<PAGE>

                                                                   Exhibit 10.42

                              SETTLEMENT AGREEMENT

         THIS SETTLEMENT AGREEMENT (this "Agreement") is entered into as of the
31st day of October, 2003 ("Effective Date") by and among TROPICAL SPORTSWEAR
INT'L CORPORATION, a Florida corporation ("Tropical") and NELSON L. MCPHERSON,
JR. ("McPherson"). The term "Parties" refers to all of the foregoing, and the
term "Party" refers to each of the foregoing.

                  WHEREAS, Tropical and McPherson are parties in a civil action
styled Tropical Sportswear Int'l Corporation vs. Christopher B. Munday, Gregory
L. Williams and Nelson L. McPherson, Jr., in the Circuit Court in and for the
Thirteenth Judicial Circuit of Hillsborough County, Florida, Case No: 03-7619,
Division I (the "Litigation"); and

                  WHEREAS, the Litigation pertains to Tropical's disputed
obligations to Christopher B. Munday ("Munday"), Gregory L. Williams
("Williams") and McPherson resulting from Tropical's termination of the
employment of Munday, Williams and McPherson, effective August 15, 2003
("Termination Date"); and

                  WHEREAS, the Parties have successfully mediated a resolution
of the Litigation, the terms and conditions of which are embodied in this
Agreement; and

                  NOW, THEREFORE, in consideration of the payments and covenants
described below, and in consideration of other good and valuable consideration,
the receipt and sufficiency of all of which are hereby acknowledged, Tropical
and McPherson agree as to the following terms and conditions:

         1.       The foregoing recitals are true and correct.

         2. A.    Tropical shall compensate McPherson in the sum of Six
                  Hundred Forty Eight Thousand Dollars and No Cents
                  ($648,000.00). This entire amount of compensation is severance
                  for termination of his employment with Tropical and, except as
                  otherwise expressly stated hereunder, is in fulfillment of all
                  obligations of Tropical to McPherson.

            B.    The amount of compensation set forth in paragraph 2.A. above,
                  shall be paid to McPherson less all sums required to be
                  withheld by Tropical pursuant to federal, state, local and
                  foreign law or regulation. The withholding sum equals the
                  amount of One Hundred Seventy One Thousand Three Hundred
                  Ninety Six Dollars and No Cents ($171,396.00). McPherson
                  acknowledges receipt of the sum of Four Hundred Seventy Six
                  Thousand Six Hundred Four Dollars and No Cents ($476,604.00),
                  which is the total compensation less the withholding sum.

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        3. A.     In addition, Tropical shall pay McPherson the sum of
                  Seventy Eight Thousand Eight Hundred Twenty Dollars and Twenty
                  Cents ($78,820.20), as compensation "grossed up" for the value
                  of, and discharge of Tropical from any responsibility in
                  connection with, the following insurance:

<TABLE>
<CAPTION>
    Type               Policy Value            Carrier             Annual Cost
    ----               ------------            -------             -----------
<S>                    <C>                     <C>                 <C>
Family HMO             n/a                     Aetna               $    13,752

Group Life             $500,000                Aetna               $  8,171.75

Family Dental          n/a                     CompBenefits        $    350.48

Individual Life        Prudential              Prudential          $       800

Executive Group
   Life                $1,000,000              C.N.A.              $       760

Supplemental
   Disability          $5000/month             MetLife             $      1547
                       $7100/month             Provident           $     2,110

Accidental Death
   & Dismemberment     $500,000                Aetna               $       120

Group Travel
   Accident            $3,000,000              Reliance Standard   $       120
                       in event of
                       death
</TABLE>

                  Tropical states that, in view of McPherson's representation
                  that he intends to continue making payments on one or more of
                  the above insurances, Tropical at this time has no intention
                  to affirmatively terminate any of the insurance described
                  above, in order to permit McPherson an opportunity to continue
                  the insurance and to pay for the insurance directly. Tropical
                  at this time does hope that it can change the billing to
                  McPherson on the above insurance, and presently intends to
                  attempt to do so. Tropical, however, represents that it does
                  intend to stop in the near future any type of administrative
                  work, including the forwarding of any premium notices in
                  connection with the insurance. McPherson shall be totally
                  responsible for the payment of insurance premiums for so long
                  as he chooses to maintain any of the above insurance. Tropical
                  represents that, should McPherson fail to pay any premium due
                  or payable, whether now due and payable or due and payable in
                  the

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                  future, or should some other reason or circumstance exist or
                  occur now or in the future, any of the insurance may expire or
                  terminate at any time. Notwithstanding the above, and
                  irrespective of any intentions or hopes of Tropical, Tropical
                  is hereby discharged and released from any responsibility or
                  duty of any nature whatsoever with respect to the above
                  insurance, and is hereby discharged and released from any type
                  of conduct, act, omission or circumstance related to or
                  arising from the above insurance, whether related to or
                  arising from contract, tort, fraud, negligence, statute,
                  regulation, duty, law, equity or otherwise.

