CULP INC
FORM OF CHANGE OF CONTROL AND NONCOMPETITION AGREEMENT
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<TYPE>EX-10
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<FILENAME>ex10hh.txt
<DESCRIPTION>FORM OF CHANGE OF CONTROL AND NONCOMPETITION AGREEMENT
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                                 EXHIBIT 10(hh)


                 CHANGE OF CONTROL AND NONCOMPETITION AGREEMENT


THIS CHANGE OF CONTROL AND  NONCOMPETITION  AGREEMENT (the  "Agreement") is made
and entered  into as of December  11, 2001 by and between  CULP,  INC.,  a North
Carolina corporation headquartered in High Point, North Carolina (the "Company")
and  __________________________,  a citizen and resident of ___________  County,
North Carolina ("Employee").

                              Background Statement

Culp,  Inc. (the  "Company") has determined  that it is in its best interests to
have the continued dedication and services of certain employees, notwithstanding
the  possibility,  threat,  or occurrence of a Change of Control (as hereinafter
defined) of the Company. It is imperative to diminish the inevitable distraction
of senior management because of the personal  uncertainties and risks created by
any pending or threatened  Change of Control,  to encourage senior  management's
full  attention and  dedication to the Company in the event of any threatened or
pending change of control, to provide an incentive for certain senior management
members  to  continue  in the  employ of the  Company  for at least  six  months
following a Change of Control in order to assure continuity in the management of
the Company,  and to provide certain senior management members with compensation
arrangements  upon a Change  of  Control  which  ensure  that  the  compensation
expectations  of certain  senior  management  members will be satisfied and that
such  compensation  will be competitive  with the  compensation  of corporations
similarly  situated.  The  Company  has also  determined  that it is in its best
interests  to restrict  competition  with the Company by certain key  management
personnel upon  termination  of their  employment  with the Company  following a
Change  of  Control.  The  purpose  of  this  Agreement  is to  memorialize  the
compensation Employee will receive upon termination of his employment in certain
circumstances following a Change of Control.

In consideration of the foregoing and the mutual covenants  contained herein and
other good and valuable consideration,  the receipt and sufficiency of which are
hereby acknowledged, the Company and Employee agree as follows:

     A. For purposes of this  Agreement,  the following  definitions and related
provisions shall apply:

     1. Total  Compensation.  "Total  Compensation" shall mean Employee's annual
salary in effect at the time of termination of employment ("Base Salary"),  plus
with respect to the Company's  annual incentive plan, the annual targeted amount
for the current year in which Employee's employment is terminated.

For purposes of the Company's  incentive plan, and  notwithstanding any terms or
conditions  of the plan or any of the  Company's  policies  and  procedures,  if
Employee's employment is terminated by the Company without Cause (as hereinafter
defined) or by Employee  for Good  Reason (as  hereinafter  defined) or Employee
terminates his employment during the Window Period (as hereinafter  defined) for
any  reason  other  than  death  or  Disability  (as  hereinafter  defined),  or
Employee's  employment is terminated in anticipation of a Change of Control, and
in each case such  termination  occurs after the time the  incentive  payment or
payments  made under any such plan for the prior year have been earned and prior
to the time the incentive  payment or payments have been  distributed,  Employee
shall nevertheless be entitled to receive such incentive payment or payments and
any deferred incentive payment or payments.

     2. Cause.  "Cause" means (i)  Employee's  willful and continued  failure to
substantially  perform his duties with the Company  (other than any such failure
resulting from Disability (as  hereinafter  defined) or occurring after issuance
by  Employee  of a  notice  of  termination  for  Good  Reason  (as  hereinafter
defined)),  after a written demand for  substantial  performance is delivered to
Employee that  specifically  identifies the manner in which the Company believes
that Employee  willfully failed to substantially  perform his duties,  and after
Employee  has  failed  to  resume  substantial  performance  of his  duties on a
continuous  basis within thirty calendar days of receiving such demand;  or (ii)
Employee  has  committed an act which  seriously  and  substantially  damages or
embarrasses  the Company for which  there is no cure (for  example,  and without
limitation,  sexual  harassment).  If Employee is charged with a felony,  in the
discretion of the board of directors,  Employee may be placed on a paid leave of
absence  for six  months  pending a trial of such  charge.  If the charge is not
brought on for trial  within this six month  period,  in the  discretion  of the
board of  directors,  Employee may be placed on an unpaid leave of absence until
the charge is tried.  If Employee  is  convicted  of the felony,  he may, in the
discretion of the board of directors,  be terminated  for Cause.  If Employee is
acquitted of the felony, he shall be reinstated to active status to the position
held  at the  beginning  of  the  paid  leave  of  absence  and  reimbursed  for
compensation  and  benefits he would have  received  during the unpaid  leave of
absence.  For  purposes of this  definition,  actions or failures to act will be
deemed  "willful"  only if done or omitted in bad faith and  without  reasonable
belief that the action or omission was in the best interests of the Company.

