XML 38 R18.htm IDEA: XBRL DOCUMENT
v2.4.0.8

STOCK-BASED COMPENSATION | 12 Months Ended
--- | ---
Apr. 28, 2013
STOCK-BASED COMPENSATION |
11. | STOCK-BASED COMPENSATION
Equity Incentive Plan Description On September 20, 2007, our shareholders approved an equity incentive plan entitled the Culp, Inc. 2007 Equity Incentive Plan (the “2007 Plan”). The types of equity based awards available for grant under the 2007 Plan include stock options, stock appreciation rights, restricted stock and restricted stock units, performance units, and other discretionary awards as determined by our Compensation Committee. An aggregate of 1,200,000 shares of common stock were authorized for issuance under the 2007 Plan. In conjunction with the approval of the 2007 Plan, our 2002 Stock Option Plan was terminated (with the exception of currently outstanding options) and no additional options will be granted under the 2002 Stock Plan. At April 28, 2013 there were 672,153 shares available for future equity based grants under the company’s 2007 Plan. Stock Options Under our 2007 Plan, employees, directors, and others associated with the company may be granted options to purchase shares of common stock at the fair market value on the date of grant. No options were granted to employees in fiscal 2013, 2012 or 2011, respectively. During fiscal 2013, an outside director was granted 2,000 option shares to purchase shares of common stock at the fair market value on the date of grant. Options granted to outside directors vest immediately on the date of grant (October each fiscal year) and expire ten years after the date of grant. No options were granted to outside directors during fiscal 2012 or 2011. The fair value of stock options granted to an outside director at each grant date during fiscal 2013 was $5.03, using the following assumptions:
|  | 2013 |  |  | 2012 |  |  | 2011 |
Risk-free interest rate |  |  | 0.67 | % |  |  | - |  |  |  | - |
Dividend yield |  |  | 3.00 | % |  |  | - |  |  |  | - |
Expected volatility |  |  | 61.70 | % |  |  | - |  |  |  | - |
Expected term (in years) |  |  | 5 |  |  |  | - |  |  |  | - |
The fair value of the above option award was estimated on the date of grant using a Black-Scholes option-pricing model. The assumptions utilized in the model are evaluated and revised, as necessary, to reflect market conditions, actual historical experience, and groups of participants that have similar exercise patterns that are considered separately for valuation purposes. The risk-free interest rate for periods within the contractual life of the option was based on the U.S. Treasury yield curve in effect at the time of grant. The dividend yield is based on historical experience and future dividend yields in effect at the time of grant. The expected volatility was derived using a term structure based on historical volatility and the volatility implied by exchange-traded options on the company’s common stock. The expected term of the options is based on the contractual term of the stock option award, and expected participant exercise trends. The company recorded compensation expense of $62,000 $134,000, and $145,000 within selling, general, and administrative expense for incentive stock options in fiscal 2013, 2012, and 2011, respectively. The following table summarizes stock option activity for fiscal 2013, 2012, and 2011:
|  |  |  |  | 2013 |  |  |  |  |  | 2012 |  |  |  |  |  | 2011 |
|  |  |  |  | Weighted- |  |  |  |  |  | Weighted- |  |  |  |  |  | Weighted- |
|  |  |  |  | Average |  |  |  |  |  | Average |  |  |  |  |  | Average |
|  |  |  |  | Exercise |  |  |  |  |  | Exercise |  |  |  |  |  | Exercise |
|  | Shares |  |  | Price |  |  | Shares |  |  | Price |  |  | Shares |  |  | Price |
outstanding at beginning |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
of year |  |  | 209,475 |  |  | $ | 7.22 |  |  |  | 268,875 |  |  | $ | 6.81 |  |  |  | 498,849 |  |  | $ | 5.87 |
granted |  |  | 2,000 |  |  |  | 12.13 |  |  |  | - |  |  |  | - |  |  |  | - |  |  | - |
exercised |  |  | (23,025 | ) |  |  | 8.92 |  |  |  | (59,400 | ) |  |  | 5.50 |  |  |  | (229,974 | ) |  |  | 4.77 |
canceled/expired |  |  | (5,625 | ) |  |  | 9.37 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |
outstanding at end of year |  |  | 182,825 |  |  |  | 6.99 |  |  |  | 209,475 |  |  |  | 7.22 |  |  |  | 268,875 |  |  |  | 6.81 |
|  |  |  |  |  | Options Outstanding |  |  |  | Options Exercisable |
|  |  | Number |  |  | Weighted-Avg. |  |  |  |  |  | Number |  |  |  |
Range of |  |  | Outstanding |  |  | Remaining |  |  | Weighted-Avg. |  |  | Exercisable |  |  | Weighted-Avg. |
Exercise Prices |  |  | at 4/28/13 |  |  | Contractual Life |  |  | Exercise Price |  |  | at 4/28/13 |  |  | Exercise Price |
$ 1.88 - $ 1.88 |  |  |  | 40,000 |  |  |  | 5.7 years |  |  |  | $1.88 |  |  |  | 32,000 |  |  |  | $1.88 |
$ 4.59 - $ 5.41 |  |  |  | 6,000 |  |  |  | 2.8 |  |  |  | $4.86 |  |  |  | 6,000 |  |  |  | $4.86 |
