**Exhibit 10.2**

**ExecutionCopy**

**SEPARATIONAGREEMENT AND GENERAL RELEASE**

ThisSeparation Agreement and General Release (“Agreement”), effective as ofNovember 7, 2006, is made and entered into by you,****James****Snyder,****onbehalf of yourself, your heirs, executors, administrators, successors andassigns (collectively referred to as “you”) and Polymer Group, Inc., on behalfof itself, its current and former divisions, subsidiaries, affiliates, relatedcompanies, 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 November7, 2006 (your “Separation Date”).  Inexchange for your promises as set forth in this Agreement, PGI agrees to payyou 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 applicablepayroll withholdings and other deductions, taking into account North Carolinatax rules relating to severance payments.

2              Recovery.  Without otherwise limiting PGI’s rights andsubject to and in further consideration of your obligations under the terms ofthis Agreement, PGI agrees that it, except to the extent required by law, willnot require you to repay or otherwise seek recovery from you of any salary orbonus amounts paid to you by PGI during your employment with PGI prior to theSeparation Date.

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

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

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

6.             Release.  In exchange for the benefits set forth inthis Agreement, you agree to waive and release PGI with respect to any and allclaims, 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 thingoccurring or existing at any time prior to or on the date on which you signthis Agreement.  Without limiting theforegoing, the claims released by you hereunder include, but are not limitedto:

 

----

 

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

(b)           allclaims 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 lawtheory; or (iii) under any employment, contract, tort, federal, state, or locallaw, regulation, ordinance, constitutional provision, or executive order; and

(c)           all claims that were or could havebeen asserted by you or on your behalf arising under any of the following laws,as amended from time to time:  Title VIIof the Civil Rights Act of 1964, the Age Discrimination in Employment Act of1967, as amended (including the Older Workers Benefit Protection Act), theEqual Pay Act of 1963, as amended, the Americans with Disabilities Act, theEmployee Retirement Income Security Act, the Family and Medical Leave Act, andthe Worker Adjustment and Retraining Notification Act any applicable ExecutiveOrder Programs, the Fair Labor Standards Act, or their state or localcounterparts, the South Carolina Human Affairs Law, S.C. Code sections 1-13-10et seq.; S.C. Code sections 41-10-10 et seq. and the retaliatory employmentdiscrimination provision of North Carolina law; provided that this release doesnot 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 forththe name of the other terminated employee.

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

8.             Acknowledgements.  You further agree that:

·                                          Youhave read this Agreement and understand all of its terms, having been advisedby counsel;

·                                          Youare entering into this Agreement knowingly, voluntarily and with full knowledgeof its significance;

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

 

2

----

 

·                                          Youacknowledge that you understand that you have seven days after the execution ofthis Agreement to revoke it and that the release contained in this Agreementshall not become effective or enforceable until this seven-day revocationperiod has expired; and

·                                          Youacknowledge that you have had at least 45 days from the date of your receipt ofthe release contained in this Agreement substantially in its final form onSeptember 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 therequired 45-day period..

9.             Terminationof Change in Control Severance Compensation Agreement.  You and PGI agree that the Change in Contro0lSeverance Compensation Agreement dated as of March 24, 2006, is herebyterminated in its entirety without any obligation on the part of you or PGI forany events, occurrences or transactions that may have occurred, or may occur,prior to or after the date hereof.

10.           ConfidentialInformation.

 **                              **(a)  Obligationto Maintain Confidentiality.  Youacknowledge that the continued success of the Company and its Subsidiaries,depends upon the use and protection of a large body of confidential andproprietary information.  All of suchconfidential and proprietary information existing prior hereto or now existingis referred to in this Agreement as “Confidential Information.”  Confidential Information will be interpretedas broadly as possible to include all information of any sort (whether merelyremembered or embodied in a tangible or intangible form) that is (i) related tothe Company’s or its Subsidiaries’ current or potential business and (ii) isnot generally or publicly known. Confidential Information includes, without specific limitation, theinformation, observations and data obtained by you during the course of youremployment with the Company and its Subsidiaries concerning the business andaffairs of the Company and its Subsidiaries, information concerning acquisitionopportunities 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, formeror prospective suppliers or customers of any one or more of them during yourcourse of your employment, as well as development, transition andtransformation plans, methodologies and methods of doing business, strategic,marketing and expansion plans, including plans regarding planned and potentialsales, 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 paidfor raw materials and supplies, negotiating strategy, customer service policiesand programs, integration processes, requirements and costs of providingservice, support and equipment. Therefore, you agree that you shall not disclose to any unauthorizedperson or use for your own account any of such Confidential Information withoutboth Board’s prior written consent, unless and to the extent that anyConfidential Information (i) becomes generally known to and available foruse 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 courtorder.  You agree to deliver to theCompany all

