Document:

Exhibit 10.16

 

December 9,
2009

 

Dennis Norman

2625 Gannett Drive

Charlotte, NC 28214

 

Re:  Change in Control
Severance Compensation Agreement

 

Dear Dennis:

 

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) or other
situations that could result in the termination of your employment.  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 under the
circumstances set forth below.

 

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 indicated below upon execution by the
Company below and shall end on December 31, 2011; 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 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 

 

2

 

trustee or other
administrator or fiduciary holding securities under an employee benefit plan of
the Company.

 

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 your
employment” also constitutes a “separation from service” as defined in 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

 

(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 

 

3

 

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;

 

(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;
or

 

(vi)          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.

 

(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 the sum of (i) twenty-four
(24) times your monthly base salary at the rate in effect at the time a
Notice of Termination is given and (ii) two
times 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 Treasury Regulation §1.409A-1(b)(9), if you
are a “specified employee” within the meaning of Code §416(i) and 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)          Anything
in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment, benefit or distribution to or for your benefit or
the acceleration thereof would be subject to the excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the “Code”) or any interest
or penalties with respect to such excise tax (collectively, such excise tax,
together with any such interest or penalties, the “Excise Tax”) (all such
payments and benefits, including any cash severance payments payable pursuant
to any other plan, arrangement or agreement, hereinafter referred to as the “Total
Payments”), then, after taking into account any reduction in the Total Payments
provided by reason of Section 280G of the Code in such other plan,
arrangement or agreement, the cash severance payments shall first be reduced,
and the noncash severance payments shall thereafter be reduced, to the extent
necessary so that no portion of the Total Payments is subject to the Excise Tax
but only if (i) the net amount of such Total Payments, as so reduced (and
after subtracting the net amount of federal, state and local income taxes on
such reduced Total Payments and after taking into account the phase out of
itemized deductions and personal exemptions attributable to such reduced
Total  Payments) is greater than or equal
to (ii) the net amount of such Total Payments without such reduction (but
after subtracting the net amount of federal, state and local income taxes on
such Total Payments and the amount of Excise Tax to which you would be subject
in respect of such unreduced Total Payments and after taking into account the
phase out of itemized deductions and personal exemptions attributable to such
unreduced Total Payments); provided, however, that you may elect to have the
noncash severance payments reduced (or eliminated) prior to any reduction of
the cash severance payments.  You shall
remain solely liable for all income taxes, Excise Tax, or other amounts
assessed on any payments or benefits and nothing in this Agreement shall be
interpreted as obligating the Company, or any successors thereto, to pay (or
reimburse you for) any income taxes, Excise Tax, or other taxes or amounts
assessed against or incurred by you in connection with your receipt of any such
payments or benefits.

 

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’

 

6

 

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 without the 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).

 

7

 

(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
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 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 

 

8

 

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.

 

(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).

 

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 

 

9

 

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., 9335 Harris Corners
Parkway, Suite 300, Charlotte, NC 28269, Attn: Vice President, Global
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 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
North 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.

 

10

 

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.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Daniel L. Rikard

  
	
   

  	
  Vice President, General
  Counsel & Secretary

  

 

 

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

 

	
  EMPLOYEE

  	
   

  	
  POLYMER GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:
  Dennis Norman

  	
   

  	
  Name: Daniel L. Rikard

  
	
   

  	
   

  	
   

  
	
  Date
  Signed:

  	
   

  	
   

  	
  Title: VP, General Counsel & Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Date Signed:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Effective Date:Exhibit 10.51

 

March 22,
2010

 

Mr. Peter H. Rothschild

Interim Chairman of the Board of Directors

Deerfield Capital Corp.

130 East 59th Street, 12th Floor

New York, NY 10022

 

Dear Mr. Rothschild:

 

The purpose of this letter agreement (the “Agreement”)
is to extend, for the 2010 calendar year, the compensation terms established in
the letter agreement that Deerfield Capital Corp. (“DFR” or “we”) entered into
with you on July 29, 2008 and the letter agreement that DFR entered into
with you March 5, 2009 (the “Prior Agreements”) as Interim Chairman of our
Board of Directors (the “Board”).

 

By your execution and delivery to us of a copy of
this Agreement, this Agreement will become a binding legal obligation of the
parties, replacing in its entirety the Prior Agreements other than amounts
already paid or agreed by us to be paid to you pursuant to the compensation
arrangements for your services during prior calendar years.

 

The compensation specified in this Agreement was
recommended to the Board by the Compensation Committee of the Board (the “Committee”)
and generally reflects the factors noted in the Prior Agreements.  The Committee also considered, among other
factors, your vital contributions to DFR and its shareholders in prior years;
the extensive amount of time you expect to continue to devote to DFR matters in
2010 and; and various challenges that DFR is likely to face in 2010 that will
require your time and high level of skills.