     3.  Disability.  "Disability"  shall have the same meaning as it does under
the Company's Long-Term Disability policy, as maintained for employees. Employee
shall be deemed to be  disabled  when  Employee  becomes  eligible  to  commence
benefits under the Company's Long-Term Disability policy.

     4. Good  Reason.  "Good  Reason"  shall mean,  without  Employee's  express
written  consent,  the occurrence of any of the following  circumstances  unless
such  circumstances  are fully  corrected  within  thirty  days  after  Employee
notifies  the Company of the  existence  of such  circumstances  as  hereinafter
provided:

     (i) the assignment to Employee of any duties, functions or responsibilities
materially  inconsistent  with the  position  with  the  Company  Employee  held
immediately  prior to the assignment of such duties or  responsibilities  or any
adverse alteration in the nature or status of Employee's responsibilities or the
condition of Employee's employment, in each case without Employee's consent;

     (ii) a  significant  change in the  persons  in the  Company  reporting  to
Employee;

     (iii) reduction by the Company in Employee's Total Compensation, except for
across the board salary reductions  similarly affecting all management personnel
of the Company;

     (iv) the relocation of the Company's  headquarters  to a location more than
fifty miles from its current location and more than fifty miles from High Point,
North Carolina,  or the Company's  requiring Employee to be based anywhere other
than the  Company's  offices at such  location,  except for  required  travel on
Company business; or

     (v)  the  failure  by  the  Company  to pay  Employee  any  portion  of his
compensation within the time guidelines established pursuant to standard Company
policies,  or any other material breach by the Company of any material provision
of this Agreement.

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

     5. Change of Control.  "Change of Control"  means the  occurrence of one of
the following:

(i) any "person" (as that term is used in  Sections 13(d)(3)  of the Securities
Exchange Act of 1934, as amended),  other than (A) a trustee or other  fiduciary
holding securities under an employee benefit plan of the Company or (B) Employee
or a group of persons including Employee, is or becomes the beneficial owner (as
determined  pursuant  to the  provisions  of  Section 13(d)  of  the  Securities
Exchange Act of 1934,  without regard to the  requirements  set forth in Section
13(d)(1)  in  regard  to  registration   and  also  without  regard  to  Section
13(d)(b)(3)),  directly or indirectly, of 35% or more of the common voting stock
of the  Company  or its  successors,  other  than an  underwriter  or  group  of
underwriters owning shares of common voting stock in connection with a bona fide
public offering of such shares and the sale of such shares to the public;

(ii)  there  shall be any  consolidation  or merger of the  Company in which the
Company is not the  continuing or surviving  corporation or as a result of which
the holders of 35% or more of the voting capital stock (if any) of the surviving
corporation were not holders of voting capital stock of the Company  immediately
prior to the transaction;

(iii)  there  occurs the sale or  transfer  of all or  substantially  all of the
assets of the Company or the liquidation or dissolution of the Company; or

(iv)  individuals  who  constitute  the Board as of the  effective  date of this
Agreement  (the  "Incumbent  Board"),  cease for any reason  (including  but not
limited to a change  mandated  by any statute or  regulation)  to  constitute  a
majority  of the  Board;  provided,  however,  that any  individual  becoming  a
director  subsequent to the date of this Agreement  whose election or nomination
for  election  was  approved by a vote of at least a majority  of the  Incumbent
Board shall be a member of the Incumbent Board; except that any individual whose
initial  assumption  of office  occurs as a result of any  actual or  threatened
election contest that is subject to the provisions of Rule 14a-11 of the General
Rules and Regulations  under the Securities  Exchange Act of 1934,  shall not be
deemed to be a member of the Incumbent Board. 6. Window Period.  "Window Period"
shall mean the  thirty-day  period  immediately  following  elapse of six months
after the occurrence of any Change of Control.

