Document:

Exhibit
10.1

 

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this “Agreement”) is dated as of _________, 2021, between Leader Capital Holdings Corp., a
Nevada Corporation (the “Company”), and ____________ (the “Purchaser”).

 

WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933, as amended
(the “Securities Act”) and Rule 504,Rule 506 and/or Regulation S promulgated thereunder, the Company desires to issue
and sell to the Purchaser, and the Purchaser desires to purchase from the Company, securities of the Company as more fully described
in this Agreement.

 

NOW,
THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt
and adequacy of which are hereby acknowledged, the Company and the Purchaser agree as follows:

 

ARTICLE
I

DEFINITIONS

 

1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes
of this Agreement, the following terms have the meanings indicated in this Section 1.1:

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 144. With respect to the Purchaser, any investment fund or managed account
that is managed on a discretionary basis by the same investment manager as the Purchaser will be deemed to be an Affiliate of the Purchaser.

 

“Business
Day” means any day except Saturday, Sunday and any day that shall be a federal legal holiday or a day on which banking institutions
in the State of Nevada are authorized or required by law or other governmental action to close.

 

“Closing”
means the closing of the purchase and sale of the Common Stock pursuant to Section 2.1.

 

“Closing
Date” means the Business Day when this Agreement has been executed and delivered by the applicable parties thereto, and all
conditions precedent to the Purchaser’s obligations to pay the Purchase Price have been satisfied or waived.

 

“Commission”
means the Securities and Exchange Commission.

 

“Common
Stock” means the common stock of the Company, $0.0001 par value per share.

 

“Common
Stock Equivalents” means any securities of the Company which would entitle the holder thereof to acquire at any time Common
Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible
into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Liens”
means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

    	 

    	 

    

 

“Losses”
means a lien, charge, security interest, encumbrance, rights of first refusal, preemptive right or other restriction.

 

“Per
Share Purchase Price” equals $0.25

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such
as a deposition), whether commenced or threatened.

 

“Purchase
Price” means ______ Hundred Thousand Dollars ($_00,000.00).

 

“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to
time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Shares”
means the ________ shares of Common Stock issued or issuable to the Purchaser pursuant to this Agreement.

 

ARTICLE
II

PURCHASE
AND SALE

 

2.1
Closing. At the Closing, the Purchaser shall purchase from the Company, and the Company shall issue and sell to the Purchaser,
the Shares. Upon satisfaction of the conditions set forth in Section 2.2, the Closing shall occur at the offices of the Company, or such
other location as the parties shall mutually agree.

 

2.2 Closing Conditions.

 

(a)
At the Closing the Company shall deliver to the Purchaser:

 

(i)
this Agreement duly executed by the Company; and

 

(ii)
a certificate evidencing the Shares registered in the name of the Purchaser.

 

(b)
At the Closing the Purchaser shall deliver or cause to be delivered to the Company the following:

 

(i)
this Agreement duly executed by the Purchaser; and

 

(ii)
the Purchase Price by wire transfer to the account of the Company using the instructions attached hereto as Exhibit A.

 

(c)
All representations and warranties of the other party contained herein shall remain true and correct as of the Closing Date and all covenants
of the other party shall have been performed if due prior to such date.

 

    	2 

    	 

    

 

ARTICLE
III

REPRESENTATIONS
AND WARRANTIES

 

3.1 Representations and Warranties of the Company. The Company hereby makes the following
representations and warranties set forth below to the Purchaser:

 

(a) Subsidiaries. The Company has no direct or indirect subsidiaries.

 

(b) Organization and Qualification. The Company is duly incorporated or otherwise organized,
validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the
requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.

 

(c) Authorization; Enforcement. The Company has the requisite corporate power and authority
to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder
or thereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated
hereby have been duly authorized by all necessary action on the part of the Company and no further consent or action is required by the
Company. This Agreement has been (or upon delivery will be) duly executed by the Company and, when delivered in accordance with the terms
hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and similar laws affecting creditors’
rights and remedies generally and general principles of equity.

 

(d) Issuance of the Shares. The Shares are duly authorized and, when issued and paid for
in accordance with this Agreement, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed
by the Company other than restrictions on transfer provided for in this Agreement.

