DELTA APPAREL, 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
______________, 2000 by and between Delta Woodside Industries, Inc. ("DWI"),
Delta Apparel, Inc. ("Delta Apparel") and the undersigned individual
("Participant").
WHEREAS, the Participant currently holds unexercised 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 and DH Apparel Company, Inc. ("Duck Head");
WHEREAS, to facilitate the Reorganization, DWI and Delta Apparel 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.
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
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.
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
TO REORGANIZATION.
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:
The first date on which Delta Apparel is in default of any Financial
Covenant and has not cured such default by the expiration of the applicable
period for cure, if any, for such a default.
At any time, "Financial Covenant" shall mean any financial covenant that is
established by and set forth in the written terms and conditions governing Delta
Apparel's primary revolving debt facility in existence at such time. The term
"Financial Covenant" is intended to include financial covenants of the type
customarily included in revolving credit facilities, such as covenants based on
leverage ratios, fixed charge coverage ratios, minimum corporate net worth and
the like.
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 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"); 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 [___________________, 2000]. Any such
election may be withdrawn or amended at any time prior to [___________________,
2000] but shall be binding upon the Participant and irrevocable after such date.
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 Delta Woodside
Group Deferred Compensation Plan for Key Managers as amended and restated
effective on or about the Reorganization Date.
4. RELEASE OF OTHER DWI COMPANIES FROM LIABILITY FOR DEFERRED COMPENSATION
BENEFITS. Participant releases any and all natural persons and legal entities
other than Delta Apparel 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). Delta Apparel agrees to assume all such liabilities.
Participant understands that this release relieves DWI and all other DWI
subsidiaries (other than Delta Apparel) of their current joint and several
obligations to pay all or a portion of the Participant's benefits accrued under
the Plan.
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.
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 entire Agreement, entitled to enforce the
terms of this Agreement against any party signing the Agreement.
2. REVIEW OF INFORMATION STATEMENTS DESCRIBING THE REORGANIZATION AND ITS
EFFECTS. Participant acknowledges that (i) Participant has received and reviewed
copies of the Information Statements of Delta Apparel, Inc. and DH Apparel
Company, Inc. respecting the Reorganization 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 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 APPAREL, INC.
By: By:
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Name: Name:
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Title: Title:
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PARTICIPANT
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Name:
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