Document:

Exhibit 10.1

 

	
  STATE OF SOUTH
  CAROLINA

  	
  )

  	
  IN THE COURT OF
  COMMON PLEAS

  
	
   

  	
  )

  	
  FOR THE NINTH
  JUDICIAL CIRCUIT

  
	
  COUNTY OF
  CHARLESTON

  	
  )

  	
  CIVIL ACTION
  NO.: 03-CP-10-3389

  
	
   

  	
  )

  	
   

  
	
  The Intertech
  Group, Inc.,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Plaintiff,

  	
  )

  	
  SETTLEMENT
  AGREEMENT,

  
	
   

  	
  )

  	
  RECEIPT
  AND RELEASE

  
	
  vs.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Polymer Group,
  Inc.,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Defendant.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  

 

SETTLEMENT AGREEMENT, RECEIPT AND
RELEASE

FULL, FINAL AND COMPLETE RELEASE.

PLEASE READ CAREFULLY.

THIS RELEASE ENDS ALL CLAIMS OF
EVERY NATURE.

 

THIS
SETTLEMENT AGREEMENT, RECEIPT AND RELEASE is entered into as of this 29th
day of April, 2005 by and among

 

a)                    The
Intertech Group, Inc., a Delaware corporation, on behalf of itself and its past
and present entities, successors, subsidiaries, divisions, affiliated entities,
shareholders, employees, officers, directors, owners, partners, heirs, assigns,
agents, attorneys and other representatives, including but not limited to Jerry
Zucker (hereinafter “TIG”), who, with PGI is at times referred to herein as the
“parties”;

 

b)                   Jerry
Zucker individually and on behalf of his past and present entities,
subsidiaries, divisions, affiliated entities, shareholders, employees,
officers, directors, owners, partners, heirs, executors, administrators, assigns, agents, attorneys and other
representatives (hereinafter “Zucker”);

 

c)                    ZS Associates LLC, a South Carolina limited
liability company, formerly ZS Associates, Inc., a South Carolina general
partnership (hereinafter “ZS Associates”) on behalf of itself and its
past and present entities, successors, subsidiaries, divisions, affiliated
entities, members, managers, shareholders, employees, officers, directors,
owners, partners, heirs, assigns, agents, attorneys and other representatives,
including but not limited to Zucker;

 

d)                   Polymer
Group, Inc. (hereinafter “PGI”) a Delaware corporation, who, with TIG is at
times referred to herein as the “parties”; and

 

1

 

e)                    the
MatlinPatterson Releasees as defined in Paragraph 4 of this Agreement.

 

WHEREAS,
although ZS Associates, Zucker, and the MatlinPatterson Releasees were not
parties to the above captioned action, the parties have agreed as a condition
of settlement that ZS Associates, Zucker, and the MatlinPatterson Releasees
join this Settlement Agreement, Receipt and Release for the purpose of
releasing PGI and others as set forth below.  
ZS Associates, Zucker, and the MatlinPatterson Releasees have agreed to
do so and therefore join in and agree to be bound by this Settlement Agreement,
Receipt and Release.  Further, the
parties, ZS Associates and Zucker, believe that the releases provided to the
MatlinPatterson Releasees are in the best interests of the parties, ZS
Associates and Zucker in light of the valuable consideration this Settlement
Agreement, Receipt and Release provides to TIG, ZS Associates and Zucker. TIG,
ZS Associates and Zucker have agreed to release the MatlinPatterson Releasees
as set forth herein. TIG, ZS Associates, and Zucker believe that the settlement
of the instant action is of value to them and constitutes valuable
consideration to them as that term is defined under South Carolina law.

 

WHEREAS,
TIG is the lessee of a certain lease, as amended, (hereinafter “the Lease”)
between itself and ZS Associates, for the real property located at 4838 Jenkins
Avenue in North Charleston, South Carolina (hereinafter “the Leased Property”).

 

WHEREAS,
PGI is a sub-lessee of the Lease, having subleased from TIG an 85% undivided
interest in the Leased Property (hereinafter “the Sublease”).  The Lease between TIG and ZS Associates and
the Sublease between PGI and TIG are more fully and completely described in the
Complaint filed in the instant action and such description is incorporated by
reference herein.

 

WHEREAS,
in the instant action TIG has alleged that, in addition to PGI’s obligations to
TIG under the Sublease, PGI is liable to TIG under the terms of a certain
Services Agreement, as amended, (hereinafter “the Services Agreement”) for
certain services provided to it from TIG in association with the Sublease.  The Services Agreement between TIG and PGI is
more fully and completely described in the Complaint filed in the instant
action and such description is incorporated by reference herein.

 

WHEREAS,
PGI no longer occupies the real property which is the subject of the Lease,
Sublease, and alleged Services Agreement, nor does it receive services under
the alleged Services Agreement.

