Exhibit 10.18**EMPLOYMENT AND NON-SOLICITATION AGREEMENT**     **THIS EMPLOYMENT AND NON-SOLICITATION AGREEMENT**(“Agreement”), dated as of January 29, 2007, isby and between DELTA APPAREL, INC., a Georgia corporation (“Company”), and David R. Palmer, a SouthCarolina resident (“Executive”).     NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and other good andvaluable consideration, the receipt and sufficiency of which are hereby acknowledged, the partiesagree as follows:     1. Employment. Executive agrees to continue Executive’s employment with the Company,and the Company agrees to employ Executive, on the terms and conditions set forth in thisAgreement. This Agreement shall replace and supersede the Prior Agreement, the term of which shallend upon the signing of this Agreement. Executive agrees during the term of this Agreement todevote substantially all of his business time, efforts, skills and abilities to the performance ofhis duties to the Company and to the furtherance of the Company’s business.     Executive’s initial job title will be Vice President of Business Planning and CompanyAssistant Treasurer and his duties will be those as are designated by the Chief Executive Officerof the Company.     2. Compensation.          (a) Base Salary. During the term of Executive’s employment with the Company pursuantto this Agreement, the Company shall pay to Executive as compensation for his services an annualbase salary of not less than $150,000.00 (“Base Salary”). Executive’s Base Salary will be payablein arrears in accordance with the Company’s normal payroll procedures and will be reviewed annuallyand subject to upward adjustment at the discretion of the President and CEO which may require theapproval of the Compensation Committee of the Company’s Board of Directors.          (b) Incentive Bonus. During the term of Executive’s employment with the Companypursuant to this Agreement, Executive shall be entitled to participate in the Company’s Short-TermIncentive Compensation Plan as in effect from time to time. Any cash compensation payable underthis paragraph shall be referred to as “Incentive Compensation” in this Agreement.          (c) Executive Fringe Benefits. During the term of Executive’s employment with theCompany pursuant to this Agreement, Executive shall be entitled to receive such executive fringebenefits as are provided to the executives in comparable positions under any of the Company’s plansand/or programs in effect from time to time for which Executive is eligible to participate and toreceive such other benefits as are customarily available to executives of the Company, including,without limitation, vacations and life, medical and disability insurance.
 

 
          (d) Tax Withholding. The Company shall have the right to deduct from any compensationpayable to Executive under this Agreement social security (FICA) taxes and all federal, state,municipal, foreign or other taxes or charges as may now be in effect or that may hereafter beenacted or required.          (e) Expense Reimbursements. The Company shall pay or reimburse Executive for allreasonable business expenses incurred or paid by Executive in the course of performing his dutieshereunder, including, but not limited to, reasonable travel expenses for Executive. As a conditionto such payment or reimbursement, however, Executive shall maintain and provide to the Companyreasonable documentation and receipts for such expenses.     3. Term. Unless sooner terminated pursuant to Section 4 of this Agreement, andsubject to the provisions of Section 5 hereof, the term of this Agreement (the “Term”) shallcommence as of the date hereof and shall continue until December 30, 2009.     4. Termination. Notwithstanding the provisions of Section 3 hereof, but subject tothe provisions of Section 5 hereof, Executive’s employment under this Agreement shall terminate asfollows:          (a) Death. Executive’s employment shall terminate upon the death of Executive;provided, however, that the Company shall continue to pay (in accordance with its normal payrollprocedures) the Base Salary to Executive’s estate for a period of six (6) months after the date ofExecutive’s death if Executive is employed by the Company on date of his death.          (b) Termination for Cause. The Company may terminate Executive’s employment at anytime for “Cause” (as hereinafter defined) by delivering a written termination notice to Executive.For purposes of this Agreement, “Cause” shall mean any of the following:     (i) fraud; (ii) embezzlement; (iii) Executive’s commission of a felony; (iv)the willful or continued failure or refusal by Executive to perform and dischargeExecutive’s duties, responsibilities and obligations under this Agreement; (v) anyact of moral turpitude or willful misconduct by Executive intended to result inpersonal enrichment of Executive at the expense of the Company, or any of itsaffiliates or which has a material adverse impact on the business or reputation ofthe Company or any of its affiliates (such determination to be made by the Presidentand CEO in his reasonable judgment); (vi) gross negligence or intentional misconductresulting in damage to the property, reputation or business of the Company; (vii)the ineligibility ofExecutive to perform Executive’s duties because of a ruling,directive or other action by any agency of the United States or any state of theUnited States having regulatory authority over the Company; or (viii) Executive’sfailure to correct or cure any material breach of or default under this Agreementwithin ten (10) days after receiving written notice of such breach or default fromthe Company.
