Chief Financial Officer Employment Agreement

POLYMER GROUP, INC.



EXECUTIVE EMPLOYMENT AGREEMENT



THIS AGREEMENT is entered into as of October 27, 2003, 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 the date hereof and ending as provided in paragraph 4 hereof (the " Employment Period ").



2. Position and Duties .



(a) During the Employment Period, Executive shall serve as the 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 and to overrule actions of officers of the Company. During the Employment Period, Executive shall render such executive and managerial services to the Company and its Subsidiaries which are consistent with Executive92s position and as the Board and the Chief Executive Officer may from time to time direct.



(b) During the Employment Period, Executive shall report to the Board and 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 Company92s and its Subsidiaries92 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 Company92s and its Subsidiaries92 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, Executive92s base salary shall be $250,000 per annum 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 Company92s general payroll practices (in effect from time to time). The Board shall undertake an annual review of Executive92s Base Salary. In addition, during the Employment Period, Executive shall be entitled to participate in all of the Company92s 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 Company92s policies, which shall accrue on a pro rata basis over the course of the year, and 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 Company92s policies in effect from time to time with respect to travel, entertainment and other business expenses, subject to the Company92s 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 Executive92s performance and the Company92 s operating results during such year; provided , that as long as Executive shall remain employed by the Company on January 1, 2005, Executive shall be entitled to a minimum performance bonus equal to $75,000 for fiscal 2004.



(d) Executive shall be entitled to receive a one-time payment of up to $8,000 to reimburse him for the out-of-pocket costs in connection with the relocation of his residence from Greensboro, North Carolina to Charleston, South Carolina. In addition, Executive shall be entitled to a one-time payment for costs and expenses related to the sale of his residence in Greensboro, North Carolina, in an amount equal to (x) $20,000 if Executive sells his residence without the use of a real estate broker or (y) $30,000 if Executive sells his residence utilizing the services of a real estate broker.



(e) 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.



(f) During the Employment Period, Executive shall also be entitled to reasonable periods of sick leave (without loss of pay) in accordance with the Company92s policies as in effect from time to time.



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



4. Term .



(a) Unless renewed by the mutual agreement of the Company and Executive, the Employment Period shall end on April 1, 2005. The Employment Period shall automatically be renewed on the same terms and conditions set forth herein as modified from time to time by the parties hereto for additional one-year periods beginning on April 1, 2005, unless the Company or Executive gives the other party written notice of the election not to renew the Employment Period at least 120 days prior to any such renewal date; provided that (i) the Employment Period shall terminate prior to such date immediately upon Executive92s 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 Executive92s resignation with Good Reason prior to the second anniversary of the date of this Agreement, Executive shall be entitled to continue to receive his Base Salary payable in regular installments as special severance payments from the date of termination through the date that is the sixth month anniversary of the date of termination (the " Severance Period "), 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 Company92s employee benefit plans or as otherwise expressly required by applicable law. The Base Salary payable pursuant to this paragraph 4(b) 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 by Executive92s resignation 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 Company92s employee benefit plans or as otherwise expressly required by applicable law.



(d) If the Employment Period is terminated by the Company without Cause or upon Executive92s resignation with Good Reason, for six months following the date of Executive92s termination, the Company shall, at its expense, continue on behalf of the Executive and his or her dependants and beneficiaries, the disability, medical, dental and hospitalization



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benefits provided to the Executive immediately prior to the date of termination. The coverage and benefits (including deductibles and costs) provided in this Section 4(d) shall be no less favorable to the Executive and his or her dependants and beneficiaries, than the coverage and benefits provided to Executive immediately prior to his termination. The Company92s 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 employer92 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 or her dependants or beneficiaries may otherwise be entitled under any of the Company92s 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 Executive92s 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). 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 Executive92s 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 Executive92s 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 Executive92s condition with the Company).



(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



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Employment Period as a result of one or more of the following reasons: (i) the Company reduces the amount of the Base Salary, (ii) the Company changes Executive92s 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 Company92s financial statements to be prepared in conformity with generally accepted accounting principles; provided that written notice of Executive92s resignation for Good Reason must be delivered to the Company within 30 days after the occurrence of any such event in order for Executive92s 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 Company92s or its Subsidiaries92 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 Company92s or its Subsidiaries92 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 Executive92s 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 Board92s 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 Executive92s 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.



(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,



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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 Company92s or its Subsidiaries92 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 Company92s or such Subsidiary92s 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 ") s ...