 

(e) Capitalization. The authorized capital stock of the Company presently consists of 600,000,000
shares of Common Stock, $0.0001 par value, and 200,000,000 shares of preferred stock, $0.0001 par value. The Company has 155,299,219
shares of Common Stock, and no shares of preferred stock, issued and outstanding as of August 31, 2021. There are no other outstanding
options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights
or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by which the Company is or may become bound to issue additional shares
of Common Stock, or securities or rights convertible or exchangeable into shares of Common Stock.

 

(f) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting the Company before or by any court, arbitrator, governmental
or administrative agency or regulatory authority (federal, state, county, local or foreign) which adversely affects or challenges the
legality, validity or enforceability of any of this Agreement or the Shares.

 

(g) Reports;
Financial Statements. The Company has filed all reports required to be filed by it under the Securities Act and the Exchange Act,
including pursuant to Section 13(a) or 15(d) thereof, for the twelve (12) months preceding the date hereof, (the foregoing materials
being collectively referred to herein as the “SEC Reports”) on a timely basis or has timely filed a valid extension of such
time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations
of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.

 

    	3 

    	 

    

 

(h) Shell Company Status. The Company is not a “shell company” (as such term
is defined in Rule 12b-2 under the Exchange, as amended (17 CFR 240.12b-2)).

 

(i) Insurance. The Company maintains no insurance.

 

(j) Private Placement. Assuming the accuracy of the Purchaser representations and warranties
set forth herein, no registration under the Securities Act is required for the offer and sale of the Shares by the Company to the Purchaser
as contemplated hereby in accordance with the terms of this Agreement.

 

3.2 Representations and Warranties of the Purchaser. The Purchaser represents and warrants
as of the date hereof and as of the Closing Date to the Company as follows:

 

(a) Organization; Authority. If the Purchaser is an entity, the Purchaser is an entity duly
organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or
partnership power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry
out its obligations thereunder. The execution, delivery and performance by the Purchaser of the transactions contemplated by this Agreement
have been duly authorized by all necessary corporate action on the part of the Purchaser. This Agreement, to which it is party has been
duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and
legally binding obligation of the Purchaser, enforceable against it in accordance with its terms except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement
of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief
or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(b) Investment Intent. The Purchaser understands that the Shares are “restricted securities”
and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Shares as principal
for its own account for investment purposes only and not with a view to or for distributing or reselling such Shares or any part thereof,
has no present intention of distributing any of such Shares and has no arrangement or understanding with any other persons regarding
the distribution of such Shares. The Purchaser is acquiring the Shares hereunder in the ordinary course of its business. The Purchaser
does not have any agreement or understanding, directly or indirectly, with any Person to distribute any of the Shares.

 

(c) Purchaser Status. At the time the Purchaser was offered the Shares, it was, and at the
date hereof it is an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities
Act. The Purchaser is not required to be registered as a broker-dealer under Section 15 of the Exchange Act.

 

(d) Experience of the Purchaser. The Purchaser, either alone or together with its representatives,
has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Purchaser is able
to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.

 

    	4 

    	 

    

 

(e) General Solicitation. The Purchaser is not purchasing the Shares as a result of any
advertisement, article, notice, general solicitation or other communication regarding the Shares published in any newspaper, magazine
or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.

 

(f) Residence. The office or offices of the Purchaser in which its investment decision was
made is located at the address or addresses of the Purchaser set forth on the signature page hereto.

 

(g) Rule 144. Subject to Section 4.1(a), the Purchaser acknowledges and agrees that the
Shares are “restricted securities” as defined in Rule 144 promulgated under the Securities Act as in effect from time to
time and must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration
is available. The Purchaser has been advised or is aware of the provisions of Rule 144, which permits limited resale of shares purchased
in a private placement subject to the satisfaction of certain conditions, including, among other things: the availability of certain
current public information about the Company, the resale occurring following the required holding period under Rule 144 and the number
of shares being sold during any three-month period not exceeding specified limitations.

