOKER FURNISHINGS CORPORATION STOCK INCENTIVE PLAN.

PROPOSAL THREE

RATIFICATION OF SELECTION OF

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board of Directors has selected the firm of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 2, 2025, subject to ratification by the shareholders. Action by the shareholders is not required by law in the selection of the Company’s independent registered public accounting firm, but the Company submits its selection in order to give shareholders an opportunity to ratify the Audit Committee’s selection of KPMG. If the shareholders do not ratify the selection of KPMG, the Audit Committee will reconsider the selection of the Company’s independent registered public accounting firm. Unless otherwise specified, shares represented by proxies will be voted for the ratification of the selection of KPMG, as the Company’s independent registered public accounting firm for fiscal 2025. KPMG has served as the Company’s independent registered public accounting firm since fiscal 2003.

Representatives of KPMG are expected to be present at the Annual Meeting either in person or telephonically. They will have the opportunity to make a statement if they desire to do so and are expected to be available to respond to appropriate questions.

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Principal Accountant Fees and Services

The following table presents fees billed to the Company by KPMG for the:

| ■ | fiscal year ended January 28, 2024 (fiscal 2024), and

| ■ | fiscal year ended January 29, 2023 (fiscal 2023).

|  | Fiscal 2024 |  |  | Fiscal 2023 |
Audit Fees |  | $ | 1,907,400 |  |  | $ | 1,533,900 |
Audit-Related Fees |  | None |  |  |  | 80,000 |
Tax Fees |  | None |  |  | None |
All Other Fees |  | None |  |  | None |

Audit Fees include KPMG’s fees for audit services, including the audits of the Company’s annual financial statements and internal control over financial reporting, review of the Company’s quarterly financial statements included in its Forms 10-Q and review of SEC filings.

Audit-Related Fees include fees billed by KPMG during the periods reported for audit-related services not otherwise reported in Audit Fees. For fiscal 2023, audit-related fees included Sunset West acquisition related issues.

Audit Committee Pre-approval of Audit and Non-Audit Services

The Audit Committee is required to pre-approve all audit and permitted non-audit services provided by KPMG, the Company’s auditing firm. The Audit Committee has authorized the Committee Chair to approve specific tax projects up to $30,000 each or an aggregate of no more than $60,000 and individual audit-related projects up to a maximum of $50,000 between Committee meetings provided that the decision to approve the service is presented at the next scheduled Committee meeting. Less than 1% of aggregate Audit-Related Fees and Tax Fees for each fiscal year presented above was approved by the Committee pursuant to the de minimis waiver of the pre-approval requirement set forth in Regulation S-X 2.01(c)(7)(i)(C).

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR RATIFICATION OF THE SELECTION OF KPMG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING FEBRUARY 2, 2025.

PROPOSAL FOUR
ADVISORY VOTE TO APPROVE EXECUTIVE COMPENSATION

The Dodd-Frank Wall Street Reform and Consumer Protection Act, enacted in July 2010, requires that the Company provide its shareholders with the opportunity to vote to approve, on a non-binding, advisory basis, the compensation of the Company’s named executive officers as disclosed in this proxy statement. Consistent with a majority of the advisory votes cast at the 2023 Annual Meeting of Shareholders and the recommendation of the Company’s Board of Directors, the Company holds a shareholder advisory vote to approve the compensation of its named executive officers annually. The Company encourages shareholders to read the disclosures under Executive Compensation, beginning on page 18, which include the Compensation Discussion and Analysis, the compensation tables and the narratives that accompany those tables, for more information concerning the Company’s compensation philosophy, programs and practices, the compensation and governance-related actions taken in fiscal 2024 and the compensation awarded to the named executive officers.

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As described under the Compensation Discussion and Analysis, the Company’s executive compensation programs are designed to:

| ■ | attract and retain highly qualified executives who will contribute significantly to the success and financial growth of the Company and enhance value for shareholders; and

| ■ | motivate and appropriately reward executives when they achieve the Company’s financial and business goals and meet their individual performance objectives.

The Board believes that the Company’s executive compensation program satisfies these objectives and is worthy of shareholder support. In determining whether to approve this proposal, the Board believes that shareholders should consider the following:

Independent Compensation Committee. Executive compensation is reviewed and established by a Compensation Committee of the Board consisting solely of independent directors. The Compensation Committee regularly meets in executive session, without executive officers present, in determining annual compensation. The Compensation Committee, at its sole discretion, may obtain data, analysis and input from an independent compensation consultant.

Compensation is Tied to Performance. Key elements of the Company’s compensation program, including annual cash incentives and certain long-term incentive awards, are aligned with financial and operational objectives established in the Board-approved annual operating plan. As a result, a meaningful portion of each executive’s total compensation is “at risk” and is earned only if a threshold level of targeted performance is achieved.

Balanced Compensation Structure. Total cash compensation is allocated between base salary and an annual incentive opportunity tied directly to objective and quantifiable measures of the Company’s business performance. Long-term incentive awards are balanced between those that are earned only if specific performance measures are met and those that are earned if an executive remains in continuous employment for a sustained period. Retirement benefits are only provided if an executive remains employed to a specified age.

This vote is not intended to address any specific item of compensation, but rather the overall compensation of the named executive officers described in this proxy statement. This vote is advisory, which means that the vote is not binding on the Company, the Board of Directors or the Compensation Committee. To the extent there is any significant vote against named executive officer compensation as disclosed in this proxy statement, the Compensation Committee will evaluate whether any actions are appropriate to address the concerns of shareholders.

This proposal will be approved if the number of votes cast in favor of the proposal exceeds the number of votes cast against it.

Accordingly, the Company asks its shareholders to vote on the following resolution at the Annual Meeting:

RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of the Company’s named executive officers, as disclosed in the Company’s proxy statement for the 2024 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE APPROVAL OF THE COMPENSATION OF THE COMPANY’S NAMED EXECUTIVE OFFICERS, AS DISCLOSED IN THIS PROXY STATEMENT.

OTHER BUSINESS

Management knows of no other business that will be presented for consideration at the Annual Meeting, but should any other matters be brought before the meeting, it is intended that the persons named in the accompanying proxy will vote that proxy at their discretion.

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ADDITIONAL INFORMATION

Shareholder Proposals for 2025 Annual Meeting

The Company plans to hold the 2025 Annual Meeting on June 3, 2025. The Company’s bylaws (Article II, Section 1) provide that for business to be properly brought before an Annual Meeting by a shareholder of record, the shareholder must, in addition to meeting other applicable requirements, give timely written notice to the Secretary at the principal office of the Company. To submit business at the 2025 Annual Meeting, the notice must be received no later than January 3, 2025. In addition to the other matters outlined in the Company’s bylaws, the shareholder’s notice must include:

| ■ | the name and address of the shareholder, as they appear on the Company’s stock transfer books;

| ■ | the number of shares of stock of the Company beneficially owned by the shareholder;

| ■ | a representation that the shareholder is a record holder at the time the notice is given and intends to appear in person or by proxy at the meeting to present the business specified in the notice;

| ■ | a brief description of the business desired to be brought before the meeting, including the complete text of any resolutions to be presented and the reasons for wanting to conduct such business; and

| ■ | any interest that the shareholder may have in such business.

The proxies for the 2025 Annual Meeting will have discretionary authority to vote on any matter that properly comes before the meeting if the shareholder has not provided written notice before March 19, 2025.

A proposal that any shareholder desires to have included in the proxy statement for the 2025 Annual Meeting of shareholders must be received by the Company no later than January 3, 2025 and must comply with the SEC rules regarding shareholder proposals.

In addition, to comply with the SEC universal proxy rules, shareholders who intend to solicit proxies in support of director nominees other than the Company’s nominees must provide notice that sets forth the information required by Rule 14a-19 to the Corporate Secretary no later than 60 calendar days prior to the anniversary of the previous year’s annual meeting. For any such director nominee to be included on the proxy card for next year’s annual meeting, the Corporate Secretary must receive notice under SEC Rule 14a-19 no later than April 5, 2025. Please note that the notice requirement under SEC Rule 14a-19 is in addition to the applicable notice requirements and deadlines outlined under the advance notice provisions of the Bylaws described above and under “Procedures for Shareholder Recommendations of Director Nominees” beginning on page 11.

Shareholder Communications

Shareholders may send written communications to the Board of Directors c/o C. Earl Armstrong III, Secretary, Hooker Furnishings Corporation, P.O. Box 4708, Martinsville, Virginia 24115-4708. Any shareholder communication directed to the Board, a Director or any Board Committee, is forwarded to the Company’s Chief Financial Officer and then to the Board or the appropriate Director(s) or Committee(s).

By Order of the Board of Directors,

C. Earl Armstrong III

Secretary

May 3, 2024

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APPENDIX A

2024 AMENDMENT AND RESTATEMENT

OF THE

HOOKER FURNISHINGS CORPORATION STOCK INCENTIVE PLAN

1. Purpose. This 2024 Amendment and Restatement of the Hooker Furnishings Corporation Stock Incentive Plan (the “Plan”) is designed to support the overall compensation philosophy and objectives of Hooker Furnishings Corporation (the “Company”) to attract, retain, motivate and appropriately reward talented employees and other service providers who can contribute significantly to the Company’s financial growth and success and enhance value for the Company’s stockholders. The Plan seeks to further these objectives through the use of equity-based and cash incentives that provide value to employees and other service providers in proportion to the Company’s overall performance or the achievement of key business goals, that align the interests of employees and other service providers with those of the Company’s stockholders, and that encourage employees to remain with the Company and maximize its future performance. The Plan also provides for grants of stock incentives to compensate non-employee members of the Company’s Board of Directors for their services.

