Severance Agreement - Collins & Aikman Corp. and Elizabeth R. Philipp
May 12, 1999
Dr. Bruce R. Barnes Mr. David A. Stockman
Wasserstein Perella & Co., Inc. The Blackstone Group
31 West 52nd Street, 27th Floor 345 Park Avenue, 31st Floor
New York, NY 10154 New York, NY 10019
Dear Bruce and David:
We have reached this understanding following the decision to relocate the
General Counsel's office to Detroit:
1. My salary will be increased to $340,000 retroactive to January 1,
1999. I will be employed through June 30, 1999 and will work full-time
through May 31, 1999.
2. Subject to point 9 below, I will receive a lump-sum payment on July 8,
1999 (or, if I execute and deliver the Release described in point 9
below after June 30, 1999, on the eighth day after the date on which I
execute and deliver such Release) in the amount of $500,000 payable in
lieu of the severance that would otherwise be payable under Section
6.2(b) of my employment agreement and in lieu of any EICP bonus for
1999.
3. My termination date for purposes of benefits shall be December 31,
1999, and I shall continue to receive benefits for one year thereafter
as provided in Section 4 of my employment agreement. I will receive
the profit sharing contribution for 1999, if there is any. The level
of my benefits shall be at the senior executive level, comparable to
other executive vice presidents and division presidents. I will be
paid on June 30, 1999 for any accrued but unused vacation.
4. My termination date for purposes of my stock options shall be December
31, 1999, and they shall be exercisable for one year thereafter.
5. My termination date for purposes of the change in control agreement
dated March 17, 1998 shall be December 31, 1999, and the payments and
benefits provided for in points 2 and 3 above shall be taken into
account under Section 6 of the change in control agreement.
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Dr. Bruce R. Barnes May 12, 1999
Mr. David A. Stockman Page 2
6. My office, office furniture, office equipment and home fax machines
shall be maintained through the expiration of the current office lease
term, which is January 31, 2000.
7. I acknowledge that the term of my employment as set forth in Section 1
of my employment agreement shall end on June 30, 1999 and I shall not
be entitled to any further notice from the Company pursuant to Section
1 of my employment agreement.
8. I acknowledge that I have no shadow equity interests under the Equity
Plan described in Section 3.3 of my employment agreement.
9. I acknowledge that payment to me of the amounts, and the other rights
accruing to me, as set forth above that are in addition to amounts and
rights to which I am currently entitled (without regard to this
letter) from Collins & Aikman (the "Additional Severance") is
conditioned upon my executing and delivering to Collins & Aikman on or
after June 30, 1999 a Release, substantially in the form attached
hereto as Exhibit 1, and on my not revoking such Release on or before
the eighth day following delivery of the Release. Delivery by fax to
the Vice-President of Human Resources or another officer or director
of Collins & Aikman shall constitute delivery.
Except as expressly modified hereby, the provisions of my employment agreement
and the change of control agreement shall continue to apply.
If this sets forth our understanding, please sign this and fax it back to me.
Very truly yours,
/s/ Elizabeth Philipp
Elizabeth R. Philipp
/s/ Bruce Barnes
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Dr. Bruce R. Barnes
/s/ David A. Stockman
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Mr. David A. Stockman
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EXHIBIT 1
RELEASE
WHEREAS, the Executive's employment with Collins & Aikman
Corporation ("Collins & Aikman") is being terminated on the date hereof on the
terms described in the letter agreement dated May __, 1999 between Elizabeth
Philipp (the "Executive") and Collins & Aikman (the "Agreement"); and
WHEREAS, the Executive is required to sign this Release in order
to receive various payments and other benefits described in the Agreement.
