Separation Agreement and General Release - Collins & Aikman Products Co. and Frank J. Preston
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (the
"Agreement") is entered into as of March 12, 2001, by and between Frank J.
Preston ("Employee") and Collins & Aikman Products Co. (the "Company").
WHEREAS, Employee and the Company wish to terminate, on an
amicable basis, the Employment Agreement between the parties, dated March 29,
2000, and wish to resolve all issues between them;
NOW THEREFORE, the Parties agree as follows:
1. Employee's employment with the Company will cease on March
12, 2001 (the "Resignation Date") due to Employee's voluntary resignation. The
employment agreement, dated March 29, 2000 ("the Employment Agreement"), will be
deemed terminated by Employee without cause on the Resignation Date. Employee
has agreed to assist Mr. Tom Evans, his successors or designees, in assuring an
orderly transition of Employee's responsibilities, and in assisting in such
special projects as seen fit by the Company prior to the Resignation Date.
2. In consideration of this Agreement becoming effective, the
Company agrees to pay Employee as severance pay, commencing in March, 2001, a
monthly base salary of $33,333, less applicable tax and other withholdings
(except that the payment made in March 2001 shall be a pro rata payment based on
the number of business days in the severance period), for a period of 26 months
ending at April 30, 2003, which shall be payable in accordance with the
Company's regular payment practices.
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3. In consideration of this Agreement becoming effective, the
Company also agrees that the Employee will be eligible to participate in: 1) the
Medical, Prescription and Dental benefit plans under the Company's policies,
through April 30, 2003, provided Employee makes the same contribution to the
cost of such coverage as is made by current employees; and 2) the Executive
Medical benefit plan which will provide reimbursement up to an annual limit of
$7,500. Employee acknowledges that the benefits provided in this paragraph
satisfy the requirements of the Consolidated Omnibus Budget Reconciliation Act
of 1985 ("COBRA") for the continuation of benefits.
4. In consideration of this Agreement becoming effective, the
Company also agrees to pay Employee a lump sum payment of $41,000, net of income
taxes, payable on March 31, 2001.
5. In consideration of this Agreement becoming effective, the
Company also agrees to pay Employee an annual incentive payment of $150,000,
payable on March 31, 2001.
6. In consideration of this Agreement becoming effective, the
Company agrees that, with respect to stock options grants awarded to Employee
while he was employed by the Company, all options will immediately vest on the
effective date of this Agreement and will remain exercisable until one year
after the Resignation Date. Employee agrees that he was awarded an option on
100,000 shares at a strike price of $6.25 on May 24, 2000.
7. The parties agree that sections 9(a), (b) and (c) of the
Employment Agreement will remain in effect during the period of this Agreement
until April 30, 2003. The parties further specifically agree that the
prohibition against competition in section 9(b) includes, but is not limited to,
the following companies: Johnson Controls, Inc., Magna International, Inc.,
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The Rieter Group, Magee Carpet Inc., Lear Corporation and H.P. Pelzer
(Automotive System), Inc. or their successors. Individual companies, including
those noted in this section, may be exempted from the prohibition against
competition, upon the Employee providing reasonable evidence to the Company that
the area of business in which he will be employed, or in which he will consult,
does not directly compete with the current businesses of the Company or any of
its affiliates.
8. Employee agrees that he will not recruit, solicit, employ
or engage, for or on behalf of himself or any third party, any employee,
officer, director, consultant, or agent of the Company, or induce or attempt to
induce any employee, officer, director, consultant, or agent of the Company to
terminate his or her relationship with, or otherwise cease his or his
relationship with, the Company through April 30, 2002, except for employees
discharged by the Company, employees who retire from the Company or as agreed by
the Company.
9. Employee agrees that the payment and benefits provided for
in paragraphs two (2), three (3), four (4), five (5) and six (6) of this
Agreement exceed any payment or other thing of value to which he otherwise would
be entitled.
10. Employee agrees that he shall not at any time seek
employment with the Company and shall not assert that the Company has any duty
or obligation to re-hire or retain him in any capacity, whether as an employee,
consultant or otherwise.
