<PAGE>
 
                      SECURITIES AND EXCHANGE COMMISSION

                             Washington, DC 20549


                                   FORM 10-K
                                 ANNUAL REPORT
         PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934

For the fiscal year ended December 28, 1996    Commission file number 1-14330

                               POLYMER GROUP, INC.
             (Exact name of registrant as specified in its charter)


        Delaware                                                57-1003983
(State or other jurisdiction                                (I.R.S. Employer
of incorporation or organization)                           Identification No.)

4838 Jenkins Ave.                                                  29405
North Charleston, South Carolina                                (Zip Code)
(Address of principal executive offices)

                                (803) 566 - 7293
              (Registrant's telephone number, including area code)

           Securities registered pursuant to Section (12)b of the Act:

                                                   Name of each exchange on
     Title of each class of stock                     which registered
Common Stock, par value $.01 per share             New York Stock Exchange

               Securities registered to Section (12)g of the Act:
                                      None

Indicate by check mark whether registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or such shorter period that the registrant was
required to file such reports), and (2) has been subject to such file
requirements for the last 90 days. Yes  X     No
                                       ---       ---

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy of information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]

The aggregate market value held of the Company's voting stock held by
nonaffiliates as of March 5, 1997 was $302,428,212. As of March 5, 1997, there
were 32,000,000 shares of common stock, par value $.01 per share outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
Specified sections of the registrant's 1997 Proxy Statement and its 1996 Annual
Report to Shareholders are incorporated by reference in Parts II and III hereof.
<PAGE>
 
                                     PART I

ITEM 1. BUSINESS

General

     Polymer Group, Inc. ("Company") is a leading worldwide manufacturer and
marketer of a broad range of nonwoven and woven polyolefin products. The
Company's principal lines of business include hygiene and medical products,
wiping products and industrial and specialty products. The Company believes that
it is one of the top four producers of nonwovens in the world and that it
employs the most extensive range of nonwoven technologies of any nonwovens
producer, which allows it to supply products tailored to customers' needs at a
competitive cost.

     The Company is a nonwovens supplier to a number of the largest consumer
products manufacturers in the world and specifically targets market niches with
high value-added products for these customers. The Company has a global presence
with an established customer base in the United States, Canada, Europe, Mexico
and the rest of the world. The Company's products are sold principally to
converters that manufacture a wide range of end-use products, such as hospital
surgical gowns and drapes, woundcare sponges, multi-use wiping cloths and
towels, flexible industrial packaging, filtration media, battery separators,
diapers, feminine hygiene products and automotive insulation
products.

     The Company operates thirteen manufacturing facilities located in five
countries and is currently the only nonwovens producer that utilizes all of the
established nonwoven process technologies. The Company believes that the quality
of its manufacturing operations and the breadth of its nonwovens process
technologies give it a competitive advantage in meeting the current and future
needs of its customers and in leading the development of an expanded range of
applications for nonwovens. The Company continues to make significant
investments in advanced technology in order to increase capacity, improve
quality and develop new low-cost, high-value structures. Working as a
developmental partner with its major customers, the Company utilizes its
technologies to develop and manufacture new products to meet their needs.

     Management has built the Company through a series of strategic business
acquisitions that have broadened the Company's technology base and increased its
product lines. The Company's strategic acquisitions have helped it to establish
strong positions in both the nonwoven and woven polyolefin fabric markets.
Synergies realized through these acquisitions have enabled the Company to better
meet the needs of existing customers, to reach emerging geographic markets and
to exploit niche market opportunities through customer-interactive specialty
product development.

                                       2
<PAGE>
 
     The Company's objectives are to continue to expand its core business while
building new capabilities to capitalize on both a broad range of new, high
value-added niche product opportunities and expanded geographic markets. In
addition to growth in its core businesses, the Company expects growth to come
from the application of several new technologies. The Company seeks to utilize
these strengths by following a strategy based on (i) continuous improvement
aimed at increasing product value and reducing costs, (ii) development of high
value-added niche products, (iii) entrance into new markets with existing
products, (iv) expansion of capacity through capital improvements and (v)
strategic acquisitions.

History of the Company

     The Company was organized on June 16, 1994 and, effective June 24, 1994,
acquired a 100% ownership interest in PGI Polymer, Inc. ("PGI"), which was
incorporated in September 1992 by The InterTech Group, Inc. ("InterTech") and
Golder, Thoma, Cressey, Rauner, Inc. ("Golder, Thoma") to act as a holding
company for entities engaged in the development, manufacture and marketing of
polymer products.

     At the time of its formation, PGI acquired from InterTech approximately 27%
of the issued and outstanding shares of stock of Fabrene Inc. ("Fabrene"), a
leading manufacturer of industrial and commercial woven polyolefins. In
addition, in October 1992, through its wholly owned subsidiary FiberTech Group,
Inc. ("FiberTech"), PGI acquired the Nonwoven Products Division ("Predecessor")
of Scott Paper Company, a major supplier of nonwovens for diapers, feminine
hygiene products and adult incontinence products. Together, Fabrene and
FiberTech offered substantial representation in both the nonwoven and woven
polyolefin markets.

     Upon the Company's formation in 1994 and in connection with the offering of
$150.0 million aggregate principal amount of the Company's 12-1/4% Senior Notes
due 2002 ("Senior Notes"), the Company acquired the remaining issued and
outstanding shares of stock of Fabrene and became the 100% parent owner of PGI.
In addition, the Company acquired all of the outstanding shares of Bonlam S.A.
de C.V. ("Bonlam"), the largest manufacturer of spunbond nonwoven fabrics in
Mexico. The acquisition of Bonlam not only presented the opportunity to meet
existing customers' needs in Mexico, but also provided the Company with the
additional nonwoven capacity necessary to meet growing demand in North American
and Latin American markets and to develop further opportunities in those
markets.

     In March 1995, the Company purchased ("Chicopee Acquisition") the Nonwovens
Business of Johnson & Johnson Advanced Materials Company and Chicopee B.V.
(collectively, "Chicopee"), a leading manufacturer and marketer of nonwoven roll
and converted products in North America and Europe. Through the Chicopee
Acquisition, the Company gained substantial manufacturing and technological
resources, as well as consumer market recognition of certain of Chicopee's
branded product lines. In addition, the Chicopee Acquisition provided the
Company with a significant presence 

                                       3
<PAGE>
 
in the nonwovens markets for wipes and medical products and enabled the Company
to realize economies of scale in production, such as in negotiating contracts
with raw material suppliers and in reducing barriers to entry for new products
by pairing complementary products together through established distribution
channels.

