Settlement Agreement

EXHIBIT 10.10


SETTLEMENT AGREEMENT


This SETTLEMENT AGREEMENT (the "Agreement") is made as of April 27, 2000 by and between COLLINS & AIKMAN PRODUCTS CO., a Delaware corporation (the "Company"), and DENNIS E. HILLER ("Executive").


W I T N E S S E T H:


WHEREAS, Executive has been employed by the Company as President - Collins & Aikman North American Interior Systems Group pursuant to the terms of that certain Employment Agreement between Executive and the Company dated January 20, 1999 (the "Employment Agreement"); and


WHEREAS, the Company and Executive agree that Executive's employment with the Company was terminated effective as of April 30, 2000; and


WHEREAS, the Company and Executive desire to confirm in this Agreement the payments and other benefits to be provided to Executive resulting from such termination;


NOW, THEREFORE, for and in consideration of the premises and the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


1. Separation Date. Executive's termination of employment with the Company shall be effective as of April 30, 2000 (the "Separation Date").


2. Pre-Separation Date Expenses. The Company and Executive agree that the Company has fully reimbursed Executive for all travel, entertainment and any other miscellaneous business or other reimbursable expenses incurred by Executive prior to the Separation Date.


3. Accrued Vacation. The Company shall pay to Executive Thirteen Thousand Eight Hundred and Eighty Nine ($13,889), less applicable payroll deductions and withholdings, said amount being equal to Executive's accrued but unused vacation as of the Separation Date, to be paid in a lump sum on June 1, 2000.


4. Salary Adjustment. As soon as practicable after the execution and delivery of this Agreement and the expiration of the revocation period described in Paragraph 11(e) below, the Company shall pay to Executive Ten Thousand Six Hundred Forty Dollars ($10,640), less applicable payroll deductions and withholdings, said amount being equal to an adjustment in Executive's base salary for the period commencing January 20, 1999 and ending March 1, 1999 to be paid in a lump sum on June 1, 2000.


5. Bonus Plan. Executive will receive a pro rata bonus under the Company's annual Executive Incentive Compensation Plan (the "EIC Plan") for 2000. The Company guarantees


2


that the pro rata bonus shall be no less than a pro rata payment of the target bonus or $66,666.67. The pro rata bonus, less applicable payroll deductions and withholdings, will be paid to Executive on or before March 31, 2001.


6. Salary Continuation. During the twelve (12) month period from the Separation Date through April 30, 2001. Executive shall continue to receive Executive's base salary in the annual amount of Four Hundred Thousand Dollars ($400,000), less applicable payroll deductions and withholdings, payable in accordance with the Company's normal payroll practices and procedures in effect from time to time. If Executive has met all terms and conditions of the agreement as of April 30, 2001 he shall receive remainder in a lump-sum payment.


7. Continuation of Certain Benefits. The Company shall provide Executive and his qualified beneficiaries the opportunity to continue health coverage under the Company's health plans under Section 4980B of the Internal Revenue Code of 1986 and Part 6 of subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended May 1, 2000, shall be kthe beginning date for measuring the maximum continuation period under COBRA. During the twelve month (12) month period from the Separation Date through April 30, 2001, if Executive elects to continue to receive Executive's current health benefits (other than the annual executive medical examination and participation in the Company's executive medical and long-term disability plans), the Company agrees to pay the applicable active Company contributions from time to time for the relevant coverages in effect from time to time; provided, however, that such Company payments shall cease prior to the expiration of such twelve (12) month period to the extent that Executive actually receives health benefits from a subsequent employer of Executive during such period, and Executive shall report any such benefits actually received to the Company. Notwithstanding anything herein to the contrary, the Company reserves the right to change the design and terms of the applicable plans from time to time and Executive shall be treated consistent with changes implemented for other active employees. All benefits and perquisites provided to Executive by the Company during the period of his employment not expressly referenced in this Paragraph shall terminate effective as of the Separation Date.


8. Purchase of Automobile. Executive shall purchase the automobile furnished to him by the Company at a price equal to the automobile's current fair market value of Thirty-Two Thousand Dollars ($32,000). The purchase price of the automobile shall be deducted from Executive's pro rata bonus under the EIC Plan described in Paragraph 5 above.


9. Stock Options. As of the Separation Date, all stock options granted to Executive under the Collins & Aikman Corporation 1994 Employee Stock Option Plan shall immediately vest. Executive shall be permitted to exercise the options at any time prior to the earlier of (i) the original expiration date of such options or (ii) October 31, 2000. Any outstanding unexercised options as of October 31, 2000 shall lapse as of such date.


10. Relocation Expenses. In the event Executive and his family shall relocate to North Carolina during the period from the Separation Date through April 30, 2002, the Company shall cause Executive to have access to the special moving rates, at Executive's own expense, otherwise available only to ...