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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A
(Amendment No. 1)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES ACT OF 1934
For the fiscal quarter ended June 29, 1996
Commission file number 1-14330
POLYMER GROUP, INC.
(Exact name of registrant as specified in its charter)
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<S> <C>
Delaware 57-1003983
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification No.)
4838 Jenkins Avenue 29405
North Charleston, South Carolina (Zip Code)
(Address of principal executive offices)
</TABLE>
Registrant's telephone number, including area code: (803) 566-7293
Indicate by check mark whether registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the last 90 days. Yes X No ___
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [_]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
As indicated in the original filing, on August 8, 1996, there were
32,000,000 Common Shares, par value $0.01 per share, outstanding. On September
2, 1997, there were 32,000,000 Common Shares outstanding.
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EXPLANATORY NOTE
This amended Quarterly Report on Form 10-Q/A (Amendment No. 1) for the
fiscal quarter ended June 29, 1996 is filed for the sole purpose of providing
Exhibits 3.1(ii) and 10.7 through 10.14, which were inadvertently omitted from
the original filing on August 13, 1996. Exhibits 3.1(ii) and 10.7 through 10.14
shall hereafter form a part of the issuer's Quarterly Report on Form 10-Q for
the fiscal quarter ended June 29, 1996 for all purposes.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Polymer Group, Inc.
Dated: September 2, 1997 By: /s/ James G. Boyd
-------------------------------------
James G. Boyd
Executive Vice President, Chief Financial
Officer, Treasurer and Secretary
(Duly Authorized Officer, Principal
Financial Officer and Chief
Accounting Officer)
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EXHIBIT INDEX
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Exhibit
Number Document Description
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<C> <S>
3.1(i) Form of Amended and Restated Certificate of Incorporation
of the Company.(1)
3.1(ii) Certificate of Designation of the Company.*
3.2 Amended and Restated By-laws of the Company.(1)
4.1 Form of certificate representing Common Stock of the
Company.(1)
4.2 Form of Rights Agreement.(1)
10.1 Stock Purchase Agreement dated as of January 10, 1996
between the Company and ConX II.(1)
10.2 1996 Key Employee Stock Option Plan of the Company.(1)
10.3 Form of Non-Qualified Stock Option Grant.(1)
10.4 Amendment No. 5 dated as of December 30, 1995 by and
among FiberTech, the Subsidiary Guarantors and Parent
Guarantors identified therein, the Lenders signatory thereto
and the Chase Manhattan Bank (National Association), as
agent.(1)
10.5 Form of Old Credit Facility.(1)
10.6 Form of Third Supplemental Indenture between the Company
and Harris Trust and Savings Bank, as successor trustee.(1)
10.7 Recapitalization Agreement, dated May 6, 1996, among GTC
Fund III, Zucker, Boyd, InterTech, FTG, CMIHI, Leeway and
CalPERS.*
10.8 Voting Agreement, dated May 15, 1996, among the
Company, GTC Fund III, Zucker, Boyd, InterTech, FTG,
CMIHI and Leeway.*
10.9 Amendment No. 1 to Management Agreement, dated May 15,
1996, by and between the Company, Chicopee and
Zucker.*/**
10.10 Amendment No. 3 to Management Agreement, dated May 15,
1996, by and between PGI Polymer, GTC Fund III, FiberTech
and Zucker.*/**
10.11 Amendment No. 1 to Management Agreement, dated May 15,
1996, by and between the Company, Chicopee and Boyd.*/**
10.12 Amendment No. 3 to Management Agreement, dated May 15,
1996, between PGI Polymer, GTC Fund III, FiberTech and
Boyd.*/**
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<TABLE>
<C> <S>
10.13 Amendment No. 1 to Roll-In Agreement, dated May 15, 1996,
by and among ZB Holdings, InterTech, the Company,
Polypore, CMIHI, Zucker, Boyd and GTC Fund III.*
10.14 Indemnification Agreement, dated May 15, 1996, among the
Company, InterTech, GTC Fund III, GTCR, ConX, ConX II,
Zucker and Boyd.*
27 Financial Data Schedule (electronic format only)***
</TABLE>
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* Filed herewith.
** Management contract or compensatory plan or arrangement.
*** Previously filed.
(1) Incorporated by reference to the respective exhibit to the Company's
Registration Statement on Form S-4 (Reg. No. 333-2424).
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EXHIBIT 3.1(ii)
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF JUNIOR PARTICIPATING PREFERRED STOCK, SERIES A
OF
POLYMER GROUP, INC.
Pursuant to Section 151 of the Corporation Law
of the State of Delaware
I, James G. Boyd, Executive Vice President, Treasurer, and Secretary of
Polymer Group, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions of
Section 151 thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the
Restated Certificate of Incorporation of the Corporation, as amended, the Board
of Directors on April 15, 1996, adopted the following resolution creating a
series of 100,000 shares of Preferred Stock designated as Junior Participating
Preferred Stock, Series A:
RESOLVED, that pursuant to the authority vested in the Board by ARTICLE IV
of the Restated Certificate of Incorporation, as amended, and in accordance with
ARTICLE IV of the Amended and Restated Certificate of Incorporation previously
adopted and approved by the Board of Directors and the stockholders of the
Corporation to be effective upon consummation of the Initial Public Offering,
upon consummation of the Recapitalization, the Stock Split and the Initial
Public Offering, a series of Preferred Stock of the Corporation shall be, and
upon such date hereby is, created and approved for issuance in accordance with
the Rights Agreement, and that the designation and amount thereof and the voting
powers, preferences and relative, participating, optional and other special
rights of the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Junior Participating Preferred Stock, Series A" (the "Series A
Preferred Stock") and the number of shares constituting such series shall be
100,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior and superior to the
shares of Series A Preferred Stock with respect to dividends, the holders
of shares of Series A Preferred Stock, in preference to the holders of
Common Stock and of any other junior stock, shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the
fifteenth day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock, in
an amount per share (rounded to
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the nearest cent) equal to the greater of (a) $25.00 or (b) the Adjustment
Number (as defined below) times the aggregate per share amount of all cash
dividends, and the Adjustment Number times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions other
than a dividend payable in shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise),
declared on the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share
of Series A Preferred Stock. The "Adjustment Number" shall initially be
1000. In the event the Corporation shall at any time after June 3, 1996 (i)
declare or pay any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock into a greater number of
shares or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the Adjustment Number in effect
immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$25.00 per share on the Series A Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series A Preferred
Stock, unless the date of issue of such shares is prior to the record date
for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after the record date for the determination of holders of shares of Series
A Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Preferred Stock in an amount less
than the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive payment of a dividend or distribution
declared
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thereon, which record date shall be no more than 30 days prior to the date
fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
(A) Each share of Series A Preferred Stock shall entitle the holder
thereof to a number of votes equal to the Adjustment Number (as adjusted
from time to time pursuant to Section 2(A) hereof) on all matters submitted
to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, in the Certificate of
Incorporation or by-laws, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock shall vote together as one class
on all matters submitted to a vote of stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon,
the occurrence of such contingency shall mark the beginning of a period
(herein called a "default period") that shall extend until such time when
all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly period on all shares of Series A
Preferred Stock then outstanding shall have been declared and paid or set
apart for payment. During each default period, (1) the number of Directors
shall be increased by two, effective as of the time of election of such
Directors as herein provided, and (2) the holders of Series A Preferred
Stock and the holders of other Preferred Stock upon which these or like
voting rights have been conferred and are exercisable (the "Voting
Preferred Stock") with dividends in arrears equal to six quarterly
dividends thereon, voting as a class, irrespective of series, shall have
the right to elect such two Directors.
(ii) During any default period, such voting right of the holders
of Series A Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(C) or at any annual
meeting of stockholders, and thereafter at annual meetings of stockholders,
provided that such voting right shall not be exercised unless the holders
of at least one-third in number of the shares of Voting Preferred Stock
outstanding shall be present in person or by proxy. The absence of a quorum
of the holders of Common Stock shall not affect the exercise by the holders
of Voting Preferred Stock of such voting right.