 

ARTICLE
IV

OTHER
AGREEMENTS OF THE PARTIES

 

4.1 Transfer Restrictions.

 

(a) The Shares may only be disposed of in compliance with state and federal securities laws. In
connection with any transfer of Shares other than pursuant to an effective registration statement or Rule 144, to the Company or to an
Affiliate of the Purchaser, the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by
the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to
the Company, to the effect that such transfer does not require registration of such transferred Shares under the Securities Act. As a
condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights
of the Purchaser under this Agreement.

 

(b) The Purchaser agrees to the imprinting, so long as is required by this Section 4.1(b), of the
following legend on any certificate evidencing Shares:

 

THESE
SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE
UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS.

 

(c) The Purchaser agrees that the removal of the restrictive legend from certificates representing
Shares as set forth in this Section 4.1 is predicated upon the Company’s reliance that the Purchaser will sell any Shares pursuant
to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption
therefrom.

 

    	5 

    	 

    

 

ARTICLE
V

MISCELLANEOUS

 

5.1 Fees
and Expenses. Except as otherwise set forth in this Agreement, each party shall pay the fees and expenses of its advisers, counsel,
accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all stamp and other taxes and duties levied in connection with the
sale of the Shares.

 

5.2 Entire
Agreement. This Agreement, together with the exhibits and schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.3 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile number set forth on the signature pages attached hereto prior to 5:00 p.m. (New York time) on a Business Day, (b) the
next Business Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number
set forth on the signature pages attached hereto on a day that is not a Business Day or later than 6:00 p.m. (New York time) on any Business
Day, (c) the second Business Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (d)
upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be
as set forth on the signature pages attached hereto.

 

5.4 Amendments; Waivers. No provision of this Agreement may be waived or amended except
in a written instrument signed, in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party
against whom enforcement of any such waiver is sought. No waiver of any default with respect to any provision, condition or requirement
of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other
provision, condition or requirement hereof, nor shall any delay or omission of either party to exercise any right hereunder in any manner
impair the exercise of any such right.

 

5.5 Construction.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof. The language used in this Agreement will be deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied against any party.

 

5.6 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser.
The Purchaser may assign its rights under this Agreement to any Person to whom the Purchaser assigns or transfers any Shares.

 

5.7 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties
hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person, except as otherwise set forth in Section 4.5.

 

    	6 

    	 

    

 

5.8 Governing Law; Venue; Waiver of Jury Trial. All questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the County of New York, New York, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of this Agreement), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or inconvenient venue for
such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding
to enforce any provisions of this Agreement, then the prevailing party in such action or proceeding shall be reimbursed by the other
party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.

 

5.9 Survival. The representations, warranties and covenants contained herein shall survive
the Closing and delivery and/or exercise of the Shares, as applicable.

 

5.10 Execution. This Agreement may be executed in two or more counterparts, all of which
when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any
signature is delivered by facsimile transmission, such signature shall create a valid and binding obligation of the party executing (or
on whose behalf such signature is executed) with the same force and effect as if such facsimile signature page were an original thereof.

 

5.11 Severability. If any provision of this Agreement is held to be invalid or unenforceable
in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected
or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor,
and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

    	7 

    	 

    

 

IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

	 	Leader
    Capital Holdings Corp.
	 	 	 
	 	By:	
	 	 	Yi-Hsiu
    Lin
	 	Title:	CEO
    
	 	 	 
	 	Address for Notice:
	 	 
	 	Room 2708-09, Metropolis Tower,

10 Metropolis Drive,

Hung Hom, Hong Kong

 

[SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

    	8 

    	 

    

 

[PURCHASER’S
SIGNATURE PAGE]

 

IN
WITNESS WHEREOF, the undersigned has caused this Securities Purchase Agreement to be duly executed by its authorized signatories as of
the date first indicated above.

 

	[PURCHASER]
     	 
	 __________	 

 

	By:
	 	 
	Name:
    	 	 
	 	 
	Address
    for Notice:	 
	 	 
	Taiwan	 

 

    	9 

    	 

    

 

Exhibit
A

 

Wire
Transfer Instructions

 

    	10 

    	 

    

 

EXHIBIT
B

 

SCHEDULE
OF PURCHASERS

 

    	11culp-ex101_178.htm

EXHIBIT 10.1

 

ANNUAL INCENTIVE AWARD AGREEMENT

THIS ANNUAL INCENTIVE AWARD AGREEMENT (the “Agreement”), dated as of ___________________, is between CULP, INC., a North Carolina corporation (the “Corporation”), and ____________________ (“Recipient”).

