Company: CULP
Filing Date: 2025-08-15
Form Type: DEF 14A
Source: 0000950170-25-109242
Chunk: 49

Company: CULP INC
Filing Date: 2025-08-15
Form: DEF 14A
Chunk 49
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 multi-year structure for these performance-based RSUs to encourage a longer-term view for participants and to align pay with longer-term Company performance success and the interest of our shareholders. Performance hurdles for the measurement period were set at the time of grant. Any earned awards are subject to adjustment based on the Company's three-year total shareholder return relative to industry peers. Annual adjusted operating income (loss) was defined under the fiscal 2025 LTIP as the operating income or loss of the applicable reporting unit for the three-year performance period, as calculated and recorded on the reporting unit’s financial statements for fiscal 2025, but excluding extraordinary and non-recurring items, if any, including restructuring and related charges, goodwill or fixed asset impairment charges, prepayment fees on debt, other extraordinary charges or credits, and the effects of acquisitions. Earned performance awards are eligible to vest in full approximately three years after the date of grant if the participant meets the continued service requirements.

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The potential number of shares of common stock that may vest in respect of fiscal 2025 performance-based RSUs for the three-year performance period is zero for below entry point (threshold) performance, 20% of target (i.e., 0.20 shares per RSU) at entry point (threshold) performance, 100% of target (i.e., one share per RSU) if target goals are met, and 200% of target (i.e., two shares per RSU) if maximum performance hurdles are achieved. The actual number of vested shares, if any, will be calculated on a pro rata basis between the threshold and maximum levels, with any earned awards payable in common stock approximately three years after the date of grant if the participant continues providing services to the Company for the full vesting period. Target performance goals for the fiscal 2025 long term equity incentive program were set at challenging levels that required significant improvement in profitability over the course of the three-year performance period. The threshold, target, and maximum performance levels with respect to cumulative adjusted operating income (loss) for the three-year performance period of the fiscal 2025 long term incentive program are not presented, as such information is confidential and competitively sensitive. However, in setting these levels, the Committee considered achievement of the target levels to be challenging (stretch) goals compared to its expectations for the Company's performance for such period. The vesting conditions for the performance-based awards granted to NEOs for fiscal 2025 include a total shareholder return (TS