Exhibit 10.1


 


[Execution Copy]


 


POLYMER GROUP, INC.


 


SEPARATION AGREEMENT


 


THIS SEPARATION AGREEMENT is entered into on April 8,
2008, between Polymer Group, Inc., a Delaware corporation (the “Company”),
and Willis C. Moore, III (“Executive”).


 


WHEREAS, the Company and Executive are parties to a
certain employment agreement entered into on March 24, 2006, as amended by
Amendment No. 1 to Employment Agreement entered into on March 30,
2007 (the employment agreement, as so amended, is referred to herein as the “Employment
Agreement”);


 


WHEREAS, the Company and Executive are parties to a
certain change in control severance compensation agreement entered into on January 23,
2008 (the “Change in Control Agreement”);


 


WHEREAS, the Company and Executive wish to end the
employment relationship.


 


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.     End of Employment.


 


(a)   The Company and Executive hereby agree that
the employment of Executive with the Company and its Subsidiaries shall end on April 22,
2008 (the “Resignation Date”).  Executive
also agrees that his service as an officer of the Company and its Subsidiaries
shall end on the earlier of the appointment of a successor or April 22,
2008.  Executive shall take such actions
reasonably requested by the Company in furtherance of the foregoing to evidence
the end of such employment and such service as an officer.  Executive shall also provide such services as
reasonably necessary to ensure a smooth and orderly transition for two weeks
immediately following the date of this Agreement through and including the
Resignation Date.


 


(b)   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, including without
limitation those entities set forth on Annex I attached hereto.


 


2.     Compensation and Benefits.


 


(a)           Salary.  Executive shall be entitled to receive his
base salary through the Resignation Date. 
As payment of severance under this Agreement, Executive shall be
entitled to receive his monthly base salary in an amount equal to $32,935.50
(the “Base Salary Payments”), until April 22, 2010 (the “Payment End Date”).  Executive shall not be entitled to receive
any 


 

















 


Base Salary
Payments for any period after the Payment End Date.  Such Base Salary Payments shall be made
bi-weekly in accordance with the Company’s current payroll practices; provided
that the first such payment shall be on October 23, 2008, and shall cover
the six-month period between the date hereof and such first payment date.  Executive shall also be entitled to an
additional payment for unused vacation days or unused paid time off days, which
payment shall be made immediately following the Resignation Date.


 


(b)   Expenses.  The Company shall reimburse Executive for all
reasonable business expenses incurred by him prior to the Resignation Date
which were incurred in the course of performing his duties and responsibilities
and 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)   Bonus. 
Executive shall also be entitled to receive his pro-rated target bonus
for the Company’s current fiscal year, calculated by multiplying (x) a
fraction, the numerator of which shall be the number of calendar days in fiscal
2008 from December 30, 2007, through the Resignation Date, and the
denominator of which shall be 365, by (y) $197,613, which amount equals
$61,720 (the “Pro-Rated Bonus Payment”, which together with the Base Salary
Payments are referred to herein as the “Severance Payments”).  The Pro-Rated Bonus Payment shall be made on October 23,
2008.  Executive shall not be entitled to
receive any other amounts that may have been due to him under the Employment
Agreement or pursuant to any Company bonus plan in respect of a bonus for the
current or any subsequent fiscal year. 
The amounts payable under Sections 2(a) and 2(c) shall not be
reduced by the amount of any compensation Executive receives with respect to
any other employment through the Payment End Date.


 


(d)   Vested Restricted Stock and Vested Stock
Options.  Executive shall be entitled
to the vested portion of his restricted stock grants, totaling 21,020 shares
(after reduction for shares withheld by the Company in payment of taxes on
behalf of Executive), subject to the terms and conditions of the 2005
Restricted Stock Plan, and to the vested portion of the stock options grants
totaling 55,000 stock options, subject to the terms and conditions of the 2003
Stock Option Plan; provided that the provisions of Section 2(c)(ii) of
the Restricted Stock Grant concerning service and performance vested shares and
Section 2(b) of the Restricted Stock Grant concerning immediately
vested shares, and the provisions of Section 6(d)(iii) of the 2003
Stock Option Plan, in each case covering forfeitures on certain terminations,
shall not apply to the shares and options referred to in this sentence;
provided further, that Executive shall be free to sell his shares of restricted
stock, and agrees to only exercise any stock options and sell the underlying
shares of common stock, commencing on the earlier to occur of (x) July 21,
2008 and (y) the opening of the Company’s trading window, if any,
applicable to all Company insiders following the filing of the Company’s
Quarterly Report on Form 10-Q for the Company’s 2008 first fiscal
quarter.  The Company agrees that any
change that is generally made to any of the terms and conditions of the stock
options issued under the 2003 Stock Option Plan or the shares issued upon
exercise and that is applicable to all employee holders of such stock options
or shares shall also be made available to the stock options or shares held by
Executive.  All other grants of restricted
stock and stock options are hereby forfeited and cancelled.  All shares of


 


2

















 


restricted stock previously withheld by the Company in satisfaction of
amounts due for taxes resulting from the grant of shares of restricted stock
shall remain with the Company.


 


(e)   Withholding.  All amounts payable to Executive as
compensation hereunder shall be subject to all required and customary
withholding by the Company.


 


(f)    Insurance.  Until April 22, 2009, the Company shall,
at its expense, pay both the employer and employee portion of the premiums for
group medical, dental and hospitalization insurance at the level and with the
coverage in effect for Executive and his dependants and beneficiaries
immediately prior to the Resignation Date. 
Executive shall only be responsible for the deductible or co-pay
obligations under such insurance programs. 
Executive shall also be entitled to receive the continuation of his
group medical, dental and hospitalization insurance coverage as provided under
the provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”)
beginning on April 22, 2009, and continuing until October 22, 2010,
at his sole cost and expense.  The
Company’s obligation hereunder with 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; provided, that any changes or amendments to such plans that
are applicable to other employees of the Company covered by such plans shall
also apply to Executive and his dependents and beneficiaries.  This subsection (f) shall not be
interpreted so as to limit any benefits to which the Executive, his 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.  The Company may
offset any amounts Executive owes it or its Subsidiaries against any amounts it
or its Subsidiaries owes Executive hereunder.


 


3.     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
employment by the Company and its Subsidiaries concerning the business and
affairs of the Company and its Subsidiaries, information concerning acquisition
opportunities in or reasonably related to the Company’s or its Subsidiaries’
business or industry of which Executive becomes aware during such employment,
the persons or entities that are current, former or prospective suppliers or
customers of any one or more of them during Executive’s employment, as well as
development, transition and transformation plans, methodologies and


 


3

















 


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,
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
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 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
thereafter ending on April 22, 2010 (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 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 have received from third parties confidential or proprietary
information (“Third Party Information”) subject to a duty on the Company’s
and its Subsidiaries’ part to maintain the confidentiality of such information
and to use it only for certain limited purposes.  Without in any way limiting the provisions of
Section 3(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, such
Third Party Information unless expressly authorized by a member of the Board in
writing.


 


4

















 


4.     Non-Compete, Non-Solicitation.


 


(a)           In
further consideration of the compensation to be paid to Executive hereunder,
including the Severance Payments, Executive acknowledges that during the course
of his employment with the Company and its Subsidiaries he became 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, from the date of this
Agreement until April 22, 2010 (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 were in process during his employment by the Company and
its Subsidiaries, 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 (i) being
a passive owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation or (ii) from owning an
interest in, managing, controlling, participating in, consulting with, or
rendering services for a company in the textile and apparel industry so long as
the company does not manufacture, market, or sell nonwoven products.  In the event Executive is approached by a
third party that is not a competitor of the Company and asked to advise such
third party with respect to a potential acquisition of the Company, Executive
may request the consent of the Company to act in such capacity and the Company
will consider such request in good faith.


 


(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 his employment by
the Company and its Subsidiaries 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 4, 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.


 


(d)           In
the event of the breach or a threatened breach by Executive of any of the
provisions of this paragraph 4, 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 


 


5

















 


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 4, the Noncompete Period
shall be tolled until such breach or violation has been duly cured.  Executive acknowledges that the restrictions
contained in paragraph 4 are reasonable and that he has reviewed the provisions
of this Agreement with his legal counsel.


 


5.     Release.  Executive
shall execute the general release dated as of the date hereof (the “Release”)
attached as Exhibit A hereto. 
Without otherwise limiting the Company’s rights and subject to and in
further consideration of Executive’s obligations under the terms of this
Agreement, the Company agrees that it will not, except to the extent required
by law, require Executive to repay or otherwise seek recovery from Executive of
any salary or bonus amounts paid to, or vested restricted stock or vested stock
options granted to, Executive by the Company during Executive’s employment with
the Company.


 


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


 


7.     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:


 


Willis C. Moore, III

2024 Beverly Drive

Charlotte, N.C.  28207


 


Notices to the Company:


 


Polymer Group, Inc.

9335 Harris Corners Parkway, Suite 300

Charlotte, NC  28269

Attn:  General Counsel


 


6

















 


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.


 


8.     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 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.


 


9.     Complete Agreement. 
This Agreement, those documents expressly referred to herein and other
documents of even date herewith, including the Release referred to in Section 5,
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.


 


10.   Termination of Employment Agreement;
Termination of Change in Control Agreement. 
The Company and Executive hereby agree to terminate, in their entirety,
the Employment Agreement and the Change in Control Agreement, without any
obligation on the part of the Company or Executive under either such agreement
for any event or transaction occurring prior to or following the termination of
such agreement.


 


11.   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.


 


12.   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.


 


13.   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.


 


14.   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 North Carolina, without 


 


7

















 


giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of North Carolina or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of North Carolina.


 


15.   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 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.


 


16.   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.


 


17.   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.


 


18.   Executive’s Cooperation.  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) and any
request by Executive for indemnification by the Company shall be subject to
such cooperation from Executive.  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); provided,
that in the event Executive is required to spend more than 40 hours in any
one-year period assisting the Company under this paragraph on any investigation
or administrative, regulatory or judicial proceeding that involves or arises
out of matters or actions that are substantially unrelated to any conduct of
Executive during his employment with the Company, as opposed to the mere fact
that he was the Chief Financial Officer of the Company during such time period,
the Company shall 


 


8

















 


reimburse Executive for his time in excess of 40 hours at the rate of
$350.00 per hour.  Executive also agrees
not to initiate contact with, or provide any information to, any third party in
respect of any matter involving the Company. 
Executive shall also make himself available for an exit interview, and
shall provide true and complete answers to all questions in such interview.


 


19.   Arbitration.  Except with respect to disputes or claims
under paragraphs 3 and 4 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
North Carolina state court of competent jurisdiction sitting in Mecklenburg
County, North Carolina, and agrees that such court shall be the exclusive forum
with respect to disputes and claims under paragraphs 3 and 4 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.


 


20.   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.


 


21.   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.


 


22.   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.


 


9

















 


23.   Copy of Agreement.  The Executive hereby acknowledges receipt of
a copy of this Agreement duly signed by the Company.


 


24.   Currency.  All dollar amounts set forth or referred to
in this Agreement refer to U.S. currency.


 


25.   Effectiveness.  Once this Agreement has been duly executed
and delivered by each party hereto, all of the provisions shall become
effective.


 


    *    *   
*    *


 


10

















 


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


 


	
   

  	
  Polymer Group, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Veronica M.
  Hagen

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  Chief Executive
  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Willis C.
  Moore, III

  
	
  Willis C.
  Moore, III

  



 














 


Exhibit A


 


GENERAL RELEASE


 


I, Willis C. Moore, III, 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
Separation Agreement, entered into on April 8, 2008, (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 2 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 2 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, 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, are connected with, or occurred during
  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
  sections 1-13-10 et seq.; S.C. Code sections 41-10-10 et seq., the
  retaliatory employment discrimination provision of North Carolina law 

  



 


A-1

















 


	
   

  	
   

  	
  or under any other
  federal, state or local civil or human rights law, including the
  Sarbanes-Oxley Act of 2002, 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 the Claims or any other 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, as amended,
  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, as amended).

  
	
   

  	
   

  	
   

  
	
  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

















 


	
  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 truthfully to any valid inquiry about this General
  Release or its underlying facts and circumstances by the Securities and
  Exchange Commission (SEC), the Financial Industry Regulatory Authority
  (FINRA), 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;
  and any request by me for indemnification by the Company shall be subject to
  such cooperation by me. 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; provided, that in the event Executive is
  required to spend more than 40 hours in any one-year period assisting the
  Company under this paragraph on any investigation or administrative,
  regulatory or judicial proceeding that involves or arises out of matters or
  actions that are substantially unrelated to any conduct of Executive during
  his employment with the Company, as opposed to the mere fact that he was the
  Chief Financial Officer of the Company during such time period, the Company
  shall reimburse Executive for his time in excess of 40 hours at the rate of
  $350.00 per hour.

  
	
   

  	
   

  	
   

  
	
  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.

  



 


A-3

















 


	
  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 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 BEEN GIVEN THE
  OPPORTUNITY FOR AT LEAST 45 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
  SUBSTANTIALLY IN ITS FINAL FORM ON APRIL 8, 2008 TO CONSIDER IT AND THE
  CHANGES MADE SINCE THE APRIL 8, 2008 VERSION OF THIS RELEASE ARE NOT MATERIAL
  AND WILL NOT RESTART THE REQUIRED 45-DAY PERIOD;

  
	
   

  	
   

  	
   

  
	
  (f)

  	
   

  	
  THE CHANGES TO THE
  AGREEMENT SINCE APRIL 8, 2008 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

  



 


A-4

















 


	
  (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:

  	
  APRIL 8, 2008

  	
  /s/ Willis C. Moore, III

  



 


A-5

















 


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
Charlotte, North 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.


 


26.   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 


 


B-1





















 


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


 


(a)   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.


 


(b)   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.


 


(c)   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.


 


(d)   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.


 


(e)   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.


 


(f)    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.


 


(g)   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.


 


27.   Costs of Arbitration.  Each party shall bear its own costs of
conducting the arbitration, and administrative fees shall be shared equally
among the parties.


 


28.   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, 


 


B-2

















 


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.


 


29.   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.


 


B-3

















 


ANNEX
I


 


SUBSIDIARIES


 


	
  Albuma S.A.S.

  
	
   

  
	
  Bonlam Andina Ltd.

  
	
   

  
	
  Bonlam Holdings BV

  
	
   

  
	
  Bonlam S.A. de C.V.

  
	
   

  
	
  Chicopee Asia Limited

  
	
   

  
	
  Chicopee Holdings B.V.

  
	
   

  
	
  Chicopee Holdings CV

  
	
   

  
	
  Chicopee, Inc.

  
	
   

  
	
  Dominion Nonwovens
  Sudamerica, S.A.

  
	
   

  
	
  Dominion Textile (USA) L.L.C.

  
	
   

  
	
  Dominion Textile
  Mauritius Inc.

  
	
   

  
	
  Dominion Textile, Inc.

  
	
   

  
	
  DT Acquisition Inc.

  
	
   

  
	
  FabPro Oriented
  Polymers, L.L.C.

  
	
   

  
	
  Fabrene, L.L.C.

  
	
   

  
	
  Fabrene, Inc.

  
	
   

  
	
  Geca Tapes B.V.

  
	
   

  
	
  Geca-Tapes PTE LTD

  
	
   

  
	
  Nanhai Nanxin
  Non-Wovens Co. Ltd.

  
	
   

  
	
  Nordlys SAS

  
	
   

  
	
  PGI Europe, Inc.

  
	
   

  
	
  PGI Holdings BV

  
	
   

  
	
  PGI Neunkirchen GmbH

  
	
   

  
	
  PGI Nonwoven (Foshan)
  Co. Ltd.

  
	
   

  
	
  PGI Nonwoven Ltd.

  
	
   

  
	
  PGI Nonwovens (China)
  Co. Ltd.

  



 

















 


	
  PGI Nonwovens A.B.

  
	
   

  
	
  PGI Nonwovens BV

  
	
   

  
	
  PGI Nonwovens Mauritius
  Ltd.

  
	
   

  
	
  PGI Polymer, Inc.

  
	
   

  
	
  Pristine Brands
  Corporation