Exhibit 4.3  


POLYMER GROUP, INC.

2004 RESTRICTED STOCK PLAN  


1.    Purpose.    



        This
plan shall be known as the Polymer Group, Inc. 2004 Restricted Stock Plan (the "Plan"). The purpose of the Plan shall be to promote the long-term growth and
profitability of Polymer Group, Inc. (the "Company") and its Subsidiaries by providing certain directors of the Company and its Subsidiaries with incentives to maximize stockholder value and
otherwise contribute to the success of the Company. Only grants of restricted stock may be made under the Plan. 


2.    Definitions.    



        (a)   "Board
of Directors" and "Board" mean the board of directors of the Company. 


        (b)   "Cause"
means the occurrence of one or more of the following events: 



        (i)    Conviction
of a felony or any crime or offense lesser than a felony involving the property of the Company or a Subsidiary; or 


        (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; or 


        (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; or 


        (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 




        (c)   "Change
in Control" means the occurrence of one of the following events: 



        (i)    if
any "person" or "group" as those terms are used in Sections 13(d) and 14(d) of the Exchange Act or any successors thereto, other than an Exempt Person, is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act or any successor thereto), directly or indirectly, of securities of the Company representing 50% or more of
the combined voting power of the Company's then outstanding securities, other than an acquisition by an Exempt Person; or 


        (ii)   during
any period of two consecutive years, individuals who at the beginning of such period constitute the Board and any new directors whose election by the Board or
nomination for election by the Company's stockholders was approved by at least two-thirds of the directors then still in office who either were directors at the beginning of the period or
whose election was previously so approved, cease for any reason to constitute a majority thereof; or 



        (iii)  the
consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation (A) which would result in all or a
portion of the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or consolidation or
(B) by which the corporate existence of the Company is not affected and following which 










 





the
Company's chief executive officer and directors retain their positions with the Company (and constitute at least a majority of the Board); or 


        (iv)  the
consummation of a plan of complete liquidation of the Company or consummation of the sale or disposition by the Company of all or substantially all the Company's
assets, other than a sale to an Exempt Person. 




        (d)   "Code"
means the Internal Revenue Code of 1986, as amended. 


        (e)   "Committee"
means the Restricted Stock Committee of the Board, which shall consist solely of two or more members of the Board not entitled to receive grants of
restricted stock under the Plan. 


        (f)    "Common
Stock" means the Class A Common Stock, par value $.01 per share, of the Company, and any other shares into which such stock may be changed by reason of a
recapitalization, reorganization, merger, consolidation or any other change in the corporate structure or capital stock of the Company. 



        (g)   "Disability"
means a disability that would entitle an eligible participant to payment of monthly disability payments under any Company disability plan or as otherwise
determined by the Committee. 


        (h)   "Exchange
Act" means the Securities Exchange Act of 1934, as amended. 


        (i)    "Exempt
Person" means (i) MatlinPatterson Global Opportunities Fund L.P., MatlinPatterson Global Opportunities Partners, L.P., MatlinPatterson Global
Opportunities Partners B, L.P., Matlin Patterson LLC, MatlinPatterson Asset Management LLC, MatlinPatterson Global Advisers LLC, MatlinPatterson Global Opportunities Partners(Bermuda), L.P.,
MatlinPatterson Global Partners LLC and any of their respective affiliated entities, (ii) any person, entity or group under the control of any party included in clause (i), or
(iii) any employee benefit plan of the Company or a trustee or other administrator or fiduciary holding securities under an employee benefit plan of the Company. 


        (j)    "Fair
Market Value" of a share of Common Stock of the Company means, as of the date in question, the officially-quoted closing selling price of the stock (or if no
selling price is quoted, the bid price) on the principal securities exchange on which the Common Stock is then listed for trading (including for this purpose the Nasdaq National Market) (the "Market")
for the applicable trading day or, if the Common Stock is not then listed or quoted in the Market, the Fair Market Value shall be the fair value of the Common Stock determined in good faith by the
Board; provided, however, that when shares received upon exercise of an option are immediately sold in the open market, the net sale price
received may be used to determine the Fair Market Value of any shares used to pay the exercise price or applicable withholding taxes and to compute the withholding taxes. 


        (k)   "Non-Employee
Director" has the meaning given to such term in Rule 16b-3 under the Exchange Act and any successor thereto. 



        (l)    "Retirement"
means retirement as defined under any Company pension plan or retirement program or termination of one's employment on retirement with the approval of the
Committee. 