     In January 1996, the Company authorized and issued 10,000 shares of 13%
Cumulative Preferred Stock, par value $.01 per share ("Company Preferred Stock")
for $10.0 million.

     In May 1996, the Company completed an initial public offering ("IPO") of
11.5 million shares of its common stock at a price of $18.00 per share. Net
proceeds to the Company after underwriting fees and discounts approximated
$190.8 million. Pursuant to the Recapitalization Agreement dated May 6, 1996,
all of the warrants to acquire shares of Class C common stock were exercised and
the outstanding shares of Class A common stock, Class B common stock and Class C
common stock were converted into a single class of common stock concurrently
with the IPO. In connection with the IPO, the Company's Board of Directors
approved an approximate 19.97 to 1 stock split. In addition, the Company
consummated the following transactions: (i) effectively repaid all outstanding
indebtedness under the FiberTech and Chicopee Credit Facilities ("Facilities")
and terminated the Facilities, redeemed $50.0 million principal amount of the
Senior Notes at premium of 112.25% plus accrued, but unpaid interest and entered
into a New Credit Facility consisting of a $200.0 million term loan and a $125.0
million revolving credit facility; (ii) redeemed the preferred stock of
Chicopee, Inc. for approximately $46.9 million; and (iii) redeemed the Company
Preferred Stock for approximately $10.5 million.

     in August 1996, the Company completed the acquisition of FNA Polymer Corp.
("FNA") (formerly known as Fitesa North America Corporation). FNA produces
polypropylene fabrics for the nonwovens industry.

Industry Overview

     The nonwovens industry began in the 1950s when paper, textile and chemical
technologies were combined to produce new fabrics and products with the
attributes of textiles but at a significantly lower cost. Today, nonwovens are
used in a wide variety of consumer, industrial and healthcare products as a
result of their superior functionality and lower cost relative to traditional 
woven and knit textiles.

     Nonwovens are categorized as either disposable, which is the category in
which the Company primarily competes, or durable. The largest end uses for
disposable nonwovens are for hygiene applications, including diapers, feminine
sanitary protection, baby wipes and adult incontinence products, and healthcare
applications, including surgical gowns and drapes and wound care sponges and
dressings. Other disposable end uses include wipes, filtration media, protective
apparel and fabric softener sheets. Durable end uses include apparel
interlinings, furniture and bedding construction sheeting, automotive
components, geotextiles, roofing membranes, 

                                       4
<PAGE>
 
carpet backing, agricultural fabrics, durable papers and coated and laminated
structures for wall coverings, upholstery, shoes, luggage and tablecloths.

     The Company also competes in the North American market for coated and
uncoated woven polyolefin products. Woven polyolefin fabrics are flat, flexible
structures produced by weaving narrow tapes of slit film and are characterized
by high strength to weight ratios. While the broad uncoated woven polyolefin
market is primarily focused on carpet backing fabric and, to a lesser extent,
geotextiles and bags, the markets in which the Company primarily competes are
made up of a large number of specialized products manufactured for niche
applications. These markets include demanding industrial packaging applications
such as lumber wrap, steel wrap and fiberglass packaging, as well as high-
strength protective coverings and specialized components that are integrated
into a variety of industrial and consumer products.

Competitive Strengths

     The Company believes that it has a strong competitive position attributable
to a number of factors, including the following:

     Technological Leadership. The Company is currently the only nonwovens
producer that utilizes all of the established nonwoven process technologies and
has recently introduced the new, proprietary Apex technology. The expertise of
the Company's research and development staff have enabled the Company to develop
innovative products, frequently in response to specific customer needs. The
Company's research and development efforts have been focused on increasing its
production capacity and improving its production processes, developing products
based on the Company's existing technologies for new markets, and developing new
process technologies to enhance existing business and allow entry into new
businesses.

     State-of-the-Art Manufacturing Capabilities. The Company believes that it
has state-of-the-art manufacturing capability in both its nonwoven and woven
product lines. As a result, the Company is one of the lowest cost producers in
the markets in which it participates. In the third quarter of 1996, the Company
announced a major capacity expansion with the installation of a new 4.2 meter
spunbond/meltblown/spunbond ("SMS") line at its Mooresville, North Carolina
plant location.

     Significant Market Share in Primary Markets. The Company has developed
significant market shares in several of its primary markets. For example, the
Company believes that it has a significant share of the noncaptive coverstock
market and the wipes market and that it is the leading North American
manufacturer of lumberwrap and woven uncoated fabric used for lamination to
paper for the steel wrap market. The Company also believes that it is the
leading North American supplier in both the manufactured housing bottom board
and fiberglass packaging markets. The Company believes it has secured its
leading share position in these markets as a result of its commitment to, and
reputation for, innovation and quality.

                                       5
<PAGE>
 
     Experienced and Successful Management Team. The Company's senior management
team has significant experience in the manufacturing and marketing of polyolefin
products, with an average of 12 years of experience in this industry.
Management's experience includes acquiring and employing assets at a low cost
and increasing the utilization of assets. Management also has a successful track
record of acquiring and improving complementary businesses while integrating
them into the Company's existing businesses.

     Key Customer Relationships. The Company has successfully cultivated
long-term relationships with key customers, such as Johnson & Johnson and
Procter & Gamble, who are market leaders in their industries. The Company
currently works closely as a developmental partner of Procter & Gamble, focusing
resources and working together to develop advanced components for next
generation diapers. As part of the Chicopee Acquisition, the Company negotiated
a long-term supply agreement with Johnson & Johnson, under which it provides
nonwoven fabric requirements for Johnson & Johnson. In addition, the Company is
the exclusive supplier to Bulldog Bag Ltd. for its woven fabrics product line
pursuant to a ten-year supply agreement. The Company's success in developing and
strengthening its relationships with these and other key customers is
attributable to its commitment to product quality, dedication to customer
technical service and sensitivity and responsiveness to changing customer needs.

