STATE OF SOUTH CAROLINA ) TERMINATION OF
) STOCK TRANSFER RESTRICTIONS
COUNTY OF GREENVILLE ) AND RIGHT OF FIRST REFUSAL
This Termination of Stock Transfer Restrictions and Right of First Refusal
("Termination Agreement") is made as of this 22nd day of June, 2000 by and
between E. Erwin Maddrey, II (hereinafter referred to as "Maddrey") and DELTA
WOODSIDE INDUSTRIES, INC., a South Carolina corporation (hereinafter referred to
as the "Corporation").
WHEREAS, Maddrey and the Corporation entered into that certain Stock
Transfer Restrictions and Right of First Refusal agreement on February 7, 1991
(the "Agreement") pursuant to which the Corporation acquired a right of first
refusal on any shares in the Corporation held by Maddrey at his death and in
consideration therefor, the Corporation purchased a $10,000,000.00 life
insurance policy or policies on the life of Maddrey, the proceeds from which are
payable to beneficiaries specified by Maddrey (collectively, the "Life Insurance
Policy"); and
WHEREAS, Maddrey and the Corporation determine that it is in their
respective best interests to terminate the Agreement as provided herein,
NOW THEREFORE, in consideration of the foregoing and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
Maddrey and the Corporation agree as follows:
1. The Corporation hereby provides to Maddrey the election to request
the transfer to Maddrey of the Life Insurance Policy, in connection with which
transfer Maddrey would be responsible for the payment of the future premiums
therefor and would pay to the Corporation the portion of the last paid premium
on the Life Insurance Policy that is attributable to any period after the
Distribution Date (as defined below) (such portion, the "Prepaid Premium").
2. Such election by Maddrey shall be made, if at all, in writing
received by the Corporation no later than five (5) business days prior to the
Duck Head distribution date and Delta Apparel distribution date (together the
"Distribution Date") as those terms are defined in the Information Statements of
Duck Head Apparel Company, Inc. and Delta Apparel, Inc. regarding the
distribution of Duck Head Apparel Company, Inc. stock and Delta Apparel, Inc.
common stock to the shareholders of the Corporation. An election form is
attached hereto as Exhibit"A".
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3. In the event that Maddrey so elects the transfer of the Life
Insurance Policy and assumption of the premium payments with respect thereto,
the Corporation shall effect such transfer as of the Distribution Date, subject
to the receipt by the Corporation of payment by Maddrey of the Prepaid Premium.
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4. Whether or not Maddrey elects the transfer of the Life Insurance
Policy, the Agreement shall automatically terminate as of the Distribution Date
and shall thereafter be of no further force and effect, and, other than as
specifically provided herein, from and after the Distribution Date Maddrey and
the Corporation mutually release and discharge each other from any and all
further obligations and liability arising out of or relating to the Agreement.
5. Maddrey acknowledges that, if he does not elect the transfer of the
Life Insurance Policy, as provided in Section 2 above, and pay the Prepaid
Premium, the Corporation shall cancel the Life Insurance Policy as of the
Distribution Date. Maddrey agrees that, in the event of such cancellation, the
Corporation shall be entitled to any refund of any premium previously paid on
the Life Insurance Policy.
6. Notwithstanding any other provision of this Termination Agreement,
the parties agree that, if Maddrey dies prior to the Distribution Date, this
Termination Agreement shall immediately cease upon such death to have any effect
and the right of the parties shall continue to be governed by the Agreement,
which in that circumstance shall continue in full force and effect.
7. This Termination Agreement shall be binding upon and shall inure to
the benefit of each of the parties hereto and his or its heirs, personal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Termination
Agreement as of the date first above written.
MADDREY THE CORPORATION
/s/ E.Erwin Maddrey, II DELTA WOODSIDE INDUSTRIES, INC.
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E. Erwin Maddrey, II
By: /s/ Jane H. Greer
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Jane H. Greer, Vice President
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EXHIBIT A
ELECTION TO REQUEST TRANSFER OF
LIFE INSURANCE POLICY
Pursuant to that certain Termination of Stock Transfer Restrictions and
Right of First Refusal by and between E. Erwin Maddrey, II, and Delta Woodside
Industries, Inc. (the "corporation") dated June 22, 2000 (the "Termination
Agreement"), I, E. Erwin Maddrey, II, hereby request that the $10,000,000.00
aggregate life insurance policy or policies on my life purchased by the
Corporation be transferred to me and, in connection therewith, I agree to be
responsible for the payment of the future premiums therefor and further agree to
reimburse the Corporation for the portion of the last paid premium on such life
insurance policy(ies) that is attributable to any period after the Distribution
Date, as that term is defined in the Termination Agreement. I acknowledge that
this Election is subject to the terms of the Termination Agreement.
Dated: June 22, 2000
/s/ E.Erwin Maddrey, II
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E. Erwin Maddrey, II
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