Exhibit 10.2

CONSULTING AGREEMENT

The Undersigned:

1                              POLYMER GROUP, INC, a public company, organised
under the laws of the State of Delaware, United States of America, having its
principle office at 4055 Faber Place Drive, Suite 201, North Charleston, South
Carolina 29405, United States of America, hereafter to be referred to as: the
“Company”, for this matter duly represented by James Schaeffer, its Chief
Executive Officer.

and

2                              MR R. ALTDORF, domiciled at Kleve (4190),
Germany, at the Hirschpfuhl 20, hereafter to be referred to as: “the
Consultant”.

Hereafter together to be referred to as: “the Parties”

WHEREAS:

·                              the Company is in need of the services of a
consultant;

·                              the Consultant is able and agrees to render such
services to the Company, for which purposes he will make himself available to
the Company;

·                              the Parties vis-à-vis do not intend de jure nor
de facto to conclude or create an employment relationship between the Company
and the Consultant;

HAVE AGREED AS FOLLOWS:

Section 1: Assignment

1.1                     This consulting agreement (“the Consulting Agreement”)
will enter into effect on July 1, 2006 and will be concluded for three years.
The Consulting Agreement will therefore end automatically on June 30, 2009,
without any notice being required. The Consulting Agreement may be extended for
subsequent one year periods by mutual agreement.

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1.2                     The Consultant will offer strategic and other advice on
a general as-needed basis and with regard to special projects. The specific
content of his function and duties for each special project will be discussed
and mutually agreed in all reasonableness.

1.3                     The Consultant will ensure the Company that he will
perform his tasks and duties to the best of his abilities and in accordance with
the Company’s requirements and the applicable law.

1.4                     The Consultant will make himself available for the
above-mentioned assignment for 150 days during the three year period mentioned
under 1.1. The Company will strive to engage the Consultant in a similar number
of days per year.  One day shall equal 8 hours of work during a 24 hour day.  To
the extent Consultant works less than 8 hours during a 24 hour day, Consultant
will aggregate his time over multiple days until 8 hours (i.e., 1 day) have been
achieved.  To the extent Consultant works more than 8 hours during a 24 hour
day, Consultant will aggregate such additional time until another 8 hours (i.e.,
1 day) has been achieved.  For avoidance of doubt, it is possible for Consultant
to receive credit for up to 3 days of work in a 24 hour day (i.e., 3 x 8 = 24). 
The Consultant shall submit a record of his time to the Company no less than
each calendar quarter during the term.

Section 2: Termination

2.1                     This agreement cannot be terminated before June 30,
2009, unless provided for in this agreement.

2.2                     Notwithstanding the above, the Company can terminate, by
written notification, the Consulting Agreement with immediate effect without the
obligation to pay any form of compensation, in the event the Consultant:

-                                files for bankruptcy or is declared bankrupt;

-                                applies for suspension of payment by a court’s
decision and/or in the event that such suspension of payment is granted;

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-                                is in material default or negligence in the
performance of the obligations of this agreement.

-                                is guilty of embezzlement;

-                                is guilty of misappropriation of corporate
funds or other material acts of dishonesty;

-                                is engaged in any activity of that could harm
the business or reputation of the Company;

-                                violates any statutory, material, contractual
or legal duty or obligation to the Company.

2.3                     Notwithstanding the above, the Consultant can terminate,
by written notification, the Consulting Agreement with immediate effect in case
the Company:

-                                files for bankruptcy or is declared bankrupt;

-                                applies for suspension of payment by a court’s
decision and/or in the event that such suspension of payment is granted;

-                                is in material default or negligence in the
performance of the obligations of this agreement.

In case of such a termination, the Company agrees to pay Consultant within 10
days the remaining fixed monthly fee due from the date of termination to the end
of the contract term.

Section 3: Fee and expenses

3.1                     In consideration for the consultancy services rendered
by the Consultant to the Company the latter will pay the former a fixed monthly
fee of € 5,312.50, excluding VAT.  For every day the 150 day maximum as
mentioned under 1.4 is exceeded, the Company will pay the Consultant a fixed
daily fee of € 1,275, excluding VAT. No fees are due from the date the
Consultant has not been able, for whatever reason (e.g. illness or disability),
to perform his work under this Consulting Agreement for a period of 30 days;
provided, every reasonable effort will be made to allow Consultant to make up
any time missed.