The Plan is an amendment and restatement of the 2020 Amendment and Restatement of the Hooker Furniture Corporation Stock Incentive Plan (the “Prior Plan”). Shares available for issuance under the Prior Plan as of the Effective Date of this Plan, assuming approval by shareholders, will continue to be available for grant subject to this Plan. Awards previously granted under the Prior Plan that remain outstanding on or after the Effective Date of this Plan shall continue to be governed by the terms of the Prior Plan. Shares of Company Stock subject to outstanding incentive awards granted under the Prior Plan that expire, are forfeited or otherwise terminate unexercised may be subjected to Incentive Awards granted under this Plan, as provided in Section 4.

2. Definitions. As used in the Plan, the following terms have the meanings indicated:

(a) “Act” means the Securities Exchange Act of 1934, as amended.

(b) “Applicable Withholding Taxes” means the aggregate amount of federal, state and local income and employment taxes that an Employer is required to withhold in connection with any Performance Grant, award of Performance Shares, any lapse of restrictions on Restricted Stock, any compensatory dividends paid on Restricted Stock, any vesting of Restricted Stock Units or Performance Share Units, or any exercise of a Nonstatutory Stock Option or Stock Appreciation Right.

(c) “Award” means any Incentive Award or Director Award.

(d) “Board” means the Board of Directors of the Company.

(e) “Change of Control” means the date on which the Company experiences a change in ownership (as described in subsection (i)) or a change in effective control (as described in subsection (ii)):

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(i) any person or more than one person acting as a group acquires beneficial ownership of Company stock that, together with the Company stock already held by such person or group, represents more than 50 percent of the total voting power of the Company stock; provided, however, that if any one person or more than one person acting as a group is considered to own more than 50 percent of the total voting power of the Company stock, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of the Company for purposes of this subsection (i);

(ii) a majority of members of the Board is replaced during a twelve-consecutive-month period by directors whose appointment or election is not endorsed by a majority of the members of the Board before the date of the appointment or election; provided, however, that if any one person or more than one person acting as a group is considered to effectively control the Company for purposes of this subsection (ii), the acquisition of additional control of the Company by the same person or persons is not considered to cause a change in the effective control for purposes of this subsection (ii).

For purposes of this Section 2(e), the term “group” shall have the same meaning as in Section 13(d)(3) of the Act, modified to the extent necessary to comply with Sections 1.409A-3(i)(5)(v)(B), (vi)(D) or (vii)(C) of the Treasury Regulations (or any successor provisions). The term “beneficial ownership” shall have the same meaning as in Rule 13d-3 promulgated under the Act, modified to the extent necessary to comply with Section 1.409A-3(i)(5)(v)(iii) of the Treasury Regulations (or any successor provision). Notwithstanding anything in this Section 2(e) to the contrary, an event which does not constitute a change in the ownership or a change in the effective control of the Company, each as defined in Section 1.409A-3(i)(5) of the Treasury Regulations (or any successor provision), shall not constitute a Change of Control for purposes of this Plan.

(f) “Code” means the Internal Revenue Code of 1986, as amended, and as may be amended from time to time. Any reference in the Plan to a specific section of the Code shall include any successor provision of the Code.

(g) “Committee” means the Compensation Committee of the Board (or any successor Board committee designated by the Board to administer the Plan), provided that, if any member of the Compensation Committee does not qualify as (i) a non-employee director for purposes of Rule 16b-3 or (ii) an independent director for purposes of the rules of the exchange on which the Company Stock is traded, the remaining members of the Committee (but not less than two members) shall be constituted as a subcommittee to act as the Committee for purposes of the Plan.

(h) “Company” means Hooker Furnishings Corporation.

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(i) “Company Stock” means the common stock of the Company. In the event of a change in the capital structure of the Company (as provided in Section 19), the shares resulting from the change shall be deemed to be Company Stock within the meaning of the Plan. Shares of Company Stock may be issued under this Plan without cash consideration.

(j) “Consultant” means any natural person providing bona fide services to the Company or a Related Company other than as an Employee or as an Outside Director.

(k) “Date of Grant” means (i) with respect to a Non-Option Award, the date on which the Committee (or, with respect to a Director Award, the Board) grants the award; (ii) with respect to a Nonstatutory Option or Stock Appreciation Right, the date on which the Committee (or, with respect to a Director Award, the Board) completes the corporate action necessary to create a legally binding right constituting the Nonstatutory Stock Option or Stock Appreciation Right; or (iii) with respect to an Incentive Stock Option, the date on which the Committee completes the corporate action constituting an offer of stock for sale to a Participant under the terms and conditions of the Incentive Stock Option. With respect to any Award, the Committee (and, with respect to any Director Award, the Board) may specify a future date on which the grant is to be granted or become effective.

(l) “Director Award” means any share of Restricted Stock awarded to an Outside Director pursuant to Section 12 of the Plan.

(m) “Disability” means, as to an Incentive Stock Option, a Disability within the meaning of Code section 22(e)(3). As to all other Awards, the Committee (or, with respect to a Director Award, the Board) shall determine whether a Disability exists and the determination shall be conclusive; provided, however, that for any Incentive Award that is subject to Code section 409A, Disability (or variations thereof) shall mean a disability defined in Code section 409A(a)(2)(C) and Section 1.409A-3(i)(4) of the Treasury Regulations (or any successor provision).

(n) “Effective Date” means the date described in Section 16 of the Plan.

(o) “Employee” means an individual employed by the Company or a Related Company as a common-law employee.

(p) “Employer” means the Company or Related Company with respect to which an Employee provides services.

(q) “Fair Market Value” means the closing price per share of Company Stock on the exchange on which the Company Stock has the highest trading volume on the Date of Grant or any other date for which the value of Company Stock must be determined under the Plan, or, if the determination date is not a trading day, on the most recent trading day immediately preceding the determination date.

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(r) “Grant Agreement” means the written or electronic agreement between the Company and a Participant containing the terms and conditions with respect to an Award. The Committee may in its discretion waive any requirement that a Participant execute the Grant Agreement and treat the Participant’s acceptance of the Award as his or her agreement to the terms of the Grant Agreement instead.

(s) “Incentive Award” means any Performance Grant, Performance Share, Option, Stock Appreciation Right, share of Restricted Stock, Restricted Stock Unit or Performance Share Unit awarded to a Service Provider under the Plan.

(t) “Incentive Stock Option” means an Option intended to meet the requirements of, and qualify for favorable federal income tax treatment under, Code section 422.

(u) “Non-Option Award” means an Award other than an Option or Stock Appreciation Right.

(v) “Nonstatutory Stock Option” means an Option that does not meet the requirements of Code section 422, or, even if meeting the requirements of Code section 422, is not intended to be an Incentive Stock Option and is so designated.

(w) “Option” means a right to purchase Company Stock granted under the Plan, at a price determined in accordance with the Plan granted under Section 10.

(x) “Outside Director” means a member of the Board who is not an Employee and who meets any other qualifications that may be established by the Board to be treated as an Outside Director under the Plan.

(y) “Participant” means any Service Provider or Outside Director who receives an Award under the Plan.

(z) “Performance Criteria” means any metric determined by the Committee and used to establish Performance Goals, which may apply to the performance of the Company on a consolidated basis or any segment, sector, one or more customers, subsidiary, affiliate, division or business unit of the Company. The Performance Criteria may be applied either individually, alternatively, or in any combination and measured on as reported (GAAP), gross, net or operating basis, on a total or continuing basis, on an annual or cumulatively over a defined period of time basis, and can be measured on an absolute, relative, growth, or per-share basis. The Performance Criteria may be measured including or excluding items unusual in nature or non-recurring, such as restructuring charges, casualty losses, insurance recoveries, or similar items. The Performance Criteria may include, but are not limited to, one or more or a combination of the following: market value of the Company Stock; pre-tax profits; unit production costs; asset growth; pre-tax earnings; debt to equity ratio; earnings per share; revenues; operating income; operating costs and efficiencies; operating cash flow; net income, before or after taxes; net income before income taxes, incentive payments and accounting for minority interest; return on total capital, equity, revenue or assets; market share; unit production and sales volume; earnings before interest, taxes, depreciation, rent and amortization expenses; earnings before interest, taxes, depreciation and amortization (EBITDA); earnings before interest and taxes (EBIT); any of the prior measures or earnings before taxes and unusual or nonrecurring items as measured either against the annual budget or as a ratio to revenue or return on total capital; net earnings; profit margin; operating margin; operating income; net worth; cash flow; cash flow per share; total stockholder return; revenues; capital expenditures; improvements in capital structure; industry indices; expenses and expense ratio management; debt reduction; profitability of an identifiable business unit or product; levels of expense, cost or liability by category, operating unit or any other delineation; or any other objective or subjective measures determined by the Committee.