NOW THEREFORE, in consideration of the promises and agreements
contained herein and in the Agreement and other good and valuable consideration,
the sufficiency and receipt of which are hereby acknowledged, and intending to
be legally bound, the Executive agrees as follows:
1. In consideration of the payments by Collins & Aikman to the
Executive set forth in the Agreement, and the other benefits accruing to the
Executive under the Agreement which the Executive acknowledges includes amounts
and benefits that are in addition to payments and benefits to which the
Executive would be entitled absent the Agreement, the Executive unconditionally
releases Collins & Aikman and its subsidiaries and affiliates and directors,
officers, employees and stockholders thereof (collectively referred to herein as
the "Released Parties"), from any and all claims, liabilities and obligations of
any nature pertaining to the terms of her employment or the termination of her
employment other than those provided for by the Agreement, the employment
agreement dated as of July 18, 1990 between Wickes Companies, Inc. and the
Executive, the change of control agreement dated March 17, 1998 between Collins
& Aikman and the Executive or this Release including, without limitation, any
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claims arising out of alleged legal restrictions on Collins & Aikman's right to
terminate its employees, such as any termination contrary to public policy or to
laws prohibiting discrimination, including but not limited to claims of
discrimination on the basis of sex, race, age, national origin, marital status,
religion or handicap, any and all claims of wrongful or unjust discharge and any
and all claims arising from any alleged violation by the Released Parties of any
federal, state, or local statutes, ordinances or common law principles,
including but not limited to the Americans with Disabilities Act, 42 U.S.C.
Section 1 to 101, et seq.; Title VII of the Civil Rights Act of 1964, 42 U.S.C.
Section 2000e, et seq.; the Age Discrimination in Employment Act, 29 U.S.C.
Section 621, et seq. ("ADEA"), and the New York Human Rights Law, and all
similar laws of the United States and any State or local jurisdiction including
all amendments to the foregoing statutes and amendments to any of the statues or
regulations incorporated by reference in or applicable to, any of the foregoing.
With respect to the ADEA, it is specifically recognized that the Executive is
not waiving by this Release any future claims she may have under that Act. For
the avoidance of doubt, this Release does not affect any rights of
indemnification as provided by law or the By-laws of Collins & Aikman or any
subsidiary and any rights under benefit plans, programs or stock option
agreements.
2. The Executive acknowledges that she has carefully read and
fully understands all of the provisions and effects of this Release; that she
has been advised in writing to consult an attorney prior to executing this
Release; that she is voluntarily entering into this Release; and that neither
Collins & Aikman nor its agents or attorneys have made any representations or
promises as to the terms or effects of this Release other than those contained
herein.
3. The Executive agrees that she has been provided this Release
on May 21, 1999 and has had the opportunity to review it for twenty-one (21)
days prior to executing it, and
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that such was a reasonable period of time. Changes to this Release, whether
material or immaterial, do not restart the running of the twenty-one (21) day
period. Collins & Aikman and the Executive also expressly agree that the
Executive's termination is not associated with an exit incentive or other
employment termination program offered to a group or class of employees.
4. For a period of seven (7) days following the execution of this
Release, the Executive may revoke this Release. Said revocation must be in
writing and must be delivered in person or by Registered or Certified mail,
postmarked within seven (7) days of execution of this Release, to the Chief
Executive Officer of Collins & Aikman.
5. This Release is made in the State of New York, and shall in
all respects be interpreted, enforced and governed under the laws of the State
of New York, except to the extent preempted by Federal law. The language of all
parts of this Release shall in all cases be construed as a whole, according to
its fair meaning, and not strictly for or against any of the parties.
6. The terms of this Release shall be considered separate from
each other, and if any shall be found to be invalid, it shall not affect the
validity of the remaining terms.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the
Executive has executed and delivered this Release on the date set forth below.
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Date: Elizabeth Philipp
STATE OF NEW YORK )
) SS.
COUNTY OF __________________________)
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On this day of , 1999, before me, a Notary Public,
personally appeared ELIZABETH PHILIPP, known by me to be the person who is
described in and who executed the foregoing Release and being first duly sworn,
acknowledged that she executed the same as her own free act and deed.
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Notary Public
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