Exhibit 10.1

 

POLYMER GROUP, INC.

 

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS AGREEMENT is entered into on March     , 2004, between Polymer Group, Inc.,
a Delaware corporation (the “Company”), and James L. Schaeffer (“Executive”).

 

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

 

1.                                       EMPLOYMENT PERIOD.  THE COMPANY SHALL
EMPLOY EXECUTIVE, AND EXECUTIVE HEREBY ACCEPTS EMPLOYMENT WITH THE COMPANY, UPON
THE TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT FOR THE PERIOD BEGINNING ON
AND AS OF APRIL 1, 2003 AND ENDING AS PROVIDED IN PARAGRAPH 4 HEREOF (THE
“EMPLOYMENT PERIOD”).

 

2.                                       POSITION AND DUTIES.

 

(A)                                  DURING THE EMPLOYMENT PERIOD, EXECUTIVE
SHALL SERVE AS THE CHIEF EXECUTIVE OFFICER OF THE COMPANY AND SHALL HAVE THE
NORMAL DUTIES, RESPONSIBILITIES, FUNCTIONS AND AUTHORITY OF THE CHIEF EXECUTIVE
OFFICER, SUBJECT TO THE POWER AND AUTHORITY OF THE BOARD TO EXPAND OR LIMIT SUCH
DUTIES, RESPONSIBILITIES, FUNCTIONS AND AUTHORITY WITHIN THE SCOPE OF DUTIES,
RESPONSIBILITIES, FUNCTIONS AND AUTHORITY ASSOCIATED WITH THE POSITION OF CHIEF
EXECUTIVE OFFICER AND TO OVERRULE ACTIONS OF OFFICERS OF THE COMPANY.  DURING
THE EMPLOYMENT PERIOD, EXECUTIVE SHALL RENDER SUCH EXECUTIVE AND MANAGERIAL
SERVICES TO THE COMPANY AND ITS SUBSIDIARIES WHICH ARE CONSISTENT WITH
EXECUTIVE’S POSITION AND AS THE BOARD MAY FROM TIME TO TIME DIRECT.

 

(B)                                 DURING THE EMPLOYMENT PERIOD, EXECUTIVE
SHALL REPORT TO THE BOARD AND SHALL DEVOTE HIS BEST EFFORTS AND HIS FULL
BUSINESS TIME AND ATTENTION (EXCEPT FOR PERMITTED VACATION PERIODS AND
REASONABLE PERIODS OF ILLNESS OR OTHER INCAPACITY) EXCLUSIVELY TO THE BUSINESS
AND AFFAIRS OF THE COMPANY AND ITS SUBSIDIARIES.  EXECUTIVE SHALL PERFORM HIS
DUTIES, RESPONSIBILITIES AND FUNCTIONS TO THE COMPANY AND ITS SUBSIDIARIES
HEREUNDER TO THE BEST OF HIS ABILITIES IN A DILIGENT, TRUSTWORTHY, PROFESSIONAL
AND EFFICIENT MANNER AND SHALL COMPLY WITH THE COMPANY’S AND ITS SUBSIDIARIES’
POLICIES AND PROCEDURES IN ALL MATERIAL RESPECTS.  IN PERFORMING HIS DUTIES AND
EXERCISING HIS AUTHORITY UNDER THE AGREEMENT, EXECUTIVE SHALL SUPPORT AND
IMPLEMENT THE BUSINESS AND STRATEGIC PLANS APPROVED FROM TIME TO TIME BY THE
BOARD AND SHALL SUPPORT AND COOPERATE WITH THE COMPANY’S AND ITS SUBSIDIARIES’
EFFORTS TO EXPAND THEIR BUSINESSES AND OPERATE PROFITABLY AND IN CONFORMITY WITH
THE BUSINESS AND STRATEGIC PLANS APPROVED BY THE BOARD.  SO LONG AS EXECUTIVE IS
EMPLOYED BY THE COMPANY, EXECUTIVE SHALL NOT, WITHOUT THE PRIOR WRITTEN CONSENT
OF THE BOARD, ACCEPT OTHER EMPLOYMENT OR PERFORM OTHER SERVICES FOR
COMPENSATION.

 

(C)                                  FOR PURPOSES OF THIS AGREEMENT,
“SUBSIDIARIES” SHALL MEAN ANY CORPORATION OR OTHER ENTITY OF WHICH THE
SECURITIES OR OTHER OWNERSHIP INTERESTS HAVING THE VOTING POWER TO ELECT A
MAJORITY OF THE BOARD OF DIRECTORS OR OTHER GOVERNING BODY ARE, AT THE TIME OF
DETERMINATION, OWNED BY THE COMPANY, DIRECTLY OR THROUGH ONE OF MORE
SUBSIDIARIES.

 

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3.                                       COMPENSATION AND BENEFITS.

 

(A)                                  DURING THE EMPLOYMENT PERIOD, EXECUTIVE’S
BASE SALARY SHALL BE $500,000 PER ANNUM OR SUCH HIGHER RATE AS THE BOARD MAY
DETERMINE FROM TIME TO TIME (AS ADJUSTED FROM TIME TO TIME, THE “BASE SALARY”),
WHICH SALARY SHALL BE PAYABLE BY THE COMPANY IN REGULAR INSTALLMENTS IN
ACCORDANCE WITH THE COMPANY’S GENERAL PAYROLL PRACTICES (IN EFFECT FROM TIME TO
TIME).  THE BOARD SHALL UNDERTAKE AN ANNUAL REVIEW OF EXECUTIVE’S BASE SALARY. 
IN ADDITION, DURING THE EMPLOYMENT PERIOD, EXECUTIVE SHALL BE ENTITLED TO
PARTICIPATE IN ALL OF THE COMPANY’S EMPLOYEE BENEFIT PROGRAMS FOR WHICH SENIOR
EXECUTIVE EMPLOYEES OF THE COMPANY AND ITS SUBSIDIARIES ARE GENERALLY ELIGIBLE,
AND EXECUTIVE SHALL BE ENTITLED TO FOUR WEEKS OF PAID VACATION EACH CALENDAR
YEAR IN ACCORDANCE WITH THE COMPANY’S POLICIES, WHICH IF NOT TAKEN DURING ANY
YEAR MAY NOT BE CARRIED FORWARD TO ANY SUBSEQUENT CALENDAR YEAR AND NO
COMPENSATION SHALL BE PAYABLE IN LIEU THEREOF.  DURING THE EMPLOYMENT PERIOD,
THE COMPANY SHALL PROVIDE EXECUTIVE WITH A CAR COMPARABLE TO THAT WHICH HE IS
USING ON THE DATE OF THIS AGREEMENT (“CAR”).  THE EMPLOYEE SHALL TAKE GOOD CARE
OF THE CAR AND ENSURE THAT THE PROVISIONS AND CONDITIONS OF ANY POLICY OF
INSURANCE RELATING THERETO ARE OBSERVED (INCLUDING THE PROVISION WITH RESPECT TO
PROTECTION OF THE CAR), AND IN THE EVENT THAT THE EMPLOYEE’S EMPLOYMENT
TERMINATES FOR WHATEVER REASON, HE SHALL FORTHWITH RETURN THE CAR WITH THE KEYS
AND ALL LICENSES AND OTHER DOCUMENTATION RELATING TO THE CAR, TO THE COMPANY. 
THE EMPLOYEE SHALL NOT HAVE ANY LIEN RIGHT IN THE CAR OR IN ANY DOCUMENT OR
PROPERTY RELATING THERETO.

 

(B)                                 DURING THE EMPLOYMENT PERIOD, THE COMPANY
SHALL REIMBURSE EXECUTIVE FOR ALL REASONABLE BUSINESS EXPENSES INCURRED BY HIM
IN THE COURSE OF PERFORMING HIS DUTIES AND RESPONSIBILITIES UNDER THIS AGREEMENT
WHICH ARE CONSISTENT WITH THE COMPANY’S POLICIES IN EFFECT FROM TIME TO TIME
WITH RESPECT TO TRAVEL, ENTERTAINMENT AND OTHER BUSINESS EXPENSES, SUBJECT TO
THE COMPANY’S REQUIREMENTS WITH RESPECT TO REPORTING AND DOCUMENTATION OF SUCH
EXPENSES.

 

(C)                                  IN ADDITION TO THE BASE SALARY, THE BOARD
MAY, IN ITS SOLE DISCRETION, AWARD A BONUS TO EXECUTIVE FOLLOWING THE END OF
EACH FISCAL YEAR DURING THE EMPLOYMENT PERIOD BASED UPON EXECUTIVE’S PERFORMANCE
AND THE COMPANY’S OPERATING RESULTS DURING SUCH YEAR; PROVIDED, THAT AS LONG AS
EXECUTIVE SHALL REMAIN EMPLOYED BY THE COMPANY ON JANUARY 4, 2004, EXECUTIVE
SHALL BE ENTITLED TO A MINIMUM PERFORMANCE BONUS EQUAL TO 25% OF HIS BASE SALARY
FOR FISCAL 2003.

