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Stock-Based Compensation | 9 Months Ended
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Feb. 02, 2020
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] |
Stock-Based Compensation | 18. Stock-Based Compensation Equity Incentive Plan Description On September 16, 2015, our shareholders approved an equity incentive plan entitled 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, restricted stock units, performance units, and other equity and cash related awards as determined by our Compensation Committee. 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. At February 2, 2020, there were 908,334 shares available for future equity-based grants under our 2015 plan. Performance-Based Restricted Stock Units Senior Executives We grant performance-based restricted stock units to certain senior executives which could earn up to a certain number of shares of common stock if certain performance targets are met over a three-fiscal year performance period as defined in the related restricted stock unit agreements. The number of shares of common stock that are earned based on the performance targets that have been achieved will be adjusted based on a market-based total shareholder return component as defined in the related restricted stock unit agreements. Compensation cost for share-based awards is measured based on their fair market value on the date of grant. The fair market value per share is determined 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 components of awards. The following table provides assumptions used to determine the fair market value of the market-based shareholder return component of awards using the Monte Carlo simulation model during the fiscal year the grants noted below were awarded:
|  | Fiscal 2020 |  |  | Fiscal 2019 |  |  | Fiscal 2018 |
Closing price of our common stock |  | $ | 18.49 |  |  | $ | 24.35 |  |  | $ | 32.50 |
Expected volatility of our common stock |  |  | 30.0 | % |  |  | 33.5 | % |  |  | 31.0 | %
Expected volatility of peer companies (1) (2) |  | 29.9% - 82.3% |  |  |  | 16.0 | % |  |  | 16.5 | %
Risk-free interest rate |  |  | 1.73 | % |  |  | 2.74 | % |  |  | 1.56 | %
Dividend yield |  |  | 2.10 | % |  |  | 1.35 | % |  |  | 1.66 | %
Correlation coefficient of peer companies (1) (2) |  | 0.00 – 0.43 |  |  |  | 0.47 |  |  |  | 0.46 |
(1) | The expected volatility and correlation coefficient of our peer companies for fiscal 2020 were based on peer companies that were approved by the Compensation Committee of our board of directors as an aggregate benchmark for determining the market-based total shareholder return component. Therefore, we disclosed the ranges of the expected volatility and correlation coefficient for the companies that represented this peer group.
(2) | The expected volatility and correlation coefficient of our peer companies for fiscal 2019 and 2018 were based on the Russell 2000 Index which was approved by the Compensation Committee of our board of directors as the benchmark for determining the market-based total shareholder return component. Since the Russell 2000 Index was the only benchmark for determining the market-based total shareholder return component, no ranges were disclosed for these assumptions.
Key Employees and a Non-Employee We grant performance-based restricted stock units which could earn up to a certain number of shares of common stock if certain performance targets are met over a three-fiscal year performance period as defined in the related restricted stock unit agreements. Our performance-based restricted stock units granted to key employees were measured based on the fair market value (the closing price of our common stock) on the date of grant. No market-based total shareholder return component was included in these awards. Our performance-based restricted stock units granted to a non-employee, which vested during the first quarter of fiscal 2020, were measured based on the fair market value (the closing price of our common stock) on the date when the performance criteria was met. The following table summarizes information related to our grants of performance-based restricted stock units associated with certain senior executives and key employees that are currently unvested:
Date of Grant |  | (3) Restricted Stock Units Awarded |  |  | Price Per Share |  |  |  | Vesting Period
July 18, 2019 (1) |  |  | 93,653 |  |  | $ | 19.04 |  | (4) |  | 3 years
July 18, 2019 (2) |  |  | 30,426 |  |  | $ | 18.49 |  | (7) |  | 3 years
August 2, 2018 (1) |  |  | 86,599 |  |  | $ | 18.51 |  | (5) |  | 3 years
August 2, 2018 (2) |  |  | 47,800 |  |  | $ | 24.35 |  | (7) |  | 3 years
July 13, 2017 (1) |  |  | 78,195 |  |  | $ | 31.85 |  | (6) |  | 3 years
July 13, 2017 (2) |  |  | 44,000 |  |  | $ | 32.50 |  | (7) |  | 3 years
(1) | Performance-based restricted stock units awarded to certain senior executives.
(2) | Performance-based restricted stock units awarded to key employees.
(3) | 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 agreements.
(4) | Price per share represents the fair market value per share ($1.03 per $1 or an increase of $0.55 to the closing price of the 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 ($18.49) for the performance-based components of the performance-based restricted stock units granted to certain senior executives on July 18, 2019.
(5) | Price per share represents the fair market value per share ($0.76 per $1 or a reduction of $5.84 to the closing price of the 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 ($24.35) for the performance-based components of the performance-based restricted stock units granted to certain senior executives on August 2, 2018.
