Document:

Exhibit 10.2

POLYMER GROUP, INC.

EXECUTIVE EMPLOYMENT AGREEMENT

THIS AGREEMENT is entered into on March 24, 2006,
between Polymer Group, Inc., a Delaware corporation (the “Company”), and
Willis C. Moore, III (“Executive”).

In consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

1.             Employment Period. The Company shall employ
Executive, and Executive hereby accepts employment with the Company, upon the
terms and conditions set forth in this Agreement for the period beginning on
and as of April 1, 2006 and ending on March 31, 2009, unless
otherwise terminated earlier as provided in paragraph 4 hereof (the “Employment
Period”).

2.             Position and Duties.

(a)           During the
Employment Period, Executive shall serve as the Vice President and Chief
Financial Officer of the Company and shall have the normal duties,
responsibilities, functions and authority of the Chief Financial Officer,
subject to the power and authority of the Board to expand or limit such duties,
responsibilities, functions and authority within the scope of duties,
responsibilities, functions and authority associated with the position of Chief
Financial Officer. During the Employment Period, Executive shall render such
executive and managerial services to the Company and its Subsidiaries which are
consistent with Executive’s position and as the Board may from time to time
direct.

(b)           During the
Employment Period, Executive shall report to the Chief Executive Officer and
shall devote his best efforts and his full business time and attention (except
for permitted vacation periods and reasonable periods of illness or other
incapacity) exclusively to the business and affairs of the Company and its
Subsidiaries. Executive shall perform his duties, responsibilities and
functions to the Company and its Subsidiaries hereunder to the best of his
abilities in a diligent, trustworthy, professional and efficient manner and
shall comply with the Company’s and its Subsidiaries’ policies and procedures
in all material respects. In performing his duties and exercising his authority
under the Agreement, Executive shall support and implement the business and
strategic plans approved from time to time by the Board and shall support and
cooperate with the Company’s and its Subsidiaries’ efforts to expand their
businesses and operate profitably and in conformity with the business and
strategic plans approved by the Board. So long as Executive is employed by the
Company, Executive shall not, without the prior written consent of the Board,
accept other employment or perform other services for compensation.

(c)           For purposes of this
Agreement, “Subsidiaries” shall mean any corporation or other entity of
which the securities or other ownership interests having the voting power to

 

elect a majority of the board of directors or other
governing body are, at the time of determination, owned by the Company,
directly or through one of more Subsidiaries.

3.             Compensation and Benefits.

(a)           During the
Employment Period, Executive’s base salary shall be $325,000 per annum,
effective on and after April 1, 2006, or such higher rate as the Board may
determine from time to time (as adjusted from time to time, the “Base Salary”),
which salary shall be payable by the Company in regular installments in
accordance with the Company’s general payroll practices (in effect from time to
time). The Board shall undertake an annual review of Executive’s Base Salary,
and shall approve such increases to such Base Salary by such amounts, if any,
as the Board determines to be appropriate. In addition, during the Employment
Period, Executive shall be entitled to participate in all of the Company’s
employee benefit programs for which senior executive employees of the Company
and its Subsidiaries are generally eligible, and Executive shall be entitled to
four weeks of paid vacation each calendar year in accordance with the Company’s
policies, which if not taken during any year may not be carried forward to any
subsequent calendar year and no compensation shall be payable in lieu thereof.

(b)           During the
Employment Period, the Company shall reimburse Executive for all reasonable
business expenses incurred by him in the course of performing his duties and
responsibilities under this Agreement which are consistent with the Company’s
policies in effect from time to time with respect to travel, entertainment and
other business expenses, subject to the Company’s requirements with respect to
reporting and documentation of such expenses.

(c)           In addition to the
Base Salary, the Board may, in its sole discretion, award a bonus to Executive
following the end of each fiscal year during the Employment Period based upon
Executive’s performance and the Company’s operating results during such year; provided,
that Executive shall be entitled to a minimum performance bonus opportunity
each year of not less than 35% of his Base Salary, which bonus shall be payable
upon the achievement by the Company of certain performance target levels
established by the Board for Executive and the other senior executive officers
of the Company. In addition, Executive may be eligible for specific bonuses as
may be determined by the Board from time to time relating to certain extraordinary
corporate events, such as acquisitions or dispositions.

(d)           In addition to the
Base Salary and any bonuses payable to Executive pursuant to this paragraph,
Executive shall be entitled to health insurance and disability insurance of
such coverage as reasonably determined by the Board.

(e)           During the
Employment Period, Executive shall also be entitled to reasonable periods of
sick leave (without loss of pay) in accordance with the Company’s policies as
in effect from time to time.

(f)            All amounts payable
to Executive as compensation hereunder shall be subject to all required and
customary withholding by the Company.

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4.             Term.

(a)           Unless renewed by
the mutual agreement of the Company and Executive, the Employment Period shall
end on March 31, 2009. The Employment Period shall terminate prior to such
date (i) immediately upon Executive’s resignation (with or without Good
Reason, as defined below), death or Disability and (ii) the Employment
Period may be terminated by the Company at any time prior to such date for
Cause (as defined below) or without Cause. Except as otherwise provided herein,
any termination of the Employment Period by the Company shall be effective as
specified in a written notice, or oral notice later confirmed in writing, from
the Company to Executive.

(b)           If the Employment
Period is terminated by the Company without Cause or upon Executive’s
resignation with Good Reason during the term of this Agreement, Executive shall
be entitled to receive from the Company as special severance payments an amount
equal to (i) his Base Salary, as in effect immediately prior to the date
of his termination, for the period equal to the 24 month anniversary of the
date of termination (the “Severance
Period”), and (ii) his target bonus opportunity for the fiscal year in
which the termination date occurs, multiplied by a fraction equal to the number
of days of employment completed by Executive during the fiscal year in which
the termination date occurs divided by 365, in each case if and only if Executive
has executed and delivered to the Company the General Release substantially in
form and substance as set forth in Exhibit A attached hereto and
only so long as Executive has not breached the provisions of paragraphs 5, 6
and 7 hereof and does not apply for unemployment compensation chargeable to the
Company during the Severance Period, and Executive shall not be entitled to any
other salary, compensation or benefits after termination of the Employment
Period, except as specifically provided for in the Company’s employee benefit
plans or as otherwise expressly required by applicable law. The Base Salary
payable pursuant to this paragraph 4(b) for the first six months of the
Severance Period and the target bonus opportunity shall be paid to Executive in
a lump sum on the first day of the calendar month following the six month
anniversary of the termination date, and the Base Salary payable pursuant to
this paragraph 4(b) for the remainder of the Severance Period shall be
payable in regular monthly installments. The amounts payable pursuant to this
paragraph 4(b) shall not be reduced by the amount of any compensation
Executive receives with respect to any other employment during the Severance
Period.

(c)           If the Employment
Period is terminated by the Company for Cause or is terminated pursuant to
clause (a)(i) above (other than termination with Good Reason) or expires
and is not renewed hereunder, Executive shall only be entitled to receive his
Base Salary through the date of termination or expiration and shall not be
entitled to any other salary, compensation or benefits from the Company or its
Subsidiaries thereafter, except as otherwise specifically provided for under
the Company’s employee benefit plans or as otherwise expressly required by
applicable law.

(d)           For twelve months
following the date of Executive’s termination, the Company shall, at its
expense, continue on behalf of the Executive and his dependants and
beneficiaries, the life insurance, disability, medical, dental and
hospitalization benefits provided to the Executive immediately prior to the
date of termination. The coverage and benefits

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(including deductibles and costs) provided in this Section 4(d) shall
be no less favorable to the Executive and his dependants and beneficiaries,
than the coverage and benefits provided to Executive immediately prior to his
termination. The Company’s obligation hereunder with respect to the foregoing
benefits shall be limited to the extent that the Executive obtains any such
benefits pursuant to a subsequent employer’s benefit plans, in which case the
Company may reduce the coverage of any benefits it is required to provide the
Executive hereunder so long as the aggregate coverage and benefits of the
combined benefit plans is no less favorable to the Executive than the coverages
and benefits required to be provided hereunder. This subsection (d) shall
not be interpreted so as to limit any benefits to which the Executive, his
dependants or beneficiaries may otherwise be entitled under any of the Company’s
employee benefit plans, programs or practices following the termination of
employment of the Executive, including without limitation, any applicable
retiree medical and life insurance benefits. Except as otherwise expressly
provided herein, all of Executive’s rights to salary, bonuses, employee
benefits and other compensation hereunder which would have accrued or become
payable after the termination or expiration of the Employment Period shall
cease upon such termination or expiration, other than those expressly required
under applicable law (such as COBRA); provided, that for purposes of
determining Executive’s rights under COBRA, the date of the later to occur of (x) the
date of the termination or expiration of the Employment Period or (y) the
date of the final payment of any severance payments made pursuant to Section 4(b) above,
shall be deemed to be the qualifying event for such purpose. The Company may
offset any amounts Executive owes it or its Subsidiaries against any amounts it
or its Subsidiaries owes Executive hereunder.