        B.     Payments upon Change of Control.

                      If

                    (i) a Change of Control  occurs  while this  Agreement is in
               effect; and

                    (ii) (A) Employee's employment is terminated in anticipation
               of a Change  of  Control,  or (B)  Employee  is  employed  by the
               Company  or an  affiliate  thereof  at the time  such  Change  of
               Control  occurs,  and at any time  during the  three-year  period
               following such Change of Control,

                    (1)  Employee  is  given  notice  of   non-renewal  of  this
               Agreement pursuant to Section E hereof, or Employee's  employment
               is  terminated  by the  Company or an  affiliate  thereof for any
               reason other than for death, Disability or Cause, or

                    (2) Employee  terminates  his  employment  during the Window
               Period,  for any  reason  other  than  death  or  Disability,  or
               Employee terminates his employment for Good Reason,

     the Company (or its successors)  shall pay Employee,  or his beneficiary in
     the event of his subsequent death,  subject to applicable federal and state
     income,  social security and other employment tax  withholdings,  an amount
     (the  "Change of Control  Payment")  equal to 1.99 times  Employee's  Total
     Compensation in effect at the date of termination of employment.

The Change of Control Payment is in addition to the payment for the covenant not
to compete provided for under Section D of this Agreement. The Change of Control
Payment shall be paid in equal monthly  installments  over the thirty-six  month
period following termination, or at Employee's option, shall be paid to Employee
in a lump sum at the time of termination  without any reduction for  commutation
to present value.

Notwithstanding  anything  in this  Agreement  to the  contrary,  if a Change of
Control occurs and if Employee is entitled under any agreement or arrangement to
receive  compensation  that would  constitute  a parachute  payment  (including,
without  limitation,  the vesting of any rights) within the meaning of S-280G of
the Internal  Revenue Code (the "Code") but for the operation of this  sentence,
the Change of Control Payment shall be reduced 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 Company or in the ownership of a substantial portion of the assets of the
Company,  not to exceed  2.99 times the Base  Amount,  all within the meaning of
Code S-280G. The parties intend for the preceding sentence to be interpreted and
applied to prevent Employee from receiving,  with respect to a Change of Control
occurring, an excess parachute payment within the meaning of Code S-280G.

     C. Confidential  Information.  Employee  acknowledges that during, and as a
result of, his employment with the Company,  he will acquire,  be exposed to and
have  access  to,  material,  data and  information  of the  Company  and/or its
customers or suppliers that is confidential or proprietary.  At all times,  both
during and after the period of Employee's employment  hereunder,  Employee shall
keep and retain in confidence and shall not disclose,  except as required in the
course of his employment with the Company,  to any person or entity,  or use for
his own purposes,  any of this  proprietary  or  confidential  information.  For
purposes of this Section C, such  information  shall  include,  but shall not be
limited to: (i) the Company's standard operating procedures, processes, know-how
and technical and product  information,  any of which is of value to the Company
and not generally  known by the Company's  competitors  or the public;  (ii) all
confidential  information  obtained from third parties and customers  concerning
the  business  of the  Company,  including  any  customer  lists  or  data;  and
(iii) confidential  business information of the Company, including marketing and
business plans, strategies, projections, business opportunities, customer lists,
sales  and  cost  information  and  financial  results  and  performance.   Such
information shall not include information that is disclosed pursuant to issuance
of  legal  process  or  regulatory  action.   Employee   acknowledges  that  the
obligations  pertaining to the confidentiality and non-disclosure of information
shall remain in effect indefinitely,  or until the Company has released any such
information  into  the  public  domain,  in  which  case  Employee's  obligation
hereunder shall cease with respect only to such information so released.