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(aa) “Performance Goal” means any goal established by the Committee that relates to one or more Performance Criteria. Performance Goals with respect to Performance Criteria may be specified in absolute terms, in percentages, or in terms of growth from period to period or growth rates over time, as well as measured relative to the performance of a group of comparator companies, or a published or special index, or a stock market index, that the Committee deems appropriate. Any member of a comparator group or index that ceases to exist as a separate entity during a measurement period shall be disregarded for the entire measurement period. Performance Goals need not be based upon an increase or positive result under a Performance Criteria and could include, for example, the maintenance of the status quo or the limitation of economic losses (measured, in each case, by reference to a Performance Criteria).

(bb) “Performance Grant” means a right to receive an amount denominated in cash (but payable in cash or Company Stock) subject to the attainment of Performance Goals as set forth under Section 6.

(cc) “Performance Share” means a right to receive a share of Company Stock subject to the satisfaction of Performance Goals as set forth in Section 7.

(dd) “Performance Share Unit” means a right to receive Company Stock or cash awarded upon the terms and subject to grant and vesting conditions as set forth in Section 9.

(ee) “Plan” and “Prior Plan” shall have the meanings set forth in Section 1.

(ff) “Plan Year” means the calendar year.

(gg) “Related Company” means, (i) for purposes of determining eligibility to receive an Incentive Stock Option, any “parent corporation” with respect to the Company within the meaning of Code section 424(e) or any “subsidiary corporation” with respect to the Company within the meaning of Code section 424(f); (ii) for purposes of determining eligibility to receive a Nonstatutory Stock Option or Stock Appreciation Right, any corporation or other entity in a chain of corporations or other entities in which each corporation or other entity has a controlling interest (within the meaning of Section 1.409A-1(b)(5)(E)(1) of the Treasury Regulations (or any successor provision)) in another corporation or other entity in the chain, beginning with a corporation or other entity in which the Company has a controlling interest; and (iii) for all other purposes under the Plan, any corporation, trade or business that would be required to be treated as a single employer with the Company under Code sections 414(b) or (c), provided that, in applying Code sections 1563(a)(1), (2) and (3) for purposes of determining a controlled group of corporations, or in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses under common control, the phrase “at least 50%” shall replace the phrase “at least 80%” each time it appears in those sections.

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(hh) “Repricing” means, with respect to an Option or Stock Appreciation Right, any of the following: (i) the lowering of the exercise price after the Date of Grant; (ii) the taking of any other action that is treated as a repricing under generally accepted accounting principles; (iii) the cancellation of the Option or Stock Appreciation Right in exchange for an Option or Stock Appreciation Right with an exercise price that is less than the exercise price of the original Option or Stock Appreciation Right; or (iv) the cancellation of the Option or Stock Appreciation Right at a time when its exercise price exceeds the Fair Market Value of the underlying Company Stock in exchange for cash, other Company securities or any other Incentive Award; provided, however, that an adjustment pursuant to Section 19(a) or a cancellation and exchange that occurs pursuant to Section 19(b) shall not constitute a Repricing.

(ii) “Restricted Stock” means Company Stock awarded upon the terms and subject to restrictions as set forth in Section 8.

(jj) “Restricted Stock Unit” means a right to receive Company Stock or cash awarded upon the terms and subject to vesting conditions as set forth in Section 9.

(kk) “Retirement” means, unless otherwise provided in the Grant Agreement for a particular Award, a Participant’s termination of employment or other separation from service on or after age 65.

(ll) “Rule 16b-3” means Rule 16b-3 of the Securities and Exchange Commission promulgated under the Act, as amended from time to time.

(mm) “Service Provider” means an Employee, Consultant or Outside Director.

(nn) “Stock Appreciation Right” means a right to receive Company Stock or cash granted under Section 11.

(oo) “Tandem Right” means a kind of Stock Appreciation Right granted in connection with a Nonstatutory Stock Option as described in Section 11.

(pp) “Taxable Year” means the fiscal period used by the Company for reporting taxes on its income under the Code.

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(qq) “Ten Percent Stockholder” means a person who owns, directly or indirectly, stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or any Related Company. Indirect ownership of stock shall be determined in accordance with Code section 424(d).

(rr) “Treasury Regulations” mean the final, temporary or proposed regulations issued by the Treasury Department and/or Internal Revenue Service as codified in Title 26 of the United States Code of Federal Regulations. Any references made in the Plan to specific Treasury Regulations shall also refer to any successor or replacement regulations thereto.

3. General. The following types of Awards may be granted under the Plan: Performance Grants, Performance Shares, shares of Restricted Stock, Restricted Stock Units, Performance Share Units, Options, or Stock Appreciation Rights. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options.

4. Stock.

(a) Reserve. Subject to Section 19 of the Plan, there shall be reserved for issuance under the Plan an aggregate total of (i) 900,000 new shares of Company Stock (not previously reserved for issuance under the Prior Plan), plus (ii) any shares of Company Stock that were reserved and remained available for issuance (and not subject to an outstanding award) under the Prior Plan as of the Effective Date, plus (iii) the number of shares of Company Stock subject to outstanding awards under the Prior Plan as of the Effective Date that expire, are forfeited or terminate unexercised, unconverted, or undistributed thereafter (the “Total Share Reserve”). The maximum aggregate number of shares that may be issued under the Plan through Incentive Stock Options is the same as the Total Share Reserve. For all purposes under the Plan, each stock-settled Stock Appreciation Right that is settled under the Plan shall be counted as one share of Company Stock against the Total Share Reserve.

(b) Share Use. Shares allocable to Incentive Awards or portions thereof granted under the Plan that expire, are forfeited, or that terminate unexercised, unconverted or undistributed may be subjected to a new Incentive Award under the Plan. Notwithstanding anything to the contrary contained herein, the following shares shall not be added to the Total Share Reserve: (i) any shares of Company Stock retained or withheld by the Employer in satisfaction of an Employee’s obligations to pay Applicable Withholding Taxes with respect to any Incentive Award, (ii) shares issued upon the exercise, vesting or distribution under an Incentive Award, (iii) shares tendered by the Participant or withheld by the Employer in payment of the purchase price of an Option, (iv) shares subject to a Stock Appreciation Right that are not issued in connection with its stock settlement on exercise thereof, and (v) shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Options.

(c) Plan Limits. No more than 75,000 shares may be allocated to Awards, including the maximum amounts payable under a Performance Grant, that are granted to any individual Participant during any single Taxable Year. The aggregate maximum cash amount payable under the Plan to any Participant in any single Taxable Year shall not exceed $500,000. The aggregate maximum award payable in equity under the Plan to any Outside Director in any single Taxable Year shall not exceed $150,000.

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(d) Assumed Awards. Any shares of Company Stock that are issued by the Company, and any awards that are granted by, or become obligations of, the Company, through the assumption by the Company (or a Related Company) of, or in substitution for, outstanding awards previously granted by an acquired company (including a predecessor of the acquired company), or any direct or indirect parent thereof, in the case of persons that become Service Providers of the Company (or a Related Company) in connection with a business or asset acquisition or similar transaction, shall not be counted against the shares available for issuance under the Plan.

5. Eligibility.

(a) Incentive Awards. All present and future Service Providers of the Company or any Related Company (whether now existing or hereafter created or acquired) who have contributed or who can be expected to contribute significantly to the Company or a Related Company shall be eligible to receive Incentive Awards under the Plan. The Committee shall have the power and complete discretion, as provided in Section 20, to select eligible Service Providers to receive Incentive Awards and to determine for each Service Provider the nature of the award and the terms and conditions of each Incentive Award.

(b) Director Awards. All present and future Outside Directors shall be eligible to receive Director Awards pursuant to Section 12 of the Plan.

6. Performance Grants.

(a) The Committee may make Performance Grants to eligible Service Providers. Each Performance Grant shall include the Performance Goals for the award, the Performance Criteria with respect to which such goals are to be measured, the threshold, target and maximum amounts payable under the award (as applicable), the period over which the award is to be earned, and any other terms and conditions as are applicable to the Performance Grant. The terms of a Performance Grant may be set in an annual or long-term bonus plan, other similar document or in such other document as the Committee identifies as containing the terms and conditions applicable to a Performance Grant. In the event of any conflict between such document and the Plan, the terms of the Plan shall control.

(b) The Committee shall establish the Performance Goals to which each Performance Grant shall be subject. The Performance Goals need not be objective and may be based on any Performance Criteria selected by the Committee in its discretion. The performance period with respect to an award shall not be less than twelve consecutive months in length and the Performance Goals with respect to such award may be established at any time after the start of such period in the Committee’s discretion. The Committee may vary the performance and other terms and conditions from Participant to Participant, grant to grant and Taxable Year to Taxable Year. The Committee may increase or decrease the threshold, target or maximum levels with respect to any Performance Goal after the start of a performance period in its discretion.

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(c) Performance Grants may be paid in cash, Company Stock, or a fixed combination of Company Stock or cash as provided by the Committee at the time of grant, or the Committee may reserve the right to determine the manner of payment at the time the Performance Grant becomes payable. Any payment in Company Stock shall be based on the Fair Market Value of a share of Company Stock on the payment date. The Committee may provide in the Grant Agreement that the Participant may make an election to defer the payment under a Performance Grant subject to such terms as the Committee may determine in accordance with Code section 409A.

(d) A Participant who receives a Performance Grant payable in Company Stock shall have no rights as a stockholder until the Company Stock is issued pursuant to the terms of the Performance Grant and all requirements with respect to the issuance of such shares have been satisfied.

