UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) December 11, 2006
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Culp, Inc.
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(Exact Name of Registrant as Specified in its Charter)
North Carolina 0-12781 56-1001967
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
1823 Eastchester Drive
High Point, North Carolina 27265
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(Address of Principal Executive Offices) (Zip Code)
(336) 889-5161
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former name or address, if changed from last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 5.02. Departure of Directors or Principal Officers; Election of
Directors; Appointment of Principal Officers; Compensatory Arrangements of
Certain Officers.
On December 11, 2006, the board of directors of Culp, Inc. (the
"company") approved a Management Incentive Plan that provides for cash bonuses
to certain individuals in the company's Culp Home Fashions (CHF) division,
including Robert G. Culp, IV, President of the CHF division and a "named
executive officer" under SEC Rules. The plan provides for cash bonuses that
could range from 1% to 48% of a participant's salary (3% to 48% in the case of
Mr. Culp, IV), depending upon the CHF division's financial performance using
three financial measures. The financial measures used to calculate eligibility
for bonuses under the plan are operating income, free cash flow and return on
capital, in each case excluding certain extraordinary and non-recurring items.
The plan is effective for the company's 2007 fiscal year that ends April 29,
2007. A written summary of the plan is attached hereto as Exhibit 10(a).
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit 10(a) - Written Summary of Culp Home Fashions Division
Management Incentive Plan
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: December 13, 2006
Culp, Inc.
By: /s/ Kenneth R. Bowling
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Kenneth R. Bowling
Vice President-Finance, Treasurer
EXHIBIT INDEX
Exhibit Number Exhibit
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10(a) Written Summary of Culp Home Fashions Division
Management Incentive Plan
Exhibit 10(a)
Written Summary of Culp Home Fashions
Division Management Incentive Plan
The plan provides for annual cash bonuses to certain employees of the Culp Home
Fashions (CHF) division, on the following basis:
Each participant in the plan has a stated Management Incentive Plan ("MIP")
bonus opportunity, stated as a percentage of the participant's annual salary.
The bonus opportunity for each participant varies from 10% to 30% of salary. The
plan sets forth target levels of three performance measures for the CHF division
- - operating income, free cash flow and return on capital, in each case excluding
certain extraordinary and non-recurring items. If the division reaches the
target levels for each performance measure, bonuses in the amount of 100% of the
bonus opportunity will be paid. There is also a minimum threshold level for each
performance measure that will cause bonuses to be paid in the amount of 10% of
the bonus opportunity, and a maximum threshold level for each performance
measure that will cause bonuses to be paid in the amount of 160% of the bonus
opportunity. Thus, the bonus amounts under the plan could range from 1% of
salary for certain participants to as much as 48% of salary for other
participants. In addition, bonuses would only be paid under the plan if the
company as a whole reports positive earnings, excluding restructuring and
related expenses and other extraordinary items.