 

(D)                                 IN ADDITION TO THE BASE SALARY AND ANY
BONUSES PAYABLE TO EXECUTIVE PURSUANT TO THIS PARAGRAPH, EXECUTIVE SHALL BE
ENTITLED TO HEALTH INSURANCE AND DISABILITY INSURANCE OF SUCH COVERAGE AS
REASONABLY DETERMINED BY THE BOARD AND TERM LIFE INSURANCE IN AN AMOUNT EQUAL TO
TWO TIMES EXECUTIVE’S BASE SALARY.

 

(E)                                  DURING THE EMPLOYMENT PERIOD, EXECUTIVE
SHALL ALSO BE ENTITLED TO REASONABLE PERIODS OF SICK LEAVE (WITHOUT LOSS OF PAY)
IN ACCORDANCE WITH THE COMPANY’S POLICIES AS IN EFFECT FROM TIME TO TIME.

 

(F)                                    ALL AMOUNTS PAYABLE TO EXECUTIVE AS
COMPENSATION HEREUNDER SHALL BE SUBJECT TO ALL REQUIRED AND CUSTOMARY
WITHHOLDING BY THE COMPANY.

 

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4.                                       TERM.

 

(A)                                  UNLESS RENEWED BY THE MUTUAL AGREEMENT OF
THE COMPANY AND EXECUTIVE, THE EMPLOYMENT PERIOD SHALL END ON MARCH 31, 2005. 
THE EMPLOYMENT PERIOD SHALL AUTOMATICALLY BE RENEWED ON THE SAME TERMS AND
CONDITIONS SET FORTH HEREIN AS MODIFIED FROM TIME TO TIME BY THE PARTIES HERETO
FOR ADDITIONAL ONE-YEAR PERIODS BEGINNING ON APRIL 1, 2005, UNLESS THE COMPANY
OR EXECUTIVE GIVES THE OTHER PARTY WRITTEN NOTICE OF THE ELECTION NOT TO RENEW
THE EMPLOYMENT PERIOD AT LEAST 120 DAYS PRIOR TO ANY SUCH RENEWAL DATE; PROVIDED
THAT (I) THE EMPLOYMENT PERIOD SHALL TERMINATE PRIOR TO SUCH DATE IMMEDIATELY
UPON EXECUTIVE’S RESIGNATION (WITH OR WITHOUT GOOD REASON, AS DEFINED BELOW),
DEATH OR DISABILITY AND (II) THE EMPLOYMENT PERIOD MAY BE TERMINATED BY THE
COMPANY AT ANY TIME PRIOR TO SUCH DATE FOR CAUSE (AS DEFINED BELOW) OR WITHOUT
CAUSE.  EXCEPT AS OTHERWISE PROVIDED HEREIN, ANY TERMINATION OF THE EMPLOYMENT
PERIOD BY THE COMPANY SHALL BE EFFECTIVE AS SPECIFIED IN A WRITTEN NOTICE, OR
ORAL NOTICE LATER CONFIRMED IN WRITING, FROM THE COMPANY TO EXECUTIVE.

 

(B)                                 IF THE EMPLOYMENT PERIOD IS TERMINATED BY
THE COMPANY WITHOUT CAUSE OR UPON EXECUTIVE’S RESIGNATION WITH GOOD REASON PRIOR
TO THE SECOND ANNIVERSARY OF THE DATE OF THIS AGREEMENT, EXECUTIVE SHALL BE
ENTITLED TO CONTINUE TO RECEIVE HIS BASE SALARY PAYABLE IN REGULAR INSTALLMENTS
AS SPECIAL SEVERANCE PAYMENTS FROM THE DATE OF TERMINATION THROUGH THE 9 MONTH
ANNIVERSARY OF THE DATE OF TERMINATION (THE “SEVERANCE PERIOD”), IF AND ONLY IF
EXECUTIVE HAS EXECUTED AND DELIVERED TO THE COMPANY THE GENERAL RELEASE
SUBSTANTIALLY IN FORM AND SUBSTANCE AS SET FORTH IN EXHIBIT A ATTACHED HERETO
AND ONLY SO LONG AS EXECUTIVE HAS NOT BREACHED THE PROVISIONS OF PARAGRAPHS 5, 6
AND 7 HEREOF AND DOES NOT APPLY FOR UNEMPLOYMENT COMPENSATION CHARGEABLE TO THE
COMPANY DURING THE SEVERANCE PERIOD, AND EXECUTIVE SHALL NOT BE ENTITLED TO ANY
OTHER SALARY, COMPENSATION OR BENEFITS AFTER TERMINATION OF THE EMPLOYMENT
PERIOD, EXCEPT AS SPECIFICALLY PROVIDED FOR IN THE COMPANY’S EMPLOYEE BENEFIT
PLANS OR AS OTHERWISE EXPRESSLY REQUIRED BY APPLICABLE LAW.  THE BASE SALARY
PAYABLE PURSUANT TO THIS PARAGRAPH 4(B) SHALL BE PAYABLE IN REGULAR MONTHLY
INSTALLMENTS.  THE AMOUNTS PAYABLE PURSUANT TO THIS PARAGRAPH 4(B) SHALL NOT BE
REDUCED BY THE AMOUNT OF ANY COMPENSATION EXECUTIVE RECEIVES WITH RESPECT TO ANY
OTHER EMPLOYMENT DURING THE SEVERANCE PERIOD.

 

(C)                                  IF THE EMPLOYMENT PERIOD IS TERMINATED BY
THE COMPANY FOR CAUSE OR IS TERMINATED PURSUANT TO CLAUSE (A)(I) ABOVE (OTHER
THAN TERMINATION WITH GOOD REASON) OR EXPIRES AND IS NOT RENEWED HEREUNDER,
EXECUTIVE SHALL ONLY BE ENTITLED TO RECEIVE HIS BASE SALARY THROUGH THE DATE OF
TERMINATION OR EXPIRATION AND SHALL NOT BE ENTITLED TO ANY OTHER SALARY,
COMPENSATION OR BENEFITS FROM THE COMPANY OR ITS SUBSIDIARIES THEREAFTER, EXCEPT
AS OTHERWISE SPECIFICALLY PROVIDED FOR UNDER THE COMPANY’S EMPLOYEE BENEFIT
PLANS OR AS OTHERWISE EXPRESSLY REQUIRED BY APPLICABLE LAW.

 

(D)                                 FOR TWELVE MONTHS FOLLOWING THE DATE OF
EXECUTIVE’S TERMINATION, THE COMPANY SHALL, AT ITS EXPENSE, CONTINUE ON BEHALF
OF THE EXECUTIVE AND HIS OR HER DEPENDANTS AND BENEFICIARIES, THE LIFE
INSURANCE, DISABILITY, MEDICAL, DENTAL AND HOSPITALIZATION BENEFITS PROVIDED TO
THE EXECUTIVE IMMEDIATELY PRIOR TO THE DATE OF TERMINATION.  THE COVERAGE AND
BENEFITS (INCLUDING DEDUCTIBLES AND COSTS) PROVIDED IN THIS SECTION 4(D) SHALL
BE NO LESS FAVORABLE TO THE EXECUTIVE AND HIS OR HER DEPENDANTS AND
BENEFICIARIES, THAN THE COVERAGE AND BENEFITS PROVIDED TO EXECUTIVE IMMEDIATELY
PRIOR TO HIS TERMINATION.  THE COMPANY’S OBLIGATION HEREUNDER WITH

 

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respect to the foregoing benefits shall be limited to the extent that the
Executive obtains any such benefits pursuant to a subsequent employer’s benefit
plans, in which case the Company may reduce the coverage of any benefits it is
required to provide the Executive hereunder so long as the aggregate coverage
and benefits of the combined benefit plans is no less favorable to the Executive
than the coverages and benefits required to be provided hereunder.  This
subsection (d) shall not be interpreted so as to limit any benefits to which the
Executive, his or her dependants or beneficiaries may otherwise be entitled
under any of the Company’s employee benefit plans, programs or practices
following the termination of employment of the Executive, including without
limitation, any applicable retiree medical and life insurance benefits.  Except
as otherwise expressly provided herein, all of Executive’s rights to salary,
bonuses, employee benefits and other compensation hereunder which would have
accrued or become payable after the termination or expiration of the Employment
Period shall cease upon such termination or expiration, other than those
expressly required under applicable law (such as COBRA); provided, that for
purposes of determining Executive’s rights under COBRA, the date of the later to
occur of (x) the date of the termination or expiration of the Employment Period
or (y) the date of the final payment of any severance payments made pursuant to
Section 4(b) above, shall be deemed to be the qualifying event for such
purpose.  The Company may offset any amounts Executive owes it or its
Subsidiaries against any amounts it or its Subsidiaries owes Executive
hereunder.