 

Accordingly, DFR proposes to pay you, for the period
January 1, 2010 through December 31, 2010, the amounts set forth
below, subject to the terms and conditions set forth below.

 

1.                                       Base Fee

 

a.                                       Base Fee.  Subject to c.
below, DFR shall pay you a fee (the “Base Fee”) at the rate of $500,000 per
annum for the 2010 calendar year.   The
Base Fee will be paid in cash, in accordance with the payroll practices of DFR’s
subsidiary, Deerfield Capital Management LLC (“DCM”).

 

 

b.                                      Expense
Reimbursement.  Subject to 1.c.
below, DFR shall reimburse you for the amounts you owe to Daroth Capital LLC
for expenses relating to office space, information technology and other items
in an amount equal to $10,000 per month for the 2010 calendar year (the “Expense
Reimbursement”).  The Expense
Reimbursement will be paid in cash, on a monthly basis.  The Expense Reimbursement is in addition to
any out-of-pocket expenses incurred by you in connection with your activities
on DFR’s behalf.

 

c.                                       Termination of Base Fee and Expense
Reimbursement.  DFR shall terminate the Base Fee and Expense
Reimbursement immediately upon your (i) voluntary resignation as Interim
Chairman, (ii) death or Disability (as defined below) or (iii) removal
as a Board member pursuant to the Director removal provision in Section 4.8
of DFR’s Charter as in effect on the date hereof.  “Disability” means your physical or mental
incapacity as a result of which you are unable for a period of 90 days during
any 180-day period to perform your duties as Interim Chairman with
substantially the same level of quality as immediately before the incapacity.  In addition, at the discretion of the
Committee, DFR may terminate the Base Fee and Expense Reimbursement upon 30
days notice to you.

 

d.                                      Equity Participation. 
There shall be no prohibition against the Committee, in the exercise of
its discretion, granting you all or part of the equity awards granted to the
independent directors of the Board (upon the same terms and conditions as the
grants to such directors).

 

2.                                       Success Fees

 

a.                                       General.  You shall be
eligible in 2010 for each of the two success fees specified below—namely, the
Capital Transaction Success Fee and the Non-Capital Transaction Success Fee.  The Committee shall have complete discretion
as to whether either or both of the Capital Transaction or Non-Capital
Transaction Success Fee is awarded and, if awarded, the amount of the fee
(subject to the ceilings on each fee specified below), as well as the fee
portion, if any, payable in cash and the portion, if any, payable in
Performance Shares (as defined in the DFR Stock Incentive Plan (the “Plan”) in
effect on the date hereof) or other non-cash compensation specified in the
Plan.  The Committee shall also have
complete discretion as to the vesting and other provisions relating to such
non-cash awards, subject to the condition that such provisions shall generally
be comparable to those relating to the awards of non-cash compensation to DCM employees
for their 2010 services.

 

b.                                      Capital Transaction Success Fee. 
You shall be eligible for a Capital Transaction Success Fee, not to
exceed $1,000,000, if, in your capacity as Interim Chairman, you are
instrumental in causing DFR to execute agreement(s) for a Capital
Transaction (as defined below) in 2010 that substantially increase DFR
shareholder value.

 

A Capital Transaction means (i) the
ownership or acquisition by any person of more than 50% of the outstanding
common stock of DFR; (ii) the merger or

 

 

consolidation of DFR with or
into any person; or (iii) any one or a series of related sales or
conveyances to any person of all or substantially all of DFR’s assets.

 

c.                                       Non-Capital Transaction Success Fee. 
You shall also be eligible for a Non-Capital Transaction Success Fee,
not to exceed $500,000, if the following conditions are met: (i) in your
capacity as Interim Chairman you are instrumental in causing DFR to engage in
actions other than a Capital Transaction that increase DFR shareholder value,
such as strategic partnerships or joint ventures, and (ii) such actions
result in a substantial increase in DFR shareholder value in 2010.  For the avoidance of doubt, your award of the
Capital Transaction Success Fee shall not affect your eligibility for the Non-Capital
Transaction Success Fee, nor vice versa.

 

d.                                      Committee Discretion. 
You acknowledge and agree that the awards of the Capital Transaction and
Non-Capital Transaction Success Fees are wholly within the discretion of the
Committee, as are the amounts of those Success Fees and the cash or stock
components of the Success Fees; that the Committee may award you both or one of
the Success Fees and not the other; and that the Committee might not award you
either of the Success Fees.

 

 

	
   

  	
   

  	
  Deerfield
  Capital Corp.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:
  

  	
  /s/
  Jonathan W. Trutter

  
	
   

  	
   

  	
  Name:

  	
  Jonathan
  W. Trutter

  
	
   

  	
   

  	
  Its:

  	
  Chief
  Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Agreed
  and Acknowledged:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  /s/ Peter H. Rothschild

  	
   

  	
   

  	
   

  
	
  Peter H. Rothschild

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