Company: CULP
Filing Date: 2025-08-15
Form Type: DEF 14A
Source: 0000950170-25-109242
Chunk: 80

Company: CULP INC
Filing Date: 2025-08-15
Form: DEF 14A
Chunk 80
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 target payout, despite ongoing economic headwinds;

providing only performance-based awards for long-term equity incentives in order to align executive pay with the Company’s longer-term success and shareholder interests; and

setting challenging performance goals for the fiscal 2025 long term equity incentive program, which require significant improvements in profitability.

Relying on these factors, the Compensation Committee developed a fiscal 2025 compensation program that included a mixture of fixed and performance-based compensation. Fixed compensation for fiscal 2025 was characterized by a continued freeze in base salary for the chief executive officer as well as a freeze in base salary for our other named executive officers. Performance-based compensation included annual bonuses tied to achievement of pre-established, short-term financial goals and equity awards designed to align executives’ long-term interests with those of shareholders. The Company encourages shareholders to read the Executive Compensation section of this Proxy Statement for additional information on compensation policies and procedures for the fiscal 2025 year, including changes to the fiscal 2025 executive compensation program in response to feedback from extensive shareholder outreach conducted in fiscal 2024 and otherwise. This material is found on pages24to39.

In addition, our corporate culture and compensation philosophy call for rewarding successful results, rather than effort, through performance-leveraged and variable incentives. Our compensation program for fiscal 2025 was intended to support the following:

continuing to be a leader in product innovation in our industry;

a planned and disciplined approach to managing our business and the utilization of capital;

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maintaining a strong focus on increasing earnings, return on capital, cash generation, balance sheet management, and shareholder returns;

prudent/calculated risk taking;

providing only very limited perquisites;

being more team-oriented than individual accountability oriented;

decision making that is decentralized as pertains to sales, marketing, and operations, and centralized as pertains to strategic matters; and

a balanced perspective between short-term and long-term incentives and goals.

Because the Board of Directors and the Compensation Committee believe these compensation policies, procedures, and our corporate culture and compensation philosophy advance the Company’s short- and long-term interests, the Board recommends an advisory vote “FOR” the following resolution:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation paid to the Company’s named executive officers, as disclosed pursuant to Item 402 of Securities and Exchange Commission Regulation S-K, including the Compensation Discussion and Analysis, compensation tables, and narrative disclosures in the Company’s proxy statement for the