Exhibit 10.2

Execution Copy

SEPARATION AGREEMENT AND GENERAL RELEASE

This Separation Agreement and General Release (“Agreement”), effective as of
November 7, 2006, is made and entered into by you, James Snyder, on behalf of
yourself, your heirs, executors, administrators, successors and assigns
(collectively referred to as “you”) and Polymer Group, Inc., on behalf of
itself, its current and former divisions, subsidiaries, affiliates, related
companies, predecessors, successors, assigns, and their officers, directors,
employees, insurers, stockholders, and agents (collectively referred to as
“PGI”).

1.             Separation Date and Pay.  Your employment with PGI will end on
November 7, 2006 (your “Separation Date”).  In exchange for your promises as set
forth in this Agreement, PGI agrees to pay you your current monthly pay, in
accordance with standard PGI payroll process, in the amount of $11,526.67 per
month until September 21, 2007, less applicable payroll withholdings and other
deductions, taking into account North Carolina tax rules relating to severance
payments.

2              Recovery.  Without otherwise limiting PGI’s rights and subject to
and in further consideration of your obligations under the terms of this
Agreement, PGI agrees that it, except to the extent required by law, will not
require you to repay or otherwise seek recovery from you of any salary or bonus
amounts paid to you by PGI during your employment with PGI prior to the
Separation Date.

3.             Additional Payment Opportunity.  You will be eligible for an
additional payment opportunity equal to $34,580.01 in lieu of any other bonus
payments or bonus opportunities available to you under any PGI plan, agreement
or arrangement, less applicable payroll withholdings and other deductions,
taking into account North Carolina tax rules relating to severance payments. 
This additional payment will only be paid on September 21, 2007 and only if you
comply with all of the terms and conditions of this Agreement for the entire
period.  Your satisfaction of the terms of this Agreement shall entitle you to
the additional payment.

4.             Stock Options; Restricted Stock.  You will forfeit all of your
shares of restricted stock and stock options that have been granted to you,
including all vested and unvested shares, and all such vested and unvested
shares shall be immediately cancelled.

5.             Vacation; Paid Time Off.  You will be entitled to receive $
3,645.00 for your 3 weeks of unused earned vacation and/or paid time off days,
less applicable payroll withholdings and other deductions, taking into account
North Carolina tax rules relating to severance payments.

6.             Release.  In exchange for the benefits set forth in this
Agreement, you agree to waive and release PGI with respect to any and all
claims, whether currently known or unknown, that you now have or have ever had,
against PGI arising from or related to any agreement, act, omission, or thing
occurring or existing at any time prior to or on the date on which you sign this
Agreement.  Without limiting the foregoing, the claims released by you hereunder
include, but are not limited to:

 

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(a)           all claims for or related in any way to your employment,
compensation, other terms and conditions of employment, actions occurring during
your employment, or termination from employment with PGI, including without
limitation all claims for salary, bonus, severance pay, or any other
compensation or benefit;

(b)           all claims that were or could have been asserted by you or on your
behalf:  (i) in any federal, state, or local court, commission, arbitration
proceeding, or agency; (ii) under any common law theory; or (iii) under any
employment, contract, tort, federal, state, or local law, regulation, ordinance,
constitutional provision, or executive order; and

(c)           all claims that were or could have been asserted by you or on your
behalf arising under any of the following laws, as amended from time to time: 
Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment
Act of 1967, as amended (including the Older Workers Benefit Protection Act),
the Equal Pay Act of 1963, as amended, the Americans with Disabilities Act, the
Employee Retirement Income Security Act, the Family and Medical Leave Act, and
the Worker Adjustment and Retraining Notification Act any applicable Executive
Order Programs, the Fair Labor Standards Act, or their state or local
counterparts, the South Carolina Human Affairs Law, S.C. Code sections 1-13-10
et seq.; S.C. Code sections 41-10-10 et seq. and the retaliatory employment
discrimination provision of North Carolina law; provided that this release does
not cover any claims you may have under the North Carolina Worker’s Comp Act,
N.C.G.S. 97-1 et seq.  Annex 1 sets forth the name of the other terminated
employee.

7.             Covenant Not to Sue.  You agree, represent and warrant that: (a)
you will not commence, aid or maintain any action or other legal proceeding
based upon any claim arising out of or related to the matters released in this
Agreement, except for the purpose of enforcing this Agreement as required by
law; (b) you have not filed or initiated any legal or other proceedings against
PGI; (c) no such proceedings have been initiated against PGI on your behalf; (d)
you are the sole owner of the claims that are released in Paragraph 6 above; (e)
none of these claims has been transferred or assigned or caused to be
transferred or assigned to any other person, firm or other legal entity; and (f)
you have the full right and power to grant, execute, and deliver the releases,
undertakings, and agreements contained in this Agreement.