                  Withholding on this compensation equals Twenty Thousand Eight
                  Hundred Forty Seven Dollars and Ninety Four Cents
                  ($20,847.94). McPherson acknowledges receipt of the sum of
                  Fifty Seven Thousand Nine Hundred Seventy Two Dollars and
                  Twenty Six Cents ($57,972.26), which is the compensation less
                  the withholding sum.

           B.     Tropical shall not be obligated to secure or provide
                  disability insurance for McPherson or his family under any
                  group disability policy.

        4. A.     The Parties mutually and generally release each other under
                  the following terms.

           B.     Unless specifically and expressly stated otherwise in this
                  Agreement, the term "Claims" as used in this Agreement
                  includes any and all rights to compensation, severance or
                  termination compensations, accrued obligations or benefits,
                  business reason termination payments, target annual cash
                  bonuses, welfare plan benefits, other benefits, actions,
                  causes of action, defenses, lawsuits, arbitrations, injuries,
                  losses, payments, attorneys' fees, benefits, rights, damages,
                  costs, loss of service, loss of opportunities, loss of
                  profits, liens, expenses, compensation, suits, debts, dues,
                  sums of money, accounts, reckonings, bonds, stock claims,
                  stock option claims, benefits claims, bills, securities,
                  specialties, covenants, contracts, controversies, agreements,
                  promises, duties and obligations, variances, judgments,
                  extents, executions, claims, and demands, of any type
                  whatsoever, including any claim for indemnity or for
                  contribution, or any claim in subrogation or other similar
                  third party type of claim, in law or equity, whether known or
                  unknown, suspected or unsuspected, actual or potential,
                  asserted or unasserted, warranted or unwarranted, fixed or
                  contingent, liquidated or unliquidated, which has matured and
                  which a Party has as of the effective date of this Agreement,
                  or had or ever had prior to the effective date of this
                  Agreement.

           C.     The term "Claims" shall also include, but is not limited to,
                  any cause of action or any matter whatsoever relating to,
                  arising from, or in any way pertaining to the Litigation, or
                  relating to, arising from, or in any way pertaining to any
                  matter which was alleged in, or which could have been alleged
                  in, the Litigation.

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<PAGE>

            D.    The term "Claims" shall also include, but is not limited to,
                  any cause of action, charges, claims, actions, causes of
                  action or liabilities of any kind or nature, whether known or
                  unknown, related to or arising out of employment and/or
                  association of McPherson or with Tropical that they have ever
                  had or now have, or that any person or entity claiming through
                  them may have or claim to have, whether based on tort,
                  contract (express or implied) or any federal, state or local
                  law, statute or regulation, including, but not limited to any
                  claim under the Employee Retirement Income Security Act, 29
                  U.S.C. Section 1001 et seq.; the Family and Medical Leave Act,
                  29 U.S.C. Section 2611 et seq.; Consolidated Omnibus Budget
                  Reconciliation Act of 1986, "COBRA," 29 U.S. C. Section 1161
                  et seq.; Title VII of the Civil Rights Act of 1964, 42.
                  U.S.C. Section 2000 et seq., as amended; the Americans With
                  Disabilities Act (ADA), 42 U.S.C. Section 12101 et seq.; the
                  Florida's Whistleblower Statute, Fla. Stat. Ann. Section
                  448.101 et seq.; the Fair Labor Standards Act; the Florida
                  Civil Rights Act, Fla. Stat. Ann. Section 760.10 et seq. or
                  any similar state or local laws or ordinances prohibiting
                  discrimination, harassment or retaliation; any other claims
                  for personal injury, emotional distress, negligence, breach of
                  fiduciary duty, fraud, worker's compensation, invasion of
                  privacy, defamation, compensatory damages, punitive damages,
                  attorney's fees or costs; and any claims to incentive payments
                  or bonuses.

            E.    Notwithstanding the above, the term "Claims" does not include,
                  and specifically excludes, any obligation of Tropical to
                  indemnify McPherson under By-Laws of Tropical, and any
                  obligation under this Agreement.

            F.    The releases set forth in this Agreement shall become
                  effective as of the Effective Date specified above, upon the
                  execution of this Agreement by all Parties.