7. Performance Shares.

(a) The Committee may grant Performance Shares to eligible Service Providers. Whenever the Committee grants Performance Shares, notice shall be given to the Service Provider stating the number of Performance Shares granted and the terms and conditions to which the grant of Performance Shares is subject. This notice shall become the Grant Agreement between the Company and the Service Provider and, at that time, the Service Provider shall become a Participant.

(b) The Committee shall establish the Performance Goals to which each award of Performance Shares shall be subject. The Performance Goals need not be objective and may be based on any Performance Criteria selected by the Committee in its discretion. The performance period with respect to an award shall not be less than twelve consecutive months in length and the Performance Goals with respect to such award may be established at any time after the start of such period in the Committee’s discretion. The Committee may vary the performance and other terms and conditions from Participant to Participant, grant to grant and Taxable Year to Taxable Year. The Committee may increase or decrease the threshold, target or maximum levels with respect to any Performance Goal after the start of a performance period in its discretion.

(c) The Committee shall establish for each award the number of shares of Company Stock payable at specified levels of performance. All determinations regarding the achievement of any Performance Goals will be made by the Committee. The actual number of shares to be paid to a Participant under an award will be calculated by measuring the achievement of the Performance Goal(s) with respect to the Performance Criteria as established by the Committee. All calculations of actual payments shall be made by the Committee whose decision shall be final and binding on all parties.

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(d) The Committee may reserve the right in a Grant Agreement to settle all or portion of an award of Performance Shares in cash instead of shares of Company Stock, with the cash portion to be determined based on the Fair Market Value as of the date of payment of the shares of Company Stock otherwise payable under the award, or to allow the Participant to defer payment under the award, subject to such terms as the Committee may determine in accordance with Code section 409A.

(e) A Participant shall have no rights as a stockholder until shares of Company Stock are issued under the Performance Share award and all requirements with respect to the issuance of such shares have been satisfied.

8. Restricted Stock Awards.

(a) The Committee may grant Restricted Stock to eligible Service Providers. Each award of Restricted Stock shall be evidenced by a Grant Agreement, which shall state the number of shares of Restricted Stock granted and the terms and conditions to which the Restricted Stock is subject.

(b) The Committee shall establish as to each award of Restricted Stock the terms and conditions upon which the restrictions set forth in paragraph (c) below shall lapse. The terms and conditions may include the continued performance of services or the achievement of one or more Performance Goals measured on an individual, corporate or other basis, or any combination thereof. The minimum vesting period for an award of Restricted Stock to an Employee or Consultant which vests based solely on continued service and the passage of time and the minimum performance period for an award of Restricted Stock to an Employee which vests based in whole or in part on the achievement of Performance Goals shall be one (1) year; provided, however, that the Committee may, in its discretion and without limitation, provide in the Grant Agreement that restrictions will lapse prior to the expiration of the service or performance period as a result of the Disability, death or Retirement of the Participant, the involuntary or constructive termination of the Participant’s employment or other service without cause, or the occurrence of an event relating to a Change of Control (as provided in Section 19).

(c) No shares of Restricted Stock may be sold, assigned, transferred, pledged, hypothecated, or otherwise encumbered or disposed of until the restrictions on the shares established by the Committee have lapsed or been removed.

(d) Upon the acceptance by a Participant of an award of Restricted Stock, the Participant shall, subject to the restrictions set forth in paragraph (c) above, have all the rights of a stockholder with respect to the shares of Restricted Stock, including, but not limited to, the right to vote the shares of Restricted Stock and the right to receive all dividends and other distributions paid thereon. Unless the Grant Agreement provides otherwise, (i) any stock dividends or other distributions with respect to any outstanding shares of Restricted Stock shall be issued subject to the same vesting conditions and transferability restrictions as the underlying shares of Restricted Stock, and (ii) any cash dividends or other distributions with respect to any outstanding shares of Restricted Stock shall be accumulated and payable in cash subject to the same restrictions and conditions as the shares of Company Stock underlying the award. Notwithstanding the foregoing, any “named executive officer” (as defined in the Exchange Act) of the Company shall not be permitted to receive payment of dividends or dividend equivalents on any unearned unvested Restricted Stock.

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(e) Upon issuance, the Company shall direct its registrar and transfer agent to make a book entry for the shares of Restricted Stock and no certificates representing the shares of Restricted Stock shall be issuable until the shares have vested and any restrictions on transferability have lapsed or been removed.

9. Performance Share Units and Restricted Stock Units.

(a) The Committee may grant Performance Share Units and Restricted Stock Units to eligible Service Providers. Each award of Performance Share Units or Restricted Stock Units shall be evidenced by a Grant Agreement, which shall state the number of Performance Share Units or Restricted Stock Units granted and the terms and conditions to which the Performance Share Units or Restricted Stock Units are subject.

(b) The Committee shall establish as to each award of Performance Share Units the terms and conditions upon which the Performance Share Units shall be earned, vest and be paid. The issuance and vesting of Performance Share Units may be conditioned on the achievement of Performance Goals measured on an individual, corporate, or other basis, or any combination thereof and on the continued performance of services. The Committee shall establish as to each award of Restricted Stock Units the terms and conditions upon which the Restricted Stock Units shall vest and be paid. Vesting may be conditioned on the continued performance of services or the achievement of Performance Goals measured on an individual, corporate, or other basis, or any combination thereof. The minimum vesting period for an award of Restricted Stock Units to an Employee which vests based solely on continued service and the passage of time and the minimum performance period for an award of Restricted Stock Units or Performance Share Units to an Employee which vests based in whole or in part on the achievement of Performance Goals shall be one (1) year; provided, however, that the Committee may, in its discretion and without limitation, provide in the Grant Agreement that restrictions will expire as a result of one or more of the Disability, death or Retirement of the Participant, the involuntary or constructive termination of the Participant’s employment or other service without cause, or the occurrence of an event relating to a Change of Control (as provided in Section 19).

(c) Performance Share Units and Restricted Stock Units may be paid in cash, Company Stock, or a fixed combination of Company Stock or cash as provided in the Grant Agreement, or the Committee may reserve the right to determine the manner of payment at the time the Performance Share Units or Restricted Stock Units become payable. The delivery of Company Stock in payment of Performance Share Units or Restricted Stock Units may be subject to additional conditions established in the Grant Agreement.

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(d) A Participant who receives Performance Share Units or Restricted Stock Units payable in Company Stock shall have no rights as a stockholder until the Company Stock is issued pursuant to the terms of the Grant Agreement and all requirements with respect to the issuance of such shares have been satisfied. The Committee may, in its discretion, provide that a Participant shall be entitled to receive dividend equivalents on outstanding Performance Share Units or Restricted Stock Units; provided, however, that any “named executive officer” (as defined in the Exchange Act) of the Company shall not be permitted to receive payment of dividends or dividend equivalents on any unearned unvested Performance Share Units or Restricted Stock Units. Unless otherwise provided in the Grant Agreement, dividend equivalents, if any, will be credited with respect to an award of Restricted Stock Units or Performance Share Units as follows: (i) in the case of a stock dividend or other distribution, by crediting the Participant with an additional number of Restricted Stock Units or Performance Share Units equal to the number of shares of Company Stock the Participant would have received in the dividend with respect to his or her Restricted Stock Units or Performance Share Units had the Restricted Stock Units or Performance Share Units been outstanding shares of Company Stock on the dividend payment date; and (ii) in the case of a cash dividend or other distribution, by crediting the Participant with an amount equal to the aggregate cash amount the Participant would have received in the dividend with respect to his or her Restricted Stock Units or Performance Share Units had the Restricted Stock Units or Performance Share Units been outstanding shares of Company Stock on the dividend payment date, which shall be accumulated and payable in cash subject to the same restrictions and conditions as the shares of Company Stock underlying the award. Any additional Restricted Stock Units or Performance Share Units issued as dividend equivalents shall be subject to the same vesting and other terms and conditions as the underlying Restricted Stock Units or Performance Share Units.

10. Stock Options.

(a) The Committee may grant Options to eligible Service Providers. Each award of Options shall be evidenced by a Grant Agreement, which will state the number of shares for which Options are granted, the Option exercise price per share, whether the Options are Incentive Stock Options or Nonstatutory Stock Options, the extent, if any, to which associated Stock Appreciation Rights are granted, and the conditions to which the grant and exercise of the Options are subject. The minimum vesting period for an award of Options shall be one (1) year.

(b) The exercise price of shares of Company Stock covered by an Option shall not be, and shall never become, less than 100 percent of the Fair Market Value of the shares on the Date of Grant, except as may be provided in Section 19 (regarding certain changes affecting Company Stock). If the Participant is a Ten Percent Stockholder and the Option is intended to qualify as an Incentive Stock Option, the exercise price shall be not less than 110 percent of the Fair Market Value of such shares on the Date of Grant.

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(c) Options may be exercised in whole or in part at the times as may be specified by the Committee in the Participant’s Grant Agreement; provided that no Option may be exercised after the expiration of ten (10) years from the Date of Grant. If the Participant is a Ten Percent Stockholder and the Option is intended to qualify as an Incentive Stock Option, the Option may not be exercised after the expiration of five (5) years from the Date of Grant.

(d) Options shall not be transferable except to the extent specifically provided in the Grant Agreement in accordance with applicable securities laws. Incentive Stock Options, by their terms, shall not be transferable except by will or the laws of descent and distribution and shall be exercisable, during the Participant’s lifetime, only by the Participant.