(iii) Unless the holders of Voting Preferred Stock shall, during
an existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than 10% of the total number
of shares of Voting Preferred Stock outstanding, irrespective of series,
may request, the calling of a special meeting of the holders of Voting
Preferred Stock, which meeting shall thereupon be called by the Chairman
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of the Board, the President, an Executive Vice President, a Vice President
or the Secretary of the Corporation. Notice of such meeting and of any
annual meeting at which holders of Voting Preferred Stock are entitled to
vote pursuant to this paragraph (C)(iii) shall be given to each holder of
record of Voting Preferred Stock by mailing a copy of such notice to him at
his last address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 10 days and not later
than 60 days after such order or request or, in default of the calling of
such meeting within 60 days after such order or request, such meeting may
be called on similar notice by any stockholder or stockholders owning in
the aggregate not less than 10% of the total number of shares of Voting
Preferred Stock outstanding. Notwithstanding the provisions of this
paragraph (C)(iii), no such special meeting shall be called during the
period within 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders.
(iv) In any default period, after the holders of Voting Preferred
Stock shall have exercised their right to elect Directors voting as a
class, (x) the Directors so elected by the holders of Voting Preferred
Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and
(y) any vacancy in the Board of Directors may be filled by vote of a
majority of the remaining Directors theretofore elected by the holders of
the class or classes of stock which elected the Director whose office shall
have become vacant. References in this paragraph (C) to Directors elected
by the holders of a particular class or classes of stock shall include
Directors elected by such Directors to fill vacancies as provided in clause
(y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Voting Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the holders
of Voting Preferred Stock as a class shall terminate and (z) the number of
Directors shall be such number as may be provided for in the Amended and
Restated Certificate of Incorporation or Amended and Restated By-Laws
irrespective of any increase made pursuant to the provisions of paragraph
(C) of this Section 3 (such number being subject, however, to change
thereafter in any manner provided by law or in the Amended and Restated
Certificate of Incorporation or Amended and Restated By-Laws). Any
vacancies in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority of the
remaining Directors.
(D) Except as set forth herein, holders of Series A Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
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Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions
on, any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on the Series A Preferred Stock and all such
parity stock on which dividends are payable or in arrears in proportion to
the total amounts to which the holders of all such shares are then
entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment
among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation
to purchase or otherwise acquire for consideration any shares of stock of
the Corporation unless the Corporation could, under paragraph (A) of this
Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled
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promptly after the acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of preferred stock and may be
reissued as part of a new series of preferred stock to be created by resolution
or resolutions of the Board of Directors, subject to the conditions and
restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any liquidation,
dissolution or winding up of the Corporation, no distribution shall be made (A)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock unless,
prior thereto, the holders of shares of Series A Preferred Stock shall have
received the greater of (i) $100 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the date
of such payment, and (ii) an aggregate amount per share, equal to the Adjustment
Number (as adjusted from time to time pursuant to Section 2(A) hereof) times the
aggregate amount to be distributed per share to holders of Common Stock, or (B)
to the holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred Stock,
except distributions made ratably on the Series A Preferred Stock and all other
such parity stock in proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or winding up.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series A Preferred Stock then outstanding shall at the same time be similarly
exchanged or changed in an amount per share equal to the Adjustment Number (as
adjusted from time to time pursuant to Section 2(A) hereof) times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged.
Section 8. No Redemption. The shares of Series A Preferred Stock shall
not be redeemable.
Section 9. Amendment. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of two-thirds of the outstanding shares of Series A
Preferred Stock, voting together as a single class.
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IN WITNESS WHEREOF, I have executed and subscribed this Certificate and do
affirm the foregoing as true under the penalties of perjury this 15th day of
May, 1996.
/s/ James G. Boyd
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James G. Boyd
Executive Vice President and Secretary
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Exhibit 10.7
RECAPITALIZATION AGREEMENT
--------------------------
THIS AGREEMENT is made as of May 6, 1996 between Polymer Group, Inc.,
a Delaware corporation (the "Company"), The InterTech Group, Inc., a South
Carolina corporation ("InterTech"), Golder, Thoma, Cressey Fund III Limited
Partnership, an Illinois limited partnership ("GTC Fund III"), Jerry Zucker
("Zucker"), James G. Boyd ("Boyd"), FTG, Inc., a South Carolina corporation
("FTG"), Chase Manhattan Investment Holdings, Inc., a Delaware corporation
("CMIHI"), Leeway & Co. ("Leeway") and California Public Employees' Retirement
System ("CalPERS"). InterTech, GTC Fund III, Zucker, Boyd, FTG, CMIHI, Leeway
and CalPERS are referred to herein as the "Stockholders." Except as otherwise
indicated herein, capitalized terms used herein are defined in Section 6 hereof.
GTC Fund III owns 190,277 shares of the Company's Class A-1 Common
Stock, par value $.01 per share ("Class A-1 Common"), 115,000 shares of the
Company's Class A-3 Common Stock, par value $.01 per share ("Class A-3 Common")
and 185,902 shares of the Company's Class B Common Stock, par value $.01 per
share ("Class B Common"). CMIHI owns 25,832 shares of Class A-1 Common, 35,000
shares of the Company's Class A-2 Common Stock, par value $.01 per share ("Class
A-2 Common") and 14,136 shares of Class B Common. InterTech owns 210,415 shares
of Class B Common. Zucker owns 83,611 shares of Class B Common. Boyd owns
27,870 shares of Class B Common. FTG owns 15,295 shares of Class B Common.
Leeway and CalPERS each own 26,150 shares of Class A-1 Common and warrants to
purchase 35,500 shares of the Company's Class C Common Stock, par value $.01 per
share ("Class C Common"), which warrants will be exercised concurrently with the
Initial Public Offering (as defined herein). All such shares of Class A-1
Common, Class A-2 Common, Class A-3 Common, Class B Common and Class C Common
are referred to herein as the "Exchange Shares."
The Company has filed a Registration Statement on Form S-1 (File No.
333-2424) with the Securities and Exchange Commission relating to an initial
public offering (the "Initial Public Offering") of the Company's common stock,
par value $.01 per share (the "Common Stock"), under the Securities Act. In
connection with the Initial Public Offering, the Stockholders desire to (i)
cause the Company to amend and restate its certificate of incorporation and (ii)
exchange their Exchange Shares for shares of Common Stock. Following such
exchange, the Exchange Shares shall be canceled.
The parties hereto agree as follows:
Section 1. Authorization and Exchange.
1A. Restated Certificate of Incorporation. The Company has previously
authorized the amendment and restatement of the Company's Restated Certificate
of Incorporation in the form attached hereto as Exhibit A (the "Restated
Certificate"), to be filed and to be effective as of the date of the
consummation of the Initial Public Offering (the "Closing Date"). The
Stockholders have
<PAGE>
previously approved such amendment and restatement pursuant to Section 242 of
the General Corporation Law of the State of Delaware.
1B. Authorization of the Common Stock. The Company hereby authorizes
the issuance of an aggregate of 20,500,000 shares of Common Stock to the
Stockholders in exchange for the Exchange Shares.
1C. Calculation of the Exchange Shares. The number of shares of
Common Stock to be issued to each Stockholder (net of any fractional shares)
shall be equal to (i) the aggregate amount such Stockholder would receive under
the Company's currently effective certificate of incorporation attached hereto
as Exhibit B (the "Current Certificate") upon a Distribution (as defined in the
Current Certificate) by the Company of an amount equal to the Pre-IPO Company
Value divided by (ii) an amount equal to (A) the initial price to the public per
share of Common Stock in the Initial Public Offering multiplied by (B) 19.96809
(the "Pre-Split IPO Price"). "Pre-IPO Company Value" means an amount equal to
(i) the Pre-Split IPO Price multiplied by (ii) 1,026,638.00093. Immediately
following the exchange, the Company will execute a 19.96809-for-one split of its
Common Stock (the "Split"). An example of the calculations set forth herein is
attached hereto as Annex A.
