Termination of Stock Transfer Restrictions and Right of First Refusal Agreement between E. Erwin Maddrey, II and Delta Woodside Industries, Inc.

Summary

This agreement, dated June 22, 2000, is between E. Erwin Maddrey, II and Delta Woodside Industries, Inc. It terminates a prior agreement that restricted Maddrey's ability to transfer company stock and gave the company a right of first refusal upon his death. Maddrey may elect to have a $10 million life insurance policy transferred to him, assuming future premium payments, or the company will cancel the policy. After the specified distribution date, both parties are released from further obligations under the original agreement, unless Maddrey dies before that date.

EX-10.5.1 12 0012.txt 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". ---------- 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. 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. - -------------------------- E. Erwin Maddrey, II By: /s/ Jane H. Greer -------------------------------------- Jane H. Greer, Vice President 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 -------------------------- E. Erwin Maddrey, II