Business Strategy

          The Company strives to be the leading supplier in its chosen markets
      by delivering high quality products and service at competitive prices. To
      achieve these goals, the Company's primary strategy focuses on:

          Continuous Improvement Aimed at Increasing Product Value and Reducing
      Costs. The Company is committed to continuous improvements throughout its
      business to increase product value and lower costs. State-of-the-art
      equipment, much of which has been developed internally and is proprietary
      to the Company, has been designed and installed to continuously measure
      process parameters and maintain narrow production tolerances, resulting in
      less product variation. As a result, the Company's manufacturing processes
      utilize less material and produce a higher quality fabric. In addition,
      the Company maintains a human resource program aimed at capturing
      productivity gains through team building, formal training and employee
      empowerment.

         Development of High Value-Added Niche Products. The Company is
     committed to investment in the development of products for high value-added
     niche markets. The Company has developed and sought patent approval for
     several new concepts for absorbent core structures, including pulpless
     cores for blood sorbents, diapers and adult incontinence products. These
     structures have the potential to significantly reduce the core size and
     cost of traditional pulp-filled 

                                       6
<PAGE>
 
     absorbent cores while improving functionality. The Company has also
     developed a new line of hydrocarbon, marketed under the Micro-Set brand,
     sorbent polymers that encapsulate oil and other petroleum products rather
     than merely absorbing them, thereby offering EPA-approved disposability at
     a cost below existing technologies. Other new developments include the new
     proprietary Apex technology, which is a surface-forming technology capable
     of producing low-cost textile replacement fabrics with intricate, three-
     dimensional patterns.

         Entrance into New Markets with Existing Products. The Company believes
     that it has significant additional market opportunities for its existing
     products. The Company is actively expanding its capabilities to take
     advantage of the penetration and growth of its core products
     internationally, particularly in developing countries.

          Expansion of Capacity through Capital Projects. The Company
     continuously evaluates opportunities to expand its existing production
     capacity and enhance production technologies. The Company has invested
     approximately $94.0 million in capital improvements since its inception to
     either debottleneck existing assets or to add new production capabilities
     and capacity.

           Strategic Acquisitions. The Company continuously evaluates
     opportunities to make acquisitions which complement and expand its core
     businesses or which have the potential to increase market share and
     distribution capability in high-margin complementary products. The Company
     may seek to vertically integrate operations where such expansion is
     economical and supports the Company's core business without adversely
     impacting its existing relationships.

Products

     The Company develops, manufactures and sells a broad array of nonwovens,
woven polyolefin products, conulated/apertured (perforated) films, laminated
composite structures, converted wipes and sorbent products. Sales are focused in
four general product categories that provide opportunities to leverage the
Company's advanced technology and substantial capacity. These product categories
include hygiene products, medical products, disposable products for wiping
applications and industrial and specialty products.

     Marketing and research and development teams are committed to constant
product innovation in conjunction with, the Company's customers. Close long-term
relationships with and independent of end-use customers have been a significant
factor in the Company's success by enabling the Company to better understand its
customers' needs. In addition, the research and development teams seek to
develop high value-added specialty products using existing assets in order to
leverage the Company's capabilities to produce high-margin products.

                                       7
<PAGE>
 
Hygiene Products

     The hygiene products category represented approximately 44.4%, 45.1% and
80.8% or $231.2 million, $197.6 million and $133.5 million, of the Company's
1996 net sales, 1995 net sales and 1994 net sales, respectively. The Company
produces a variety of nonwoven fabrics and films for use in the production of
diapers, training pants, feminine sanitary protection, baby wet wipes and adult
incontinence products. 

     Recent innovations by the Company have broadened its product portfolio and
provided customers with a full range of specialized components for unique or
distinctive products. Accordingly, the Company believes that it is the only
supplier capable of providing all of the thermal bond, adhesive bond, spunbond,
SMS, coextruded apertured films, through-air bond and ultrasonic bond
technologies which are required in the manufacturing of these products.

     The Company has a significant relationship with Procter & Gamble and
supplies a full range of products to Procter & Gamble on a global basis. Procter
& Gamble and the Company's marketing and research and development teams work
closely as partners in the development of next generation products. The Company
believes that this technical support ensures that the Company's products will
continue to be incorporated into Procter & Gamble's product designs in the
future. In addition, the Company has significant relationships with
private-label producers of diaper products and is currently the primary supplier
to Johnson & Johnson Personal Products for its nonwoven requirements for
sanitary protection, tampon and adult incontinence products.

Medical Products

     The medical products category represented approximately 17.6% and 16.7%, or
$91.7 million and $73.0 million, of the Company's 1996 net sales and 1995 net
sales, respectively. The Company's medical products are used in the production
of wound care sponges and dressings, disposable surgical packs, apparel such as
operating room gowns, drapes for operating rooms and face masks, shoe covers and
head wear.

     Johnson & Johnson is the Company's primary customer for medical products
pursuant to a long-term supply agreement dated March 15, 1995 ("Supply
Agreement"). The Supply Agreement lasts for a period of five years, and,
provided that the Company's prices remain competitive with the marketplace,
extends for a period of an additional five years.

     Surgical gowns and drapes containing a protective barrier against fluid
strike-through are the largest and fastest growing applications for nonwoven
fabrics in the medical products category. The Company produces fabric for this
product group and treats the surface of the fabric to give it high fluid
repellency required for this 

                                       8
<PAGE>
 
application. The sponge and dressing products are produced using spunlace 
apertured technology.

Wiping Products

     The wiping products category represented approximately 17.4% and 16.7% or
$90.6 million and $73.0 million, of the Company's 1996 net sales and 1995 net
sales, respectively. The Company has a complete line of wiping products used for
food service, institutional, light industrial, janitorial and consumer markets.
The Company primarily participates in the "dry wipes" portion of the market,
which it considers to have greater potential for growth and opportunity to
develop more value-added, specialty products. Within the "dry wipe" category,
the three general end-use products are foodservice wipes, consumer household
wipes and industrial and specialty wipes. The Company maintains a significant
market share in the foodservice category and is a leading producer for the
consumer and industrial categories.