(e)           For purposes of this
Agreement, “Cause” shall mean with respect to Executive one or more of
the following:  (i) a material
breach of this Agreement by Executive; provided, that if such breach is capable
of being cured, Executive shall be provided 15 days notice to cure such breach,
(ii) a breach of Executive’s duty of loyalty to the Company or any of its
Subsidiaries or any act of dishonesty or fraud with respect to the Company or
any of its Subsidiaries, (iii) the commission by Executive of a felony, a
crime involving moral turpitude or other act or omission causing material harm
to the standing and reputation of the Company and its Subsidiaries, (iv) reporting
to work under the influence of alcohol or illegal drugs, the use of illegal
drugs (whether or not at the workplace) or other repeated conduct causing the
Company or any of its Subsidiaries substantial public disgrace or disrepute or
economic harm, or (v) any act or omission aiding or abetting a competitor,
supplier or customer of the Company or any of its Subsidiaries to the material
disadvantage or detriment of the Company and its Subsidiaries.

(f)            For purposes of
this Agreement, “Disability” shall mean Executive’s inability to perform
the essential duties, responsibilities and functions of his position with the
Company and its Subsidiaries as a result of any mental or physical disability
or incapacity even with reasonable accommodations of such disability or
incapacity provided by the Company and its Subsidiaries or if providing such accommodations
would be unreasonable, all as determined by the Board in its reasonable good
faith judgment. Executive shall cooperate in all respects with the Company if a
question arises as to whether he has become disabled (including, without
limitation, submitting to an examination by a medical doctor or other health
care specialists selected by the Company and authorizing such medical doctor or
such other health care specialist to discuss Executive’s condition with the
Company).

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(g)           For purposes of this
Agreement, “Good Reason” shall mean if Executive resigns from employment
with the Company and its Subsidiaries prior to the end of the Employment Period
as a result of one or more of the following reasons:  (i) the Company reduces the amount of
the Base Salary as set forth in paragraph 3(a) or the target annual bonus
opportunity payable to Executive (assuming achievement of the relevant
performance goals) as set forth in paragraph 3(c), (ii) the Company
changes Executive’s title or reduces his responsibilities inconsistent with the
positions he holds or (iii) Executive and the Company are unable to agree
upon the proper reporting of any financial matter which Executive reasonably
believes is appropriate in order to comply with the rules and regulations
of the United States Securities and Exchange Commission or in order for the
Company’s financial statements to be prepared in conformity with generally
accepted accounting principles; provided that written notice of Executive’s
resignation for Good Reason must be delivered to the Company within 30 days
after the occurrence of any such event in order for Executive’s resignation
with Good Reason to be effective hereunder.

5.             Confidential Information.

(a)           Obligation to
Maintain Confidentiality. Executive acknowledges that the continued success
of the Company and its Subsidiaries, depends upon the use and protection of a
large body of confidential and proprietary information. All of such
confidential and proprietary information existing prior hereto, now existing or
to be developed in the future will be referred to in this Agreement as “Confidential
Information.”  Confidential
Information will be interpreted as broadly as possible to include all
information of any sort (whether merely remembered or embodied in a tangible or
intangible form) that is (i) related to the Company’s or its Subsidiaries’
current or potential business and (ii) is not generally or publicly known.
Confidential Information includes, without specific limitation, the
information, observations and data obtained by him during the course of his
performance under this Agreement concerning the business and affairs of the
Company and its Subsidiaries, information concerning acquisition opportunities
in or reasonably related to the Company’s or its Subsidiaries’ business or
industry of which Executive becomes aware during the Employment Period, the
persons or entities that are current, former or prospective suppliers or
customers of any one or more of them during Executive’s course of performance
under this Agreement, as well as development, transition and transformation
plans, methodologies and methods of doing business, strategic, marketing and
expansion plans, including plans regarding planned and potential sales,
financial and business plans, employee lists and telephone numbers, locations
of sales representatives, new and existing programs and services, prices and
terms, customer service, integration processes, requirements and costs of
providing service, support and equipment. Therefore, Executive agrees that he
shall not disclose to any unauthorized person or use for his own account any of
such Confidential Information without both Board’s prior written consent,
unless and to the extent that any Confidential Information (i) becomes
generally known to and available for use by the public other than as a result
of Executive’s acts or omissions to act or (ii) is required to be
disclosed pursuant to any applicable law or court order. Executive agrees to
deliver to the Company at the end of the Employment Period, or at any other
time the Company may request in writing, all memoranda, notes, plans, records,
reports and other documents (and copies thereof) relating to the business of
the Company or its Subsidiaries (including, without limitation, all Confidential
Information) that he may then possess or have under his control.

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(b)           Ownership of
Intellectual Property. Executive agrees to make prompt and full disclosure
to the Company or its Subsidiaries, as the case may be, of all ideas,
discoveries, trade secrets, inventions, innovations, improvements,
developments, methods of doing business, processes, programs, designs,
analyses, drawings, reports, data, software, firmware, logos and all similar or
related information  (whether or not
patentable and whether or not reduced to practice) that relate to the Company’s
or its Subsidiaries’ actual or anticipated business, research and development,
or existing or future products or services and that are conceived, developed,
acquired, contributed to, made, or reduced to practice by Executive (either
solely or jointly with others) while employed by the Company or its
Subsidiaries and for a period of one (1) year thereafter (collectively, “Work
Product”). Any copyrightable work falling within the definition of Work
Product shall be deemed a “work made for hire” under the copyright laws of the
United States, and ownership of all rights therein shall vest in the Company or
its Subsidiary. To the extent that any Work Product is not deemed to be a “work
made for hire,” Executive hereby assigns and agrees to assign to the Company or
such Subsidiary all right, title and interest, including without limitation,
the intellectual property rights that Executive may have in and to such Work
Product. Executive shall promptly perform all actions reasonably requested by
the Board (whether during or after the Employment Period) to establish and
confirm the Company’s or such Subsidiary’s ownership (including, without
limitation, providing testimony and executing assignments, consents, powers of
attorney, and other instruments).

(c)           Third Party
Information. Executive understands that the Company and its Subsidiaries
will receive from third parties confidential or proprietary information (“Third
Party Information”) subject to a duty on the Company’s and its Subsidiaries’
part to maintain the confidentiality of such information and to use it only for
certain limited purposes. During the Employment Period and thereafter, and
without in any way limiting the provisions of Section 5(a) above,
Executive will hold Third Party Information in the strictest confidence and
will not disclose to anyone (other than personnel of the Company or its
Subsidiaries who need to know such information in connection with their work
for the Company or such Subsidiaries) or use, except in connection with his
work for the Company or its Subsidiaries, Third Party Information unless
expressly authorized by a member of the Board in writing.

6.             Non-Compete, Non-Solicitation.

(a)           In further
consideration of the compensation to be paid to Executive hereunder, Executive
acknowledges that during the course of his employment with the Company and its
Subsidiaries he shall become familiar with the Company’s trade secrets and with
other Confidential Information concerning the Company and its predecessors and
its Subsidiaries and that his services shall be of special, unique and
extraordinary value to the Company and its Subsidiaries, and therefore,
Executive agrees that, during the Employment Period and for such time as
Executive is receiving any severance payments from the Company, or twelve month
if Executive is not entitled to receive any severance payments hereunder (the “Noncompete
Period”), he shall not directly or indirectly own any interest in, manage,
control, participate in, consult with, render services for, or in any manner
engage in any business competing with the businesses of the Company or its
Subsidiaries, as such businesses exist or are in process during the Employment
Period on the date of the termination or expiration of the Employment Period,
within any geographical area in which the Company or its Subsidiaries engage or
plan to engage

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in such businesses. Nothing herein shall prohibit
Executive from being a passive owner of not more than 2% of the outstanding
stock of any class of a corporation which is publicly traded, so long as
Executive has no active participation in the business of such corporation.

