Vice President of Marketing Employment Agreement

MUTUAL RELEASE AND SETTLEMENT AGREEMENT


THIS AGREEMENT is made by and between Daniel Cox (hereinafter referred to as "Cox"), and Signal Apparel Company, Inc. (hereinafter referred to as "Signal").


WHEREAS, prior to March 24, 1995, Cox was employed by Signal in the position of executive vice president of marketing and sales and was within the protected-age category under state age discrimination laws:


WHEREAS, effective March 17, 1995, Cox resigned his position as an officer of Signal, contending that the terms and conditions of his employment had been altered by Signal in a discriminatory manner based upon his age, and his employment with Signal was terminated by mutual agreement of the parties effective March 24, 1995;


WHEREAS, Cox has instituted litigation against the company alleging age discrimination under state law in the case styled DANIEL COX V. SIGNAL APPAREL COMPANY, INC., in the Circuit Court of Hamilton County, Tennessee, No. 95-CV-749 (the "Litigation"), seeking recovery of monetary damages;


WHEREAS, Cox and Signal desire to fully settle and compromise all matters in dispute between them.


NOW, THEREFORE, in consideration of the aforementioned premises, and other good and valuable consideration, the receipt and sufficiency of which is acknowledged, the parties agree as follows:


1. The "Effective Date" of this Agreement is the date upon which said document is fully executed.


2. No later than April 22, 1995, Signal agrees to pay to Cox the sum of $38,500 as full settlement and satisfaction of Cox's claims for future salary and as consideration for the termination of the employment contract between Cox and Signal dated March 4, 1994 (the "Employment Agreement"). Said sum shall be subject to federal withholding taxes.


3. Signal agrees to pay to Cox the sum of $25,000 representing the guaranteed bonus which Cox earned for the fiscal year 1994. Said sum shall be subject to federal withholding taxes and shall be paid within three (3) business days of the execution of this Agreement.


4. Signal shall pay to Cox the sum of $13,125, representing 15 days' of unused vacation which accrued to Cox prior to his termination. Said sum shall be subject to federal withholding taxes and shall be paid (delete: simultaneously with; add: within three business days of) (/s/ W.H.W.) the execution of this Agreement.


5. Signal agrees to pay Cox the additional sum of $21,389 per month for a nine-month period, beginning May, 1995, as compensation to Cox for the alleged humiliation, embarrassment, pain and suffering associated with the alleged diminution of Cox's duties and responsibilities at the company due to his age. As a settlement of personal injury claims, the monthly payments shall not be treated as taxable income subject to withholding and will be paid in gross to Cox. Said payments shall be due on or before the 22nd day of each month, beginning May 22, 1995 and ending on January 22, 1996. In the event Signal fails to make any payment called for under this Agreement within twenty (20) days of the date upon which it is due, all future payments contemplated under this paragraph shall be accelerated and shall become immediately due and payable to Cox without further demand. Any payments due under this paragraph which are not made within twenty days after they are due shall bear interest at the rate of 10% per annum until paid.


6. Cox agrees to indemnify, defend, and hold Signal harmless for any and all liability that Signal incurs for interest and penalties to any and all taxing authorities, arising from Signal not withholding the aforesaid taxes on the payments described in PARAGRAPH 5.


7. Signal agrees to continue the benefits which Cox received as of March 24, 1995, ...