 

WHEREAS,
in August 2003, TIG filed the instant action against PGI and said action
is still pending.

 

WHEREAS,
TIG has agreed to accept the payment described below on behalf of itself, ZS
Associates and Zucker as full and final payment of all amounts due and owing or
to become due and owing to TIG by PGI under the Lease, Sublease, and alleged
Services Agreement and any amounts owed by the PGI Releasees (as defined in 

 

2

 

Paragraph 3 of this
Agreement) and the MatlinPatterson Releasees to TIG, ZS Associates and Zucker
for whatever reason, and for any and all other claims in the instant action and
for the releases set forth in this Settlement Agreement, Receipt And Release.

 

NOW,
THEREFORE, in consideration of the mutual promises and obligations set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties, ZS Associates and Zucker, hereto
agree as follows:

 

1.                                      Payment by PGI
to TIG.  TIG, on behalf of TIG, ZS Associates and Zucker, hereby
acknowledges and accepts from PGI the payment of Three Million One Hundred Thousand
and No/100 ($3,100,000.00) Dollars as full and final payment of all amounts due
and owing to TIG by PGI under the Lease, Sublease, alleged Services Agreement,
for any and all other claims in the instant action, and as full and final
payment of any and all amounts due and owing to TIG, ZS Associates and Zucker
by the PGI Releasees and the MatlinPatterson Releasees and as consideration for
the releases referenced in this Settlement Agreement, Receipt And Release.  PGI and TIG agree that TIG shall immediately
dismiss the instant action with prejudice. 
The parties shall bear their own costs and fees, if any, in relation to
any such dismissal.

 

2.                                      Intent of
Settlement Agreement, Receipt and Release.    The
parties, ZS Associates and Zucker, recognize that over the last several years
they have had a variety of disputes, interactions and business dealings with
each other, the instant action being one of them.   It is the intent of the parties, ZS
Associates and Zucker, that this instant Settlement Agreement, Receipt
And Release resolve not only the claims
set forth in the instant action, but to also resolve any claims by TIG, ZS
Associates, and Zucker, whether known or unknown, ripe or inchoate, asserted or
withheld, whether arising from claims arising from or related to the Lease, Sublease and alleged Services
Agreement or otherwise against the PGI Releasees and the MatlinPatterson
Releasees.

 

Further, it is the intent of the parties, ZS
Associates and Zucker, that TIG, ZS Associates, and Zucker release the PGI
Releasees and the MatlinPatterson Releasees, from any and all charges, complaints, promises, covenants, contracts, agreements,
controversies, variances, damages, judgments, extents, executions, remedies,
actions, suits, dues, sums of money, accounts, reckonings, bonds, bills, specialties, costs, losses, trespasses
debts, duties, liabilities, obligations, claims, rights, demands,
actions or causes of actions and
expenses (including attorneys’ fees and costs), howsoever arising, and
of any nature or description whatsoever, known or unknown, asserted or
unasserted, liquidated or unliquidated,
ripe or inchoate, at law or in equity including, without limitation, any
claim for equity or equity-related compensation, incentive compensation, or any
other compensation or remuneration whatsoever based on any alleged promises or
undertakings by or agreements with the PGI Releasees and/or the MatlinPatterson
Releasees from the beginning of time until as of the date of this Agreement.

 

3

 

3.                                      TIG, ZS
Associates, and Zucker Release.  TIG,
ZS Associates and Zucker hereby unconditionally and irrevocably release and
forever discharge PGI, its past and present entities, successors, subsidiaries,
divisions, affiliated entities, shareholders, employees, officers, directors,
owners, partners, heirs, assigns, agents, attorneys and other representatives (“PGI
Releasees”) and the MatlinPatterson Releasees from any and all claims which
TIG, ZS Associates and Zucker now have, has had or may hereafter claim to have
against the PGI Releasees or the MatlinPatterson Releasees whether arising from
or related to the Lease, Sublease and Services Agreement or otherwise.  Further, TIG, ZS Associates and Zucker hereby
unconditionally and irrevocably release and forever discharge the PGI Releasees
and the MatlinPatterson Releasees from any and all debts, duties, liabilities,
obligations, claims, rights, demands, actions or causes of action, howsoever
arising, and of any nature whatsoever, known or unknown, asserted or
unasserted, liquidated or unliquidated, ripe
or inchoate, at law or in equity including, without limitation, any
claim for equity or equity-related compensation, incentive compensation, or any
other compensation or remuneration whatsoever based on any alleged promises or
undertakings by or agreements with the PGI Releasees and/or the MatlinPatterson
Releasees from the beginning of time until as of the date of this Agreement.