11. In exchange for the consideration provided for in this
Agreement, Employee for himself, and his heirs, executors, administrators and
assigns (collectively the "Releasors") forever waives, releases and discharges
the Company, its parent Collins & Aikman Corporation and its affiliates and all
past and present officers, directors, employees,
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representatives, and agents of the foregoing (collectively the "Releasees"),
from any and all claims, demands, causes of actions, fees, liabilities and
expenses of any kind whatsoever, whether known or unknown, which they ever had
or now have against the Releasees by reason of any actual or alleged act,
omission, transaction, practice, conduct, occurrence or other matter up to and
including the date of this Agreement. Without limiting the generality of this
release, the Releasors release the Releasees from all claims arising out of any
aspect of Employee's employment with the Company and from all claims in his
capacity as a shareholder of Collins & Aikman Corporation including, but not
limited to: (i) any claims under Title VII of the Civil Rights Act of 1964, as
amended, the Civil Rights Act of 1991, 42 U.S.C. ss. 1981, the Age
Discrimination in Employment Act, as amended, the Americans With Disabilities
Act, the Family and Medical Leave Act, the Elliott-Larsen Civil Rights Act or
any other federal, state, or local law (statutory or decisional), regulation, or
ordinance; and (ii) any tort and/or contract claims, including, without
limitation, any claims of constructive discharge, wrongful discharge, breach of
contract, breach of implied covenant of good faith and fair dealing,
retaliation, assault, intentional infliction of emotional distress, defamation,
nonphysical injury, personal injury or sickness or other harm.
The Releasors further acknowledge that they will not bring
suit or authorize suit on any of their behalves against the Releasees or any of
them, and, to the extent permitted by law, they agree not to file any charge or
complaint, commence any proceeding of any kind or participate in any
investigation or proceeding against the Releasees or any of them, with respect
to any matter occurring prior to this Agreement. Should any charge, complaint,
suit or proceeding be filed, the Releasors agree that they will not accept any
relief or recovery therefrom.
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12. Employee acknowledges that he has been urged by the
Company to consult an attorney before signing this agreement and that he has
executed this agreement with the waiver and release set forth above, after
having had the opportunity to consult with an attorney and after having had the
opportunity to consider the terms of this agreement for twenty-one (21) days
after such terms were proposed to him. Employee further acknowledges that: he
has read this agreement in its entirety; he understands all of its terms; he
knowingly and voluntarily assents to all of the terms and conditions contained
herein including, without limitation, the waiver and release; he is executing
this agreement, including the waiver and release, in exchange for consideration
in addition to anything of value to which he is already entitled; he is not
waiving or releasing rights or claims that may arise after this agreement; and
that he understands that the waiver and release in this agreement is being
requested in connection with the cessation of his employment with the Company
and in exchange for his receipt of consideration to which he otherwise would not
be entitled.
This agreement, including the waiver and release contained
herein, shall become effective the eighth (8th) day following Employee's
execution of this agreement and he may at any time prior to the effective date
revoke this agreement by giving written notice of such revocation to Gregory
Tinnell, Senior Vice President, Human Resources.
Employee acknowledges and agrees that all payments and
benefits provided herein shall be null and void and that he will repay the
Company for any payments and benefits provided for in paragraphs two (2) and
three (3) that the Company has provided to Employee or on his behalf commencing
on and after the Resignation Date, if he does not execute this agreement after
having had the opportunity to consider its terms for up to twenty-one (21) days
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after such terms were proposed to him or if he revokes this agreement within
seven (7) days of his having executed it.
13. Employee agrees that he will keep the terms, amount and
fact of this Agreement completely confidential and that he will not disclose to
any entity or other person the terms and conditions of this Agreement until such
time as it is publicly disclosed by the Company except that he may disclose the
terms of this Agreement: (i) as is necessary to enforce the terms of this
Agreement; (ii) to such persons to whom disclosure is necessary to file a tax
return or contest a denial of tax refund; (iii) to Employee's spouse, immediate
family, legal, financial and tax advisors; and (iv) pursuant to a valid subpoena
or court order, provided that the Company shall have a right to challenge any
such subpoena or court order before Employee complies with it.