     The Company utilizes primarily dry form resin bonded and spunlace
technologies to manufacture its wiping products and also maintains dedicated
converting and packaging equipment. In North America, the Company has a
long-term manufacturing and distribution agreement with Berkley Medical
Resources Inc. ("BMR") in Fairfield, Pennsylvania, to convert, warehouse and
distribute a wide range of wiping products. The equipment used in the converting
and packaging operations is owned by the Company and operated solely for its
benefit. In Europe, the Company operates its own converting and packaging
equipment within the Cuijk manufacturing facility. The Company is a leading
manufacturer and marketer of wiping products as a result of its wide range of
products, wide distribution base of dealers and foodservice distributors and
its reputation for excellent customer service and technical support, including
the ability to meet specific customer requirements.

Industrial and Specialty Products

     The industrial and specialty products category represented approximately
20.6%, 21.5% and 19.2%, or $107.8 million, $94.1 million and $31.8 million, of
the Company's 1996 net sales, 1995 net sales and 1994 net sales, respectively.
Demand for this product category is distributed among hundreds of end-use
applications. Some typical end uses include filtration media, home furnishings,
apparel interlinings, automotive insulation, agricultural fabrics, battery
separators, fabric softener sheets, protective coverings and flexible industrial
packaging. The Company's strength in engineering and extensive range of process
technologies are well-suited to meet the specialized functionality requirements
in this category. Customers typically have very specific performance and quality
requirements that demand efficient design and process conditions. The ability to
meet these design and process parameters at a competitive cost is a key
strategic strength of the Company.

     The Company produces a broad range of industrial and specialty products and
a variety of specialized niche products that add further to the diversification
of this product category. The Company's industrial and specialty products are 
produced 

                                       9
<PAGE>
 
primarily using wetlaid, adhesive bond, through-air fusible fiber bond, 
spunbond, woven polyolefin and lamination technologies.

New Product Development

     The Company continually develops new products that incorporate the
Company's wide variety of technologies. The Company's research and development
efforts are focused on increasing production capacity and improving production
processes, developing products based on existing technologies for new markets
and developing new process technologies to enhance existing businesses and allow
entry into new businesses. The expertise of the Company's research and
development staff, working closely with manufacturing and marketing personnel,
have enabled the Company to develop innovative products, frequently in response
to specific customer needs. In addition, the Company enters into collaborative
partnerships with its customers to develop and manufacture next generation
products. The Company believes that these developmental partnerships enhance
customer relationships by ensuring that the Company's products will continue to
be incorporated into its customers' future products. The Company also utilizes
in-plant pilot lines that are installed in its manufacturing facilities in order
to develop new products under real manufacturing conditions prior to
commercialization. The Company currently has several projects in advanced stages
of development that it believes will present the potential for substantial
growth. Research and development spending approximated $6.9 million in 1996.

Marketing and Sales

     The Company sells to well over 1,000 customers in the domestic and
international markets. Approximately 59.8%, 11.0%, 20.8% and 8.4% of the
Company's 1996 net sales were to entities in the United States, Canada, Europe
and Mexico, respectively. Johnson & Johnson, the Company's largest customer,
accounted for approximately 29% of the Company's 1996 net sales, while sales to
Procter & Gamble accounted for approximately 14% of the Company's net sales for
the same period, respectively.

     The Company sells primarily to manufacturers and converters who incorporate
the Company's products into their finished goods. The Company employs direct
sales representatives, a number of whom are engineers and each of whom has
advanced technical knowledge of the Company's products and the applications for
which they are used. The Company's sales representatives are active in the
Company's new product development efforts and are strategically located in the
major geographic regions in which the Company's products are utilized. Woven
polyolefin products are sold primarily through a well-established network of
converters, most of whom have been doing business with the Company or its
subsidiaries for more than 15 years. Converters add incremental value to the
Company's products and service the small order size requirements typical of many
end users.

                                      10
<PAGE>
 
     In certain new high-margin niche markets, the Company has maintained
control over distribution by dealing directly with end-use customers through its
sales representatives. The Company offers a broad range of high-quality
products, utilizing multiple technologies and materials, allowing its sales
force to offer customers what the Company believes is the widest range and
variety of nonwoven and woven polyolefin products available to meet customers'
requirements from a single source. The Company has utilized its diverse product
lines resulting from strategic acquisitions to market its products in high-value
niche product areas.

Manufacturing Processes

         General.  The Company's competitive strengths include low-cost, high-
quality manufacturing processes and a broad range of process technologies, which
allows the Company to offer its customers the best-suited product for each
respective application. Additionally, the Company has made significant capital
investments in modern technology and has developed proprietary equipment and
manufacturing techniques. The Company believes that it exceeds industry
standards in productivity, reduction of production variances and delivery lead
time. The Company has a wide range of manufacturing capabilities (many of which
are patented) that allow it to produce specialized products which, in certain
cases, cannot be reproduced in the market. Substantially all of the Company's
manufacturing sites have plant-wide real time control and monitoring systems
that constantly monitor key process variables using a sophisticated closed loop
system of computers, sensors and custom software.

     Nonwovens.  The Company believes that it has the most comprehensive array
of nonwoven manufacturing technologies in the industry. The Company has
capabilities spanning the entire spectrum of nonwoven technologies, including
the following manufacturing processes: spunbond, SMS, thermal and adhesive bond,
spunlace, wet-laid, film extrusion and aperturing, through-air bond, ultrasonic
bond and tenters, which is a finishing process.

     Nonwoven rollgoods typically have three process steps: web formation, web
consolidation or bonding and finishing. Web formation is the process by which
previously prepared fibers, filaments or films are arranged into loosely held
networks called webs, batts or sheets. In each process, the fiber material is
laid onto a forming or conveying surface, which may be dry, wet or molten. The
dry-laid process utilizes textile fiber processing equipment, called "cards,"
that have been specifically designed for high-capacity nonwoven production. The
carding process converts bales of entangled fibers into uniform oriented webs
that then feed into the bonding process. The wet-laid process utilizes
papermaking technology in which the fibers are suspended in a water slurry and
deposited onto a moving screen, allowing the water to pass through and the
believes fibers to collect. In a molten polymer-laid process, extrusion
technology is used to transform polymer pellets into filaments, which are laid
on a conveying screen and interlocked by thermal fusion. In this process, the
fiber formation, web formation and web consolidation are completed
simultaneously, making this method very efficient.