        (m)  "Subsidiary"
means a corporation or other entity of which outstanding shares or ownership interests representing 50% or more of the combined voting power of such
corporation or other entity entitled to elect the management thereof, or such lesser percentage as may be approved by the Committee, are owned directly or indirectly by the Company. 



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3.    Administration    


        The
Plan shall be administered by the Committee; provided that the Board may, in its discretion, at any time and from time to time, resolve to administer the Plan, in which case the term
"Committee" shall be deemed to mean the Board for all purposes herein. Subject to the provisions of the Plan, the Committee shall be authorized to (i) determine the form and substance of grants
made under the Plan to each participant, and the conditions and restrictions, if any, subject to which such grants will be made, (ii) certify that the conditions and restrictions applicable to
any grant have been met, (iii) modify the terms of grants made under the Plan, (iv) interpret the Plan and grants made thereunder, and (iv) adopt, amend, or rescind such rules and
regulations, and make such other determinations, for carrying out the Plan as it may deem appropriate. Decisions of the Committee on all matters relating to the Plan shall be in the Committee's sole
discretion and shall be conclusive and binding on all parties. The validity, construction, and effect of the Plan and any rules and regulations relating to the Plan shall be determined in accordance
with applicable federal and state laws and rules and regulations promulgated pursuant thereto. No member of the Committee and no officer of the Company shall be liable for any action taken or omitted
to be taken by such member, by any other member of the Committee or by any officer of the Company in connection with the performance of duties under the Plan, except for such person's own willful
misconduct or as expressly provided by statute. 


        The
expenses of the Plan shall be borne by the Company. The Plan shall not be required to establish any special or separate fund or make any other segregation of assets to assume the
payment of any award under the Plan, and rights to the payment of such awards shall be no greater than the rights of the Company's general creditors. 


4.    Shares Available for the Plan    



        Subject
to adjustments as provided in Section 10, an aggregate of 200,000 shares of Common Stock (the "Shares") may be issued pursuant to the Plan. Such Shares may be in whole or
in part authorized and unissued or held by the Company as treasury shares. If any grant under the Plan becomes unexercisable or is forfeited as to any Shares, then such forfeited or withheld Shares
shall thereafter be available for further grants under the Plan. 


        Without
limiting the generality of the foregoing provisions of this Section 4 or the generality of the provisions of Sections 3, 6 or 11 or any other section of this Plan, the
Committee may, at any time or from time to time, and on such terms and conditions (that are consistent with and not in contravention of the other provisions of this Plan) as the Committee may, in its
sole discretion, determine, enter into agreements (or take other actions with respect to the options) for new shares of restricted stock containing terms more (or less) favorable than any outstanding
restricted shares. 


5.    Participation    


        Participation
in the Plan shall be limited to the directors (including Non-Employee Directors), of, the Company and its Subsidiaries. Nothing in the Plan or in any grant
thereunder shall confer any right on a participant to continue in the employ as a director of or in the performance of services for the Company or shall interfere in any way with the right of the
Company to terminate the employment or to reduce the compensation or responsibilities of a participant at any time. By accepting any award under the Plan, each participant and each person claiming
under or through him or her shall be conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, any action taken under the Plan by the Company, the Board or the
Committee. 


        Determinations
made by the Committee under the Plan need not be uniform and may be made selectively among eligible individuals under the Plan, whether or not such individuals are
similarly situated. A grant made hereunder in any one year to an eligible participant shall neither guarantee nor preclude a further grant to such participant in that year or subsequent years. 


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6.    Restricted Stock    


        The
Committee may at any time and from time to time grant Shares of restricted stock under the Plan to such participants and in such amounts as it determines. Each grant of restricted
stock shall specify the applicable restrictions on such Shares, the duration of such restrictions (which shall be at least six months except as otherwise determined by the Committee or provided in the
third paragraph of this Section 6), and the time or times at which such restrictions shall lapse with respect to all or a specified number of Shares that are part of the grant. 


        Unless
otherwise determined by the Committee, each Non-employee Director of the Company that is also not affiliated with an Exempt Person (as defined on January 1,
2004), shall be entitled to receive a grant of restricted shares each fiscal quarter, beginning with the fiscal quarter ending April 3, 2004. The number of shares to be granted will be based on
the formula of (x) $2,500 divided by (y) the average closing price of the Class A Common Stock for each trading day in the 15
trading day period ending on the last day of each fiscal quarter. Each grant will be made promptly after the end of such fiscal quarter. 