 

3

----

 

memoranda, notes, plans, records, reports and otherdocuments (and copies thereof) relating to the business of the Company or itsSubsidiaries (including, without limitation, all Confidential Information) thatyou possess or have under your control.

(b)  Ownership of Intellectual Property.  You agree to make prompt and full disclosureto 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 orrelated information (whether or not patentable and whether or not reduced topractice) that relate to the Company’s or its Subsidiaries’ actual oranticipated business, research and development, or existing or future productsor services and that are conceived, developed, acquired, contributed to, made,or reduced to practice by you (either solely or jointly with others) whileemployed by the Company or it Subsidiaries and for a period of one (1) yearthereafter (collectively, “Work Product”).  Any copyrightable work falling within thedefinition of Work Product shall be deemed a “work made for hire” under thecopyright laws of the United States, and ownership of all right therein shallvest in the Company or its Subsidiary. To the extent that any Work Product is not deemed to be a “work made forhire,” you hereby assign and agree to assign to the Company or such Subsidiaryall right, title and interest, including without limitation, the intellectualproperty rights that you may have in and to such Work Product.  You shall promptly perform all actions reasonablyrequested by the Board to establish and confirm the Company’s or suchSubsidiary’s ownership (including, without limitation, providing testimony andexecuting assignments, consents, powers of attorney, and other instruments).

(c)  Third Party Information.  You understand that the Company and itsSubsidiaries have received from third parties confidential or proprietaryinformation (“Third Party Information”) subject to a duty on theCompany’s and its Subsidiaries’ part to maintain the confidentiality of suchinformation and to use it only for certain limited purposes.  Without in any way limiting the provisions ofsubsection (a) above, you will hold Third Party Information in the strictestconfidence and will not disclose to anyone (other than personnel of the Companyor its Subsidiaries who need to know such information in connection with theirwork for the Company or such Subsidiaries) or use Third Party Informationunless 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 materialsprovided 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; andall written or graphic materials (and all copies) relating in any way to PGI’sbusiness, including documents, manuals, computer files, diskettes, customerlists and reports.

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

 

4

----

 

13.           Assistance.  You agree:

(a)           to cooperate fully with PGI and itslegal counsel in investigating, defending, prosecuting, litigating, filing,initiating or asserting any claims or potential claims (including withoutlimitation in connection with legal, equitable, administrative or otherproceedings) that may be made by or against PGI to the extent that such claimsmay relate to or arise out of your employment with PGI;

(b)           tocooperate fully with PGI and its legal counsel with respect to any government or private investigations or legal claimsrelated to PGI. Such cooperation shall include, but not be limited to, makingyourself available upon reasonable notice for interviews and deposition andtrial testimony as needed, in the sole discretion of PGI and its legalcounsel.  You further agree to providePGI with any documents related to PGI, whether foreign or domestic, that are inyour  possession, custody orcontrol.  You shall provideimmediate notice to PGI of any subpoena or other legal document that youreceive that relates in any way to PGI, along with a copy of such subpoena orother legal document.  You may be accompanied at any time you so desireby counsel of your choice and must provide truthful and accurateinformation  and testimony and not assertany privilege on behalf of PGI, other than the attorney-client or work productprivileges which may arise from your retention of your separate counsel; and

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

14.           Non-Compete, Non-Solicitation.

## (a)           In furtherconsideration of the compensation to be paid to you hereunder, you acknowledgethat during the course of your employment with the Company and its Subsidiariesyou became familiar with the Company’s trade secrets and with otherConfidential Information concerning the Company and its predecessors and itsSubsidiaries and that your services were of special, unique and extraordinaryvalue to the Company and its Subsidiaries, and therefore, you agree that, for aperiod of twelve months following the Separation Date (the “NoncompetePeriod”), you shall not directly or indirectly own any interest in, manage,control, participate in, consult with, 

##  

5

----

##  

render services for, be employed by or in any mannerengage in any business competing with the businesses of the Company or itsSubsidiaries, as such businesses exist or are in process, as made known toExecutive during his employment with the Company, on the date hereof, withinany geographical area in which the Company or its Subsidiaries engage or planto engage in such businesses, as such plans were made known to Executive duringhis employment with the Company.  Nothingherein shall prohibit you from being a passive owner of not more than 2% of theoutstanding stock of any class of a corporation which is publicly traded, solong as you have no active participation in the business of such corporation.