8.             Acknowledgements.  You further agree that:

·                                          You have read this Agreement and
understand all of its terms, having been advised by counsel;

·                                          You are entering into this Agreement
knowingly, voluntarily and with full knowledge of its significance;

·                                          The promises contained in Paragraphs
1 and 3, are consideration for your signing this Agreement and represent
payments and benefits that, in absence of signing this Agreement, you would not
be entitled to receive from PGI;

 

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·                                          You acknowledge that you understand
that you have seven days after the execution of this Agreement to revoke it and
that the release contained in this Agreement shall not become effective or
enforceable until this seven-day revocation period has expired; and

·                                          You acknowledge that you have had at
least 45 days from the date of your receipt of the release contained in this
Agreement substantially in its final form on September 25, 2006, to consider it
and the changes made since the September 25, 2006 version of this Agreement are
not material and will not restart the required 45-day period..

9.             Termination of Change in Control Severance Compensation
Agreement.  You and PGI agree that the Change in Contro0l Severance Compensation
Agreement dated as of March 24, 2006, is hereby terminated in its entirety
without any obligation on the part of you or PGI for any events, occurrences or
transactions that may have occurred, or may occur, prior to or after the date
hereof.

10.           Confidential Information.

                                (a)  Obligation to Maintain Confidentiality. 
You acknowledge that the continued success of the Company and its Subsidiaries,
depends upon the use and protection of a large body of confidential and
proprietary information.  All of such confidential and proprietary information
existing prior hereto or now existing is referred to in this Agreement as
“Confidential Information.”  Confidential Information will be interpreted as
broadly as possible to include all information of any sort (whether merely
remembered or embodied in a tangible or intangible form) that is (i) related to
the Company’s or its Subsidiaries’ current or potential business and (ii) is not
generally or publicly known.  Confidential Information includes, without
specific limitation, the information, observations and data obtained by you
during the course of your employment with the Company and its Subsidiaries
concerning the business and affairs of the Company and its Subsidiaries,
information concerning acquisition opportunities in or reasonably related to the
Company’s or it Subsidiaries’ business or industry of which you become aware
during your employment, the persons or entities that are current, former or
prospective suppliers or customers of any one or more of them during your course
of your employment, as well as development, transition and transformation plans,
methodologies and methods of doing business, strategic, marketing and expansion
plans, including plans regarding planned and potential sales, financial and
business plans, employee lists and telephone numbers, locations of sales
representatives, new and existing programs and services, prices and terms of
purchases, purchasing practices, contact terms, prices paid for raw materials
and supplies, negotiating strategy, customer service policies and programs,
integration processes, requirements and costs of providing service, support and
equipment.  Therefore, you agree that you shall not disclose to any unauthorized
person or use for your own account any of such Confidential Information without
both Board’s prior written consent, unless and to the extent that any
Confidential Information (i) becomes generally known to and available for use by
the public other than as a result of your acts or omissions to act or (ii) is
required to be disclosed pursuant to any applicable law or court order.  You
agree to deliver to the Company all

 

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memoranda, notes, plans, records, reports and other documents (and copies
thereof) relating to the business of the Company or its Subsidiaries (including,
without limitation, all Confidential Information) that you possess or have under
your control.

(b)  Ownership of Intellectual Property.  You agree to make prompt and full
disclosure to the Company or its Subsidiaries, as the case may be, of all ideas,
discoveries, trade secrets, inventions, innovations, improvements, developments,
methods of doing business, processes, programs, designs, analyses, drawings,
reports, data, software, firmware, logos and all similar or related information
(whether or not patentable and whether or not reduced to practice) that relate
to the Company’s or its Subsidiaries’ actual or anticipated business, research
and development, or existing or future products or services and that are
conceived, developed, acquired, contributed to, made, or reduced to practice by
you (either solely or jointly with others) while employed by the Company or it
Subsidiaries and for a period of one (1) year thereafter (collectively, “Work
Product”).  Any copyrightable work falling within the definition of Work Product
shall be deemed a “work made for hire” under the copyright laws of the United
States, and ownership of all right therein shall vest in the Company or its
Subsidiary.  To the extent that any Work Product is not deemed to be a “work
made for hire,” you hereby assign and agree to assign to the Company or such
Subsidiary all right, title and interest, including without limitation, the
intellectual property rights that you may have in and to such Work Product.  You
shall promptly perform all actions reasonably requested by the Board to
establish and confirm the Company’s or such Subsidiary’s ownership (including,
without limitation, providing testimony and executing assignments, consents,
powers of attorney, and other instruments).