 

(E)                                  FOR PURPOSES OF THIS AGREEMENT, “CAUSE”
SHALL MEAN WITH RESPECT TO EXECUTIVE ONE OR MORE OF THE FOLLOWING:  (I) A
MATERIAL BREACH OF THIS AGREEMENT BY EXECUTIVE; PROVIDED, THAT IF SUCH BREACH IS
CAPABLE OF BEING CURED, EXECUTIVE SHALL BE PROVIDED 15 DAYS NOTICE TO CURE SUCH
BREACH, (II) A BREACH OF EXECUTIVE’S DUTY OF LOYALTY TO THE COMPANY OR ANY OF
ITS SUBSIDIARIES OR ANY ACT OF DISHONESTY OR FRAUD WITH RESPECT TO THE COMPANY
OR ANY OF ITS SUBSIDIARIES, (III) THE COMMISSION BY EXECUTIVE OF A FELONY, A
CRIME INVOLVING MORAL TURPITUDE OR OTHER ACT OR OMISSION CAUSING MATERIAL HARM
TO THE STANDING AND REPUTATION OF THE COMPANY AND ITS SUBSIDIARIES,
(IV) REPORTING TO WORK UNDER THE INFLUENCE OF ALCOHOL OR ILLEGAL DRUGS, THE USE
OF ILLEGAL DRUGS (WHETHER OR NOT AT THE WORKPLACE) OR OTHER REPEATED CONDUCT
CAUSING THE COMPANY OR ANY OF ITS SUBSIDIARIES SUBSTANTIAL PUBLIC DISGRACE OR
DISREPUTE OR ECONOMIC HARM, OR (V) ANY ACT OR OMISSION AIDING OR ABETTING A
COMPETITOR, SUPPLIER OR CUSTOMER OF THE COMPANY OR ANY OF ITS SUBSIDIARIES TO
THE MATERIAL DISADVANTAGE OR DETRIMENT OF THE COMPANY AND ITS SUBSIDIARIES.

 

(F)                                    FOR PURPOSES OF THIS AGREEMENT,
“DISABILITY” SHALL MEAN EXECUTIVE’S INABILITY TO PERFORM THE ESSENTIAL DUTIES,
RESPONSIBILITIES AND FUNCTIONS OF HIS POSITION WITH THE COMPANY AND ITS
SUBSIDIARIES AS A RESULT OF ANY MENTAL OR PHYSICAL DISABILITY OR INCAPACITY EVEN
WITH REASONABLE ACCOMMODATIONS OF SUCH DISABILITY OR INCAPACITY PROVIDED BY THE
COMPANY AND ITS SUBSIDIARIES OR IF PROVIDING SUCH ACCOMMODATIONS WOULD BE
UNREASONABLE, ALL AS DETERMINED BY THE BOARD IN ITS REASONABLE GOOD FAITH
JUDGMENT.  EXECUTIVE SHALL COOPERATE IN ALL RESPECTS WITH THE COMPANY IF A
QUESTION ARISES AS TO WHETHER HE HAS BECOME DISABLED (INCLUDING, WITHOUT
LIMITATION, SUBMITTING TO AN EXAMINATION BY A MEDICAL DOCTOR OR OTHER HEALTH
CARE SPECIALISTS SELECTED BY THE COMPANY AND AUTHORIZING SUCH MEDICAL DOCTOR OR
SUCH OTHER HEALTH CARE SPECIALIST TO DISCUSS EXECUTIVE’S CONDITION WITH THE
COMPANY).

 

(G)                                 FOR PURPOSES OF THIS AGREEMENT, “GOOD
REASON” SHALL MEAN IF EXECUTIVE RESIGNS FROM EMPLOYMENT WITH THE COMPANY AND ITS
SUBSIDIARIES PRIOR TO THE END OF THE EMPLOYMENT PERIOD AS A RESULT OF ONE OR
MORE OF THE FOLLOWING REASONS:  (I) THE COMPANY REDUCES

 

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the amount of the Base Salary, (ii) the Company changes Executive’s title or
reduces his responsibilities inconsistent with the positions he holds or
(iii) Executive and the Company are unable to agree upon the proper reporting of
any financial matter which Executive reasonably believes is appropriate in order
to comply with the rules and regulations of the United States Securities and
Exchange Commission or in order for the Company’s financial statements to be
prepared in conformity with generally accepted accounting principles; provided
that written notice of Executive’s resignation for Good Reason must be delivered
to the Company within 30 days after the occurrence of any such event in order
for Executive’s resignation with Good Reason to be effective hereunder.

 

5.                                       CONFIDENTIAL INFORMATION.

 

(A)                                  OBLIGATION TO MAINTAIN CONFIDENTIALITY. 
EXECUTIVE ACKNOWLEDGES 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, NOW EXISTING OR TO BE DEVELOPED
IN THE FUTURE WILL BE 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 HIM DURING THE COURSE OF HIS
PERFORMANCE UNDER THIS AGREEMENT CONCERNING THE BUSINESS AND AFFAIRS OF THE
COMPANY AND ITS SUBSIDIARIES, INFORMATION CONCERNING ACQUISITION OPPORTUNITIES
IN OR REASONABLY RELATED TO THE COMPANY’S OR ITS SUBSIDIARIES’ BUSINESS OR
INDUSTRY OF WHICH EXECUTIVE BECOMES AWARE DURING THE EMPLOYMENT PERIOD, THE
PERSONS OR ENTITIES THAT ARE CURRENT, FORMER OR PROSPECTIVE SUPPLIERS OR
CUSTOMERS OF ANY ONE OR MORE OF THEM DURING EXECUTIVE’S COURSE OF PERFORMANCE
UNDER THIS AGREEMENT, 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,
CUSTOMER SERVICE, INTEGRATION PROCESSES, REQUIREMENTS AND COSTS OF PROVIDING
SERVICE, SUPPORT AND EQUIPMENT.  THEREFORE, EXECUTIVE AGREES THAT HE SHALL NOT
DISCLOSE TO ANY UNAUTHORIZED PERSON OR USE FOR HIS 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 EXECUTIVE’S ACTS
OR OMISSIONS TO ACT OR (II) IS REQUIRED TO BE DISCLOSED PURSUANT TO ANY
APPLICABLE LAW OR COURT ORDER.  EXECUTIVE AGREES TO DELIVER TO THE COMPANY AT
THE END OF THE EMPLOYMENT PERIOD, OR AT ANY OTHER TIME THE COMPANY MAY REQUEST
IN WRITING, ALL 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 HE MAY THEN
POSSESS OR HAVE UNDER HIS CONTROL.

 

(B)                                 OWNERSHIP OF INTELLECTUAL PROPERTY. 
EXECUTIVE AGREES 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

 

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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 Executive (either solely or jointly with others) while
employed by the Company or its 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 rights
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,” Executive hereby
assigns and agrees to assign to the Company or such Subsidiary all right, title
and interest, including without limitation, the intellectual property rights
that Executive may have in and to such Work Product.  Executive shall promptly
perform all actions reasonably requested by the Board (whether during or after
the Employment Period) 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. EXECUTIVE
UNDERSTANDS THAT THE COMPANY AND ITS SUBSIDIARIES WILL RECEIVE 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.  DURING THE EMPLOYMENT PERIOD AND THEREAFTER, AND WITHOUT IN ANY WAY
LIMITING THE PROVISIONS OF SECTION 5(A) ABOVE, EXECUTIVE 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, EXCEPT IN CONNECTION WITH HIS WORK FOR THE COMPANY OR ITS SUBSIDIARIES,
THIRD PARTY INFORMATION UNLESS EXPRESSLY AUTHORIZED BY A MEMBER OF THE BOARD IN
WRITING.

 

6.                                       NON-COMPETE, NON-SOLICITATION.

 

(A)                                  IN FURTHER CONSIDERATION OF THE
COMPENSATION TO BE PAID TO EXECUTIVE HEREUNDER, EXECUTIVE ACKNOWLEDGES THAT
DURING THE COURSE OF HIS EMPLOYMENT WITH THE COMPANY AND ITS SUBSIDIARIES HE
SHALL BECOME FAMILIAR WITH THE COMPANY’S TRADE SECRETS AND WITH OTHER
CONFIDENTIAL INFORMATION CONCERNING THE COMPANY AND ITS PREDECESSORS AND ITS
SUBSIDIARIES AND THAT HIS SERVICES SHALL BE OF SPECIAL, UNIQUE AND EXTRAORDINARY
VALUE TO THE COMPANY AND ITS SUBSIDIARIES, AND THEREFORE, EXECUTIVE AGREES THAT,
DURING THE EMPLOYMENT PERIOD AND FOR SUCH TIME AS EXECUTIVE IS RECEIVING ANY
SEVERANCE PAYMENTS FROM THE COMPANY, OR SIX MONTHS IF EXECUTIVE IS NOT ENTITLED
TO RECEIVE ANY SEVERANCE PAYMENTS HEREUNDER (OTHER THAN IN THE SPECIFIC CASE IN
WHICH EXECUTIVE IS TERMINATED FOR CAUSE AS A RESULT OF EVENTS THAT OCCURRED
PRIOR TO DECEMBER 31, 2002, IN WHICH CASE THIS PROVISION SHALL NOT APPLY), (THE
“NONCOMPETE PERIOD”), HE SHALL NOT DIRECTLY OR INDIRECTLY OWN ANY INTEREST IN,
MANAGE, CONTROL, PARTICIPATE IN, CONSULT WITH, RENDER SERVICES FOR, 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 DURING THE
EMPLOYMENT PERIOD ON THE DATE OF THE TERMINATION OR EXPIRATION OF THE EMPLOYMENT
PERIOD, WITHIN ANY GEOGRAPHICAL AREA IN WHICH THE COMPANY OR ITS SUBSIDIARIES
ENGAGE OR PLAN TO ENGAGE IN SUCH BUSINESSES.  NOTHING HEREIN SHALL PROHIBIT
EXECUTIVE FROM BEING A PASSIVE OWNER OF NOT

 

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more than 2% of the outstanding stock of any class of a corporation which is
publicly traded, so long as Executive has no active participation in the
business of such corporation.

