Document:

<PAGE>

                                                                    EXHIBIT 10.1

                                AMENDMENT NO. 4

          AMENDMENT NO. 4 dated as of March 30, 2000, between POLYMER GROUP,
INC. ("PGI"); each of the other "Borrowers" identified under the caption
       ---
"BORROWERS" on the signature pages hereto, each of the Domestic Non-Borrower
Guarantors identified under the caption "DOMESTIC NON-BORROWER GUARANTORS" on
the signature pages hereto; each of the lenders identified under the caption
"LENDERS" on the signature pages hereto (the "Lenders"); and THE CHASE MANHATTAN
                                              -------
BANK, as administrative agent for the Lenders (in such capacity, together with
its successors in such capacity, the "Administrative Agent").
                                      --------------------

          PGI, the other Borrowers, the Domestic Non-Borrower Guarantors, the
Lenders referred to therein and the Administrative Agent are parties to a Second
Amended, Restated and Consolidated Credit Agreement dated as of July 3, 1997 (as
heretofore amended, the "Credit Agreement"), providing for the Lenders to extend
                         ----------------
credit (by way of revolving credit loans, term loans and letters of credit) to
the Borrowers in U.S. Dollars and in certain Alternative Currencies in an amount
at any time not exceeding U.S. $500,000,000. PGI has now requested that the
Lenders consent (i) to the creation of an additional term loan facility under
the Credit Agreement in U.S. Dollars in the amount of up to U.S. $100,000,000 to
be used by PGI and its subsidiaries to finance capital expenditures and for
general corporate purposes and (ii) to certain other amendments to the Credit
Agreement. Accordingly, the parties hereto hereby agree as follows:

          Section 1.  Definitions.  Capitalized terms used but not otherwise
                      -----------
defined herein have the meanings given them in the Credit Agreement.

          Section 2.  Amendments. Subject to (i) the execution and delivery of
                      ----------
this Amendment No. 4 by each Obligor, by Lenders constituting the Majority
Lenders under the Credit Agreement and by the Administrative Agent and (ii) the
payment by PGI to the Administrative Agent for the account of the Lenders of
such amendment, upfront and other fees as have been agreed to be paid in
connection with the amendments to the Credit Agreement contemplated hereby, but
effective as of the date hereof, the Credit Agreement shall be amended as
follows:

          Section 2.01. General. References in the Credit Agreement (including
                        -------
references to the Credit Agreement as amended hereby) to "this Agreement" (and
indirect references such as "hereunder", "hereby", "herein" and "hereof") shall
be deemed to be references to the Credit Agreement as amended by this Section 2.

          Section 2.02. Preamble.  The fourth paragraph in the preamble to the
                        --------
Credit Agreement shall be amended by inserting after the amount "U.S.
$500,000,000" the words "(which amount may, in the circumstances hereinafter
provided, be increased to U.S. $600,000,000)".
<PAGE>

                                      -2-

          Section 2.03.  Definitions. Section 1.01 of the Credit Agreement shall
                         -----------
be amended by adding the following new definitions (to the extent not already
included in said Section 1.01) and inserting the same in the appropriate
alphabetical locations and amending in their entirety the following definitions
(to the extent already included in said Section 1.01), as follows:

          "Applicable Margin" shall mean with respect to Eurocurrency Revolving
           -----------------
     Credit Loans, Base Rate Revolving Credit Loans, Canadian Base Rate Loans,
     letter of credit fees (as such term is used in Section 2.03(g) hereof),
     commitment fees (as such term is used in Section 2.05 hereof), Eurocurrency
     Term B Loans, Base Rate Term B Loans, Eurocurrency Term B-1 Loans, Base
     Rate Term B-1 Loans, Eurocurrency Term C Loans and Base Rate Term C Loans
     during any Accrual Period (as defined below), the respective rates set
     forth below for such Loans of such Class and Type and such fees for such
     Accrual Period, which rates shall be based upon the Leverage Ratio for such
     Accrual Period:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------------
                               Base Rate
                               Revolving                              Euro-
                   Euro-        Credit                               currency    Base Rate
                  currency     Loans and     Letter                  Term B       Term B        Euro-
                  Revolving    Canadian        of                    and Term      and        currency     Base Rate
    Leverage       Credit      Base Rate     Credit      Commit-       B-1       Term B-1      Term C       Term C
      Ratio        Loans        Loans         Fees      ment Fees     Loans        Loans        Loans        Loans
--------------------------------------------------------------------------------------------------------------------
<S>               <C>          <C>           <C>        <C>         <C>          <C>         <C>          <C>
 Greater than
      or
 equal to 4.50     2.50%        1.25%        2.50%       0.500%       3.00%       1.75%        3.25%        2.00%
--------------------------------------------------------------------------------------------------------------------
 Greater than
  or equal to
 4.25 but less
   than 4.50       2.25%        1.00%        2.25%       0.375%       2.75%       1.50%        3.25%        2.00%
--------------------------------------------------------------------------------------------------------------------
 Greater than
  or equal to
 3.75 but less
   than 4.25       1.75%        0.50%        1.75%       0.375%       2.50%       1.25%        3.25%        2.00%
--------------------------------------------------------------------------------------------------------------------
 Greater than
  or equal to
 3.00 but less
   than 3.75       1.50%        0.25%        1.50%       0.300%       2.25%       1.00%        3.25%        2.00%
--------------------------------------------------------------------------------------------------------------------
 Greater than
  or equal to
 2.50 but less
   than 3.00       1.25%        0.25%        1.25%       0.250%       2.25%       1.00%        3.25%        2.00%
--------------------------------------------------------------------------------------------------------------------

  Less than
     2.50          1.00%        0.25%        1.00%       0.200%       2.25%       1.00%        3.25%        2.00%
--------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>

                                      -3-

          For purposes hereof, an "Accrual Period" shall mean each of the
                                   --------------
     following successive periods, as applicable:

               (i)  the period commencing during any fiscal quarter on the date
          (the "Change Date") that is the second Business Day following the
                -----------
          receipt by the Administrative Agent of the certificate referred to in
          clause (a) of the next following paragraph or

               (ii) in the event that PGI or any of its Restricted Subsidiaries
          makes an Acquisition and borrows hereunder in an amount equal to or
          greater than U.S. $25,000,000 (or the Foreign Currency Equivalent
          thereof) in connection with such Acquisition, the period commencing
          during any fiscal quarter on the second Business Day (the "Acquisition
                                                                     -----------
          Change Date") following the date of such Acquisition,
          -----------

     in each case to but not including the earlier of (x) the Change Date in the
     immediately following fiscal quarter and (y) the next Acquisition Change
     Date, provided, that the initial Accrual Period shall commence on the
           --------
     Effective Date and continue until the earlier of (x) the Change Date during
     the fiscal quarter ending on December 27, 1997 and (y) an Acquisition
     Change Date, and provided further, that the Leverage Ratio for any Accrual
                      -------- -------
     Period commencing with an Acquisition Change Date shall be calculated on a
     pro forma basis, as at the end of and for the period of four fiscal
     --- -----
     quarters most recently ended prior to the date of the related Acquisition
     for which financial statements of PGI are available, under the assumption
     that such Acquisition and the incurrence of any Indebtedness in connection
     with such Acquisition, shall have occurred at the beginning of the
     applicable period.

          The Leverage Ratio for the initial Accrual Period shall be determined
     on the basis of the certificate of a senior officer delivered pursuant to
     Section 7.01(p) hereof (together with the financial statements for the
     fiscal quarter on which such calculation is based). The Leverage Ratio for
     any Accrual Period after the initial Accrual Period shall be determined (a)
     if such Accrual Period commences with a Change Date, on the basis of a
     certificate of a senior officer setting forth a calculation of the Leverage
     Ratio as at the last day of the fiscal quarter immediately prior to the
     first day of such Accrual Period (together with the financial statements
     for the fiscal quarter on which such calculation is based) and (b) if such
     Accrual Period commences with an Acquisition Change Date, on the basis of
     the certificate of a senior officer delivered pursuant to Section
     9.05(d)(iv)(z) hereof in connection with the related Acquisition.

          Anything in this Agreement to the contrary notwithstanding, the
     Applicable Margin shall be the highest applicable rate provided for above
     (i.e., 2.50% for Eurocurrency Revolving Credit Loans, 1.25% for Base Rate
     Revolving Credit Loans and Canadian Base Rate Loans, 2.50% for letter of
     credit fees, 0.50% for commitment fees, 3.00% for Eurocurrency Term B Loans
     and Eurocurrency Term B-1 Loans, 1.75% for
<PAGE>

                                      -4-

     Base Rate Term B Loans and Base Rate Term B-1 Loans, 3.25% for Eurocurrency
     Term C Loans and 2.00% for Base Rate Term C Loans (i) during any period
     when an Event of Default shall have occurred and be continuing or (ii) if
     the Obligors shall default in the delivery of any financial statements
     pursuant to Section 9.01(a) or 9.01(b) hereof, or in the delivery of the
     certificate of a senior financial officer pursuant to Section
     9.05(d)(iv)(z).

          "Commitments" shall mean the Facility A Revolving Credit Commitments,
           -----------
     the Facility B Revolving Credit Commitments, the Term B Loan Commitments,
     the Term B-1 Loan Commitments and the Term C Loan Commitments.

          "Interest Period" shall mean, with respect to any Eurocurrency Loan,
           ---------------
     each period commencing on the date such Eurocurrency Loan is made or
     Converted from a Base Rate Loan or the last day of the next preceding
     Interest Period for such Loan and ending on the numerically corresponding
     day in the first, third or sixth (or, subject to the agreement of each
     Lender participating in such Loan in its sole discretion, twelfth) calendar
     month thereafter, as the Borrowers may select as provided in Section 4.05
     hereof, except that each Interest Period that commences on the last
     Business Day of a calendar month (or on any day for which there is no
     numerically corresponding day in the appropriate subsequent calendar month)
     shall end on the last Business Day of the appropriate subsequent calendar
     month. Notwithstanding the foregoing:

               (i)   if any Interest Period for any Revolving Credit Loan would
          otherwise end after the Revolving Credit Termination Date, such
          Interest Period shall end on the Revolving Credit Termination Date;

               (ii)  no Interest Period for any Facility A Revolving Credit Loan
          may commence before and end after any Reduction Date unless, after
          giving effect thereto, the aggregate principal amount of the Facility
          A Revolving Credit Loans having Interest Periods that end after such
          Reduction Date shall be equal to or less than the aggregate amount of
          the Facility A Revolving Credit Commitments on such Reduction Date;

               (iii) no Interest Period for any Term B Loan may commence before
          and end after any Principal Payment Date applicable thereto unless,
          after giving effect thereto, the aggregate principal amount of the
          Term B Loans having Interest Periods that end after such Principal
          Payment Date shall be equal to or less than the aggregate principal
          amount of the Term B Loans scheduled to be outstanding after giving
          effect to the payments of principal required to be made on such
          Principal Payment Date;

               (iv)  no Interest Period for any Term B-1 Loan may commence
          before and end after any Principal Payment Date applicable thereto
          unless, after giving effect thereto, the aggregate principal amount of
          the Term B-1 Loans having Interest Periods that end after such
          Principal Payment Date shall be equal to or less than
<PAGE>

                                      -5-

          the aggregate principal amount of the Term B-1 Loans scheduled to be
          outstanding after giving effect to the payments of principal required
          to be made on such Principal Payment Date;

               (v)   no Interest Period for any Term C Loan may commence before
          and end after any Principal Payment Date applicable thereto unless,
          after giving effect thereto, the aggregate principal amount of the
          Term C Loans having Interest Periods that end after such Principal
          Payment Date shall be equal to or less than the aggregate principal
          amount of the Term C Loans scheduled to be outstanding after giving
          effect to the payments of principal required to be made on such
          Principal Payment Date;

               (vi)  each Interest Period that would otherwise end on a day
          which is not a Business Day shall end on the next succeeding Business
          Day (or, if such next succeeding Business Day falls in the next
          succeeding calendar month, on the next preceding Business Day); and

               (vii) notwithstanding clauses (i), (ii), (iii), (iv) and (v)
          above, no Interest Period shall have a duration of less than one month
          and, if the Interest Period for any Loan would otherwise be a shorter
          period, such Loan shall not be available hereunder for such period.