$ 7.08 - $ 7.27 |  |  |  | 27,125 |  |  |  | 4.4 |  |  |  | $7.12 |  |  |  | 22,125 |  |  |  | $7.13 |
$ 8.75 - $ 9.57 |  |  |  | 101,700 |  |  |  | 3.9 |  |  |  | $8.81 |  |  |  | 101,700 |  |  |  | $8.81 |
$10.11 - $ 12.13 |  |  |  | 8,000 |  |  |  | 5.7 |  |  |  | $10.62 |  |  |  | 8,000 |  |  |  | $10.62 |
|  |  |  | 182,825 |  |  |  | 4.4 |  |  |  | $6.99 |  |  |  | 169,825 |  |  |  | $7.23 |
At April 28, 2013, the aggregate intrinsic value for options exercisable was $1.5 million and had a weighted average contractual term of 4.3 years. At April 28, 2013, the aggregate intrinsic value for options outstanding was $1.7 million. The aggregate intrinsic value for options exercised was $90,000, $220,000, and $1.1 million in fiscal 2013, 2012, and 2011, respectively. The remaining unrecognized compensation costs related to unvested awards at April 28, 2013 was $10,000 which is expected to be recognized over a weighted average period of 0.5 years. Time Vested Restricted Stock Awards On July 1, 2009 (fiscal 2010), two executive officers were granted 80,000 shares of time vested restricted common stock. This time vested restricted stock award vests in equal one-third installments on July 1, 2012, 2013, and 2014. The fair value (the closing price of the company’s common stock) of this restricted stock award is measured at the date of grant (July 1, 2009) and was $5.08 per share. On January 7, 2009 (fiscal 2009), certain key management employees and a non-employee were granted 115,000 shares of time vested restricted common stock. Of these 115,000 shares, 105,000 and 10,000 were granted to employees and a non-employee, respectively. This time vested restricted stock award vests in equal one-third installments on May 1, 2012, 2013, and 2014. The fair value of this restricted stock award for key management employees is measured at the date of grant (January 7, 2009) and was $1.88 per share. The fair value of this restricted stock award for the non-employee is measured at the earlier date when the service period is met or the end of each reporting period. The fair value of the one-third installment that vested on May 1, 2012 was $11.05. The fair value of the one-third installment that vested on May 1, 2013 and 2014 was $16.25. The following table summarizes the time vested restricted stock activity for fiscal 2013, 2012, and 2011:
|  | 2013 |  |  | 2012 |  |  | 2011 |
|  | Shares |  |  | Shares |  |  | Shares |
outstanding at beginning |  |  |  |  |  |  |  |  |
of year |  |  | 185,000 |  |  |  | 195,000 |  |  |  | 195,000 |
granted |  |  | - |  |  |  | - |  |  |  | - |
vested |  |  | (61,665 | ) |  |  | (10,000 | ) |  |  | - |
outstanding at end of year |  |  | 123,335 |  |  |  | 185,000 |  |  |  | 195,000 |
During fiscal 2013, 61,665 shares of time vested restricted stock vested and had a weighted average fair value of $232,000 or $3.76 per share. During fiscal 2012, 10,000 shares of time vested restricted stock were vested due to disability and had a weighted average fair value of $18,800 or $1.88 per share. At April 28, 2013, there were 123,335 shares of time vested restricted stock outstanding and unvested. Of the 123,335 shares outstanding and unvested, 70,000 shares were granted on January 7, 2009 and 53,335 shares were granted on July 1, 2009. At April 28, 2013, the weighted average fair value of these outstanding and unvested shares was $4.04 per share. At April 29, 2012, there were 185,000 shares of time vested restricted stock and unvested. Of the 185,000 shares outstanding and unvested, 105,000 shares were granted on January 7, 2009 and 80,000 shares were granted on July 1, 2009. At April 29, 2012, the weighted average fair value of these outstanding and unvested shares was $3.76 per share. At April 28, 2013, the remaining unrecognized compensation cost related to the unvested restricted stock awards was $59,000, which is expected to be recognized over a weighted average vesting period of 1 year. We recorded compensation expense of $140,000, $189,000 and $172,000 within selling, general, and administrative expense for time vested restricted stock awards in fiscal 2013, 2012 and fiscal 2011, respectively. Performance Based Restricted Stock Units Fiscal 2013 On July 11, 2012, certain key members of management were granted performance based restricted common stock units which could earn up to 120,000 shares of common stock if certain performance targets are met as defined in the agreement. These awards were valued based on the fair market value on the date of grant. The fair value of these awards was $10.21, which represents the closing price of our common stock on the date of grant. The vesting of these awards is over the requisite service period of three years. Compensation cost is recorded based on an assessment each reporting period of the probability if certain performance goals will be met during the vesting period. If performance goals are not probable of occurrence, no