 

(B)                                 DURING THE NONCOMPETE PERIOD, EXECUTIVE
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 EMPLOYMENT PERIOD 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 6, 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.  EXECUTIVE
ACKNOWLEDGES THAT THE RESTRICTIONS CONTAINED IN THIS PARAGRAPH 6 ARE REASONABLE
AND THAT HE HAS REVIEWED THE PROVISIONS OF THIS AGREEMENT WITH HIS LEGAL
COUNSEL.

 

(D)                                 IN THE EVENT OF THE BREACH OR A THREATENED
BREACH BY EXECUTIVE OF ANY OF THE PROVISIONS OF THIS PARAGRAPH 6, 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 EXECUTIVE OF THIS PARAGRAPH 6,
THE NONCOMPETE PERIOD SHALL BE TOLLED UNTIL SUCH BREACH OR VIOLATION HAS BEEN
DULY CURED.  EXECUTIVE ACKNOWLEDGES THAT THE RESTRICTIONS CONTAINED IN PARAGRAPH
6 ARE REASONABLE AND THAT HE HAS REVIEWED THE PROVISIONS OF THIS AGREEMENT WITH
HIS LEGAL COUNSEL.

 

(E)                                  CHANGE IN CONTROL OF THE COMPANY.  IN THE
EVENT OF A CHANGE IN CONTROL OF THE COMPANY (AS DEFINED IN THE COMPANY’S 2003
STOCK OPTION PLAN), THE PROVISIONS OF THIS SECTION 6 SHALL, ON AND AFTER SUCH
TIME, CEASE TO APPLY AND BE OF NO FURTHER FORCE AND EFFECT.

 

7.                                       EXECUTIVE’S REPRESENTATIONS.  EXECUTIVE
HEREBY REPRESENTS AND WARRANTS TO THE COMPANY THAT (I) THE EXECUTION, DELIVERY
AND PERFORMANCE OF THIS AGREEMENT BY EXECUTIVE DO NOT AND SHALL NOT CONFLICT
WITH, BREACH, VIOLATE OR CAUSE A DEFAULT UNDER ANY CONTRACT, AGREEMENT,
INSTRUMENT, ORDER, JUDGMENT OR DECREE TO WHICH EXECUTIVE IS A PARTY OR BY WHICH
HE IS BOUND, (II) EXECUTIVE IS NOT A PARTY TO OR BOUND BY ANY EMPLOYMENT
AGREEMENT, NONCOMPETE AGREEMENT OR CONFIDENTIALITY AGREEMENT WITH ANY OTHER
PERSON OR ENTITY AND (III) UPON THE EXECUTION AND DELIVERY OF THIS AGREEMENT BY
THE COMPANY, THIS AGREEMENT SHALL BE THE VALID AND BINDING OBLIGATION OF
EXECUTIVE, ENFORCEABLE IN ACCORDANCE WITH ITS TERMS.  EXECUTIVE HEREBY
ACKNOWLEDGES AND REPRESENTS THAT HE HAS CONSULTED WITH INDEPENDENT LEGAL COUNSEL
REGARDING HIS

 

7

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rights and obligations under this Agreement and that he fully understands the
terms and conditions contained herein.

 

8.                                       SURVIVAL.  PARAGRAPHS 4 THROUGH 27
SHALL SURVIVE AND CONTINUE IN FULL FORCE IN ACCORDANCE WITH THEIR TERMS
NOTWITHSTANDING THE EXPIRATION OR TERMINATION OF THE EMPLOYMENT PERIOD.

 

9.                                       NOTICES.  ANY NOTICE PROVIDED FOR IN
THIS AGREEMENT SHALL BE IN WRITING AND SHALL BE EITHER PERSONALLY DELIVERED,
SENT BY REPUTABLE OVERNIGHT COURIER SERVICE OR MAILED BY FIRST CLASS MAIL,
RETURN RECEIPT REQUESTED, TO THE RECIPIENT AT THE ADDRESS BELOW INDICATED:

 

Notices to Executive:

 

James L. Schaeffer
8 Ripplemoor Lane
Charleston, S.C.  29404

 

With a copy to:

 

Charles F. Castner
Parker Poe Adams & Bernstein L.L.P.
200 Meeting Street
Suite 301
Charleston, S.C.  29401

 

Notices to the Company:

 

Polymer Group, Inc.
4055 Faber Place Drive
North Charleston, S.C.  29405
Attn:  General Counsel

 

With a copy to:

 

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

 

or such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party.  Any
notice under this Agreement shall be deemed to have been given when so
delivered, sent or mailed.

 

10.                                 SEVERABILITY.  WHENEVER POSSIBLE, EACH
PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED IN SUCH MANNER AS TO BE
EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION OF THIS AGREEMENT
IS HELD TO BE INVALID, ILLEGAL OR UNENFORCEABLE IN ANY RESPECT UNDER ANY
APPLICABLE LAW OR RULE IN ANY JURISDICTION, SUCH INVALIDITY, ILLEGALITY OR
UNENFORCEABILITY SHALL

 

8

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not affect any other provision of this Agreement or any action in any other
jurisdiction, but this Agreement shall be reformed, construed and enforced in
such jurisdiction as if such invalid, illegal or unenforceable provision had
never been contained herein.

 

11.                                 COMPLETE AGREEMENT.  THIS AGREEMENT, THOSE
DOCUMENTS EXPRESSLY REFERRED TO HEREIN AND OTHER DOCUMENTS OF EVEN DATE
HEREWITH, EMBODY THE COMPLETE AGREEMENT AND UNDERSTANDING AMONG THE PARTIES AND
SUPERSEDE AND PREEMPT ANY PRIOR UNDERSTANDINGS, AGREEMENTS OR REPRESENTATIONS BY
OR AMONG THE PARTIES, WRITTEN OR ORAL, WHICH MAY HAVE RELATED TO THE SUBJECT
MATTER HEREOF IN ANY WAY INCLUDING, WITHOUT LIMITATION, THE COMPANY’S KEY
EMPLOYEE RETENTION AND SEVERANCE PROGRAM ADOPTED IN 2002.

 

12.                                 NO STRICT CONSTRUCTION.  THE LANGUAGE USED
IN THIS AGREEMENT SHALL BE DEEMED TO BE THE LANGUAGE CHOSEN BY THE PARTIES
HERETO TO EXPRESS THEIR MUTUAL INTENT, AND NO RULE OF STRICT CONSTRUCTION SHALL
BE APPLIED AGAINST ANY PARTY.

 

13.                                 COUNTERPARTS.  THIS AGREEMENT MAY BE
EXECUTED IN SEPARATE COUNTERPARTS, EACH OF WHICH IS DEEMED TO BE AN ORIGINAL AND
ALL OF WHICH TAKEN TOGETHER CONSTITUTE ONE AND THE SAME AGREEMENT.

 

14.                                 SUCCESSORS AND ASSIGNS.  THIS AGREEMENT IS
INTENDED TO BIND AND INURE TO THE BENEFIT OF AND BE ENFORCEABLE BY EXECUTIVE,
THE COMPANY AND THEIR RESPECTIVE HEIRS, SUCCESSORS AND ASSIGNS, EXCEPT THAT
EXECUTIVE MAY NOT ASSIGN HIS RIGHTS OR DELEGATE HIS DUTIES OR OBLIGATIONS
HEREUNDER WITHOUT THE PRIOR WRITTEN CONSENT OF THE COMPANY.

 

15.                                 CHOICE OF LAW.  ALL ISSUES AND QUESTIONS
CONCERNING THE CONSTRUCTION, VALIDITY, ENFORCEMENT AND INTERPRETATION OF THIS
AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF SOUTH CAROLINA, WITHOUT
GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW RULES OR PROVISIONS
(WHETHER OF THE STATE OF SOUTH CAROLINA OR ANY OTHER JURISDICTION) THAT WOULD
CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF
SOUTH CAROLINA.

