Company: CULP
Filing Date: 2025-08-15
Form Type: DEF 14A
Source: 0000950170-25-109242
Chunk: 66

Company: CULP INC
Filing Date: 2025-08-15
Form: DEF 14A
Chunk 66
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, directly or indirectly, 35% or more of our common voting stock (subject to certain exceptions); • a merger or consolidation involving us and another entity, if we are not the surviving entity and after the merger or consolidation the holders of 35% or more of the voting stock of the surviving corporation were not holders of our voting stock immediately before the transaction; • our liquidation or dissolution, or a sale or transfer of substantially all of our assets; or • a change in the majority of our directors that our directors have not approved. Each agreement provides for payment to the officer in connection with a change of control if any of the following triggering events were to occur: • the officer is terminated in anticipation of the change of control; • the officer is terminated within three years after the change of control for any reason other than death, disability or for cause; or • the officer terminates his or her employment during that three-year period following the change of control because we (or our survivor) change his or her employment conditions in a negative and material way. Following a triggering event, the officer would be entitled to payment in the amount of 1.99 times the officer’s total compensation. “Total compensation” means base salary plus the target annual incentive bonus for the fiscal year in which the termination occurs. In addition, if the termination were to occur prior to the annual bonus payout for the prior fiscal year, the officer would be entitled to that bonus payment as well. However, any compensation that would constitute a parachute payment under Section 280G of the federal tax code would be reduced to the extent necessary to avoid a federal excise tax on the officer or the loss of our federal income tax deduction. Each agreement requires the officer to receive the his or her change of control payment in a single lump sum following termination. The agreements also provide for an additional payment of one year’s total compensation to each officer in exchange for non-competition covenants by the officer that take effect only if the officer’s employment terminates following a change of control. Under these covenants, each officer agrees not to compete with us or solicit our customers or employees for 12 months following termination. The officer would receive the non-competition payment in 12 equal monthly installments beginning on the date of termination. In addition, the agreements require us to reimburse the officers for any fees and expenses incurred in connection with any claim or controversy arising out of or relating to the agreements. The following table estimates the total amounts we would owe to our current NEOs under these agreements if