Document:

a5912487ex10_8.htm

    EXHIBIT
10.8

     

    

    RESTRICTED
STOCK AGREEMENT

    

    

    THIS RESTRICTED STOCK AGREEMENT
(the “Agreement”), dated as of
January 7, 2009, is between CULP, INC., a North Carolina
corporation (the “Corporation”), and KENNETH
R. BOWLING (“Employee”).

     

    Background
Statement

    

    The Corporation desires to grant to
Employee shares of Restricted Stock pursuant to the Culp, Inc. 2007 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 Restricted
Stock.  The Corporation hereby grants and issues to Employee
10,000 shares of Restricted Stock consisting of 10,000 shares of common stock,
par value $0.05 per share, of the Corporation (the “Shares”).  The
Shares shall be fully paid, nonassessable and subject to the restrictions and
limitations set forth herein.

     

    Section
2.     Restrictions.  Prior
to the vesting of the Shares pursuant to Section 3
hereof:

     

    (a)  the
Shares shall not be transferable and shall not be sold, exchanged, transferred,
pledged, hypothecated or otherwise disposed of; and

     

    (b)  the
stock certificate(s) evidencing the Shares shall contain the following
legend:

     

    “The
shares represented by this certificate are subject to the terms of a Restricted
Stock Agreement, dated as of January 7, 2009, a copy of which is available at
the principal office of the corporation.”

     

    Except as
expressly stated herein, Employee shall have all rights as a shareholder with
respect to the Shares, commencing as of the date of issuance thereof and
continuing for so long as Employee remains the record owner of the Shares,
including the right to receive dividends in cash or other property and other
distributions or rights in respect of the Shares and to vote the Shares as the
record owner thereof.  For the avoidance of doubt, no cash dividends
paid in respect of the Shares shall be deferred and reinvested in additional
shares of Restricted Stock as permitted by the second sentence of Section 4.4 of
the Plan.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
3.     Vesting.  The
restrictions described in Section 2 shall lapse and
the Shares shall vest in Employee on the following dates:

     

    (a)  on
May 1, 2012, to the extent of 3,333 Shares;

     

    (b)  on
May 1, 2013, to the extent of 3,333 Shares;

     

    (c)  on
May 1, 2014, to the extent of any and all unvested Shares as of such date;
and

     

    (d)  at
any time upon the occurrence of a Change of Control or if the employment of
Employee is terminated by the Corporation without Cause or by reason of the
death or Disability of Employee, to the extent of any and all unvested Shares as
of such date.

     

    For
purposes of this Agreement, the following terms shall have the meanings
indicated below:

    

    “Cause” shall mean (i) the
commission by Employee of a felony (or crime involving moral turpitude); (ii)
theft, conversion, embezzlement or misappropriation by Employee 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 Employee 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.

    

    “Disability” shall have the
meaning given to such term in the primary disability benefit plan of the
Corporation in which Employee participates.  In the absence of any
such plan, “Disability”
shall mean any physical or mental impairment that renders Employee unable to
perform the essential functions of his 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, Employee
shall submit to an examination by a duly licensed physician who is mutually
acceptable to the Corporation and Employee for the purpose of ascertaining the
existence of a Disability, and shall authorize the physician to release the
results of Employee’s examination to the Corporation.

    

    Upon the
vesting of any Shares, Employee shall be entitled to receive replacement stock
certificate(s) evidencing such vested Shares and such certificate(s) shall not
contain the legend set forth in Section 2(b).

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Section
4.     Forfeiture.  If,
prior to vesting of any Shares, the employment of Employee with the Corporation
or its Subsidiaries is terminated by Employee for any reason or by the
Corporation for Cause, then all of the Shares that are not vested under Section 3 as of the date
of termination shall be forfeited to the Corporation (such event being referred
to herein as a “Forfeiture
Event”).  Upon the occurrence of a Forfeiture Event, Employee
shall return for cancellation all stock certificates
representing unvested Shares, and irrespective of whether such stock
certificates are so returned and cancelled, all unvested Shares shall
automatically, without further action, be cancelled and shall no longer be
issued and outstanding.

     

    Section
5.     Taxes and Related
Matters.