          "Lenders" shall mean, collectively, the Facility A Revolving Credit
           -------
     Lenders, the Facility B Revolving Credit Lenders, the Term B Loan Lenders,
     the Term B-1 Loan Lenders and the Term C Loan Lenders.

          "Loans" shall mean, collectively, the Facility A Revolving Credit
           -----
     Loans, the Facility B Revolving Credit Loans, the Term B Loans, the Term B-
     1 Loans and the Term C Loans.

          "Majority Term C Loan Lenders" shall mean Term C Loan Lenders holding
           ----------------------------
     at least 51% of the aggregate outstanding principal amount of the Term C
     Loans.

          "Notes" shall mean, collectively, the Facility A Revolving Credit
           -----
     Notes, the Facility B Revolving Credit Notes, the Term B Loan Notes, the
     Term B-1 Loan Notes and the Term C Loan Notes.

          "Term" refers, as applicable, to the Term B Loan Commitments, Loan
           ----
     Lenders, Loans and Loan Notes, the Term B-1 Loan Commitments, Loan Lenders,
     Loans and Loan Notes and the Term C Loan Commitments, Loan Lenders, Loans
     and Loan Notes.

          "Term C Loan Agreement" shall have the meaning assigned to such term
           ---------------------
     in Section 2.01(e) hereof
<PAGE>

                                      -6-

          "Term C Loan Closing Date" shall mean the date on which each of the
           ------------------------
     conditions precedent to the making of the Term C Loans specified in
     Sections 7.02 and 7.05 hereof shall have been satisfied or waived.

          "Term C Loan Commitment" shall mean, for each Term C Loan Lender, the
           ----------------------
     obligation of such Lender, pursuant to the provisions of Section 2.01(e)
     hereof, to make a Term C Loan to PGI on the Term C Loan Closing Date in
     U.S. Dollars in an amount up to but not exceeding the amount set opposite
     the name of such Lender pursuant to the Term C Loan Agreement, or in the
     case of any Person that becomes a Term C Loan Lender pursuant to an
     assignment permitted under Section 12.06(b) hereof, as specified in the
     respective instrument of assignment pursuant to which such assignment is
     effected (as the same may be reduced from time to time pursuant to Section
     2.04 hereof).

          "Term C Loan Commitment Termination Date" shall mean the Business Day
           ---------------------------------------
     immediately preceding April 30, 2000.

          "Term C Loan Lenders" shall mean (a) the Lenders and other financial
           -------------------
     institutions that shall have executed the Term C Loan Agreement pursuant to
     Section 2.01(e) hereof and (b) following such execution, the Lenders from
     time to time holding Term C Loans and Term C Loan Commitments after giving
     effect to any assignments thereof permitted by Section 12.06 hereof.

          "Term C Loan Notes" shall mean the promissory notes provided for by
           -----------------
     Section 2.08(e) hereof and all promissory notes delivered in substitution
     or exchange therefor, in each case as the same shall be modified and
     supplemented and in effect from time to time.

          "Term C Loans" shall mean the loans provided for by Section 2.01(e)
           ------------
     hereof, which may be Base Rate Loans and/or U.S. Dollar denominated
     Eurocurrency Loans.

          Section 2.04.  Classes of Loans.  Section 1.03 of the Credit
                         ----------------
Agreement shall be deleted in its entirety and replaced with the following:

          "1.03 Classes, Types and Currencies of Loans. Loans hereunder are
                --------------------------------------
     distinguished by "Class", "Type" and "Currency". The "Class" of a Loan (or
     of a Commitment to make a Loan) refers to whether such Loan is a Facility A
     Revolving Credit Loan, a Facility B Revolving Credit Loan, a Term B Loan, a
     Term B-1 Loan or a Term C Loan, each of which constitutes a Class. The
     "Type" of a Loan as used in connection with U.S. Dollar-denominated Loans
     refers to whether such Loan is a Base Rate Loan, a Eurocurrency Loan or a
     Eurodollar Loan, each of which constitutes a Type, and, as used in
     connection with Canadian Dollar-denominated Loans refers to whether such
     Loan is a Canadian Base Rate Loan or a Bankers' Acceptance Loan, each of
     which constitutes a Type. The "Currency" of a Loan refers to whether such
     Loan is to be made in U.S. Dollars, Dutch Guilders or Canadian Dollars,
     each of which constitutes a "Currency". Loans may be identified by Class,
     Type and Currency."
<PAGE>

                                      -7-

          Section 2.05.  Loans.  Section 2.01 of the Credit Agreement shall be
                         -----
amended by relettering paragraphs (e), (f) and (g) thereof, as paragraph (f),
(g) and (h), respectively, and inserting a new paragraph (e) as follows:

          "(e) Term C Loans. At any time and from time to time prior to the Term
               ------------
     C Loan Commitment Termination Date, PGI may request that the Lenders (or
     such other financial institutions as shall thereby agree to become Lenders
     hereunder), offer to enter into commitments to make Term C Loans in an
     aggregate principal amount up to but not exceeding U.S. $100,000,000. In
     the event that one or more of the Lenders (or such other financial
     institutions) offer, in their sole discretion, to enter into such
     commitments, and such Lenders (or other financial institutions) and PGI
     agree as to the amount of such commitments that shall be allocated to such
     Lenders (or other financial institutions) making such offers and the fees
     to be payable by PGI in connection therewith, such Lenders (and other
     financial institutions), the Administrative Agent and PGI shall execute and
     deliver an agreement (herein, the "Term C Loan Agreement") pursuant to
                                        ---------------------
     which such Lenders (and other financial institutions) shall become
     irrevocably obligated to make Term C Loans under this Agreement on the Term
     C Loan Closing Date in an amount equal to the amount of their respective
     Term C Loan Commitments specified in the Term C Loan Agreement.

          Following the execution and delivery of the Term C Loan Agreement,
     each Term C Loan Lender severally agrees, on the terms and conditions of
     this Agreement, to make loans to PGI in a single drawing on the Term C Loan
     Closing Date in U.S. Dollars in an aggregate principal amount up to but not
     exceeding such Lender's Term C Loan Commitment as then in effect. Any
     financial institution not theretofore a Lender hereunder, which shall
     become a Term C Loan Lender pursuant to this Section 2.01(e), shall thereby
     become a Lender hereunder and shall have all of the obligations, rights and
     benefits of a Lender hereunder and under the Security Documents (including
     the right to share equally and ratably with the other Lenders in the
     collateral security and guarantees provided thereunder). After the Term C
     Loan Closing Date, and subject to the terms and conditions of this
     Agreement, PGI may Convert Term C Loans of one Type into Term C Loans of
     another Type (as provided in Section 2.09 hereof) or Continue Term C Loans
     of one Type as Term C Loans of the same Type (as provided in Section 2.09
     hereof). Proceeds of Term C Loans shall be available for any use permitted
     under Section 9.13 hereof."

          Section 2.06.  Borrowings.  Section 2.02 of the Credit Agreement
                         ----------
shall be amended by adding after the words "Term B-1 Loan Lender" in the second
sentence thereof the following: "or Term C Loan Lender".
<PAGE>

                                      -8-

          Section 2.07.  Reduction of Commitments.  Section 2.04(a) of the
                         ------------------------
Credit Agreement shall be amended by inserting the following after the third
sentence thereof:

          "The Term C Loan Commitments shall be automatically terminated on the
     Term C Loan Closing Date (following the making of the loans under Section
     2.01(e) hereof to be made on such Date) or, if the Term C Loan Closing Date
     does not occur prior to the Term C Loan Commitment Termination Date, on the
     Term C Loan Commitment Termination Date."

          Section 2.08.  Notes.  Section 2.08 of the Credit Agreement shall be
                         ------
amended by relettering paragraphs (e) and (f) thereof, as paragraph (f) and (g),
respectively, and inserting a new paragraph (e) as follows:

          "(e) The Term C Loan made by each Term C Loan Lender to PGI shall be
     evidenced by a single promissory note of PGI, substantially in the form of
     Exhibit A-5 hereto, dated the Term C Loan Closing Date, payable to such
     Lender in a principal amount equal to the amount of its Term C Loan
     Commitment as originally in effect, and otherwise duly completed."

          Section 2.09.  Prepayments.  Section 2.10 of the Credit Agreement
                         -----------
shall be amended by deleting paragraph (e) in its entirety and replacing it with
the following:

          "(e) Application.  Prepayments and reductions of Commitments
               -----------
     described in the above paragraphs of this Section 2.10 shall be effected as
     follows:

               (i) in the case of paragraphs (a), (c) and (d) above, the amount
          of the required prepayment and reduction shall be apportioned between
          the Term C Loans, the Term B-1 Loans, the Term B Loans and the
          Revolving Credit Loans (and Letter of Credit Liabilities) ratably in
          accordance with the respective then-outstanding aggregate principal
          amounts of the Term C Loans, the Term B-1 Loans, the Term B Loans and
          the Revolving Credit Commitments with the amounts so apportioned to be
          applied to the prepayment of the respective Loans of each such Class
          (and to provide cover for Letter of Credit Liabilities and to the
          reduction of Revolving Credit Commitments), such reductions of
          Revolving Credit Commitments, and prepayments of the Revolving Credit
          Loans, to be applied first to the reduction of Facility A Revolving
                               -----
          Credit Commitments (and to the prepayment first of Facility A
          Revolving Credit Loans denominated in U.S. Dollars, second to the
          prepayment of Facility A Revolving Credit Loans denominated in Dutch
          Guilders and third to provide cover for Letter of Credit Liabilities),
          and second, after all outstanding Facility A Revolving Credit
              ------
          Commitments have been reduced to zero (and all Facility A Revolving
          Credit Loans paid in full and cover for all Letter of Credit
          Liabilities provided), to the reduction of Facility B Revolving Credit
          Commitments (and to the prepayment of Facility B Revolving Credit
          Loans), provided that to the extent any such required reduction of
                  --------
          Revolving Credit Commitments shall exceed the then-outstanding
<PAGE>

                                      -9-

          aggregate principal amount of Revolving Credit Loans (and Letter of
          Credit Liabilities), such excess shall be applied ratably to the
          prepayment of Term C Loans, Term B-1 Loans and Term B Loans, and

               (ii) in the case of paragraph (b) above, the amount of the
          required prepayment and reduction shall be apportioned between the
          Term C Loans, the Term B-1 Loans, the Term B Loans and the Revolving
          Credit Loans (and Letter of Credit Liabilities) ratably in accordance
          with the respective then-outstanding aggregate principal amounts of
          the Term C Loans, the Term B-1 Loans, the Term B Loans and the
          Revolving Credit Commitments with the amounts so apportioned to be
          applied to the prepayment of the Term C Loans, to the prepayment of
          the Term B-1 Loans, to the prepayment of the Term B Loans and to the
          prepayment of the Revolving Credit Loans (to provide cover for Letter
          of Credit Liabilities), but not to the reduction of the Revolving
          Credit Commitments, such prepayments to the Revolving Credit Loans to
          be applied first to Facility A Revolving Credit Loans denominated in
                     -----
          U.S. Dollars, second to Facility A Revolving Credit Loans denominated
                        ------
          in Dutch Guilders, third to the provision of cover for Letter of
                             -----
          Credit Liabilities and fourth to Facility B Revolving Credit Loans.
                                 ------

     Notwithstanding anything herein to the contrary, any Term Loan Lender shall
     have the option to forego a prepayment of any Term Loan at its sole
     discretion, and in any such case, the amount of any such foregone
     prepayment will be applied pro rata to the outstanding Term Loan Lenders
     who have not foregone such prepayment; provided, in the event that, with
                                            --------
     respect to any such prepayment, each Term Loan Lender shall forego such
     prepayment, the amount of such foregone prepayment will be applied pro rata
     to the outstanding Revolving Credit Loans (and Letter of Credit
     Liabilities) of the Revolving Credit Lenders (and, in the case of any such
     prepayment contemplated by paragraphs (a), (c) or (d) above, to the
     reduction of the Revolving Credit Commitments), all in accordance with and
     subject to the priorities set forth in clauses (i) and (ii) above."

