Company: CULP
Filing Date: 2025-08-15
Form Type: DEF 14A
Source: 0000950170-25-109242
Chunk: 5

Company: CULP INC
Filing Date: 2025-08-15
Form: DEF 14A
Chunk 5
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 executive officers and directors to own and/or retain meaningful amounts of Culp stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | x | Do not gross up excise taxes upon a change of control                              |
| Mitigate undue risk – We have a clawback policy on performance-based compensation and caps on potential incentive payments.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  | x | Do not pay dividends on unearned performance shares or units                       |
| Policy against hedging and pledging of Culp stock by executive officers and directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                    |
| Provide double-trigger severance and change-in-control arrangements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                                    |
| Include only independent directors on our Compensation Committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                                                                    |
| Our Compensation Committee engages and relies on an independent compensation consultant to evaluate our executive compensation programs.  The consultant reports directly to the Compensation Committee and provides no other services to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                                                    |

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Summary of Company Performance Highlights and Effects on Compensation

The Company continued to face a difficult industry environment during fiscal 2025. The ongoing slowdown in demand for home furnishings, soft home sales, low discretionary spending on consumer durables, inflation concerns, the recent global trade negotiations and related tariff and other trade restriction measures, and general economic uncertainty all played a role in creating weakness in the domestic mattress and residential home furnishings markets. Our results for fiscal 2025 reflect these challenging conditions, with lower sales for the Company overall and for both of our operating segments compared to the prior fiscal year. Despite these external pressures, the Company, under the leadership of its executive officers, made substantial strides in reducing its cost structure and improving its operating efficiency to better navigate the continued difficult industry environment and position the Company to take advantage of any improvement in business conditions.

In fiscal 2025, the Company successfully completed the restructuring plan announced in May 2024 as planned. That restructuring effort was primarily focused within the Company's mattress fabrics segment and is expected to generate $10 to $11 million in annualized savings and operating improvements, with many of these benefits already manifesting in the Company’s fiscal 2025 fourth quarter results. The Company incurred total restructuring and restructuring-related expenses of $9.4 million in fiscal 2025, compared to $676,000 in fiscal 2024. These restructuring and related expenses, along with lower sales, drove a consolidated loss from operations of $(18.4