Exhibit 10.1
Execution Copy
POLYMER GROUP, INC.
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT is entered into on October 31, 2006, between Polymer
Group, Inc., a Delaware corporation (the "Company"), and James L. Schaeffer
("Executive").
WHEREAS, the Company and Executive are parties to a certain employment agreement
dated as of March 24, 2006 (the "Employment Agreement");
WHEREAS, the Company and Executive are parties to a certain change in control
severance compensation agreement dated as of March 24, 2006 (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 OCTOBER 31, 2006
(THE "TERMINATION DATE").
EXECUTIVE ALSO AGREES THAT HIS SERVICE AS A MEMBER OF
THE BOARD OF DIRECTORS AND AS AN OFFICER OF THE COMPANY AND ITS SUBSIDIARIES
SHALL END ON OCTOBER 31, 2006.
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 A DIRECTOR AND/OR OFFICER.
(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 TERMINATION DATE.
AS PAYMENT OF SEVERANCE UNDER THIS AGREEMENT,
EXECUTIVE SHALL BE ENTITLED TO RECEIVE AN AMOUNT EQUAL TO HIS BASE SALARY UNTIL
DECEMBER 20, 2006 (THE "PAYMENT END DATE").
EXECUTIVE SHALL NOT BE ENTITLED TO
RECEIVE ANY AMOUNTS OF BASE SALARY FOR ANY PERIOD AFTER THE PAYMENT END DATE.
SUCH SEVERANCE PAYMENTS SHALL BE MADE BI-WEEKLY IN ACCORDANCE WITH THE COMPANY'S
CURRENT PAYROLL PRACTICES.
EXECUTIVE SHALL NOT BE ENTITLED TO ANY ADDITIONAL
PAYMENT FOR UNUSED VACATION DAYS OR PAID TIME OFF DAYS.
(B)
EXPENSES.
THE COMPANY SHALL REIMBURSE EXECUTIVE FOR ALL
REASONABLE BUSINESS EXPENSES INCURRED BY HIM PRIOR TO THE TERMINATION DATE WHICH
WERE INCURRED IN THE COURSE OF PERFORMING HIS DUTIES AND RESPONSIBILITIES 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 NOT BE ENTITLED TO RECEIVE ANY 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 FISCAL YEAR.
(D)
VESTED RESTRICTED STOCK AND VESTED STOCK OPTIONS.
AS ADDITIONAL
PAYMENT OF