(b)           During the
Noncompete Period, Executive shall not directly or indirectly through another
person or entity (i) induce or attempt to induce any employee of the
Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company
or any Subsidiary and any employee thereof, (ii) hire any person who was
an employee of the Company or any Subsidiary at any time during the Employment
Period or (iii) induce or attempt to induce any customer, supplier,
licensee, licensor, franchisee or other business relation of the Company or any
Subsidiary to cease doing business with the Company or such Subsidiary, or in
any way interfere with the relationship between any such customer, supplier,
licensee or business relation and the Company or any Subsidiary (including,
without limitation, making any negative or disparaging statements or
communications regarding the Company or its Subsidiaries).

(c)           If, at the time of
enforcement of this paragraph 6, a court shall hold that the duration, scope or
area restrictions stated herein are unreasonable under circumstances then
existing, the parties agree that the maximum duration, scope or area reasonable
under such circumstances shall be substituted for the stated duration, scope or
area and that the court shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope and area permitted by law. Executive
acknowledges that the restrictions contained in this paragraph 6 are reasonable
and that he has reviewed the provisions of this Agreement with his legal
counsel.

(d)           In the event of the
breach or a threatened breach by Executive of any of the provisions of this
paragraph 6, the Company would suffer irreparable harm, and in addition and
supplementary to other rights and remedies existing in its favor, the Company
shall be entitled to specific performance and/or injunctive or other equitable
relief from a court of competent jurisdiction in order to enforce or prevent
any violations of the provisions hereof (without posting a bond or other
security). In addition, in the event of an alleged breach or violation by
Executive of this paragraph 6, the Noncompete Period shall be tolled until such
breach or violation has been duly cured. Executive acknowledges that the
restrictions contained in paragraph 6 are reasonable and that he has reviewed
the provisions of this Agreement with his legal counsel.

7.             Executive’s Representations. Executive hereby
represents and warrants to the Company that (i) the execution, delivery
and performance of this Agreement by Executive do not and shall not conflict
with, breach, violate or cause a default under any contract, agreement,
instrument, order, judgment or decree to which Executive is a party or by which
he is bound, (ii) Executive is not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (iii) upon the execution and delivery of this
Agreement by the Company, this Agreement shall be the valid and binding
obligation of Executive, enforceable in accordance with its terms. Executive
hereby acknowledges and represents that he has consulted with independent legal
counsel regarding his rights and obligations under this Agreement and that he
fully understands the terms and conditions contained herein.

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8.             Survival. Paragraphs 4 through 27 shall survive
and continue in full force in accordance with their terms notwithstanding the
expiration or termination of the Employment Period.

9.             Notices. Any notice provided for in this
Agreement shall be in writing and shall be either personally delivered, sent by
reputable overnight courier service or mailed by first class mail, return
receipt requested, to the recipient at the address below indicated:

Notices to Executive:

Willis C. Moore, III

3801 Round Hill Road

Greensboro, N.C. 27408

Notices to the Company:

Polymer Group, Inc.

4055 Faber Place Drive

North Charleston, S.C. 29405

Attn:  General Counsel

With a copy to:

H. Kurt von Moltke, P.C.

Kirkland & Ellis LLP

200 East Randolph Drive

Chicago, IL  60601

or such other address or to the attention of such other
person as the recipient party shall have specified by prior written notice to
the sending party. Any notice under this Agreement shall be deemed to have been
given when so delivered, sent or mailed.

10.           Severability. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be invalid, illegal or unenforceable in any respect under
any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any action in any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision had never been contained herein.

11.           Complete Agreement. This
Agreement, those documents expressly referred to herein and other documents of
even date herewith, including the Change in Control Severance Compensation
Agreement referred to in Section 12, embody the complete agreement and
understanding among the parties and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written
or oral, which may have related to the subject matter hereof in any way.

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12.           Construction with Change in
Control Severance Compensation Agreement. The Company and Executive are
entering into a Change in Control Severance Compensation Agreement dated as of March 24,
2006, concurrently with entering into this Agreement. For the avoidance of
doubt, the Change in Control Severance Compensation Agreement is to be read as
additive to this Agreement solely in the circumstances following a Change in
Control of the Company, so that the provisions of Sections 4 and Section 6
of the Change in Control Severance Compensation Agreement are in addition to
the provisions of Sections 4 and 6 of this Agreement; provided, that
Executive shall only be entitled to receive the higher of the amounts payable
under Section 4(a) of the Change in Control Severance Agreement and
the amounts payable to Executive under Section 4(b) of this Agreement
rather than the sum of the two amounts.

13.           No Strict Construction. The
language used in this Agreement shall be deemed to be the language chosen by
the parties hereto to express their mutual intent, and no rule of strict
construction shall be applied against any party.

14.           Counterparts. This Agreement
may be executed in separate counterparts, each of which is deemed to be an
original and all of which taken together constitute one and the same agreement.

15.           Successors and Assigns. This
Agreement is intended to bind and inure to the benefit of and be enforceable by
Executive, the Company and their respective heirs, successors and assigns, except
that Executive may not assign his rights or delegate his duties or obligations
hereunder without the prior written consent of the Company.

16.           Choice of Law. All issues and
questions concerning the construction, validity, enforcement and interpretation
of this Agreement and the exhibits and schedules hereto shall be governed by,
and construed in accordance with, the laws of the State of South Carolina,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the State of South Carolina or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of South Carolina.

17.           Amendment and Waiver. The
provisions of this Agreement may be amended or waived only with the prior written
consent of the Company (as approved by the Board) and Executive, and no course
of conduct or course of dealing or failure or delay by any party hereto in
enforcing or exercising any of the provisions of this Agreement (including,
without limitation, the Company’s right to terminate the Employment Period for
Cause) shall affect the validity, binding effect or enforceability of this
Agreement or be deemed to be an implied waiver of any provision of this
Agreement.

18.           Insurance. The Company may, at
its discretion, apply for and procure in its own name and for its own benefit
life and/or disability insurance on Executive in any amount or amounts
considered advisable. Executive agrees to cooperate in any medical or other
examination, supply any information and execute and deliver any applications or
other instruments in writing as may be reasonably necessary to obtain and
constitute such insurance.

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Executive hereby
represents that he has no reason to believe that his life is not insurable at
rates now prevailing for healthy men of his age.

19.           Indemnification and Reimbursement
of Payments on Behalf of Executive. The Company and its respective
Subsidiaries shall be entitled to deduct or withhold from any amounts owing
from the Company or any of its Subsidiaries to Executive any federal, state,
local or foreign withholding taxes, excise tax, or employment taxes (“Taxes”)
imposed with respect to Executive’s compensation or other payments from the
Company or any of its Subsidiaries or Executive’s ownership interest in the
Company (including, without limitation, wages, bonuses, dividends, the receipt
or exercise of equity options and/or the receipt or vesting of restricted
equity). In the event the Company or any of its Subsidiaries does not make such
deductions or withholdings, Executive shall indemnify the Company and its
Subsidiaries for any amounts paid with respect to any such Taxes.

20.           Waiver of Jury Trial. AS A
SPECIFICALLY BARGAINED FOR INDUCEMENT FOR EACH OF THE PARTIES HERETO TO ENTER
INTO THIS AGREEMENT (AFTER HAVING THE OPPORTUNITY TO CONSULT WITH COUNSEL), EACH
PARTY HERETO EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR
PROCEEDING RELATING TO OR ARISING IN ANY WAY FROM THIS AGREEMENT OR THE MATTERS
CONTEMPLATED HEREBY.

21.           Executive’s Cooperation. During
the Employment and thereafter, Executive shall cooperate with the Company and
its Subsidiaries in any internal investigation or administrative, regulatory or
judicial proceeding as reasonably requested by the Company (including, without limitation,
Executive being available to the Company upon reasonable notice for interviews
and factual investigations, appearing at the Company’s request to give
testimony without requiring service of a subpoena or other legal process,
volunteering to the Company all pertinent information and turning over to the
Company all relevant documents which are or may come into Executive’s
possession, all at times and on schedules that are reasonably consistent with
Executive’s other permitted activities and commitments). In the event the
Company requires Executive’s cooperation in accordance with this paragraph, the
Company shall reimburse Executive solely for reasonable travel expenses
(including lodging and meals, upon submission of receipts).