        The
participant will be required to pay the Company the aggregate par value of any Shares of restricted stock (or such larger amount as the Board may determine to constitute capital
under Section 154 of the Delaware General Corporation Law, as amended, or any successor thereto) within ten days of the date of grant, unless such Shares of restricted stock are treasury
shares. Unless otherwise determined by the Committee, certificates representing Shares of restricted stock granted under the Plan will be held in escrow by the Company on the participant's behalf
during any period of restriction thereon and will bear an appropriate legend specifying the applicable restrictions thereon, and the participant will be required to execute a blank stock power
therefore. Except as otherwise provided by the Committee, during such period of restriction the participant shall have all of the rights of a holder of Common Stock, including but not limited to the
rights to receive dividends and to vote, and any stock or other securities received as a distribution with respect to such participant's restricted stock shall be subject to the same restrictions as
then in effect for the restricted stock. 


        Except
as otherwise provided by the Committee, immediately prior to the consummation of a Change in Control, or at such time as a participant ceases to be a director of the Company and
its Subsidiaries due to death, Disability or Retirement during any period of restriction, all restrictions on Shares granted to such participant shall lapse. At such time as a participant ceases to be
a director of the Company or its Subsidiaries for any other reason, all Shares of restricted stock granted to such participant which have not vested shall be immediately forfeited to the Company. 


7.    Withholding Taxes.    


        (a)    Participant Election.    Unless otherwise determined by the Committee, a participant may elect to deliver
shares of Common Stock (or have the Company withhold shares granted) to satisfy, in whole or in part, the amount the Company is required to withhold for taxes. Such election must be made on or before
the date the amount of tax to be withheld is determined. Once made, the election shall be irrevocable. The fair market value of the shares to be withheld will be the Fair Market Value as of the date
the amount of tax to be withheld is determined. 


        (b)    Company Requirement.    The Company may require, as a condition to any grant under the Plan or to the delivery
of certificates for Shares issued hereunder, that the grantee make provision for the payment to the Company, either pursuant to Section 7(a) or this Section 7(b), of federal, state or
local taxes of any kind required by law to be withheld with respect to any delivery of Shares. The Company, to the extent permitted or required by law, shall have the right to deduct from any payment
of any kind (including normal directors fees) otherwise due to a grantee, an amount equal to any federal, state or local taxes of any kind required by law to be withheld with respect to any delivery
of Shares under the Plan. 


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8.    Transferability.    


        Unless
the Committee determines otherwise, no Shares granted under the Plan shall be transferable by a participant other than by will or the laws of descent and distribution prior to the
date the restrictions on the Shares lapse, or, subject to the provision of Section 5 of the form of grant, to any of your Family Members by gift or a qualified domestic relations order as
defined by the Code. 


9.    Listing, Registration and Qualification.    


        If
the Committee determines that the listing, registration or qualification upon any securities exchange or under any law of Shares is necessary or desirable as a condition of, or in
connection with, the issue of Shares hereunder, no such Shares may be granted, unless such listing, registration or qualification is effected free of any conditions not acceptable to the Committee. 



10.    Adjustments.    


        In
the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger, consolidation, distribution of assets, or any other change in the
corporate structure or shares of the Company, the Committee shall make such adjustment as it deems appropriate in the number and kind of Shares or other property available for issuance under the Plan
(including, without limitation, the total number of Shares available for issuance under the Plan pursuant to Section 4). Any such adjustment shall be final, conclusive and binding for all
purposes of the Plan. 


11.    Amendment and Termination of the Plan.    


        The
Board of Directors or the Committee, without approval of the stockholders, may amend or terminate the Plan, except that no amendment shall become effective without prior approval of
the stockholders of the Company if stockholder approval would be required by applicable law or regulations, including if required for continued compliance with the performance-based compensation
exception of Section 162(m) of the Code or any successor thereto or by any listing requirement of the principal stock exchange on which the Common Stock is then listed. 



12.    Commencement Date; Termination Date.    


        The
date of commencement of the Plan shall be January 1, 2004, subject to approval by the shareholders of the Company. 


        Unless
previously terminated upon the adoption of a resolution of the Board terminating the Plan, the Plan shall terminate at the close of business on January 1, 2014. No
termination of the Plan shall materially and adversely affect any of the rights or obligations of any person, without his or her written consent, under any grant of Shares theretofore granted under
the Plan. 


13.    Severability.    


        Whenever
possible, each provision of the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan is held to be
prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of the Plan. 


14.    Governing Law.    



        The
Plan shall be governed by the corporate laws of the State of Delaware, without giving effect to any choice of law provisions that might otherwise refer construction or interpretation
of the Plan to the substantive law of another jurisdiction. 


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