 

TIG,
ZS Associates and Zucker hereby represent that TIG, ZS Associates and Zucker,
have not filed, and agree that they will not file, any additional demands for
arbitration, claims, complaints, charges or lawsuits against the PGI Releasees or
the MatlinPatterson Releasees for claims, whether at law or equity, or for damages
under the Lease, Sublease, and alleged Services Agreement or arising from or
related to the Lease, Sublease, and alleged Services Agreement or
otherwise.  TIG, ZS Associates and Zucker
hereby further represent that TIG, ZS Associates and Zucker have not filed, and
agree that they will not file, any additional demands for arbitration, claims,
complaints, charges or lawsuits against the PGI Releasees or the
MatlinPatterson Releasees for claims, debts, duties, liabilities, obligations,
rights, demands, actions or causes of action, howsoever arising, and of any
nature whatsoever, known or unknown, asserted or unasserted, liquidated or
unliquidated, ripe or inchoate, at
law or in equity including, without limitation, any claim for equity or
equity-related compensation, incentive compensation, or any other compensation or
remuneration whatsoever based on any alleged promises or undertakings by or
agreements with the PGI Releasees and/or the MatlinPatterson Releasees from the
beginning of time until as of the date of this Agreement.

 

4.                                      MatlinPatterson
Releasees.  The parties, ZS
Associates and Zucker, agree that the MatlinPatterson Releasees as
referenced in this Settlement Agreement, Receipt and Release shall include, but
are not limited to, MatlinPatterson Global Opportunities Partners L.P.,
MatlinPatterson Global Opportunities Partners (Bermuda) L.P., and
MatlinPatterson Global Opportunities Partners B, L.P. and their related
entities, including, without limitation, MatlinPatterson Global Partners LLC,
MatlinPatterson Global Advisers LLC, MatlinPatterson Asset Management LLC,
MatlinPatterson LLC and all of their subsidiaries, parent entities, affiliated
companies, limited liability companies, limited partnerships, joint venturers
and other related entities, and all of the foregoing entities’ respective
predecessors, successors, heirs, assigns, 

 

4

 

officers, directors,
partners, limited partners, members, managers, stockholders, employees, agents
and representatives, and any and all persons acting by, through, under, or in
concert with any of them (all of the foregoing in their capacities as
shareholders and in any other capacity collectively, the “MatlinPatterson
Releasees”).

 

5.                                      PGI
and MatlinPatterson Release.   The
PGI Releasees and the MatlinPatterson Releasees hereby unconditionally and
irrevocably release and forever discharge TIG, ZS Associates and Zucker, their
past and present entities, successors, subsidiaries, divisions, affiliated
entities, shareholders, employees, officers, directors, owners, partners,
heirs, assigns, agents, attorneys and other representatives (the “TIG Releasees”)
from any and all claims which the PGI Releasees or MatlinPatterson Releasees
now have, have had or may hereafter claim to have against the TIG Releasees
whether arising from or related to the Lease, Sublease and Services Agreement
or otherwise.  Further, the PGI Releasees
and MatlinPatterson Releasees hereby unconditionally and irrevocably release
and forever discharge the TIG Releasees from any and all debts, duties,
liabilities, obligations, claims, rights, demands, actions or causes of action,
howsoever arising, and of any nature whatsoever, known or unknown, asserted or
unasserted, liquidated or unliquidated, ripe
or inchoate, at law or in equity including, without limitation, any
claim for equity or equity-related compensation, incentive compensation, or any
other compensation or remuneration whatsoever based on any alleged promises or
undertakings by or agreements with the TIG Releasees from the beginning of time
until as of the date of this Agreement.

 

The
PGI Releasees and the MatlinPatterson Releasees hereby represent that they have
not filed, and agree that they will not file, any additional demands for
arbitration, claims, complaints, charges or lawsuits against the TIG Releasees
for claims, whether at law or equity, or for damages under the Lease, Sublease,
and alleged Services Agreement or arising from or related to the Lease,
Sublease, and alleged Services Agreement or otherwise.  The PGI Releasees and the MatlinPatterson
Releasees hereby further represent that they have not filed, and agree that
they will not file, any additional demands for arbitration, claims, complaints,
charges or lawsuits against the TIG Releasees for claims, debts, duties,
liabilities, obligations, rights, demands, actions or causes of action,
howsoever arising, and of any nature whatsoever, known or unknown, asserted or
unasserted, liquidated or unliquidated, ripe
or inchoate, at law or in equity including, without limitation, any
claim for equity or equity-related compensation, incentive compensation, or any
other compensation or remuneration whatsoever based on any alleged promises or
undertakings by or agreements with the TIG Releasees from the beginning of time
until as of the date of this Agreement.