22.           Arbitration. Except with
respect to disputes or claims under paragraphs 5 and 6 hereof (which may be
pursued in any court of competent jurisdiction as specified below and with
respect to which each party shall bear the cost of its own attorney’s fees and
expenses except as otherwise required by applicable law), each party hereto
agrees that the arbitration procedure set forth in Exhibit B hereto shall
be the sole and exclusive method for resolving any claim or dispute (“Claim”)
arising out of or relating to the rights and obligations acknowledged and
agreed to in this Agreement and the employment of Executive by the Company and
its Subsidiaries (including, without limitation, disputes and claims regarding
employment discrimination, sexual harassment, termination and discharge),
whether such Claim arose or the facts on which such Claim is based occurred
prior to or after the execution and delivery of adoption of this Agreement. The
parties agree that the result of any arbitration hereunder shall be final,
conclusive and binding on all of the parties. Nothing in this paragraph shall
prohibit a

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party hereto from instituting litigation to enforce
any Final Determination (as defined in Exhibit B hereto). Each party
hereto hereby irrevocably submits to the jurisdiction of any United States
District Court or South Carolina state court of competent jurisdiction sitting
in Charleston County, South Carolina, and agrees that such court shall be the
exclusive forum with respect to disputes and claims under paragraphs 5 and 6
and for the enforcement of any Final Determination, and irrevocably and
unconditionally waives (i) any objection to the laying of venue of any
such action, suit or proceeding in such court or (ii) any argument, claim,
defense or allegation that any such action, suit or proceeding brought in such
court has been brought in an inconvenient forum. Each party hereto irrevocably
consents to service of process by registered mail or personal service and
waives any objection on the grounds of personal jurisdiction, venue or inconvenience
of the forum.

23.           Section and Headings. The
division of this Agreement into sections and the insertion of headings are for
the convenience of reference only and shall not affect the construction or
interpretation of this Agreement. The terms “this Agreement”, “hereof”, “hereunder”
and similar expressions refer to this Agreement and not to any particular
section or other portion hereof. Unless something in the subject matter or
context is inconsistent therewith, references to sections and clauses are to
sections and clauses of this Agreement.

24.           Number. In this Agreement,
words importing the singular number only shall include the plural and vice
versa, and words importing the masculine gender shall include the feminine and
neuter genders and vice versa, and words importing persons shall include
individuals, partnerships, associations, trusts, unincorporated organizations
and corporations.

25.           Independent Advice. The
Company and the Executive acknowledge and agree that they have each obtained
independent legal advice in connection with this Agreement and they further
acknowledge and agree that they have read, understand and agree with all of the
terms hereof and that they are executing this Agreement voluntarily and in good
faith.

26.           Copy of Agreement. The
Executive hereby acknowledges receipt of a copy of this Agreement duly signed
by the Company.

27.           Termination Prior to Effective
Date. In the event of a termination of employment of the Executive prior to
the Effective Date, this Agreement shall be terminated and shall have no
further force or effect.

28.           Currency. All dollar amounts
set forth or referred to in this Agreement refer to U.S. currency.

29.           Effectiveness. Once this
Agreement has been duly executed and delivered by each party hereto, all of the
provisions shall become effective as of April 1, 2006, as if this
Agreement had been entered into at such time, including the compensation
provisions contained in Section 3.

    *   
*    *    *

 11
 

 

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date first written above.

	
  :

  	
  Polymer Group, Inc.

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Its:

  	
   

  
	
   

  	
   

  
	
   

  	
  Willis C. Moore, III

  

 

 12

 

Exhibit A

GENERAL RELEASE

I, Willis C. Moore, III, in  consideration of and subject to the
performance by Polymer Group, Inc., a Delaware corporation (together with
its subsidiaries, the “Company”), of its obligations under the Employment
Agreement, entered into on March 24, 2006, (the “Agreement”), do
hereby release and forever discharge as of the date hereof the Company and its
affiliates and all present and former directors, officers, agents,
representatives, employees, successors and assigns of the Company and its
affiliates and the Company’s direct or indirect owners (collectively, the “Released
Parties”) to the extent provided below.

1.                                       I
understand that any payments or benefits paid or granted to me under paragraph
4(b) of the Agreement represent, in part, consideration for signing this
General Release and are not salary, wages or benefits to which I was already
entitled. I understand and agree that I will not receive the payments and
benefits specified in paragraph 4(b) of the Agreement unless I execute
this General Release and do not revoke this General Release within the time
period permitted hereafter or breach this General Release. Such payments and
benefits will not be considered compensation for purposes of any employee
benefit plan, program, policy or arrangement maintained or hereafter
established by the Company or its affiliates. I also acknowledge and represent
that I have received all payments and benefits that I am entitled to receive
(as of the date hereof) by virtue of any employment by the Company.

2.                                       Except
as provided in paragraph 4 below and except for the provisions of my Employment
Agreement which expressly survive the termination of my employment with the
Company, I knowingly and voluntarily (for myself, my heirs, executors, administrators
and assigns) release and forever discharge the Company and the other Released
Parties from any and all claims, suits, controversies, actions, causes of
action, cross-claims, counter-claims, demands, debts, compensatory damages,
liquidated damages, punitive or exemplary damages, other damages, claims for
costs and attorneys’ fees, or liabilities of any nature whatsoever in law and
in equity, existing or hereafter arising, based in whole or in part upon any
act or omission, transaction, agreement, event or other occurrence taking place
from the beginning of time through the date this General Release becomes
effective and enforceable and whether known or unknown, suspected, or claimed
against the Company or any of the Released Parties which I, my spouse, or any
of my heirs, executors, administrators or assigns, may have, which arise out of
or are connected with my employment with, or my separation or termination from,
the Company (including, but not limited to, any allegation, claim or violation,
arising under: Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as
amended (including the Older Workers Benefit Protection Act); the Equal Pay Act
of 1963, as amended; the Americans with Disabilities Act of 1990; the Family
and Medical Leave Act of 1993; the Worker Adjustment Retraining and
Notification Act; the Employee Retirement Income Security Act of 1974; any
applicable Executive Order Programs; the Fair Labor Standards Act; or their
state or local counterparts; the South Carolina Human Affairs Law, S.C. Code

 ExA-1
 

 

sections 1-13-10
et seq.; S.C. Code sections 41-10-10 et seq. or under any other
federal, state or local civil or human rights law, or under any other local,
state, or federal law, regulation or ordinance; or under any public policy,
contract or tort, or under common law; or arising under any policies, practices
or procedures of the Company; or any claim for wrongful discharge, breach of
contract, infliction of emotional distress, defamation; or any claim for costs,
fees, or other expenses, including attorneys’ fees incurred in these matters)
(all of the foregoing collectively referred to herein as the “Claims”).

3.                                       I
represent that I have made no assignment or transfer of any right, claim,
demand, cause of action, or other matter covered by paragraph 2 above.

4.                                       I
agree that this General Release does not waive or release any rights or claims
that I may have under the Age Discrimination in Employment Act of 1967 which
arise after the date I execute this General Release. I acknowledge and agree
that my separation from employment with the Company in compliance with the
terms of the Agreement shall not serve as the basis for any claim or action
(including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967).

5.                                       In
signing this General Release, I acknowledge and intend that it shall be
effective as a bar to each and every one of the Claims hereinabove mentioned or
implied. I expressly consent that this General Release shall be given full
force and effect according to each and all of its express terms and provisions,
including those relating to unknown and unsuspected Claims (notwithstanding any
state statute that expressly limits the effectiveness of a general release of
unknown, unsuspected and unanticipated Claims), if any, as well as those
relating to any other Claims hereinabove mentioned or implied. I acknowledge
and agree that this waiver is an essential and material term of this General Release
and that without such waiver the Company would not have agreed to the terms of
the Agreement. I further agree that in the event I should bring a Claim seeking
damages against the Company, or in the event I should seek to recover against
the Company in any Claim brought by a governmental agency on my behalf, this
General Release shall serve as a complete defense to such Claims. I further
agree that I am not aware of any pending charge or complaint of the type
described in paragraph 2 as of the execution of this General Release.

6.                                       I
agree that neither this General Release, nor the furnishing of the
consideration for this General Release, shall be deemed or construed at any
time to be an admission by the Company, any Released Party or myself of any
improper or unlawful conduct.

7.                                       I
agree that I will forfeit all amounts payable by the Company pursuant to the
Agreement if I challenge the validity of this General Release. I also agree
that if I violate this General Release by suing the Company or the other Released
Parties, I will pay all costs and expenses of defending against the suit
incurred by the Released Parties, including reasonable attorneys’ fees, and
return all payments received by me pursuant to the Agreement.

 ExA-2
 

 

8.                                       I
agree that this General Release is confidential and agree not to disclose any
information regarding the terms of this General Release, except to my immediate
family and any tax, legal or other counsel I have consulted regarding the
meaning or effect hereof or as required by law, and I will instruct each of the
foregoing not to disclose the same to anyone.

9.                                       Any
non-disclosure provision in this General Release does not prohibit or restrict
me (or my attorney) from responding to any inquiry about this General Release
or its underlying facts and circumstances by the Securities and Exchange
Commission (SEC), the National Association of Securities Dealers, Inc.
(NASD), any other self-regulatory organization or governmental entity.