Background Statement

The Corporation desires to grant to Recipient an Annual Incentive Award (the “Award”) pursuant to the Culp, Inc. 2015 Equity Incentive Plan (the “Plan”).  Capitalized terms used but not defined in this Agreement shall have the meanings given to them in the Plan.

STATEMENT OF AGREEMENT

NOW, THEREFORE, the parties hereby agree as follows:

Section 1.Grant of Award.  The Corporation hereby grants to Recipient the Award described below. 

The Award will pay an incentive bonus for the Performance Period stated below to Recipient upon final determination by the Compensation Committee (the “Committee”) of the Corporation’s board of directors that a bonus payment is due pursuant to the terms of this Agreement and the Plan.

The bonus payment due hereunder is calculated with reference to the Total Bonus Percentage for the Reporting Unit in which Recipient participates.  The bonus due to Recipient is the Total Bonus Percentage for Recipient’s Reporting Unit multiplied by Recipient’s Bonus Opportunity.  

Performance Period:  The Corporation’s fiscal year ending ____________.

Reporting Unit:  ____________ [or the ____________ Division (the “Division”)]

Bonus Opportunity:  Recipient’s Bonus Opportunity is _____% of Recipient’s base salary during the Performance Period.

Total Bonus Percentage for a Reporting Unit is calculated using the percentage amounts derived from Schedule A attached hereto, 80% of which is based upon the total Adjusted Operating Income results for Recipient’s Reporting Unit during the Performance Period (the “OI Bonus Percentage”), and 20% of which is based upon the total Adjusted Free Cash Flow results for Recipient’s Reporting Unit during the Performance Period (the “FCF Bonus Percentage”), in each case with straight line interpolation being used to determine OI Bonus Percentage and FCF Bonus Percentage amounts between the amounts shown on Schedule A.  Upon determination of the OI Bonus Percentage and the FCF Bonus Percentage, the Total Bonus Percentage is calculated as follows:  (80% multiplied by the OI Bonus Percentage) plus (20% multiplied by the FCF Bonus Percentage) = Total Bonus Percentage.  The maximum Bonus Percentage for this award is 200%.   

 

 
 

 

“Adjusted Operating Income” shall mean operating income for a Reporting Unit as calculated and recorded on the Reporting Unit’s financial statements, but excluding (prior to) the payment of bonus payments related to bonuses awarded under this form of Agreement under the annual incentive plan, and also excluding extraordinary and non-recurring items including restructuring and related charges, goodwill or fixed asset impairment charges, prepayment fees on debt, other extraordinary charges or credits, and the effects of acquisitions, and also excluding any other items that the Committee deems appropriate for exclusion.  

“Adjusted Free Cash Flow” (i) for the Corporate Shared Services Reporting Unit shall mean such Reporting Unit’s net cash provided by (used in) operating activities (which shall include and be calculated using the Adjusted Operating Income, as defined above, for the Reporting Unit), less cash capital expenditures, less payments on vendor-financed capital expenditures, plus any proceeds from sale of property, plant, and equipment, plus proceeds from life insurance policies, less premium payments on life insurance policies, plus proceeds from the sale of long-term investments associated with the Corporation’s rabbi trust, less the purchase of long-term investments associated with the Corporation’s rabbi trust, and plus or minus the effects of exchange rate changes on cash and cash equivalents, in each case as calculated and reported on the Reporting Unit’s financial statements, and also excluding any other items that the Committee deems appropriate for exclusion; and (ii) for each Division Reporting Unit shall mean such Division’s cash from earnings (which shall include and be calculated using Adjusted Operating Income, as defined above, for the Division), plus or minus cash from working capital, less cash capital expenditures, and plus proceeds from sale of property, plant, and equipment, in each case as calculated and reported by the Division, and also excluding any other items the Committee deems appropriate for exclusion.

Section 2.Vesting.  The bonus amount to be paid hereunder will vest and become payable upon final determination of the amount to be paid by the Corporation and the Committee,  provided, however, that if such determination is made by the Committee prior to the Corporation’s filing with the Securities and Exchange Commission (“SEC”) of its annual report on Form 10-K that relates to the financial results for the applicable Performance Period, then the bonus amount to be paid here under will not vest and become payable until after such filing is complete.

