Exhibit 4.1

                                  CULP, INC.

                      1997 PERFORMANCE-BASED OPTION PLAN

      1.     Purpose  of Plan.  The 1997  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 106,000.

      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.

      1.     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 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
      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 $1.00 per share.

            (d)    Date of Grants:  Term of  Options.  By April 1,  1997,  the
      Committee will grant to Employees  hereunder options to purchase 106,000
      shares,  all of which options will be on the terms specified on Schedule
      4(d) attached hereto.

      1.     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.

      2.     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.

      3.     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.

      4.     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.

      5.     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.

      6.     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  affect any rights or obligations
of the holder of an option  theretofore  granted  under the Plan  without  his
consent.

      7.     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.

      8.     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
twelve 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 , 2006.

         (a)       Earnings.  If the Company's  reported  audited earnings for
   any fiscal  year 1997  through  1999 equal or exceed  $1.50 per share,  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,
   accounting  changes or substantial  changes  (including  additional  equity
   offerings) to the Company's capital structure.)

         (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.

         (c)       Limitations  on  Exercise.  Before  the holder of an option
   granted  pursuant to this plan may exercise  such option,  such holder must
   first  provide  five  (5)  business  days  notice  to Culp of the  holder's
   intention  to make  such  exercise,  including  the  number of shares as to
   which the holder  intends to  exercise an option and the  proposed  date of
   the exercise.  Upon receiving such notice,  Culp will make a  determination
   of  the  amount  of  applicable   employee   remuneration   that  would  be
   attributable  to the holder  upon such  exercise  under the  provisions  of
   Section  162(m) of the Internal  Revenue  Code of 1986,  as amended (or any
   successor  provision)  ("Section  162(m)").  If the  amount  of  applicable
   employee remuneration  attributable to the holder under Section 162(m) upon
   the  proposed  exercise,   together  with  all  other  applicable  employee
   remuneration  attributable  to the  holder for Culp's tax year in which the
   exercise is proposed to be made, exceeds the amount of applicable  employee
   remuneration  attributable  to the holder that would be  deductible by Culp
   under the provisions of Section  162(m),  then Culp will notify the holder,
   on or before  the  proposed  date of  exercise  specified  in the  holder's
   notice,  of the  maximum  number  of  shares  as to which  the  holder  may
   exercise  an  option  and not  exceed  the  amount of  applicable  employee
   remuneration  that would be deductible by Culp under  Section  162(m),  and
   the holder's  exercise shall be limited to an exercise with respect to such
   maximum number of shares.  Further,  if after the exercise of options under
   the plan the maximum amount of deductible  applicable employee remuneration
   (as determined  under Section 162(m)) has been received by or attributed to
   the holder of such  options  for Culp's  current  tax year,  then any other
   applicable employee  remuneration payable or to be paid during the same tax
   year by Culp to such holder pursuant to any agreement,  plan or arrangement
   will not be paid to the holder  during such tax year,  but will be deferred
   and paid to such holder during the period  beginning three months after the
   beginning  of Culp's  following  tax year and ending four months  after the
   beginning  of such tax year.  It is the  intention of these  provisions  to
   limit the amount of shares as to which a holder of options  under this plan
   may  exercise  options in any tax year to an amount that,  when  considered
   together  with all other  compensation  received  by the  holder  from Culp
   during such year, will not cause any  compensation to be paid or attributed
   to such holder to be  nondeductible  to Culp  pursuant to the  provision of
   Section 162(m).

      1.  Duration  of  Options.  Once the options  become  exercisable,  they
remain  exercisable until December 31, 2006;  provided,  however,  that if the
holder of options  hereunder is prevented from  exercising  options because of
the provisions of paragraph  1(c) above,  the period during which such options
may be  exercised  shall be extended by such period of time as is necessary to
allow the holder to exercise all such  options in  compliance  with  paragraph
1(c),  except  that in no case  will  any  options  remain  exercisable  after
December 31, 2011.

      2.  Forfeiture/  Early   Termination  of  Options.   If  the  employee's
employment  is  terminated  for cause,  the option  expires upon  termination;
otherwise,   the  option  expires  three  (3)  months  after   termination  of
employment.