 

6.                                      Acknowledgments.  Each of the parties, ZS Associates,
Zucker, and the MatlinPatterson Releasees acknowledge, represent and warrant as
follows, with the understanding that the PGI Releasees and the MatlinPatterson
Releasees are relying thereon:

 

5

 

(a)                                  They
fully comprehend and understand all the terms of this Settlement Agreement,
Receipt and Release and its legal effects;

 

(b)                                 They
warrant that all corporate approvals necessary for execution of this Settlement
Agreement, Receipt and Release on behalf of the signing entities have been
properly obtained and the individuals executing this Settlement Agreement,
Receipt and Release are legally competent and duly authorized to do so;

 

(c)                                  This
Settlement Agreement, Receipt and Release is executed knowingly and voluntarily
and without reliance upon any statement or representation of any third party or
its representatives;

 

(d)                                 This
Settlement Agreement, Receipt and Release is enforceable against them in
accordance with its terms;

 

(e)                                  They
have had the benefit of legal counsel of their own choice and have been
afforded an opportunity to review this Settlement Agreement, Receipt and
Release with their legal counsel and that this Settlement Agreement, Receipt
and Release shall be construed as if collectively drafted by them and their
legal counsel; and

 

(f)                                    They
have not assigned, pledged, transferred, or otherwise conveyed any rights in
this instant action or any claims of any nature whether related or unrelated in
whole or in part to, the Lease, Sublease, and alleged Services Agreement or
otherwise, in whole or in part or any interest therein, to any third party nor
have they purported to do so.

 

7.                                      Counterparts.  This Settlement Agreement, Receipt and
Release may be executed simultaneously in several counterparts, each of which
shall be deemed an original and all of which together shall constitute one and
the same agreement.

 

8.                                      Modification and Entire Agreement.                                              No
modification, amendment, change, or addition to this Settlement Agreement,
Receipt and Release shall be binding upon the parties, ZS Associates, Zucker,
and the MatlinPatterson Releasees, unless reduced to writing and signed by the
parties, ZS Associates, Zucker, and MatlinPatterson Global Advisers LLC on
behalf of the MatlinPatterson Releasees. 
This Settlement Agreement, Receipt and Release constitutes the entire
agreement between the parties, ZS Associates, Zucker, and the MatlinPatterson
Releasees, and is an integrated agreement as that term applies under South
Carolina law.

 

9.                                      Settlement
Not an Admission.  It is
understood and agreed that this Settlement Agreement, Receipt and Release is
the result of a good faith compromise settlement of disputed claims and that
the parties, ZS Associates, Zucker, and the MatlinPatterson Releasees, are
entering into this Settlement Agreement, Receipt and Release to avoid the
expense, disruption and uncertainty of further litigation regarding their
respective claims and defenses.  Entry
into this Settlement Agreement, Receipt 

 

6

 

and Release does not
constitute any admission of liability on the part of any signatory, and
liability from PGI or the MatlinPatterson Releasees to any signatory to this
Settlement Agreement, Receipt and Release is expressly denied.

 

10.                               Headings.  The headings of this Settlement Agreement,
Receipt and Release are for the convenience of the parties, ZS Associates,
Zucker, and the MatlinPatterson Releasees, only and shall not limit, expand,
modify, or aid in the interpretation or constructions of this Settlement
Agreement, Receipt and Release.

 

11.                               Successors and
Assigns.  This Settlement
Agreement, Receipt and Release shall be binding upon and inure to the benefit
of the parties, ZS Associates, Zucker, and the MatlinPatterson Releasees, their
respective past and present entities, subsidiaries, divisions, affiliated
entities, shareholders, employees, successors, officers, directors, owners, partners,
heirs, assigns, agents, attorneys and other representatives.

 

12.                               Governing
Law.  This Settlement Agreement,
Receipt and Release shall be governed by and construed under the laws of the
State of South Carolina.

 

13.                               Attorney’s Fees.       The parties, ZS Associates, Zucker, and the
MatlinPatterson Releasees, agree that they shall each be responsible for their
own attorney’s fees and costs which they have incurred as a result of the
instant action.

 

14.                               Representation of Comprehension of Document.                             In
entering into this Settlement Agreement, Receipt and Release the parties, ZS
Associates, Zucker, and the MatlinPatterson Releasees represent that they have
relied upon the legal advice of their attorneys who are the attorneys of their
own choice and that the terms of this Settlement Agreement, Receipt and Release
have been completely read and explained to them by their attorneys, and that
those terms are fully understood and voluntarily accepted by each signatory to
this Settlement Agreement, Receipt and Release.

 

15.                               Non-Disparagement.  The parties, ZS Associates, Zucker, and the
MatlinPatterson Releasees agree that, except as may be required by law, they
will not disparage the other, or their respective officers, employees, and
agents for a time period of one year from the date of this Agreement, and if
asked about the other, they shall state simply that “our business relationship
has ended.  We had some issues that we
worked through and now we have settled them satisfactorily” or words
substantially to that effect.