            G.    McPherson and Tropical voluntarily and knowingly release and
                  discharge from any Claims, jointly and severally, each other
                  and each other's current, former and future agents, attorneys,
                  heirs, representatives, executors, employees, officers,
                  directors, partners, trustees, shareholders, subsidiaries,
                  successors, assigns, affiliates, beneficiaries, insurers,
                  sureties, indemnitors, guarantors, benefit or compensation
                  plans, and their respective current, former and future agents,
                  attorneys, heirs, representatives, executors, employees,
                  officers, directors, partners, trustees, shareholders,
                  subsidiaries, successors, assigns, affiliates, beneficiaries,
                  insurers, sureties, indemnitors, guarantors, and benefit or
                  compensation plans.

            H.    McPherson and Tropical voluntarily and knowingly terminate any
                  employment agreements between them including, but not limited
                  to, the following document bearing signatures of McPherson and
                  Tropical: (i) a document, dated April 15, 2002, entitled
                  "Employment Agreement".

            I.    McPherson represents that he has not filed any complaint,
                  claim or charge against Tropical with the Equal Employment
                  Opportunity Commission, Florida

                                       4
<PAGE>

                  Commission on Human Relations, the Federal or Florida
                  Department of Labor, or with any other local, state or federal
                  agency or court. McPherson agrees that, if any such agency or
                  court assumes the prosecution or jurisdiction of any complaint
                  or charge against Tropical, McPherson will immediately dismiss
                  the complaint or charge and/or will immediately request such
                  agency or court to dismiss and withdraw from the matter. In
                  the event McPherson fails or refuses to undertake these
                  obligations, McPherson agrees that this Agreement shall
                  operate to effect McPherson' dismissal or withdrawal of such
                  complaint, charge or claim and that McPherson will forward to
                  Tropical any monies McPherson receives from such complaint,
                  charge or claim. Tropical acknowledges that McPherson has
                  filed for unemployment compensation.

            J.    The Parties represent and warrant that any Claim owned or held
                  by them at any time has not been assigned and has not been
                  transferred to any other person or entity.

            K.    The release of this Agreement evidences settlement of claims
                  which are disputed both as to liability and as to amount, and
                  the consideration recited above shall not be construed as an
                  admission of liability, as the same is now and has been
                  expressly denied.

            L.    Tropical shall remain obligated to indemnify McPherson for any
                  Excise Tax "grossed up" and any related taxes, interest,
                  penalties and costs, including attorneys fees, imposed upon
                  McPherson under Section 4999 of the Internal Revenue Code or
                  related sections as a result of any payment made to McPherson
                  under this Agreement.

        5.        All vested or non-vested options of McPherson to purchase
                  stock, or to purchase any type of equity, debt, security or
                  other type of right or obligation, in or issued by Tropical,
                  are cancelled as of the Effective Date. McPherson represents
                  he has exercised no such options on or after Wednesday,
                  October 8, 2003.

        6.        For three (3) years after the Termination Date, McPherson
                  shall not solicit for hire any individual who was an employee
                  of Tropical on the Effective Date.

        7.        McPherson shall cooperate with Tropical and its counsel in
                  respect to any lawsuits, proceedings, investigations or other
                  types of actions involving Tropical, and shall provide and
                  deliver to Tropical and its counsel at reasonable times and
                  places, upon reasonable request of Tropical, truthful
                  information, and originals or duplicates of documents or
                  information whether electronic or otherwise, within the
                  custody, possession or control of McPherson in respect to any
                  such lawsuits, proceedings, investigations, or other types of
                  actions, or in relation to Tropical.

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<PAGE>

        8.        The Litigation shall be immediately dismissed with prejudice
                  by stipulation of the parties in the Litigation.. A copy of
                  the Stipulation for Dismissal With Prejudice is attached as
                  Exhibit A.

        9.        Tropical is bound by an obligation of indemnity and of
                  advancement of expenses to the fullest extent permitted by the
                  law of the State of Florida, as the same may be in effect from
                  time to time, and as provided in its Bylaws, and as defined
                  and set forth in correspondence of Tropical to McPherson dated
                  October 28, 2003.

        10.       Tropical and McPherson agree that each has reviewed this
                  Agreement and any rule of construction to the effect that
                  ambiguities are to be resolved against the drafter shall not
                  apply to the interpretation of this Agreement.

        11.       Tropical and McPherson agree that they have each relied
                  exclusively upon independent counsel in connection with this
                  Agreement, which has been completely read and is readily
                  understood and voluntarily accepted.

        12.       In the event of breach of this Agreement by either Party, the
                  other Party shall be entitled at its option to seek the remedy
                  of specific performance exclusively before a state or federal
                  court of competent jurisdiction in Hillsborough County,
                  Florida.