(e) Options that are intended to qualify as Incentive Stock Options shall be granted only to Employees who meet the eligibility requirements of Section 5.

(f) Options that are intended to qualify as Incentive Stock Options shall, by their terms, not be exercisable after the first to occur of (x) ten years from the Date of Grant (five years if the Participant to whom the Option has been granted is a Ten Percent Stockholder), (y) three months following the date of the Participant’s termination of employment with the Company and all Related Companies for reasons other than Disability or death, or (z) one year following the date of the Participant’s termination of employment on account of Disability or death.

(g) Options that are intended to qualify as Incentive Stock Options shall, by their terms, be exercisable in any calendar year only to the extent that the aggregate Fair Market Value (determined as of the Date of Grant) of the Company Stock with respect to which Incentive Stock Options are exercisable for the first time during the Plan Year does not exceed $100,000 (the “Limitation Amount”). Incentive Stock Options granted under the Plan and all other plans of the Company and all Related Companies shall be aggregated for purposes of determining whether the Limitation Amount has been exceeded. The Committee may impose any conditions as it deems appropriate on an Incentive Stock Option to ensure that the foregoing requirement is met. If Incentive Stock Options that first become exercisable in a Plan Year exceed the Limitation Amount, the excess Options shall be treated as Nonstatutory Stock Options to the extent permitted by law.

(h) A Participant who purchases shares of Company Stock under an Option shall have no rights as a stockholder until the Company Stock is issued pursuant to the terms of the Grant Agreement and all requirements with respect to the issuance of such shares have been satisfied.

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(i) Options may be exercised by the Participant giving written notice of the exercise to the Company, stating the number of shares the Participant has elected to purchase under the Option. The notice shall be effective only if accompanied by the exercise price in full in cash; provided, however, that if the terms of an Option or the Committee in its discretion so permits, (i) unless prohibited by law, the Participant may deliver a properly executed exercise notice together with irrevocable instructions to a broker to deliver promptly to the Company, from the sale or loan proceeds with respect to the sale of Company Stock or a loan secured by Company Stock, the amount necessary to pay the exercise price and, if required by the terms of the Option or the Committee in its discretion, Applicable Withholding Taxes, (ii) the Participant may deliver shares of Company Stock for which the Participant thereof has good title, free and clear of all liens and encumbrances (valued at their Fair Market Value on the date of exercise) in satisfaction of all or any part of the exercise price, or (iii) the Company may withhold from the Option shares, shares of Company Stock (valued at their Fair Market Value on the date of exercise) in satisfaction of all or any part of the exercise price; or (iv) may use any other methods of payment as the Committee, at its discretion, deems appropriate. Until the Participant has paid the exercise price and any Applicable Withholding Taxes, no shares shall be issued.

(j) (i) No Modification shall be made in respect to any Option if such Modification would result in the Option constituting a deferral of compensation, and (ii) no Extension shall be made in respect to any Option if such Extension would result in the Option having an additional deferral feature from the Date of Grant, in each case within the meaning of applicable Treasury Regulations under Code section 409A. Subject to the remaining part of this subsection (j), (i) a “Modification” means any change in the terms of the Option (or change in the terms of the Plan or applicable Grant Agreement) that may provide the holder of the Option with a direct or indirect reduction in the exercise price of the Option, regardless of whether the holder in fact benefits from the change in terms; and (ii) an “Extension” means either (A) the provision to the holder of an additional period of time within which to exercise the Option beyond the time originally prescribed, (B) the conversion or exchange of the Option for a legally binding right to compensation in a future taxable year, (C) the addition of any feature for the deferral of compensation to the terms of the Option, or (D) any renewal of the Option that has the effect of (A) through (C) above. Notwithstanding the preceding sentence, it shall not be a Modification or an Extension, respectively, to change the terms of an Option in accordance with Section 19 of the Plan, or in any of the other ways or for any of the other purposes provided in applicable Treasury Regulations or other generally applicable guidance under Code section 409A as not resulting in a Modification or Extension for purposes of that section. In particular, it shall not be an Extension to extend the exercise period of an Option to a date no later than the earlier of (i) the latest date upon which the Option could have expired by its original terms under any circumstances or (ii) the tenth anniversary of the original Date of Grant.

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11. Stock Appreciation Rights.

(a) The Committee may grant Stock Appreciation Rights to eligible Service Providers. Each award of Stock Appreciation Rights shall be evidenced by a Grant Agreement, which shall state the number of shares of Company Stock with respect to which Stock Appreciation Rights are granted, the extent, if any, to which the Stock Appreciation Rights are granted in connection with all or any part of a Nonstatutory Stock Option (“Tandem Rights”), and the conditions to which the grant and exercise of the Stock Appreciation Rights are subject. The minimum vesting period for an award of Stock Appreciation Rights shall be one (1) year.

(b) Stock Appreciation Rights (other than Tandem Rights) shall entitle the Participant, upon exercise of all or any part of the Stock Appreciation Rights, to receive in exchange from the Company an amount equal to the excess of (x) the Fair Market Value on the date of exercise of the Company Stock covered by the surrendered Stock Appreciation Right over (y) the exercise price of the Stock Appreciation Right, which shall not be and, except as provided in Section 19 below, shall never become less than 100% of the Fair Market Value of a share of Company Stock on the Date of Grant.

(c) Tandem Rights shall entitle the Participant, upon exercise of all or any part of the Tandem Rights, to surrender to the Company unexercised that portion of the underlying Nonstatutory Stock Option relating to the same number of shares of Company Stock as is covered by the Tandem Right (or the portion of the Tandem Right so exercised) and to receive in exchange from the Company an amount equal to the excess of (x) the Fair Market Value on the date of exercise of the Company Stock covered by the surrendered portion of the underlying Nonstatutory Stock Option over (y) the exercise price of the Company Stock covered by the surrendered portion of the underlying Nonstatutory Stock Option.

(d) Upon the exercise of a Tandem Right and surrender of the related portion of the underlying Nonstatutory Stock Option, the Nonstatutory Stock Option, to the extent surrendered, shall not thereafter be exercisable.

(e) Subject to any further conditions upon exercise imposed by the Committee, a Tandem Right shall be granted on the same Date of Grant as the related Nonstatutory Stock Option, be transferable only to the extent that the related Nonstatutory Stock Option is transferable, be exercisable only to the extent that the related Nonstatutory Stock Option is exercisable and shall expire no later than the date on which the related Nonstatutory Stock Option expires.

(f) The Committee may limit the amount that the Participant will be entitled to receive upon exercise of Stock Appreciation Rights.

(g) Stock Appreciation Rights shall not be transferable except to the extent specifically provided in the Grant Agreement in accordance with applicable securities laws.

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(h) Stock Appreciation Rights may be exercised in whole or in part at the times as may be specified by the Committee in the Participant’s Grant Agreement; provided that no Stock Appreciation Right may be exercised after the expiration of ten (10) years from the Date of Grant.

(i) A Stock Appreciation Right may only be exercised at a time when the Fair Market Value of the Company Stock covered by the Stock Appreciation Right exceeds the exercise price of the Stock Appreciation Right (or, in the case of a Tandem Right, only to the extent it exceeds the exercise price of the Company Stock covered by the underlying Nonstatutory Stock Option).

(j) The manner in which the Company’s obligation arising upon the exercise of a Stock Appreciation Right shall be paid shall be determined by the Committee and shall be set forth in the Grant Agreement. The Grant Agreement may provide for payment in Company Stock or cash, or a fixed combination of Company Stock or cash, or the Committee may reserve the right to determine the manner of payment at the time the Stock Appreciation Right is exercised. Shares of Company Stock issued upon the exercise of a Stock Appreciation Right shall be valued at their Fair Market Value on the date of exercise.

(k) A Participant who acquires shares of Company Stock upon exercise of a Stock Appreciation Right shall have no rights as a stockholder until the Company Stock is issued pursuant to the terms of the Grant Agreement and all requirements with respect to the issuance of such shares have been satisfied.

(l) Stock Appreciation Rights may be exercised by the Participant giving written notice of the exercise to the Company, stating the number of Stock Appreciation Rights the Participant has elected to exercise.

(m) (i) No Modification shall be made in respect to any Stock Appreciation Right if such Modification would result in the Stock Appreciation Right constituting a deferral of compensation, and (ii) no Extension shall be made in respect to any Stock Appreciation Right if such Extension would result in the Stock Appreciation Right having an additional deferral feature from the Date of Grant, in each case within the meaning of applicable Treasury Regulations under Code section 409A. Subject to the remaining part of this subsection (m), (i) a “Modification” means any change in the terms of the Stock Appreciation Right (or change in the terms of the Plan or applicable Grant Agreement) that may provide the holder of the Stock Appreciation Right with a direct or indirect reduction in the exercise price of the Stock Appreciation Right, regardless of whether the holder in fact benefits from the change in terms; and (ii) an “Extension” means either (A) the provision to the holder of an additional period of time within which to exercise the Stock Appreciation Right beyond the time originally prescribed, (B) the conversion or exchange of the Stock Appreciation Right for a legally binding right to compensation in a future taxable year, (C) the addition of any feature for the deferral of compensation to the terms of the Stock Appreciation Right, or (D) any renewal of the Stock Appreciation Right that has the effect of (A) through (C) above. Notwithstanding the preceding sentence, it shall not be a Modification or an Extension, respectively, to change the terms of a Stock Appreciation Right in accordance with Section 19 of the Plan, or in any of the other ways or for any of the other purposes provided in applicable Treasury Regulations or other generally applicable guidance under Code section 409A as not resulting in a Modification or Extension for purposes of that section. In particular, it shall not be an Extension to extend the exercise period of a Stock Appreciation Right to a date no later than the earlier of (i) the latest date upon which the Stock Appreciation Right could have expired by its original terms under any circumstances or (ii) the tenth anniversary of the original Date of Grant.

