DELTA WOODSIDE INDUSTRIES, INC. & DELTA MILLS, INC.
AMENDMENT OF CERTAIN RIGHTS AND BENEFITS
RELATING TO STOCK OPTIONS AND DEFERRED COMPENSATION
This Amendment of Certain Rights and Benefits Relating to Stock Options and
Deferred Compensation (this "Agreement") is entered into as of the ____ day of
June, 2000 by and between Delta Woodside Industries, Inc. ("DWI"), Delta Mills,
Inc. ("Delta Mills") and the undersigned individual ("Participant").
WHEREAS, the Participant currently holds options (the "Stock Options") to
purchase the common stock of DWI and/or is entitled to accrued but unpaid
benefits under the Delta Woodside Group Deferred Compensation Plan for Key
Managers (the "Deferred Compensation");
WHEREAS, DWI proposes to consummate a corporate reorganization (the
"Reorganization") whereby DWI will distribute to its shareholders all of the
stock of Delta Apparel, Inc. ("Delta Apparel") and Duck Head Apparel Company,
Inc. ("Duck Head");
WHEREAS, to facilitate the Reorganization, DWI and Delta Mills desire to have
the Participant agree to certain modifications of the terms and conditions
governing the Stock Options and the Deferred Compensation;
WHEREAS Participant hereby agrees to such modifications in return for new rights
with respect to the Stock Options and Deferred Compensation to which the
Participant was not previously entitled;
NOW THEREFORE, in consideration of the mutual covenants and representations made
herein, the parties agree as follows:
A. AMENDMENT OF STOCK OPTIONS.
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1. VESTING AND EXERCISE. Any and all of the Stock Options that were not fully
vested and exercisable immediately prior to the date of this Agreement are fully
vested and exercisable as of the date of this Agreement.
2. NO ADJUSTMENT FOR REORGANIZATION; LOSS OF ABILITY TO RECEIVE DELTA APPAREL
AND DUCK HEAD STOCK. Notwithstanding any stock option grant letter or agreement,
the terms of the Delta Woodside Industries, Inc. Stock Option Plan, or the terms
of any other agreement or understanding, no adjustment shall be made on account
of the Reorganization to the stock and other property that the Participant is
entitled to receive upon the exercise of a Stock Option. Therefore, if the
Participant exercises a Stock Option after the record date of the distribution
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by DWI to its shareholders of the stock of Delta Apparel and Duck Head (the
"Record Date"), the Participant will not be entitled to receive any shares of
the common stock of Delta Apparel or Duck Head and shall be entitled to receive
only the same number of shares of common stock of DWI that the Participant would
have received if the Participant had exercised the Stock Option prior to the
Reorganization.
Assuming consummation of the Reorganization, if the Participant exercises a
Stock Option on or prior to the Record Date, the Participant will be entitled to
receive a distribution of Delta Apparel common stock, Duck Head common stock
and/or cash for fractional shares with respect to the shares of DWI common stock
acquired pursuant to such exercise on the same terms and conditions applicable
to all other persons holding DWI common stock on the Record Date.
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3. OTHER TERMS REMAIN IN EFFECT. Except to the extent expressly amended by this
Agreement, the Stock Options shall remain subject to all of the terms and
conditions applicable to them immediately prior to the execution of this
Agreement.
B. AMENDMENT OF TERMS APPLICABLE TO DEFERRED COMPENSATION BENEFITS ACCRUED PRIOR
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TO REORGANIZATION
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1. ADDITIONAL TRIGGER EVENT. For purposes of the Delta Woodside Group Deferred
Compensation Plan for Key Managers (the "Plan"), the following described date
shall constitute a Trigger Event under the Plan with respect to Participant's
benefits accrued under the Plan prior to the effective date (and not the record
date) of the distribution by DWI to its shareholders of the stock of Delta
Apparel and Duck Head (the "Reorganization Date"):
The last day of a fiscal quarter of Delta Mills if on such date, and on the
last day of each of the three immediately preceding fiscal quarters, Available
Cash is and was, as the case may be, less than 150% of the Aggregate Deferred
Compensation Liability.
"Available Cash" means Delta Mills' cash, cash equivalents and readily
marketable securities plus any funds available to Delta Mills pursuant to any
and all existing credit facilities, less accrued interest (not including any
amounts that represent Interest Equivalent (as defined in the Plan) under the
Plan).
"Aggregate Deferred Compensation Liability" means the sum of the Lump Sum
Deferral Account (as defined in the Plan) and Installment Deferral Account (as
defined in the Plan) balances for all Plan participants, as adjusted in
accordance with Article III of the Plan as of the Adjustment Date (as defined in
the Plan) occurring on, or the last Adjustment Date occurring prior to, the date
of the Trigger Event.
2. ONE-TIME CASH OUT ELECTION. Notwithstanding the terms of the Plan,
Participant may elect to receive a lump sum payment of all or a portion of the
Participant's vested benefits under the Plan accrued as of the Reorganization
Date; provided that (i) such election must be made in writing on a form provided
by the Plan administrative committee and (ii) such election form must be
submitted to the administrative committee no later than June 12, 2000. Such
lump-sum payment shall be made to the Participant as soon as reasonably feasible
after the Reorganization Date.
