Document:

NATIONAL PENN BANCSHARES, INC.
                         ------------------------------

          COMMUNITY NON-EMPLOYEE DIRECTOR SUBSTITUTE STOCK OPTION PLAN
          ------------------------------------------------------------

                        (as assumed, amended and restated
                           effective January 3, 2001)

     1.   Purpose, Assumption, Amendment and Restatement
          ----------------------------------------------

          (a) Community  Independent  Bank, Inc.  ("CIB") adopted the 1996 Stock
Option  Plan for  Non-Employee  Directors  (the  "CIB  Plan").  The CIB Plan was
intended to enhance the ability of CIB to attract,  retain, motivate and provide
additional  incentive to members of CIB's Board of Directors by encouraging them
to invest in shares of CIB's common  stock,  and thereby  acquire a  proprietary
interest in CIB and an increased  personal  interest in CIB's continued  success
and progress, to the mutual benefit of directors, employees and shareholders.

          (b) On January 3, 2001 (the  "Effective  Date"),  CIB merged  with and
into National Penn Bancshares,  Inc. (the "Company"), with the Company surviving
such merger (the "Merger"),  pursuant to an Agreement (the "Agreement")  between
CIB and the Company dated July 23, 2000.

          (c) On the Effective Date, pursuant to the Agreement, each outstanding
share of CIB's common stock was automatically  converted into 0.945 share of the
Company's common stock, without par value (the "Stock").

          (d) Immediately  prior to the Effective Date, there were stock options
outstanding  under the CIB Plan for 6,000 shares of CIB's common  stock,  all of
which became 100% vested and presently exercisable because of the Merger. On the
Effective Date, pursuant to the CIB Plan and the Agreement, each such option was
automatically  converted  into a  substitute  stock  option for Stock,  with the
number of shares  and the per share  exercise  price  adjusted  to  reflect  the
exchange  ratio of 0.945 to 1, and otherwise on the same terms and conditions as
the  converted  CIB stock  option.  As a result,  stock  options 100% vested and
presently exercisable for 5,670 shares of Stock are outstanding.

          (e) This  National  Penn  Bancshares,  Inc.  Community  Non-  Employee
Director  Substitute  Stock  Option Plan (the  "Plan")  reflects  the  Company's
assumption  of the CIB Plan and of the stock options  outstanding  under the CIB
Plan as of the  Effective  Date,  on the terms and  conditions  provided  in the
Agreement, and the Company's determination to delete provisions of the CIB Plan

                                        1

<PAGE>

inapplicable to such outstanding  options.  The Plan amends and restates the CIB
Plan accordingly.

          (f) As  used  herein,  the  term  "Options"  means,  individually  and
collectively,  the substitute  stock options issued pursuant to the CIB Plan and
the Agreement,  exercisable for 5,670 shares of Stock,  subject to adjustment as
provided in Section 2 hereof.

     2.   Total Number of Shares
          ----------------------

          The total  number of shares of Stock that is subject to Options  under
the Plan is 5,670 shares, subject to adjustment in accordance with this Section.
If the shares of Stock shall be changed into or exchanged for a different number
or kind of shares of Stock of the Company or of another corporation  (whether by
reason  of  merger,  consolidation,  recapitalization,  reclassification,  stock
split,  combination of shares or otherwise),  or if the number of such shares of
Stock shall be  increased  through the payment of a stock  dividend,  then there
shall be  substituted  for or added to each share of Stock  subject to an Option
under the Plan and to the maximum  number of shares of Stock that may be subject
to Options  as set forth in this  Section,  the  number and kind of shares  into
which each outstanding share of Stock shall be exchanged,  or to which each such
share shall be  entitled,  as the case may be.  Where  appropriate,  outstanding
Options shall also be amended by the  Committee  (defined in Section 4(a)) as to
Option  Price and other  terms as may be  necessary  to  equitably  reflect  the
foregoing  events.  If there shall be any other  change in the number or kind of
outstanding  shares of Stock,  or any shares into which such  shares  shall have
been  changed,  or for  which  the  Committee  shall,  in its  sole  discretion,
determine that such change  equitably  requires an adjustment in any outstanding
Options,  such  adjustments  shall be made in accordance  with the  Committees's
determination.  Reacquired  shares of the Company's  Stock,  as well as unissued
shares, may be used for the purpose of this Plan.

     3.   No Further Eligible Non-Employee Directors
          ------------------------------------------

          Other than the persons who received  Options on the Effective Date, no
persons are eligible to  participate in the Plan.  Prior to the Effective  Date,
the  persons  eligible  to  participate  in the CIB Plan were  persons  who were
directors  of CIB or an  affiliated  or  subsidiary  corporation,  but  were not
employees of CIB or an affiliated or subsidiary  corporation,  and were selected
by the administrative committee under the CIB Plan.

     4.   Administration of Plan
          ----------------------

          (a) The Plan shall be  administered  by a committee (the  "Committee")
which shall be either the entire Board of Directors (the "Board") or a committee
appointed by the Board composed of

                                        2

<PAGE>

three to six members of the Board who are (i)  "non-employee  directors"  of the
Company  within  the  meaning  of  Rule  16b-3(b)(3)  under  Section  16 of  the
Securities  Exchange Act of 1934 (the "1934 Act"), and (ii) "outside  directors"
of the Company within the meaning of Section 162(m) of the Internal Revenue Code
of 1986, as amended (the "Code").