 

16.                               Non-Waiver.   The failure of any of the signatories to
this Agreement to insist upon or enforce strict performance of any provision of
this Agreement or to exercise any rights or remedies thereunder will not be
construed as a waiver by said signatory to assert or rely upon any such
performance right or remedy in that or any other instance.

 

17.                               Confidentiality.   The signatories to this Agreement agree and
understand that this Agreement and the terms and conditions of the settlement
reflected herein are confidential and shall not be disclosed to third parties
except to the 

 

7

 

signatories’
representative legal, accounting, or tax advisors or as may be required by law
or by any governmental, judicial, regulatory, or tax authority or as required
in connection with the fulfillment of any reporting responsibilities in the
ordinary course of business.  The
signatories to this Agreement acknowledge that officers, directors,
shareholders, and employees of the parties may learn of this settlement in the
normal course of their employment, and it is agreed that such knowledge is not
a violation of this paragraph.

 

18.                               Stipulation of
Dismissal With Prejudice.   Upon
the execution of this Agreement, the parties will execute a Stipulation of
Dismissal with Prejudice in the action The Intertech Group, Inc. vs. Polymer
Group, Inc., Civil Action No. 03-CP-10-3389 which will promptly be filed in
the Court of Common Pleas for Charleston County, South Carolina in the form
attached as Exhibit A to this Agreement.

 

19.                               Severability.   The parties, ZS Associates, Zucker, and the
MatlinPatterson Releasees agree that the provisions contained herein are not
known or believed to be in violation of any federal, state, or local law, rule
or regulation.  In the event a court of
competent jurisdiction finds any provision herein or subpart thereof to be
illegal or unenforceable, the parties, ZS Associates, Zucker, and the
MatlinPatterson Releasees agree that the court shall modify said provisions or
subparts thereof to make said provisions or subparts thereof in this Agreement
valid and enforceable.

 

20.                               Additional
Documents.                     The
parties, ZS Associates, Zucker, and the MatlinPatterson Releasees agree to
cooperate fully and execute any and all supplementary documents and take all
additional actions which may be necessary or appropriate to give full force and
effect to the basic terms and intent of this Settlement Agreement, Receipt and
Release.

 

21.                               Effective
Date.                   This Settlement
Agreement, Receipt and Release shall be effective as of the date that the
parties, ZS Associates, Zucker, and the MatlinPatterson Releasees execute this
Agreement.

 

8

 

WITNESS
WHEREOF, each of the undersigned has executed this Settlement Agreement,
Receipt and Release under seal as of the date first written above.

 

 

	
  WITNESSES:

  	
  THE INTERTECH GROUP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jerry Zucker

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (CORPORATE SEAL)

  
					

 

SWORN
to and subscribed before me this

 

            day
of                               ,
2004.

 

	
   

  	
   

  
	
  Notary Public for

  	
   

  
	
  My notary expires:

  	
   

  	
   

  
			

 

 

	
  WITNESSES:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jerry Zucker

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Individually and on behalf of his past and present entities,
  subsidiaries, divisions, affiliated entities, shareholders, employees,
  officers, directors, owners, partners, heirs, executors, administrators,
  assigns, agents, attorneys and other representatives

  
	
   

  	
   

  

 

SWORN
to and subscribed before me this

 

            day
of                               ,
2004.

 

	
   

  	
   

  
	
  Notary Public for

  	
   

  	
   

  
	
  My notary expires:

  	
   

  	
   

  
					

 

9

 

	
  WITNESSES:

  	
  ZS ASSOCIATES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Jerry Zucker

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (CORPORATE SEAL)

  
					

 

SWORN
to and subscribed before me this

 

            day
of                               ,
2004.

 

	
   

  	
   

  
	
  Notary Public for

  	
   

  
	
  My notary expires:

  	
   

  	
   

  
			

 

 

	
  WITNESSES:

  	
  POLYMER
  GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  James Schaeffer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its: Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (CORPORATE SEAL)

  

 

SWORN
to and subscribed before me this

 

            day
of                               ,
2004.

 

	
   

  	
   

  
	
  Notary Public for

  	
   

  
	
  My notary expires:

  	
   

  	
   

  
			

 

10

 

	
  WITNESSES:

  	
  MATLINPATTERSON GLOBAL

  ADVISERS LLC, ON BEHALF OF ITSELF

  AND THE MATLINPATTERSON

  RELEASEES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (CORPORATE SEAL)

  
					

 

SWORN
to and subscribed before me this

 

            day
of                               ,
2004.