(c)  Third Party Information.  You understand that the Company and its
Subsidiaries have received from third parties confidential or proprietary
information (“Third Party Information”) subject to a duty on the Company’s and
its Subsidiaries’ part to maintain the confidentiality of such information and
to use it only for certain limited purposes.  Without in any way limiting the
provisions of subsection (a) above, you will hold Third Party Information in the
strictest confidence and will not disclose to anyone (other than personnel of
the Company or its Subsidiaries who need to know such information in connection
with their work for the Company or such Subsidiaries) or use Third Party
Information unless expressly authorized by a member of the Board in writing.

11.           Return of PGI Property.  You agree to return to PGI all PGI
property, equipment and materials, including, but not limited to, the following
materials provided to you in the course of your employment with PGI, if
applicable:  laptop computer and peripherals; cell phone; telephone calling
cards; keys; PGI identification card; credit cards; PDA; and all written or
graphic materials (and all copies) relating in any way to PGI’s business,
including documents, manuals, computer files, diskettes, customer lists and
reports.

12.           Transition.  You agree that you will assist PGI, as reasonably
requested, in the professional transition of work in progress, duties, files and
pertinent information for matters occurring prior to the Separation Date.

 

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13.           Assistance.  You agree:

(a)           to cooperate fully with PGI and its legal counsel in
investigating, defending, prosecuting, litigating, filing, initiating or
asserting any claims or potential claims (including without limitation in
connection with legal, equitable, administrative or other proceedings) that may
be made by or against PGI to the extent that such claims may relate to or arise
out of your employment with PGI;

(b)           to cooperate fully with PGI and its legal counsel with respect to
any government or private investigations or legal claims related to PGI. Such
cooperation shall include, but not be limited to, making yourself available upon
reasonable notice for interviews and deposition and trial testimony as needed,
in the sole discretion of PGI and its legal counsel.  You further agree to
provide PGI with any documents related to PGI, whether foreign or domestic, that
are in your  possession, custody or control.  You shall provide immediate notice
to PGI of any subpoena or other legal document that you receive that relates in
any way to PGI, along with a copy of such subpoena or other legal document.  You
may be accompanied at any time you so desire by counsel of your choice and must
provide truthful and accurate information  and testimony and not assert any
privilege on behalf of PGI, other than the attorney-client or work product
privileges which may arise from your retention of your separate counsel; and

(c)           that on reasonable notice, and without service of a subpoena, you
will cooperate with the United States Securities and Exchange Commission (“SEC”)
and its staff (“staff”) and any other securities regulatory or law enforcement
agency with respect to any investigation involving PGI.  As part of such
cooperation you will truthfully disclose all information with respect to your
activities and the activities of others about which the SEC or its staff may
inquire; accept service, and appear and testify in all investigations,
administrative and judicial proceedings, at which the SEC or its staff makes
requests for such testimony.  You shall further make yourself available for
interviews if requested by the staff and must produce any documents related to
the above matters that are within your possession, custody or control, domestic
or foreign.  You may be accompanied at any time you so desire by counsel of your
choice and must provide truthful and accurate information and testimony and not
assert any evidentiary or other privilege on behalf of PGI, other than the
attorney-client or work product privileges which may arise from your retention
of your separate counsel.

14.           Non-Compete, Non-Solicitation.

(A)           IN FURTHER CONSIDERATION OF THE COMPENSATION TO BE PAID TO YOU
HEREUNDER, YOU ACKNOWLEDGE THAT DURING THE COURSE OF YOUR EMPLOYMENT WITH THE
COMPANY AND ITS SUBSIDIARIES YOU BECAME FAMILIAR WITH THE COMPANY’S TRADE
SECRETS AND WITH OTHER CONFIDENTIAL INFORMATION CONCERNING THE COMPANY AND ITS
PREDECESSORS AND ITS SUBSIDIARIES AND THAT YOUR SERVICES WERE OF SPECIAL, UNIQUE
AND EXTRAORDINARY VALUE TO THE COMPANY AND ITS SUBSIDIARIES, AND THEREFORE, YOU
AGREE THAT, FOR A PERIOD OF TWELVE MONTHS FOLLOWING THE SEPARATION DATE (THE
“NONCOMPETE PERIOD”), YOU SHALL NOT DIRECTLY OR INDIRECTLY OWN ANY INTEREST IN,
MANAGE, CONTROL, PARTICIPATE IN, CONSULT WITH,