1D. Notice. Prior to the Closing, the Company shall calculate the
number of shares of Common Stock to be issued to each Stockholder as set forth
above, and shall deliver notice to each Stockholder of the results of such
calculation in accordance with Section 7M hereof at least two days before the
Closing. The Company's calculations shall be conclusive and binding upon each
Stockholder unless such Stockholder objects to such calculation in writing prior
to the Closing.
1E. Exchange of the Exchange Shares. At the Closing, the Company
shall, upon the effectiveness of the Restated Certificate and subject to the
terms and conditions set forth herein, issue to each Stockholder a number of
shares of Common Stock calculated as set forth below, in exchange for the
Exchange Shares held by such Stockholder which shares shall be canceled
immediately thereafter. The Company will pay each Stockholder for any
fractional shares resulting from such calculation by check and such fractional
shares will not be issued.
1F. The Closing. The closing of the transactions contemplated hereby
(the "Closing") shall take place at the offices of Kirkland & Ellis, 153 East
53rd Street, New York, New York at 10:00 a.m. on the Closing Date, or at such
other place as may be mutually agreeable to the Company and the Stockholders.
At the Closing, the Company shall deliver, or cause the Company's transfer agent
to deliver, to each Stockholder stock certificates evidencing the shares of
Common Stock to be issued by the Company to each such Stockholder, registered in
each such Stockholder's name or its nominee's name, upon presentment and
delivery by each such Stockholder to the Company of the certificates
representing the Exchange Shares duly endorsed for transfer to the Company. At
the option of any Stockholder who is subject to Regulation Y of the Board of
Governors of the Federal Reserve System, the Company shall deliver shares of the
Company's non-voting common stock, par value $.01 per share, to such Stockholder
in lieu of Common Stock.
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Section 2. Conditions of Each Stockholder's Obligation at the
Closing. The obligation of each Stockholder to exchange its Exchange Shares for
the Common Stock at the Closing is subject to the satisfaction as of the Closing
of the following conditions:
2A. Representations and Warranties. The representations and
warranties contained in Section 4 hereof shall be true and correct in all
material respects at and as of the Closing as though then made, except to the
extent of changes caused by the transactions expressly contemplated herein.
2B. Initial Public Offering. The Company shall consummate the
Initial Public Offering concurrently with the transactions contemplated hereby.
2C. Amendment of Certificate of Incorporation. The Restated
Certificate shall be in full force and effect as of the Closing under the laws
of Delaware and shall not have been further amended or modified.
2D. Securities Law Compliance. The Company shall have made all
filings under all applicable federal and state securities laws necessary to
consummate the issuance of the Common Stock pursuant to this Agreement in
compliance with such laws.
2E. Voting Agreement. The Company and the Stockholders (other than
CalPERS) shall have entered into a voting agreement (the "Voting Agreement")
substantially in the form attached hereto as Exhibit C, and the Voting Agreement
shall be in full force and effect as of the Closing and shall not have been
amended or modified.
2F. Credit Agreement. The Company and its subsidiaries and The Chase
Manhattan Bank (National Association) and certain other lenders shall have
entered into a credit agreement (the "Credit Agreement"), and related documents,
providing for term loans and revolving loans of up to an aggregate of $200
million and $125 million, respectively, and the Credit Agreement shall be in
full force and effect as of the Closing and shall not have been amended or
modified.
2G. Closing Documents. The Company shall have delivered to each
Stockholder such documents relating to the transactions contemplated by this
Agreement as any Stockholder or its special counsel may reasonably request.
2H. Proceedings. All corporate and other proceedings taken or
required to be taken by the Company in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to each Stockholder and its special counsel.
2I. Waiver. Any condition specified in this Section 2 may be waived
if consented to by each Stockholder; provided that no such waiver shall be
effective against any Stockholder unless it is set forth in a writing executed
by such Stockholder.
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Section 3. Transfer of Restricted Securities.
3A. General Provisions. Restricted Securities are transferable only
pursuant to (i) public offerings registered under the Securities Act, (ii) Rule
144 or Rule 144A under the Securities Act (or any similar rule or rules then in
force) if such rule is available and (iii) subject to the conditions specified
in paragraph 3B below, any other legally available means of transfer.
3B. Opinion Delivery. In connection with the transfer of any
Restricted Securities (other than a transfer described in paragraph 3A(i) or
(ii) above), the holder thereof shall deliver written notice to the Company
describing in reasonable detail the transfer or proposed transfer, together with
an opinion of Kirkland & Ellis or other counsel which (to the Company's
reasonable satisfaction) is knowledgeable in securities law matters to the
effect that such transfer of Restricted Securities may be effected without
registration of such Restricted Securities under the Securities Act. In
addition, if the holder of the Restricted Securities delivers to the Company an
opinion of Kirkland & Ellis or such other counsel that no subsequent transfer of
such Restricted Securities shall require registration under the Securities Act,
the Company shall promptly upon such contemplated transfer deliver new
certificates for such Restricted Securities which do not bear the Securities Act
legend set forth in paragraph 7E. If the Company is not required to deliver new
certificates for such Restricted Securities not bearing such legend, the holder
thereof shall not transfer the same until the prospective transferee has
confirmed to the Company in writing its agreement to be bound by the conditions
contained in this paragraph and paragraph 7E.
3C. Rule 144A. Upon the request of any Stockholder, the Company
shall promptly supply to such Stockholder or its prospective transferees all
information regarding the Company required to be delivered in connection with a
transfer pursuant to Rule 144A under the Securities Act.
3D. Legend Removal. If any Restricted Securities become eligible for
sale pursuant to Rule 144(k) under the Securities Act, the Company shall, upon
the request of the holder of such Restricted Securities, remove the legend set
forth in paragraph 7E(i) from the certificates for such Restricted Securities.
Section 4. Representations and Warranties of the Company. As a
material inducement to the Stockholders to enter into this Agreement and to
exchange their Exchange Shares for Common Stock hereunder, the Company hereby
represents and warrants that:
4A. Organization and Corporate Power. The Company is a corporation
duly organized, validly and in good standing under the laws of Delaware and is
qualified to do business in every jurisdiction in which the failure to so
qualify has had or would reasonably be expected to have a material adverse
effect on the financial condition, operating results, assets, operations or
business prospects of the Company and its Subsidiaries taken as a whole.
4B. Authorization; No Breach. The execution, delivery and
performance of this Agreement, the Stock Purchase Agreement, the Voting
Agreement, the Credit Agreement and all
-4-
<PAGE>
other agreements contemplated hereby and thereby to which the Company is a
party, the amendment of the Certificate of Incorporation have been duly
authorized by the Company. This Agreement, the Voting Agreement, the Credit
Agreement, the Restated Certificate and all other agreements contemplated hereby
and thereby to which the Company is a party each constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms. The
execution and delivery by the Company of this Agreement, the Voting Agreement,
the Credit Agreement and all other agreements contemplated hereby and thereby to
which the Company is a party, the issuance of the Common Stock hereunder, the
amendment of the Restated Certificate and the fulfillment of and compliance with
the respective terms hereof and thereof by the Company, do not and shall not (i)
conflict with or result in a breach of the terms, conditions or provisions of,
(ii) constitute a default under, (iii) except pursuant to the Credit Agreements,
result in the creation of any lien, security interest, charge or encumbrance
upon the Company's or any Subsidiary's capital stock or assets pursuant to, (iv)
give any third party the right to modify, terminate or accelerate any obligation
under, (v) result in a violation of, or (vi) require any authorization, consent,
approval, exemption or other action by or notice or declaration to, or filing
with, any court or administrative or governmental body or agency pursuant to,
the Current Certificate or the certificate of incorporation of any Subsidiary,
or any law, statute, rule or regulation to which the Company or any Subsidiary
is subject, or any agreement, instrument, order, judgment or decree to which the
Company or any Subsidiary is a party or by which their respective property is
bound, other than as expressly contemplated in such agreements described above
and other than those made and obtained.
