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Stock-Based Compensation | 6 Months Ended
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Oct. 29, 2023
Share-Based Payment Arrangement [Abstract] |
Stock-Based Compensation | 15. Stock-Based Compensation Equity Incentive Plan Description 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, restricted stock units, performance-based 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 October 29, 2023, there were 765,399 shares available for future equity-based grants under the Amended and Restated Plan. Performance-Based Restricted Stock Units Senior Executives We grant performance-based restricted stock units to 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 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. Our performance-based restricted stock units granted to senior executives were measured based on their fair market value on the date of grant. The fair market value per share was 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 component. 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 September 28, 2023, August 10, 2022 and July 22, 2021:
|  | September 28, |  | August 10, |  | July 22,
|  | 2023 |  | 2022 |  | 2021
Closing price of our common stock |  | $5.59 |  | $5.06 |  | $14.75
Expected volatility of our common stock |  | 37.3% |  | 48.2% |  | 54.2%
Expected volatility of peer companies |  | 35.7%-91.5% |  | 41.6%-105.1% |  | 45.7%-101.5%
Risk-free interest rate |  | 4.90% |  | 3.13% |  | 0.33%
Dividend yield |  | 0.00% |  | 0.00% |  | 3.00%
Correlation coefficient of peer companies |  | 0.01-0.21 |  | 0.05-0.23 |  | 0.03-0.35
Key Employees We grant performance-based restricted stock units to key employees 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 award 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. Overall The following table summarizes information related to our grants of performance-based restricted stock units associated with senior executives and key employees that were unvested as of October 29, 2023:
|  | (3) |  |  | (4) |  |  |  |  |  |  |
|  | Performance-Based |  |  | Restricted Stock |  |  |  |  |  |  |
|  | Restricted Stock |  |  | Units Expected |  |  |  |  |  |  |
Date of Grant |  | Units Awarded |  |  | to Vest |  |  | Price Per Share |  |  |  | Vesting Period
September 28, 2023 (1) |  |  | 227,497 |  |  |  | 121,740 |  |  | $ | 6.43 |  | (5) |  | 34 months
August 10, 2022 (1) |  |  | 178,714 |  |  |  | — |  |  | $ | 5.77 |  | (6) |  | 3 years
July 22, 2021 (1) |  |  | 122,476 |  |  |  | — |  |  | $ | 15.93 |  | (7) |  | 3 years
July 22, 2021 (2) |  |  | 20,500 |  |  |  | — |  |  | $ | 14.75 |  | (8) |  | 3 years
(1) Performance-based restricted stock units awarded to 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) Compensation cost is based on an assessment each reporting period to determine the probability of whether or not certain performance goals 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 were expected to vest as of October 29, 2023. (5) 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. (6) Price per share represents the fair market value per share ($1.14 per $1, or an increase of $0.71 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 ($5.06) for the performance-based component of the performance-based restricted stock units granted to senior executives on August 10, 2022. (7) Price per share represents the fair market value per share ($1.08 per $1, or an increase of $1.18 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 ($14.75) for the performance-based component of the performance-based restricted stock units granted to senior executives on July 22, 2021. (8) Price per share represents the closing price of our common stock on the date of grant. There were no performance-based restricted stock units that vested during the six-month period ended October 29, 2023. The following table summarizes information related to our performance-based restricted stock units that vested during the six-month period ended October 30, 2022:
|  | Performance-Based |  |  |  |  |  | (4) |
|  | Restricted Stock |  |  | (3) |  |  | Price |
Fiscal Year |  | Units Vested |  |  | Fair Value |  |  | Per Share |
Fiscal 2023 (1) |  |  | 545 |  |  | $ | 3 |  |  | $ | 5.10 |
Fiscal 2023 (2) |  |  | 437 |  |  | $ | 2 |  |  | $ | 5.10 |