 

16.                                 AMENDMENT AND WAIVER.  THE PROVISIONS OF
THIS AGREEMENT MAY BE AMENDED OR WAIVED ONLY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY (AS APPROVED BY THE BOARD) AND EXECUTIVE, AND NO COURSE OF CONDUCT
OR COURSE OF DEALING OR FAILURE OR DELAY BY ANY PARTY HERETO IN ENFORCING OR
EXERCISING ANY OF THE PROVISIONS OF THIS AGREEMENT (INCLUDING, WITHOUT
LIMITATION, THE COMPANY’S RIGHT TO TERMINATE THE EMPLOYMENT PERIOD FOR CAUSE)
SHALL AFFECT THE VALIDITY, BINDING EFFECT OR ENFORCEABILITY OF THIS AGREEMENT OR
BE DEEMED TO BE AN IMPLIED WAIVER OF ANY PROVISION OF THIS AGREEMENT.

 

17.                                 INSURANCE.  THE COMPANY MAY, AT ITS
DISCRETION, APPLY FOR AND PROCURE IN ITS OWN NAME AND FOR ITS OWN BENEFIT LIFE
AND/OR DISABILITY INSURANCE ON EXECUTIVE IN ANY AMOUNT OR AMOUNTS CONSIDERED
ADVISABLE.  EXECUTIVE AGREES TO COOPERATE IN ANY MEDICAL OR OTHER EXAMINATION,
SUPPLY ANY INFORMATION AND EXECUTE AND DELIVER ANY APPLICATIONS OR OTHER
INSTRUMENTS IN WRITING AS MAY BE REASONABLY NECESSARY TO OBTAIN AND CONSTITUTE
SUCH INSURANCE.  EXECUTIVE HEREBY REPRESENTS THAT HE HAS NO REASON TO BELIEVE
THAT HIS LIFE IS NOT INSURABLE AT RATES NOW PREVAILING FOR HEALTHY MEN OF HIS
AGE.

 

9

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18.                                 INDEMNIFICATION AND REIMBURSEMENT OF
PAYMENTS ON BEHALF OF EXECUTIVE.  THE COMPANY AND ITS RESPECTIVE SUBSIDIARIES
SHALL BE ENTITLED TO DEDUCT OR WITHHOLD FROM ANY AMOUNTS OWING FROM THE COMPANY
OR ANY OF ITS SUBSIDIARIES TO EXECUTIVE ANY FEDERAL, STATE, LOCAL OR FOREIGN
WITHHOLDING TAXES, EXCISE TAX, OR EMPLOYMENT TAXES (“TAXES”) IMPOSED WITH
RESPECT TO EXECUTIVE’S COMPENSATION OR OTHER PAYMENTS FROM THE COMPANY OR ANY OF
ITS SUBSIDIARIES OR EXECUTIVE’S OWNERSHIP INTEREST IN THE COMPANY (INCLUDING,
WITHOUT LIMITATION, WAGES, BONUSES, DIVIDENDS, THE RECEIPT OR EXERCISE OF EQUITY
OPTIONS AND/OR THE RECEIPT OR VESTING OF RESTRICTED EQUITY).  IN THE EVENT THE
COMPANY OR ANY OF ITS SUBSIDIARIES DOES NOT MAKE SUCH DEDUCTIONS OR
WITHHOLDINGS, EXECUTIVE SHALL INDEMNIFY THE COMPANY AND ITS SUBSIDIARIES FOR ANY
AMOUNTS PAID WITH RESPECT TO ANY SUCH TAXES.

 

19.                                 WAIVER OF JURY TRIAL.  AS A SPECIFICALLY
BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER INTO THIS
AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH PARTY
HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR PROCEEDING
RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS
CONTEMPLATED HEREBY.

 

20.                                 EXECUTIVE’S COOPERATION.  DURING THE
EMPLOYMENT AND THEREAFTER, EXECUTIVE SHALL COOPERATE WITH THE COMPANY AND ITS
SUBSIDIARIES IN ANY INTERNAL INVESTIGATION OR ADMINISTRATIVE, REGULATORY OR
JUDICIAL PROCEEDING AS REASONABLY REQUESTED BY THE COMPANY (INCLUDING, WITHOUT
LIMITATION, EXECUTIVE BEING AVAILABLE TO THE COMPANY UPON REASONABLE NOTICE FOR
INTERVIEWS AND FACTUAL INVESTIGATIONS, APPEARING AT THE COMPANY’S REQUEST TO
GIVE TESTIMONY WITHOUT REQUIRING SERVICE OF A SUBPOENA OR OTHER LEGAL PROCESS,
VOLUNTEERING TO THE COMPANY ALL PERTINENT INFORMATION AND TURNING OVER TO THE
COMPANY ALL RELEVANT DOCUMENTS WHICH ARE OR MAY COME INTO EXECUTIVE’S
POSSESSION, ALL AT TIMES AND ON SCHEDULES THAT ARE REASONABLY CONSISTENT WITH
EXECUTIVE’S OTHER PERMITTED ACTIVITIES AND COMMITMENTS). IN THE EVENT THE
COMPANY REQUIRES EXECUTIVE’S COOPERATION IN ACCORDANCE WITH THIS PARAGRAPH, THE
COMPANY SHALL REIMBURSE EXECUTIVE SOLELY FOR REASONABLE TRAVEL EXPENSES
(INCLUDING LODGING AND MEALS, UPON SUBMISSION OF RECEIPTS).

 

21.                                 ARBITRATION.  EXCEPT WITH RESPECT TO
DISPUTES OR CLAIMS UNDER PARAGRAPHS 5 AND 6 HEREOF (WHICH MAY BE PURSUED IN ANY
COURT OF COMPETENT JURISDICTION AS SPECIFIED BELOW AND WITH RESPECT TO WHICH
EACH PARTY SHALL BEAR THE COST OF ITS OWN ATTORNEY’S FEES AND EXPENSES EXCEPT AS
OTHERWISE REQUIRED BY APPLICABLE LAW), EACH PARTY HERETO AGREES THAT THE
ARBITRATION PROCEDURE SET FORTH IN EXHIBIT B HERETO SHALL BE THE SOLE AND
EXCLUSIVE METHOD FOR RESOLVING ANY CLAIM OR DISPUTE (“CLAIM”) ARISING OUT OF OR
RELATING TO THE RIGHTS AND OBLIGATIONS ACKNOWLEDGED AND AGREED TO IN THIS
AGREEMENT AND THE EMPLOYMENT OF EXECUTIVE BY THE COMPANY AND ITS SUBSIDIARIES
(INCLUDING, WITHOUT LIMITATION, DISPUTES AND CLAIMS REGARDING EMPLOYMENT
DISCRIMINATION, SEXUAL HARASSMENT, TERMINATION AND DISCHARGE), WHETHER SUCH
CLAIM AROSE OR THE FACTS ON WHICH SUCH CLAIM IS BASED OCCURRED PRIOR TO OR AFTER
THE EXECUTION AND DELIVERY OF ADOPTION OF THIS AGREEMENT.  THE PARTIES AGREE
THAT THE RESULT OF ANY ARBITRATION HEREUNDER SHALL BE FINAL, CONCLUSIVE AND
BINDING ON ALL OF THE PARTIES.  NOTHING IN THIS PARAGRAPH SHALL PROHIBIT A PARTY
HERETO FROM INSTITUTING LITIGATION TO ENFORCE ANY FINAL DETERMINATION (AS
DEFINED IN EXHIBIT B HERETO).  EACH PARTY HERETO HEREBY IRREVOCABLY SUBMITS TO
THE JURISDICTION OF ANY UNITED STATES DISTRICT COURT OR SOUTH CAROLINA STATE
COURT OF COMPETENT JURISDICTION SITTING IN CHARLESTON

 

10

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County, South Carolina, and agrees that such court shall be the exclusive forum
with respect to disputes and claims under paragraphs 5 and 6 and for the
enforcement of any Final Determination, and irrevocably and unconditionally
waives (i) any objection to the laying of venue of any such action, suit or
proceeding in such court or (ii) any argument, claim, defense or allegation that
any such action, suit or proceeding brought in such court has been brought in an
inconvenient forum.  Each party hereto irrevocably consents to service of
process by registered mail or personal service and waives any objection on the
grounds of personal jurisdiction, venue or inconvenience of the forum.

 

22.                                 SECTION AND HEADINGS.  THE DIVISION OF THIS
AGREEMENT INTO SECTIONS AND THE INSERTION OF HEADINGS ARE FOR THE CONVENIENCE OF
REFERENCE ONLY AND SHALL NOT AFFECT THE CONSTRUCTION OR INTERPRETATION OF THIS
AGREEMENT.  THE TERMS “THIS AGREEMENT”, “HEREOF”, “HEREUNDER” AND SIMILAR
EXPRESSIONS REFER TO THIS AGREEMENT AND NOT TO ANY PARTICULAR SECTION OR OTHER
PORTION HEREOF.  UNLESS SOMETHING IN THE SUBJECT MATTER OR CONTEXT IS
INCONSISTENT THEREWITH, REFERENCES TO SECTIONS AND CLAUSES ARE TO SECTIONS AND
CLAUSES OF THIS AGREEMENT.