4C. Capital Stock and Related Matters. As of the Closing and
immediately thereafter, the authorized capital stock of the Company shall
consist of 100,000,000 shares of Common Stock, of which 32,000,000 shares will
be issued and outstanding, 3,000,000 shares of Non-Voting Common Stock, par
value $.01 per share (none of which shall be issued and outstanding), and
10,000,000 shares of preferred stock, par value $.01 per share (none of which
shall be issued and outstanding). As of the Closing, all of the outstanding
shares of the Company's capital stock shall be validly issued, fully paid and
nonassessable. There are no statutory or contractual stockholders preemptive
rights or rights of refusal with respect to the issuance of Common Stock
hereunder which have not been waived or terminated. The Company has not
violated any applicable federal or state securities laws in connection with the
offer, sale or issuance of any of its capital stock, and the offer, sale and
issuance of the Common Stock hereunder does not require registration under the
Securities Act or any applicable state securities laws.
Section 5. Representations and Warranties of the Stockholders. The
Stockholders hereby represent and warrant to the Company that:
5A. Authorization; Enforceability. The execution, delivery and
performance of this Agreement and the Voting Agreement, all other agreements
contemplated hereby and thereby to which any Stockholder is a party each
constitutes a valid and binding obligation of such Stockholder, enforceable in
accordance with its terms.
5B. No Violation. Neither the execution and the delivery of this
Agreement and the other documents contemplated hereby to which each Stockholder
is a party, nor the
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<PAGE>
consummation of the transactions contemplated hereby and thereby, will (a)
conflict with, result in a breach of any of the provisions of, (b) constitute a
default under, (c) result in the violation of, (d) give any third party the
right to terminate or to accelerate any obligation under, or (e) require any
authorization, consent, approval, execution or other action by or notice to or
filing with any court or administrative or governmental body under, the
provisions of the certificate of incorporation or bylaws of the Stockholder
(where the Stockholder is an incorporated entity) or any statute, regulation,
rule, judgment, order, decree or other restriction of any government,
governmental agency or court to which the Stockholder is subject.
5C. Ownership. Each Stockholder owns the Exchange Shares being
exchanged by such Stockholder pursuant to this Agreement free and clear of any
restrictions on transfer, claims, taxes, liens, charges, encumbrances, pledges,
security interests, options, warrants, rights, contracts, calls, commitments,
equities and demands, except for applicable restrictions on transfer under
securities laws.
Section 6. Definitions. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization and a governmental entity or any
department, agency or political subdivision thereof.
"Restricted Securities" means (i) the Common Stock issued hereunder
and (ii) any securities issued with respect to the securities referred to in
clause (i) above by way of a stock dividend or stock split or in connection with
a combination of shares, recapitalization, merger, consolidation or other
reorganization. As to any particular Restricted Securities, such securities
shall cease to be Restricted Securities when they have (a) been effectively
registered under the Securities Act and disposed of in accordance with the
registration statement covering them, (b) become eligible for sale pursuant to
Rule 144 (or any similar provision then in force) under the Securities Act or
(c) been otherwise transferred and new certificates for them not bearing the
Securities Act legend set forth in paragraph 7E have been delivered by the
Company in accordance with paragraph 3B. Whenever any particular securities
cease to be Restricted Securities, the holder thereof shall be entitled to
receive from the Company, without expense, new securities of like tenor not
bearing a Securities Act legend of the character set forth in paragraph 7E.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Subsidiary" means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or
-6-
<PAGE>
other business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a limited liability company, partnership, association or
other business entity if such Person or Persons shall be allocated a majority of
limited liability company, partnership, association or other business entity
gains or losses or shall be or control any managing director or general partner
of such limited liability company, partnership, association or other business
entity.
Section 7. Miscellaneous.
7A. Termination. This Agreement shall terminate upon the earlier of
(i) June 30, 1996 and (ii) the sending of notice by the Company to each
Stockholder that the Initial Public Offering will not be consummated.
7B. Termination of Stockholders Agreement. Contingent upon the
consummation of the Initial Public Offering, the Company and each of the
Stockholders hereby agree to terminate that certain Amended and Restated
Stockholders Agreement, dated as of March 15, 1995, by and among the Company and
the Stockholders.
7C. Expenses. The Company shall pay, and hold each Stockholder and
all holders of Common Stock harmless against liability for the payment of, the
fees and expenses of their special counsel arising in connection with the
negotiation and execution of this Agreement and the agreements contemplated
hereby and the consummation of the transactions contemplated hereby.
7D. Remedies. Any Person having any rights under any provision of
this Agreement shall be entitled to enforce such rights specifically (without
posting a bond or other security), to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law.
7E. Legend. Each certificate or instrument representing Restricted
Securities shall be imprinted with a legend in substantially the following form:
"The securities represented by this certificate were originally issued
on_______ __, 199__ and have not been registered under the Securities Act
of 1933, as amended. The transfer of the securities represented by this
certificate is subject to the conditions specified in the Recapitalization
Agreement, dated as of May 6, 1996 and as amended and modified from time to
time, between the issuer (the "Company") and certain investors, and the
Company reserves the right to refuse the transfer of such securities until
such conditions have been fulfilled with respect to such transfer. A copy
of such conditions shall be furnished by the Company to the holder hereof
upon written request and without charge."
7F. Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may take
any action herein
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<PAGE>
prohibited, or omit to perform any act herein required to be performed by it,
only if the Company has obtained the written consent of the holders of at least
two-thirds of the Common Stock held by the parties subject to this Agreement
(voting together as a single class).
7G. Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, regardless of any
investigation made by any Stockholder or on its behalf.
7H. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not. In addition, and whether or not any express assignment has been made, the
provisions of this Agreement which are for any Stockholder's benefit as a
Stockholder or holder of Common Stock are also for the benefit of, and
enforceable by, any subsequent holder of such Common Stock.
7I. 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 prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
7J. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
7K. Descriptive Headings; Interpretation. The descriptive headings
of this Agreement are inserted for convenience only and do not constitute a
substantive part of this Agreement. The use of the word "including" in this
Agreement shall be by way of example rather than by limitation.
7L. Governing Law. The corporate law of Delaware shall govern all
issues concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity and interpretation of this
Agreement and the exhibits and schedules hereto shall be governed by the
internal law, and not the law of conflicts, of New York.
7M. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally
to the recipient, sent to the recipient by reputable overnight courier service
(charges prepaid) or telecopied to the recipient. Such notices, demands and
other communications shall be sent to each Stockholder at the address indicated
next to such party's name on the signature pages hereto or to such other address
or to the attention of such other person as the recipient party has specified by
prior written notice to the sending party.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Recapitalization Agreement on the date first written above.
<TABLE>
<CAPTION>
<S> <C>
Address: POLYMER GROUP, INC.
4838 Jenkins Avenue
North Charleston, SC 29406 By: /s/ Jerry Zucker
Attention: President --------------------------
Telecopier: 803/747-4092
Its: Chairman, President & CEO
--------------------------
Address: THE INTERTECH GROUP, INC.
4838 Jenkins Avenue
North Charleston, SC 29406 By: /s/ Jerry Zucker
Attention: President --------------------------
Telecopier: 803/747-4092
Its: Chairman, President & CEO
--------------------------
Address: GOLDER, THOMA, CRESSEY FUND III
6100 Sears Tower LIMITED PARTNERSHIP
Chicago, IL 60606-6402
Attention: Bruce V. Rauner By: Golder, Thoma, Cressey & Rauner, L.P.