(1) Performance-based restricted stock units vested by senior executives. (2) Performance-based restricted stock units vested by key employees. (3) Dollar amounts are in thousands. (4) Price per share is derived from the closing price of our common stock on the date the respective performance-based restricted stock units vested. We recorded compensation expense of $23,000 and $2,000 within selling, general, and administrative expenses associated with our performance-based restrictive stock units for the six-month periods ended October 29, 2023, and October 30, 2022, respectively. Compensation expense is recorded 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. If certain performance goals are not expected to be achieved, compensation expense would not be recorded, and any previously recognized compensation expense would be reversed. As of October 29, 2023, the remaining unrecognized compensation expense related to our performance-based restricted stock units was $759,000, which is expected to be recognized over a weighted average vesting period of 2.7 years. As of October 29, 2023, the performance-based restricted stock units that are expected to vest had a fair value totaling $674,000. Time-Based Restricted Stock Units The following table summarizes information related to our grants of time-based restricted stock unit awards associated with senior executives, key employees, and outside directors that were unvested as of October 29, 2023:
|  | Time-Based |  |  |  |  |  |  |
|  | Restricted Stock |  |  | (1) |  |  |  |
Date of Grant |  | Units Awarded |  |  | Price Per Share |  | Vesting Period
September 28, 2023 (2) |  |  | 100,068 |  |  | $ | 5.59 |  |  |  | 34 months
September 28, 2023 (3) |  |  | 59,928 |  |  | $ | 5.59 |  |  |  | 1 year
September 6, 2022 (2) |  |  | 25,114 |  |  | $ | 4.58 |  |  |  | 2 to 3 years
August 10, 2022 (2) |  |  | 78,225 |  |  | $ | 5.06 |  |  |  | 3 years
July 22, 2021 (2) |  |  | 30,835 |  |  | $ | 14.75 |  |  |  | 3 years
(1) Price per share represents closing price of 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 awarded to outside directors. The following table summarizes information related to our time-based restricted stock units that vested during the six-month periods ending October 29, 2023, and October, 30, 2022, respectively:
|  | Time-Based |  |  |  |  |  | (2)
|  | Restricted Stock |  |  | (1) |  |  | Price
Fiscal Year |  | Units Vested |  |  | Fair Value |  |  | Per Share
Fiscal 2024 |  |  | 151,653 |  |  | $ | 857 |  |  | $ | 5.65 |  |
Fiscal 2023 |  |  | 32,799 |  |  | $ | 167 |  |  | $ | 5.10 |  |
(1) Dollar amounts are in thousands. (2) Price per share is derived from the closing price of our common stock on the date the respective time-based restricted stock units vested. We recor ded compensation expense of $378,000 and $396,000 within selling, general, and administrative expenses associated with our time-based restricted stock unit awards for the six-month periods ended October 29, 2023, and October 30, 2022, respectively. As of October 29, 2023, the remaining unrecognized compensation expense related to our time-based restricted stock units was $1.3 million, which is expected to be recognized over a weighted average vesting period of 1.9 years. As of October 29, 2023, the time-based restricted stock units that are expected to vest had a fair value totaling $1.6 million. Immediately Vested Common Stock Awards We granted a total of 16,616 shares of common stock to our outside directors on July 3, 2023. These shares of common stock vested immediately and were measured at their fair value on the date of the grant. The fair value of these awards was $5.04 per share on July 3, 2023, which represents the closing price of our common stock on the date of grant. We granted a total of 18,326 and 19,753 shares of common stock to our outside directors on October 3, 2022, and July 1, 2022, respectively. These shares of common stock vested immediately and were measured at their fair value on the date of the grant. The fair value of these awards was $4.57 and $4.24 per share on October 3,2022, and July 1, 2022, respectively, which represents the closing price of our common stock on the date of grant. We recorded $84,000 and $167,000 of compensation expense within selling, general, and administrative expenses for common stock awards to our outside directors for the six-month periods ended October 29, 2023, and October 30, 2022, respectively.

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