 

23.                                 NUMBER.  IN THIS AGREEMENT, WORDS IMPORTING
THE SINGULAR NUMBER ONLY SHALL INCLUDE THE PLURAL AND VICE VERSA, AND WORDS
IMPORTING THE MASCULINE GENDER SHALL INCLUDE THE FEMININE AND NEUTER GENDERS AND
VICE VERSA, AND WORDS IMPORTING PERSONS SHALL INCLUDE INDIVIDUALS, PARTNERSHIPS,
ASSOCIATIONS, TRUSTS, UNINCORPORATED ORGANIZATIONS AND CORPORATIONS.

 

24.                                 INDEPENDENT ADVICE.  THE COMPANY AND THE
EXECUTIVE ACKNOWLEDGE AND AGREE THAT THEY HAVE EACH OBTAINED INDEPENDENT LEGAL
ADVICE IN CONNECTION WITH THIS AGREEMENT AND THEY FURTHER ACKNOWLEDGE AND AGREE
THAT THEY HAVE READ, UNDERSTAND AND AGREE WITH ALL OF THE TERMS HEREOF AND THAT
THEY ARE EXECUTING THIS AGREEMENT VOLUNTARILY AND IN GOOD FAITH.

 

25.                                 COPY OF AGREEMENT.  THE EXECUTIVE HEREBY
ACKNOWLEDGES RECEIPT OF A COPY OF THIS AGREEMENT DULY SIGNED BY THE COMPANY.

 

26.                                 TERMINATION PRIOR TO EFFECTIVE DATE.  IN THE
EVENT OF A TERMINATION OF EMPLOYMENT OF THE EXECUTIVE PRIOR TO THE EFFECTIVE
DATE, THIS AGREEMENT SHALL BE TERMINATED AND SHALL HAVE NO FURTHER FORCE OR
EFFECT.

 

27.                                 CURRENCY.  ALL DOLLAR AMOUNTS SET FORTH OR
REFERRED TO IN THIS AGREEMENT REFER TO U.S. CURRENCY.

 

28.                                 EFFECTIVENESS.  ONCE THIS AGREEMENT HAS BEEN
DULY EXECUTED AND DELIVERED BY EACH PARTY HERETO, ALL OF THE PROVISIONS SHALL
BECOME EFFECTIVE AS OF APRIL 1, 2003, AS IF THIS AGREEMENT HAD BEEN ENTERED INTO
AT SUCH TIME, INCLUDING THE COMPENSATION PROVISIONS CONTAINED IN SECTION 3.

 

    *    *    *    *

 

11

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

 

 

Polymer Group, Inc.

 

 

 

By:

 

 

 

 

 

Its:

 

 

 

 

 

 

 

 

James L. Schaeffer

 

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Exhibit A

 

GENERAL RELEASE

 

I, James L. Schaeffer, in  consideration of and subject to the performance by
Polymer Group, Inc., a Delaware corporation (together with its subsidiaries, the
“Company”), of its obligations under the Employment Agreement, entered into on
March     , 2004, (the “Agreement”), do hereby release and forever discharge as
of the date hereof the Company and its affiliates and all present and former
directors, officers, agents, representatives, employees, successors and assigns
of the Company and its affiliates and the Company’s direct or indirect owners
(collectively, the “Released Parties”) to the extent provided below.

 

1.                                       I understand that any payments or
benefits paid or granted to me under paragraph 4(b) of the Agreement represent,
in part, consideration for signing this General Release and are not salary,
wages or benefits to which I was already entitled. I understand and agree that I
will not receive the payments and benefits specified in paragraph 4(b) of the
Agreement unless I execute this General Release and do not revoke this General
Release within the time period permitted hereafter or breach this General
Release.  Such payments and benefits will not be considered compensation for
purposes of any employee benefit plan, program, policy or arrangement maintained
or hereafter established by the Company or its affiliates.  I also acknowledge
and represent that I have received all payments and benefits that I am entitled
to receive (as of the date hereof) by virtue of any employment by the Company.

 

2.                                       Except as provided in paragraph 4 below
and except for the provisions of my Employment Agreement which expressly survive
the termination of my employment with the Company, I knowingly and voluntarily
(for myself, my heirs, executors, administrators and assigns) release and
forever discharge the Company and the other Released Parties from any and all
claims, suits, controversies, actions, causes of action, cross-claims,
counter-claims, demands, debts, compensatory damages, liquidated damages,
punitive or exemplary damages, other damages, claims for costs and attorneys’
fees, or liabilities of any nature whatsoever in law and in equity, existing or
hereafter arising, based in whole or in part upon any act or omission,
transaction, agreement, event or other occurrence taking place from the
beginning of time through the date this General Release becomes effective and
enforceable and whether known or unknown, suspected, or claimed against the
Company or any of the Released Parties which I, my spouse, or any of my heirs,
executors, administrators or assigns, may have, which arise out of or are
connected with my employment with, or my separation or termination from, the
Company (including, but not limited to, any allegation, claim or violation,
arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; 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 of 1990; the Family and Medical
Leave Act of 1993; the Worker Adjustment Retraining and Notification Act; the
Employee Retirement Income Security Act of 1974; 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

 

A-1

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sections 1-13-10 et seq.; S.C. Code sections 41-10-10 et seq. or under any other
federal, state or local civil or human rights law, or under any other local,
state, or federal law, regulation or ordinance; or under any public policy,
contract or tort, or under common law; or arising under any policies, practices
or procedures of the Company; or any claim for wrongful discharge, breach of
contract, infliction of emotional distress, defamation; or any claim for costs,
fees, or other expenses, including attorneys’ fees incurred in these matters)
(all of the foregoing collectively referred to herein as the “Claims”).

 

3.                                       I represent that I have made no
assignment or transfer of any right, claim, demand, cause of action, or other
matter covered by paragraph 2 above.

 

4.                                       I agree that this General Release does
not waive or release any rights or claims that I may have under the Age
Discrimination in Employment Act of 1967 which arise after the date I execute
this General Release. I acknowledge and agree that my separation from employment
with the Company in compliance with the terms of the Agreement shall not serve
as the basis for any claim or action (including, without limitation, any claim
under the Age Discrimination in Employment Act of 1967).

 

5.                                       In signing this General Release, I
acknowledge and intend that it shall be effective as a bar to each and every one
of the Claims hereinabove mentioned or implied. I expressly consent that this
General Release shall be given full force and effect according to each and all
of its express terms and provisions, including those relating to unknown and
unsuspected Claims (notwithstanding any state statute that expressly limits the
effectiveness of a general release of unknown, unsuspected and unanticipated
Claims), if any, as well as those relating to any other Claims hereinabove
mentioned or implied. I acknowledge and agree that this waiver is an essential
and material term of this General Release and that without such waiver the
Company would not have agreed to the terms of the Agreement.  I further agree
that in the event I should bring a Claim seeking damages against the Company, or
in the event I should seek to recover against the Company in any Claim brought
by a governmental agency on my behalf, this General Release shall serve as a
complete defense to such Claims. I further agree that I am not aware of any
pending charge or complaint of the type described in paragraph 2 as of the
execution of this General Release.

 

6.                                       I agree that neither this General
Release, nor the furnishing of the consideration for this General Release, shall
be deemed or construed at any time to be an admission by the Company, any
Released Party or myself of any improper or unlawful conduct.

 

7.                                       I agree that I will forfeit all amounts
payable by the Company pursuant to the Agreement if I challenge the validity of
this General Release. I also agree that if I violate this General Release by
suing the Company or the other Released Parties, I will pay all costs and
expenses of defending against the suit incurred by the Released Parties,
including reasonable attorneys’ fees, and return all payments received by me
pursuant to the Agreement.

 

A-2

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8.                                       I agree that this General Release is
confidential and agree not to disclose any information regarding the terms of
this General Release, except to my immediate family and any tax, legal or other
counsel I have consulted regarding the meaning or effect hereof or as required
by law, and I will instruct each of the foregoing not to disclose the same to
anyone.

 

9.                                       Any non-disclosure provision in this
General Release does not prohibit or restrict me (or my attorney) from
responding to any inquiry about this General Release or its underlying facts and
circumstances by the Securities and Exchange Commission (SEC), the National
Association of Securities Dealers, Inc. (NASD), any other self-regulatory
organization or governmental entity.