          (b) The  Committee  shall  adopt  such  rules for the  conduct  of its
business and administration of this Plan as it considers  desirable.  A majority
of the members of the Committee shall constitute a quorum for all purposes.  The
vote or written  consent  of a majority  of the  members of the  Committee  on a
particular matter shall constitute the act of the Committee on such matter.  The
Committee shall have the right to construe the Plan and the Options,  to correct
defects and omissions and to reconcile  inconsistencies  to the extent necessary
to effectuate the Plan and the Options,  and such action shall be final, binding
and  conclusive  upon all parties  concerned.  No member of the Committee or the
Board shall be liable for any act or omission  (whether or not negligent)  taken
or omitted in good faith,  or for the exercise of any  authority  or  discretion
granted in connection with the Plan to a Committee or the Board, or for the acts
or  omissions of any other  members of a Committee or the Board.  Subject to the
numerical  limitations on Committee membership set forth in Section 4(a) hereof,
the Board may at any time appoint additional members of the Committee and may at
any time remove any member of the Committee with or without cause.  Vacancies in
the Committee, however caused, may be filled by the Board if it so desires.

          (c) The Committee  does not have  authority to grant any stock options
in addition to the Options set forth in Section 2 hereof.

     5.   Non-Qualified Stock Options
          ---------------------------

          (a) All Options  issued  pursuant  to the CIB Plan were  Non-Qualified
Stock Options.  No incentive stock options were issued pursuant to the CIB Plan.
References in the Plan to "Options" means only non-qualified stock options.

          (b) The per share  exercise  price of the Stock covered by each Option
(the "Option  Price") was determined by dividing the per share exercise price of
each stock option  outstanding  on the Effective  Date under the CIB Plan by the
exchange ratio (0.945).

          (c)  Options  issued  pursuant  to the CIB Plan  were  issued by stock
option  agreements  substantially in the form set forth in Appendix I to the CIB
Plan  (prior to its  assumption,  amendment  and  restatement  into this  Plan).
Substitute  Options  outstanding  under  this Plan shall be  reflected  by stock
option  agreements  substantially  in the form set forth in  Appendix  I hereto,
which form is hereby incorporated by reference and made a part hereof and

                                        3

<PAGE>

incorporates  by reference the terms and conditions of the original stock option
agreement,  except as changed by the  Agreement,  this Plan or the stock  option
agreement  itself.  The  Options  shall  expire  ten years  after the date their
predecessor  options were granted,  unless terminated earlier under the terms of
the Option.

     6.   Amendment, Supplement, Suspension and Termination
          -------------------------------------------------

          The Board shall have the right at any time,  and from time to time, to
amend or  supplement  this  Plan in any way,  or to  suspend  or  terminate  it,
effective as of such date,  which date may be either  before or after the taking
of such action, as may be specified by the Board;  provided,  however, that such
action  shall not  affect  any  Options.  If not  terminated  by the Board at an
earlier time, then, at such time as all Options  outstanding under the Plan have
either been exercised,  lapsed  unexercised,  or been  terminated,  forfeited or
cancelled as provided herein, the Plan shall terminate.

     7.   Effectiveness of Plan
          ---------------------

          This Plan shall be effective as of January 3, 2001.

     8.   General Conditions
          ------------------

          (a) Nothing  contained in this Plan or any Option granted  pursuant to
this Plan shall  confer upon any director the right to continue as a director of
the Company or any affiliated or subsidiary corporation, or interfere in any way
with the rights of the Company or any  affiliated or subsidiary  corporation  to
remove him as a director.  For purposes of this Plan, service as a member of the
Berks County  Division  Board of  Directors of National  Penn Bank, a subsidiary
corporation, shall constitute service as a director of National Penn Bank.

          (b) The term "subsidiary  corporation" as used in this Plan shall mean
a corporation in which the Company owns, directly or indirectly, shares of stock
representing  fifty  percent  or more of the  outstanding  voting  power  of all
classes of stock of such corporation Plan.

          (c)  References in this Plan to the Code shall be deemed to also refer
to the corresponding provisions of any future United States revenue law.

          (d) The use of the masculine pronoun shall include the feminine gender
whenever appropriate.

                                        4

<PAGE>

                                                                      APPENDIX I
                                                                      ----------

                         NATIONAL PENN BANCSHARES, INC.
                         ------------------------------

          COMMUNITY NON-EMPLOYEE DIRECTOR SUBSTITUTE STOCK OPTION PLAN
          ------------------------------------------------------------

                             STOCK OPTION AGREEMENT
                                       FOR
                           NON-QUALIFIED STOCK OPTION

                                     BETWEEN

                         NATIONAL PENN BANCSHARES, INC.

                                       AND

                    ----------------------------------------
                                 (the Optionee)

                    Date of Grant:
                                    ---------------------------------
                                       [Date of original grant by
                                    Community Independent Bank, Inc.]

                    Number of Shares:                          shares
                                       -----------------------

                    Purchase Price:             $           per share
                                                 ----------

                    Option Expires:
                                     --------------------------------

                                        5

<PAGE>

                      NON-QUALIFIED STOCK OPTION AGREEMENT
                      ------------------------------------

Number of shares subject to option:  _____________________ shares.

     This  Agreement  is  dated  _____________________   between  National  Penn
Bancshares, Inc. (the "Corporation") and _____________________ (the "Optionee").

                                   BACKGROUND:

     1. In 1996, Community Independent Bank, Inc. ("CIB") adopted the 1996 Stock
Option Plan for Non-Employee Directors (the "CIB Plan").