                                       11
<PAGE>
 
     Web consolidation is the process by which the fibers or film are bonded
together using either mechanical, thermal, chemical or solvent means. The
bonding method greatly influences the end products' strength, softness, loft and
utility. The principal bonding processes are thermal bond, resin or adhesive
bond, hydroentanglement or spunlace, binder fiber or through-air bond, calender,
spunbond, meltblown, SMS, ultrasonic bond and needlepunch. Thermal bond utilizes
heated calender rolls with embossed patterns to point bond or fuse the fibers
together. In the resin bond process, an adhesive, typically latex, is pad rolled
onto the web to achieve a bond. Spunlace, or hydroentanglement, uses high
pressure water jets to mechanically entangle the fibers. Through-air bonding
takes place through the fusion of bi-component fibers in a blown hot air drum.
Spunbond and meltblown take advantage of the melt properties of the resins and
may use thermal fusion with the aid of calender rolls. SMS is the integrated
process of combining spunbond and meltblown sheets in a laminated structure,
creating very strong, lightweight and uniform fabrics. Ultrasonic bonding
utilizes high-frequency sound waves that heat the bonding sites. Needlepunch is
a mechanical process in which beds of needles are punched through the web,
entangling the fibers.

     Finishing, or post-treatment, adds value and functionality to the product
and typically includes surface treatments for fluid repellency, aperturing,
embossing, laminating, printing and slitting. Spunlace and resin bond systems
also have a post-treatment drying or curing step. Certain products also go
through an aperturing process in which holes are opened in the fabric, improving
absorbency.

     Films and Wovens. The woven/film process begins with plastic resin, which
is extruded into a thin plastic film. The film is slit into narrow tapes and
stretched or "oriented," the process through which it derives its high strength.
The tapes are wound onto spools which feed weaving machines. In the final step,
the product is coated for water or chemical resistance, ultraviolet
stabilization and protection, flame retardancy, color and other specialized
characteristics. The Company operates 160-inch and 80-inch coating lines that
have been equipped with the latest technology for gauge control, print treating,
lamination, anti-slip finishes and perforation. The 160-inch line is one of only
two lines of that size in North America. At its Portland, Oregon facility, the
Company extrudes specialized films that are used to laminate the woven product
to paper and has the additional capability of printing up to four colors on one
of the widest printing presses in North America.

     Outside Converting. In North America, the Company entered into a five-year
manufacturing and distribution agreement in August 1993 with BMR to convert,
warehouse and distribute a wide range of wiping products, utilizing the
Company's manufacturing and converting assets. In Europe, the Company operates
its own cutting, folding and packaging machines at its Cuijk manufacturing
facility.

                                       12
<PAGE>
 
Competition

     The Company's primary competitors in its hygiene product categories are
Veratec (a subsidiary of International Paper Co.), FiberWeb Group, Inc. and 
Poly-Bond Inc. in North America, and Corovin GmbH and J.W. Suominen O.Y. in
Europe. Generally, product cost, technical capacity and innovation and customer
relationships are the most important competitive factors. The Company believes
that it is an industry leader in each of these categories.

     The Company's primary competitors in its medical product markets are E.I.
Du Pont de Nemours & Co. ("Dupont") and the Dexter Nonwovens Division. Price,
distribution, variety of product offerings and performance are the chief
competitive factors in this product category.

     The Company's primary competitors in its wiping product markets are Du Pont
in nonwovens and paper producers such as Fort Howard Corp., Atlantic Mills Inc.,
James River Corp. of Virginia and Kimberly-Clark Corporation. In addition to
like-kind products, the Company's wiping products also compete with used rags,
linen and paper products. Generally, cost, distribution and utility are the
principal factors considered in food service and janitorial end uses, while
product innovation, performance and technical support are the most important
factors for specialty and industrial wiping products.

     The Company's primary competitors in its industrial and specialty product
markets are Du Pont, Freudenberg Nonwovens L.P., Kimberly-Clark Corporation,
Dexter Nonwovens Division, Kuraray Co., Ltd., Veratec and Reemay Inc. for
nonwoven products and Intertape Polymer Group Inc. and Amoco Fabrics and Fibers
Co. for woven products. Generally, product innovation and performance, quality,
service and cost are the primary competitive factors, with technical support
being highly valued by the largest customers.

     A number of the Company's niche product applications are sold into select
specialized markets, and the Company believes that the size of such markets,
relative to the amount of capital required for entry, as well as the advanced
manufacturing processes required to service them, present barriers to entry for
potential competitors. There can be no assurance, however, that these
specialized markets, particularly as niche product applications become
standardized over time, will not attract additional competitors that could have
greater financial, technological, manufacturing and marketing resources than the
Company.

Raw Materials

     The primary raw materials used in the manufacture of most of the Company's
products are polypropylene and polyester fiber, polyethylene and polypropylene
resin, and, to a lesser extent, rayon and tissue paper. In 1996, polypropylene
fiber accounted for approximately 23% of the Company's cost of sales. The price
of polypropylene and 

                                       13
<PAGE>
 
polyethylene is a function of, among other things, manufacturing capacity,
demand and the price of crude oil. Historically, the price of polypropylene and
polyethylene has fluctuated, such as in late 1994 and early 1995 when resin
prices increased significantly. The sharp increase was primarily due to short-
term interruptions in production capacity and increased demand as a result of an
expanding economy. By mid-1995, supply had increased, reducing prices, which
reductions the Company expects will continue as incremental capacity continues
to be added.

     There can be no assurance that the price of polypropylene and polyethylene
will not increase in the future or that the Company will be able to pass on such
increases to its customers as it has generally been able to do in the past. A
significant increase in the price of polyolefin resins that cannot be passed on
to customers could have a material adverse effect on the Company's results of
operations and financial conditions.

     The Company's major suppliers of polypropylene fiber are Hercules Fibres
Corp. and Danaklon a/s, while its major supplier of polyethylene is Novacor
Chemicals. The Company's major suppliers of rayon are Lenzing Fibers Corp. and
Courtaulds Fibers, Inc., while its major suppliers of polyester are Wellman,
Inc. and DuPont. The Company purchases its polypropylene resin and tissue paper
from Indelpro, S.A. de C.V. and Crown Vantage, Inc., respectively.