Notwithstanding the foregoing, all unvested Awards (and a bonus payment at Recipient’s Bonus Opportunity) shall immediately vest and become payable upon the occurrence of the following:

(a)termination of Recipient’s employment by reason of the death or Disability of Recipient; or

(b)Recipient’s employment is terminated by the Corporation in anticipation of a Change of Control, or 

(c)Recipient is employed by the Corporation or an affiliate thereof at the time a Change of Control occurs, and at any time during the 18-month period following such 

 

2

 

Change of Control (provided that the bonus payment provided for hereunder shall have not already become due and been paid),

(i)Recipient’s employment is terminated by the Corporation or an affiliate thereof for any reason other than for death, Disability or Cause, or

(ii)Recipient terminates his/her employment for Good Reason within one year following the initial existence of the conditions giving rise to such Good Reason.

Section 3.Additional Definitions.  For purposes of this Agreement, the following terms shall have the meanings indicated below:

“Cause” shall mean (i) the commission by Recipient of a felony (or crime involving moral turpitude); (ii) theft, conversion, embezzlement or misappropriation by Recipient of funds or other assets of the Corporation or its Subsidiaries or any other act of fraud with respect to the Corporation or its Subsidiaries (including without limitation the acceptance of bribes or kickbacks or other acts of self-dealing); (iii) intentional, grossly negligent or unlawful misconduct by Recipient that causes significant harm to the Corporation or its Subsidiaries; or (iv) repeated instances of intoxication with alcohol or drugs while conducting business during regular business hours.

“Change of Control” shall have the meaning given to such term in the Plan.  In addition, for an award that vests according to Adjusted Operating Income or Adjusted Free Cash Flow of a Division, “Change of Control” shall be deemed to have occurred upon consummation of a sale of all or substantially all of the assets of such Division by the Corporation to an unaffiliated third party.

“Disability” shall have the meaning given to such term in the primary disability benefit plan of the Corporation in which Recipient participates.  In the absence of any such plan, “Disability” shall mean any physical or mental impairment that renders Recipient unable to perform the essential functions of Recipient’s job with the Corporation and its Subsidiaries for a period of at least 120 days, either with or without reasonable accommodation.  At the Corporation’s request, Recipient shall submit to an examination by a duly licensed physician who is mutually acceptable to the Corporation and Recipient for the purpose of ascertaining the existence of a Disability, and shall authorize the physician to release the results of Recipient’s examination to the Corporation.

“Good Reason” shall mean, without Recipient’s express written consent, the existence of any of the following conditions unless such conditions are fully corrected within thirty days after Recipient notifies the Corporation of the existence of such conditions as hereinafter provided:

(a)a material diminution in Recipient’s authority, duties or responsibilities;

(b)a material diminution in the authority, duties or responsibilities of the supervisor to whom Recipient is required to report;

 

3

 

(c)a material diminution in Recipient’s base salary, other than as a result of across-the-board salary reductions similarly affecting all management personnel of the Corporation; or

(d)a material change in the geographic location at which Recipient must regularly perform services for the Corporation.

Recipient shall notify the Corporation that he/she believes that one or more of the conditions described above exists, and of his/her intention to terminate employment for Good Reason as a result thereof, within sixty days after the time that he/she gains knowledge of such conditions.  Recipient shall not deliver a notice of termination of employment for Good Reason until thirty days after he/she delivers the notice described in the preceding sentence, and Recipient may do so only if the conditions described in such notice have not been fully corrected by the Corporation.

Section 4.Settlement.

As soon as reasonably practicable following (i) a determination by the Corporation that a bonus payment is due hereunder and (ii) the Corporation’s filing with the SEC of its annual report on Form 10-K that relates to the financial results for the applicable Performance Period of the Award, the bonus will be paid in cash, or will be paid in accordance with any proper and valid election under the Culp, Inc. Deferred Compensation Plan for Key Employees, but only if such election has been made in accordance with the policies and procedures of the Corporation pursuant to such plan.