     2. Optionee was granted  options  under the CIB Plan to purchase  shares of
CIB Common Stock pursuant to an agreement dated  _____________________ (the "CIB
Agreement").

     3. Pursuant to an Agreement  between CIB and the Corporation dated July 23,
2000, CIB merged with and into the Corporation on January 3, 2001, resulting in,
among  other  things,  the  Corporation  assuming  the CIB Plan and the  options
outstanding thereunder as of January 3, 2001.

                                   WITNESSETH:

     1.   Grant of Option

          Pursuant to the  provisions  of the  National  Penn  Bancshares,  Inc.
Community  Non-Employee  Director Substitute Stock Option Plan (the "Plan"), the
Corporation  hereby  confirms  that  the  Optionee,  subject  to the  terms  and
conditions of the Plan and subject  further to the terms and  conditions  herein
set  forth,  has  been  granted  the  right  and  option  to  purchase  from the
Corporation all or any part of an aggregate of __________ shares of Common Stock
(without par value) of the  Corporation at the purchase price of $__________ per
share, such option to be exercised as hereinafter provided.

     2.   Terms and Conditions

          It is  understood  and  agreed  that the  option  evidenced  hereby is
subject to the following terms and conditions:

          (a) Expiration Date.  Subject to the provisions of Paragraph 2(d), the
option  evidenced hereby shall expire on  _____________________  [the expiration
date of the original option granted by CIB].

          (b) Exercise of Option. As of January 3, 2001, the Optionee has a 100%
vested interest in the right to exercise the option evidenced hereby.

                                        6

<PAGE>

     This option may be  exercised  in whole or from time to time in part at any
time prior to the  expiration  hereof.  Any exercise  shall be  accompanied by a
written  notice to the  Corporation  specifying the number of shares as to which
the option is being exercised.

     (c) Payment of Purchase Price Upon  Exercise.  At the time of any exercise,
the  purchase  price of the shares as to which this  option  shall be  exercised
shall be paid in any of the following forms: (1) cash, which may be evidenced by
a check; (2) unless prohibited by the Committee  appointed pursuant to Section 4
of the Plan (the "Committee"),  certificates representing shares of Common Stock
of the Corporation,  which will be valued by the Secretary of the Corporation at
the fair market value per share of the Corporation's Common Stock (determined in
a manner consistent with fair market value  determination under the CIB Plan) on
the date of delivery of such certificates to the Corporation,  accompanied by an
assignment  of the stock to the  Corporation;  or (3) unless  prohibited  by the
Committee, any combination of cash and Common Stock of the Corporation valued as
provided in clause (2). Any assignment of stock shall be in a form and substance
satisfactory  to the  Secretary  of the  Corporation,  including  guarantees  of
signature(s)  and  payment of all  transfer  taxes if the  Secretary  deems such
guarantees necessary or desirable.

     In addition, to the extent permitted by applicable law and regulations, the
Committee may permit payment of the purchase price through  arrangements  with a
brokerage firm under which such firm, on behalf of the Optionee, will pay to the
Corporation  the  purchase  price  of  the  shares  being  purchased,   and  the
Corporation  will  promptly  deliver to such firm the number of shares of Common
Stock subject to the option so that the firm may sell such shares,  or a portion
thereof, for the account of the Optionee. In addition,  the Committee may permit
payment of the purchase price by delivery of an  unconditional  and  irrevocable
undertaking by a broker to deliver promptly to the Corporation  sufficient funds
to pay the  purchase  price as soon as the shares  subject to the  option,  or a
portion thereof, are sold on behalf of the Optionee.

     (d) Exercise Upon Termination of Directorship.  When the Optionee ceases to
be  a  director  of  the  Corporation  or  any  subsidiary,  whether  by  death,
disability,  resignation,  removal,  failure to be reelected or  otherwise,  and
regardless  of whether the  failure to  continue as a director  was for cause or
otherwise,  the  unexercised  portion of any option held by the  Optionee  shall
lapse on the earlier of (i) the  expiration  of the term of the option,  or (ii)
three months from the date the Optionee ceases to be a director. For purposes of
this  Agreement,  service  as a member of the  Berks  County  Division  Board of
Directors  of  National  Penn  Bank,  a  subsidiary  of the  Corporation,  shall
constitute service as a director of National Penn Bank.

                                        7
<PAGE>

     (e)  Transferability.  This option shall not be transferable  other than by
Will or by the laws of descent  and  distribution.  During the  lifetime  of the
Optionee, this option shall be exercisable only by the Optionee.

     (f)  Adjustments.  In the event of any change in the Common  Stock  through
merger,  consolidation,  reorganization,  recapitalization,  stock split,  stock
dividend,  combination of shares, transfer of assets, conversion or other change
in the corporate  structure of the Corporation  which the Committee deems in its
sole discretion to be similar  circumstances,  the Committee shall appropriately
adjust  the  number of shares  subject  to this  option  and the price per share
thereof (but not the total  price),  so that upon  exercise  the Optionee  shall
receive  the same  number of shares the  Optionee  would have  received  had the
Optionee been the holder of all shares subject to this option immediately before
the effective date of such change in the capital  structure of the  Corporation.
Any adjustment so made shall be final and binding upon the Optionee.

     (g) No  Rights  as  Shareholder.  The  Optionee  shall  have no rights as a
shareholder  with respect to any shares of Common  Stock  subject to this option
prior to the date of issuance to the Optionee of a certificate  or  certificates
for such shares.