David A. Donnini Its: General Partner
Telecopier: 312/382-2201
By: /s/ Bruce V. Rauner
--------------------------
Its: General Partner
--------------------------
Address:
c/o The InterTech Group, Inc. /s/ Jerry Zucker
4838 Jenkins Avenue -------------------------------
North Charleston, SC 29406 Jerry Zucker
Telecopier: 803/747-4092
Address:
c/o The InterTech Group, Inc. /s/ James G. Boyd
4838 Jenkins Avenue -------------------------------
North Charleston, SC 29406 James G. Boyd
Telecopier: 803/747-4092
Address: FTG, INC.
4838 Jenkins Avenue
North Charleston, SC 29406 By: /s/ Jerry Zucker
Attention: President --------------------------
Telecopier: 803/747-4092 Its: Chairman, President & CEO
--------------------------
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
Address: CHASE MANHATTAN INVESTMENT
c/o Chase Capital Partners HOLDINGS, INC.
380 Madison Avenue, 12th Floor
New York, NY 10017 By: /s/ Donna L. Carter
Attention: Robert Ruggiero ------------------------------------
Telecopier: 212/622-3101 Its: Senior Vice President & Treasurer
------------------------------------
Address: LEEWAY & CO.
c/o State Street Bank and
Trust Company By: State Street Bank & Trust,
Master Trust Division-Q4W -------------------------------------
P.O. Box 1992 by /s/ John Muir
Boston, MA 02101 ----------------------------------
Telecopier: Its: Assistant Vice President
-------------------------------------
Address: CALIFORNIA PUBLIC EMPLOYEES'
CalPERS RETIREMENT SYSTEM
Investment Office
P.O. Box 2749
Sacramento, CA 95812-2749 By: /s/ David E. Maxwell
Attention: David E. Maxwell, -------------------------------------
Principal Investment Officer Its: Principal Investment Officer
Telecopier: 916/326-3330 -------------------------------------
</TABLE>
<PAGE>
ANNEX A--Example Share Calculation
There are currently 418,409 shares of Class A Common, 537,229 shares
of Class B Common and 71,000 shares of Class C Common outstanding (assuming
exercise of warrants to purchase shares of Class C Common). Assume the
aggregate face value of the Class A Common is $48,000,000 and the accrued yield
on the Class A Common is $6,826,308 as of April 30, 1996 and $7,094,044 as of
May 15, 1996. Further assume the Pre-Split IPO Price is $329.47349 per share
($16.50 post-Split) and therefore the Pre-IPO Company Value is $338,250,000.
Under the Current Certificate (i) first, the holders of Class A Common
are entitled to receive the face value of the Class A Common plus accrued but
unpaid yield thereon, (ii) second, the holders of Class A Common and Class B
Common are entitled to receive an amount equal to $85,000,000 less the amount
distributed to holders of Class A Common pursuant to clause (i) above (allocated
pro rata according to the number of shares owned) and (iii) third, holders of
Class A Common, Class B Common and Class C Common are entitled to receive the
remainder (allocated pro rata according to the number of shares owned).
Using the April 30, 1996 accrued yield assumptions, the
1,026,638.00093 shares of Common Stock to be outstanding after the exchange
would be distributed as follows: holders of Class A Common would receive an
aggregate of 166,405.82525 shares of Common Stock (3,322,806.49504 shares after
giving effect to the Split) in respect of the face value and accrued yield on
their Class A Common, holders of Class A Common and Class B Common would receive
an aggregate of 91,581.54727 shares of Common Stock (1,828,708.57831 shares
after giving effect to the Split) in respect of the distribution contemplated by
clause (ii) above and the holders of Class A Common, Class B Common and Class C
Common would receive an aggregate of 768,650.6284 shares of Common Stock
(15,348,484.9265 shares after giving effect to the Split) in respect of the
distribution contemplated by clause (iii) above. As a result, Holders of Class
A Common would receive 1.24225 shares of Common Stock per share of Class A
Common, for an aggregate of 519,768.73960 shares of Common Stock
(10,378,788.9715 shares after giving effect to the Split); holders of Class B
Common would receive .84454 shares of Common Stock per share of Class B Common
for an aggregate of 453,711.09397 shares of Common Stock (9,059,743.95834 shares
after giving effect to the Split); and holders of Class C Common would receive
.74871 shares of Common Stock per share of Class C Common, for an aggregate of
53,158.167735 shares of Common Stock (1,061,467 shares after giving effect to
the Split). Using the May 15, 1996 accrued yield assumption would, of course,
yield slightly different results.
The following chart shows the results of such calculations for each
Stockholder after giving effect to the Split as of April 30, 1996 and as of
May 15, 1996:
<TABLE>
<CAPTION>
Class A-1 Class A-2 Class A-3 Class B Class C Common Stock Common Stock
Common Common Common Common Common As of April 30 As of May 15
------- ------ ------- ------- ------ -------------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Golder, Thoma, 190,277 115,000 185,902 10,707,531 10,711,029
Cressey Fund III
Chase Manhattan 25,832 35,000 14,136 1,747,348 1,748,434
Investment Holdings
The InterTech Group 210,765 3,554,307 3,550,728
Jerry Zucker 83,349 1,405,584 1,404,169
James G. Boyd 27,782 468,511 468,039
FTG 15,295 257,932 257,673
Leeway & Co. 26,150 35,500 1,179,394 1,179,964
CalPERS 26,150 35,500 1,179,394 1,179,964
------- ------ ------- ------- ------ -------------- ------------
Total 268,409 35,000 115,000 537,229 71,000 20,500,001 20,500,000
</TABLE>
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<PAGE>
Exhibit 10.8
VOTING AGREEMENT
----------------
THIS AGREEMENT is made as of May 15, 1996, by and among Polymer Group,
Inc., a Delaware corporation (the "Company"), The InterTech Group, Inc., a South
Carolina corporation ("InterTech"), Golder, Thoma, Cressey Fund III Limited
Partnership, an Illinois limited partnership ("GTC"), Jerry Zucker ("Zucker"),
James G. Boyd ("Boyd"), FTG, Inc., a South Carolina corporation ("FTG"), Chase
Manhattan Investment Holdings, Inc., a Delaware corporation ("Chase") and Leeway
& Co. ("Leeway"). InterTech, GTC, Zucker, Boyd, FTG, Chase and Leeway are
sometimes collectively referred to herein as the "Stockholders" and individually
as a "Stockholder." Certain capitalized terms used herein are defined in
paragraph 4 hereof.
The Company and the Stockholders desire to enter into this Agreement
for the purpose of establishing the composition of the Company's board of
directors (the "Board").
NOW, THEREFORE, 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 to this Agreement hereby agree as
follows:
1. Board of Directors.
(a) From and after the date hereof and until the provisions of this
paragraph 1 cease to be effective, each Stockholder shall vote all of his or its
Stockholder Shares and any other voting securities of the Company over which
such Stockholder has voting control and shall take all other necessary or
desirable actions within his or its control (whether in the capacity as a
stockholder, director, member of a board committee or officer of the Company or
otherwise, and including, without limitation, attendance at meetings in person
or by proxy for purposes of obtaining a quorum and execution of written consents
in lieu of meetings), and the Company shall take all necessary and desirable
actions within its control (including, without limitation, calling special board
and stockholder meetings), so that:
(i) the authorized number of directors on the Board shall be
established at seven directors;
(ii) the following persons shall be elected to the Board:
(A) the Chief Executive Officer of the Company;
(B) the Executive Vice President of the Company;
(C) two representatives designated by GTC (the "GTC
Directors"); and
<PAGE>
(D) two representatives jointly selected by GTC and the ZB
Group (based upon a vote of the holders of a majority of the Company's
voting stock held by the ZB Group (the "Independent Directors")),
provided that no Independent Director shall be (x) a member of the
Company's management or an employee or officer of the Company or any
of its Subsidiaries or (y) an officer, stockholder, general partner or
employee of GTC, any member of the ZB Group or any of their
Affiliates.