## (b)           During theNoncompete Period, you shall not directly or indirectly through another personor entity (i) induce or attempt to induce any employee of the Company or anySubsidiary to leave the employ of the Company or such Subsidiary, or in any wayinterfere with the relationship between the Company or any Subsidiary and anyemployee thereof, (ii) hire any person who was an employee of the Company orany Subsidiary at any time during the period of your employment with theCompany or (iii) induce or attempt to induce any customer, supplier, licensee,licensor, franchisee or other business relation of the Company or anySubsidiary to cease doing business with the Company or such Subsidiary, or inany 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 orcommunications regarding the Company or its Subsidiaries).

## (c)           If, at the time ofenforcement of this paragraph 14, a court shall hold that the duration, scopeor area restrictions stated herein are unreasonable under circumstances thenexisting, the parties agree that the maximum duration, scope or area reasonableunder such circumstances shall be substituted for the stated duration, scope orarea and that the court shall be allowed to revise the restrictions containedherein to cover the maximum period, scope and area permitted by law.  You acknowledge that the restrictionscontained in this paragraph 14 are reasonable and that have reviewed theprovisions of this Agreement with your legal counsel.

## (d)           In the event of thebreach or a threatened breach by you of any of the provisions of this paragraph14, the Company would suffer irreparable harm, and in addition andsupplementary to other rights and remedies existing in its favor, the Companyshall be entitled to specific performance and/or injunctive or other equitablerelief from a court of competent jurisdiction in order to enforce or preventany violations of the provisions hereof (without posting a bond or othersecurity).  In addition, in the event ofan alleged breach or violation by you of this paragraph 14, the NoncompetePeriod shall be tolled until such breach or violation has been duly cured andthe Company may suspend or terminate its payments to you under paragraph1.  You acknowledge that the restrictionscontained in this paragraph 14 are reasonable and that you have reviewed theprovisions of this Agreement with your legal counsel.

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

** **

6

----

** **

preclude you fromdesignating a beneficiary or beneficiaries to receive any benefit payable onyour death.

16.           No Admission.  You and PGI acknowledge that this Agreementdoes not constitute an admission by you and PGI of any liability or wrongdoingwhatsoever.

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

18.           Severability.  You and PGI agree that to the extent that anyportion 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 andeffect.

19.           Enforcement.         You and PGI reserve the right toinitiate and pursue any legal action necessary to enforce the terms of thisAgreement.  You acknowledge and agreethat a breach of Paragraph 14 of this Agreement will result in immediate andirreparable harm to PGI and its affiliates and other related entities for whichfull damages cannot readily be calculated and for which damages are aninadequate remedy.  Accordingly, youagree that PGI shall be entitled to injunctive relief to prevent any suchactual or threatened breach or any continuing breach by you (without posting a bondor other security) of paragraph 14, without limiting any other remedies thatmay be available to PGI.   In the eventof any legal action or proceeding to enforce the terms of this Agreement, theprevailing party will be entitled to recover from the losing party, in additionto any and all other relief awarded or recovered, its reasonable expenses,attorneys’ fees and costs.  ThisAgreement will be construed and governed by the laws of the State of NorthCarolina, without reference to the principles of conflict of laws or choice oflaw rules.

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

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

If to you:

7

----

 

James Snyder18218 Town Harbor RoadCornelius, NC  28031

With a copy to:

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

If to PGI:

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

With a copy to:

H. Kurt von Moltke, P.C.Kirkland & Ellis LLP200 East Randolph DriveChicago, IL  60601

Or to such other addressas 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 |

 

8

----

**ANNEXI**

** **

**OTHERTERMINATED EMPLOYEES**

James L.Schaeffer, Age:  56

 

 

 

Annex I

----