     (h) No Right To Continue as Director. This option shall not confer upon the
Optionee  any  right  to  continue  as a  director  of  the  Corporation  or any
subsidiary,  nor shall it interfere in any way with the right of the Corporation
or any subsidiary to remove the Optionee as a director at any time.

     (i) Compliance with Law and Regulations.  This option and the obligation of
the  Corporation  to sell and deliver shares  hereunder  shall be subject to all
applicable  federal and state laws,  rules and regulations and to such approvals
by any government or regulatory agency as may be required. The Corporation shall
not be required to issue or deliver any  certificates for shares of Common Stock
prior to (1) the  listing  of such  shares  on any stock  exchange  on which the
Common Stock may then be listed and (2) the  completion of any  registration  or
qualification  of such  shares  under any  federal or state law,  or any rule or
regulation  of any  government  body which the  Corporation  shall,  in its sole
discretion, determine to be necessary or advisable.

     3.   Investment Representation

     The Committee may require the Optionee to furnish to the Corporation, prior
to the  issuance  of any  shares  upon the  exercise  of all or any part of this
option,  an agreement (in such form as such  Committee may specify) in which the
Optionee  represents  that the shares acquired by the Optionee upon exercise are
being

                                        8
<PAGE>

acquired for investment and not with a view to the sale or distribution thereof.

     4.   Optionee Bound by Plan

     The Optionee hereby  acknowledges  receipt of a copy of the Plan and agrees
to be  bound  by  all  the  terms  and  provisions  thereof,  all of  which  are
incorporated herein by reference.  In addition,  the terms and provisions of the
CIB  Agreement  are   incorporated   herein  by  reference  to  the  extent  not
inconsistent with the terms and provisions hereof or the terms and provisions of
the Plan.

     5.   Notices

     Any notice  hereunder  to the  Corporation  shall be addressed to it at its
office,  Philadelphia  and  Reading  Avenues,  Boyertown,   Pennsylvania  19512,
Attention:  Corporate  Secretary,  and any notice hereunder to Optionee shall be
addressed to the Optionee at the address  below,  subject to the right of either
party to designate at any time hereafter in writing some other address.

     IN  WITNESS  WHEREOF,  National  Penn  Bancshares,  Inc.  has  caused  this
Agreement  to be executed by a duly  authorized  officer  and the  Optionee  has
executed this Agreement, both as of the day and year first above written.

         NATIONAL PENN BANCSHARES, INC.                  OPTIONEE

         By: _________________________            _________________________
                  (Signature)                          (Signature)

             _________________________            _________________________
                  (Print Name)

             _________________________            _________________________
                 (Print Title)                         (Print Address)

                                        9EXHIBIT 10.10

                              EMPLOYMENT AGREEMENT
                              --------------------

         THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of November 7,
2000, is by and between DELTA APPAREL, INC., a Georgia corporation (the
"Company"), and HERBERT M. MUELLER, a Georgia resident ("Executive").

         WHEREAS, Executive and the Company want to enter into a written
agreement providing for the terms of Executive's employment by the Company.

         NOW, THEREFORE, in consideration of the foregoing recital and of the
mutual covenants set forth herein, and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:

         1. Employment. Executive agrees to continue his employment by the
Company, and the Company agrees to employ Executive, on the terms and conditions
set forth in this Agreement. Executive agrees during the term of this Agreement
to devote substantially all of his business time, efforts, skills and abilities
to the performance of his duties as stated in this Agreement and to the
furtherance of the Company's business.

                  Executive's initial job title will be Vice President, Chief
Financial Officer and Company Treasurer and his duties will be those as are
designated by the Chief Executive Officer of the Company. Executive further
agrees to serve, without additional compensation, as an officer or director, or
both, of any subsidiary, division or affiliate of the Company or any other
entity in which the Company holds an equity interest, provided, however, that
(a) the Company shall indemnify Executive from liabilities in connection with
serving in any such position to the same extent as his indemnification rights
pursuant to the Company's Articles of Incorporation, By-laws and applicable
Georgia law, and (b) such other position shall not materially detract from the
responsibilities of Executive pursuant to this Section 1 or his ability to
perform such responsibilities.

         2. Compensation.

                  (a) Base Salary. During the term of Executive's employment
with the Company pursuant to this Agreement, the Company shall pay to Executive
as compensation for his services an annual base salary of not less than
$160,000.00 ("Base Salary"). Executive's Base Salary will be payable in arrears
in accordance with the Company's normal payroll procedures and will be reviewed
annually and subject to upward adjustment at the discretion of the Compensation
Committee of the Company's Board of Directors.

                  (b) Incentive Bonus. During the term of Executive's employment
with the Company pursuant to this Agreement, Executive shall be entitled to
participate in the Company's Short Term Incentive Compensation Plan.

                  (c) Executive Perquisites. During the term of Executive's
employment with the Company pursuant to this Agreement, Executive shall be
entitled to receive such executive perquisites and fringe benefits as are
provided to the executives in comparable positions and their families under any
of the Company's plans and/or programs in effect from time to time and such
other benefits as are customarily available to executives of the Company and
their families, including without limitation vacations and life, medical and
disability insurance.

                  (d) Tax Withholding. The Company has the right to deduct from
any compensation payable to Executive under this Agreement social security
(FICA) taxes and all federal, state, municipal or other such taxes or charges as
may now be in effect or that may hereafter be enacted or required.