          Section 2.10.  Amortization of Term C Loans.  Section 3.01 of the
                         ----------------------------
Credit Agreement shall be amended by inserting the following new paragraph (e):

          "(e) PGI hereby promises to pay to the Administrative Agent in U.S.
     Dollars for account of the Term C Loan Lenders the following aggregate
     principal amounts on the following Principal Payment Dates:

<TABLE>
<CAPTION>
                  Principal Payment Date                Amount of Payment
                  ----------------------                -----------------
                  <S>                                   <C>
                    December 20, 2000                   U.S. $   500,000

                    June 20, 2001                       U.S. $   500,000
                    December 20, 2001                   U.S. $   500,000
</TABLE>
<PAGE>

                                      -10-

<TABLE>
                    <S>                                 <C>
                    June 20, 2002                       U.S. $   500,000
                    December 20, 2002                   U.S. $   500,000

                    June 20, 2003                       U.S. $   500,000
                    December 20, 2003                   U.S. $   500,000

                    June 20, 2004                       U.S. $   500,000
                    December 20, 2004                   U.S. $   500,000

                    June 20, 2005                       U.S. $   500,000
                    December 20, 2005                   U.S. $   500,000

                    June 20, 2006                       U.S. $47,250,000
                    December 20, 2006                   U.S. $47,250,000
</TABLE>

          In the event that the aggregate principal amount of Term C Loans made
     on the Term C Loan Closing Date shall be less than U.S. $100,000,000, then
     each of the installments set forth above shall be ratably reduced."

          Section 2.11.  Limitation of Eurodollar Loans.  Section 5.02 of the
                         ------------------------------
Credit Agreement shall be amended by deleting Section 5.02(b) in its entirety
and replacing it with the following:

          "(b) if the related Loans are Facility A Revolving Credit Loans, the
     Majority Facility A Revolving Credit Lenders determine or, if the related
     Loans are Term B Loans, the Majority Term B Loan Lenders determine or, if
     the related Loans are Term B-1 Loans, the Majority Term B-1 Loan Lenders
     determine or, if the related Loans are Term C Loans, the Majority Term C
     Loan Lenders determine (in each case, which determination shall be
     conclusive), and notify the Administrative Agent that the relevant rates of
     interest referred to in the definition of "Eurocurrency Base Rate" in
     Section 1.01 hereof upon the basis of which the rate of interest for
     Eurodollar Loans for such Interest Period is to be determined are not
     likely to adequately cover the cost to such Lenders of making or
     maintaining Eurodollar Loans for such Interest Period;"

          Section 2.12.  Conditions.  Section 7.02 of the Credit Agreement
                         ----------
shall be deleted in its entirety and replaced with the following:

          "7.02  Initial and Subsequent Extensions of Credit. The obligation of
                 -------------------------------------------
     the Lenders to make any Loan, including, without limitation, the obligation
     to create and discount any Bankers' Acceptance, or otherwise extend any
     credit to the Borrowers upon the occasion of each borrowing or other
     extension of credit hereunder (including the initial borrowing, the
     borrowing to be made on the Term B Loan Closing Date, the borrowing to be
     made on the Term B-1 Loan Closing Date and the borrowing to be made on the
     Term C Loan Closing Date) is subject to the further conditions precedent
     that, both immediately prior to the making of such Loan or creation and
     discount of such Bankers' Acceptance or
<PAGE>

                                     -11-

     other extension of credit and also after giving effect thereto and to the
     intended use thereof:

                    (a)  no Default shall have occurred and be continuing; and

                    (b) the representations and warranties made by the Obligors
                 in Section 8 hereof, and by each of the Group Members in each
                 of the other Basic Documents to which it is a party, shall be
                 true and complete on and as of the date of the making of such
                 Loan or other extension of credit with the same force and
                 effect as if made on and as of such date (or, if any such
                 representation or warranty is expressly stated to have been
                 made as of a specific date, as of such specific date).

     Each notice of borrowing or request for the issuance of a Letter of Credit
     by the Borrowers hereunder shall constitute a certification by the
     Borrowers to the effect set forth in the preceding sentence (both as of the
     date of such notice or request and, unless the Borrowers otherwise notify
     the Administrative Agent prior to the date of such borrowing or issuance,
     as of the date of such borrowing or issuance).

                 Notwithstanding anything herein to the contrary, for purposes
     of Loans to be made on the Term C Loan Closing Date, any determination to
     be made that there has been no material adverse change in the financial
     condition, operation, business or prospects of PGI and its consolidated
     Subsidiaries taken as a whole from that set forth in the financial
     statements referred to in Section 8.02 hereof shall be made only by the
     Administrative Agent."

                 Section 2.13.  Additional Conditions to Term C Loans.
                                -------------------------------------
Section 7 of the Credit Agreement shall be amended by adding the following new
Section 7.05:

                 "7.05 Term C Loan Closing Date. Without in any way limiting the
                       ------------------------
         applicability of Section 7.02 hereof, the obligation of each Term C
         Loan Lender to make its Term C Loan on the Term C Loan Closing Date is
         subject to the satisfaction of the following conditions precedent or,
         as applicable, to the receipt by the Administrative Agent of the
         following documents, in each case in a manner in form and substance
         satisfactory to the Administrative Agent:

                       (a)  Corporate  Documents.  Certified  copies  of the
                            --------------------
                 charter and by-laws (or equivalent documents) of each Group
                 Member and of all corporate authority for each Group Member
                 (including, without limitation, board of director resolutions
                 and evidence of the incumbency of officers) with respect to the
                 execution, delivery and performance of such Basic Documents to
                 which such Group Member is or is intended to be a party and
                 each other document to be delivered by such Group Member from
                 time to time in connection with the transactions contemplated
                 in connection with the Term C Loan Commitments and Term C Loans
                 hereunder (and the Administrative Agent and each Lender may

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -12-

                 conclusively rely on such certificate until it receives notice
                 in writing from such Group Member).

                           (b)  Officer's Certificate. A certificate of a senior
                                ---------------------
                 financial officer of PGI, dated the Term C Loan Closing Date,
                 to the effect set forth in paragraphs (a) and (b) of the first
                 sentence of Section 7.02 hereof.

                           (c)  Opinion  of  Counsel  to the Group  Members.  An
                                -------------------------------------------
                 opinion, dated the Term C Loan Closing Date, of Kirkland &
                 Ellis, special New York counsel to the Group Members, covering
                 matters covered by the opinions of Kirkland & Ellis delivered
                 in connection with the Credit Agreement (including, without
                 limitation, with respect to the Term C Loans), and in each case
                 covering such other matters as the Administrative Agent or any
                 Lender may reasonably request, including, without limitation,
                 matters related to the Security Documents (and each Obligor
                 hereby instructs such counsel to deliver each such opinion to
                 the Lenders and to the Administrative Agent).

                           (d)  Additional Security Documents.  The
                                -----------------------------
                 Administrative Agent shall have received the following:

                                    (i)   all necessary modifications or
                           confirmations to the Security Documents in effect on
                           the Term C Loan Closing Date duly executed and
                           delivered so as to ensure the continued effectiveness
                           of the security interests created thereby and the
                           spreading of the liens created thereby to cover the
                           additional obligations to be incurred by the Obligors
                           on the Term C Loan Closing Date, in each case
                           covering such matters as shall be requested by the
                           Administrative Agent and in each case in form and
                           substance satisfactory to the Administrative Agent;
                           and

                                    (ii)  evidence that such other action
                           (including, in the case of real property, obtaining
                           appropriate mortgagee title insurance policies) as
                           shall be necessary to perfect or record the Liens
                           contemplated by the foregoing clause (i) under
                           applicable law shall have been taken.

                           (e) Notes. The Term C Loan Notes described in Section
                               -----
                 2.08(e) hereof shall have been duly completed and executed.

                           (f) Other Documents. Such other documents as the
                               ---------------
                 Administrative Agent, any Lender or special New York counsel to
                 Chase may reasonably request."

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -13-

                 Section 2.14.  Leverage Ratio.  Section 9.10(a) of the Credit
                                --------------
     Agreement shall be deleted in its entirety and replaced with the following:

                 "(a)  Leverage Ratio.  PGI will not permit the Leverage Ratio
                       --------------
     to exceed the following respective ratios at any time during the following
     respective periods:

                   Period                                              Ratio
                   ------                                              -----
         From the Effective Date through
          but excluding the last day
          of the fourth fiscal quarter in 2000                       5.75 to 1

         From the last day of the fourth fiscal
          quarter in 2000 through but excluding the
           last day of the first fiscal quarter in 2001              5.50 to 1

         From the last day of the first fiscal
          quarter in 2001 through but excluding the
           last day of the second fiscal quarter in 2001             5.25 to 1

         From the last day of the second fiscal
          quarter in 2001 through but excluding the
           last day of the first fiscal quarter in 2002              4.75 to 1

         From the last day of the first fiscal
          quarter in 2002 through but excluding the
           last day of the first fiscal quarter in 2003              4.50 to 1

         From the last day of the first fiscal
           quarter in 2003 and at all times thereafter               4.25 to 1

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -14-

                  Section 2.15.  Fixed Charges Ratio.  Section 9.10(c) of the
                                 -------------------
Credit Agreement shall be deleted in its entirety and replaced with the
following:

                  "(c)  Fixed Charges Ratio. PGI will not permit the Fixed
                        -------------------
         Charges Ratio to be less than the following respective ratios at the
         end of any fiscal quarter which falls within the following respective
         periods:

                      Period                                          Ratio
                      ------                                          -----
                From the Amendment No. 4 Effective Date
                  but excluding the last day
                  of the second fiscal quarter in 2000              1.30 to 1

                From the last day of the second fiscal
                  quarter in 2000 and at all times thereafter       1.40 to 1"

                  Section 2.16.  Year 2000 Issues.  Section 9.19 of the Credit
                                 ----------------
Agreement shall be deleted in its entirety and replaced with the following:

                  "9.19. Year 2000 Issues. Any reprogramming  required to permit
                         ----------------
         the proper functioning, in and following the year 2000, of (i) the
         computer systems of the Borrower and its Subsidiaries and (ii)
         equipment containing embedded microchips (including systems and
         equipment supplied by others or with which the systems of the Borrower
         and its Subsidiaries interface) and the testing of all such systems and
         equipment, as so reprogrammed, has been completed in all material
         respects. The computer and management information systems of the
         Borrower and its Subsidiaries are and, with ordinary course upgrading
         and maintenance, will continue for the term of this Agreement to be,
         sufficient to permit the Borrower and its Subsidiaries to conduct its
         business without a Material Adverse Effect."

