Company: CULP
Filing Date: 2025-08-15
Form Type: DEF 14A
Source: 0000950170-25-109242
Chunk: 57

Company: CULP INC
Filing Date: 2025-08-15
Form: DEF 14A
Chunk 57
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 purchasing any instrument or engaging in any transaction, including put options or forward-sale contracts, with the purpose of offsetting or reducing exposure to the risk of price fluctuations in Company securities. In addition, the Company’s policy strongly discourages executive officers, directors, and other designated individuals from pledging Company securities to secure a loan, including holding such securities in a margin account, unless such person has the clear financial capability to repay any associated loan without resort to the pledged securities. The Company policy requires advance notice and pre-clearance of any such pledge or margin transaction. None of the Company’s executive officers or directors have currently pledged any Company securities.

Shareholder Engagement and Executive Compensation Program Changes for Fiscal 2025

After over ten years of consistently strong shareholder support for our annual Say-on-Pay proposal, at the Company’s 2023 annual meeting of shareholders, our Say-on-Pay proposal with respect to our fiscal 2023 NEO compensation program received 67.6% approval. The Committee recognized that the results of this vote were substantially lower than previous Say-on-Pay votes. In response, in 2024 we invited 13 of our top shareholders representing over 56% of the Company's outstanding common stock (based on management estimates derived from third-party reports on the Company's share ownership) at such time to engage with the chair of the Committee on the Company's executive compensation philosophy, program, and other compensation-related matters. The chair of the Committee at that time, Mr. Perry E. Davis (Mr. Davis no longer serves on our Board as of our 2024 annual meeting of shareholders), participated in all of these shareholder discussions. This shareholder outreach effort resulted in substantive engagement on executive compensation matters with holders of over 39% of the Company's outstanding common stock (based on management estimates derived from third-party reports on the Company's share ownership) at such time.

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The Committee and the Board reviewed a comprehensive summary of the shareholder feedback received on executive compensation-related matters. While shareholders were generally supportive of our executive compensation program and approved of the extent to which it is performance-based, the Committee made certain changes to the design of our fiscal 2025 executive compensation program that it believed to be responsive to the key areas of feedback received, as summarized in the chart below.

| What We Heard                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |     | What We Did                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Certain shareholders noted that the Company's relative size positioning versus the industry peer group used for market benchmarking had declined