3. ELECTION TO CHANGE PAYMENT METHOD. Notwithstanding the terms of the Plan,
Participant may elect to change his or her method-of-payment election with
respect to all or a portion of the Participant's benefits accrued under the Plan
prior to the Reorganization Date and the methods of payment among which the
Participant may choose shall include the lump sum, installment payment and
level-payment installment payment options as described in the Plan as amended
and restated effective on or about the Reorganization Date. I have reviewed a
copy of the Plan, as amended and restated. Such election must also be made on a
form provided by the Plan administrative committee and submitted no later than
June 12, 2000.
4. RELEASE OF OTHER DWI COMPANIES FROM LIABILITY FOR DEFERRED COMPENSATION
BENEFITS. Participant releases any and all natural persons and legal entities
other than DWI and Delta Mills from any and all obligations and liabilities that
currently exist or may arise in connection with Participant's benefits accrued
prior to the Reorganization Date under the Plan (whether under its terms as
currently amended or as amended from time to time at any time prior to the date
of this Agreement). DWI and Delta Mills agree to assume all such liabilities.
Participant understands that this release relieves all other DWI subsidiaries
(other than Delta Mills) of their current joint and several obligations to pay
all or a portion of the Participant's benefits accrued under the Plan.
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5. OTHER TERMS REMAIN IN EFFECT. Except as such terms and conditions are
expressly amended by this Agreement, Participant's benefits accrued under the
Plan shall remain subject to all of the terms and conditions applicable to such
benefits immediately prior to the execution of this Agreement.
C. OTHER TERMS.
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1. THIRD-PARTY BENEFICIARIES. The parties to this Agreement specifically intend
for any and all beneficiaries of the release set forth in Section B.4. to be
third-party beneficiaries of this Agreement, entitled to enforce the terms of
this Agreement against any party signing the Agreement.
2. REVIEW OF INFORMATION REGARDING THE REORGANIZATION AND ITS EFFECTS.
Participant acknowledges that (i) Participant has had the opportunity to review
recent financial statements of Delta Woodside Industries, Inc. reflecting the
effects of the spin-off of Delta Apparel, Inc. and Duck Head Apparel Company,
Inc. and (ii) Participant has had the opportunity to ask the management of Delta
Woodside Industries, Inc. and its subsidiaries for any additional information
that Participant desired in order to make a fully informed decision with respect
to signing this Agreement, exercising Stock Options and making the various
elections permitted by this Agreement with respect to Participant's benefits
under the Plan.
3. NO REPRESENTATIONS REGARDING TAX CONSEQUENCES. Neither DWI nor Delta Mills
nor Delta Apparel nor Duck Head nor any other subsidiary or affiliate of DWI
make any representation as to the tax consequences to the Participant of any
decision the Participant may make regarding the exercise of any Stock Options or
making any of the elections permitted by this Agreement with respect to
Participant's benefits under the Plan. The Participant understands that he or
she should consult with the Participant's personal tax advisor if the
Participant wishes to receive any assurances regarding such tax consequences.
4. ENTIRE AGREEMENT; AMENDMENT. This Agreement is the entire agreement between
the parties with respect to the subject matter addressed herein, and supersedes
any prior or contemporaneous oral or written agreements or understandings. This
Agreement may not be amended except by written amendment duly executed by the
party against whom such amendment is to be enforced.
5. GOVERNING LAW. This Agreement shall be governed by the law of South Carolina
without regard to the application of the principles of conflicts of laws.
Executed as of the date first above written.
DELTA WOODSIDE INDUSTRIES, INC. DELTA MILLS, INC.
By:__________________________________ By:_______________________________
Name:________________________________ Name:_____________________________
Title:_______________________________ Title:____________________________
PARTICIPANT
__________________________________
By:_______________________________
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EXHIBIT A
DEFERRED COMPENSATION ELECTION FORM
This form may be used by Participant to make those elections regarding
deferred compensation benefits permitted under Sections B.2 and B.3 of the Delta
Woodside Industries, Inc. & Delta Mills, Inc. Amendment of Certain Rights and
Benefits Relating to Stock Options and Deferred Compensation (the "Amendment").
Participant's Name:_____________________ Date:__________________
1. CASH OUT ELECTION. Mark one option. Fill in any required information. If this
form is returned without any selection being marked, Participant will be deemed
to have elected not to receive any portion of Participant's accrued deferred
compensation benefits under the Delta Woodside Group Deferred Compensation Plan
for Key Managers (the "Plan")
a. _____ I elect to receive $______________ of my vested benefits under the
Plan. [Fill in the desired dollar amount. If the amount specified exceeds
Participant's total vested benefits, Participant will be deemed to have elected
to receive the entire amount of Participant's vested benefits.]
b. _____ I elect to receive _______________% of my vested benefits under
the Plan. [Fill in the desired percentage.]
c. _____ I do not wish to receive any of my vested benefits.
2. ELECTION TO CHANGE PAYMENT METHOD. Mark one option. Fill in any required
information. If this form is returned without any selection being marked,
Participant will be deemed to have elected not to change the form of payment
with respect to any of Participant's benefits.
a. _____ I elect to change the form(s) in which my benefits will ultimately
be payable to me in the event that I receive a distribution on account of
retirement, disability or death. [Fill in percentage of benefits to be paid out
in each form of payment.]
(i) _____% lump sum payment as described in Section 5.1(a)(i) of the
amended and restated Plan.
(ii) _____% installment payments as described in Section
5.1(a)(ii)(A) of the amended and restated Plan.
(iii) _____% level-payment installment payments as described in
Section 5.1(a)(ii)(B) of the amended and restated Plan.
b. _____ I do not wish to change the form(s) of payment that I have
previously selected.
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