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          (c) Termination Without Cause. The Company may terminate Executive’s employment atany time for any or no reason by delivering a written termination notice to Executive.          (d) Termination by Executive. Executive may terminate his employment at any time bydelivering sixty (60) days prior written notice to the Company; provided, however, that the terms,conditions and benefits specified in Section 5 hereof shall apply or be payable to Executive onlyif such termination occurs as a result of a material breach by the Company of any provision of thisAgreement which breach is not cured within ten (10) days after the Chief Executive Officer of theCompany receives from Executive a written notice detailing such breach.          (e) Termination Following Disability. In the event Executive becomes “disabled” (asdefined below), the Company may terminate Executive’s employment by delivering a writtentermination notice to Executive. Notwithstanding the foregoing, Executive shall continue toreceive his full Base Salary and benefits to which he is entitled under this Agreement for a periodof six (6) months after the effective date of such termination. For purposes of this section, theExecutive shall be considered disabled if the Executive (i) is unable to engage in any substantialgainful activity by reason of any medically determinable physical or mental impairment which can beexpected to result in death or can be expected to last for a continuous period of not less than 12months, or (ii) is, by reason of any medically determinable physical or mental impairment which canbe expected to result in death or can be expected to last for a continuous period of not less than12 months, receiving income replacement benefits for a period of not less than three (3) monthsunder the Company’s disability insurance policy and/or salary continuation policy as in effect onthe date of such disability.          (f) Payments. Subject to any limitations under Section 409A of the Internal RevenueCode of 1986, as amended (“Code”), and related Treasury Regulations, following any expiration ortermination of this Agreement or Executive’s employment hereunder, and in addition to (but not induplication of) any amounts owed pursuant to Section 5 hereof, the Company shall pay to Executiveall amounts earned by Executive hereunder prior to the date of such expiration or termination.          (g) Non-Disparagement. Executive agrees that during and following the termination ofhis employment he will not publicly (or in a manner he reasonably should have expected to be madepublic) disparage or otherwise make negative comments regarding the Company, its employees or itsaffiliates, provided, however, that the foregoing shall in no way restrict the Executive from ingood faith reporting any concerns that he may have to (i) any authority within the Companydesignated to receive complaints or concerns from employees, including, without limitation, theCompany’s Board of Directors or a committee thereof, or (ii) any regulator or other governmentalauthority with supervisory responsibility for the Company (including, without limitation, theSecurities and Exchange Commission) or the Company’s independent auditors.     5. Certain Termination Benefits. In the event that:
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     (i) the provisions of Section 6 do not apply;     (ii) either the Company terminates Executive’s employment without Cause pursuant toSection 4(c) or Executive terminates his employment pursuant to Section 4(d) as aresult of an uncured material breach by the Company of any provision of this Agreement; and     (iii) the Executive executes and delivers the release contemplated in Section (f)below,     then in such case the Company will provide Executive the benefits described insubsection (a) below and, if and to the extent that Executive is eligible to participate insuch plans, subsections (b) through (c) below.          (a) Base Salary and Incentive Compensation. The Company shall pay to Executive (i)his Base Salary (as in effect as of the date of his termination) and (ii) Incentive Compensation(in an aggregate amount equal to the applicable portion of the cash Incentive Compensation receivedby the Executive for the most recent fiscal year prior to his termination) as follows:       **Years of** **Base**   **Payout****Service** **Salary** **Incentive Compensation** **Period**Less than one 3 months 25% of the Short TermIncentive Plan awardfor the most recentfull fiscal year priorto termination 3 monthsOne but less