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12. Outside Director Awards. On the third business day following (i) the 2024 annual meeting of the Company’s shareholders and (ii) each of the four annual meetings thereafter (each, an “Annual Grant Date”), each Outside Director shall be granted shares of Restricted Stock without further action on the part of the Board or the Committee. The number of shares of Restricted Stock awarded to an Outside Director on an Annual Grant Date shall be determined annually by the Compensation Committee; provided, however, that the value of such award determined as of the annual grant date shall not exceed $150,000 in any Grant Year. The term “Grant Year” shall mean the twelve-month period beginning on the annual meeting date that immediately precedes the Annual Grant Date. Each award agreement evidencing a grant of Restricted Stock pursuant to this Section 12 shall provide that the Restricted Stock will become fully vested, and the restrictions (as determined in accordance with Section 8(c)) applicable to such Restricted Stock shall lapse, (i) on the date of the first annual meeting of the Company’s shareholders that occurs after the Annual Grant Date (the “Next Annual Meeting Date”), if the Outside Director continuously serves as an Outside Director from the Annual Grant Date to the Next Annual Meeting Date or, (ii) if earlier, the date on which the first of the following events occur: the Outside Director dies or becomes Disabled, the first annual meeting of the Company’s shareholders following the Outside Director’s attainment of age 75, or a Change of Control of the Company (without regard to the restrictions described in Section 19(c)).

13. Applicable Withholding Taxes. A Participant may be required to pay to the Employer and the Employer shall have the right and is hereby authorized to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to a Participant an amount (in cash, shares of Company Stock, other securities, other Awards, or other property) sufficient to cover the Applicable Withholding Taxes in respect of an Award, its exercise, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Employer to satisfy all obligations for the payment of such taxes. The Employer shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Employer, an amount sufficient to satisfy the Employer’s obligation to withhold Applicable Withholding Taxes with respect to any exercise, lapse of restriction or other taxable event arising as a result of the Plan. The obligations of the Company under the Plan will be conditioned on such payment or arrangements and the Employer will, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant. Unless otherwise determined by the Committee at the time the Incentive Award is made or thereafter, any such withholding requirement may be satisfied, in whole or in part, by withholding from the Incentive Award shares of Company Stock having a Fair Market Value on the date of withholding equal to the amount that the Employer determines is necessary to satisfy its withholding obligation. All such elections shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

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14. Nontransferability. Except as otherwise provided in this Section 14, by applicable law or by the terms of a Grant Agreement, (i) all Incentive Awards are non-transferable and shall not be subject in any manner to anticipation, alienation, assignment, pledge, encumbrance or charge; (ii) Options and Stock Appreciation Rights shall be exercised only by the Participant; and (iii) amounts payable or shares issuable pursuant to an Incentive Award shall be delivered only to (or for the account of) the Participant. The foregoing exercise and transfer restrictions shall not apply to: (a) transfers to the Company upon forfeiture or cancellation of an Incentive Award or to pay the exercise price of an Option or to an Employer to pay Applicable Withholding Taxes; (b) transfers to or exercises by the Participant’s beneficiary in the event of a Participant’s death, or, in the absence of a validly designated beneficiary, transfers by will or the laws of descent and distribution; (c) transfers pursuant to a qualified domestic relations order (as defined in the Code) (in the case of Incentive Stock Options, to the extent such transfers are permitted by the Code); or (d) if the Participant is incapacitated, permitted transfers to or exercises on behalf of the Participant by his or her legal representative. The Committee may expressly provide in the Grant Agreement that an Incentive Award (other than an Incentive Stock Option) may be transferred to, exercised by and paid to members of the Participant’s family, charitable institutions, or trusts or other entities whose beneficiaries or beneficial owners are members of the Participant’s family and/or charitable institutions, for estate and/or tax planning purposes and in compliance with applicable securities laws.

15. Prohibition on Repricing; Reloading. The Committee is prohibited from Repricing any Option or Stock Appreciation Right without the prior approval of the stockholders of the Company with respect to the proposed Repricing. No Option or Stock Appreciation Right may include provisions that “reload” the Option or Stock Appreciation Right upon exercise or that extend the term of an Option or Stock Appreciation Right beyond what is the maximum period specified in the Plan and/or Grant Agreement.

16. Effective Date of the Plan. The Plan shall become effective on June 4, 2024, provided that the Plan has been approved by the Company’s stockholders. However, until the requirements of any applicable federal or state securities laws have been met, no shares of Company Stock issuable under Non-Option Awards shall be issued and no Options or Stock Appreciation Rights shall be exercisable that, in either case, are not contingent on the occurrence of both such events.

17. Continuing Securities Law Compliance. If at any time on or after the Effective Date, the requirements of any applicable federal or state securities laws should fail to be met, no shares of Company Stock issuable under Non-Option Awards shall be issued and no Options or Stock Appreciation Rights shall be exercisable until the Committee (or, with respect to a Director Award, the Board) has determined that these requirements have again been met. The Committee (or, with respect to a Director Award, the Board) may suspend the right to exercise an Option or Stock Appreciation Right at any time when it determines that allowing the exercise and issuance of Company Stock would violate any federal or state securities or other laws, and may provide that any time periods to exercise the Option or Stock Appreciation Right are extended during a period of suspension. Shares of Company Stock issued and delivered under the Plan shall be subject to such stop-transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Company Stock is then listed and any applicable federal or state laws, and the Committee may cause a legend or legends to be placed on any certificate or certificates representing any such shares to make appropriate reference to any such restrictions. In making such determination, the Committee may rely upon an opinion of counsel for the Company.

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18. Termination, Modification and Amendment. If not sooner terminated by the Board, this Plan shall terminate at the close of business on the date that immediately follows the fifth anniversary of the date on which the Plan was approved by the Company’s stockholders. No new Awards shall be granted under the Plan after the date on which the Plan terminates. The Board may terminate the Plan at any time and may amend the Plan at any time in any respect as it shall deem advisable; provided that no change shall be made that increases the total number of shares of Company Stock reserved for issuance under the Plan (except pursuant to Section 15), materially modifies the requirements as to eligibility for participation in the Plan, or that would otherwise be considered a material revision or amendment under Code section 422 or the listing standards of the exchange on which the Company Stock is traded, unless the change is authorized by the stockholders of the Company. Notwithstanding the foregoing, the Board may unilaterally amend the Plan and outstanding Awards with respect to Participants as it deems appropriate to ensure compliance with Rule 16b-3 and other applicable federal or state securities laws and to meet the requirements of the Code and applicable regulations or other generally applicable guidance thereunder. Except as provided in the preceding sentence, a termination or amendment of the Plan or of an Incentive Award shall not, without the consent of the Participant, adversely affect a Participant’s rights under an Award previously granted to him or her.

19. Change in Capital Structure.

(a) The Committee (or, with respect to a Director Award, the Board) shall proportionately adjust the number and kind of shares of Company Stock or securities of the Company to be subject to the Plan and to Awards then outstanding or to be granted thereunder, the maximum number of shares Company Stock or securities which may be delivered under the Plan (including the maximum limit on Non-Option Awards or Incentive Stock Options under Section 4, if any), the maximum number of shares of Company Stock or securities that can be granted to an individual Participant under Section 4, the exercise price of Options, the initial Fair Market Value of Company Stock under Stock Appreciation Rights, and other relevant terms of the Plan and any Awards whenever, in the event of a stock dividend, stock split or combination of shares, recapitalization or merger in which the Company is the surviving corporation, or other change in the Company’s corporate structure or capital stock (including, but not limited to, the creation or issuance to stockholders generally of rights, options or warrants for the purchase of common stock or preferred stock of the Company), it deems any such adjustment necessary or desirable to preserve the intended benefits of the Plan and any outstanding Awards for the Company and the Participants. The Committee’s (or, with respect to a Director Award, the Board’s) determination in this regard shall be binding on all persons. If the adjustment would produce fractional shares with respect to any unexercised Option or Stock Appreciation Right or fractional cents with respect to the exercise price thereof, the Committee (or, with respect to a Director Award, the Board) shall round down the number of shares covered by the Option or Stock Appreciation Right to the nearest whole share and round up the exercise price to the nearest whole cent.