 

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render services for, be employed by or in any manner engage in any business
competing with the businesses of the Company or its Subsidiaries, as such
businesses exist or are in process, as made known to Executive during his
employment with the Company, on the date hereof, within any geographical area in
which the Company or its Subsidiaries engage or plan to engage in such
businesses, as such plans were made known to Executive during his employment
with the Company.  Nothing herein shall prohibit you from being a passive owner
of not more than 2% of the outstanding stock of any class of a corporation which
is publicly traded, so long as you have no active participation in the business
of such corporation.

(B)           DURING THE NONCOMPETE PERIOD, YOU SHALL NOT DIRECTLY OR INDIRECTLY
THROUGH ANOTHER PERSON OR ENTITY (I) INDUCE OR ATTEMPT TO INDUCE ANY EMPLOYEE OF
THE COMPANY OR ANY SUBSIDIARY TO LEAVE THE EMPLOY OF THE COMPANY OR SUCH
SUBSIDIARY, OR IN ANY WAY INTERFERE WITH THE RELATIONSHIP BETWEEN THE COMPANY OR
ANY SUBSIDIARY AND ANY EMPLOYEE THEREOF, (II) HIRE ANY PERSON WHO WAS AN
EMPLOYEE OF THE COMPANY OR ANY SUBSIDIARY AT ANY TIME DURING THE PERIOD OF YOUR
EMPLOYMENT WITH THE COMPANY OR (III) INDUCE OR ATTEMPT TO INDUCE ANY CUSTOMER,
SUPPLIER, LICENSEE, LICENSOR, FRANCHISEE OR OTHER BUSINESS RELATION OF THE
COMPANY OR ANY SUBSIDIARY TO CEASE DOING BUSINESS WITH THE COMPANY OR SUCH
SUBSIDIARY, OR IN ANY WAY INTERFERE WITH THE RELATIONSHIP BETWEEN ANY SUCH
CUSTOMER, SUPPLIER, LICENSEE OR BUSINESS RELATION AND THE COMPANY OR ANY
SUBSIDIARY (INCLUDING, WITHOUT LIMITATION, MAKING ANY NEGATIVE OR DISPARAGING
STATEMENTS OR COMMUNICATIONS REGARDING THE COMPANY OR ITS SUBSIDIARIES).

(C)           IF, AT THE TIME OF ENFORCEMENT OF THIS PARAGRAPH 14, A COURT SHALL
HOLD THAT THE DURATION, SCOPE OR AREA RESTRICTIONS STATED HEREIN ARE
UNREASONABLE UNDER CIRCUMSTANCES THEN EXISTING, THE PARTIES AGREE THAT THE
MAXIMUM DURATION, SCOPE OR AREA REASONABLE UNDER SUCH CIRCUMSTANCES SHALL BE
SUBSTITUTED FOR THE STATED DURATION, SCOPE OR AREA AND THAT THE COURT SHALL BE
ALLOWED TO REVISE THE RESTRICTIONS CONTAINED HEREIN TO COVER THE MAXIMUM PERIOD,
SCOPE AND AREA PERMITTED BY LAW.  YOU ACKNOWLEDGE THAT THE RESTRICTIONS
CONTAINED IN THIS PARAGRAPH 14 ARE REASONABLE AND THAT HAVE REVIEWED THE
PROVISIONS OF THIS AGREEMENT WITH YOUR LEGAL COUNSEL.

(D)           IN THE EVENT OF THE BREACH OR A THREATENED BREACH BY YOU OF ANY OF
THE PROVISIONS OF THIS PARAGRAPH 14, THE COMPANY WOULD SUFFER IRREPARABLE HARM,
AND IN ADDITION AND SUPPLEMENTARY TO OTHER RIGHTS AND REMEDIES EXISTING IN ITS
FAVOR, THE COMPANY SHALL BE ENTITLED TO SPECIFIC PERFORMANCE AND/OR INJUNCTIVE
OR OTHER EQUITABLE RELIEF FROM A COURT OF COMPETENT JURISDICTION IN ORDER TO
ENFORCE OR PREVENT ANY VIOLATIONS OF THE PROVISIONS HEREOF (WITHOUT POSTING A
BOND OR OTHER SECURITY).  IN ADDITION, IN THE EVENT OF AN ALLEGED BREACH OR
VIOLATION BY YOU OF THIS PARAGRAPH 14, THE NONCOMPETE PERIOD SHALL BE TOLLED
UNTIL SUCH BREACH OR VIOLATION HAS BEEN DULY CURED AND THE COMPANY MAY SUSPEND
OR TERMINATE ITS PAYMENTS TO YOU UNDER PARAGRAPH 1.  YOU ACKNOWLEDGE THAT THE
RESTRICTIONS CONTAINED IN THIS PARAGRAPH 14 ARE REASONABLE AND THAT YOU HAVE
REVIEWED THE PROVISIONS OF THIS AGREEMENT WITH YOUR LEGAL COUNSEL.

