On September 16, 2015, our shareholders approved an equity incentive plan titled the Culp, Inc. 2015 Equity Incentive Plan (the “2015 Plan”). The 2015 Plan authorizes the grant of stock options intended to qualify as incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, time-based restricted stock units, performance-based restricted stock units, and other equity and cash related awards as determined by the Compensation Committee of our board of directors. An aggregate of 1,200,000 shares of common stock were authorized for issuance under the 2015 Plan, with certain sub-limits that would apply with respect to specific types of awards that may be issued as defined in the 2015 Plan. Effective September 27, 2023, our shareholders approved an amendment and restatement of the 2015 Plan (the "Amended and Restated Plan"). The Amended and Restated Plan authorizes the issuance of an additional 960,000 shares of common stock in addition to the shares of common stock still available for issuance under the 2015 Plan. The Amended and Restated Plan also removed certain sub-limits that previously applied with respect to specific type of awards that may be issued under the plan.

As of May 3, 2026, there were 387,293 shares available for future equity-based grants under the company’s Amended and Restated Plan.

The following table summarizes the time-based restricted stock unit activity during fiscal years 2026, 2025, and 2024:


	2026			2025			2024
	Shares			Shares			Shares
Outstanding at beginning of year		262,148			308,927			285,826
Granted		96,235			91,629			174,754
Vested (1)		(119,933	)		(103,320	)		(151,653	)
Forfeited		(26,689	)		(35,088	)		—
Outstanding at end of year		211,761			262,148			308,927

(1) During fiscal 2026, 119,933 time-based restricted stock units vested at an aggregate fair value of $532,000, or $4.44 per share. During fiscal 2025, 103,320 time-based restricted stock units vested at an aggregate fair value of $581,000, or $5.63 per share. During fiscal 2024, 151,653 time-based restricted stock vested at an aggregate fair value of $857,000, or $5.65 per share.

The following table summarizes information related to our grants of time-based restricted stock unit awards associated with certain senior executives and key members of management during fiscal years 2026, 2025, and 2024:


	Time-Based		(1)
	Restricted Stock		Price		Vesting
Date of Grant	Units Awarded		Per Share		Period
September 25, 2025 (3)		80,335	$	4.17	1 year
August 7, 2025 (2)		15,900	$	4.23	3 years
January 6, 2025 (2)		21,506	$	5.69	3 years
September 26, 2024 (3)		46,823	$	5.98	1 year
August 8, 2024 (2)		23,300	$	4.65	3 years
January 8, 2024 (2)		14,758	$	5.61	31 months
September 28, 2023 (2)		100,067	$	5.59	34 months
September 28, 2023 (3)		59,929	$	5.59	1 year

(1)

Price per share represents the closing price of our common stock on the date the respective award was granted.

(2)

Time-based restricted stock units awarded to senior executives and key employees.

(3)

Time-based restricted stock units award to outside directors.

We recorded compensation expense of $550,000, $644,000, and $823,000 within selling, general, and administrative expense for time-based restricted stock units during fiscal 2026, 2025, and 2024, respectively.

As of May 3, 2026, the remaining unrecognized compensation cost related to our time-based restricted stock units was $291,000, which is expected to be recognized over a weighted average vesting period of 1 year. As of May 3, 2026, our time-based restricted stock unit awards that were expected to vest had a fair value totaling $720,000.

On August 7, 2025, we granted performance-based restricted stock units to senior executives which could earn up to a certain number of shares of common stock if performance targets related to adjusted EBITDA were met over the performance period defined in the related restricted stock unit award agreements. The number of shares of common stock that are earned based on performance targets that have been achieved are not adjusted based on a market-based total shareholder return component. Accordingly, fair market value was measured based on the closing price of our common stock on the date of grant.

