CULP, INC. OPTION AGREEMENT
Exhibit P
XXXX, INC.
Notice is hereby given of the following option grant (the “Option”) to purchase shares of
Common Stock of Xxxx, Inc. (the “Company”) to the undersigned individual. Capitalized terms used
but not otherwise defined herein shall have the same meanings given them in the Xxxx, Inc. 2002
Stock Option Plan (the “Plan”). The terms of the Option are as follows:
Optionee: Xxxxxx X. Xxxx, III (the “Optionee”)
Option Grant Date: June 14, 2006
Vesting Commencement Date: June 14, 2007
Exercise Price: $4.52 per share
Number of Option Shares: 30,000 shares of Common Stock
Option Expiration Date: June 13, 2011
Type of Option: Non-Qualified Stock Option
| Vesting Schedule: | June 14, 2007: 7,500 shares (25%); June 14, 2008: 7,500 shares (50%); June 14, 2009: 7,500 shares (75%); June 14, 2010: 7,500 shares (100%). |
Option Subject to Plan. The Optionee acknowledges and agrees that this Option is
subject to the terms and conditions of the Plan, which are incorporated herein by reference. The
Optionee hereby acknowledges that he or she has previously been provided with a copy of the Plan.
Exercise of Option. This Option shall be exercisable in one or more installments in
accordance with the Vesting Schedule set forth above and the Plan. This Option must be exercised
by signing and delivering to the Company an Option Exercise Form, a copy of which may be obtained
from the Company.
TRANSFER RESTRICTIONS. THE OPTIONEE HEREBY ACKNOWLEDGES AND AGREES THAT THIS OPTION
IS SUBJECT TO CERTAIN TRANSFER RESTRICTIONS SPECIFIED IN THE PLAN.
Additional Terms Applicable to an Incentive Option. If this Option is designated as
an Incentive Option above, the following terms and conditions shall apply:
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(p) During the lifetime of the Optionee, this Option shall be exercisable only by the Optionee
and shall not be assignable or transferable other than by will or by the laws of descent and
distribution following the Optionee’s death.
(q) This Option shall cease to qualify for favorable tax treatment as an Incentive Option if
(and to the extent) this Option is exercised for one or more Option Shares more than three months
after the date the Optionee ceases to be an Employee for any reason other than death or Permanent
Disability or more than twelve (12) months after the date the Optionee ceases to be an Employee by
reason of death or Permanent Disability.
(r) No installment under this Option shall qualify for favorable tax treatment as an Incentive
Option if (and to the extent) the aggregate Fair Market Value (determined as of the date of grant)
of the Common Stock for which such installment first becomes exercisable hereunder would, when
added to the aggregate value (determined as of the respective dates of grant) of any earlier
installments of the Common Stock and any other securities for which this Option or any other
Incentive Options granted to the Optionee prior to the date of grant (whether under the Plan or any
other plan of the Company or any Parent or Subsidiary) first become exercisable during the same
calendar year, exceed One Hundred Thousand Dollars ($100,000) in the aggregate. Should such One
Hundred Thousand Dollar ($100,000) limitation be exceeded in any calendar year, this Option shall
nevertheless become exercisable for the excess shares in such calendar year as a Non-Qualified
Option.
(s) Should the exercisability of this Option be accelerated, then this Option shall qualify
for favorable tax treatment as an Incentive Option only to the extent the aggregate Fair Market
Value (determined as of the date of grant) of the Common Stock for which this Option first becomes
exercisable in the calendar year in which the acceleration occurs does not, when added to the
aggregate value (determined as of the respective dates of grant) of the Common Stock or other
securities for which this Option or one or more other Incentive Options granted to the Optionee
prior to the date of grant (whether under the Plan or any other Option plan of the Company or any
Parent or Subsidiary) first become exercisable during the same calendar year, exceed One Hundred
Thousand Dollars ($100,000) in the aggregate. Should the applicable One Hundred Thousand Dollar
($100,000) limitation be exceeded in the calendar year of such acceleration, the Option may
nevertheless be exercised for the excess shares in such calendar year as a Non-Qualified Option.
(t) Should the Optionee hold, in addition to this Option, one or more other Options to
purchase Common Stock which become exercisable for the first time in the same calendar year as this
Option, then the foregoing limitations on the exercisability of such Options as Incentive Options
shall be applied on the basis of the order in which such Options are granted.
No Employment or Service Contract. Nothing in this Notice or in the Plan shall confer
upon the Optionee any right to continue in Service for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Company (or any Parent or Subsidiary
employing or retaining the Optionee) or of the Optionee to terminate the Optionee’s Service at any
time for any reason, with or without cause.
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DATED: June 14, 2006.
| XXXX, INC. |
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| By: | /s/Xxxxxxx X. Xxxxxx | |||
| Xxxxxxx X. Xxxxxx | ||||
| Senior Vice President | ||||
| OPTIONEE |
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| /s/Xxxxxx X. Xxxx, III | ||||
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