 

	
   

  	
   

  
	
  Notary Public for

  	
   

  
	
  My notary expires:

  	
   

  	
   

  
			

 

11

 

	
  STATE OF SOUTH
  CAROLINA

  	
  )

  	
  IN THE COURT OF
  COMMON PLEAS

  
	
   

  	
  )

  	
  FOR THE NINTH
  JUDICIAL CIRCUIT

  
	
  COUNTY OF
  CHARLESTON

  	
  )

  	
  CIVIL ACTION
  NO.: 03-CP-10-3389

  
	
   

  	
  )

  	
   

  
	
  The Intertech
  Group, Inc.,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Plaintiff,

  	
  )

  	
  Stipulation
  of Dismissal with

  
	
   

  	
  )

  	
  Prejudice

  
	
  vs.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Polymer Group,
  Inc.,

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  
	
  Defendant.

  	
  )

  	
   

  
	
   

  	
  )

  	
   

  

 

The issues in the
above-captioned action having been settled to the satisfaction of all parties,
now, therefore, pursuant to Rule 41(a)(1)(B), SCRCP, it is hereby

 

STIPULATED,
that the above-captioned action be, and hereby is, dismissed with prejudice.

 

	
   

  	
   

  	
   

  	
   

  
	
  Richard M. Smith

  	
   

  	
  Ben F. Easterlin, IV,
  Esquire

  	
   

  
	
  Michael Scardato

  	
  King & Spalding, LLP

  
	
  MCNAIR LAW FIRM, P.A.

  	
  191 Peachtree Street.

  
	
  Post Office Drawer 418

  	
  Atlanta Georgia 30303

  
	
  Georgetown, SC
  29442

  	
   

  
	
   

  	
   

  
	
  Attorneys for Defendant

  	
  Attorney for Plaintiff

  

 

12EXHIBIT
10.62

 

GUESS?,
INC.

2004
EQUITY INCENTIVE PLAN

NONQUALIFIED
STOCK OPTION AGREEMENT

 

THIS NONQUALIFIED STOCK OPTION
AGREEMENT (this “Option Agreement”) dated                         by
and between Guess?, Inc., a Delaware corporation (the “Company”),
and                                                 (the
“Grantee”) evidences the nonqualified
stock option (the “Option”) granted
by the Company to the Grantee as to the number of shares of the Company’s
Common Stock first set forth below.

 

	
   

  	
   

  	
   

  
	
   

  	
  Number of Shares of Common
  Stock: (1)

  	
   

  	
   

  	
  Award Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Exercise Price per Share: (1)

  	
  $

  	
   

  	
   

  	
  Expiration Date: (1)(2)

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Vesting (1)(2) 
  [The Option shall become
  vested as to 25% of the total number of shares of Common Stock subject to the
  Option on the first, second, third and fourth anniversaries of the Award
  Date.]

  	
   

  
	
   

  	
   

  	
   

  
											

 

The Option is granted
under the Guess?, Inc. 2004 Equity Incentive Plan (the “Plan”) and subject to the Terms and Conditions of Nonqualified Stock
Option (the “Terms”) attached to this Option
Agreement (incorporated herein by this reference) and to the Plan.  The Option has been granted to the Grantee in
addition to, and not in lieu of, any other form of compensation otherwise payable
or to be paid to the Grantee.  Capitalized
terms are defined in the Plan if not defined herein.  The parties agree to the terms of the Option
set forth herein.  The Grantee
acknowledges receipt of a copy of the Terms, the Plan and the Prospectus for
the Plan.

 

	
  “GRANTEE”

  	
   

  	
  GUESS?, INC.

  a Delaware corporation 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Signature

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Print Name:

  	
   

  
	
  Print
  Name

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						

 

CONSENT OF SPOUSE

 

In
consideration of the Company’s execution of this Option Agreement, the
undersigned spouse of the Grantee agrees to be bound by all of the terms and
provisions hereof and of the Plan.

 

	
   

  	
   

  	
   

  
	
  Signature
  of Spouse

  	
   

  	
  Date

  

 

 

 

 

(1)     Subject
to adjustment under Section 16 of the Plan.

(2)     Subject
to early termination if the Grantee’s employment terminates.  See Sections 4, 6 and 7 of the Terms and
Sections 14, 16 and 17 of the Plan for additional details regarding possible
adjustments and acceleration of vesting in connection with a Change in Control
of the Company.

 

 

TERMS AND CONDITIONS OF
NONQUALIFIED STOCK OPTION

 

1.             Vesting;
Limits on Exercise; Incentive Stock Option Status.

 

The Option shall vest and
become exercisable in percentage installments of the aggregate number of shares
subject to the Option as set forth on the cover page of this Option
Agreement.  The Option may be exercised
only to the extent the Option is vested and exercisable.

 

	
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  Cumulative
  Exercisability.
  To the extent that the Option is vested and exercisable, the Grantee has the
  right to exercise the Option (to the extent not previously exercised), and
  such right shall continue, until the expiration or earlier termination of the
  Option.