compensation cost will be recognized and any recognized compensation cost would be reversed. At April 28, 2013, the remaining unrecognized compensation cost related to the performance based restricted stock units was $885,000, which is expected to be recognized over a weighted average vesting period of 2.2 years. Fiscal 2012 We did not grant any performance based restricted stock units during fiscal 2012. No performance based restricted units vested during fiscal 2012. Fiscal 2011 On January 7, 2009 (fiscal 2009), certain key management employees and a non-employee were granted 120,000 shares of performance based restricted stock units. This award contingently vested in one third increments, if in any discrete period of two consecutive quarters from February 2, 2009 through April 30, 2012, certain performance goals were met, as defined in the agreement. During the first quarter of fiscal 2011, the last one-third increment of 40,000 shares of performance based restricted stock units were vested. The total fair value of the 40,000 performance based restricted stock units that vested during fiscal 2011 was $117,900 and had a weighted average grant date fair value of $2.95 per share. We did not grant any performance based restricted stock units during fiscal 2011. Overall We recorded compensation expense of $340,000 and $12,000 within selling, general, and administrative expense for performance based restricted stock units in fiscal 2013 and fiscal 2011 respectively. No compensation expense was recorded for performance based restricted stock units in fiscal 2012 as the performance based restricted stock units granted in fiscal 2009 were fully vested in fiscal 2011 and no performance based restricted stock units were granted in fiscal years 2010 through 2012. Common Stock Awards On October 8, 2012, we granted a total of 1,658 shares of common stock to certain outside directors. These shares of common stock vested immediately and were measured at $12.13 per share, which represents the closing price of the company’s common stock at the date of grant. On October 1, 2011, we granted a total of 3,075 shares of common stock to our board of directors. These shares of common stock vested immediately and were measured at $8.45 per share, which represents the closing price of the company’s common stock at the date of grant. On October 1, 2010, we granted a total of 3,114 shares of common stock to our board of directors. These shares of common stock vested immediately and were measured at a fair value of $10.02 per share, which represents the closing price of our common stock at the date of grant. We recorded $20,000, $26,000, and $31,000 of compensation expense within selling, general, and administrative expense for these common stock awards for fiscal 2013, 2012, and 2011, respectively. Other Share-Based Arrangements The company had a stock-based compensation agreement with a non-employee that required us to settle in cash and was indexed by shares of our common stock as defined in the agreement. The cash settlement was based on a 30-day average closing price of our common stock at the time of payment. During fiscal 2011, this agreement was terminated and settled for a cash payment of $644,000 that was indexed on 68,260 shares of our common stock at $9.44 per share. The $9.44 per share represents the closing price of our common stock on the date this agreement was settled. Effective May 2, 2011, we entered into an agreement in which we granted a non-employee a stock appreciation right that is indexed on 70,000 shares of our common stock. This agreement required us to settle in cash an amount equal to $35,000, plus the excess, if any, over a stock appreciation right value of $700,000 at May 2, 2011. This stock appreciation right value of $700,000 represented the 70,000 indexed shares of common stock noted above measured at the closing price per share of $10.00 at May 2, 2011. The cash settlement in connection with the stock appreciation right value would represented the difference between a stock appreciation right value that is indexed on the 70,000 shares of common stock noted above and based on the highest closing price per share of our common stock for the period May 2, 2011 through June 30, 2012 (limited to $12.00 per share) and the $700,000 stock appreciate right value at May 2, 2011. This award vested over the period May 2, 2011 through June 30, 2012 and represented the non-employee’s required service period. During the first quarter of fiscal 2013, this award fully vested and was paid out at a fair value totaling $174,000. We recorded $40,000 and $134,000 of compensation expense within selling, general, and administrative expense for this agreement during fiscal 2013 and 2012, respectively. At April 29, 2012, the fair value of this agreement was $134,000 and was included in accrued expenses in the 2012 Consolidated Balance Sheet.

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration