Exhibit 10.2




Execution
Copy


SEPARATION
AGREEMENT AND GENERAL RELEASE 


This
Separation Agreement and General Release (“Agreement”), effective as of
November 7, 2006, is made and entered into by you, James Snyder, on
behalf of yourself, your heirs, executors, administrators, successors and
assigns (collectively referred to as “you”) and Polymer Group, Inc., on behalf
of itself, its current and former divisions, subsidiaries, affiliates, related
companies, 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 November
7, 2006 (your “Separation Date”).  In
exchange for your promises as set forth in this Agreement, PGI agrees to pay
you 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 applicable
payroll withholdings and other deductions, taking into account North Carolina
tax rules relating to severance payments.


2              Recovery.  Without otherwise limiting PGI’s rights and
subject to and in further consideration of your obligations under the terms of
this Agreement, PGI agrees that it, except to the extent required by law, will
not require you to repay or otherwise seek recovery from you of any salary or
bonus amounts paid to you by PGI during your employment with PGI prior to the
Separation Date.


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


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


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


6.             Release.  In exchange for the benefits set forth in
this Agreement, you agree to waive and release PGI with respect to any and all
claims, 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 thing
occurring or existing at any time prior to or on the date on which you sign
this Agreement.  Without limiting the
foregoing, the claims released by you hereunder include, but are not limited
to:


 










 



 


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


(b)           all
claims 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 law
theory; or (iii) under any employment, contract, tort, federal, state, or local
law, regulation, ordinance, constitutional provision, or executive order; and


(c)           all claims that were or could have
been asserted by you or on your behalf arising under any of the following laws,
as amended from time to time:  Title VII
of the Civil Rights Act of 1964, 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, the
Employee Retirement Income Security Act, the Family and Medical Leave Act, and
the Worker Adjustment and Retraining Notification Act 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. and the retaliatory employment
discrimination provision of North Carolina law; provided that this release does
not 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 forth
the name of the other terminated employee.


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


8.             Acknowledgements.  You further agree that:


·                                          You
have read this Agreement and understand all of its terms, having been advised
by counsel;


·                                          You
are entering into this Agreement knowingly, voluntarily and with full knowledge
of its significance;


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


 



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·                                          You
acknowledge that you understand that you have seven days after the execution of
this Agreement to revoke it and that the release contained in this Agreement
shall not become effective or enforceable until this seven-day revocation
period has expired; and


·                                          You
acknowledge that you have had at least 45 days from the date of your receipt of
the release contained in this Agreement substantially in its final form on
September 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 the
required 45-day period..


9.             Termination
of Change in Control Severance Compensation Agreement.  You and PGI agree that the Change in Contro0l
Severance Compensation Agreement dated as of March 24, 2006, is hereby
terminated in its entirety without any obligation on the part of you or PGI for
any events, occurrences or transactions that may have occurred, or may occur,
prior to or after the date hereof.


10.           Confidential
Information.


                                (a)  Obligation
to Maintain Confidentiality.  You
acknowledge 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 or now existing
is 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 you during the course of your
employment with 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 it Subsidiaries’
business or industry of which you become aware during your employment, the persons or entities that are current, former
or prospective suppliers or customers of any one or more of them during your
course of your employment, as well as development, transition and
transformation plans, methodologies and methods of doing business, strategic,
marketing and expansion plans, including plans regarding planned and potential
sales, financial and business plans, employee lists and telephone numbers,
locations of sales representatives, new and existing programs and services,
prices and terms of purchases, purchasing practices, contact terms, prices paid
for raw materials and supplies, negotiating strategy, customer service policies
and programs, integration processes, requirements and costs of providing
service, support and equipment. 
Therefore, you agree that you shall not disclose to any unauthorized
person or use for your own account any of such Confidential Information without
both Board’s prior written consent, unless and to the extent that any
Confidential Information (i) becomes generally known to and available for
use by the public other than as a result of your acts or omissions to act or
(ii) is required to be disclosed pursuant to any applicable law or court
order.  You agree to deliver to the
Company all


 



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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
you possess or have under your control.


(b)  Ownership of Intellectual Property.  You agree 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 you (either solely or jointly with others) while
employed by the Company or it Subsidiaries and for a period of one (1) year
thereafter (collectively, “Work Product”).  Any copyrightable work falling within the
definition of Work Product shall be deemed a “work made for hire” under the
copyright laws of the United States, and ownership of all right 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,” you hereby assign and agree to assign to the Company or such Subsidiary
all right, title and interest, including without limitation, the intellectual
property rights that you may have in and to such Work Product.  You 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.  You understand 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
subsection (a) above, you 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 Third Party Information
unless 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 materials
provided 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; and
all written or graphic materials (and all copies) relating in any way to PGI’s
business, including documents, manuals, computer files, diskettes, customer
lists and reports.


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


 



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13.           Assistance.  You agree:


(a)           to cooperate fully with PGI and its
legal counsel in investigating, defending, prosecuting, litigating, filing,
initiating or asserting any claims or potential claims (including without
limitation in connection with legal, equitable, administrative or other
proceedings) that may be made by or against PGI to the extent that such claims
may relate to or arise out of your employment with PGI;


(b)           to
cooperate fully with PGI and its legal counsel with respect to any government or private investigations or legal claims
related to PGI. Such cooperation shall include, but not be limited to, making
yourself available upon reasonable notice for interviews and deposition and
trial testimony as needed, in the sole discretion of PGI and its legal
counsel.  You further agree to provide
PGI with any documents related to PGI, whether foreign or domestic, that are in
your  possession, custody or
control.  You shall provide
immediate notice to PGI of any subpoena or other legal document that you
receive that relates in any way to PGI, along with a copy of such subpoena or
other legal document.  You may be accompanied at any time you so desire
by counsel of your choice and must provide truthful and accurate
information  and testimony and not assert
any privilege on behalf of PGI, other than the attorney-client or work product
privileges which may arise from your retention of your separate counsel; and


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


14.           Non-Compete, Non-Solicitation.


(a)           In further
consideration of the compensation to be paid to you hereunder, you acknowledge
that during the course of your employment with the Company and its Subsidiaries
you became familiar with the Company’s trade secrets and with other
Confidential Information concerning the Company and its predecessors and its
Subsidiaries and that your services were of special, unique and extraordinary
value to the Company and its Subsidiaries, and therefore, you agree that, for a
period of twelve months following the Separation Date (the “Noncompete
Period”), you shall not directly or indirectly own any interest in, manage,
control, participate in, consult with, 


 



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render services for, be employed by or in any manner
engage in any business competing with the businesses of the Company or its
Subsidiaries, as such businesses exist or are in process, as made known to
Executive during his employment with the Company, on the date hereof, within
any geographical area in which the Company or its Subsidiaries engage or plan
to engage in such businesses, as such plans were made known to Executive during
his employment with the Company.  Nothing
herein shall prohibit you from 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 you have no active participation in the business of such corporation.


(b)           During the
Noncompete Period, you shall not directly or indirectly through another person
or entity (i) induce or attempt to induce any employee of the Company or any
Subsidiary to leave the employ of the Company or such Subsidiary, or in any way
interfere with the relationship between the Company or any Subsidiary and any
employee thereof, (ii) hire any person who was an employee of the Company or
any Subsidiary at any time during the period of your employment with the
Company 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 14, 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.  You acknowledge that the restrictions
contained in this paragraph 14 are reasonable and that have reviewed the
provisions of this Agreement with your legal counsel.


(d)           In the event of the
breach or a threatened breach by you of any of the provisions of this paragraph
14, the Company would suffer irreparable harm, and in addition and
supplementary to other rights and remedies existing in its favor, the Company
shall be entitled to specific performance and/or injunctive or other equitable
relief from a court of competent jurisdiction in order to enforce or prevent
any violations of the provisions hereof (without posting a bond or other
security).  In addition, in the event of
an alleged breach or violation by you of this paragraph 14, the Noncompete
Period shall be tolled until such breach or violation has been duly cured and
the Company may suspend or terminate its payments to you under paragraph
1.  You acknowledge that the restrictions
contained in this paragraph 14 are reasonable and that you have reviewed the
provisions of this Agreement with your legal counsel.


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


 



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preclude you from
designating a beneficiary or beneficiaries to receive any benefit payable on
your death.


16.           No Admission.  You and PGI acknowledge that this Agreement
does not constitute an admission by you and PGI of any liability or wrongdoing
whatsoever.


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


18.           Severability.  You and PGI agree that to the extent that any
portion 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 and
effect.


19.           Enforcement.         You and PGI reserve the right to
initiate and pursue any legal action necessary to enforce the terms of this
Agreement.  You acknowledge and agree
that a breach of Paragraph 14 of this Agreement will result in immediate and
irreparable harm to PGI and its affiliates and other related entities for which
full damages cannot readily be calculated and for which damages are an
inadequate remedy.  Accordingly, you
agree that PGI shall be entitled to injunctive relief to prevent any such
actual or threatened breach or any continuing breach by you (without posting a bond
or other security) of paragraph 14, without limiting any other remedies that
may be available to PGI.   In the event
of any legal action or proceeding to enforce the terms of this Agreement, the
prevailing party will be entitled to recover from the losing party, in addition
to any and all other relief awarded or recovered, its reasonable expenses,
attorneys’ fees and costs.  This
Agreement will be construed and governed by the laws of the State of North
Carolina, without reference to the principles of conflict of laws or choice of
law rules.


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


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


If to you:



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James Snyder

18218 Town Harbor Road

Cornelius, NC  28031


With a copy to:


C. Margaret Errington

Ferguson, Stein, Chambers, Gresham &Sumter, P.A.

741 Kenilworth Avenue, Suite 300

Charlotte, NC  28204-2828


If to PGI:


Polymer Group, Inc.

9335 Harris Corners Parkway, Suite 300

Charlotte, NC  28269

Attn:  General Counsel


With a copy to:


H. Kurt von Moltke, P.C.

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, IL  60601


Or to such other address
as 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

  



 



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ANNEX
I


 


OTHER
TERMINATED EMPLOYEES


James L.
Schaeffer, Age:  56


 


 


 



 Annex I