(iii) any committees of the Board are to be created only upon
the approval of a majority of the members of the Board;
(iv) the removal from the Board (with or without cause) of any
representative designated hereunder pursuant to (ii)(C) and (ii)(D) above
shall be at the written request of GTC and of GTC and the holders of a
majority of the Stockholder Shares held by the ZB Group, respectively, but
only upon such written request and under no other circumstances; and
(v) in the event that any representative designated pursuant to
(ii)(C) and (ii)(D) above for any reason ceases to serve as a member of the
Board during his term of office, the resulting vacancy on the Board shall
be filled by a representative designated by GTC and by GTC and the holders
of a majority of the Stockholder Shares held by the ZB Group, respectively,
as provided hereunder.
(b) The Company shall pay the reasonable out-of-pocket expenses
incurred by each director in connection with attending the meetings of the Board
and any committee thereof. In addition, the Company shall pay to each GTC
Director and each Independent Director an annual fee of $5,000, and $500 for any
committee meeting attended on a day other than a day of a Board meeting; which
amounts shall be subject to periodic review and increase by the Board. So long
as any GTC Director or Independent Director serves on the Board and for five
years thereafter, the Company shall maintain directors and officers indemnity
insurance coverage satisfactory to GTC, and the Company's certificate of
incorporation and bylaws shall provide for indemnification and exculpation of
directors to the fullest extent permitted under applicable law.
(c) The rights of GTC and the ZB Group, respectively, under this
paragraph 1 shall terminate at such time as any such Person (together with its
Permitted Transferees) holds in the aggregate less than 10% of the Common Stock
on a fully diluted basis (assuming the exercise of all outstanding options,
warrants and other securities convertible into or exchangeable for Common
Stock).
(d) If any party fails to designate a representative to fill a
directorship pursuant to the terms of this paragraph 1, the election of a person
to such directorship shall be accomplished in accordance with the Company's or
any Subsidiary's by-laws and applicable law, as appropriate.
2. Legend. Each certificate evidencing voting capital stock of the
Company owned by a party hereto and each certificate issued in exchange for or
upon the transfer of any such
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<PAGE>
securities (if such shares remain subject hereto after such transfer) shall be
stamped or otherwise imprinted with a legend in substantially the following
form:
"The securities represented by this certificate are subject to a Voting
Agreement dated as of May 15, 1996, among the issuer of such securities
(the "Company") and certain of the Company's stockholders. A copy of such
Voting Agreement will be furnished without charge by the Company to the
holder hereof upon written request."
The Company shall imprint such legend on certificates evidencing Stockholder
Shares outstanding prior to the date hereof. The legend set forth above shall
be removed from the certificates evidencing any shares which cease to be
Stockholder Shares in accordance with the terms hereof.
3. Transfer. Prior to transferring any Stockholder Shares (other than
in a Public Sale or upon the Sale of the Company to any Person), the
transferring Stockholder shall cause the prospective transferee to execute and
deliver to the Company and the other Stockholders a counterpart of this
Agreement.
4. Definitions.
"Affiliate" means any Person which controls, is controlled by or is
under common control with another Person, any partner of any Person which is a
partnership and Persons which have received distributions of securities from a
partnership holding such securities.
"Certificate of Incorporation" means the Company's amended and
restated certificate of incorporation of the Company as filed with the Delaware
Secretary of State on May 15, 1996.
"Common Stock" means the Company's Common Stock, par value $.01 per
share.
"Family Group" means an Executive's spouse and descendants (whether
natural or adopted) and any trust solely for the benefit of the Executive and/or
the Executive's spouse and/or descendants.
"Permitted Transferees" means (i) in the case of a Stockholder who is
a natural person, such person's spouse, descendants (whether natural or adopted)
and any trust solely for the benefit of such person and/or such person's spouse
and/or descendants, and (ii) in the case of any other Stockholder, any Affiliate
of such Stockholder.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"Public Sale" means any sale of Stockholder Shares to the public
pursuant to an offering registered under the Securities Act or to the public
through a broker, dealer or market maker pursuant to the provisions of Rule 144
adopted under the Securities Act.
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<PAGE>
"Recapitalization Agreement" means the Recapitalization Agreement of
even date herewith among the Company and the Stockholders.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Stockholder Shares" means (i) any Common Stock owned by any
Stockholder, whether acquired pursuant to the Recapitalization Agreement or
otherwise, and (ii) any equity securities issued or issuable directly or
indirectly with respect to the Securities referred to in clause (i) above by way
of stock dividend or stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. As to any
particular shares constituting Stockholder Shares, such shares will cease to be
Stockholder Shares when they have been disposed of in a Public Sale.
"Subsidiary" means, with respect to any Person, any corporation,
partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the managing
director or general partner of such partnership, association or other business
entity.
"ZB Group" means Zucker, Boyd, InterTech, and FTG.
5. Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement shall be
effective against the Company or the Stockholders unless such modification,
amendment or waiver is approved in writing by the Company, GTC and the ZB Group
(determined by a vote of the holders of a majority of the Stockholder Shares
held by the ZB Group). The failure of any party to enforce any of the
provisions of this Agreement shall in no way be construed as a waiver of such
provisions and shall not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
6. 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 or 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.
-4-
<PAGE>
7. Entire Agreement. Except as otherwise expressly set forth herein,
this document embodies the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersedes and
preempts any prior understandings, agreements or representations by or among the
parties, written or oral.
8. Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind the Stockholders and the respective successors and assigns
of each of them.
9. Counterparts. This Agreement may be executed in separate
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same agreement.
10. Remedies. The Company and the Stockholders shall be entitled to
enforce their rights under this Agreement specifically to recover damages by
reason of any breach of any provision of this Agreement and to exercise all
other rights existing in their favor. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of the Agreement and that the Company and the Stockholders in its
sole discretion apply to any court of law or equity of competent jurisdiction
for specific performance and/or injunctive relief (without posting a bond or
other security) in order to enforce or prevent any violation of the provisions
of this Agreement.
11. Notices. Any notice provided for in this Agreement shall be in
writing and shall be either personally delivered, or mailed first class mail
(postage prepaid) or sent by reputable overnight courier service (charges
prepaid) to the Company at the address set forth below and to any other
recipient at the address indicated on the signature page hereto and to any
subsequent holder of Stockholder Shares subject to this Agreement at such
address as indicated by the Company's records, or at such address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. Notices will be deemed to have been given
hereunder when delivered personally, three days after deposit in the U.S. mail
and one day after deposit with a reputable overnight courier service. The
Company's address is:
Polymer Group, Inc.
4838 Jenkins Avenue
North Charleston, South Carolina 29406
Attention: President
12. Governing Law. The corporate law of Delaware shall govern all
issues concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity and interpretation of this
Agreement shall be governed by the internal law, and not the law of conflicts,
of New York.
13. Descriptive Headings. The descriptive headings of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
* * * * *
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Stockholder
Agreement on the day and year first above written.
POLYMER GROUP, INC.
By: /s/ Jerry Zucker
---------------------------
Its: Chairman, President & CEO
---------------------------
Address: THE INTERTECH GROUP, INC.
4838 Jenkins Avenue
North Charleston, SC 29406 By: /s/ Jerry Zucker
---------------------------
Its: Chairman, President & CEO
---------------------------
Address: By: /s/ Bruce V. Rauner
6100 Sears Tower ---------------------------
Chicago, IL 60606-6402 Its: General Partner
---------------------------
Address: /s/ Jerry Zucker
c/o The InterTech Group, Inc. --------------------------------
4838 Jenkins Avenue Jerry Zucker
North Charleston, SC 29406
/s/ James G. Boyd
Address: --------------------------------
c/o The InterTech Group, Inc. James G. Boyd
4838 Jenkins Avenue
North Charleston, SC 29406
-6-
<PAGE>
Address: FTG, INC.
