EXHIBIT 10(bb)
CULP, INC.
1994 PERFORMANCE-BASED OPTION PLAN
1. Purpose of Plan. This Performance-Based Option Plan
(the "Plan") is intended to increase the incentive for
participants to contribute to the success of Culp, Inc. and its
subsidiaries ("Culp") and to reward them for their contribution
to that success.
2. Shares Subject to Plan. The options granted under this
Plan will be options to acquire shares of Culp's common stock,
$.05 par value. The maximum number of shares that may be issued
pursuant to this Plan is 128,000.
3. Administration of Plan. The Compensation Committee
(the "Committee") of Culp's Board of Directors will administer
the Plan. Except to the extent permitted under Rule 16b-3
promulgated under the Securities Exchange Act of 1934, during the
year prior to commencement of service on the Committee, the
Committee members will not have participated in or received
securities under, and while serving and for one year after
serving on the Committee, such members shall not receive
securities under or be eligible for selection as persons to whom
shares may be transferred or to whom stock options may be granted
under, the Plan or any other discretionary plan of Culp (or an
affiliate of Culp) under which participants are entitled to
acquire shares, stock options or stock appreciation rights of
Culp (or an affiliate of Culp).
The Committee, in addition to any other powers granted to it
hereunder, shall have the powers, subject to the expressed
provisions of the Plan:
(a) in its discretion, to determine the Employees
(defined in Section 4(a) hereof) to receive options,
the times when options shall be granted, the times when
options may be exercised, the number of shares to be
subject to each option, and any restrictions on the
transfer or ownership of shares purchased pursuant to
an option;
(b) to prescribe, amend and repeal rules and
regulations of general application relating to the
Plan;
(c) to construe and interpret the Plan;
(d) to require of any person exercising an option
granted under the Plan, at the time of such exercise,
the execution of any paper or making or any
representation or the giving of any commitment that the
Committee shall, in its discretion, deem necessary or
advisable by reason of the securities laws of the
United States or any State, or the execution of any
paper or the payment of any sum of money in respect of
taxes or the undertaking to pay or
have paid any such sum that the Committee shall, in
its discretion, deem necessary by reason of the Internal
Revenue Code or any rule or regulation thereunder, or by
reason of the tax laws of any State;
(e) to amend stock options previously granted and
outstanding, but no amendment to any such agreement
shall be made without the consent of the optionee if
such amendment would adversely affect the rights of the
optionee under his stock option agreement; and no
amendment shall be made to any stock option agreement
that would cause the inclusion therein of any term or
provision inconsistent with the Plan; and
(f) to make all other determinations necessary or
advisable for the administration of the Plan.
Determinations of the Committee with respect to the
matters referred to in this section shall be conclusive
and binding on all persons eligible to participate
under the Plan and their legal representatives and
beneficiaries. The Committee shall have full authority
to act with respect to the participation of any
Employee, and nothing in the Plan shall be construed to
be in derogation of such authority.
The Committee may designate selected Committee members or
employees of Culp to assist the Committee in the administration
of the Plan and may grant authority to such persons to execute
documents, including options, on behalf of the Committee, subject
in each such case to the requirements of Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended.
Decisions and determinations of the Committee on all matters
relating to the Plan shall be in its sole discretion and shall be
conclusive. No member of the Committee, nor any person
authorized to act on behalf of the Committee, shall be liable for
any action taken or decision made in good faith relating to the
Plan or any award thereunder.
4. Grant of Option to Employees.
(a) Employees to Whom Options May Be Granted. The
Committee may grant an option to any employee of Culp who is a
corporate officer or who is determined by the Committee to be a
key senior manager ("Employee"). In determining which Employees
will be granted an option, the Committee shall consider the
duties of the Employees, their present and potential
contributions to the success of Culp, and such other factors as
the Committee deems relevant in connection with accomplishing the
purposes of the Plan.
(b) Number of Shares. The Committee may grant to an
Employee
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an option to purchase such number of shares as the
Committee may chose.
(c) Exercise Price. The exercise price with respect to
each option granted hereunder will be $.05, the par value of the
company's stock.
(d) Date of Grants; Term of Options. On June 21, 1994, the
Committee will grant to Employees hereunder options to purchase
128,000 shares, all of which options will be on the terms
specified on Schedule 4(d) attached hereto.
5. Exercise. An option granted hereunder may be exercised
as to part or all of the shares covered thereby. During the
participant's lifetime, only the participant or his legal
guardian may exercise an option granted to the participant. If a
participant dies prior to the expiration date of an option
granted to him, without having exercised his option as to all of
the shares covered thereby, the option may be exercised by the
estate or a person who acquired the right to exercise the option
by bequest or inheritance or by reason of the death of the
Employee.
6. Payment of Exercise Price. The exercise price will be
payable upon exercise of the option to purchase shares. Payment
of the exercise price shall be made in cash or, to the extent
permitted by the Committee and as set forth in the Memorandum of
Option, with shares of Culp common stock, valued at the fair
market value on the date of exercise, delivered to or withheld by
Culp at the time of exercise.
7. Transferability. No option granted hereunder may be
transferred by the participant except by will or by the laws of
descent and distribution, upon the death of the participant.
8. Memorandum of Option. The Committee will deliver to
each participant to whom an option is granted a Memorandum of
Option, stating the terms of the option.
9. Capital Adjustments. The number of shares of common
stock covered by each outstanding option granted under the Plan,
and the option price thereof, will be subject to an appropriate
and equitable adjustment, as determined by the Committee, to
reflect any stock dividend, stock split or share combination, and
will be subject to such adjustment as the Committee may deem
appropriate to reflect any exchange of shares, recapitalization,
merger, consolidation, separation, reorganization, liquidation or
the like, of or by Culp.
10. Amendment or Discontinuance. The Plan may be amended,
altered or discontinued by the Board of Directors of Culp. No
termination or amendment of the Plan shall materially and
adversely
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affect any rights or obligations of the holder of an option
theretofore granted under the Plan without his consent.
11. Effect of the Plan. Neither the adoption of this Plan
nor any action of the Board or the Committee shall be deemed to
give any person any right to be granted an option to purchase
common stock of Culp or any other rights hereunder except as may
be expressly granted by the Committee and evidenced by a
Memorandum of Option described in Section 8.
12. Effectiveness of the Plan; Duration. The Plan shall be
effective upon the approval of the Plan by the Board of Directors
of Culp, but the Plan shall be subject to approval by the vote of
the holders of a majority of the shares of stock of Culp entitled
to vote. The Committee shall grant options as contemplated in
Section 4(d) before submission of the Plan to the shareholders
for their approval, but if such approval is not obtained within
six months of the approval by the Board of Directors, then the
Plan shall terminate and any options theretofore granted shall be
void. No options may be granted under this Plan except the
initial grants as contemplated in Section 4(d).
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Schedule 4(d)
1. Vesting/Exercisability. Except as provided below, the
options would not become exercisable until January 1, 2003.
(a) Earnings. If the Company's reported audited
earnings over a 3-year period ending with the end of fiscal
1997 average a compound growth rate of 17%, the options
would become exercisable five business days after the
Company makes a public announcement of such earnings. (The
Committee would have the discretion to determine appropriate
treatment for extraordinary items or accounting changes.)
(b) Death, Disability, Retirement. If the employee's
employment terminates on account of death, disability or
retirement after reaching age 65, his options will become
immediately exercisable.
2. Duration of Options. Once the options become exer-
cisable, they remain exercisable until December 31, 2003.
3. Early Termination of Options. If the employee's
employment is terminated for cause, the option expires upon
termination; otherwise the option expires three months after
termination of employment.
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