Summary of Assumptions Used to Determine Fair Value of Performance Based Restricted Stock Units

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, September 28, 2023, and August 10, 2022:


	August 8,			January 8,			September 28,			August 10,
		2024		2024			2023			2022
Closing price of our common stock	$	4.65		$	5.61		$	5.59		$	5.06
Expected volatility of our common stock		35.0	%		33.5	%		37.3	%		48.2	%
Expected volatility of peer companies	22.6- 104.0		%	33.7 - 102.6		%	35.7- 91.5		%	41.6 - 105.1		%
Risk-free interest rate		3.90	%		4.3	%		4.9	%		3.13	%
Dividend yield		-	%		-	%		-	%		-	%
Correlation coefficient of peer companies	(0.01) - 0.17			0.01 - 0.21			0.01 - 0.21			0.05 - 0.23

Summary of Grants of Performance Based Restricted Stock Units

The following table summarizes information related to our grants of performance-based restricted stock units associated with senior executives that were unvested as of October 27, 2024:


	(2)		(3)
	Performance-Based		Restricted Stock
	Restricted Stock		Units Expected
Date of Grant	Units Awarded		to Vest		Price Per Share			Vesting Period
August 8, 2024 (1)		505,003		50,500	$	5.35	(4)	36 months
January 8, 2024 (1)		24,597		8,501	$	6.23	(5)	31 months
September 28, 2023 (1)		192,771		—	$	6.43	(6)	34 months
August 10, 2022 (1)		146,048		—	$	5.77	(7)	3 years

(1)

Performance-based restricted stock units awarded to senior executives.

(2)

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.

(3)

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 27, 2024.

(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 a senior executive 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.

(7)

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.

Summary of Grants of Time-Based Restricted Stock Unit Awards

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 27, 2024:


	Time-Based
	Restricted Stock		(1)
Date of Grant	Units Awarded		Price Per Share		Vesting Period
September 26, 2024 (2)		46,823	$	5.98	1 year
August 8, 2024 (3)		23,300	$	4.65	36 months
January 8, 2024 (3)		14,758	$	5.61	31 months
September 28, 2023 (3)		90,951	$	5.59	34 months
September 6, 2022 (3)		12,557	$	4.58	3 years
August 10, 2022 (3)		64,753	$	5.06	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 outside directors.

(3)

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

CULP INC 10-Q