10.                                 I
agree to reasonably cooperate with the Company in any internal investigation or
administrative, regulatory, or judicial proceeding. I understand and agree that
my cooperation may include, but not be limited to, making myself available to
the Company upon reasonable notice for interviews and factual investigations;
appearing at the Company’s request to give testimony without requiring service
of a subpoena or other legal process; volunteering to the Company pertinent
information; and turning over to the Company all relevant documents which are
or may come into my possession all at times and on schedules that are
reasonably consistent with my other permitted activities and commitments. I
understand that in the event the Company asks for my cooperation in accordance
with this provision, the Company will reimburse me solely for reasonable travel
expenses, including lodging and meals, upon my submission of receipts.

11.                                 I
agree not to disparage the Company, its past and present investors, officers,
directors or employees or its affiliates and to keep all confidential and
proprietary information about the past or present business affairs of the
Company and its affiliates confidential unless a prior written release from the
Company is obtained. I further agree that as of the date hereof, I have
returned to the Company any and all property, tangible or intangible, relating
to its business, which I possessed or had control over at any time (including,
but not limited to, company-provided credit cards, building or office access
cards, keys, computer equipment, manuals, files, documents, records, software,
customer data base and other data) and that I shall not retain any copies,
compilations, extracts, excerpts, summaries or other notes of any such manuals,
files, documents, records, software, customer data base or other data.

12.                                 Notwithstanding
anything in this General Release to the contrary, this General Release shall
not relinquish, diminish, or in any way affect any rights or claims arising out
of any breach by the Company or by any Released Party of the Agreement after the
date hereof.

13.                                 Whenever
possible, each provision of this General Release shall be interpreted in, such
manner as to be effective and valid under applicable law, but if any provision
of this General Release is held to be invalid, illegal or unenforceable in any
respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other provision
or any other jurisdiction, but this General Release

 ExA-3
 

 

shall be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.

BY SIGNING THIS GENERAL RELEASE, I REPRESENT AND AGREE
THAT:

(a)                                  I
HAVE READ IT CAREFULLY;

(b)                                 I
UNDERSTAND ALL OF ITS TERMS AND KNOW THAT I AM GIVING UP IMPORTANT RIGHTS,
INCLUDING BUT NOT LIMITED TO, RIGHTS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS AMENDED;
THE EQUAL PAY ACT OF 1963, THE AMERICANS WITH DISABILITIES ACT OF 1990; AND THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED;

(c)                                  I
VOLUNTARILY CONSENT TO EVERYTHING IN IT;

(d)                                 I
HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING IT AND I HAVE
DONE SO OR, AFTER CAREFUL READING AND CONSIDERATION I HAVE CHOSEN NOT TO DO SO
OF MY OWN VOLITION;

(e)                                  I
HAVE HAD AT LEAST 21 DAYS FROM THE DATE OF MY RECEIPT OF THIS RELEASE
SUBSTANTIALLY IN ITS FINAL FORM ON                 ,       TO
CONSIDER IT AND THE CHANGES MADE SINCE THE                   ,       VERSION OF THIS RELEASE ARE NOT MATERIAL AND
WILL NOT RESTART THE REQUIRED 21-DAY PERIOD;

(f)                                    THE
CHANGES TO THE AGREEMENT SINCE                    ,       EITHER ARE NOT MATERIAL OR WERE MADE AT MY
REQUEST.

(g)                                 I
UNDERSTAND THAT I HAVE SEVEN DAYS AFTER THE EXECUTION OF THIS RELEASE TO REVOKE
IT AND THAT THIS RELEASE SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE
REVOCATION PERIOD HAS EXPIRED;

(h)                                 I
HAVE SIGNED THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY AND WITH THE ADVICE
OF ANY COUNSEL RETAINED TO ADVISE ME WITH RESPECT TO IT; AND

(i)                                     I
AGREE THAT THE PROVISIONS OF THIS GENERAL RELEASE MAY NOT BE AMENDED,
WAIVED, CHANGED OR MODIFIED EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY AN
AUTHORIZED REPRESENTATIVE OF THE COMPANY AND BY ME.

	
  DATE:

  	
   

  	
   

  	
   

  

 

 ExA-4

 

Exhibit B

ARBITRATION PROCEDURE

1.             Notice of Claim. A party
asserting a Claim (the “Claimant”) shall deliver written notice to each
party against whom the Claim is asserted (collectively, the “Opposing Party”),
with a copy to the persons required to receive copies of notices under the
Agreement (the “Additional Notice Parties”), specifying the nature of
the Claim and requesting a meeting to resolve same. The Additional Notice
Parties shall be given reasonable notice of and invited and permitted to attend
any such meeting. If no resolution is reached within 10 business days after
delivery of such notice, the Claimant or the Opposing Party may, within 45 days
after giving such notice, invoke the arbitration procedure provided herein by
delivering to each Opposing Party and the Additional Notice Parties a notice of
arbitration which shall specify the Claim as to which arbitration is sought,
the nature of the Claim, the basis for the Claim and the nature and amount of
any damages or other compensation or relief sought (a “Notice of Arbitration”).
Each party agrees that no punitive damages may be sought or recovered in any
arbitration, judicial proceeding or otherwise. Failure to file a Notice of
Arbitration within 45 days shall constitute a waiver of any right to relief for
the matters asserted in the notice of Claim. Any Claim shall be forever barred,
and no relief may be sought therefor, if written notice of such Claim is not
made as provided above within one year of the date such Claim accrues.

2.             Selection of Arbitrator. Within
20 business days after receipt of the Notice of Arbitration, the Executive and
a duly authorized representative of the Company shall confer, whether in
person, by telephone or in writing, and attempt to agree on an arbitrator to
hear and decide the Claim. If the Executive and the Board cannot agree on an
arbitrator within ten business days, then they shall request the American
Arbitration Association (the “AAA”) in Charleston, South Carolina to
appoint an arbitrator experienced in the area of dispute who does not have an
ongoing business relationship with any of the parties to the dispute. If the
arbitrator selected informs the parties he cannot hear and resolve the Claim
within the time-frame specified below, the Executive and the Board shall
request the appointment of another arbitrator by the AAA subject to the same
requirements.

3.             Arbitration Procedure. The
following procedures shall govern the conduct of any arbitration under this
section. All procedural matters relating to the conduct of the arbitration
other than those specified below shall be discussed among counsel for the
parties and the arbitrator. Subject to any agreement of the parties, the
arbitrator shall determine all procedural matters not specified herein.

(a)           Within
30 days after the delivery of a Notice of Arbitration, each party shall afford
the other, or its counsel, with reasonable access to documents relating
directly to the issues raised in the Notice of Arbitration. All documents
produced and all copies thereof shall be maintained as strictly confidential,
shall be used for no purpose other than the arbitration hereunder, and shall be
returned to the producing party upon completion of the arbitration. There shall
be no other discovery except that, if a reasonable need is shown, limited
depositions may be allowed in the discretion of the arbitrator, it being the
expressed intention and agreement of each

 ExB-1
 

 

party to have the arbitration proceedings conducted and resolved as
expeditiously, economically and fairly as reasonably practicable, and with the
maximum degree of confidentiality.

 

(b)           All
written communications regarding the proceeding sent to the arbitrator shall be
sent simultaneously to each party or its counsel, with a copy to the Additional
Notice Parties. Oral communications between any of the parties or their counsel
and the arbitrator shall be conducted only when all parties or their counsel
are present and participating in the conversation.

(c)           Within
20 days after selection of the arbitrator, the Claimant shall submit to the
arbitrator a copy of the Notice of Arbitration, along with a supporting
memorandum and any exhibits or other documents supporting the Claim.

(d)           Within
20 days after receipt of the Claimant’s submission, the Opposing Party shall
submit to the arbitrator a memorandum supporting its position and any exhibits
or other supporting documents. If the Opposing Party fails to respond to any of
the issues raised by the Claimant within 20 days of receipt of the Claimant’s
submission, then the arbitrator may find for the Claimant on any such issue and
bar any subsequent consideration of the matter.

(e)           Within
20 days after receipt of the Opposing Party’s response, the Claimant may submit
to the arbitrator a reply to the Opposing Party’s response, or notification
that no reply is forthcoming.

(f)            Within
10 days after the last submission as provided above, the arbitrator shall
confer with the parties to select the date of the hearing on the issues raised
by the Claim. Scheduling of the hearing shall be within the sole discretion of
the arbitrator, but in no event more than 30 days after the last submission by
the parties, and shall take place within 50 miles of the corporate headquarters
of the Company at a place selected by the arbitrator or such other place as is
mutually agreed. Both parties shall be granted substantially equal time to
present evidence at the hearing. The hearing shall not exceed one business day,
except for good cause shown.