4838 Jenkins Avenue
North Charleston, SC 29406 By: /s/ Jerry Zucker
----------------------------------
Its: Chairman, President & CEO
----------------------------------
Address: CHASE MANHATTAN INVESTMENT
c/o Chase Capital Partners HOLDINGS, INC.
380 Madison Avenue, 12th Floor
New York, NY 10017 By: /s/ Donna L. Carter
Attention: Robert Ruggiero -----------------------------------
Its: Senior Vice President & Treasurer
----------------------------------
LEEWAY & CO.
By: State Street Bank & Trust Company,
Address: Partner
c/o State Street Bank and
Trust Company By: /s/ John Muir
Master Trust Division-Q4W ----------------------------------
P.O. Box 1992
Boston, MA 02101 Its: Assistant Vice President
---------------------------------
-7-
<PAGE>
Exhibit 10.9
AMENDMENT NO. 1 TO MANAGEMENT AGREEMENT
THIS AMENDMENT, dated as of May 15, 1996, is by and between Polymer Group,
Inc. (the "Company"), Chicopee, Inc., a Delaware corporation ("Chicopee") and
Jerry Zucker (the "Executive").
WHEREAS, the parties hereto are parties to a Management Agreement dated as
of March 15, 1995 (the "Management Agreement");
WHEREAS, the Company is contemporaneously with the execution hereof
consummating an initial public offering of its common stock; and
WHEREAS, the parties hereto desire to amend certain provisions of the
Management Agreement as set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Vesting. Notwithstanding anything to the contrary contained in the
Management Agreement, all Executive Stock shall be Vested Stock as of the date
hereof.
2. Amendments.
(i) The following definition set forth in Section 1 of the Management
Agreement is hereby amended in its entirety to read as follows:
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of May 15, 1996 among Polymer Group, Inc. and its subsidiaries and
the Chase Manhattan Bank, N.A. and certain other lenders, as the same may
be amended, modified or amended and restated from time to time.
(ii) The definitions of "Vested Stock" and "Unvested Stock" set forth in
Section 1 of the Management Agreement are hereby deleted in their entirety.
(iii) Sections 3, 4 and 6 of the Management Agreement and any definitions
which are not used outstide of such sections are hereby deleted in their
entirety.
3. Counterparts. This Amendment may be executed in counterparts each of
which may contain the signature of only one party but each such counterpart
shall be deemed an original and all such counterparts taken together shall
constitute one and the same Amendment.
4. Effect of Amendment. The Management Agreement, as previously amended
and otherwise as in effect immediately prior to this Amendment, continues in
full force and effect in accordance with the original terms thereof, except and
to the extent amended hereby. All
<PAGE>
references in the Management Agreement shall, from and after the effective date
of this Amendment, refer to the Management Agreement as amended hereby.
5. Definitions. All capitalized terms used in this Amendment and not
otherwise defined herein shall have the meanings given to such terms in the
Management Agreement.
6. Governing Law. All questions concerning the construction, validity and
interpretation of this Amendment will be governed by the internal law, and not
the law of conflicts, of the State of Delaware.
* * * * *
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1
to Management Agreement as of the date first above written.
POLYMER GROUP, INC.
By: /s/ James G. Boyd
Its: Executive Vice President, Treasurer and
Secretary
---------------------------------------
CHICOPEE, INC.
By: /s/ James G. Boyd
---------------------------------------
Its: Executive Vice President, Treasurer and
Secretary
---------------------------------------
/s/ Jerry Zucker
---------------------------------------
JERRY ZUCKER
<PAGE>
Exhibit 10.10
AMENDMENT NO. 3 TO MANAGEMENT AGREEMENT
THIS AMENDMENT, dated as of May 15, 1996, is by and between PGI
Polymer Inc., a Delaware corporation formerly known as Polymer Group, Inc. (the
"Company"), FiberTech Group, Inc., a Delaware corporation ("FiberTech"), Golder,
Thoma, Cressey Fund III Limited Partnership, an Illinois limited partnership, as
successor in interest to ZBG Partners, and Jerry Zucker (the "Executive").
WHEREAS, the parties hereto are parties to a Management Agreement
dated as of October 21, 1992, as subsequently amended as of June 24, 1994 and
March 15, 1995 (the "Management Agreement");
WHEREAS, pursuant to an Exchange Agreement dated as of June 29, 1994
(the "Exchange Agreement"), the Executive exchanged certain shares of capital
stock of the Company for shares of capital stock of Polymer Group, Inc., a
Delaware corporation ("New PGI");
WHEREAS, New PGI is contemporaneously with the execution hereof
consummating an initial public offering of its common stock; and
WHEREAS, the parties hereto desire to amend certain provisions of the
Management Agreement as set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Vesting. Notwithstanding anything to the contrary contained in
the Management Agreement, all Executive Stock shall be Vested Stock as of the
date hereof.
2. Amendments.
(i) The following definition set forth in Section 1 of the Management
Agreement is hereby amended in its entirety to read as follows:
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of May 15, 1996 among Polymer Group, Inc. and its subsidiaries and
the Chase Manhattan Bank, N.A. and certain other lenders, as the same may
be amended, modified or amended and restated from time to time.
(ii) The definitions of "Vested Stock" and "Unvested Stock" set forth
in Section 1 of the Management Agreement are hereby deleted in their entirety.
(iii) Paragraphs (e) and (f) of Section 2 and any definitions which
are not used
<PAGE>
outstide of such paragraphs are hereby deleted in their entirety.
(iv) Sections 3, 4 and 6 of the Management Agreement and any
definitions which are not used outstide of such sections are hereby deleted in
their entirety.
3. Counterparts. This Amendment may be executed in counterparts each
of which may contain the signature of only one party but each such counterpart
shall be deemed an original and all such counterparts taken together shall
constitute one and the same Amendment.
4. Effect of Amendment. The Management Agreement, as previously
amended and otherwise as in effect immediately prior to this Amendment,
continues in full force and effect in accordance with the original terms
thereof, except and to the extent amended hereby. All references in the
Management Agreement shall, from and after the effective date of this Amendment,
refer to the Management Agreement as amended hereby.
5. Definitions. All capitalized terms used in this Amendment and not
otherwise defined herein shall have the meanings given to such terms in the
Management Agreement.
6. Governing Law. All questions concerning the construction,
validity and interpretation of this Amendment will be governed by the internal
law, and not the law of conflicts, of the State of Delaware.
* * * * *
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 3 to Management Agreement as of the date first above written.
POLYMER GROUP, INC.
By: /s/ James G. Boyd
---------------------------------------
Its: Executive Vice President, Treasurer and
Secretary
---------------------------------------
FIBERTECH GROUP, INC.
By: /s/ James G. Boyd
---------------------------------------
Its: Executive Vice President, Treasurer and
Secretary
---------------------------------------
GOLDER, THOMA, CRESSEY FUND III
LIMITED PARTNERSHIP
By: Golder, Thoma, Cressey &
Rauner, L.P.
Its: General Partner
By: /s/ Bruce V. Rauner
---------------------------------------
Its: General Partner
/s/ Jerry Zucker
--------------------------------------------
JERRY ZUCKER
<PAGE>
Exhibit 10.11
AMENDMENT NO. 1 TO MANAGEMENT AGREEMENT
THIS AMENDMENT, dated as of May 15, 1996, is by and between Polymer
Group, Inc. (the "Company"), Chicopee, Inc., a Delaware corporation ("Chicopee")
and James G. Boyd (the "Executive").
WHEREAS, the parties hereto are parties to a Management Agreement
dated as of March 15, 1995 (the "Management Agreement");
WHEREAS, the Company is contemporaneously with the execution hereof
consummating an initial public offering of its common stock; and
WHEREAS, the parties hereto desire to amend certain provisions of the
Management Agreement as set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Vesting. Notwithstanding anything to the contrary contained in
the Management Agreement, all Executive Stock shall be Vested Stock as of the
date hereof.