        D.     Noncompetition.

               (1) Noncompetition.  Employee shall not take any of the following
          actions  during  the  applicable  Noncompetition  Period  (as  defined
          below):

               (i)  Become  employed  by (as  an  officer,  director,  employee,
          consultant  or  otherwise),  involved  or  engaged  in,  or  otherwise
          commercially  interested in or  affiliated  with (other than as a less
          than 5%  equity  owner  of any  corporation  traded  on any  national,
          international  or regional stock  exchange or in the  over-the-counter
          market)  any person or entity  that  competes  with the  Company or an
          affiliate  thereof  in  the  business  of  designing,   manufacturing,
          marketing  and  selling   upholstery   fabrics  and  mattress  ticking
          primarily  for  use  in the  furniture  (residential,  commercial  and
          juvenile) and bedding industries.

               (ii) Solicit or attempt to solicit, for competitive purposes, the
          business  of any of the  clients  or  customers  of the  Company or an
          affiliate  thereof,  or otherwise  induce such customers or clients or
          prospective  customers  or clients to reduce,  terminate,  restrict or
          alter their  business  relationship  with the Company or an  affiliate
          thereof in any fashion; or

               (iii)  Induce or attempt to induce any employee of any Company or
          an affiliate  thereof to leave the Company for the purpose of engaging
          in a business operation that is competitive with the Company.

     (2)  Noncompetition  Period. For purposes of this Section D "Noncompetition
Period"  shall  mean  the  period  commencing  on the  date  of  termination  of
employment  (but only  following a Change in Control) and ending  twelve  months
thereafter.

     (3) Geographic  Scope. The restrictions on competition and solicitation set
forth in this Section D shall apply to the forty-eight  contiguous states of the
United States of America.

     (4) Providing Copy of Agreement.  Employee agrees to provide a copy of this
Agreement to any person or entity with whom he interviews that is in competition
with the Company during the Noncompetition Period.

     (5) Obligations Survive.  Employee's obligations under this Section D shall
survive any termination of employment with the Company.

     (6) Payment  for  Noncompetition.  In addition to the  payments to Employee
provided by Section B, Employee shall be paid for not competing with the Company
as above provided his Total Compensation in effect at the time of termination of
employment  for a period of one year,  such payment to be made in equal  monthly
installments during the Noncompetition  Period with no option on Employee's part
to receive a lump sum payment.

     (7)  Company's  Right to Obtain an  Injunction;  Other  Remedies.  Employee
acknowledges  that the Company  will have no adequate  means of  protecting  its
rights  under  Sections C  and D of this  Agreement  other than by  securing  an
injunction. Accordingly, Employee agrees that the Company is entitled to enforce
this Agreement by obtaining a preliminary and permanent injunction and any other
appropriate  equitable relief in any court of competent  jurisdiction.  Employee
acknowledges  that the  Company's  recovery  of damages  will not be an adequate
means to redress a breach of this Agreement. Nothing contained in this Section D
shall prohibit the Company from obtaining any  appropriate  remedies in addition
to injunctive relief,  including recovery of damages.  All benefits and payments
under  Sections  B and D of this  Agreement  shall be  forfeitable  and shall be
discontinued in the event Employee  breaches or fails to perform his obligations
under  Sections C and D of this  Agreement,  and all benefits and payments under
this Agreement shall immediately cease from and after the date of such breach or
failure of performance.

     E. Term of Agreement. The term of this Agreement shall commence immediately
upon the date hereof and shall continue until the third  anniversary of the date
hereof, unless terminated earlier (the "Term"); provided,  however, that on each
anniversary date of this Agreement,  the Term shall be extended for one year (so
that on each  anniversary  date the Term will be three years) unless at least 60
days prior to any such  anniversary  date either party gives to the other notice
in writing of non-renewal.

     F. General Provisions.

     (1) Entire  Agreement.  This  Agreement  contains the entire  understanding
between the parties relating to the subject matter hereof and supersedes any and
all prior agreements and discussions  between the Company and Employee  relating
to the subject matter hereof.

     (2)  Assignability.  Neither  this  Agreement  nor any  right  or  interest
hereunder  shall  be  assignable  by  Employee,   his   beneficiaries  or  legal
representatives, without the Company's prior written consent; provided, however,
that nothing shall  preclude  (i) Employee  from  designating  a beneficiary  to
receive any benefit  payable  hereunder upon his death,  or (ii) the  executors,
administrators  or other  legal  representatives  of Employee or his estate from
assigning any rights hereunder to the person or persons entitled thereunto.