(g)           Within
30 days after the conclusion of the hearing, the arbitrator shall issue a
written decision to be delivered to both parties and the Additional Notice
Parties (the “Final Determination”). The Final Determination shall address each
issue disputed by the parties, state the arbitrator’s findings and reasons therefor,
and state the nature and amount of any damages, compensation or other relief
awarded.

(h)           The
award rendered by the arbitrator shall be final and non-appealable, except as
otherwise provided under the Federal Arbitration Act, and judgment may be entered
upon it in accordance with applicable law in such court as has jurisdiction
thereof.

4.             Costs of Arbitration. Each
party shall bear its own costs of conducting the arbitration, and
administrative fees shall be shared equally among the parties.

5.             Satisfaction of Award. If
any party fails to pay the amount of the award, if any, assessed against it
within 30 days after the delivery to such party of the Final Determination,

 ExB-2
 

 

the unpaid amount shall bear interest from the date of such delivery at
the lesser of (i) prime lending rate announced by Citibank N.A. plus three
hundred basis points and (ii) the maximum rate permitted by applicable
usury laws. In addition, such party shall promptly reimburse the other party
for any and all costs or expenses of any nature or kind whatsoever (including
attorneys’ fees) reasonably incurred in seeking to collect such award or to
enforce any Final Determination.

 

6.             Confidentiality of Proceedings.
The parties hereto agree that all of the arbitration proceedings provided for
herein, including any notice of claim, the Notice of Arbitration, the
submissions of the parties, and the Final Determination issued by the
arbitrator, shall be confidential and shall not be disclosed at any time to any
person other than the parties, their representatives, the arbitrator and the
Additional Notice Parties; provided, however, that this provision shall not
prevent the party prevailing in the arbitration from submitting the Final
Determination to a court for the purpose of enforcing the award, subject to
comparable confidentiality protections if the court agrees; and further
provided that the foregoing shall not prohibit disclosure to the minimum extent
reasonably necessary to comply with (i) applicable law (or requirement
having the force of law), court order, judgment or decree, including, without
limitation, disclosures which may be required pursuant to applicable securities
laws, and (ii) the terms of contractual arrangements (such as financing
arrangements) to which the Company or any Additional Notice Party may be
subject so long as such contractual arrangements were not entered into for the
primary purpose of permitting disclosure which would otherwise be prohibited
hereunder.

 

 ExB-3Exhibit
10.3

February 24,
2006

[Name and Address]

 

Re:  Change in Control
Severance Compensation Agreement

Dear  ________:

 

The board of directors (the “Board”) of Polymer Group, Inc.
(the “Company”) has determined that it is in the best interests of the Company
and its shareholders to assure the continued dedication to the Company of
certain senior management personnel, notwithstanding any possibility, threat or
occurrence of a Change in Control of the Company (as defined below). Accordingly,
in order to encourage your continued attention and dedication to your assigned
duties regardless of any such possibility, threat or occurrence, the Board has
authorized the Company to enter into this “Change in Control Severance
Compensation Agreement” (the “Agreement”) in order to provide you with certain
compensation and other benefits in the event that your employment with the
Company is terminated as a result of a Change in Control of the Company.

The terms and conditions of this Agreement are as
follows:

1.     Term of the Agreement.
(A) The Term of this Agreement shall commence on the date executed by the
Company below and shall end on December 31, 2007; subject to any extension under Paragraph 1(B) below. In
addition, the Term of this Agreement shall automatically end upon the
occurrence of any of the following:

(i)            Your death or receipt of a Notice of Termination due to
Disability;

(ii)           Your attainment of your Retirement Date; or

(iii)           A determination by the Board that you are no longer
eligible to receive the benefits set forth in this Agreement in connection
with your Termination prior to a Change in Control of the Company due
to performance-related matters and your receipt of notice of any such
determination; provided, that such a determination shall have no effect
if made in anticipation of a Change in Control of the Company and for the sole
purpose of avoiding application of this Agreement to your Termination, in
which case your Termination shall be deemed to have been a Termination
without Cause pursuant to this Agreement and, if the Change in Control of
the Company occurs during the Term and within twelve (12) months of
your Termination, you shall be entitled to the benefits pursuant to
Paragraph 4 payable on the later of (i) the first business day of the
calendar year following the calendar year in which the Termination occurs and (ii) five
(5) days following the date of the Change in Control of the

 

Company, but in any event no later than the last day
of the calendar year following the calendar year in which the Termination
occurs.

(B)           In
the event of a Change in Control of the Company, subject to Paragraph 1(A), the
Term of this Agreement shall be automatically extended to the earlier of:  (i) the date that is one year from the
date such Change in Control of the Company occurred; or (ii) the
occurrence of an event described in Paragraph 1(A)(i) or 1(A)(ii) above.

2.     Change in Control of the
Company. For purposes of this Agreement, a “Change in Control of the
Company” shall mean any of the following events:

(A)          if
any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of
the Exchange Act or any successors thereto, other than an Exempt Person, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act or any successor thereto), directly or indirectly, of securities
of the Company representing (A) 50% or more of the combined voting power
of the Company’s then outstanding securities or (B) 30% or more of the
combined voting power of the Company’s then outstanding securities if at such
time, such person or group also beneficially owns more of the combined voting
power of the Company’s then outstanding securities than an Exempt Person; or

(B)           during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new directors whose election by the Board
or nomination for election by the Company’s stockholders was approved by at
least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election was previously so
approved, cease for any reason to constitute a majority thereof; or

(C)           the
consummation of a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation (A) which would result
in all or a portion of the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 50% of the combined voting power of the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation or (B) by which the corporate existence of the Company is
not affected and following which the Company’s chief executive officer and
directors retain their positions with the Company (and constitute at least a
majority of the Board); or

(D)          the
consummation of a plan of complete liquidation of the Company or consummation
of the sale or disposition by the Company of all or substantially all the
Company’s assets, other than a sale to an Exempt Person.

(E)           For
purposes of this Agreement, the term (i) “Exempt Person” means (a) MatlinPatterson
Global Opportunities Fund L.P., MatlinPatterson Global Opportunities Partners,
L.P., MatlinPatterson Global Opportunities Partners B, L.P., MatlinPatterson
LLC, MatlinPatterson Asset Management LLC, MatlinPatterson Global Advisers LLC,
MatlinPatterson Global Opportunities Partners (Bermuda), L.P., MatlinPatterson
Global Partners

 2
 

 

LLC and any of their respective affiliated entities, (b) any
person, entity or group under the control of any party included in clause (a),
or (c) any employee benefit plan of the Company or a trustee or other
administrator or fiduciary holding securities under an employee benefit plan of
the Company, and (ii) “MP and its Affiliates” shall mean MatlinPatterson
Global Opportunities Fund L.P., MatlinPatterson Global Opportunities Partners,
L.P., MatlinPatterson Global Opportunities Partners B, L.P., MatlinPatterson
LLC, MatlinPatterson Asset Management LLC, 
MatlinPatterson Global Advisers LLC, MatlinPatterson Global
Opportunities Partners (Bermuda), L.P., MatlinPatterson Global Partners LLC and
any of their respective affiliated entities.

3.     Termination of
Employment Following Change in Control of the Company.

(A)          Termination.
If a Change in Control of the Company occurs, you shall be entitled, upon the
subsequent termination of your employment (but only if the “termination of employment”
also constitutes a “separation from service” as defined in Proposed Treasury
Regulation §1.409A-1(h), as amended or supplemented from time to time)
with the Company (“Termination”), to the benefits described in Paragraph 4
below, unless such Termination is:  (i) by
you other than for Good Reason; (ii) by the Company for Cause or because
of your Disability; or (iii) because of your death or attainment of your
Retirement Date. Any Termination (except a Termination resulting from your
death) shall be made by written Notice of Termination from the party initiating
such Termination to the other party to this Agreement.

(B)           Notice
of Termination. A Notice of Termination shall mean a written document
stating the specific provision in this Agreement upon which a Termination is
based and otherwise setting forth the facts and circumstances which provide the
basis for a Termination.

(C)           Date
of Termination. The Date of Termination shall mean:  (i) if the Termination occurs as a
result of Disability, thirty (30) days after a Notice of Termination is given; (ii) if
the Termination occurs for Good Reason, the date specified in the Notice of
Termination; and (iii) if the Termination occurs for any other reason, the
date on which the Notice of Termination is given.