     

    (a)  If
Employee properly elects, within 30 days of the date on which he acquires the
Shares, to include in gross income for federal income tax purposes an amount
equal to the fair market value (as of the date of issuance) of the Shares
granted pursuant to this Agreement, Employee shall pay to the Corporation, in
the year of this Agreement, all federal, state and local income, social security
and payroll taxes required to be withheld with respect to the grant of the
Shares.  If Employee fails to make such tax payments as required, the
Corporation shall, to the extent permitted by law, have the right to deduct from
any payment of any kind otherwise due to Employee all federal, state and local
income, social security and payroll taxes of any kind required by law to be
withheld with respect to the Shares.

     

    (b)  If
Employee does not make the election described in subparagraph (a) of this
section, he shall, on the date as to which the restrictions described in Section 3 shall lapse as
to any Shares, 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 such vested Shares.  Subject to the approval of the
Committee, Employee may elect to satisfy this obligation by having the
Corporation withhold a number of Shares that have vested having a Fair Market
Value (as of the date that the amount of the withholding requirement is to be
determined) equal to the amount of such withholding requirement.  If
Employee fails to make such payments as required (in cash or by withholding
Shares), the Corporation shall, to the extent permitted by law, have the right
to deduct from any payment of any kind otherwise due to Employee all federal,
state and local income, social security and payroll taxes of any kind required
by law to be withheld with respect to such vested Shares.

     

    (c)  Notwithstanding
anything in this Agreement to the contrary, if a Change of Control occurs and if
Employee 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
Employee 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 Employee’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 Employee from receiving, with
respect to a Change of Control, an excess parachute payment within the meaning
of Section 280G of the Code.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
6.     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 Shares issued hereunder shall
be subject to the terms of the Plan, which hereby is incorporated into this
Agreement as if set forth in full herein.  Employee hereby
acknowledges that he has received 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.  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 Employee
any right to continue in the employ of the Corporation or any of its
Subsidiaries.

     

    (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
Employee shall be addressed to Employee 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.]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN WITNESS WHEREOF, this
Agreement has been duly executed on the 7th day of
January, 2009.

     

    
       

       

      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                	
                                  CULP,
      INC.,

                                	 
	
                                	
                                  a
      North Carolina corporation

                                	 
	 	 	 
	
                                	
                                  By:

                                	 
	 
      	
                                  Name:
      /s/ Franklin N. Saxon

                                	 
	 
      	
                                  Title:
      Chief Executive Officer

                                	 
	 
      	 
      	 
	 
      	 
      	 
	 
      	
                                  EMPLOYEE

                                	 
	
                                	 
      	 
	 	 	 
	 
      	
                                  /s/
      Kenneth R. Bowlinga5912487ex10_9.htm

    EXHIBIT
10.9

    

    FORM
OF

    STOCK
OPTION AGREEMENT

    (Culp,
Inc. 2007 Equity Incentive Plan)

    

    THIS STOCK OPTION AGREEMENT
(the “Agreement”), made
effective as of the ___ day of ___________, ______ (the “Grant Date”), is by
and between Culp, Inc., a North Carolina corporation (the “Corporation”), and
__________________ (the “Holder”).

     

    WHEREAS, the Corporation has
adopted the Culp, Inc. 2007 Equity Incentive Plan (the “Plan”) to give
Eligible Individuals the opportunity to acquire a proprietary interest, or
otherwise increase their proprietary interest, in the Corporation as an
incentive to provide or continue their Service; and

     

    WHEREAS, the Corporation has
awarded to the Holder an Option under the Plan, which Award shall be evidenced
by this Agreement and effective as of the Grant Date (even though this Agreement
may be physically executed and delivered after the Grant Date);

     

    NOW, THEREFORE, the parties
hereto agree as follows:

     

    
      	
               
      

            	
              1.

            	
              Grant of Option.  Pursuant
      to the Plan, the Corporation hereby grants to the Holder an Option to
      purchase all or any part of an aggregate of  shares of
      Common Stock (the “Option
      Shares”), subject to, and in accordance with, the terms and
      conditions set forth in this Agreement and the Plan.  The Option
      and this Agreement are subject to all of the terms and conditions of the
      Plan, which terms and conditions hereby are incorporated by
      reference.  Except as otherwise expressly set forth herein,
      capitalized terms used in this Agreement shall have the same definitions
      as set forth in the Plan.