                  (e) Expense Reimbursements. The Company shall pay or reimburse
Executive for all reasonable business expenses incurred or paid by Executive in
the course of performing his duties hereunder, including but not limited to
reasonable travel expenses for Executive. As a condition to such payment or
reimbursement, however,
<PAGE>

Executive shall maintain and provide to the Company reasonable documentation and
receipts for such expenses.

         3. Term. Unless sooner terminated pursuant to Section 4 of this
Agreement, and subject to the provisions of Section 5 hereof, the term of this
Agreement (the "Term") shall commence as of the date hereof and shall continue
until December 31, 2003.

         4. Termination. Notwithstanding the provisions of Section 3 hereof, but
subject to the provisions of Section 5 hereof, Executive's employment under this
Agreement shall terminate as follows:

                  (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 payroll procedures) the Base Salary to
Executive's estate for a period of six months after the date of Executive's
death.

                  (b) Termination for Cause. The Company may terminate
Executive's employment at any time for "Cause" (as hereinafter defined) by
delivering a written termination notice to Executive. For purposes of this
Agreement, "Cause" shall mean any of: (i) Executive's conviction of a felony or
a crime involving moral turpitude; (ii) Executive's commission of an act
constituting fraud, deceit or material misrepresentation with respect to the
Company; (iii) Executive's embezzlement of funds or assets from the Company;
(iv) evidence sufficient to conclude that Executive is addicted to any
alcoholic, controlled or illegal substance or drug; (v) Executive's commission
of any act or omission of gross negligence or willful misconduct which would
give the Company the right to terminate Executive's employment under applicable
law; or (vi) Executive's failure to correct or cure any material breach of or
default under this Agreement within ten days after receiving written notice of
such breach or default from the Company.

                  (c) Termination Without Cause. The Company may terminate
Executive's employment at any 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 by delivering sixty 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 only if such termination
occurs as a result of a material breach by the Company of any provision of this
Agreement.

                  (e) Termination Following Disability. In the event Executive
becomes "disabled" (as defined in the Company's disability insurance policy) and
is unable to perform his material duties and responsibilities hereunder for a
period of at least ninety days in the aggregate during any one hundred twenty
consecutive day period, the Company may terminate Executive's employment by
delivering a written termination notice to Executive. Notwithstanding the
foregoing, Executive shall continue to receive his full Base Salary and benefits
under this Agreement for a period of six months after the effective date of such
termination.

                  (f) Payments. Following any expiration or termination of this
Agreement or Executive's employment hereunder, and in addition to any amounts
owed pursuant to Section 5 hereof, the Company shall pay to Executive all
amounts earned by Executive hereunder prior to the date of such expiration or
termination.

         5. Certain Termination Benefits. Subject to Section 6(a) hereof, in the
event (i) the Company terminates Executive's employment without cause pursuant
to Section 4(c) or (ii) Executive terminates his employment pursuant to Section
4(d) as a result of a material breach by the Company of any provision of this
Agreement:

                  (a) Base Salary and Incentive Compensation. The Company shall
continue to pay to Executive his Base Salary (as in effect as of the date of
such termination) and Incentive Compensation (equal to the Incentive
Compensation received for the most recent year) that would have been payable
hereunder to Executive from the date of such termination for a period of twelve
months following the termination.

                  (b) Life Insurance. The Company shall continue to provide
Executive with group and additional life insurance coverage for a period of
twelve months following termination at coverage levels equal to those applicable
to
<PAGE>

Executive immediately prior to such termination or as provided to other
executive level employees during such twelve month period.

                  (c) Medical Insurance. The Company shall continue to provide
Executive and his family with group medical insurance coverage under the
Company's Medical Plans (as the same may change from time to time) or other
substantially similar health insurance for a period of twelve months following
termination at coverage levels equal to those applicable to Executive
immediately prior to such termination or as provided to other executive level
employees during such twelve month period or pay COBRA premiums during such
twelve month period.

                  (d) Group Disability. The Company shall continue to provide
Executive coverage under the Company's group disability plan, if any, for a
period of twelve months following termination at coverage levels equal to those
applicable to Executive immediately prior to such termination or as provided to
other executive level employees during such twelve month period.

                  (e) Offset. Any fringe benefits received by Executive in
connection with any other employment accepted by Executive that are reasonably
comparable, even if not necessarily as beneficial, to Executive as the fringe
benefits then being provided by the Company pursuant to paragraphs (c), (d) and
(e) of this Section 5, shall be deemed to be the equivalent of, and shall
terminate the Company's responsibility to continue providing, the fringe
benefits package, taken as a whole, then being provided by the Company pursuant
to paragraphs (c), (d) and (e) of this Section 5. The Company agrees that if
Executive's employment with the Company is terminated, Executive shall have no
duty to mitigate damages.

                  (f) Payment Default. Any amounts owed by Company to Executive
under this Section 5 that are not paid when due shall bear interest at a rate of
10% per annum.

                  (g) General Release. Acceptance by Executive of any amounts
pursuant to this Section 5 shall constitute a full and complete release by
Executive of any and all claims Executive may have against the Company, its
officers, directors and affiliates, including, but not limited to, claims he
might have relating to Executive's cessation of employment with the Company;
provided, however, that there may properly be excluded from the scope of such
general release the following:

                           (i) claims that Executive may have against the
                  Company for reimbursement of ordinary and necessary business
                  expenses incurred by him during the course of his employment;

                           (ii) claims that may be made by the Executive for
                  payment of Base Salary, bonuses, fringe benefits, stock upon
                  vesting of inactive stock awards, stock upon exercise of stock
                  options properly due to him, or other amounts or benefits due
                  to him under this Agreement;

                           (iii) claims respecting matters for which the
                  Executive is entitled to be indemnified under the Company's
                  Certificate of Incorporation or Bylaws, respecting third party
                  claims asserted or third party litigation pending or
                  threatened against the Executive; or

                           (iv) claims Executive may have against the Company
                  for violation of employment laws, including, without
                  limitation, laws prohibiting discrimination against employees.