(D)          Good
Reason. A Termination for Good Reason shall mean a Termination as a result
of:

(i)            The assignment to you, without your express written
consent, of any duties reasonably inconsistent with your position, duties,
responsibilities and status with the Company immediately prior to a Change in
Control of the Company, or a change in your titles or offices (if any) in
effect immediately prior to a Change in Control of the Company, or any removal
of you from, or any failure to reelect you to, any of such positions, except in
connection with your Termination for Cause, death, Disability, or as a result
of your attainment of your Retirement Date; or

 3
 

 

(ii)           A reduction by the Company in your base salary as in
effect on the date hereof, or as the same may be increased from time to time
thereafter; or

(iii)          The failure of the Company to continue in effect any
material compensation, welfare or benefit plan in which you are participating
at the time of a Change in Control of the Company, without substituting
therefor plans providing you with substantially similar benefits at
substantially the same cost to you; or the taking of any action by the Company
which would adversely affect your participation in or materially reduce your
benefits or materially increase the cost to you under any of such plans or
deprive you of any material fringe benefit enjoyed by you at the time of the
Change in Control of the Company; or

(iv)          Any purported Termination for Cause or Disability without
grounds therefor; or

(v)           A
requirement that you relocate your principal residence at least 100 miles from
that in effect prior to the Change in Control to continue to provide services
to the Company.

(E)           Cause.
A Termination for Cause shall mean a Termination as a result of one or more of
the following:  (i) a material
breach of this Agreement by you; provided, that if such breach is capable of
being cured, you shall be provided 15 days notice to cure such breach, (ii) a
breach of your duty of loyalty to the Company or any of its Subsidiaries or any
act of dishonesty or fraud with respect to the Company or any of its
Subsidiaries, (iii) the commission by you of a felony, a crime involving
moral turpitude or other act or omission causing material harm to the standing
and reputation of the Company and its Subsidiaries, (iv) reporting to work
under the influence of alcohol or illegal drugs, the use of illegal drugs
(whether or not at the workplace) or other repeated conduct causing the Company
or any of its Subsidiaries substantial public disgrace or disrepute or economic
harm, or (v) any act or omission aiding or abetting a competitor, supplier
or customer of the Company or any of its Subsidiaries to the material
disadvantage or detriment of the Company and its Subsidiaries. The burden for
establishing the validity of any termination for Cause shall rest upon the
Company. No Termination shall be deemed to be for Cause unless and until there
shall have been delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of
the Board called and held for such purpose (after reasonable notice is provided
to you and you are given an opportunity, together with counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board, you
are guilty of the conduct described above, and specifying the particulars
thereof in reasonable detail.

(F)           Disability.
A “Disability” shall mean that, as a result of your incapacity due to physical
or mental illness, you shall have been unable to perform your duties with the
Company for a period of six (6) months, and have no prospect of returning
to employment with the Company within an additional six (6) months; provided,
that the Company shall have made a reasonable accommodation of any such
incapacity pursuant to, and shall otherwise have complied in all respects with,
the provisions of the Americans with Disabilities Act of 1990 or any successors
thereto.

 4
 

 

(G)           Retirement
Date. Your “Retirement Date” shall mean the date on which you attain age 70-1/2.

4.     Benefits. Subject in each case to Paragraph 3(A),

(A)          The
Company shall pay to you in a lump sum payment within five (5) business days following the
Date of Termination, an amount that is [twelve (12)] [twenty-four (24)] times the sum of (i) your
monthly base salary at the rate in effect at the time a Notice of Termination
is given and (ii) the greater of
(x) your annual bonus earned for the most-recently completed fiscal year
of the Company and (y) your annual target bonus for the year which
includes the Date of Termination; provided, that you shall have
executed a reasonable and customary release in favor of the Company and its
subsidiaries releasing all claims related to or arising out of the termination
of your employment.

(B)           In
addition to any rights you may have under the 2005 Employee Restricted Stock
Plan, all of your then-unvested shares of Restricted Stock issued under such
Plan shall vest as
of the Date of Termination and, 90 days thereafter, you shall be free to
sell such shares without restriction.

(C)           The
Company shall maintain in full force and effect, for a period of twelve (12)
months following your Date of Termination, all life insurance and medical
insurance plans and programs (the “Company Programs”) in which you are entitled
to participate immediately prior to the Date of Termination; provided
that your continued participation is possible under the terms and provisions of
such Company Programs. In the event that your participation in any Company
Program is not permitted under the terms and provisions thereof, the Company
will use its commercially reasonable efforts to provide you with, or arrange
coverage for you which is substantially similar to (including comparable
terms), the coverage that you would have received under the applicable Company
Program. Notwithstanding the foregoing, the Company’s obligations under this
Paragraph 4(C) shall terminate with respect to any Company Program on the
date that you first become eligible, after your Date of Termination, for the
same type of coverage under another employer’s plan.

(D)          The
Company shall pay all reasonable legal fees and expenses incurred by you as a
result of your Termination (including all such reasonable fees and expenses, if
any, incurred in contesting or disputing your Termination or in seeking to
obtain or enforce any rights or benefits provided by this Agreement).

(E)           The
Company shall pay the costs of reasonable outplacement services until you are
employed on a full-time basis; provided that payment by the Company of
such costs shall not exceed $15,000.

(F)           You
shall not be required to mitigate the amount of any payment provided for in
this Paragraph 4 by seeking other employment or otherwise, nor shall the amount
of any payment provided for in this Paragraph 4 be reduced by any compensation
earned by you as a

 5
 

 

result of employment by another employer after the
Date of Termination, or otherwise, except as specifically provided in Paragraph
4(C).

(G)           Notwithstanding the above and unless exempt under Proposed
Treasury Regulation §1.409A-1(b)(9), if you are a “specified employee”
within the meaning of Code §416(i) and Proposed Treasury Regulation
§1.409A-1(i), no payments may be made under this Agreement before the
date that is six months after the Termination (or, if earlier, the date of
death of the specified employee). In such case, all payments to which you are
entitled during the first six months shall be accumulated and paid on the first
date of the seventh month following Termination.

(H)          If it is determined that any payments hereunder, either
separately or in conjunction with any other payments, benefits and entitlements
received by you hereunder, would constitute an “excess parachute payment”
within the meaning of Section 280G of the Internal Revenue Code of 1986,
as amended (the “Code”), and thereby be subject to the excise tax imposed by Section 4999
of the Code (the “Excise Tax”), then in such event, the Company shall be
obligated to pay to you promptly following such determination and upon notice
thereof a “gross-up” payment in an amount equal to the amount of such Excise
Tax, plus all federal and state income or other taxes with respect to the
payment of the amount of such Excise Tax, including all such taxes (including
any additional Excise Tax) with respect to any such gross-up payment.

5.             Confidential
Information.

(A)          Obligation
to Maintain Confidentiality. You acknowledge that the continued success of
the Company and its Subsidiaries, depends upon the use and protection of a
large body of confidential and proprietary information. All of such
confidential and proprietary information existing prior hereto, now existing or
to be developed in the future will be referred to in this Agreement as “Confidential
Information.”  Confidential
Information will be interpreted as broadly as possible to include all
information of any sort (whether merely remembered or embodied in a tangible or
intangible form) that is (i) related to the Company’s or its Subsidiaries’
current or potential business and (ii) is not generally or publicly known.
Confidential Information includes, without specific limitation, the
information, observations and data obtained by you during the course of your
performance under this Agreement concerning the business and affairs of the
Company and its Subsidiaries, information concerning acquisition opportunities
in or reasonably related to the Company’s or it Subsidiaries’ business or
industry of which you become aware during your employment, the persons or
entities that are current, former or prospective suppliers or customers of any
one or more of them during your course of performance under this Agreement, as
well as development, transition and transformation plans, methodologies and
methods of doing business, strategic, marketing and expansion plans, including
plans regarding planned and potential sales, financial and business plans,
employee lists and telephone numbers, locations of sales representatives, new
and existing programs and services, prices and terms, customer service,
integration processes, requirements and costs of providing service, support and
equipment. Therefore, you agree that you shall not disclose to any unauthorized
person or use for your own account any of such Confidential Information

 6
 

 

without both Board’s prior written consent, unless and
to the extent that any Confidential Information (i) becomes generally
known to and available for use by the public other than as a result of your
acts or omissions to act or (ii) is required to be disclosed pursuant to
any applicable law or court order. You agree to deliver to the Company at the
end of your employment, or at
any other time the Company may request in writing, all memoranda, notes, plans,
records, reports and other documents (and copies thereof) relating to the
business of the Company or its Subsidiaries (including, without limitation, all
Confidential Information) that you may then possess or have under your control.