                  Section 2.17.  Certain Agency Provisions.  Sections 11.02 and
                                 -------------------------
11.03 of the Credit Agreement shall be amended by adding after the words "the
Majority Term B-1 Loan Lenders" the following wherever such words appear: "or
the Majority Term C Loan Lenders".

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -15-

                  Section  2.18.   Amendments.   Section  12.04  of  the  Credit
                                   ----------
Agreement shall be amending by adding the words "or Majority Term C Loan
Lenders" immediately after the words "Majority Term B-1 Loan Lenders" in clause
(b) thereof and by replacing the word "and" immediately before clause (D) with a
comma, and inserting immediately after clause (D) a new clause (E) as follows:

         "and (E) no waiver or modification of any provision of this Agreement
         that has the effect (either immediately or at some later time) of
         enabling PGI to satisfy a condition precedent to the making of a Term C
         Loan shall be effective against the Term C Loan Lenders for the
         purposes of the Term C Loan Commitments unless the Majority Term C Loan
         Lenders shall have concurred with such waiver or modification."

                  Section 2.19. Treatment of Certain Information;
                                --------------------------------
Confidentiality.  Section  12.16(b) of the Credit Agreement shall be amending by
---------------
renumbering  clause (vii) thereof as clause (viii) and adding a new clause (vii)
as follows:

         "(vii)  to any direct or indirect contractual counterparty in swap
         agreements or such contractual counterparty's professional advisor (so
         long as such contractual counterparty or professional advisor to such
         contractual counterparty agrees to be bound by the provisions of this
         Section 12.16), or to any nationally recognized rating agency that
         requires access to information about a Lender."

                  Section 2.20.   Certain Tax Considerations.  Section 12.19(a)
                                  --------------------------
shall be amended by adding after the words "or Term B-1 Loan Lender" in the
first sentence thereof the following: "or Term C Loan Lender"

                  Section 2.21.  Additional Schedule and Exhibit.  The Credit
                                 -------------------------------
Agreement shall be amended by attaching thereto and making a part thereof
Exhibit A-5 attached hereto.

                  Section 3. Security Agreement. Effective as of the Term C Loan
                             ------------------
Closing Date, PGI, the Domestic Non-Borrower Guarantors and the Administrative
Agent agree that the Security Agreement shall be amended by replacing the amount
"U.S. $500,000,000" in the third paragraph thereof with the amount "U.S.
$600,000,000" and, for avoidance of doubt, that the "Credit Agreement" referred
to in the Security Agreement shall mean the Credit Agreement as amended hereby.

                  Section  4.  Representations and Warranties. Each Obligor
                               ------------------------------
represents and warrants to the Lenders and the Administrative Agent that the
representations and warranties set forth in Section 8 of the Credit Agreement as
amended hereby are true and complete on the date hereof as if made on and as of
the date hereof and as if each reference in said Section 8 to "this Agreement"
include reference to this Amendment No. 4.

                  Section  5.  Miscellaneous.  Except  as herein  provided,  the
                               -------------
Credit  Agreement  shall  remain  unchanged  and in full force and effect.  This
Amendment  No. 4 may be  executed  in any

                                Amendment No.4
                                --------------
<PAGE>

                                     -16-

number of counterparts, all of which taken together shall constitute one and the
same amendatory instrument and any of the parties hereto may execute this
Amendment No. 4 by signing any such counterpart. This Amendment No. 4 shall be
governed by, and construed in accordance with, the law of the State of New York.

                                Amendment No.4
                                --------------
<PAGE>

                                     -17-

                  IN WITNESS WHEREOF, the parties hereto have caused this
Amendment No. 4 to be duly executed and delivered as of the day and year first
above written.

                                 THE BORROWERS
                                 -------------

POLYMER GROUP, INC.                      PGI NONWOVENS B.V.

By  /s/ James G. Boyd                    By  /s/ James G. Boyd
   -------------------------------          -----------------------------------
       James G. Boyd                             James G. Boyd
Title: Executive Vice President          Title: Executive Vice President
          and CFO                                 and CFO

CHICOPEE HOLDINGS B.V.                   FABRENE INC.

By  /s/ James G. Boyd                    By  /s/ James G. Boyd
   -------------------------------          -----------------------------------
       James G. Boyd                             James G. Boyd
Title: Executive Vice President          Title: Executive Vice President
         and CFO                                  and CFO

                       DOMESTIC NON-BORROWER GUARANTORS
                       --------------------------------

FIBERTECH GROUP, INC.                       CHICOPEE, INC.

By  /s/ James G. Boyd                    By  /s/ James G. Boyd
   ------------------------------           -----------------------------------
       James G. Boyd                             James G. Boyd
Title: Executive Vice President          Title: Executive Vice President
         and CFO                                  and CFO

PGI POLYMER, INC.                        PGI EUROPE, INC.

By  /s/ James G. Boyd                    By  /s/ James G. Boyd
   ------------------------------           -----------------------------------
       James G. Boyd                             James G. Boyd
Title: Executive Vice President          Title:  Executive Vice President
         and CFO                                   and CFO

                               Amendment No. 4
                               ---------------
<PAGE>

                                     -18-

TECHNETICS GROUP, INC.                      FABRENE GROUP, L.L.C.

By  /s/ James G. Boyd                   By  /s/ James G. Boyd
   ------------------------------          -----------------------------------
    James G. Boyd                              James G. Boyd
Title: Executive Vice President         Title: Executive Vice President and CFO
         and CFO

FABRENE CORP.                               FIBERGOL CORPORATION

By  /s/ James G. Boyd                   By  /s/ James G. Boyd
   ------------------------------          -----------------------------------
       James G. Boyd                           James G. Boyd
Title: Executive Vice President         Title: Executive Vice President and CFO
        and CFO

FABRENE GROUP, INC.                         PNA CORP.

By  /s/ James G. Boyd                   By  /s/ James G. Boyd
   ------------------------------          -----------------------------------
       James G. Boyd                           James G. Boyd
Title: Executive Vice President         Title: Executive Vice President and CFO
         and CFO

FNA POLYMER CORP.                           FABPRO ORIENTED POLYMERS, INC.

By  /s/ James G. Boyd                   By  /s/ James G. Boyd
   ------------------------------          -----------------------------------
       James G. Boyd                           James G. Boyd
Title: Executive Vice President and CFO Title: Executive Vice President and CFO

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -19-

                                    LENDERS
                                    -------

THE CHASE MANHATTAN BANK                    THE CHASE MANHATTAN
   as Lender and Administrative Agent        BANK OF CANADA

By: /s/ Peter Dedousis                      By: /s/ Christine Chan
   ----------------------------                -----------------------
         Peter Dedousis                      Name: Christine Chan
   Title: Managing Director                  Title: Vice President

                                            By: /s/ Ralph Kern
                                               -----------------------
                                             Name:  Ralph Kern
                                             Title: Vice President

THE BANK OF NOVA SCOTIA                     THE BANK OF NOVA SCOTIA,
                                             as Canadian Dollar Lender

By: /s/ William E. Zarrett                  By: /s/ Judy McKay
   ----------------------------                -----------------------
   Name: William E. Zarrett                  Name: Judy McKay
   Title: Managing Director                  Title: Director

BHF (USA) CAPITAL CORPORATION               FIRST UNION NATIONAL BANK

By: /s/ J.P. Steinhauser                    By: /s/ David J.C. Silander
   ----------------------------                -----------------------
   Name: J.P. Steinhauser                    Name: David J.C. Silander
   Title: Associate                          Title: Vice President

By: /s/ D. McDougall
   ----------------------------
   Name: D. McDougall
   Title: Vice President

BALANCED HIGH YIELD FUND I LTD.,            BALANCED HIGH YIELD FUND II LTD.,
  By:  BHF (USA) CAPITAL CORPORATION         By:  BHF (USA) CAPITAL CORPORATION
       acting as Attorney-in-Fact                 acting as Attorney-in-Fact

By: /s/ J.P. Steinhauser                          By: /s/ J.P. Steinhauser
   ----------------------------                     -----------------------
   Name: J.P. Steinhauser                          Name: J.P. Steinhauser
   Title: Associate                                Title: Associate

By: /s/ Dana L. McDougall                         By: /s/ Dana L. McDougall
   ----------------------------                     -----------------------
   Name: Dana L. McDougall                         Name: Dana L. McDougall
   Title: Vice President                           Title: Vice President

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -20-

CIBC INC.                                         CREDIT INDUSTRIEL
                                                   ET COMMERCIAL

By: /s/ Katherine Bass                            By: /s/ Brian O'Leary
   ----------------------------                      -----------------------
   Name: Katherine Bass                            Name: Brian O'Leary
   Title: Executive Director                       Title: Vice President

                                                  By: /s/ Sean Mounier
                                                   Name: Sean Mounier
                                                   Title: First Vice President

WACHOVIA BANK, N.A.                               DG BANK DEUTSCHE
                                                  GENOSSENSCHAFTSBANK AG

By: /s/ Donald E. Sellers, Jr.                    By: /s/ Sabine Wendt
   ----------------------------                      -----------------------
   Name: Donald E. Sellers, Jr.                    Name: Sabine Wendt
   Title: Vice President                           Title: Vice President

                                                  By: /s/ Lynne McCarthy
                                                     -----------------------
                                                   Name: Lynne McCarthy
                                                   Title: Vice President

MERITA BANK PLC.,                                 NATIONAL CITY BANK
  NEW YORK BRANCH

By: /s/ Clifford Abramsky                        By: /s/ Lisa B. Lisi
   ----------------------------                      -----------------------
   Name: Clifford Abramsky                        Name: Lisa B. Lisi
   Title: Vice President                           Title: Vice President

By: /s/ Anu Seppala
   ----------------------------
   Name: Anu Seppala
   Title: Vice President

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -21-

ERSTE BANK                                     THE DAI-ICHI KANGYO
                                                BANK, LIMITED

By: /s/ Arcinee Hovanessian                    By: /s/ Ronald Wolinsky
   --------------------------------               --------------------------
   Name: Arcinee Hovanessian                    Name: Ronald Wolinsky
   Title: Vice President                        Title: Vice President & Group
                                                       Leader

By: /s/ John S. Runnion
   --------------------------------
   Name: John S. Runnion
   Title: First Vice President

BANK ONE, NA (MAIN OFFICE                      SEQUILS I, LTD.
CHICAGO)                                        By: TCW Advisors, Inc. as its
f.k.a. The First National Bank of Chicago           Collateral Manager

By: /s/ James F. Gable                         By: /s/ Jonathan R. Ingull
   --------------------------------               --------------------------
   Name: James F. Gable                         Name: Jonathan R. Ingull
   Title: Assistant Vice President              Title: Senior Vice President