Section 5.Forfeiture.  All bonus amounts that do not vest pursuant to Section 2 shall automatically be cancelled and forfeited by Recipient effective as of the earlier to occur of (a) the first day after the end of the Performance Period (to the extent that neither Adjusted Operating Income nor Adjusted Free Cash Flow for the relevant Reporting Unit is sufficient to cause any bonus payment to vest pursuant to the terms of this Agreement), (b) the termination by Recipient of his/her employment with the Corporation or its Subsidiaries for any reason, except as otherwise determined by the Committee, in its sole discretion (for example, under circumstances in which Recipient will continue providing Services to the Corporation as a director, consultant, or independent contractor following any such termination by Recipient, or such other circumstances as determined by the Committee), or (c) the termination by the Corporation of Recipient’s employment with the Corporation or its Subsidiaries for any reason (including with or without Cause) (each such event being referred to herein as a “Forfeiture Event”).  Upon the occurrence of a Forfeiture Event, all unvested bonus amounts shall automatically, without further action by the Corporation or Recipient, be cancelled and forfeited.

Section 6.Tax Matters.

(a)Recipient shall promptly pay to the Corporation all federal, state and local income, social security and payroll taxes of any kind required by law to be withheld with respect to the vesting or payment of a bonus hereunder, and the Corporation, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to Recipient all federal, state and local income, social security and payroll taxes of any kind 

 

4

 

required by law to be withheld with respect to the vesting or payment of a bonus earned hereunder.

(b)Notwithstanding anything in this Agreement to the contrary, if a Change of Control occurs and if Recipient is entitled under any agreement or arrangement (including, without limitation, this Agreement) to receive compensation that would constitute a parachute payment (including, without limitation, the vesting of any rights) within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”) but for the operation of this sentence, then the amount of all such payments shall be reduced, as determined by the Corporation, to the extent necessary to cause the aggregate present value of all payments in the nature of compensation to Recipient that are contingent on a change in the ownership or effective control of the Corporation, or in the ownership of a substantial portion of the assets of the Corporation, not to exceed 2.99 times Recipient’s “base amount,” all within the meaning of Section 280G of the Code and the regulations promulgated thereunder.  The parties intend for the immediately preceding sentence to be interpreted and applied so as to prevent Recipient from receiving, with respect to a Change of Control, an excess parachute payment within the meaning of Section 280G of the Code.

Section 7.Clawback.  

(a)If the Corporation’s reported financial or operating results become subject to a material negative restatement, the Committee may require Recipient to pay to the Corporation an amount corresponding to the amount that the Committee determines would not have been vested or paid if the Corporation’s results as originally published had been equal to the Corporation’s results as subsequently restated; provided that any requirement or claim under this Section 7(a) must be made, if at all, within five years after the date the amount claimed was originally vested or paid, whichever is later.

In the alternative, the Committee may require Recipient to repay or return compensation awarded hereunder pursuant to such rules as may be adopted from time to time pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, to the extent applicable.  By acceptance of any Award or bonus payment hereunder, Recipient expressly acknowledges and agrees that any and all amounts paid to Recipient hereunder are and will be fully subject to the terms of any policy regarding repayment, recoupment or clawback of compensation now or hereafter adopted by the Corporation in response to the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act, rulemaking of the Securities and Exchange Commission or otherwise.  Recipient acknowledges and agrees that any such policy will apply to any and all bonus amounts paid hereunder in accordance with its terms, whether retroactively or prospectively, and agrees to cooperate fully with the Corporation to facilitate the recovery of any that the Committee determines in its sole discretion is required to be recovered pursuant to the terms of such policy.

The obligations of Recipient to make payments or return bonus amounts paid hereunder under this Section 7(a) are independent of any involvement by such Recipient in events that led to the restatement.  The provisions of this Section 7(a) are in addition 

 

5

 

to, not in lieu of, any remedies that the Corporation may have against any persons whose misconduct caused or contributed to a need to restate the Corporation’s reported results.