(B)           Ownership
of Intellectual Property. You agree to make prompt and full disclosure to
the Company or its Subsidiaries, as the case may be, of all ideas, discoveries,
trade secrets, inventions, innovations, improvements, developments, methods of
doing business, processes, programs, designs, analyses, drawings, reports,
data, software, firmware, logos and all similar or related information (whether
or not patentable and whether or not reduced to practice) that relate to the
Company’s or its Subsidiaries’ actual or anticipated business, research and
development, or existing or future products or services and that are conceived,
developed, acquired, contributed to, made, or reduced to practice by you
(either solely or jointly with others) while employed by the Company or it
Subsidiaries and for a period of one (1) year thereafter (collectively, “Work
Product”). Any copyrightable work falling within the definition of Work
Product shall be deemed a “work made for hire” under the copyright laws of the
United States, and ownership of all right therein shall vest in the Company or
its Subsidiary. To the extent that any Work Product is not deemed to be a “work
made for hire,” you hereby assign and agree to assign to the Company or such
Subsidiary all right, title and interest, including without limitation, the
intellectual property rights that you may have in and to such Work Product. You
shall promptly perform all actions reasonably requested by the Board (whether
during or after your
employment) to establish and confirm the Company’s or such Subsidiary’s
ownership (including, without limitation, providing testimony and executing
assignments, consents, powers of attorney, and other instruments).

(C)           Third
Party Information. You understand that the Company and its Subsidiaries
will receive from third parties confidential or proprietary information (“Third
Party Information”) subject to a duty on the Company’s and its Subsidiaries’
part to maintain the confidentiality of such information and to use it only for
certain limited purposes. During your employment and thereafter, and without in any way limiting
the provisions of Paragraph 5(A) above, you will hold Third Party
Information in the strictest confidence and will not disclose to anyone (other
than personnel of the Company or its Subsidiaries who need to know such
information in connection with their work for the Company or such Subsidiaries)
or use, except in connection with his work for the Company or its Subsidiaries,
Third Party Information unless expressly authorized by a member of the Board in
writing.

6.     Non-Compete,
Non-Solicitation.

(A)          In
further consideration of the compensation to be paid to you hereunder, whether
under Article 4 or Paragraph 6(E), you acknowledge that during the course
of your employment with the Company and its Subsidiaries you shall become
familiar with the

 7
 

 

Company’s trade secrets and with other Confidential
Information concerning the Company and its predecessors and its Subsidiaries
and that your services shall be of special, unique and extraordinary value to
the Company and its Subsidiaries, and therefore, you agree that, during the
time you are employed by the Company and for a period of time equal to [twelve (12)] [twenty-four (24)] months thereafter (the “Noncompete
Period”), you shall not directly or indirectly own any interest in, manage,
control, participate in, consult with, render services for, or in any manner
engage in any business competing with the businesses of the Company or its
Subsidiaries, as such businesses exist or are in process during your employment on the date of the
termination or expiration of your employment,
within any geographical area in which the Company or its Subsidiaries engage or
plan to engage in such businesses. Nothing herein shall prohibit you from being
a passive owner of not more than 2% of the outstanding stock of any class of a
corporation which is publicly traded, so long as you have no active
participation in the business of such corporation.

(B)           During
the Noncompete Period, you shall not directly or indirectly through another
person or entity (i) induce or attempt to induce any employee of the
Company or any Subsidiary to leave the employ of the Company or such
Subsidiary, or in any way interfere with the relationship between the Company
or any Subsidiary and any employee thereof, (ii) hire any person who was
an employee of the Company or any Subsidiary at any time during your employment or (iii) induce
or attempt to induce any customer, supplier, licensee, licensor, franchisee or
other business relation of the Company or any Subsidiary to cease doing
business with the Company or such Subsidiary, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and the Company or any Subsidiary (including, without limitation, making any
negative or disparaging statements or communications regarding the Company or
its Subsidiaries).

(C)           If,
at the time of enforcement of this Paragraph 6, a court shall hold that the duration, scope or area
restrictions stated herein are unreasonable under circumstances then existing,
the parties agree that the maximum duration, scope or area reasonable under
such circumstances shall be substituted for the stated duration, scope or area
and that the court shall be allowed to revise the restrictions contained herein
to cover the maximum period, scope and area permitted by law.

(D)          In
the event of the breach or a threatened breach by you of any of the provisions
of this Paragraph
6, the Company would suffer irreparable harm, and in addition and supplementary
to other rights and remedies existing in its favor, the Company shall be
entitled to specific performance and/or injunctive or other equitable relief
from a court of competent jurisdiction in order to enforce or prevent any
violations of the provisions hereof (without posting a bond or other security).
In addition, in the event of an alleged breach or violation by you of this Paragraph 6, the Noncompete Period
shall be tolled until such breach or violation has been duly cured. You
acknowledge that the restrictions contained in Paragraph 6 are reasonable and that you have been given the opportunity to review
the provisions of this Agreement with legal counsel.

 8
 

 

(E)           Absent
a Change in Control of the Company, you shall be entitled, upon your
Termination (unless such Termination is (i) by you other than for Good
Reason; (ii) by the Company for Cause or because of your Disability; or (iii) because
of your death or attainment of your Retirement Date), to those Company benefits
to which you would otherwise be entitled; provided that you shall receive an
amount of severance pay equal to no less than the amount set forth in Paragraph
4(A); provided further that the benefits set forth in this Paragraph 6(E) will
not be available to you if you have been offered the opportunity to relocate to
the Company’s new headquarters office in the Charlotte, North Carolina region
and you have refused to relocate.

7.     Miscellaneous.

(A)          Limitation
of Effect. Except as may otherwise be provided in Paragraph 1(A)(iii) or
Paragraph 6(E), notwithstanding any other provision in this Agreement, this
Agreement shall have no effect on any Termination of your employment prior to a
Change in Control of the Company, or upon any Termination of your employment at
any time as a result of your Disability, attainment of your Retirement Date, or
death; and upon the occurrence of any such events, you shall receive only those
benefits to which you would have been otherwise entitled prior to a Change in
Control of the Company.

(B)           Successors.
(i)  The Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company, to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform this Agreement if no such succession had taken place. Failure
of the Company to obtain such assumption or agreement prior to the
effectiveness of any such succession shall be a breach of this Agreement.

(ii)           This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If you
should die while any amounts would still be payable to you hereunder if you had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee, legatee or
other designee or, if there be no such designee, to your estate.

(C)           Notice.
Notices provided for in the Agreement shall be in writing and shall be deemed
to have been duly given when delivered in person or mailed by United States
registered mail, return receipt requested, postage prepaid, to you at the
address set forth on the first page of this Agreement, or to the Company
at Polymer Group, Inc., 4055 Faber Place Drive, North Charleston, S.C.
29405, Attn: Vice President, Human Resources, or to such other address as
either party may have furnished to the other in writing, except that notices of
change of address shall be effective only upon receipt by the other party.

(D)          Modifications.
No provision of this Agreement may be modified, waived or discharged unless
such modification, waiver, or discharge is agreed to in writing and is signed
by you and the Company. No waiver by either party hereto at any time of any
breach by the

 9
 

 

other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time.

(E)           Interpretation.
The validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of South Carolina. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

(F)           Other
Agreements. This Agreement shall supercede all other agreements,
arrangements, understandings or policies, related to the payment of severance
amounts between you and the Company that are in existence on the date hereof,
and shall be the exclusive agreement between you and the Company with respect
to the subject matter hereof; provided, that if you would otherwise be
entitled to receive any payments in the nature of severance or separation pay
from the Company, whether by separate agreement, Company policy, statutory
provision or otherwise, any amounts otherwise to be received hereunder shall be
reduced on a dollar-for-dollar basis by the amount of such other payments you
receive.

(G)           Consequences
of Termination or Expiration. The provisions of this Agreement that by
their nature are intended to survive termination or expiration of this
Agreement shall survive termination or expiration.

If you agree that the foregoing correctly sets forth
the agreement between us, please sign both copies of this Agreement in the
space indicated below and return both copies to the Company. This Agreement
will not become effective until signed by the Company in the space indicated
below. Following proper execution of this Agreement by you and the Company, the
Company will return one fully-executed copy to you for your files.

Very truly yours,

Polymer Group, Inc.

Bruce Rockenfield
 Vice President, Human Resources

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Agreed
to as of the date executed by Polymer Group, Inc. below:

	
  EMPLOYEE

  	
   

  	
  POLYMER GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  Name:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Date Signed:

  	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Effective Date:

  	
   

  
					

 

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