            

    

     

    
      	
               
      

            	
              2.

            	
              Status of
      Option.  The Option is intended to be [select
      one]:

            

    

     

    o an Incentive
Stock Option.

    o   a
Non-Qualified Stock Option.

     

    
      	
               
      

            	
              3.

            	
              Exercise
      Price.  The price at which the Holder shall be entitled
      to purchase Option Shares upon the exercise of the Option shall be $____
      per share.

            

    

     

    
      	
               
      

            	
              4.

            	
              Term
      of Option.  Subject to the terms of the Plan and
      this Agreement, the Option shall be exercisable at any time prior to the
      tenth anniversary of the Grant Date (the “Expiration
      Date”).  To the extent not exercised before the
      Expiration Date, this Option shall automatically expire
      unexercised.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    
      	
               
      

            	
              5.

            	
              Vesting and
      Exercisability of Option.  Subject to the terms
      of the Plan, the Option shall vest and become exercisable [select
      one]:

            

    

     

    o with respect to:

     

    
      	
               
      

            	
              (a)

            	
              twenty
      percent (20%) of the Option Shares beginning on the first anniversary of
      the Grant Date;

            

    

     

    
      	
               
      

            	
              (b)

            	
              an
      additional twenty percent (20%) of the Option Shares beginning on the
      second anniversary of the Grant
Date;

            

    

     

    
      	
               
      

            	
              (c)

            	
              an
      additional twenty percent (20%) of the Option Shares beginning on the
      third anniversary of the Grant
Date;

            

    

     

    
      	
               
      

            	
              (d)

            	
              an
      additional twenty percent (20%) of the Option Shares beginning on the
      fourth anniversary of the Grant Date;
and

            

    

    

    
      	
               
      

            	
              (e)

            	
              the
      remaining twenty percent (20%) of the Option Shares beginning on the fifth
      anniversary of the Grant Date.

            

    

    

    Notwithstanding
the foregoing, subject to the provisions of the Plan and the discretion of the
Committee, no portion of the Option shall become exercisable following the
termination of the Holder’s Service.

    

    o other
(specify):

    ________________________________________________________________________

    ________________________________________________________________________

    ________________________________________________________________________

    

    
      	
               
      

            	
              6.

            	
              Acceleration of
      Vesting.  (select
one)

            

    

     

    o The Option shall not
accelerate automatically upon the occurrence of a Change of Control or the
occurrence of any other events, provided that nothing herein shall affect the
authority of the Committee to accelerate the time after which the Option shall
be exercisable.

    

    o other
(specify):

    
      

      
        
          

          

          
            
              

              

              
                
                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              7.

            	
              Termination of
      Service.  Subject to the terms of the Plan and the
      discretion of the Committee, the Option shall, upon termination of the
      Holder’s Service, terminate and cease to be outstanding with respect to
      any and all Option Shares for which the Option is not otherwise
      exercisable as of the date of termination of the Holder’s Service (the
      “Termination
      Date”).  Subject to the terms of this Agreement, the
      Option may be exercised following the termination of the Holder’s Service
      only to the extent that the Option was exercisable as of the Termination
      Date.  Upon the expiration of the applicable exercise period as
      set forth below or (if earlier) upon expiration of the term, the Option
      shall terminate and cease to be
outstanding.

            

    

     

    In the
Holder’s Service is terminated, the Option shall continue to be exercisable (to
the extent the Holder could have exercised the Option as of the Termination
Date) until [select one]:

     

    o thirty
(30) days after the Termination Date, unless the Holder’s Service is terminated
due to the Holder’s:

     

    
      	
               
      

            	
              (i)

            	
              death,
      in which case the Holder’s legatee(s) under the Holder’s last will or the
      Holder's personal representative or representatives may exercise all or
      part of the previously unexercised portion of the Option at any time
      within one year, but not beyond the expiration of its term, after the
      Holder's death; or

            

    

     

    
      	
               
      

            	
              (ii)

            	
              total
      and permanent disability (as defined in Section 22(e)(3) of the Code), in
      which case the Holder or the Holder’s personal representative may exercise
      the previously unexercised portion of the Option at any time within one
      year, but not beyond the expiration of its term, after the Termination
      Date.