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  No Fractional Shares. Fractional share interests shall be
  disregarded, but may be cumulated.

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  Minimum Exercise. No fewer than 1001 shares
  of Common Stock may be purchased at any one time, unless the number purchased
  is the total number at the time exercisable under the Option.

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  Nonqualified Stock
  Option. The
  Option is a nonqualified stock option and is not, and shall not be, an
  incentive stock option within the meaning of Section 422 of the Code.

  

 

2.             Continuance
of Employment/Service Required; No Employment/Service Commitment.

 

                The vesting schedule requires
continued employment or service through each applicable vesting date as a
condition to the vesting of the applicable installment of the Option and the
rights and benefits under this Option Agreement.  Employment or service for only a portion of
the vesting period, even if a substantial portion, will not entitle the Grantee
to any proportionate vesting or avoid or mitigate a termination of rights and
benefits upon or following a termination of employment or services as provided
in Section 4 below or under the Plan.

 

                Nothing contained in this Option
Agreement or the Plan constitutes a continued employment or service commitment
by the Company or any of its Subsidiaries, affects the Grantee’s status, if he
or she is an employee, as an employee at will who is subject to termination
without cause, confers upon the Grantee any right to remain employed by or in
service to the Company or any Subsidiary or interferes in any way with the
right of the Company or any Subsidiary at any time to terminate such employment
or service.

 

3.             Method
of Exercise of Option.

 

The Option shall be
exercisable by the delivery to the Secretary of the Company (or such other
person as the Committee may require pursuant to such administrative exercise
procedures as the Committee may implement from time to time) of:

 

 

	
  •

  	
   

  	
  a written notice
  stating the number of shares of Common Stock to be purchased pursuant to the
  Option or by the completion of such other administrative exercise procedures
  as the Committee may require from time to time,

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  payment in full for the
  Exercise Price of the shares to be purchased (a) in cash, cashier’s or bank check
  to the Company, or (b) (subject to compliance with all applicable laws,
  rules, regulations and listing requirements and further subject to such rules
  as the Committee may adopt as to any non-cash payment) in shares of Common
  Stock already owned by the Grantee, valued at their Fair Market Value on the
  exercise date, provided, however, that any shares initially
  acquired upon exercise of a stock option or otherwise from the Company must
  have been owned by the Grantee for at least six (6) months before the date of
  such exercise, or (c) through a “cashless exercise” procedure by notice and
  third party payment in such manner as may be authorized by the Committee
  pursuant to Section 8(f) of the Plan;

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  any written statements
  or agreements required pursuant to Section 19(g) of the Plan; and

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  satisfaction of the tax
  withholding provisions of Section 19(a) of the Plan.

  

 

4.             Termination
of Option upon a Termination of Grantee’s Employment or Services.

 

Subject to earlier termination on the Expiration Date
of the Option and subject to any applicable provision of a valid employment
agreement between the Company and Participant, if the Grantee ceases to be
employed by or ceases to provide services to the Company or a Subsidiary, the
following rules shall apply (the last day that the Grantee is employed by or
provides services to the Company or a Subsidiary is referred to as the Grantee’s
“Severance Date”):

 

	
  •

  	
   

  	
  if the Grantee’s
  employment by the Company or a Subsidiary terminates due to his or her death,
  Disability or Retirement, then (a) the Grantee, his or her personal
  representative or beneficiary will have twelve (12) months from the Severance
  Date to exercise the Option (or any portion thereof) to the extent that it
  was exercisable on the Severance Date; provided that if the Grantee’s
  employment terminates as a result of Disability or Retirement and he or she
  dies during such 12-month period, his or her beneficiary will have one year
  from the date of the Grantee’s death to exercise the Option (or any portion
  thereof) to the extent it was vested on the Grantee’s Severance Date, (b) the
  Option, to the extent not exercisable on the Severance Date, shall terminate
  on the Severance Date, and (c) the Option, to the extent exercisable for the
  12-month period following the Severance Date (or, if applicable, the 12-month
  period following the Grantee’s subsequent death) and not exercised during
  such period, shall terminate at the close of business on the last day of such
  12-month period.

  
	
   

  	
   

  	
   

  
	
  •

  	
   

  	
  if the Grantee’s employment
  by the Company or a Subsidiary terminates for any reason other than his or
  her death, Retirement or Disability, then (a) the Grantee will have sixty
  (60) days from the Severance Date to exercise the Option (or portion thereof)
  to the extent that it was exercisable on the Grantee’s Severance Date (b) the

  

 

 

2

 

	
   

  	
   

  	
  Option, to the extent
  not exercisable on the Severance Date, shall terminate on the Severance Date,
  and (c) the Option, to the extent exercisable for the sixty (60) day period
  following the Severance Date and not exercised during such period, shall
  terminate at the close of business on the last day of the 60-day period.

