Company: CULP
Filing Date: 2025-08-15
Form Type: DEF 14A
Source: 0000950170-25-109242
Chunk: 46

Company: CULP INC
Filing Date: 2025-08-15
Form: DEF 14A
Chunk 46
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 includes corporate senior officers and managers), and upon these metrics for our mattress fabrics division reporting unit in the case of management of our mattress fabrics operating segment. Any earned award for the adjusted operating cash flow and net sales components was subject to a downward adjustment of 40% if adjusted operating income (loss) was below a specific threshold level established for the applicable reporting unit, and no award could be earned for any component if adjusted operating income (loss) was significantly below the threshold level set for the applicable reporting unit.

The Committee chose these annual incentive plan measures to reinforce the Company’s key strategic priorities for fiscal 2025, particularly its focus on profitability, top line sales growth, cash generation and balance sheet management during a time of continued uncertainty due to industry and macroeconomic challenges. The Committee believed that these three measures were critical in evaluating the Company’s ability to operate effectively in this challenging business environment.

Messrs. Culp and Bowling, who are each part of our executive shared services reporting unit, participated in the plan that awards cash bonuses based upon the selected metrics for the entire Company. Mr. Bruno participated in the plan that awards bonuses based on the selected metrics for the Culp Home Fashions (“CHF”) mattress fabrics division.

Adjusted operating income (loss) was defined under the annual incentive plan for fiscal 2025 as the operating income or loss for a reporting unit (or the Company, in the case of the executive shared services reporting unit) as calculated and recorded on the Company's financial statements, but excluding extraordinary and non-recurring items, if any, including, but not limited to, restructuring and related charges, goodwill or fixed asset impairment charges, prepayment fees on debt, other extraordinary charges or credits, and the effects of acquisitions.

Adjusted operating cash flow for the executive shared services reporting unit was defined under the annual cash incentive plan for fiscal 2025 as the Company's consolidated net cash provided by (used in) operating activities (which includes and is calculated using the calculation of consolidated adjusted operating income (loss) under the annual incentive plan for the Company), plus proceeds from the sale of long-term investments (rabbi trust), minus the purchase of long-term investments (rabbi trust), plus proceeds from the sale of equipment, plus proceeds from note receivable, and plus or minus the effect of exchange rate changes on cash and cash equivalents, in each case as calculated and reported on the Company's financial statements. Adjusted operating cash flow for the mattress fabrics operating division reporting unit was defined under the annual incentive plan for fiscal 202