                                               By: /s/ Justin L. Driscoll
                                                  --------------------------
                                                Name: Justin L. Driscoll
                                                Title: Senior Vice President

DELANO COMPANY                                 CAPTIVA IV FINANCE LTD.
  By: Pacific Investment Management Company     as advised by Pacific Investment
     as its investment advisor                  Management Company
   By:   PIMCO Management Inc., a
         general partner

By: _______________                            By: _______________
   Name:                                        Name:
   Title:                                       Title:

TRIGON HEALTHCARE INC.
  By:  Pacific Investment Management Company
   as its investment advisor, acting through The
   Bank of New York in the Nominee Name
     of Hare & Co.
  By:  PIMCO Management Inc., a general partner

By: _______________
   Name:
   Title:

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -22-

ARCHIMEDES FUNDING II, LTD.                 ING HIGH INCOME PRINCIPAL
By: ING Capital Advisors LLC                PRESERVATION FUND HOLDINGS, LDC
    as Collateral Manager                   By: ING Capital Advisors LLC,
                                                as Investment Advisor

By: /s/ Michael D. Hatley                   By: /s/ Michael D. Hatley
   -----------------------------               ---------------------------
   Name: Michael D. Hatley                   Name: Michael D. Hatley
   Title: Managing Director                  Title: Managing Director

ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors LLC
    as Collateral Manager

By: /s/ Michael D. Hatley
   -----------------------------
   Name: Michael D. Hatley
   Title: Managing Director

MORGAN STANLEY DEAN WITTER                  AVALON CAPITAL LTD.
PRIME INCOME TRUST                          By: INVESCO Senior Secured
                                                Management as Portfolio Advisor

By: /s/ Sheila A. Finnesty                  By: _______________
   -----------------------------
   Name: Sheila A. Finnesty                  Name:
   Title: Senior Vice President              Title:

                                            By: _______________
                                             Name:
                                             Title:

PILGRIM PRIME RATE TRUST                    VAN KAMPEN CLO I, LTD.
By: Pilgrim Investments, Inc.               By: Van Kampen Management Inc.
  as its Investment Manager                     as Collateral Manager

By: _______________                         By: /s/ Darvin D. Pierce
                                               ---------------------------
   Name:                                     Name: Darvin D. Pierce
   Title:                                    Title: Vice President

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -23-

SENIOR DEBT PORTFOLIO                        EATON VANCE INSTITUTIONAL   a
By: Boston Management and Research           SENIOR LOAN FUND
as Investment Advisor                         By: Eaton Vance Management,
                                              as Investment Adviser

By: /s/ Payson F. Swaffield                   By: /s/ Payson F. Swaffield
   ------------------------------               --------------------------
   Name: Payson F. Swaffield                  Name: Payson F. Swaffield
   Title: Vice President                      Title: Vice President

EATON VANCE SENIOR INCOME TRUST              SRV - HIGHLAND, INC.
By:  Eaton Vance Management,
as Investment Adviser

By: /s/ Payson F. Swaffield                  By: /s/ Kelly C. Walker
   ------------------------------             ----------------------------
   Name: Payson F. Swaffield                  Name: Kelly C. Walker
   Title: Vice President                      Title: Vice President

SUNTRUST BANK

By: /s/ Kim A. Willis
   ------------------------------
   Name: Kim A. Willis
   Title: Vice President

By: _______________
   Name:
   Title:

ABN AMRO BANK, N.V.                          FIRSTAR BANK, N.A.

By: _______________                          By: /s/ Mark A. Whitson
                                                --------------------------
   Name:                                      Name: Mark A. Whitson
   Title:                                     Title: Vice President

By: _______________
   Name:
   Title:

                               Amendment No. 4
                               ---------------
<PAGE>

                                     -24-

CYPRESSTREE INVESTMENT FUND,                   NORTH AMERICAN SENIOR FLOATING
LLC                                              RATE FUND

By: Cypress Tree Investment Management         By: Cypress Tree Investment
       Company, Inc.,                              Management Company, Inc.,
        its Managing Member                        as Portfolio Manager

By: /s/ Jeffrey W. Hever                       By: /s/ Jeffrey W. Hever
   -----------------------------                  -------------------------
   Name: Jeffrey W. Hever                       Name: Jeffrey W. Hever
   Title: Principal                             Title: Principal

CYPRESSTREE INVESTMENT MANAGEMENT              CYPRESSTREE INSTITUTIONAL
COMPANY, INC.                                  FUND, LLC

As: Attorney-in-Fact and on behalf of First    By: CypressTree Investment
     Allmerica Financial Life Insurance            Management Company, Inc.,
     Company as Portfolio Manager                  its Managing Member

By: /s/ Jeffrey W. Hever                       By: /s/ Jeffrey W. Hever
   -----------------------------                  -------------------------
   Name: Jeffrey W. Hever                       Name: Jeffrey W. Hever
   Title: Principal                             Title: Principal

CYPRESSTREE INVESTMENT PARTNERS II LTD.,       CYPRESSTREE SENIOR FLOATING
                                                RATE FUND

By: CypressTree Investment Management          By: CypressTree Investment
    Company, Inc.,                                 Management Company, Inc.,
    as Portfolio Manager                           as Portfolio Manager

By: /s/ Jeffrey W. Hever                       By: /s/ Jeffrey W. Hever
   -----------------------------                  -------------------------
   Name: Jeffrey W. Hever                       Name: Jeffrey W. Hever
   Title: Principal                             Title: Principal

                                Amendment No. 4
                                ---------------
<PAGE>

                                     -25-

KZH CRESCENT LLC                             KZH CRESCENT-2 LLC

By: _______________                          By: _______________
   Name:                                      Name:
   Title:                                     Title:

KZH CYPRESSTREE-1 LLC                        KZH ING-2 LLC

By: _______________                          By: _______________
   Name:                                      Name:
   Title:                                     Title:

                               Amendment No. 4
                               ---------------
<PAGE>

                                                                     EXHIBIT A-5

                          [Form of Term C Loan Note]

                                PROMISSORY NOTE
                                (Term C Loans)

U.S. $_______________                                          ___________, 2000
                                                              New York, New York

         FOR VALUE RECEIVED, POLYMER GROUP, INC., a corporation duly organized
and validly existing under the laws of the State of Delaware (the "Maker"),
                                                                   -----
hereby promises to pay to __________________ (the "Lender") [or registered
                                                   ------
assigns]/1/, for account of its respective Applicable Lending Offices provided
for by the Credit Agreement referred to below, at the principal office of The
Chase Manhattan Bank at 270 Park Avenue, New York, New York 10017, the principal
sum of _______________ U.S. Dollars (or such lesser amount as shall equal the
aggregate unpaid principal amount of the Term C Loans made by the Lender to the
Maker under the Credit Agreement), in lawful money of the United States of
America and in immediately available funds, on the dates and in the principal
amounts provided in the Credit Agreement, and to pay interest on the unpaid
principal amount of each such Term C Loan, at such office, in like money and
funds, for the period commencing on the date of such Term C Loan until such Term
C Loan shall be paid in full, at the rates per annum and on the dates provided
in the Credit Agreement.

          [This Note and the Loans evidenced hereby may be transferred in whole
or in part only by registration of such transfer on the register maintained for
such purpose by or on behalf of PGI as provided by the Credit Agreement.]

          The date, amount, Type, interest rate and duration of Interest Period
(if applicable) of each Term C Loan made by the Lender to the Maker, and each
payment made on account of the principal thereof, shall be recorded by the
Lender on its books and, prior to any transfer of this Note, endorsed by the
Lender on the schedule attached hereto or any continuation thereof (and the
Maker hereby authorizes the Lender to endorse such recording on the schedule
attached hereto), provided that the failure of the Lender to make any such
                  --------
recordation or endorsement shall not affect the obligations of the Maker to make
a payment when due of any amount owing under the Credit Agreement or hereunder
in respect of the Term C Loans made by the Lender.

          This Note is one of the Term C Loan Notes [(constituting a Registered
Note)] referred to in the Second Amended, Restated and Consolidated Credit
Agreement dated as of July 3, 1997 (as modified and supplemented and in effect
from time to time, the "Credit Agreement") between the Maker, the other
                        ----------------
"Borrowers" named therein, the Domestic Non-

________________
/1/  Bracketed language to be inserted into Registered Notes

                                Term C Loan Note
                                ----------------
<PAGE>

                                      -2-

Borrower Guarantors named therein, the lenders named therein (including the
Lender), and The Chase Manhattan Bank, as Administrative Agent, and evidences
Term C Loans made by the Lender to the Maker thereunder. Terms used but not
defined in this Note have the respective meanings assigned to them in the Credit
Agreement.

          The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.

          Except as permitted by Section 12.06(b) of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.

          This Note shall be governed by, and construed in accordance with, the
law of the State of New York.

          The Maker hereby waives presentment, demand, notice of protest or
notice of any other kind with respect to this Note.

                                   POLYMER GROUP, INC.

                                   By_______________________
                                     Name:
                                     Title:

                               Term C Loan Note
                               ----------------
<PAGE>

                                      -3-

                           SCHEDULE OF TERM C LOANS

          This Note evidences Term C Loans made to the Maker, or Continued or
Converted, under the within-described Credit Agreement, on the dates, in the
principal amounts, of the Types, bearing interest at the rates and having
Interest Periods (if applicable) of the durations set forth below, subject to
the payments, Continuations, Conversions and prepayments of principal set forth
below:

<TABLE>
<CAPTION>
                                                               Amount
   Date           Prin-                                         Paid,
   Made,          cipal                         Duration      Prepaid,         Unpaid
 Continued       Amount      Type                  of         Continued         Prin-
    or             of         of     Interest   Interest         or             cipal       Notation
 Converted        Loan       Loan      Rate      Period       Converted        Amount        Made by
 ---------        ----       ----    --------    ------       ---------        ------        -------
<S>              <C>         <C>     <C>        <C>           <C>              <C>          <C>
</TABLE>

                               Term C Loan Note
                               ----------------<PAGE>

                                                                   Exhibit 10.1

                           iGate Capital Corporation

                   AMENDED AND RESTATED STOCK INCENTIVE PLAN

     Section 1.   General Purpose of the Plan; Definitions.  The name of this
plan is the iGate Capital Corporation Amended and Restated Stock Incentive Plan
(formerly the Mastech Corporation Second Amended and Restated 1996 Stock
Incentive Plan) (the "Plan"). The purpose of the Plan is to encourage and enable
the officers, employees, directors and consultants of iGate Capital Corporation
(the "Company") and its Subsidiaries upon whose judgment, initiative and efforts
the Company largely depends for the successful conduct of its business to
acquire a proprietary interest in the Company. It is anticipated that providing
such persons with a direct stake in the Company's welfare will assure a closer
identification of their interests with those of the Company, thereby stimulating
their efforts on the Company's behalf and strengthening their desire to remain
with the Company.  Except as otherwise specifically provided herein, the Plan as
amended and restated generally applies to Awards granted prior to, as well as
Awards granted on or after, the Restated Effective Date.

     The following terms shall be defined as set forth below:

     "Act" means the Securities Exchange Act of 1934, as amended.

     "Award" or "Awards," except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Restricted Stock Awards, Stock Awards, Performance Share Awards and
Stock Appreciation Rights.

     "Board" means the Board of Directors of the Company.

     "Change of Control" shall have the meaning assigned to that term in Section
15.