  

 

In all events the Option
is subject to earlier termination on the Expiration Date of the Option.  The Committee shall be the sole judge of
whether the Grantee continues to render employment or services for purposes of
this Option Agreement.

 

5.             Non-Transferability.

 

The
Option and any other rights of the Grantee under this Option Agreement or the
Plan are nontransferable and exercisable only by the Grantee, except as set
forth in Section 15 of the Plan.

6.             Adjustments
Upon Changes in Capitalization.

 

                As provided in
Section 16(b) of the Plan, in the event of any change in the outstanding Common
Stock by reason of a stock dividend, recapitalization, reorganization, merger,
consolidation, stock split, combination or exchange of shares, the Committee
shall, in such manner, to such extent (if any) and at such times as it deems
necessary make adjustments in the number of shares subject to the Option and
the Exercise Price and the securities deliverable upon exercise of the Option and
such other adjustments, consistent with the foregoing, as it deems
appropriate.  All rights of the Grantee
hereunder are subject to such adjustments and other provisions of the Plan.

 

7.             Change
in Control.

 

As provided in Section 17 of the Plan, in the event of
a Change in Control and except as the Committee (as constituted immediately
prior to such Change in Control) may otherwise determine in its sole
discretion, (a) the Option shall become fully exercisable as of the date of the
Change in Control, whether or not then exercisable, and (b) in the case of a
Change in Control involving a merger of, or consolidation involving, the
Company in which the Company (i) is not the surviving corporation (the “Surviving
Entity”) or (ii) becomes a wholly owned subsidiary of the Surviving Entity or
any Parent thereof, the Option, to the extent not exercised, (a “Predecessor
Option”) will be converted into an option (a “Substitute Option”) to acquire
common stock of the Surviving Entity or its Parent which Substitute Option will
have substantially the same terms and conditions as the Predecessor Option,
with appropriate adjustments as to the number and kind of shares and exercise
price subject thereto.

 

8.             Notices.

 

Any notice required or
permitted under this Agreement shall be deemed given when personally delivered,
or when deposited in a United States Post Office, postage prepaid, addressed,
as appropriate, to the Grantee either at the address on record with the Company
or such other address as may be designated by Grantee in writing to the
Company; or to the Company, Attention: Angelina Orona, Stock Plan
Administrator, 1444 South Alameda Street, Los Angeles, California  90021, or such other address as the Company
may designate in writing

 

 

3

 

to the Grantee.  Any such notice shall be given only when
received, but if the Grantee is no longer employed by the Company or a
Subsidiary, shall be deemed to have been duly given five business days after
the date mailed in accordance with the foregoing provisions of this Section 8.

 

9.             Plan.

 

The Option and all rights
of the Grantee under this Option Agreement are subject to, and the Grantee
agrees to be bound by, all of the terms and conditions of the Plan,
incorporated herein by this reference. 
In the event of a conflict or inconsistency between the terms and
conditions of this Option Agreement and of the Plan, the terms and conditions
of the Plan shall govern.  The Grantee
agrees to be bound by the terms of the Plan and this Option Agreement
(including these Terms).  The Grantee
acknowledges having read and understood the Plan, the Prospectus for the Plan,
and this Option Agreement.  Unless
otherwise expressly provided in other sections of this Option Agreement,
provisions of the Plan that confer discretionary authority on the Board or the Committee
do not and shall not be deemed to create any rights in the Grantee unless such
rights are expressly set forth herein or are otherwise in the sole discretion
of the Board or the Committee so conferred by appropriate action of the Board
or the Committee under the Plan after the date hereof.

 

10.          Entire
Agreement.

 

This Option Agreement
(including these Terms) and the Plan together constitute the entire agreement
and supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof.  The Plan and this Option Agreement may be
amended pursuant to Section 18 of the Plan.  Such amendment must be in writing and signed
by the Company.  The Company may,
however, unilaterally waive any provision hereof in writing to the extent such
waiver does not adversely affect the interests of the Grantee hereunder, but no
such waiver shall operate as or be construed to be a subsequent waiver of the
same provision or a waiver of any other provision hereof.

 

11.          Governing
Law.

This Option Agreement
shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware without regard to conflict of law principles thereunder.

 

12.          Effect
of this Agreement.

This Option Agreement
shall be assumed by, be binding upon and inure to the benefit of any successor
or successors to the Company.

 

13.          Counterparts.

This Option Agreement may
be executed simultaneously in any number of counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.

 

4

 

 

14.          Section
Headings.

The section headings of
this Option Agreement are for convenience of reference only and shall not be
deemed to alter or affect any provision hereof.

 

 

5

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