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(b) Notwithstanding anything to the contrary in Section 19(a) and to the extent not inconsistent with Section 27 hereof, and unless specifically prohibited under applicable laws, or by the rules and regulations of any governmental agencies or national securities exchanges, the Committee may, in its sole discretion, at the time an Award is made to an Employee Participant, or at any time prior to, coincident with or after the time of a Change of Control, take any one or more of the following actions which may apply only upon the occurrence of a Change of Control or, if later, upon the action being taken: (A) provide for the acceleration of any service conditions, or the waiver of any other conditions, relating to the vesting, exercise, payment or distribution of an Award so that any Award to an Employee Participant, whose employment has been terminated involuntarily absent cause or for “good reason” or “constructive termination” (as may be defined in the applicable Grant Agreement) as a result of the Change of Control may be vested, exercised, paid or distributed in full on or before a date fixed by the Committee, and in connection with such action (i) provide for an extended period to exercise any stock Options (not to exceed the original term of the Option) and (ii) determine the level of attainment of any applicable Performance Goals; (B) provide for the purchase of any Awards from a Participant whose employment has been terminated as a result of a Change of Control, upon the Participant’s request, for an amount of cash equal to the amount that could have been obtained upon the exercise, payment or distribution of such rights had such Award been currently exercisable or payable; or (C) provide for an equivalent award or substitute Award in respect of securities of the surviving entity of such transaction. For purposes of this Section, any Participant whose employment is either (i) terminated by the Company other than for cause or (ii) terminated for “good reason” or “constructive termination” (as may be defined in the applicable Grant Agreement) in either case upon or prior to the second anniversary of a Change of Control, shall be deemed to have been terminated as a result of the Change of Control. Any such action taken by the Committee will be final, conclusive, and binding for all purposes of this Plan. With respect to the grant of any Director Award, the Board shall retain the right to accelerate the vesting of such Award in connection with a Change of Control.

(c) Notwithstanding anything in the Plan to the contrary, the Committee (or, with respect to a Director Award, the Board) may take the foregoing actions without the consent of any Participant, and its determination shall be conclusive and binding on all persons and for all purposes.

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20. Administration of the Plan.

(a) The Plan shall be administered by the Committee. Subject to the express provisions and limitations set forth in this Plan or the Committee’s charter or as otherwise established by the Board, the Committee shall be authorized and empowered to do all things necessary or desirable, in its sole discretion, in connection with the administration of this Plan, including, without limitation, the following:

(i) to prescribe, amend and rescind policies relating to this Plan, and to interpret the Plan, including defining terms not otherwise defined;

(ii) to determine which persons are eligible Service Providers, to which of the Service Providers, if any, Incentive Awards shall be granted hereunder and the timing of any Incentive Awards;

(iii) to grant Incentive Awards to Service Providers and determine the terms and conditions thereof, including the number of shares of Company Stock subject to Incentive Awards and the exercise or purchase price of the shares of Company Stock and the circumstances under which Incentive Awards become exercisable or vested or are forfeited or expire, which terms may but need not be conditioned upon the passage of time, continued employment, the satisfaction of Performance Goals, the occurrence of certain events, or other factors;

(iv) to establish or verify the extent of satisfaction of any Performance Goals or other conditions applicable to the grant, issuance, exercisability, vesting and/or ability to retain any Incentive Award;

(v) to prescribe and amend the terms of the Grant Agreements or other documents evidencing Incentive Awards made under this Plan (which need not be identical);

(vi) to determine whether, and the extent to which, adjustments are required pursuant to Section 19;

(vii) to interpret and construe this Plan, any policies under this Plan and the terms and conditions of any Incentive Award granted hereunder, and to make exceptions to any provisions for the benefit of the Company;

(viii) to delegate, to the extent permitted by applicable law, any portion of its authority under the Plan to make Incentive Awards to an executive officer of the Company, subject to any conditions that the Committee may establish (including but not limited to conditions on such officer’s ability to make awards to “executive officers” within the meaning of section 16 of the Act); and

(ix) to make all other determinations deemed necessary or advisable for the administration of this Plan.

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(b) The Committee may amend the terms of previously granted Incentive Awards so long as the terms as amended are consistent with the terms of the Plan and provided that the consent of the Participant is obtained with respect to any amendment that would be detrimental to him or her, except that the consent will not be required if the amendment is for the purpose of complying with applicable provisions of the Code or any federal or state securities laws or as provided in Section 19.

(c) The interpretation and construction of any provision of the Plan by the Committee shall be final and conclusive as to any Participant. The Committee may consult with counsel, who may be counsel to the Company, and shall not incur any liability for any action taken in good faith in reliance upon the advice of counsel.

(d) The Committee (or any subcommittee established thereunder to administer the Plan) shall meet at such times and places as it determines a majority of the members of the Committee (or subcommittee) shall constitute a quorum, and all actions of the Committee (or subcommittee) shall be taken by a majority of the members present. Any action may be taken by the Committee (or subcommittee) in writing or by electronic transmission or transmissions as permitted by the Bylaws of the Company, and any action so taken shall be fully effective as if it had been taken at a meeting.

(e) The Committee may delegate the administration of the Plan to an officer or officers of the Company, and such officer(s) may have the authority to execute and distribute agreements or other documents evidencing or relating to Incentive Awards granted by the Committee under this Plan, to maintain records relating to the grant, vesting, exercise, forfeiture or expiration of Incentive Awards, to process or oversee the issuance of shares of Company Stock upon the exercise, vesting and/or settlement of an Incentive Award, to interpret the terms of Incentive Awards and to take any other actions as the Committee may specify, provided that in no case shall any such officer(s) be authorized to grant Incentive Awards under the Plan, except in accordance with Section 20(a)(viii) above. Any action by an administrator within the scope of its delegation shall be deemed for all purposes to have been taken by the Committee and references in this Plan to the Committee shall include any such officer(s), provided that the actions and interpretations of any such officer(s) shall be subject to review and approval, disapproval or modification by the Committee.

(f) In addition to such other rights of indemnification as they may have as directors of the Company or as members of the Committee, the members of the Committee shall be indemnified by the Company against reasonable expenses, including attorney’s fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal thereof, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Incentive Award granted thereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment or settlement in any such action, suit or proceeding, except as to matters as to which the Committee member has been negligent or engaged in misconduct in the performance of his duties; provided, however, that within sixty (60) days after institution of any such action, suit or proceeding, a Committee member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same.

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(g) Subject to the express provisions of the Plan, the Committee shall have full power and authority to determine whether, to what extent and under what circumstances any outstanding Incentive Award shall be terminated, canceled, forfeited or suspended, which may include, without limitation, (i) competing with the Company or participating in any enterprise that competes with the Company; (ii) using or disclosing, other than as expressly authorized by the Company or a Related Company, any confidential business information or trade secrets that the Participant obtains during the course of his or her employment with the Company or any Related Company; and (iii) soliciting any employee or customer of the Company or a Related Company. Notwithstanding the foregoing or any other provision of the Plan or a Grant Agreement, all Incentive Awards to any Participant that are subject to any restriction or have not been earned or exercised in full by the Participant shall be terminated and canceled if the Participant is terminated for cause, as determined by the Committee in its sole discretion, to the extent consistent with such Participant’s employment agreement, if any. Additionally, any Incentive Awards granted pursuant to this Plan shall be subject to any recoupment or clawback policy that is adopted by, or applicable to, the Company.

21. Notice. All notices and other communications required or permitted to be given under this Plan shall be in writing and shall be deemed to have been duly given if delivered personally or mailed first class, postage prepaid, or emailed, as follows (a) if to the Company—at the principal business address of the Company to the attention of the Corporate Secretary of the Company, or their email address at CorpSec@hookerfurnishings.com; and (b) if to any Participant—at the last address of the Participant known to the sender at the time the notice or other communication is sent.

22. No Effect on Other Plans. Nothing contained in the Plan will be deemed in any way to limit or restrict the Company or any Related Company from making any award or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter in effect.

23. Interpretation. The Plan is intended to operate in compliance with the provisions of Rule 16b-3. The terms of this Plan are subject to all present and future regulations and rulings of the Secretary of the Treasury of the United States or his or her delegate relating to the qualification of Incentive Stock Options under the Code. This Plan and the individual Awards under the Plan are intended to comply with any applicable requirements of Code section 409A and shall be interpreted to the extent context reasonably permits in accordance with such requirements. If any provision of the Plan conflicts with any such regulation or ruling, then that provision of the Plan shall be void and of no effect. The terms of this Plan shall be governed by the laws of the Commonwealth of Virginia and applicable federal law.

24. No Employment/Service Rights. Nothing in the Plan or any Incentive Award shall confer upon any Participant any right to continue in service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Related Company employing or retaining such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such person’s service at any time for any reason, with or without cause.

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25. Beneficiary. A Participant may designate a beneficiary to receive benefits due under an Incentive Award, if any, upon the Participant’s death. Designation of a beneficiary shall be made by execution of a form approved or accepted by the Committee. In the absence of a valid beneficiary designation, a Participant’s surviving spouse, if any, and if none, the Participant’s estate, shall be the beneficiary. A Participant may change a prior beneficiary designation made under this Section 25 by a subsequent execution of a new beneficiary designation form. The change in beneficiary will be effective upon receipt by the Committee. Any payment made to a beneficiary under this Plan in good faith shall fully discharge the Company and any Related Company from all further obligations with respect to that payment. If the Committee has any doubt as to the proper beneficiary to receive a payment under this Plan, the Committee shall have the right to withhold such payment until the matter is fully adjudicated. In making any payment to or for the benefit of any minor or an incompetent Participant or beneficiary, the administrator, in its sole and absolute discretion, may make a distribution to a legal or natural guardian or other relative of a minor or court-appointed representative of such incompetent. Alternatively, it may make a payment to any adult with whom the minor or incompetent temporarily or permanently resides. The receipt by a guardian, representative, relative or other person shall be a complete discharge of the Company and any Related Company’s obligations under the Plan. The Company shall have no responsibility to see to the proper application of any payment so made. The Plan shall be binding on all successors and assigns of a Participant, including, without limitation, the estate of such participant and the executor, administrator or trustee of such estate, or any receiver or trustee in bankruptcy or representative of the Participant’s creditors.