A condition to Executive's receipt of any amounts pursuant to this Section 5
shall be Executive's execution and delivery of a general release as described
above. In exchange for such release, the Company shall, if Executive's
employment is terminated without Cause, provide a release to Executive, but only
with respect to claims against Executive which are actually known to the Company
as of the time of such termination.

         6. Effect of Change in Control.

                  (a) If within one year following a "Change of Control" (as
hereinafter defined), Executive
<PAGE>

terminates his employment with the Company for Good Reason (as hereinafter
defined) or the Company terminates Executive's employment for any reason other
than Cause, death or disability, the Company shall pay to Executive: (1) an
amount equal to one times the Executive's Base Salary as of the date of
termination; (2) an amount equal to one times the average annual cash bonus paid
to Executive for the one fiscal year immediately preceding the date of
termination; (3) all benefits under the Company's various welfare and benefit
plans, including retirement, group healthcare, dental and life, for the period
equal to twelve months from the date of termination; and (4) outplacement
assistance.

                  (b) "Change of Control" shall mean the date as of which: (i)
there shall be consummated (1) any consolidation or merger of the Company other
than a merger of the Company in which the holders of the Company's common stock
immediately prior to the merger have the majority ownership of common stock of
the surviving corporation immediately after the merger, or (2) any sale, lease,
exchange or other transfer (in one transaction or a series of related
transactions) of all, or substantially all, of the assets of the Company; or
(ii) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company; or (iii) any person ( as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of 30% of the Company's
outstanding common stock; or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the entire board of
directors of the Company shall cease for any reason to constitute a majority
thereof unless the election, or the nomination for election by the Company's
stockholders, of each new director was approved by a vote of at least two-thirds
of the directors then still in office who were directors at the beginning of the
period.

                  (c) "Good Reason" shall mean any of the following actions
taken by the Company without the Executive's written consent after a Change of
Control :

                           (i) the assignment to the Executive by the Company of
                  duties inconsistent with, or the reduction of the powers and
                  functions associated with, the Executive's position, duties,
                  responsibilities and status with the Company immediately prior
                  to a Change of Control or Potential Change of Control (as
                  defined below), or an adverse change in Executive's titles or
                  offices as in effect immediately prior to a Change of Control
                  or Potential Change of Control, or any removal of the
                  Executive from or any failure to re-elect Executive to any of
                  such positions, except in connection with the termination of
                  his employment for disability or Cause or as a result of
                  Executive's death except to the extent that a change in duties
                  relates to the elimination of responsibilities attendant to
                  the Company's no longer being a publicly traded company;

                           (ii) A reduction by the Company in the Executive's
                  Base Salary as in effect on the date of a Change of Control or
                  Potential Change of Control, or as the same may be increased
                  from time to time during the term of his Agreement;

                           (iii) The Company shall require the Executive to be
                  based anywhere other than at or within a 25 mile radius of the
                  Company's principal executive offices or the location where
                  the Executive is based on the date of a Change of Control or
                  Potential Change of Control, or if Executive agrees to such
                  relocation, the Company fails to reimburse the Executive for
                  moving and all other expenses reasonably incurred in
                  connection with such move;

                           (iv) A significant increase in Executive's required
                  travel on behalf of the Company;

                           (v) The Company shall fail to continue in effect any
                  Company-sponsored plan or benefit that is in effect on the
                  date of a Change of Control or Potential Change of Control
                  (other than the Incentive Stock Award Plan or the Company's
                  stock option plan), that provides (A) incentive or bonus
                  compensation, (B) fringe benefits such as vacation, medical
                  benefits, life insurance and accident insurance, (C)
                  reimbursement for reasonable expenses incurred by the
                  Executive in connection with the performance of duties with
                  the Company, or (D) retirement benefits such as a Code Section
                  401(k) plan,
<PAGE>

                  except to the extent that such plans taken as a whole are
                  replaced with substantially comparable plans;

                           (vi) Any material breach by the Company of any
                  provision of this Agreement which is not cured within 10 days
                  of Company's receipt from Executive of notice thereof; and

                           (vii) Any failure by the Company to obtain the
                  assumption of this Agreement by any successor or assign of the
                  Company effected in accordance with the provisions of Section
                  12.

                  (d) "Potential Change of Control" shall mean the date as of
which (1) the Company enters into an agreement the consummation of which, or the
approval by shareholders of which, would constitute a Change of Control; (ii)
proxies for the election of Directors of the Company are solicited by anyone
other than the Company; (iii) any person (including, but not limited to, any
individual, partnership, joint venture, corporation, association or trust)
publicly announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change of Control; or (iv) any other event
occurs which is deemed to be a Potential Change of Control by the Board and the
Board adopts a resolution to the effect that a Potential Change of Control has
occurred.