     The Company believes that the loss of any one or more of its suppliers
would not have a long-term material adverse effect on the Company because other
manufacturers with whom the Company conducts business would be able to fulfill
the Company's requirements. However, the loss of the Company's suppliers could,
in the short term, adversely affect the Company's business until alternative
supply arrangements are secured. In addition, there is no assurance that any new
supply agreement entered into by the Company will have terms as favorable as
those contained in current supply arrangements. The Company has not experienced
any significant disruptions in supply as a result of shortages in raw materials.

Environmental

     The Company is subject to a broad range of federal, foreign, state and
local laws and regulations relating to the pollution and protection of the
environment. Among the many environmental requirements applicable to the Company
are laws relating to air emissions, wastewater discharges and the handling,
disposal and release of solid and hazardous substances and wastes. Based on
continuing internal review and advice from independent consultants, the Company
believes that it is currently in substantial compliance with applicable
environmental requirements.

     The Company is also subject to laws, such as the federal Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 ("CERCLA"), that
may impose liability retroactively and without fault for releases of hazardous

                                       14
<PAGE>
 
substances at on-site or off-site locations. The Company is not aware of any
releases for which it may be liable under CERCLA or any analogous provision.

     Actions by federal, state and local governments in the United States and
abroad concerning environmental matters could result in laws or regulations that
could increase the cost of producing the products manufactured by the Company or
otherwise adversely affect demand for its products. For example, certain local
governments have adopted ordinances prohibiting or restricting the use or
disposal of certain plastic products, such as certain of the plastic wrapping
materials which are produced by the Company. Widespread adoption of such
prohibitions or restrictions could adversely affect demand for the Company's
products and thereby have a material adverse effect upon the Company. In
addition, a decline in consumer preference for plastic products due to
environmental considerations could have a material adverse effect upon the
Company.

     Most of the Company's manufacturing processes are mechanical and are
therefore considered to be environmentally benign. Some risk of environmental
liability is inherent, however, in the nature of the Company's business, and
there can be no assurance that material environmental liabilities will not
arise. It is also possible that future developments in environmental regulation
could lead to material environmental compliance or cleanup costs.

Employees

     As of December 28, 1996, the Company employed approximately 2,300 persons.
Of this total, approximately 900 employees are represented by labor unions or
trade councils that have entered into separate collective bargaining agreements
with the Company. The Company considers its employee relations to be very good.

Backlog

     Unfilled orders as of December 28, 1996 and December 30, 1995 amounted to
approximately $76.8 million and $54.1 million, respectively.

Patents and Trademarks

     The Company considers its patents, patent licenses and trademarks, in the
aggregate, to be of material importance to its business and seeks to protect
this proprietary know-how in part through United States and foreign patent and
trademark registrations. The Company maintains over 40 registered trademarks and
approximately 100 patents or patent licenses in the United States. In addition,
the Company maintains certain trade secrets for which, in order to maintain the
confidentiality of such trade secrets, it has not sought patent protection.

Safe Harbor Statement

This Form 10-K and the 1996 Annual Report from which certain portions are
incorporated by reference contain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. In addition, from time to time, the
Company or its representatives have made or may make forward-looking statements
orally or in writing. Such forward-looking statements may be included in, but
not limited to, various filings made by the Company with the Securities and
Exchange Commission, press releases or oral statements made with the approval of
an authorized executive officer of the Company. Actual results could differ
materially from those projected or suggested in any forward-looking statements
as a result of a variety of factors and conditions. The following factors could
cause actual results to differ materially from historical results or those
anticipated: adverse economic conditions, competition in the Company's markets,
fluctuations in raw material costs, and other risks detailed in documents filed
by the Company with the Securities and Exchange Commission, including the
Company's Registration Statement on Form S-1, declared effective on May 9, 1996.


                                      15
<PAGE>
 
ITEM 2. PROPERTIES

     The Company and its subsidiaries operate the following principal
manufacturing plants and other facilities, all of which are owned, except as
noted. All of the Company's owned properties are subject to liens in favor of
the lenders under the Company's credit facilities. The Company believes that
substantially all of its property and equipment is in good condition and that
such equipment are adequate to meet its current manufacturing needs.
<TABLE> 
<CAPTION> 


                                   Square
         Location                  Feet           Principal Function
     --------------------------------------------------------------------------------------
     <S>                           <C>          <C> 
     Benson, North Carolina        469,000         Manufacturing, Sales, Marketing and
                                                   Warehousing
     Mooresville, North
     Carolina                       73,500         Manufacturing, Sales, Marketing and
                                                   Warehousing
     North Little Rock,
     Arkansas (Plant 1)            364,000(1)      Manufacturing

     North Little Rock,
     Arkansas (Plant 2)            119,000         Manufacturing and Warehousing

     Gainesville, Georgia          121,000(2)      Manufacturing and Warehousing

     Dayton, New Jersey            239,200         Research and Development

     Montreal, Quebec              118,000(2)      Manufacturing

     Cuijk, The Netherlands        364,000         Manufacturing, Sales, Marketing and
                                                   Warehousing

     Landisville, New Jersey       245,000         Manufacturing, Sales, Marketing and Research
                                                   and Development

     Vineland, New Jersey          83,500(3)       Manufacturing

     Rogers, Arkansas              126,000         Manufacturing

     Rogers, Arkansas              15,000(2)       Warehousing

     Neunkirchen, Germany          149,200         Manufacturing, Sales and Marketing

     North Bay, Ontario            300,000         Manufacturing

     Mississauga, Ontario          2,900(2)        Sales and Marketing

     Portland (Clackamas),
     Oregon                        30,000          Manufacturing

     Vancouver, British
     Columbia                      60,000(2)       Manufacturing

     San Luis Potosi, Mexico       100,000         Manufacturing and Marketing

</TABLE> 

                                       16
<PAGE>
 
     ITEM 2. PROPERTIES (continued)
<TABLE> 
<CAPTION> 
                                  Square
        Location                  Feet            Principal Function
     -------------------------------------------------------------------------------------
     <S>                          <C>             <C>   
     Guadalajara, Mexico           6,200(2)        Sales, Marketing and Warehousing

     Monterrey, Mexico             2,325(2)        Sales, Marketing and Warehousing

     Mexico City, Mexico           9,850(2)        Sales, Marketing and Warehousing

     North Charleston, South
     Carolina                      4,500(3)        Corporate

</TABLE> 
------------
     (1) Approximately 52,000 square feet of manufacturing space is utilized by
         the Company.
     (2) Leased.
     (3) Leased from entities affiliated with one of the Company's stockholders.