     (3) Binding  Agreement.  This Agreement shall be binding upon, and inure to
the benefit of, Employee and the Company and permitted successors and assigns.

     (4) Amendment of Agreement.  This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.

     (5) Insurance. The Company, at its discretion, may apply for and procure in
its own name and for its own benefit,  life  insurance on Employee in any amount
or amounts  considered  advisable;  and Employee  shall have no right,  title or
interest therein.  Employee agrees to submit to any medical or other examination
and execute and deliver any applications or other  instruments in writing as may
be reasonably necessary to obtain such insurance.

     (6)  Severability.  If any provision  contained in this Agreement shall for
any  reason be held  invalid,  illegal or  unenforceable  in any  respect,  such
invalidity,  illegality or unenforceability shall not affect any other provision
of this  Agreement,  but this  Agreement  shall be construed as if such invalid,
illegal or unenforceable  provision had never been contained  herein. If a court
determines that this Agreement or any covenant contained herein is unreasonable,
void or unenforceable, for any reason whatsoever, then in such event the parties
hereto agree that the duration,  geographical or other limitation imposed herein
should be such as the court, or jury, as the case may be,  determines to be fair
and reasonable,  it being the intent of each of the parties hereto to be subject
to an agreement that is necessary for the protection of the legitimate  interest
of the Company  and its  successors  or assigns and that is not unduly  harsh in
curtailing Employee's legitimate rights.

     (7)  Governing  Law.  This  Agreement  shall be governed  and  construed in
accordance with the laws of the State of North Carolina.

     (8) Expenses in Enforcing Agreement.  If there is a dispute concerning this
Agreement,  all reasonable expenses (including,  without limitation,  legal fees
and expenses)  incurred by Employee in connection  with,  or in  prosecuting  or
defending,  any claim or controversy arising out of or related to this Agreement
shall be paid by the Company.

     (9)  Dispute  Concerning  Termination.  If there is a dispute  between  the
Company and Employee  following a Change of Control  concerning  termination  of
this  Agreement  by the Company for Cause or  termination  of this  Agreement by
Employee for Good Reason or  termination  by Employee  during the Window Period,
the Company shall continue to pay to Employee his Total  Compensation  in effect
at the time the  dispute  arises  until the date on which the dispute is finally
resolved,  either by  mutual  written  agreement  of the  parties  or by a final
judgment,  order or decree of an arbitrator or a court of competent jurisdiction
(which is not appealable or with respect to which the time for appeal  therefrom
has expired and no appeal has been  perfected).  Amounts paid under this section
are in addition to all other  amounts due under this  Agreement and shall not be
offset against or reduce any other amounts due under this Agreement.

     (10)  Mitigation.  The Company  agrees that upon  termination of Employee's
employment following or in contemplation of a Change of Control, Employee is not
required to seek other employment or to attempt in any way to reduce any amounts
payable  pursuant  to this  Agreement,  and the amount of any payment or benefit
provided for in this Agreement shall not be reduced by any  compensation  earned
by Employee  as the result of  employment  by another  employer,  by  retirement
benefits,  be offset  against  any amount  claimed to be owed by Employee to the
Company, or otherwise, except as expressly provided to the contrary herein.

     (11)  Arbitration.  Any  controversy or claim arising out of or relating to
this  Agreement  or  the  validity,  interpretation,  enforceability  or  breach
thereof,  which is not settled by agreement among the parties,  shall be settled
by arbitration in Greensboro,  North  Carolina,  in accordance with the Rules of
the American  Arbitration  Association,  and judgment upon the award rendered in
such arbitration may be entered in any court having  jurisdiction.  All expenses
(including, without limitation, legal fees and expenses) incurred by Employee in
connection  with,  or in  prosecuting  or  defending,  any claim or  controversy
arising out of or relating to this Agreement following a Change of Control shall
be paid by the Company.


IN WITNESS WHEREOF,  the parties have duly executed this Agreement as of the day
and year first above written.

                                            CULP, INC.


                                            By:_________________________________



                                            ______________________________(SEAL)

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