        13.       This Agreement may be executed by any Party by execution of a
                  counterpart. A signature of a Party shall be effective by that
                  Party faxing or delivering a copy of the signed counterpart to
                  the other Party.

        14.       Except as otherwise expressly provided herein, and except for
                  the obligation of indemnity or advancement of expenses
                  referenced above, this Agreement contains the entire agreement
                  between the Parties and is only subject to modification by
                  written instrument signed by the Parties. No representation or
                  statement not contained herein, shall be binding on the
                  Parties.

        15.       The Parties agree that no inducements, statements or
                  representations have been made that are not set forth in this
                  Agreement and that the Parties did not rely upon any
                  inducements, statements or representations not set forth
                  herein.

        16.       This Agreement was negotiated and delivered within the state
                  of Florida, and shall be governed by Florida law.

        17.       Tropical represents and warrants to McPherson that the officer
                  executing this Agreement has the requisite corporate authority
                  to do so after receiving all necessary and appropriate
                  approvals.

        18.       McPherson is aware that this Agreement has significant legal
                  meaning, and he

                                        6
<PAGE>

                  enters into this Agreement freely and voluntarily.

         IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the day and year indicated above.

     Signed this 31st day of October, 2003.

MCPHERSON                           TROPICAL

/s/ Nelson L. McPherson             /s/ Michael Kagan
---------------------------         -----------------------------
Nelson L. McPherson                 Michael Kagan
                                    Chief Executive Officer
                                    Tropical Sportswear Int'l
                                    Corporation

                                        7
<PAGE>

                                    EXHIBIT A

             IN THE CIRCUIT COURT OF THE THIRTEENTH JUDICIAL CIRCUIT
                     IN AND FOR HILLSBOROUGH COUNTY, FLORIDA
                                 CIVIL DIVISION

TROPICAL SPORTSWEAR
INT'L CORPORATION,

                                Plaintiff,

vs.
                                                               Case No: 03-7619
                                                               Division: I

CHRISTOPHER B. MUNDAY,
GREGORY L. WILLIAMS and
NELSON L. MCPHERSON, JR.,

                                Defendants.

________________________________________________/

                     STIPULATION OF DISMISSAL WITH PREJUDICE

         Plaintiff and Defendants, by undersigned counsel and pursuant to Fla.
R. Civ. P. 1.420(A)(1), stipulate to dismissal with prejudice of this action,
with each such party to bear that Party's own fees and costs.

                    Dated as of _____________________, 2003.

____________________________________
                                                _______________________________
Leslie Joughin, III, FBN: 339385                Lawrence P. Ingram, FBN: 855510
Charles F. Ketchey, FBN: 0181735          PHELPS DUNBAR LLP
Joseph W. N. Rugg, FBN: 335096            100 S. Ashley Drive
S. Gordon Hill, FBN: 094374                     Suite 1900
AKERMAN SENTERFITT                              Tampa, Florida  33602-5311
100 S. Ashley Dr., Suite 1500                   Tel:  813-472-7550
Post Office Box 3273 (Zip 33601)          Fax:  813-472-7570
Tampa, Florida  33602                           Attorney for Defendant,
Tel: 813-223-7333/Fax: 813-223-2837       Nelson L. McPherson, Jr.
Attorneys for Plaintiff

                                        8
<PAGE>

David P. Rankin, FBN:  ________           Michael C. Addison, FBN: 0145579
14502 N. Dale Mabry                              ADDISON & DELANO, P.A
Suite 300                                             Post Office Box 2175
Tampa, FL  33618                                 Tampa, FL  33601-2175
Tel: 813-968-6633                                Tel: 813-223-2000
Fax: 813-963-2175                                Fax: 813-228-6000
Attorney for Defendant,                     Attorney for Defendant,
 Christopher B. Munday                      Gregory L. Williams

                             CERTIFICATE OF SERVICE

         I HEREBY CERTIFY that a true and correct copy of the foregoing has been
furnished via U.S. Mail to Lawrence P. Ingram, Esquire, Phelps Dunbar LLP, 100
S. Ashley Dr., Suite 1900, Tampa, Florida 33602-5311; Jeffrey A. Aman, Esquire,
Aman Law Firm, 14502 N. Dale Mabry, Suite 300, Tampa, Florida 33618; Michael C.
Addison, Esquire, Addison & Delano, P.A., Post Office Box 2175, Tampa, Florida
33601-2175, and Leslie Joughin, III, Charles F. Ketchey, Joseph W. N. Rugg, and
S. Gordon Hill, Akerman Senterfitt, Post Office Box 3273, Tampa, Florida
33601-3273 this ____ day of _______, 2003.

                        ____________________________
                        Attorney

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