                                       17
<PAGE>
 
ITEM 3. LEGAL PROCEEDINGS

     The Company is currently a party to various claims and legal actions which
arise in the ordinary course of business. The Company believes such claims and
legal actions, individually and in the aggregate, will not have a material
adverse effect on the business, financial condition or results of operations of
the Company.


ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

                                       18
<PAGE>
 
                                     PART II


ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND 
     RELATED STOCKHOLDER MATTERS

     Information required by this Item is incorporated by reference from page 42
of the 1996 Annual Report under the caption "Corporate and Investor
Information."

ITEM 6.  SELECTED FINANCIAL DATA

     Information required by this Item is incorporated by reference from pages
17 and 18 of the 1996 Annual Report under the caption "Selected Consolidated
Financial Data."

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
     OF OPERATIONS

     Information required by this Item is incorporated by reference from
pages 19 through 23 of the 1996 Annual Report under the caption "Management's
Discussion and Analysis of Results of Operations and Financial Condition."

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Financial Statements, including the report of independent auditors, and
supplementary data required by this Item are incorporated by reference from the
1996 Annual Report. See Item 14 for a list of financial statements and the pages
in the 1996 Annual Report from which they are incorporated.


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
     FINANCIAL DISCLOSURE

     In connection with the Chicopee Acquisition on March 15, 1995, the
Company appointed Ernst & Young LLP, independent auditors, as independent
accountants for Chicopee B.V. to replace Coopers & Lybrand (Nederland) ("C&L
Nederland"), independent public accountants affiliated with Coopers & Lybrand
International, whom the Company dismissed as of March 15, 1995. During the two
fiscal years prior to the Chicopee Acquisition, there were no disagreements with
C&L Nederland on any matter of accounting principles or practices, financial
statement disclosure or auditing scope of procedure nor did C&L Nederland
reports on the financial statements for such periods contain an adverse opinion
or disclaimer of opinion, nor were such reports qualified or modified as to
uncertainty, audit scope or accounting. C&L Nederland furnished a letter
addressed to the Securities and Exchange Commission stating that they agree with
these statements.

                                       19
<PAGE>
 
                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information about directors required by this Item is incorporated by
reference from the Notice of 1997 Annual Meeting of Stockholders and Proxy
Statement dated March 20, 1997, ("Proxy Statement") under the captions "Election
of Directors" on pages 1 - 3 of the Proxy Statement. The information on
executive officers as of December 28, 1996 is listed below:

Jerry Zucker, Chairman, President, Chief Executive Officer and Director of the
Company, 47, has been Chairman, President Chief Executive Officer and a Director
since its inception. In addition to his duties with the Company, Mr. Zucker
presently serves as Chairman of InterTech, one of the Company's principal
stockholders, and has served in this capacity since 1983.

James G. Boyd, Executive Vice President, Treasurer, Secretary and Director of
the Company, 52, has been Executive Vice President, Treasurer, Secretary and a
Director of the Company since its inception. In 1986, Mr. Boyd joined InterTech
where he currently serves as Executive Vice President, Treasurer and Director
and performs various treasury, financial and legal functions for the Company and
its affiliates.

S. Grant Reeves, Vice President of the Company, 40, has been Vice President of 
the Company since its inception.  Mr. Reeves joined InterTech in 1986 and served
as General Manager at Fabrene from 1991 through June 1994.

Thomas E. Phillips, Group Vice President - Finance, Systems and Administration,
Nonwovens, 46, has held this position since March 1995. From 1993 until March
1995, Mr. Phillips served as General Manager and Vice President of FiberTech.
Prior to joining FiberTech, Mr. Phillips served as a Vice President (1986-1992)
and a Senior Vice President (1992-1993) of Reemay, Inc., a former InterTech
affiliate, where his responsibilities included financial, human resources and
administrative functions.

James L. Schaeffer, Group Vice President - Operations/Engineering, Nonwovens,
46, has served in this capacity since March 1995. From 1992 until March 1995,
Mr. Schaeffer served as Vice President - Operations/Engineering of FiberTech.
Prior to joining FiberTech, Mr. Schaeffer served as General Manager for Scott
Nonwovens at the Landisville facility from 1990 to 1992.

Gregg Wilkinson, Group Vice President - Marketing, Sales and Technology,
Nonwovens, 44, has served in this capacity since March 1995. From July 1994
until March 1995, Mr. Wilkinson served as Vice President - Marketing, Sales and
Technology of FiberTech and from August 1993 until July 1994, Mr. Wilkinson
served as Director - New Business Development. For the period 1987 to August
1993, Mr. Wilkinson served in sales and marketing management capacities with
Reemay, Inc., a former InterTech affiliate.

                                       20
<PAGE>
 
Peter C. Bourgeois, Vice President, Wovens, 53, has served in this capacity
since the Company's inception. Prior to attaining this position, Mr. Bourgeois
had served as Vice President - Marketing and Sales for Fabrene since June 1989.

                                       21
<PAGE>
 
ITEM 11.  EXECUTIVE COMPENSATION

         Information required by this Item is incorporated by reference from
pages 6 - 9 of the Proxy Statement under the caption "Executive Compensation."


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     Information required by this Item is incorporated by reference from pages 
4 - 6 of the Proxy Statement under the caption "Security Ownership."


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         Information required by this Item is incorporated by reference from
pages 13 and 14 of the Proxy Statement under the caption "Certain Relationships
and Related Transactions."

                                       22
<PAGE>
 
                                    PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, and REPORTS ON FORM 8-K

Financial Statements and Schedules

     (a)  The following financial statements and Independent auditors report 
required by this Item are incorporated by reference from pages 24 - 41 of the 
1996 Annual Report:

          (i)   Consolidated Balance Sheet.

          (ii)  Consolidated Statement of Operations.

          (iii) Consolidated Statements of Shareholders' Equity (Deficit).

          (iv)  Consolidated Statements of Cash Flows.

          (v)   Notes to Consolidated Financial Statements.

          (vi)  Report of Ernst & Young LLP, Independent Auditors.