     "Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.

     "Effective Date" means November 4, 1996, the date on which the Plan was
originally approved by the Company's stockholders.

     "Fair Market Value" of the Stock on any given date means (i) if the Stock
is admitted to quotation on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"), the Fair Market Value on any given date
shall be the average of the highest bid and lowest asked prices of the Stock
reported for such date or, if no bid and asked prices were reported for such
date, for the last day preceding such date for which such prices were reported,
or (ii) if the Stock is admitted to trading on a United States securities
exchange or the NASDAQ National Market System, the Fair Market Value on any date
shall be the closing price reported for the Stock on such

                                       1
<PAGE>

exchange or system for such date or, if no sales were reported for such date,
for the last day preceding such date for which a sale was reported; (iii)
notwithstanding the foregoing, the Fair Market Value of the Stock on the
effective date of the Initial Public Offering shall be the offering price to the
public of the Stock on such date; and (iv) if the Fair Market Value cannot be
determined on the basis previously set forth in this definition on the date that
Fair Market Value is to be determined, the Board shall in good faith determine
the Fair Market Value of the Stock on such date.

     "Incentive Stock Option" means any Stock Option designated and qualified as
an "incentive stock option" as defined in Section 422 of the Code.

     "Independent Director" means a member of the Board who is not an employee
or officer of the Company or any Subsidiary.

     "Initial Public Offering" means the Company's first underwritten public
offering pursuant to an effective registration statement under the Securities
Act of 1933, as amended, covering the offer and sale of Stock to the public.

     "Non-Qualified Stock Option" means any Stock Option that is not an
Incentive Stock Option.

     "Option" or "Stock Option" means any Option to purchase shares of Stock
granted pursuant to Section 6.

     "Performance Share Award" means any Award granted pursuant to Section 12.

     "Restated Effective Date" means April 6, 2000, the effective date of the
Plan as amended and restated herein.

     "Restricted Stock Award" means any Award granted pursuant to Section 10.

     "Stock" means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 14.

     "Stock Appreciation Right" or "SAR" means any Award granted pursuant to
Section 7.

     "Stock Award" means any Award granted pursuant to Section 11.

     "Subsidiary" means any corporation or other entity (other than the Company)
in any unbroken chain of corporations or other entities, beginning with the
Company, if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.

                                       2
<PAGE>

     Section 2.   Administration. The Plan shall be administered by the full
Board of Directors of the Company or a committee of such Board of Directors
comprised of two or more "Non-Employee Directors" within the meaning of Rule
16b-3(a)(3) promulgated under the Act (the "Plan Administrator"). Subject to the
provisions of the Plan, the Plan Administrator is authorized to:

     (a) construe the Plan and any Award under the Plan;

          (b)  select the directors, officers, employees and consultants of the
               Company and its Subsidiaries to whom Awards may be granted;

          (c)  determine the number of shares of Stock to be covered by any
               Award;

          (d)  determine and modify from time to time the terms and
               conditions, including restrictions, of any Award and to approve
               the form of written instrument evidencing Awards;

          (e)  accelerate at any time the exercisability or vesting of all or
               any portion of any Award and/or to include provisions in awards
               providing for such acceleration;

          (f)  impose limitations on Awards, including limitations on transfer
               and repurchase provisions;

          (g)  extend the exercise period within which Stock Options may be
               exercised; and

          (h)  determine at any time whether, to what extent, and under what
               circumstances Stock and other amounts payable with respect to an
               Award   shall be deferred either automatically or at the election
               of the  participant and whether and to what extent the Company
               shall pay or credit amounts   constituting interest (at rates
               determined by the Plan Administrator) or dividends or deemed
               dividends on such deferrals.

The determination of the Plan Administrator on any such matters shall be
conclusive.

  Section 3.   Delegation of Authority to Grant Awards. The Plan Administrator,
in its discretion, may delegate to the Co-Chairmen of the Company all or part of
the Plan Administrator's authority and duties with respect to granting Awards to
individuals who are not subject, by reason of their position with the Company or
its Subsidiaries, to the reporting provisions of Section 16 of the Act and who
are not expected to be "covered employees" of the Company or its Subsidiaries
within the meaning of Section 162(m) of the Code.  The Plan Administrator may
revoke or amend the terms of such a delegation at

                                       3
<PAGE>

any time, but such revocation shall not invalidate prior actions of the Co-
Chairmen that were consistent with the terms of the Plan.

  Section 4.   Eligibility. Directors, officers, employees and consultants of
the Company or its Subsidiaries who, in the opinion of the Plan Administrator,
are primarily responsible for the continued growth and development and future
financial success of the business shall be eligible to participate in the Plan.
In addition, Independent Directors are eligible to receive an automatic grant of
Stock Options pursuant to Section 9 hereof.

  Section 5.   Shares Subject to the Plan. The number of shares of Stock which
may be issued pursuant to the Plan shall be 10,000,000 shares, plus an automatic
annual increase on the first day of each fiscal year of the Company beginning on
or after January 1, 2001 and ending on or before December 31, 2006 equal to the
lesser of  (i) 2,000,000 shares, (ii) 3% of the shares outstanding on the last
day of the immediately preceding fiscal year, or (iii) such lesser number of
shares as is determined by the Board.  For purposes of the foregoing limitation,
the shares of Stock underlying any Awards which are forfeited, canceled,
reacquired by the Company, satisfied without the issuance of Stock or otherwise
terminated (other than by exercise) shall be added back to the number of shares
of Stock available for issuance under the Plan. Notwithstanding the foregoing,
Stock Options with respect to no more than 500,000 shares of Stock may be
granted to any one individual participant during any one calendar year period.
To the extent that an SAR is granted in conjunction with an Option, the shares
covered by such SAR and Option shall be counted only once. Common Stock to be
issued under the Plan may be either authorized and unissued shares or shares
held in treasury by the Company.

  Section 6.   Stock Options. Options granted pursuant to the Plan may be either
Incentive Stock Options or Non-Qualified Stock Options. Incentive Stock Options
and Non-Qualified Stock Options shall be granted separately hereunder. The Plan
Administrator shall determine whether and to what extent Options shall be
granted under the Plan and whether such Options granted shall be Incentive Stock
Options or Non-Qualified Stock Options; provided, however, that: (a) Incentive
Stock Options may be granted only to employees of the Company or any Subsidiary
that is a "subsidiary corporation" within the meaning of Section 424(f) of the
Code; and (b) no Incentive Stock Option may be granted following the tenth
anniversary of the Effective Date. The provisions of the Plan and any Option
agreement pursuant to which Incentive Stock Options shall be issued shall be
construed in a manner consistent with Section 422 of the Code (or any successor
provision) and rules and regulations promulgated thereunder.

  Section 7.   Stock Appreciation Rights. The Plan Administrator may, from time
to time, subject to the provisions of the Plan, grant SARs to eligible
participants. Such SARs may be granted (i) alone, (ii) simultaneously with the
grant of an Option (either an Incentive Stock Option or Non-Qualified Stock
Option) and in conjunction therewith or in the alternative thereto or (iii)
subsequent to the grant of a Non-Qualified Stock Option and in conjunction
therewith or in the alternative thereto.

                                       4
<PAGE>

     (a)  An SAR shall entitle the holder upon exercise thereof to receive from
          the Company, upon a written request filed with the Secretary of the
          Company at its principal offices (the "Request"), (i) a number of
          shares of Stock (with or without restrictions as to substantial risk
          of forfeiture and transferability, as determined by the Plan
          Administrator in its sole discretion), (ii) an amount of cash, or
          (iii) any combination of shares of Stock and cash, as specified in the
          Request (but subject to the approval of the Plan Administrator in its
          sole discretion, at any time up to and including the time of payment,
          as to the making of any cash payment), having an aggregate Fair Market
          Value equal to the product of (i) the excess of the Fair Market Value,
          on the day of such Request, of one share of Stock over the exercise
          price per share specified in such SAR or its related Option,
          multiplied by (ii) the number of shares of Stock for which such SAR
          shall be exercised.

     (b)  The exercise price of an SAR granted alone shall be determined by the
          Plan Administrator, but may not be less than the Fair Market Value of
          the underlying Stock on the date of grant. An SAR granted
          simultaneously with or subsequent to the grant of an Option and in
          conjunction therewith or in the alternative thereto shall have the
          same exercise price as the related Option, shall be transferable only
          upon the same terms and conditions as the related Option, and shall be
          exercisable only to the same extent as the related Option; provided,
                                                                     --------
          however, that an SAR, by its terms, shall be exercisable only when the
          -------
          Fair Market Value of the Stock subject to the SAR and related Option
          exceeds the exercise price thereof.

     (c)  Upon exercise of an SAR granted simultaneously with or subsequent to
          an Option and in the alternative thereto, the number of
          shares of Stock for which the related Option shall be exercisable
          shall be reduced by the number of shares of Stock for which the SAR
          shall have been exercised.  The number of shares of Stock for which an
          SAR shall be exercisable shall be reduced upon any exercise of a
          related Option by the number of shares of Stock for which such Option
          shall have been exercised.

     (d)  Any SAR shall be exercisable upon such additional terms and conditions
          as may be prescribed by the Plan Administrator.

  Section 8.   Terms of Options and SARs.  Each Option or SAR granted under the
Plan shall be evidenced by an agreement between the Company and the person to
whom such Option or SAR is granted and shall be subject to the following terms
and conditions:

     (a)  Subject to adjustment as provided in Section 14 of this Plan, the
          price at which each share covered by an Option may be purchased shall
          be determined in each case by the Plan Administrator; provided,
          however, that such price shall not, in the case of an Incentive Stock
          Option, be less

                                       5
<PAGE>

          than the Fair Market Value of the underlying Stock at the time the
          Option is granted. If an optionee owns (or is deemed to own under
          applicable provisions of the Code and rules and regulations
          promulgated thereunder) more than ten percent (10%) of the combined
          voting power of all classes of the stock of the Company and an Option
          granted to such optionee is intended to qualify as an Incentive Stock
          Option, the Option price shall be no less than 110% of the Fair Market
          Value of the Common Stock covered by the Option on the date the Option
          is granted.

     (b)  The aggregate Fair Market Value of shares of Stock with respect to
          which Incentive Stock Options are first exercisable by the
          optionee in any calendar year (under all plans of the Company) shall
          not exceed the limitations, if any, imposed by Section 422(d) of the
          Code (or any successor provision). If any Option designated as an
          Incentive Stock Option, either alone or in conjunction with any other
          Option or Options, exceeds the foregoing limitation, the portion of
          such Option in excess of such limitation shall automatically be
          reclassified (in whole share increments and without fractional share
          portions) as a Non-Qualified Stock Option, with later granted Options
          being so reclassified first.

     (c)  Neither an Option nor an SAR shall be transferable by the participant
          otherwise than by will or by the laws of descent and distribution or
          pursuant to a domestic relations order. After the death of the
          participant, the Option or SAR may be transferred to the Company upon
          such terms and conditions, if any, as the Plan Administrator and the
          personal representative or other person entitled to exercise the
          Option or SAR may agree within the period specified in subsection
          8(d)(iii) hereof.