(6) | Price per share represents the fair market value per share ($0.98 per $1 or a reduction of $0.65 to the closing price of the 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 ($32.50) for the performance-based components of the performance-based restricted stock units granted to certain senior executives on July 13, 2017.
(7) | Price per share represents the closing price of our common stock on the date of grant.
The following table summarizes information related to our performance-based restricted stock units that vested during the nine-month period ending February 2, 2020 and the entire fiscal year ending April 28, 2019:
Fiscal Year |  | Restricted Stock Units Vested |  |  | (3) Fair Value |  |  | Weighted Average Price Per Share |  |
Fiscal 2020 (1) |  |  | 9,489 |  |  | $ | 165 |  |  | $ | 17.36 |  | (4)
Fiscal 2020 (2) |  |  | 4,148 |  |  | $ | 72 |  |  | $ | 17.36 |  | (4)
Fiscal 2019 (1) |  |  | 128,632 |  |  | $ | 3,754 |  |  | $ | 29.19 |  | (4)
Fiscal 2019 (2) |  |  | 10,364 |  |  | $ | 320 |  |  | $ | 30.90 |  | (4)
(1) | Certain senior executives and key employees.
(2) | Non-employee
(3) | Dollar amounts are in thousands.
(4) | The weighted average price per share is derived from the closing prices of our common stock on the dates the respective performance-based restricted stock units vested.
Overall We recorded compensation expense of $467,000 and $259,000 within selling, general, and administrative expenses for the nine-month periods ending February 2, 2020, and January 27, 2019, respectively. Compensation cost is recorded based on an assessment each reporting period of the probability that certain performance goals will be met during the vesting period of outstanding awards. If performance goals are not probable of occurrence, compensation cost will not be recorded and any previously recognized compensation cost would be reversed. At February 2, 2020, the remaining unrecognized compensation cost related to our performance-based restricted stock units was $680,000, which is expected to be recognized over a weighted average vesting period of 1.9 years. At February 2, 2020, the performance-based restricted stock units that were expected to vest had a fair value totaling $757,000. Time-Based Restricted Stock Units The following table summarizes information related to our grants of time-based restricted stock units associated with senior executives and key members of management that are currently unvested:
Date of Grant |  | Time Based Stock Units Awarded |  |  | Price Per Share |  |  |  | Vesting Period
July 18, 2019 |  |  | 34,399 |  |  | $ | 18.49 |  | (1) |  | 3 years
August 2, 2018 |  |  | 10,000 |  |  | $ | 24.35 |  | (1) |  | 5 years
(1) | Price per share represents closing price of common stock on the date the respective award was granted
The following table summarizes information related to our time-based restricted stock units that vested during the nine-month period ending February 2, 2020 and the entire fiscal year ending April 28, 2019:
Fiscal Year |  | Restricted Stock Units Vested |  |  | (1) Fair Value |  |  | Weighted Average Price Per Share |  |
Fiscal 2020 |  |  | — |  |  | $ | — |  |  |  | — |  |
Fiscal 2019 |  |  | 1,200 |  |  | $ | 21 |  |  | $ | 17.36 |  | (2)
(1) | Dollar amounts are in thousands.
(2) | The weighted average price per share is derived from the closing prices of our common stock on the dates the respective time-based restricted stock units vested.
Overall We recorded compensation expense of $154,000 and $30,000 within selling, general, and administrative expense associated with our time-based restricted stock unit awards for the nine-month periods ending February 2, 2020, and January 27, 2019, respectively. At February 2, 2020, the remaining unrecognized compensation cost related to our time-based restricted stock units was $688,000, which is expected to be recognized over a weighted average vesting period of 2.6 years. At February 2, 2020, the time-based restricted stock awards that were expected to vest had a fair value totaling $561,000. Common Stock Award Fiscal 2020 We granted a total of 4,972, 4,519, and 3,659 shares of common stock to our outside directors on January 2, 2020, October 1, 2019, and July 1, 2019, respectively. These shares of common stock vested immediately and were measured at their fair value on the date of grant. The fair value of these awards was $14.08, $15.49, and $19.21 per share on January 2, 2020, October 1, 2019, and July 1, 2019, respectively, which represents the closing price of our common stock on the date of grant. Fiscal 2019 We granted a total of 2,948 and 3,600 shares of common stock to our outside directors on April 1, 2019 and October 1, 2018, respectively. These shares of common stock vested immediately and were measured at their fair value on the date of grant. The fair value of these awards was $19.18 and $23.45 per share on April 1, 2019 and October 1, 2018, respectively, which represents the closing price of our common stock on the date of grant. We recorded $210,000 and $84,000 of compensation expense within selling, general, and administrative expense for our common stock awards for the nine-months ending February 2, 2020 and January 27, 2019, respectively.

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- Definition The entire disclosure for share-based payment arrangement. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -URI http://asc.fasb.org/topic&trid=2228938 + Details
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