3.2                     The Company shall reimburse the reasonable and
pre-approved travel and out-of-pocket expenses incurred by the Consultant in the
performance of his consulting activities. Travel will be done in accordance with
the Company’s policies as they exist from time-to-time and as they apply to vice
presidents of the Company.

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3.3                     The Consultant shall invoice the Company every month.
The Company shall pay these invoices within 10 days after the invoice date. This
invoice has to be faxed to the attention of the CEO of the Company.

Section 4: Confidentiality and disclosure

4.1                     The Consultant must at all times both during and after
the term of this consultancy agreement observe secrecy with respect to the terms
and conditions of the Consulting Agreement and with respect to all matters
coming to the knowledge of the Consultant during the performance of his
consulting activities as well as with respect to all trade secrets and
confidential information of the Company or its affiliates or received by the
Company, unless such matters are of nature requiring legal communication
required to third parties and prior reasonable notice of such disclosure is
given to the Company.

4.2                     It is prohibited for the Consultant to have books,
correspondence, notes, drawings, calculations, and other documents of which the
confidential character can be assumed or copies or drawings thereof, and that
belong to the Company, to have in his private possession, or to show to third
parties or to put at the disposal without prior written approval of the Company.

4.3                     All such correspondence, notes, drawings, calculations
etc. even if they are put at the disposal of the Consultant or were personally
addressed and sent to the Consultant, have to be returned at first request or at
the termination of the Consulting Agreement, together with all other Company
property that the Consultant possesses or controls.

Section 5: Non-competition

Without the prior written consent of the Company, the Consultant will not during
the duration of the Consulting Agreement and during a period of one year after
termination of the Consulting Agreement, work directly or indirectly with or for
a company or group or individual(s), that wholly or partially are engaged in the
same business as the Company and/or its affiliated companies, wherever in the
world.

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Section 6: Non-solicitation

The consultant will not during the duration of the Consulting Agreement and
during a period of one year after the termination of the Consulting Agreement
without the prior written consent of the Company, either alone or jointly with
others, or as employee, advisor, manager, consultant or agent of any person or
entity, directly or indirectly, solicit the employment of any person who is, or
has at any time during the two years preceding the termination date been, an
employee, vendor or customer of the Company and/or any of its affiliated
companies.

Section 7: Intellectual and industrial property rights

7.1                     All Intellectual and Industrial property rights
resulting from the consulting activities carried out by the Consultant pursuant
to the Consulting Agreement shall become and remain the property of the Company.
Insofar as the Intellectual and Industrial property rights are not vested in the
Company by operation of law, the Consultant herewith transfers to the Company
all Intellectual and Industrial property rights resulting from his consulting
activities. The Consultant waives his moral rights to which the may be entitled.

7.2                     The Company warrants that the fee mentioned under
section 3 includes reasonable compensation for the fact that Intellectual and
Industrial property rights will vest in the Company and that Consultant will not
be entitled to any further compensation.

Section 8: Miscellaneous

8.1                     The Consultant will hold the Company harmless from any
possible claim with respect to the existence of an employment agreement, in the
event this agreement will be considered as such by any relevant government,
public authority or court.

8.2                     No modification, variation or amendment to this
agreement shall be effective unless such modification, variation or amendment is
in writing and has been signed by or on behalf of both parties.

8.3                     This agreement is not assignable by Consultant without
the express written consent of the Company, which consent may be withheld in its
sole discretion.  This agreement is freely assignable by the Company to any
affiliated entity.  This agreement is binding on each party’s successors and
permitted assignees.

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8.4                     This agreement contains the entire understanding between
the Company and the Consultant and therefore supersedes any previous (oral and
written) agreements.

8.5                     This agreement shall be exclusively governed by and
shall be interpreted by the laws of the State of Delaware, United States of
America.

8.6                     If any stipulation or paragraph of the Consulting
Agreement will be declared null and void, this will not affect the validity of
the rest of the agreement. The Company and The Consultant will consult with each
other regarding the stipulations, which are not valid in order to agree upon a
new stipulation that corresponds as much as possible with the essence of the
original stipulation.

Thus agreed and signed in duplicate, each party acknowledging having received
one copy, on the 8th day of May, 2006.

/s/

/s/

 

 

James Schaeffer

Mr Rolf Altdorf

 

 

On behalf of Polymer Group, Inc.

 

 

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