 

10.                                 I agree to reasonably cooperate with the
Company in any internal investigation or administrative, regulatory, or judicial
proceeding. I understand and agree that my cooperation may include, but not be
limited to, making myself available to the Company upon reasonable notice for
interviews and factual investigations; appearing at the Company’s request to
give testimony without requiring service of a subpoena or other legal process;
volunteering to the Company pertinent information; and turning over to the
Company all relevant documents which are or may come into my possession all at
times and on schedules that are reasonably consistent with my other permitted
activities and commitments. I understand that in the event the Company asks for
my cooperation in accordance with this provision, the Company will reimburse me
solely for reasonable travel expenses, including lodging and meals, upon my
submission of receipts.

 

11.                                 I agree not to disparage the Company, its
past and present investors, officers, directors or employees or its affiliates
and to keep all confidential and proprietary information about the past or
present business affairs of the Company and its affiliates confidential unless a
prior written release from the Company is obtained.  I further agree that as of
the date hereof, I have returned to the Company any and all property, tangible
or intangible, relating to its business, which I possessed or had control over
at any time (including, but not limited to, company-provided credit cards,
building or office access cards, keys, computer equipment, manuals, files,
documents, records, software, customer data base and other data) and that I
shall not retain any copies, compilations, extracts, excerpts, summaries or
other notes of any such manuals, files, documents, records, software, customer
data base or other data.

 

12.                                 Notwithstanding anything in this General
Release to the contrary, this General Release shall not relinquish, diminish, or
in any way affect any rights or claims arising out of any breach by the Company
or by any Released Party of the Agreement after the date hereof.

 

13.                                 Whenever possible, each provision of this
General Release shall be interpreted in, such manner as to be effective and
valid under applicable law, but if any provision of this General Release is held
to be invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or unenforceability
shall not affect any other provision or any other jurisdiction, but this General
Release

 

A-3

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shall be reformed, construed and enforced in such jurisdiction as if such
invalid, illegal or unenforceable provision had never been contained herein.

 

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE THAT:

 

(a)                                  I HAVE READ IT CAREFULLY;

 

(b)                                 I UNDERSTAND ALL OF ITS TERMS AND KNOW THAT
I AM GIVING UP IMPORTANT RIGHTS, INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE
AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL
RIGHTS ACT OF 1964, AS AMENDED; THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH
DISABILITIES ACT OF 1990; AND THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED;

 

(c)                                  I VOLUNTARILY CONSENT TO EVERYTHING IN IT;

 

(d)                                 I HAVE BEEN ADVISED TO CONSULT WITH AN
ATTORNEY BEFORE EXECUTING IT AND I HAVE DONE SO OR, AFTER CAREFUL READING AND
CONSIDERATION I HAVE CHOSEN NOT TO DO SO OF MY OWN VOLITION;

 

(e)                                  I HAVE HAD AT LEAST 21 DAYS FROM THE DATE
OF MY RECEIPT OF THIS RELEASE SUBSTANTIALLY IN ITS FINAL FORM ON
                                   ,            TO CONSIDER IT AND THE CHANGES
MADE SINCE THE                                    ,            VERSION OF THIS
RELEASE ARE NOT MATERIAL AND WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

 

(f)                                    THE CHANGES TO THE AGREEMENT SINCE
                                     ,            EITHER ARE NOT MATERIAL OR
WERE MADE AT MY REQUEST.

 

(g)                                 I UNDERSTAND THAT I HAVE SEVEN DAYS AFTER
THE EXECUTION OF THIS RELEASE TO REVOKE IT AND THAT THIS RELEASE SHALL NOT
BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE REVOCATION PERIOD HAS EXPIRED;

 

(h)                                 I HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY
AND VOLUNTARILY AND WITH THE ADVICE OF ANY COUNSEL RETAINED TO ADVISE ME WITH
RESPECT TO IT; AND

 

(i)                                     I AGREE THAT THE PROVISIONS OF THIS
GENERAL RELEASE MAY NOT BE AMENDED, WAIVED, CHANGED OR MODIFIED EXCEPT BY AN
INSTRUMENT IN WRITING SIGNED BY AN AUTHORIZED REPRESENTATIVE OF THE COMPANY AND
BY ME.

 

DATE:

 

 

 

 

 

A-4

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Exhibit B

 

ARBITRATION PROCEDURE

 

1.                                       NOTICE OF CLAIM.  A PARTY ASSERTING A
CLAIM (THE “CLAIMANT”) SHALL DELIVER WRITTEN NOTICE TO EACH PARTY AGAINST WHOM
THE CLAIM IS ASSERTED (COLLECTIVELY, THE “OPPOSING PARTY”), WITH A COPY TO THE
PERSONS REQUIRED TO RECEIVE COPIES OF NOTICES UNDER THE AGREEMENT (THE
“ADDITIONAL NOTICE PARTIES”), SPECIFYING THE NATURE OF THE CLAIM AND REQUESTING
A MEETING TO RESOLVE SAME.  THE ADDITIONAL NOTICE PARTIES SHALL BE GIVEN
REASONABLE NOTICE OF AND INVITED AND PERMITTED TO ATTEND ANY SUCH MEETING.  IF
NO RESOLUTION IS REACHED WITHIN 10 BUSINESS DAYS AFTER DELIVERY OF SUCH NOTICE,
THE CLAIMANT OR THE OPPOSING PARTY MAY, WITHIN 45 DAYS AFTER GIVING SUCH NOTICE,
INVOKE THE ARBITRATION PROCEDURE PROVIDED HEREIN BY DELIVERING TO EACH OPPOSING
PARTY AND THE ADDITIONAL NOTICE PARTIES A NOTICE OF ARBITRATION WHICH SHALL
SPECIFY THE CLAIM AS TO WHICH ARBITRATION IS SOUGHT, THE NATURE OF THE CLAIM,
THE BASIS FOR THE CLAIM AND THE NATURE AND AMOUNT OF ANY DAMAGES OR OTHER
COMPENSATION OR RELIEF SOUGHT (A “NOTICE OF ARBITRATION”).  EACH PARTY AGREES
THAT NO PUNITIVE DAMAGES MAY BE SOUGHT OR RECOVERED IN ANY ARBITRATION, JUDICIAL
PROCEEDING OR OTHERWISE.  FAILURE TO FILE A NOTICE OF ARBITRATION WITHIN 45 DAYS
SHALL CONSTITUTE A WAIVER OF ANY RIGHT TO RELIEF FOR THE MATTERS ASSERTED IN THE
NOTICE OF CLAIM.  ANY CLAIM SHALL BE FOREVER BARRED, AND NO RELIEF MAY BE SOUGHT
THEREFOR, IF WRITTEN NOTICE OF SUCH CLAIM IS NOT MADE AS PROVIDED ABOVE WITHIN
ONE YEAR OF THE DATE SUCH CLAIM ACCRUES.

 

2.                                       SELECTION OF ARBITRATOR.  WITHIN 20
BUSINESS DAYS AFTER RECEIPT OF THE NOTICE OF ARBITRATION, THE EXECUTIVE AND A
DULY AUTHORIZED REPRESENTATIVE OF THE COMPANY SHALL CONFER, WHETHER IN PERSON,
BY TELEPHONE OR IN WRITING, AND ATTEMPT TO AGREE ON AN ARBITRATOR TO HEAR AND
DECIDE THE CLAIM.  IF THE EXECUTIVE AND THE BOARD CANNOT AGREE ON AN ARBITRATOR
WITHIN TEN BUSINESS DAYS, THEN THEY SHALL REQUEST THE AMERICAN ARBITRATION
ASSOCIATION (THE “AAA”) IN CHARLESTON, SOUTH CAROLINA TO APPOINT AN ARBITRATOR
EXPERIENCED IN THE AREA OF DISPUTE WHO DOES NOT HAVE AN ONGOING BUSINESS
RELATIONSHIP WITH ANY OF THE PARTIES TO THE DISPUTE.  IF THE ARBITRATOR SELECTED
INFORMS THE PARTIES HE CANNOT HEAR AND RESOLVE THE CLAIM WITHIN THE TIME-FRAME
SPECIFIED BELOW, THE EXECUTIVE AND THE BOARD SHALL REQUEST THE APPOINTMENT OF
ANOTHER ARBITRATOR BY THE AAA SUBJECT TO THE SAME REQUIREMENTS.

 

3.                                       ARBITRATION PROCEDURE.  THE FOLLOWING
PROCEDURES SHALL GOVERN THE CONDUCT OF ANY ARBITRATION UNDER THIS SECTION.  ALL
PROCEDURAL MATTERS RELATING TO THE CONDUCT OF THE ARBITRATION OTHER THAN THOSE
SPECIFIED BELOW SHALL BE DISCUSSED AMONG COUNSEL FOR THE PARTIES AND THE
ARBITRATOR.  SUBJECT TO ANY AGREEMENT OF THE PARTIES, THE ARBITRATOR SHALL
DETERMINE ALL PROCEDURAL MATTERS NOT SPECIFIED HEREIN.