On August 8, 2024, January 8, 2024, and September 28, 2023, we granted performance-based restricted stock units to senior executives which could earn up to a certain number of shares of common stock if performance targets related to operating income were met over performance periods defined in the related restricted stock unit award agreements. The number of shares of common stock that are earned based on performance targets that have been achieved may be adjusted based on a market-based total shareholder return component as defined in the related restricted stock unit award agreements. Accordingly, fair market value was measured using the

Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock for the performance-based component on the date of grant.

The following table provides assumptions used to determine the fair market value of the market-based total shareholder return component using the Monte Carlo simulation model on our outstanding performance-based restricted stock units granted to senior executives on August 8, 2024, January 8, 2024, and September 28, 2023:


	August 8,			January 8,			September 28,
	2024			2024			2023
Closing price of our common stock	$	4.65		$	5.61		$	5.59
Expected volatility of our common stock		35.0	%		33.5	%		37.3	%
Expected volatility of peer companies		22.6% - 104.0	%		33.7% - 102.6	%		35.7% - 91.5	%
Risk-free interest rate		3.90	%		4.30	%		4.90	%
Dividend yield		0.00	%		0.00	%		0.00	%
Correlation coefficient of peer companies		(0.01) - 0.17			0.01 - 0.21			0.01 - 0.21

The following table summarizes information related to our grants of performance-based restricted stock units to our senior executives that were unvested as of May 3, 2026:


	(1)		(2)
	Performance-Based		Restricted Stock
	Restricted Stock		Units Expected
Date of Grant	Units Awarded		to Vest		Price Per Share			Vesting Period
August 7, 2025		298,909		59,782	$	4.23	(3)	3 years
August 8, 2024		488,377		—	$	5.35	(4)	3 years
January 8, 2024		8,199		4,238	$	6.23	(5)	31 months
September 28, 2023		—		—	$	6.43	(6)	34 months

(1)

Amounts represent the maximum number of common stock shares that could be earned if certain performance targets are met as defined in the related restricted stock unit award agreements as of the date of grant.

(2)

Compensation cost is based on an assessment each reporting period to determine the probability of whether or not certain performance targets will be met and how many shares are expected to be earned as of the end of the vesting period. These amounts represent the number of shares that are expected to vest as of May 3, 2026.

(3)

Price per share represents the closing price of our common stock on the date the respective award was granted.

(4)

Price per share represents the fair market value per share ($1.15 per $1, or an increase of $0.70 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($4.65) for the performance-based component of the performance-based restricted stock units granted to senior executives on August 8, 2024.

(5)

Price per share represents the fair market value per share ($1.11 per $1, or an increase of $0.62 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.61) for the performance-based component of the performance-based restricted stock units granted to senior executives on January 8, 2024.

(6)

Price per share represents the fair market value per share ($1.15 per $1, or an increase of $0.84 to the closing price of our common stock on the date of grant) determined using the Monte Carlo simulation model for the market-based total shareholder return component and the closing price of our common stock ($5.59) for the performance-based component of the performance-based restricted stock units granted to senior executives on September 28, 2023.

There were no performance-based restricted stock units that vested during fiscal 2026, 2025, or 2024.

We recorded compensation expense totaling $75,000, $6,000, and $8,000, within selling, general, and administrative expense for performance-based restricted stock units during fiscal years 2026, 2025, and 2024, respectively. As of May 3, 2026, the remaining

unrecognized compensation expense related to our performance-based restricted stock units was $191,000, which is expected to be recognized over a weighted average vesting period of 2.2 years. As of May 3, 2026, performance-based restricted stock units that are expected to vest had a fair value of $218,000.

No immediately vested common stock awards were granted to our board of directors during fiscal 2026 and fiscal 2025, respectively.

On July 3, 2023 (first quarter of fiscal 2024), we granted a total of 16,616 shares of common stock to certain outside directors. These shares of common stock vested immediately and were measured at $5.04 per share, which represents the closing price of the company's common stock at the date of grant. We recorded compensation expense totaling $84,000 within selling, general, and administrative expense related to these common stock awards during fiscal 2024.