     (d)  An Option or SAR may be exercised in whole at any time, or in part
          from time to time, within such period or periods (not to exceed ten
          years from the granting of the Option in the case of an Incentive
          Stock Option) as may be determined by the Plan Administrator and set
          forth in the agreement (such period or periods being hereinafter
          referred to as the "Option Period"), provided that, unless the
          agreement provides otherwise:

          (i)  If a participant who is an employee of the Company shall cease to
               be employed by the Company, all Options and SARs which the
               employee is then entitled to exercise may be exercised only
               within three months after the termination of employment and
               within the Option Period or, if such termination was due to
               disability or retirement (as hereinafter defined), within one
               year after termination of employment and within the Option
               Period. Notwithstanding the foregoing: (a) In the event that any
               termination of employment shall be for Cause (as defined herein)
               or the participant becomes an officer or director of, a
               consultant to or employed by a Competing Business (as defined
               herein), during

                                       6
<PAGE>

               the Option Period, then any and all Options and SARs held by such
               participant shall forthwith terminate; and (b) the Plan
               Administrator may, in its sole discretion, extend the Option
               Period of any Option or SAR for up to three years from the date
               of termination of employment regardless of the original Option
               Period. For purposes of the Plan, retirement shall mean the
               termination of employment with the Company, other than for Cause,
               at any time after age 65.

               For purposes of this Plan, the term "Cause" shall mean (a) with
               respect to an individual who is party to a written agreement with
               the Company which contains a definition of "cause" or "for cause"
               or words of similar import for purposes of termination of
               employment thereunder by the Company, "cause" or "for cause" as
               defined in such agreement; (b) in all other cases (i) the willful
               commission by an employee of a criminal or other act that causes
               substantial economic damage to the Company or substantial injury
               to the business reputation of the Company; (ii) commission of an
               act of fraud in the performance of such person's duties to or on
               behalf of the Company; or (iii) the continuing willful failure of
               a person to perform the duties of such person to the Company
               (other than a failure to perform duties resulting from such
               person's incapacity due to illness) after written notice thereof
               (specifying the particulars thereof in reasonable detail) and a
               reasonable opportunity to cure such failure are given to the
               person by the Board of Directors of the Company or the Plan
               Administrator.  For purposes of the Plan, no act, or failure to
               act, on the part of any person shall be considered "willful"
               unless done or omitted to be done by the person other than in
               good faith and without reasonable belief that the person's action
               or omission was in the best interest of the Company.

               For purposes of this Plan, the term "Competing Business" shall
               mean: any person, corporation or other entity engaged in the
               business of (a) providing information technology services or (b)
               selling or attempting to sell any product or service which is the
               same as or similar to products or services sold by the Company
               within the last year prior to termination of such person's
               employment, consultant relationship or directorship, as the case
               may be, hereunder.

          (ii) If a participant who is a director of the Company shall cease to
               serve as a director of the Company, any Options or SARs then
               exercisable by such director may be exercised only within three
               months after the cessation of service and within the Option
               Period unless such cessation was due to disability, in which case
               such

                                       7
<PAGE>

               optionee may exercise such Option or SAR within one year after
               cessation of service and within the Option Period.
               Notwithstanding the foregoing: (a) if any cessation of service as
               a director was the result of removal for Cause or the participant
               becomes an officer or director of, a consultant to or employed by
               a Competing Business during the Option Period, any Options and
               SARs held by such participant shall forthwith terminate; and (b)
               the Plan Administrator may in its sole discretion extend the
               Option Period of any Option or SAR for up to three years from the
               date of cessation of service regardless of the original Option
               Period;

         (iii) If the participant shall die during the Option Period, any
               Options or SARs then exercisable may be exercised only within one
               year after the participant's death and within the Option Period
               and only by the participant's personal representative or persons
               entitled thereto under the participant's will or the laws of
               descent and distribution;

          (iv) The Option or SAR may not be exercised for more shares (subject
               to adjustment as provided in Section 14) after the termination of
               the participant's employment, cessation of service as a director
               or the participant's death, as the case may be, than the
               participant was entitled to purchase thereunder at the time of
               the termination of the participant's employment or the
               participant's death; and

          (v)  If a participant owns (or is deemed to own under applicable
               provisions of the Code and regulations promulgated thereunder)
               more than 10% of the combined voting power of all classes of
               stock of the Company (or any parent or subsidiary corporation of
               the Company) and an Option granted to such participant is
               intended to qualify as an Incentive Stock Option, the Option by
               its terms may not be exercisable after the expiration of five
               years from the date such Option is granted.

     (e)  The Option exercise price of each share purchased pursuant to an
          Option shall be paid in full at the time of each exercise (the
          "Payment Date") of the Option (i) in cash; (ii) by delivering to the
          Company a notice of exercise with an irrevocable direction to a
          broker-dealer registered under the Act to sell a sufficient portion of
          the shares and deliver the sale proceeds directly to the Company to
          pay the exercise price; (iii) in the discretion of the Plan
          Administrator, through the delivery to the Company of previously-owned
          shares of Common Stock having an aggregate Fair Market Value equal to
          the Option exercise price of the shares being purchased pursuant to
          the exercise of the Option; provided, however, that shares of Common
          Stock delivered in payment of the Option price must have been held by
          the participant for at least six (6) months in order to be utilized to
          pay the Option price; (iv) in the discretion of the Plan

                                       8
<PAGE>

          Administrator, through an election to have shares of Common Stock
          otherwise issuable to the optionee withheld to pay the exercise price
          of such Option; or (v) in the discretion of the Plan Administrator,
          through any combination of the payment procedures set forth in
          subsections (i)-(iv) of this Section 8(e).

     (f)  The Plan Administrator, in its discretion, may authorize "stock
          retention Options" which provide, upon the exercise of an Option
          previously granted under this Plan (a "prior Option"), using
          previously owned shares, for the automatic issuance of a new Option
          under this Plan with an exercise price equal to the current Fair
          Market Value and for up to the number of shares equal to the number of
          previously-owned shares delivered in payment of the exercise price of
          the prior Option. Such stock retention Option shall have the same
          Option Period as the prior Option.

     (g)  Nothing contained in the Plan nor in any Award agreement shall confer
          upon any participant any right with respect to the continuance of
          employment by the Company nor interfere in any way with the right of
          the Company to terminate his employment or change his compensation at
          any time.

     (h)  The Plan Administrator may include such other terms and conditions not
          inconsistent with the foregoing as the Plan Administrator shall
          approve.  Without limiting the generality of the foregoing sentence,
          the Plan Administrator shall be authorized to determine that Options
          or SARs shall be exercisable in one or more installments during the
          term of the Option, subject to the attainment of performance goals and
          objectives, and the right to exercise may be cumulative as determined
          by the Plan Administrator.

  Section 9.   Independent Director Options. Anything to the contrary
notwithstanding, each Independent Director who is first elected or appointed to
serve as a director commencing after the effective time of the Initial Public
Offering shall automatically be granted Non-Qualified Stock Options to purchase
30,000 shares of Stock. The Option exercise price for Options granted to
Independent Directors under the Plan will be equal to the Fair Market Value of
the Stock on the date of grant. Options granted to Independent Directors under
the foregoing provisions will be granted on the date that such Independent
Director is first elected or appointed to serve as a director and will vest in
equal annual installments over three years commencing on the anniversary of the
date of grant and will expire ten years after grant, subject to earlier
termination if the optionee ceases to serve as a director.

  Section 10.   Restricted Stock Awards.

     (a)  The Plan Administrator may grant Restricted Stock Awards to any
          officer, employee or consultant of the Company and its
          Subsidiaries. A Restricted

                                       9
<PAGE>

          Stock Award entitles the recipient to acquire shares of Stock subject
          to such restrictions and conditions as the Plan Administrator may
          determine at the time of grant ("Restricted Stock"). Conditions may be
          based on continuing employment (or other business relationship) and/or
          achievement of pre-established performance goals and objectives.

     (b)  Upon execution of a written instrument setting forth the Restricted
          Stock Award and paying any applicable purchase price, a
          participant shall have the rights of a shareholder with respect to the
          Stock subject to the Restricted Stock Award, including, but not
          limited to, the right to vote and receive dividends with respect
          thereto; provided, however, that shares of Stock subject to Restricted
          Stock Awards that have not vested shall be subject to the restrictions
          on transferability described in Section 10(d) below. Unless the Plan
          Administrator shall otherwise determine, certificates evidencing the
          Restricted Stock shall remain in the possession of the Company until
          such Restricted Stock is vested as provided in Section 10(c) below.

     (c)  The Plan Administrator at the time of grant shall specify the date or
          dates and/or the attainment of pre-established performance goals,
          objectives and other conditions on which Restricted Stock shall become
          vested, subject to such further rights of the Company or its assigns
          as may be specified in the instrument evidencing the Restricted Stock
          Award.

     (d)  Unvested Restricted Stock may not be sold, assigned, transferred,
          pledged or otherwise encumbered or disposed of except as specifically
          provided herein or in the written instrument evidencing the Restricted
          Stock Award.

  Section 11.   Stock Awards. The Plan Administrator may, in its sole
discretion, grant (or sell at a purchase price determined by the Plan
Administrator) a Stock Award to any officer, employee or consultant of the
Company or its Subsidiaries, pursuant to which such individual may receive
shares of Stock free of any vesting restrictions (a "Stock Award") under the
Plan. Stock Awards may be granted or sold as described in the preceding sentence
in respect of past services or other valid consideration, or in lieu of any cash
compensation due to such individual.

  Section 12. Performance Share Awards. A Performance Share Award is an Award
entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Plan Administrator may make Performance Share
Awards independent of or in connection with the granting of any other Award
under the Plan. Performance Share Awards may be granted under the Plan to any
officer, employee or consultant of the Company or its Subsidiaries, including
those who qualify for awards under other performance plans of the Company. The
Plan Administrator in its sole discretion shall determine whether and to whom
Performance Share Awards shall be made, the performance goals applicable under
each such Award, the periods during which performance is to be measured, and all
other limitations and conditions applicable

                                       10
<PAGE>

to the awarded Performance Shares; provided, however, that the Plan
Administrator may rely on the performance goals and other standards applicable
to other performance plans of the Company in setting the standards for
Performance Share Awards under the Plan.

  Section 13. Tax Withholding.

     (a)  Whenever shares are to be issued or cash is to be paid under the Plan,
          the Company shall have the right to require the participant
          to remit to the Company an amount sufficient to satisfy federal, state
          and local tax withholding requirements prior to the delivery of any
          certificate for shares or any proceeds; provided, however, that in the
          case of a participant who receives an Award of shares under the Plan
          which is not fully vested, the participant shall remit such amount on
          the first business day following the Tax Date. The "Tax Date" for
          purposes of this Section 13 shall be the date on which the amount of
          tax to be withheld is determined.  If a participant makes a
          disposition of shares acquired upon the exercise of an Incentive Stock
          Option within either two years after the Option was granted or one
          year after its exercise by the participant, the participant shall
          promptly notify the Company, and the Company shall have the right to
          require the participant to pay to the Company an amount sufficient to
          satisfy federal, state and local tax withholding requirements.

     (b)  A participant who is obligated to pay the Company an amount required
          to be withheld under applicable tax withholding requirements may pay
          such amount (i) in cash; (ii) in the discretion of the Plan
          Administrator, through the delivery to the Company of previously-owned
          shares of Common Stock having an aggregate Fair Market Value on the
          Tax Date which does not exceed the amount of the tax required to be
          withheld (based on the statutory minimum withholding rates for federal
          and state tax purposes, including payroll taxes), provided that the
          previously owned shares delivered in satisfaction of the withholding
          obligations must have been held by the participant for at least six
          (6) months; or (iii) in the discretion of the Plan Administrator,
          through a combination of the procedures set forth in subsections (i)
          and (ii) of this Section 13(b).