                  (e) In the event that (i) Executive would otherwise be
entitled to the compensation and benefits described in Section 6(a) hereof
("Compensation Payments"), and (ii) the Company determines, based upon the
advice of tax counsel selected by the Company's independent auditors and
acceptable to Executive, that, as a result of such Compensation Payments and any
other benefits or payments required to be taken into account under Code Section
280G(b)(2) ("Parachute Payments"), any of such Parachute Payments would be
reportable by the Company as "excess parachute payments", such Compensation
Payments shall be reduced to the extent necessary to cause Executive's Parachute
Payments to equal 2.99 times the "base amount" as defined in Code Section
280G(b)(3) with respect to such Executive. However, such reduction in the
Compensation Payments shall be made only if, in the opinion of such tax counsel,
it would result in a larger Parachute Payment to the Executive than payment of
the unreduced Parachute Payments after deduction in each case of tax imposed on
and payable by the Executive under Section 4999 of the Code ("Excise Tax"). The
value of any non-cash benefits or any deferred payment or benefit for purposes
of this paragraph shall be determined by the Company's independent auditors.

                  (f) The parties hereto agree that the payments provided under
Section 6(a) above, as the case may be, are reasonable compensation in light of
Executive's services rendered to the Company and that neither party shall
contest the payment of such benefits as constituting an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Code.

                  (g) Unless the Company determines that any Parachute Payments
made hereunder must be reported as "excess parachute payments" in accordance
with Section 6(e) above, neither party shall file any return taking the position
that the payment of such benefits constitutes an "excess parachute payment"
within the meaning of Section 280G(b)(1) of the Code.

         7. Non-Competition. Executive agrees that during the Term and for a
period of four months from the date of the termination of Executive's employment
with the Company pursuant to Sections 4(b), 4(c), 4(d), 4(e) and 6 herein or for
any other reason that results in the Executive being entitled to the benefits
described in Section 5, he will not, directly or indirectly, compete with the
Company by providing to any company that is in a "Competing Business" services
substantially similar to the services provided by Executive at the time of
termination. Competing Business shall be defined as any business that engages,
in whole or in part, in the manufacturing or marketing of activewear tee shirts
in the United States of America (the "Restrictive Territory"), and Executive's
employment function or affiliation is directly or indirectly in such business of
activewear tee shirt manufacturing or marketing.

         8. Nonsolicitation of Employees. For a period of two years after the
later of the expiration of the Term or the termination or cessation of his
employment with the Company for any reason whatsoever, Executive shall not, on
his own behalf or on behalf of any other person, partnership, association,
corporation, or other entity, (a) solicit or in any manner attempt to influence
or induce any employee of the Company or its subsidiaries or affiliates (known
by the Executive to be such) to leave the employment of the Company or its
subsidiaries or affiliates, nor shall he use or
<PAGE>

disclose to any person, partnership, association, corporation or other entity
any information obtained while an employee of the Company concerning the names
and addresses of the Company's employees, or (b) solicit, entice or induce any
customer or supplier of the Company (or any actively sought customer or supplier
of the Company) for or on behalf of any Competing Business in the Restricted
Territory.

         9. Nondisclosure of Trade Secrets. During the Term, Executive will have
access to and become familiar with various trade secrets and proprietary and
confidential information of the Company, its subsidiaries and affiliates,
including, but not limited to, processes, computer programs, compilations of
information, records, sales procedures, customer requirements, pricing
techniques, customer lists, methods of doing business and other confidential
information (collectively, referred to as "Trade Secrets") which are owned by
the Company, its subsidiaries and/or affiliates and regularly used in the
operation of its business, and as to which the Company, its subsidiaries and/or
affiliates take precautions to prevent dissemination to persons other than
certain directors, officers and employees. Executive acknowledges and agrees
that the Trade Secrets (1) are secret and not known in the industry; (2) give
the Company or its subsidiaries or affiliates an advantage over competitors who
do not know or use the Trade Secrets; (3) are of such value and nature as to
make it reasonable and necessary to protect and preserve the confidentiality and
secrecy of the Trade Secrets; and (4) are valuable, special and unique assets of
the Company or its subsidiaries or affiliates, the disclosure of which could
cause substantial injury and loss of profits and goodwill to the Company or its
subsidiaries or affiliates. Executive may not use in any way or disclose any of
the Trade Secrets, directly or indirectly, either during the Term or at any time
after the expiration of the Term or the termination of Executive's employment
with the Company for any reason whatsoever, except as required in the course of
his employment under this Agreement, if required in connection with a judicial
or administrative proceeding, or if the information becomes public knowledge
other than as a result of an unauthorized disclosure by the Executive. All
files, records, documents, information, data and similar items relating to the
business of the Company, whether prepared by Executive or otherwise coming into
his possession, will remain the exclusive property of the Company and may not be
removed from the premises of the Company under any circumstances without the
prior written consent of the Board (except in the ordinary course of business
during Executive's period of active employment under this Agreement), and in any
event must be promptly delivered to the Company upon termination of Executive's
employment with the Company. Executive agrees that upon his receipt of any
subpoena, process or other request to produce or divulge, directly or
indirectly, any Trade Secrets to any entity, agency, tribunal or person,
Executive shall timely notify and promptly hand deliver a copy of the subpoena,
process or other request to the Board. For this purpose, Executive irrevocably
nominates and appoints the Company (including any attorney retained by the
Company), as his true and lawful attorney-in-fact, to act in Executive's name,
place and stead to perform any act that Executive might perform to defend and
protect against any disclosure of any Trade Secrets. The rights granted to the
Company in this Section 9 are intended to be in addition to and not in
replacement of any protection of trade secrets provided by any statute or
judicially created law.