 

(A)                                  WITHIN 30 DAYS AFTER THE DELIVERY OF A
NOTICE OF ARBITRATION, EACH PARTY SHALL AFFORD THE OTHER, OR ITS COUNSEL, WITH
REASONABLE ACCESS TO DOCUMENTS RELATING DIRECTLY TO THE ISSUES RAISED IN THE
NOTICE OF ARBITRATION.  ALL DOCUMENTS PRODUCED AND ALL COPIES THEREOF SHALL BE
MAINTAINED AS STRICTLY CONFIDENTIAL, SHALL BE USED FOR NO PURPOSE OTHER THAN THE
ARBITRATION HEREUNDER, AND SHALL BE RETURNED TO THE PRODUCING PARTY UPON
COMPLETION OF THE ARBITRATION.  THERE SHALL BE NO OTHER DISCOVERY EXCEPT THAT,
IF A REASONABLE NEED IS SHOWN, LIMITED DEPOSITIONS MAY BE ALLOWED IN THE
DISCRETION OF THE ARBITRATOR, IT BEING THE EXPRESSED INTENTION AND AGREEMENT OF
EACH

 

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party to have the arbitration proceedings conducted and resolved as
expeditiously, economically and fairly as reasonably practicable, and with the
maximum degree of confidentiality.

 

(B)                                 ALL WRITTEN COMMUNICATIONS REGARDING THE
PROCEEDING SENT TO THE ARBITRATOR SHALL BE SENT SIMULTANEOUSLY TO EACH PARTY OR
ITS COUNSEL, WITH A COPY TO THE ADDITIONAL NOTICE PARTIES.  ORAL COMMUNICATIONS
BETWEEN ANY OF THE PARTIES OR THEIR COUNSEL AND THE ARBITRATOR SHALL BE
CONDUCTED ONLY WHEN ALL PARTIES OR THEIR COUNSEL ARE PRESENT AND PARTICIPATING
IN THE CONVERSATION.

 

(C)                                  WITHIN 20 DAYS AFTER SELECTION OF THE
ARBITRATOR, THE CLAIMANT SHALL SUBMIT TO THE ARBITRATOR A COPY OF THE NOTICE OF
ARBITRATION, ALONG WITH A SUPPORTING MEMORANDUM AND ANY EXHIBITS OR OTHER
DOCUMENTS SUPPORTING THE CLAIM.

 

(D)                                 WITHIN 20 DAYS AFTER RECEIPT OF THE
CLAIMANT’S SUBMISSION, THE OPPOSING PARTY SHALL SUBMIT TO THE ARBITRATOR A
MEMORANDUM SUPPORTING ITS POSITION AND ANY EXHIBITS OR OTHER SUPPORTING
DOCUMENTS.  IF THE OPPOSING PARTY FAILS TO RESPOND TO ANY OF THE ISSUES RAISED
BY THE CLAIMANT WITHIN 20 DAYS OF RECEIPT OF THE CLAIMANT’S SUBMISSION, THEN THE
ARBITRATOR MAY FIND FOR THE CLAIMANT ON ANY SUCH ISSUE AND BAR ANY SUBSEQUENT
CONSIDERATION OF THE MATTER.

 

(E)                                  WITHIN 20 DAYS AFTER RECEIPT OF THE
OPPOSING PARTY’S RESPONSE, THE CLAIMANT MAY SUBMIT TO THE ARBITRATOR A REPLY TO
THE OPPOSING PARTY’S RESPONSE, OR NOTIFICATION THAT NO REPLY IS FORTHCOMING.

 

(F)                                    WITHIN 10 DAYS AFTER THE LAST SUBMISSION
AS PROVIDED ABOVE, THE ARBITRATOR SHALL CONFER WITH THE PARTIES TO SELECT THE
DATE OF THE HEARING ON THE ISSUES RAISED BY THE CLAIM.  SCHEDULING OF THE
HEARING SHALL BE WITHIN THE SOLE DISCRETION OF THE ARBITRATOR, BUT IN NO EVENT
MORE THAN 30 DAYS AFTER THE LAST SUBMISSION BY THE PARTIES, AND SHALL TAKE PLACE
WITHIN 50 MILES OF THE CORPORATE HEADQUARTERS OF THE COMPANY AT A PLACE SELECTED
BY THE ARBITRATOR OR SUCH OTHER PLACE AS IS MUTUALLY AGREED.  BOTH PARTIES SHALL
BE GRANTED SUBSTANTIALLY EQUAL TIME TO PRESENT EVIDENCE AT THE HEARING.  THE
HEARING SHALL NOT EXCEED ONE BUSINESS DAY, EXCEPT FOR GOOD CAUSE SHOWN.

 

(G)                                 WITHIN 30 DAYS AFTER THE CONCLUSION OF THE
HEARING, THE ARBITRATOR SHALL ISSUE A WRITTEN DECISION TO BE DELIVERED TO BOTH
PARTIES AND THE ADDITIONAL NOTICE PARTIES (THE “FINAL DETERMINATION”).  THE
FINAL DETERMINATION SHALL ADDRESS EACH ISSUE DISPUTED BY THE PARTIES, STATE THE
ARBITRATOR’S FINDINGS AND REASONS THEREFOR, AND STATE THE NATURE AND AMOUNT OF
ANY DAMAGES, COMPENSATION OR OTHER RELIEF AWARDED.

 

(H)                                 THE AWARD RENDERED BY THE ARBITRATOR SHALL
BE FINAL AND NON-APPEALABLE, EXCEPT AS OTHERWISE PROVIDED UNDER THE FEDERAL
ARBITRATION ACT, AND JUDGMENT MAY BE ENTERED UPON IT IN ACCORDANCE WITH
APPLICABLE LAW IN SUCH COURT AS HAS JURISDICTION THEREOF.

 

4.                                       COSTS OF ARBITRATION.  EACH PARTY SHALL
BEAR ITS OWN COSTS OF CONDUCTING THE ARBITRATION, AND ADMINISTRATIVE FEES SHALL
BE SHARED EQUALLY AMONG THE PARTIES.

 

5.                                       SATISFACTION OF AWARD.  IF ANY PARTY
FAILS TO PAY THE AMOUNT OF THE AWARD, IF ANY, ASSESSED AGAINST IT WITHIN 30 DAYS
AFTER THE DELIVERY TO SUCH PARTY OF THE FINAL DETERMINATION,

 

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the unpaid amount shall bear interest from the date of such delivery at the
lesser of (i) prime lending rate announced by Citibank N.A. plus three hundred
basis points and (ii) the maximum rate permitted by applicable usury laws.  In
addition, such party shall promptly reimburse the other party for any and all
costs or expenses of any nature or kind whatsoever (including attorneys’ fees)
reasonably incurred in seeking to collect such award or to enforce any Final
Determination.

 

6.                                       CONFIDENTIALITY OF PROCEEDINGS.  THE
PARTIES HERETO AGREE THAT ALL OF THE ARBITRATION PROCEEDINGS PROVIDED FOR
HEREIN, INCLUDING ANY NOTICE OF CLAIM, THE NOTICE OF ARBITRATION, THE
SUBMISSIONS OF THE PARTIES, AND THE FINAL DETERMINATION ISSUED BY THE
ARBITRATOR, SHALL BE CONFIDENTIAL AND SHALL NOT BE DISCLOSED AT ANY TIME TO ANY
PERSON OTHER THAN THE PARTIES, THEIR REPRESENTATIVES, THE ARBITRATOR AND THE
ADDITIONAL NOTICE PARTIES; PROVIDED, HOWEVER, THAT THIS PROVISION SHALL NOT
PREVENT THE PARTY PREVAILING IN THE ARBITRATION FROM SUBMITTING THE FINAL
DETERMINATION TO A COURT FOR THE PURPOSE OF ENFORCING THE AWARD, SUBJECT TO
COMPARABLE CONFIDENTIALITY PROTECTIONS IF THE COURT AGREES; AND FURTHER PROVIDED
THAT THE FOREGOING SHALL NOT PROHIBIT DISCLOSURE TO THE MINIMUM EXTENT
REASONABLY NECESSARY TO COMPLY WITH (I) APPLICABLE LAW (OR REQUIREMENT HAVING
THE FORCE OF LAW), COURT ORDER, JUDGMENT OR DECREE, INCLUDING, WITHOUT
LIMITATION, DISCLOSURES WHICH MAY BE REQUIRED PURSUANT TO APPLICABLE SECURITIES
LAWS, AND (II) THE TERMS OF CONTRACTUAL ARRANGEMENTS (SUCH AS FINANCING
ARRANGEMENTS) TO WHICH THE COMPANY OR ANY ADDITIONAL NOTICE PARTY MAY BE SUBJECT
SO LONG AS SUCH CONTRACTUAL ARRANGEMENTS WERE NOT ENTERED INTO FOR THE PRIMARY
PURPOSE OF PERMITTING DISCLOSURE WHICH WOULD OTHERWISE BE PROHIBITED HEREUNDER.

 

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