(b)If at any time within three years of the vesting or payment of any award to Recipient under this Agreement, whichever is later, Recipient’s employment is terminated for Cause (or, if such termination is deemed not to be for Cause, but the Corporation determines at any time during such three-year period that the Corporation could have terminated Recipient’s employment for Cause based on Recipient’s conduct during his or her time of employment with the Corporation), then if any part of the underlying conduct or circumstances giving rise to such determination of Cause by the Corporation took place at any time during the applicable vesting period for each such award, as specified in this Agreement, then the Committee may require Recipient to pay to the Corporation an amount corresponding to each award that vested or was paid to Recipient pursuant to this Agreement.

By acceptance of any Award or bonus payment hereunder, Recipient expressly acknowledges and agrees that any and all amounts paid to Recipient hereunder are and will be fully subject to the terms of the foregoing clawback provision, and agrees to cooperate fully with the Corporation to facilitate the recovery of any such amounts that the Committee requires to be recovered pursuant to the foregoing.

Section 8.Miscellaneous.

(a)Governing Law.  This Agreement shall be construed, administered and governed in all respects under and by the applicable internal laws of the State of North Carolina, without giving effect to the principles of conflicts of laws thereof.

(b)Entire Agreement; Amendment and Waiver.  This Agreement and the Award granted hereunder shall be subject to the terms of the Plan, which hereby is incorporated into this Agreement as though set forth in full herein.  Recipient hereby acknowledges receipt of a copy of the Plan.  This Agreement and the Plan reflect the entire agreement between the parties hereto and supersede any prior or contemporaneous written or oral understanding or agreement regarding the subject matter hereof.  This Agreement may not be modified, amended, supplemented or waived except by a writing signed by the parties hereto, and such writing must refer specifically to this Agreement.

(c)Assignment; Binding Effect.  Except as permitted by the Plan, this Agreement and the Award granted hereunder may not be assigned, pledged, hypothecated or transferred by Recipient in any manner.  This Agreement, as amended from time to time, shall be binding upon, inure to the benefit of and be enforceable by the heirs, successors and assigns of the parties hereto; provided, however, that this provision shall not permit any assignment in contravention of the terms contained elsewhere herein.

(d)No Right to Employment.  Nothing in this Agreement shall confer on Recipient any right to continue in the employ of the Corporation or any of its Subsidiaries.

 

6

 

(e)Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  Delivery of an executed counterpart of this Agreement by facsimile or other electronic device shall be equally as effective as delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by facsimile or other electronic device shall also deliver an original executed counterpart of this Agreement, but the failure to deliver an original executed counterpart of this Agreement shall not affect the validity, enforceability and binding effect of this Agreement.

(f)Notices.  Any notice hereunder to the Corporation shall be addressed to the Corporation’s principal executive office, Attention: Compensation Committee, and any notice hereunder to Recipient shall be addressed to Recipient at his last address in the records of the Corporation, subject to the right of either party to designate at any time hereafter in writing a different address.  Any notice shall be deemed to have been given when delivered personally, one (1) day after dispatch if sent by reputable overnight courier, fees prepaid, or three (3) days following mailing if sent by registered mail, return receipt requested, postage prepaid and addressed as set forth above.

[Signature page is the next page.]

 

7

 

 

IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first written above.

 

	
CULP, INC.,

	
a North Carolina corporation

	
 
	
 
	
 
	
 
	
 

	
By:
	
 
	
 
	
 
	
 

	
 
	
 
	
Name:
	
 
	
 

	
 
	
 
	
Title:
	
 
	
 

 

 

	
RECIPIENT

	
 

	
 

	
 

 

 

 

 

8

 

 

SCHEDULE A

 

			
	
OI Bonus Percentage
	
Adjusted Operating Income Results

	
0%
	
Below $__
	
	
X
	
X
	
	
X
	
X
	
	
X
	
X
	
	
X
	
X
	
	
100%
	
Target Level
	
	
X
	
X
	
	
X
	
X
	
	
X
	
X
	
	
__%
	
Maximum
	

 

 

			
	
FCF Bonus Percentage
	
Adjusted Free Cash Flow Results

	
0%
	
Less than $__
	
	
X
	
X
	
	
X
	
X
	
	
X
	
X
	
	
X
	
X
	
	
100%
	
Target Level
	
	
X
	
X
	
	
X
	
X
	
	
X
	
X
	
	
__%
	
Maximum
	

 

 

A-1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00333-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00333-of-00352.parquet"}]]