     (b)  Schedule II - Valuation and Qualifying Accounts ("Schedule II") is 
included on page 25 of this Form 10-K.  Supplemental schedules other than 
Schedule II are omitted because of the absence of conditions under which they 
are required or because the required information is included in the consolidated
financial statements or in the notes thereto.

Exhibits

          Exhibits required to be filed with this Form 10-K are listed in the
following Exhibit Index.

Form 8-K

          On October 25, 1996, the Company filed a Form 8-K/A relative to the
acquisition of FNA.

                                       23
<PAGE>
 
                               Polymer Group, Inc.

                 Schedule II - Valuation and Qualifying Accounts

                                 (In Thousands)

<TABLE> 
<CAPTION> 


               COLUMN A                     COLUMN B                COLUMN C                  COLUMN D            COLUMN E
               --------                  ----------------  ---------------------------     --------------      ----------------
                                                                   ADDITIONS           
                                                           --------------------------- 
                                                                                       
                                           Balance at        Charged to                                           Balance at
                                          Beginning of       Costs and                       Deductions              End of
             Description                     Period          Expenses        Other           (Describe)              Period
             -----------                  ----------------  --------------  -----------     --------------      ----------------
<S>                                       <C>               <C>              <C>            <C>                 <C>    
Year ended December  28, 1996
Allowance  for doubtful accounts           $      1,885           9,060          114 (2)         7,211   (1)      $    3,848    
Valuation allowance for deferred          
     tax assets                            $     11,792           2,357            -               -              $   14,149
Restructuring costs                        $     15,453            -               -             3,444   (3)      $   12,009
                                                                                                                  
Year ended December  30, 1995                                                                                     
Allowance  for doubtful accounts           $        496           5,788          674  (2)        5,073   (1)      $    1,885 
Valuation allowance for deferred                                                                                  
     tax assets                            $     10,198           1,594            -                 -            $   11,792
Restructuring costs                        $          -               -       17,859  (4)        2,406   (3)      $   15,453
                                                                                                                  
Year ended December  31, 1994                                                                                     
Allowance  for doubtful accounts           $        117             435          121               177   (1)      $      496 
                                                                                                                   
Valuation allowance for deferred                                                                                  
     tax assets                            $        693           9,505            -                 -            $   10,198
                                                   
</TABLE> 

(1) Uncollectible accounts written off and price concessions.
(2) Business acquisitions, net.
(3) Charges to reserve.
(4) Reserve established as part of business acquisition.

                                       24
<PAGE>
 
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                                 Polymer Group, Inc.


                                                 /s/  Jerry Zucker
                                                 Jerry Zucker
                                                 Chairman, President
                                                 and Chief Executive
                                                 Officer

                                                 March 26, 1997

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has signed below by the following persons on behalf of the registrant and in the
capacities on the dates indicated.

/s/ Jerry Zucker
Jerry Zucker                                     Chairman,Chief Executive
March 26, 1997                                   Officer, President and
                                                 Director (principal
                                                 executive officer)

/s/ James G. Boyd
James G. Boyd                                    Executive Vice President,
March 26, 1997                                   Treasurer and Director
                                                 (principal financial officer
                                                 and principal accounting
                                                 officer)


Bruce V. Rauner                                  Director
March 26, 1997

/s/ David A. Donnini
David A. Donnini                                 Director
March 26, 1997

/s/ Michael J. McGovern
Michael J. McGovern                              Director
March 26, 1997



/s/ L. Glenn Orr                                 Director
L. Glenn Orr
March 26, 1997

                                       25
<PAGE>
 
                                  EXHIBIT INDEX

3.1  Form of Amended and Restated Certificate of Incorporation of the Company
     (incorporated by reference to Exhibit 3.1 to the Company's Registration
     Statement on Form S-1 (Reg. No. 333-2424)).

3.2  Amended and Restated By-laws of the Company (incorporated by reference to
     Exhibit 3.2 to the Company's Registration Statement on Form S-1 (Reg. No.
     333-2424)).

4.1  Form of certificate representing Common Stock of the Company (incorporated
     by reference to Exhibit 4.1 to the Company's Registration Statement on Form
     S-1 (Reg. No. 333-2424)).

4.2  Form of Rights Agreement (incorporated by reference to Exhibit 4.2 to the
     Company's Registration Statement on Form S-1 (Reg. No. 333-2424)).

10.1 Stock Purchase Agreement dated as of January 10, 1996 between the Company
     and ConX II (incorporated by reference to Exhibit 10.47 to the Company's
     Registration Statement on Form S-1 (Reg. No. 333-2424)).

10.2 1996 Key Employee Stock Option Plan of the Company (incorporated by
     reference to Exhibit 10.48 to the Company's Registration Statement on Form
     S-1 (Reg. No. 333-2424)).

10.3 Form of Non-Qualified Stock Option Grant (incorporated by reference to the
     Company's to Exhibit 10.49 Registration Statement on Form S-1 (Reg. No.
     333-2424)).

10.4 Amendment No. 5 dated as of December 30, 1995 by and among FiberTech, the
     Subsidiary Guarantors and Parent Guarantors identified therein, the Lenders
     signatory thereto and the Chase Manhattan Bank (National Association), as
     agent (incorporated by reference to Exhibit 10.50 to the Company's
     Registration Statement on Form S-1 (Reg. No. 333-2424)).

10.5 Form of New Credit Facility (incorporated by reference to Exhibit 10.51 to
     the Company's Registration Statement on Form S-1 (Reg. No. 333-2424)).

10.6 Form of Third Supplemental Indenture between the Company and Harris Trust
     and Savings Bank, as successor trustee (incorporated by reference to
     Exhibit 10.52 to the Company's Registration Statement on Form S-1 (Reg. No.
     333-2424)).

11*  Statement of Computation of Earnings Per Share.

                                       26
<PAGE>
 
                                  Exhibit Index


13*  Portions of 1996 Annual Report to security holders which have been
     expressly incorporated by reference.

16   Letter of Coopers & Lybrand (Nederland) (incorporated by reference to
     Exhibit 16 to the Company's Registration Statement on Form S-1 (Reg. No.
     333-2424)).

21*  Subsidiaries of the Company.

23*  Consent of Ernst & Young LLP.

27*  Financial Data Schedule.


* Filed herewith.

                                       27