            

    

     

    o other
(specify):

     

    
      

    

     

    
      

    

     

    
      

    

     

    
      	
               
      

            	
              8.

            	
              Exercise of
      Option.  The Holder may exercise all or a portion of the
      Option by giving written notice to the Corporation of exercise, and
      specifying the number of Option Shares with respect to which the Option is
      being exercised.  Such notice shall be delivered to the
      Secretary of the Corporation and shall be effective as of the later of the
      date of its receipt by the Secretary of the Corporation and the date on
      which the Holder has complied with the provisions of the Plan (including,
      without limitation, payment of the exercise price) with respect
      thereto.

            

    

     

    
      	
               
      

            	
              9.

            	
              Non-Transferability of
      Option.   The Option shall not be transferable by
      the Holder except to the extent permitted under the
  Plan.

            

    

     

    
      	
               
      

            	
              10.

            	
              No Rights as a
      Shareholder.  The Holder shall not have any rights or
      privileges of a shareholder with respect to any Option Shares by virtue of
      the Option until the date of issuance by the Corporation of a certificate
      for such shares pursuant to the exercise of the
  Option.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        	
                 
      

              	
                11.

              	
                Holder Bound by the
      Plan.  The Holder hereby acknowledges receipt of a copy
      of the Plan and agrees to be bound by all the terms and provisions
      thereof.  A determination of the Committee as to any questions
      which may arise with respect to the interpretation of the provisions of
      this Agreement and of the Plan shall be final.  The Committee
      may authorize, establish and revise such rules and regulations with
      respect to the operation of the Plan not inconsistent with the provisions
      of the Plan, as it may deem
advisable.

              

      

    

     

    
      	
               
      

            	
              12.

            	
              Modification of
      Agreement.  Subject to the provisions of the Plan, this
      Agreement may be modified, amended, suspended or terminated, and any terms
      or conditions may be waived, but only by a written instrument executed by
      the parties hereto.

            

    

     

    
      	
               
      

            	
              13.

            	
              Severability.  Each
      provision of this Agreement is intended to be severable.  Should
      any provision of this Agreement be held by a court of competent
      jurisdiction to be unenforceable or invalid for any reason, the remaining
      provisions of this Agreement shall not be affected by such holding and
      shall continue in full force in accordance with their
    terms.

            

    

     

    
      	
               
      

            	
              14.

            	
              Governing Law;
      Jurisdiction.  This Agreement shall be governed and
      construed in accordance with the laws of the State of North Carolina,
      without regard to the principles of conflicts of law, except to the extent
      governed by federal law.  Each party hereby irrevocably submits
      to the jurisdiction of the state and federal courts sitting in Guilford
      County, State of North Carolina, for the adjudication of any dispute
      hereunder.

            

    

     

    
      	
               
      

            	
              15.

            	
              Successors in Interest.  This
      Agreement shall inure to the benefit of and be binding upon any successor
      to the Corporation.  This Agreement shall inure to the benefit
      of the Holder’s legal representatives.   All obligations
      imposed upon the Holder and all rights granted to the Corporation under
      this Agreement shall be final, binding and conclusive upon the Holder’s
      heirs, executors, administrators and
successors.

            

    

     

    [signatures
are on the next page]

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN WITNESS WHEREOF, this
Agreement has been executed by the Corporation and the Holder effective as of
the date and year first written above.

     

    

    
      
        
          
            	 	
                    CULP,
      INC.

                  
	 	 
      
	 	
                    By:
      ________________________________________

                  
	 	
                    Name:
      _____________________

                    Title:  _____________________

                  
	 	 
      
	 	 
	 	
                    EMPLOYEE

                  
	 	 
	 	
                    By:
      ________________________________________

                  
	 	
                    Name:
      _____________________

                    Title:  _____________________

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