15.           Assignment.  You agree that the rights and benefits provided to
you under this Agreement are personal to you and no such right or benefit will
be subject to alienation, assignment or transfer except as required by law;
provided, however, that nothing in this paragraph will

 

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preclude you from designating a beneficiary or beneficiaries to receive any
benefit payable on your death.

16.           No Admission.  You and PGI acknowledge that this Agreement does
not constitute an admission by you and PGI of any liability or wrongdoing
whatsoever.

17.           Entire Agreement.  You and PGI agree that this Agreement
constitutes the complete understanding between you and PGI regarding the matters
herein and that no other promises or agreements, express or implied, will be
binding between you and PGI unless signed in writing by you and PGI.  This
Agreement fully supersedes and replaces any and all prior agreements or
understandings, if any, between you and PGI on any matter that is addressed in
this Agreement.  This Agreement may not be amended except in writing signed by
you and a duly authorized senior officer of PGI.

18.           Severability.  You and PGI agree that to the extent that any
portion of this Agreement may be held to be invalid or legally unenforceable,
the remaining portions will not be affected and will be given full force and
effect.

19.           Enforcement.         You and PGI reserve the right to initiate and
pursue any legal action necessary to enforce the terms of this Agreement.  You
acknowledge and agree that a breach of Paragraph 14 of this Agreement will
result in immediate and irreparable harm to PGI and its affiliates and other
related entities for which full damages cannot readily be calculated and for
which damages are an inadequate remedy.  Accordingly, you agree that PGI shall
be entitled to injunctive relief to prevent any such actual or threatened breach
or any continuing breach by you (without posting a bond or other security) of
paragraph 14, without limiting any other remedies that may be available to
PGI.   In the event of any legal action or proceeding to enforce the terms of
this Agreement, the prevailing party will be entitled to recover from the losing
party, in addition to any and all other relief awarded or recovered, its
reasonable expenses, attorneys’ fees and costs.  This Agreement will be
construed and governed by the laws of the State of North Carolina, without
reference to the principles of conflict of laws or choice of law rules.

20.           No Waiver.  The failure to enforce at any time any of the
provisions of this Agreement, or to require at any time performance by the other
party of any of the provisions hereof, will in no way be construed to be a
waiver of such provisions or to affect either the validity of this Agreement or
any part hereof or the right of either party thereafter to enforce each and
every provision in accordance with the terms of this Agreement.

21.           Notices.  All notices required hereunder will be in writing and
will be deemed given upon receipt if delivered personally (receipt of which is
confirmed) or by courier service promising overnight delivery (with delivery
confirmed the next day) or three (3) business days after deposit in the U.S.
Mails, certified with return receipt requested.  All notices will be addressed
as follows:

If to you:

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James Snyder
18218 Town Harbor Road
Cornelius, NC  28031

With a copy to:

C. Margaret Errington
Ferguson, Stein, Chambers, Gresham &Sumter, P.A.
741 Kenilworth Avenue, Suite 300
Charlotte, NC  28204-2828

If to PGI:

Polymer Group, Inc.
9335 Harris Corners Parkway, Suite 300
Charlotte, NC  28269
Attn:  General Counsel

With a copy to:

H. Kurt von Moltke, P.C.
Kirkland & Ellis LLP
200 East Randolph Drive
Chicago, IL  60601

Or to such other address as either party will have furnished to the other in
writing.

SIGNED:

/s/ James B. Snyder

 

/s/ William B. Hewitt

 

 

Title: Interim CEO

 

 

Polymer Group, Inc.

 

 

 

Dated: November 7, 2006

 

Dated: November 7, 2006

 

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ANNEX I

 

OTHER TERMINATED EMPLOYEES

James L. Schaeffer, Age:  56

 

 

 

Annex I

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