         10. Remedies. In the event that Executive violates any of the
provisions of Sections 7, 8 or 9 hereof (the "Protective Covenants") or fails to
provide the notice required by Section 4(d) hereof, in addition to any other
remedy that may be available at law, in equity or hereunder, the Company shall
be entitled to receive from Executive the profits, if any, received by Executive
upon exercise of any Company granted stock options or incentive stock awards or
upon lapse of the restrictions on any grant of restricted stock to the extent
such options or rights were exercised, or such restrictions lapsed, subsequent
to six months prior to the termination of Executive's employment. In addition,
Executive acknowledges and agrees that any breach of a Protective Covenant by
him will cause irreparable damage to the Company, the exact amount of which will
be difficult to determine, and that the remedies at law for any such breach will
be inadequate. Accordingly, Executive agrees that, in addition to any other
remedy that may be available at law, in equity, or hereunder, the Company shall
be entitled to specific performance and injunctive relief, without posting bond
or other security, to enforce or prevent any violation of any of the Protective
Covenants by him.

         11. Severability. The parties hereto intend all provisions of Sections
7, 8, 9 and 10 hereof to be enforced to the fullest extent permitted by law.
Accordingly, should a court of competent jurisdiction determine that the scope
of any provision of Sections 7, 8, 9 or 10 hereof is too broad to be enforced as
written, the parties intend that the court reform the provision to such narrower
scope as it determines to be reasonable and enforceable. In addition, however,
Executive agrees that the nonsolicitation and nondisclosure agreements set forth
above each constitute separate
<PAGE>

agreements independently supported by good and adequate consideration shall be
severable from the other provisions of, and shall survive, this Agreement. The
existence of any claim or cause of action of Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of the covenants of Executive
contained in the nonsolicitation and nondisclosure agreements. If any provision
of this Agreement is held to be illegal, invalid or unenforceable under present
or future laws effective during the term hereof, such provision shall be fully
severable and this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision never constituted a part of this Agreement;
and the remaining provisions of this Agreement shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom. Furthermore, in lieu of such illegal,
invalid or unenforceable provision, there shall be added as part of this
Agreement, a provision as similar in its terms to such illegal, invalid or
enforceable provision as may be possible and be legal, valid and enforceable.

         12. Miscellaneous.

                  (a) Notices. Any notices, consents, demands, requests,
approvals and other communications to be given under this Agreement by either
party to the other must be in writing and must be either (i) personally
delivered, (ii) mailed by registered or certified mail, postage prepaid with
return receipt requested, (iii) delivered by overnight express delivery service
or same-day local courier service, or (iv) delivered by telex or facsimile
transmission, to the address set forth below, or to such other address as may be
designated by the parties from time to time in accordance with this Section
12(a):

                                            If to the Company:
                                            Delta Apparel, Inc.
                                            2750 Premiere Parkway
                                            Suite 100
                                            Duluth, Georgia 30047
                                            Attn:  Chief Executive Officer

                                            If to Executive:
                                            Mr. Herbert M. Mueller
                                            375 Oxford Meadow Run
                                            Alpharetta, Georgia 30004

                  Notices delivered personally or by overnight express delivery
service or by local courier service are deemed given as of actual receipt.
Mailed notices are deemed given three business days after mailing. Notices
delivered by telex or facsimile transmission are deemed given upon receipt by
the sender of the answer back (in the case of a telex) or transmission
confirmation (in the case of a facsimile transmission).

                  (b) Entire Agreement. This Agreement supersedes any and all
other agreements, either oral or written, between the parties with respect to
the subject matter of this Agreement and contains all of the covenants and
agreements between the parties with respect to the subject matter of this
Agreement.

                  (c) Modification. No change or modification of this Agreement
is valid or binding upon the parties, nor will any waiver, termination or
discharge of any term or condition of this Agreement be so binding, unless
confirmed in writing and signed by the parties to this Agreement.

                  (d) Governing Law and Venue. The parties acknowledge and agree
that this Agreement and the obligations and undertakings of the parties under
this Agreement will be performable in Georgia. This Agreement is
<PAGE>

governed by, and construed in accordance with, the laws of the State of Georgia.
If any action is brought to enforce or interpret this Agreement, venue for the
action will be in Georgia.

                  (e) Counterparts. This Agreement may be executed in
counterparts, each of which constitutes an original, but all of which
constitutes one document.

                  (f) Costs. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, each party shall bear its own
costs and expenses; provided, however, that in the event Executive incurs costs
or expenses in connection with successfully enforcing this Agreement following a
Change of Control, then Company shall reimburse Executive for all such costs or
expenses.

                  (g) Estate. If Executive dies prior to the expiration of the
term of employment or during a period when monies are owing to him, any monies
that may be due him from the Company under this Agreement as of the date of his
death shall be paid to his estate and as when otherwise payable.

                  (h) Assignment. The rights, duties and benefits to Executive
hereunder are personal to him, and no such right or benefit may be assigned by
him without the prior written consent of the Company.

                  (i) Binding Effect. This Agreement is binding upon and shall
inure to the benefit of the parties hereto, their respective executors,
administrators, successors, personal representatives, heirs and permitted
assigns.

                  (j) Waiver of Breach. The waiver by the Company or Executive
of a breach of any provision of this Agreement by Executive or the Company may
not operate or be construed as a waiver of any subsequent breach.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

                           "Company"

                           DELTA APPAREL, INC.

                           By:
                              --------------------------------------------------

                           Name:
                                ------------------------------------------------

                           Title:
                                 -----------------------------------------------

                           "Executive"

                           -----------------------------------------------------
                           Herb Mueller

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