26. Unfunded Plan. This Plan is unfunded. Although bookkeeping accounts may be established with respect to Participants who are entitled to cash, Company Stock or rights thereto under this Plan, any such accounts shall be used merely as a bookkeeping convenience. The Company shall not be required to segregate any assets that may at any time be represented by cash, Company Stock or rights thereto, nor shall this Plan be construed as providing for such segregation, nor shall the Company, the Board or the Committee be deemed to be a trustee of any cash, Company Stock or rights thereto to be granted under this Plan. Any liability or obligation of the Company to any Participant with respect to an Incentive Award of cash, Company Stock or rights thereto under this Plan shall be based solely upon any contractual obligations that may be created by this Plan and any Grant Agreement, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. None of the Company, the Board or the Committee shall be required to give any security or bond for the performance of any obligation that may be created by this Plan. With respect to this Plan and any Incentive Awards granted hereunder, Participants are general and unsecured creditors of the Company and have no rights or claims except as otherwise provided in this Plan or any applicable Grant Agreement.

27. Section 409A. The Plan and any Incentive Awards granted hereunder that provide for a deferral of compensation for purposes of Code section 409A are intended to comply with the applicable provisions of Code section 409A and shall be interpreted to the maximum extent possible in accordance with such intent. With respect to any Incentive Award that provides for a deferral of compensation for purposes of Code section 409A and that is payable under its terms on a Participant’s termination of employment or other service, (i) any references herein and in the Participant’s Grant Agreement to the Participant’s termination of employment or other service shall refer to the Participant’s “separation from service,” as defined in Code section 409A; and (ii) notwithstanding any provision herein or in the Participant’s Incentive Award to the contrary, if at the time of payment under such an Incentive Award, the Participant is a “specified employee” (as defined in Code section 409A), no such payment shall occur prior to the earlier of (A) the expiration of the six (6)-month period measured from the date of the Participant’s “separation from service,” or (B) the date of the Participant’s death. Upon the expiration of the six (6)-month deferral period referred to in the preceding sentence or the Participant’s death, all amounts that would otherwise have been paid during such period but for this Section 27 shall be paid and any amounts that remain to be paid under the Incentive Award shall be paid in accordance with the terms hereof and of the Grant Agreement.

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28. Deferral of Outside Director Restricted Stock Awards.

(a) Notwithstanding any provision in the Plan to the contrary, an Outside Director may elect to defer receipt of all or half of the whole shares of Company Stock issuable to the Outside Director with respect to a Director Award granted pursuant to Section 12 of the Plan. Such an election may be made by an Outside Director by filing with the Committee (or its designee) a Deferral Election Form on or before the Election Deadline for a Deferral Year (as such terms are defined herein). The deferral election shall relate solely to the Director Award granted during the Deferral Year and the election shall become irrevocable on the first day of the Deferral Year.

(b) If an Outside Director makes a valid election pursuant to subsection (a) hereof, the shares of Company Stock issuable with respect to the Director Award that have vested and ceased to be subject to restrictions on transferability (the “Vested Deferred Shares”) shall continue to be held by the Company in book entry form without regard to Section 8(e) of the Plan until the Deferred Delivery Date (as such term is defined herein). The Company shall cause certificates representing the Vested Deferred Shares to be delivered to the Outside Director within thirty (30) days following the Deferred Delivery Date.

(c) Outside Directors shall have all rights of a stockholder with respect to their Vested Deferred Shares. Dividends payable with respect to Vested Deferred Shares shall be paid at the same time as dividends are paid in general to the Company’s shareholders.

(d) The following terms have the meanings indicated below and shall govern any deferral election made by an Outside Director pursuant to this section:

(i) “Deferral Election Form” means the form for making a deferral election pursuant to this section. The deferral election shall be in such written or electronic format as may be specified by the Committee (or its designee).

A-25

(ii) “Deferral Year” means a calendar year in which a Director Award will be granted to an Outside Director pursuant to Section 12 and for which an Outside Director can make a deferral election pursuant to this section.

(iii) “Deferred Delivery Date” means the date specified by the Outside Director in his or her Deferral Election Form for issuance and delivery of certificates representing his or her Vested Deferred Shares, which shall be his or her termination of service with the Board, or a fixed date in the future. Notwithstanding the above, certificates representing an Outside Director’s Vested Deferred Shares (or the other consideration received with respect thereto) shall be issued and delivered within thirty (30) days following the first to occur of the Outside Director’s death, Disability (within the meaning of Code section 409A(a)(2)(C) and Treasury Regulation section 1.409A-3(i)(4)), or a Change of Control of the Company.

(iv) “Election Deadline” means the deadline established by the Committee (or its designee) for making a deferral election with respect to a Deferral Year. The Election Deadline shall in no event be later than December 31 of the calendar year immediately preceding the Deferral Year.

(v) “Vested Deferred Shares” has the meaning specified in subsection (b) above.

A-26

ANNUAL MEETING OF SHAREHOLDERS OF

HOOKER FURNISHINGS CORPORATION

June 4, 2024

GO GREEN

e-Consent makes it easy to go paperless. With e-Consent, you can quickly access your proxy material, statements and other eligible documents online, while reducing costs, clutter and paper waste. Enroll today via https://equiniti.com/us/ast-access to enjoy online access.

Important Notice Regarding the Availability of Proxy Materials for
the Annual Meeting of Shareholders to be Held on Tuesday, June 4, 2024:
The Company's Proxy Statement and Annual Report to Shareholders are available at
http://www.astproxyportal.com/ast/25490

Please complete, sign, date and mail

your proxy card in the

envelope provided as soon

as possible.

Please detach along perforated line and mail in the envelope provided.

PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE ☒
(1) Election of Directors: |  | (2) Approve the 2024 amendment and restatement of the Hooker Furnishings Corporation Stock Incentive Plan. | FOR ☐ | AGAINST ☐ | ABSTAIN ☐
☐ FOR ALL NOMINEES ☐ WITHHOLD AUTHORITY FOR ALL NOMINEES ☐ FOR ALL EXCEPT (See instructions below) | NOMINEES ○W. Christopher Beeler, Jr. ○ Maria C. Duey ○ Paulette Garafalo ○ Christopher L. Henson ○ Jeremy R. Hoff ○ Tonya H. Jackson ○ Ellen C. Taaffe |  |  |  |
(3) Ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending February 2, 2025. | FOR ☐ | AGAINST ☐ | ABSTAIN ☐
(4) Advisory vote to approve named executive officer compensation. | FOR ☐ | AGAINST ☐ | ABSTAIN ☐
(5) In their discretion the proxies are authorized to vote upon such other matters as may come before the meeting or any adjournment thereof. |  |  |
|  | All as more particularly described in the Company’s Proxy Statement for the Annual Meeting of Shareholders to be held on June 4, 2024, receipt of which is hereby acknowledged.
INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark “FOR ALL EXCEPT” and fill in the circle next to each nominee for whom you wish to withhold authority to vote, as shown here: ● |
| THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED AS SPECIFIED BY THE UNDERSIGNED SHAREHOLDER. IF NO CHOICE IS SPECIFIED BY THE SHAREHOLDER, THIS PROXY WILL BE VOTED “FOR” THE 7 DIRECTOR NOMINEES LISTED IN ITEM (1), “FOR” ITEMS (2) (3) and (4) AND IN THE PROXIES’ DISCRETION ON ANY OTHER MATTERS COMING BEFORE THE MEETING. The undersigned hereby revokes any proxy or proxies heretofore given to vote upon or act with respect to such stock and hereby ratifies and confirms all that said proxies, their substitutes or any of them may lawfully do by virtue hereof.
To change your address on the account please check the box at right and indicate your new address in the address space above. Please note that the changes to the registered name(s) on the account may not be submitted via this method. ☐ | Please promptly complete, sign, date and mail this Proxy Card in the enclosed envelope. No postage is required.
Signature of Shareholder______________________ Date: ________ | Signature of Shareholder______________________ Date: ________
Note: Please sign exactly as your name or names appear on this Proxy. When shares are held jointly, each holder should sign. When signing as executor, administrator, attorney, trustee or guardian, please give full title as such. If the signer is a corporation, please sign full corporate name by duly authorized officer, giving full title as such. If signer is partnership, please sign in partnership name by authorized person.

REVOCABLE PROXY

HOOKER FURNISHINGS CORPORATION

PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

For the Annual Meeting of Shareholders called for Tuesday, June 4, 2024

The undersigned hereby appoints Jeremy R. Hoff and Paul A. Huckfeldt, or either of them, the attorneys, agents and proxies of the undersigned, with full power of substitution, to vote all the shares of common stock of Hooker Furnishings Corporation (the “Company”) that the undersigned is entitled to vote at the Annual Meeting of Shareholders of the Company to be held at the Company’s Corporate Office at 440 East Commonwealth Boulevard, Martinsville, Virginia, on Tuesday, June 4, 2024 at 1:00 P.M., and all adjournments thereof, with all the powers the undersigned would possess if then and there personally present. Without limiting the general authorization and power hereby given, the above proxies are directed to vote as instructed on the matters on the reverse side:

(Continued and to be completed, dated and signed on reverse side.)

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