14. Employee agrees that he will not disparage, denigrate or
ridicule the Company, its parent, affiliates, successors, or any of their
respective past or present employees, officers, or any individual or entity with
whom the Company or its parent or any of its affiliates has a business
relationship, whether by way of news interviews or the expression of personal
views, opinions or judgments made to the news media, the employees of the
Company, its parent or any of its affiliates or any individual or entity with
whom the Company or any of its affiliates has a business relationship, or
otherwise. Employee and the Company agree to direct all inquiries regarding
employment references to the Senior Vice President, Human Resources, who will
provide a reference and who will not disparage, denigrate or ridicule the
Employee.
15. Employee acknowledges that material to the inducement for
the Company to enter into this Agreement are the waiver and release set forth in
paragraph eleven (11) herein,
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and Employee's covenants with respect to non-competition, non-solicitation of
employees, confidentiality, and nondisparagement set forth in paragraphs seven
(7), eight (8), thirteen (13) and fourteen (14) herein.
16. If any provision of this Agreement is determined by a
court of competent jurisdiction not to be enforceable in the manner set forth in
this Agreement, the Company and Employee agree that it is the intention of the
parties that such provision should be enforceable to the maximum extent possible
under applicable law and that such provision shall be reformed to make it
enforceable in accordance with the intent of the parties.
17. This Agreement shall be binding upon and inure to the
benefit of the heirs, trustees, executors, administrators, successors and
assigns of the respective parties. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
constitute the same instrument. This Agreement shall be governed by and subject
to the laws of the State of Michigan without giving effect to conflict of law
rules.
18. Employee understands that the Company's obligations to
make payments hereunder are unfunded and that claims for payments by Employee or
any beneficiary shall be those of a general, unsecured creditor. The severance
payment provided for in paragraphs two (2) and five (5) hereunder shall be
subject to withholding in accordance with applicable federal, state, or local
law. Employee, and not the Company, will be solely responsible for all taxes due
as a result of the benefits provided for in paragraph three (3) hereunder.
19. Employee and the Company agree to each bear their own
costs, attorneys' fees and any other expenses incurred in connection with this
Agreement and the matters referred to herein.
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20. This Agreement contains a complete statement of all the
arrangements between Employee and the Company with respect to his employment and
the cessation of his employment. This Agreement may not be changed orally. No
other promises or agreements shall be binding unless in writing and signed by
the Company and Employee.
IN WITNESS WHEREOF, the parties hereto have knowingly and
voluntarily executed this Agreement or have caused its duly authorized officer
to execute this Agreement.
By: /s/ Frank J. Preston
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Frank J. Preston
Dated: 3/12/01
Collins & Aikman Products Co.
By: /s/ Gregory Tinnell
-------------------
Name: Gregory Tinnell
Title: Sr. Vice President, Human Resources
Dated: 3/12/01
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STATE OF MICHIGAN )
: ss:
COUNTY of OAKLAND )
On March 12, 2001, before me personally came Gregory Tinnell to me
known and known to me to be the individual described in, and who executed the
foregoing Separation Agreement and General Release on behalf of Collins & Aikman
as its Sr. V.P. - Human Resources, and he duly acknowledged to me that he
executed the same in such capacity.
/s/ Sherry E. Johnson
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Notary Public
Sherry E. Johnson
Notary Public, Oakland County, MI
My Commission Expires 09/08/2004
STATE OF MICHIGAN )
: ss:
COUNTY of OAKLAND )
On March 12, 2001 before me personally came Frank J. Preston
to me known and known to be the individual described in, and who executed the
foregoing Separation Agreement and General Release, and he duly acknowledged to
me that he executed the same.
/s/ Sherry E. Johnson
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Notary Public
[SEAL]
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