Exhibit 10.31


 


AGREEMENT OF CANCELLATION OF

INCENTIVE STOCK OPTIONS


 


This Agreement of Cancellation
of Incentive Stock Options (“Cancellation Agreement”) is entered into by and between Golden Enterprises, Inc., a Delaware
corporation (the “Company”), and Mark W. McCutcheon (the “Employee”) effective this 18th day of July, 2016.


 


RECITALS


 


A.           On
April 9, 2015, the Company and the Employee entered into an Incentive Stock Option Agreement (“Option Agreement”) whereby
the Company granted to the Employee the right and option to purchase, pursuant to the terms and conditions of the Option Agreement
and the 2014 Long Term Incentive Plan (“Plan”), an aggregate of 50,000 shares of the Company’s Common Stock at
a price of $3.84 per share (the “Company Stock Options”).


 


B.           The
Company has entered into an Agreement and Plan of Merger (“Merger Agreement”) as of July 18, 2016 with Utz Quality
Foods, Inc. (“Parent”) and Westminister Sub, Inc., a wholly-owned subsidiary of Parent (“Merger Sub”) whereby
Merger Sub will merge with and into the Company (the “Merger”) and the separate corporate existence of Merger Sub will
cease and the Company will continue its corporate existence as the surviving corporation (the “Surviving Corporation”).


 


C.           Under
the terms of the Merger Agreement, the Company is required to take all requisite action so that the Option Agreement and the Company
Stock Options, whether or not then vested or exercisable, are cancelled and converted into the right of Employee to receive from
Parent and the Surviving Corporation an amount in cash, without interest, equal to the product of (x) the aggregate number of shares
of Company Common Stock subject to such Company Stock Option, multiplied by (y) the excess, if any, of the Merger Consideration,
as defined in the Merger Agreement, over the per share exercise price of the Company Stock Options, less any Taxes required to
be withheld in accordance with the Merger Agreement.


 


D.           In
accordance therewith, the Company and Employee desire to cancel the Option Agreement and the Company Stock Options and to convert
the same into the right of Employee to receive from Parent and the Surviving Corporation the Stock Option Cancellation Price as
hereinafter defined.


 


NOW, THEREFORE, it
is agreed as follows:


 


1.           The
above Recitals are true and correct.


 


2.           At
the Effective Time of the Merger, as defined in the Merger Agreement, the Option Agreement and all Company Stock Options granted
thereunder and under the Plan to Employee, whether or not then vested or exercisable, are hereby cancelled and converted into the
right of Employee to receive from Parent and the Surviving Corporation pursuant to the terms of the Merger Agreement, an amount
in cash, without interest, equal to the product of (x) the aggregate number of shares of Company Common Stock subject to such Company
Stock Options, multiplied by (y) the excess, if any, of the Merger Consideration, as defined in the Merger Agreement, over the
per share exercise price of such Company Stock Options (the “Stock Option Cancellation Price”), less any Taxes required
to be withheld in accordance with the Merger Agreement. For example, if the Merger under the Merger Agreement is consummated, the
Stock Option Cancellation Price will be $408,000.00.


 




     


     


    

  


3.           The
Employee shall look solely to the Parent and the Surviving Corporation for payment of the Stock Option Cancellation Price.


 


4.           The
Parent and the Surviving Corporation shall pay to the Employee the Stock Option Cancellation Price, less any Taxes required to
be withheld in accordance with the Merger Agreement, as promptly as reasonably practicable after the Effective Time, as defined
in the Merger Agreement. The Employee understands and agrees that the Stock Option Cancellation Price shall be subject to ordinary
income taxes, and agrees to forego any favorable tax treatment which may have been anticipated or described in any Option Agreement.


 


5.           Employee
agrees that the payments Employee receives pursuant to this Cancellation Agreement are in full satisfaction of any rights Employee
may have under the Option Agreement and the Plan. Employee therefore releases and forever discharges the Company, the Parent,
the Merger Sub and their respective past and present parents, subsidiaries, divisions and related and affiliated organizations,
and their respective officers, shareholders, directors, attorneys, agents, servants and employees and their respective successors,
heirs and assigns from any causes of action, claims, debts, accounts, controversies, sums of money, contracts, promises, agreements,
judgments, demands, and liabilities of any kind or nature whatsoever in law, in equity, or otherwise, whether known or unknown,
asserted or unasserted, relating in any way to Employee’s rights under the Option Agreement and the Plan.


 


6.           Employee
hereby represents and acknowledges that Employee has had the opportunity to consult with an attorney of his/her choosing before
signing this Cancellation Agreement; and the consideration provided Employee under this Cancellation Agreement is sufficient to
support the releases provided by him/her under this Cancellation Agreement and is greater than Employee would be entitled to receive
if he/she did not sign this Cancellation Agreement. Employee understands that Employer regards the representations made by him/her
as material and that Employer is relying on these representations in entering into this Cancellation Agreement


 


7.           The
terms of this Cancellation Agreement shall be interpreted under and consistently with the laws of Alabama and federal law and to
the fullest extent permitted by law the federal and/or state courts within Alabama shall have exclusive jurisdiction over any claims
arising out of this Cancellation Agreement.


 


8.           If
any court of competent jurisdiction invalidates any part of this Cancellation Agreement, then the court making such determination
shall have the right to modify this Cancellation Agreement and in its reduced form this Cancellation Agreement shall be enforceable
to the fullest extent permitted by law. If any provision or part of a provision of this Cancellation Agreement is held to be invalid
or unenforceable, such provision shall be severed from this Cancellation Agreement and the remaining provisions shall remain in
full force and effect. This paragraph shall be interpreted to give the fullest possible effect to Employee’s release of claims.


 




     


     


    

  


9.          This
Cancellation Agreement states the whole agreement between the parties as to its terms and supersedes all prior or contemporaneous
agreements, offers, representations, negotiations or discussions with respect to such subject matter. Any changes to this Cancellation
Agreement must be in writing and signed by both parties.


 


10.         This
Cancellation Agreement is conditioned upon and subject to the terms of and the implementation and closing of the Merger Agreement.
In the event the Merger Agreement is not implemented and closed, this Cancellation Agreement shall be null and void and the Company
Stock Options shall continue to be fully effective.


 


	 	GOLDEN ENTERPRISES, INC.
	 	 	 
	 	By:	/s/Mark W. McCutcheon
	 	 	Mark W. McCutcheon
	 	 	Its Chairman


 


	ATTEST:	 
	 	 	 
	By:	/s/Patty R. Townsend	 
	 	Patty R. Townsend	 
	 	Its Secretary	 


 


	 	/s/Mark W. McCutcheon
	 	EMPLOYEE