Company: CULP
Filing Date: 2025-08-15
Form Type: DEF 14A
Source: 0000950170-25-109242
Chunk: 40

Company: CULP INC
Filing Date: 2025-08-15
Form: DEF 14A
Chunk 40
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 goals and challenging market conditions resulted in none of the minimum performance thresholds for adjusted operating income (loss), adjusted operating cash flow or net sales being met by any of our reporting units for fiscal 2025. As a result of this below-threshold performance across all three metrics and reporting units, none of our NEOs earned any annual cash incentive awards for fiscal 2025. Notably, in monitoring and evaluating business conditions and the Company's performance across these metrics throughout fiscal 2025, the Committee did not alter or adjust the performance targets originally set under the fiscal 2025 annual cash incentive plan to favorably benefit any participants, despite greater-than-expected macroeconomic headwinds faced by the Company during the year. Additional details about the fiscal 2025 annual cash incentive plan and performance thereunder are discussed later in this Compensation Discussion and Analysis section under the heading “Annual Incentive Plan."

Long term equity incentive awards granted under the fiscal 2023 long term incentive compensation plan (“LTIP”) for the three-year period ended April 27, 2025, consisted of a mix of performance-based and service-based stock awards for our executive officers, with the award to our chief executive officer consisting of 75% performance-based restricted stock unit ("RSU") awards and 25% service-based RSU awards, and awards to our other executive officers consisting of one-half performance-based RSU awards and one-half service-based RSU awards. For each reporting unit, cumulative adjusted operating income (loss) over the three-year performance period for the applicable reporting unit was the metric for the performance-based RSUs, with award opportunities ranging from 0% to 200% of target grants. Any earned performance-based RSUs from the fiscal 2023 grants to executive officers were subject to an upward or downward adjustment of up to 25%, based on the Company’s total shareholder return (“TSR”) for the three-year period ended as of the conclusion of fiscal 2025, as compared to companies in the Company’s fiscal 2023 peer group. Operating results during this three-year performance period were below the threshold performance levels for these equity awards for both of the reporting units (the Company on a consolidated basis and our mattress fabrics segment). Despite the significant and greater-than-expected headwinds during each of fiscal 2023, fiscal 2024, and fiscal 2025, the Committee did not alter or adjust the previously set levels of adjusted operating income (loss) over the three-year performance period. As such, no performance-based RS