     (c)  A participant who is obligated to pay to the Company an amount
          required to be withheld under applicable tax withholding requirements
          in connection with either the exercise of a Non-Qualified Stock
          Option, or the receipt of a Restricted Stock Award, Stock Award or
          Performance Share Award under the Plan may, in the discretion of the
          Plan Administrator, elect to satisfy this withholding obligation, in
          whole or in part, by requesting that the Company withhold shares of
          stock otherwise issuable to the participant having a Fair Market Value
          on the Tax Date which does not exceed the amount of the tax required
          to be withheld (based on the statutory minimum withholding rates for
          federal and state tax purposes, including payroll taxes); provided,
          however, that shares may

                                       11
<PAGE>

          be withheld by the Company only if such withheld shares have vested.
          Any fractional amount shall be paid to the Company by the participant
          in cash or shall be withheld from the participant's next regular
          paycheck.

     (d)  An election by a participant to have shares of stock withheld to
          satisfy federal, state and local tax withholding requirements pursuant
          to Section 13(c) must be in writing and delivered to the Company prior
          to the Tax Date.

  Section 14.   Adjustment of Number and Price of Shares.

  Any other provision of the Plan notwithstanding:

     (a)  If, through or as a result of any reorganization, recapitalization,
          reclassification, stock dividend, stock split, reverse stock split or
          other similar transaction, the outstanding shares of Stock are
          increased or decreased or are exchanged for a different number or kind
          of shares or other securities of the Company, or additional shares or
          new or different shares or other securities of the Company or other
          noncash assets are distributed with respect to such shares of Stock or
          other securities, the Plan Administrator shall make an appropriate or
          proportionate adjustment in (i) the number of Stock Options that can
          be granted to any one individual participant, (ii) the number and kind
          of shares or other securities subject to any then outstanding Awards
          under the Plan, and (iii) the price for each share subject to any then
          outstanding Stock Options under the Plan, without changing the
          aggregate exercise price (i.e., the exercise price multiplied by the
          number of shares) as to which such Stock Options remain exercisable.
          The adjustment by the Plan Administrator shall be final, binding and
          conclusive.

     (b)  In the event that, by reason of a corporate merger, consolidation,
          acquisition of property or stock, separation, reorganization or
          liquidation, the Board of Directors shall authorize the issuance or
          assumption of a stock Option or stock Options in a transaction to
          which Section 424(a) of the Code applies, then, notwithstanding any
          other provision of the Plan, the Plan Administrator may grant an
          Option or Options upon such terms and conditions as it may deem
          appropriate for the purpose of assumption of the old Option, or
          substitution of a new Option for the old Option, in conformity with
          the provisions of Code Section 424(a) and the rules and regulations
          thereunder, as they may be amended from time to time.

     (c)  No adjustment or substitution provided for in this Section 14 shall
          require the Company to issue or to sell a fractional share
          under any stock Option agreement or share award agreement and the
          total adjustment or substitution with respect to each stock Option and
          share award agreement shall be limited accordingly.

                                       12
<PAGE>

  Section 15.   Definition of Change of Control.  For purposes of this Plan, a
"Change of Control" shall mean the occurrence of any of the following events:

      (a) The acquisition, other than from the Company, by any individual,
          entity or group (within the meaning of Section 13(d) (3) or 14(d) (2)
          of the Act ) (a "Person") (other than the Company, a Subsidiary or any
          of their respective benefit plans or affiliates (within the meaning of
          Rule 144 under the Securities Act of 1933, as amended)) of beneficial
          ownership (within the meaning of Rule 13d-3 promulgated under the Act)
          of 30% or more of either (i) the then outstanding shares of Stock (the
          "Outstanding Stock") or (ii) the combined voting power of the then
          outstanding voting securities of the Company entitled to vote
          generally in the election of directors (the "Company Voting
          Securities"); or

     (b)  Individuals who, as of the Restated Effective Date, constitute the
          Board (the "Incumbent Board") cease for any reason to constitute at
          least a majority of the Board, provided that any individual becoming a
          director subsequent to the Restated Effective Date whose election or
          nomination for election by the Company's stockholders was approved by
          a vote of at least a majority of the directors then comprising the
          Incumbent Board shall be considered as though such individual were a
          member of the Incumbent Board, but excluding, for this purpose, any
          such individual whose initial assumption of office is in connection
          with an actual or threatened election contest relating to the election
          of the Directors of the Company (as such terms are used in Rule 14a-ll
          of Regulation 14A promulgated under the Act); or

     (c)  Approval by the stockholders of the Company of a reorganization,
          merger or consolidation or similar form of corporate  transaction,
          involving the Company or any of its Subsidiaries (a "Business
          Combination"), in each case, with respect to which all or
          substantially all of the individuals and entities who were the
          respective beneficial owners of the Outstanding Stock and Company
          Voting Securities immediately prior to such Business Combination do
          not, immediately following such Business Combination, beneficially
          own, directly or indirectly, more than 50% of, respectively, the then
          outstanding shares of common stock and the combined voting power of
          the then outstanding voting securities entitled to vote generally in
          the election of directors, as the case may be, of the corporation
          resulting from such Business Combination in substantially the same
          proportion as their ownership immediately prior to such Business
          Combination of the Outstanding Stock and Company Voting Securities, as
          the case may be; or

     (d)  (A) Approval by the stockholders of the Company of a complete
          liquidation or dissolution of the Company or (B) sale or other
          disposition of all or substantially all of the assets of the Company
          other than to a

                                       13
<PAGE>

          corporation with respect to which, following such sale or disposition,
          more than 50% of, respectively, the then outstanding shares of common
          stock and the combined voting power of the then outstanding voting
          securities entitled to vote generally in the election of directors is
          then owned beneficially, directly or indirectly, by all or
          substantially all of the individuals and entities who were the
          beneficial owners, respectively, of the Outstanding Stock and Company
          Voting Securities immediately prior to such sale or disposition in
          substantially the same proportion as their ownership of the
          Outstanding Stock and Company Voting Securities, as the case may be,
          immediately prior to such sale or disposition.

     Section 16.   Consequences of a Change of Control.

     (a)  Upon a Change of Control, (i) each outstanding Option or SAR shall be
          assumed by the Acquiring Corporation (as defined below) or parent
          thereof or replaced with a comparable option or right to purchase or
          to be awarded shares of the capital stock, or equity equivalent
          instrument, of the Acquiring Corporation or parent thereof, or other
          comparable rights (such assumed and comparable options and rights,
          together, the "Replacement Options"), and (ii) each share of
          Restricted Stock shall be converted to a comparable restricted grant
          of capital stock, or equity equivalent instrument, of the Acquiring
          Corporation or parent thereof or other comparable restricted property
          (such assumed and comparable restricted grants, together, the
          "Replacement Restricted Stock"); provided, however, that if the
          Acquiring Corporation or parent thereof does not agree to grant
          Replacement Options and Replacement Restricted Stock, then all
          outstanding Options or SARs which have been granted under the Plan and
          which are not exercisable as of the effective date of the Change of
          Control shall automatically accelerate and become exercisable
          immediately prior to the effective date of the Change of Control, and
          all restrictions and conditions on any Restricted Stock shall lapse
          upon the effective date of the Change of Control.  The term "Acquiring
          Corporation" means the surviving, continuing, successor or purchasing
          corporation, as the case may be.  The Board may determine in its
          discretion (but shall not be obligated to do so) that in lieu of the
          issuance of Replacement Options, all holders of outstanding Options
          and SARs which are exercisable immediately prior to a Change of
          Control (including those that become exercisable under this Section
          16(a)) will be required to surrender them in exchange for a payment by
          the Company, in cash or Common Stock as determined by the Board, of an
          amount equal to the amount (if any) by which the per-share value of
          Stock subject to unexercised Options or SARs (determined by the Board
          in good faith, based on the applicable price in the transaction giving
          rise to the Change of Control, and such other considerations as the
          Board deems appropriate) exceeds the exercise price of those Options
          or SARs (where Options and SARS are issued in tandem, such payment to
          be made only with respect to a single underlying

                                       14
<PAGE>

          share of Stock upon surrender of each tandem pair of Options and
          SARs), with such payment to take place as of the date of the Change of
          Control or such other date as the Board may prescribe.

     (b)  Any Options or SARs that are not assumed or replaced by Replacement
          Options, exercised or cashed out prior to or concurrent with a Change
          of Control will terminate effective upon the Change of Control or at
          such other time as the Board deems appropriate.

     (c)  Notwithstanding anything in the Plan to the contrary, in the event of
          a Change of Control, no action described in the Plan shall be taken
          (including, without limitation, actions described in subsections (a)
          and (b) above) if such actions would make the Change of Control
          ineligible for "pooling of interests" accounting treatment or would
          make the Change of Control ineligible for desired tax treatment if, in
          the absence of such actions, the Change of Control would qualify for
          such treatment and the Company intends to use such treatment with
          respect to such Change of Control.

     Section 17.   Amendment and Discontinuance. The Board of Directors may
alter, amend, suspend or discontinue the Plan, provided that no such action
shall deprive any person without such person's consent of any rights theretofore
granted pursuant hereto.

     Section 18.   Compliance with Governmental Regulations. Notwithstanding any
provision of the Plan or the terms of any agreement entered into pursuant to the
Plan, the Company shall not be required to issue any shares hereunder prior to
registration of the shares subject to the Plan under the Securities Act of 1933
or the Act, if such registration shall be necessary, or before compliance by the
Company or any participant with any other provisions of either of those acts or
of regulations or rulings of the Securities and Exchange Commission thereunder,
or before compliance with other federal and state laws and regulations and
rulings thereunder, including the rules of any applicable exchange or of the
NASDAQ National Market System.  The Company shall use its best efforts to effect
such registrations and to comply with such laws, regulations and rulings
forthwith upon advice by its counsel that any such registration or compliance is
necessary.

     Section 19.  Compliance with Section 16. With respect to persons subject to
Section 16 of the Act by reason of their service with the Company or its
Subsidiaries, transactions under this Plan are intended to comply with all
applicable conditions of Rule 16b-3 (or any successor rule) and shall be
construed to the fullest extent possible in a manner consistent with this
intent. To the extent that any Award fails to so comply, it shall be deemed to
be modified to the extent permitted by law and to the extent deemed advisable by
the Plan Administrator in order to comply with Rule 16b-3.

                                       15
<PAGE>

     Section 20.   Participation by Foreign Nationals. The Plan Administrator
may, in order to fulfill the purposes of the Plan and without amending the Plan,
determine the terms and conditions applicable to Awards to foreign nationals or
United States citizens employed abroad in a manner otherwise inconsistent with
the Plan if it deems such terms and conditions necessary in order to recognize
differences in local law or regulations, tax policies or customs.

     Section 21.   Restated Effective Date of Plan; Termination of Plan. The
Plan's Effective Date was November 4, 1996, the date of initial approval and
adoption of the Plan by requisite vote of the holders of the outstanding shares
of Stock.  The Plan was thereafter amended and restated on each of June 1, 1998
and February 1, 1999.  The Restated Effective Date is April 6, 2000.  The Plan
shall terminate on November 3, 2006, unless it is earlier terminated by the
Board.  Termination of the Plan shall not affect previous Awards under the Plan.

                                       16

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