2. Amendments.
(i) The following definition set forth in Section 1 of the Management
Agreement is hereby amended in its entirety to read as follows:
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of May 15, 1996 among Polymer Group, Inc. and its subsidiaries and
the Chase Manhattan Bank, N.A. and certain other lenders, as the same may
be amended, modified or amended and restated from time to time.
(ii) The definitions of "Vested Stock" and "Unvested Stock" set forth
in Section 1 of the Management Agreement are hereby deleted in their entirety.
(iii) Sections 3, 4 and 6 of the Management Agreement and any
definitions which are not used outstide of such sections are hereby deleted in
their entirety.
3. Counterparts. This Amendment may be executed in counterparts each
of which may contain the signature of only one party but each such counterpart
shall be deemed an original and all such counterparts taken together shall
constitute one and the same Amendment.
4. Effect of Amendment. The Management Agreement, as previously
amended and otherwise as in effect immediately prior to this Amendment,
continues in full force and effect in accordance with the original terms
thereof, except and to the extent amended hereby. All references in the
Management Agreement shall, from and after the effective date of this Amendment,
refer to
<PAGE>
the Management Agreement as amended hereby.
5. Definitions. All capitalized terms used in this Amendment and not
otherwise defined herein shall have the meanings given to such terms in the
Management Agreement.
6. Governing Law. All questions concerning the construction,
validity and interpretation of this Amendment will be governed by the internal
law, and not the law of conflicts, of the State of Delaware.
* * * * *
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 1 to Management Agreement as of the date first above written.
POLYMER GROUP, INC.
By: /s/ Jerry Zucker
--------------------------
Its: Chairman, President & CEO
--------------------------
CHICOPEE, INC.
By: /s/ Jerry Zucker
--------------------------
Its: Chairman, President & CEO
--------------------------
/s/ James G. Boyd
-------------------------------
JAMES G. BOYD
<PAGE>
Exhibit 10.12
AMENDMENT NO. 3 TO MANAGEMENT AGREEMENT
THIS AMENDMENT, dated as of May 15, 1996, is by and between PGI
Polymer Inc., a Delaware corporation formerly known as Polymer Group, Inc. (the
"Company"), FiberTech Group, Inc., a Delaware corporation ("FiberTech"), Golder,
Thoma, Cressey Fund III Limited Partnership, an Illinois limited partnership, as
successor in interest to ZBG Partners, and James G. Boyd (the "Executive").
WHEREAS, the parties hereto are parties to a Management Agreement
dated as of October 21, 1992, as subsequently amended as of June 24, 1994 and
March 15, 1995 (the "Management Agreement");
WHEREAS, pursuant to an Exchange Agreement dated as of June 29, 1994
(the "Exchange Agreement"), the Executive exchanged certain shares of capital
stock of the Company for shares of capital stock of Polymer Group, Inc., a
Delaware corporation ("New PGI");
WHEREAS, New PGI is contemporaneously with the execution hereof
consummating an initial public offering of its common stock; and
WHEREAS, the parties hereto desire to amend certain provisions of the
Management Agreement as set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Vesting. Notwithstanding anything to the contrary contained in
the Management Agreement, all Executive Stock shall be Vested Stock as of the
date hereof.
2. Amendments.
(i) The following definition set forth in Section 1 of the Management
Agreement is hereby amended in its entirety to read as follows:
"Credit Agreement" means the Amended and Restated Credit Agreement
dated as of May 15, 1996 among Polymer Group, Inc. and its subsidiaries and
the Chase Manhattan Bank, N.A. and certain other lenders, as the same may
be amended, modified or amended and restated from time to time.
(ii) The definitions of "Vested Stock" and "Unvested Stock" set forth
in Section 1 of the Management Agreement are hereby deleted in their entirety.
(iii) Paragraphs (e) and (f) of Section 2 and any definitions which
are no used outstide of such paragraphs are hereby deleted in their entirety.
<PAGE>
(iv) Sections 3, 4 and 6 of the Management Agreement and any
definitions which are not used outstide of such sections are hereby deleted in
their entirety.
3. Counterparts. This Amendment may be executed in counterparts each
of which may contain the signature of only one party but each such counterpart
shall be deemed an original and all such counterparts taken together shall
constitute one and the same Amendment.
4. Effect of Amendment. The Management Agreement, as previously
amended and otherwise as in effect immediately prior to this Amendment,
continues in full force and effect in accordance with the original terms
thereof, except and to the extent amended hereby. All references in the
Management Agreement shall, from and after the effective date of this Amendment,
refer to the Management Agreement as amended hereby.
5. Definitions. All capitalized terms used in this Amendment and not
otherwise defined herein shall have the meanings given to such terms in the
Management Agreement.
6. Governing Law. All questions concerning the construction,
validity and interpretation of this Amendment will be governed by the internal
law, and not the law of conflicts, of the State of Delaware.
* * * * *
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 3 to Management Agreement as of the date first above written.
POLYMER GROUP, INC.
By: /s/ Jerry Zucker
--------------------------
Its: Chairman, President & CEO
--------------------------
FIBERTECH GROUP, INC.
By: /s/ Jerry Zucker
--------------------------
Its: Chairman, President & CEO
--------------------------
GOLDER, THOMA, CRESSEY FUND III
LIMITED PARTNERSHIP
By: Golder, Thoma, Cressey &
Rauner, L.P.
Its: General Partner
By: /s/ Bruce V. Rauner
--------------------------
Its: General Partner
/s/ James G. Boyd
---------------------------
JAMES G. BOYD
<PAGE>
Exhibit 10.13
AMENDMENT NO. 1 TO
ROLL-IN AGREEMENT
-----------------
This Amendment No. 1 to Roll-In Agreement (this "Amendment") is
entered into as of May 15, 1996 by and among ZB Holdings, Inc., a South Carolina
corporation ("ZBH"), The InterTech Group, Inc., a South Carolina corporation
("InterTech"), Polymer Group, Inc., a Delaware corporation ("PGI"), Polypore,
Inc., a Delaware corporation ("Polypore"), Chase Manhattan Investment Holdings,
Inc., a Delaware corporation ("CMIHI"), Jerry Zucker ("Zucker"), James Boyd
("Boyd"), and Golder, Thoma, Cressey Fund III Limited Partnership, an Illinois
limited partnership ("GTC").
The parties hereto, together with FTG, Inc., a South Carolina
corporation ("FTG"), are parties to a Roll-In Agreement, dated as of November
18, 1994 ("Agreement"). InterTech has acquired all of the PGI capital stock
owned by FTG and, as a result, has succeeded to the rights and obligations of
FTG with respect to such stock under the Agreement. The parties hereto desire
to amend the Agreement in the manner specified herein. Capitalized terms used
herein and not otherwise defined shall have the respective meanings assigned to
such terms in the Agreement.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
1. Amendments.
(A) The second paragraph of the Agreement (i.e., the second recital)
is hereby amended by deleting such paragraph and replacing it with the
following:
InterTech, GTC, Chase, Zucker and Boyd each own shares of PGI capital
stock (in their capacity as holders of such capital stock, the "PGI
Stockholders"). ZBH, GTC, Chase, Zucker and Boyd each own shares of
Polypore capital stock (in their capacity as holders of such capital
stock, the "Polypore Stockholders"). PGI and Polypore are
collectively referred to herein as the "Companies." The Polypore
Stockholders desire to grant to the PGI Stockholders the option to
cause the Polypore Stock (as defined below) to be exchanged for shares
of PGI Stock (as defined below) on the terms and subject to the
conditions set forth herein.
(B) A third paragraph (i.e., a third recital) is hereby added to the
Agreement as follows:
The parties hereto acknowledge that all outstanding shares of PGI
capital stock are to be exchanged for shares of PGI's common stock,
par value $.01 per share ("PGI Common Stock"), pursuant to a
Recapitalization Agreement to be entered into by and among PGI and
<PAGE>
its stockholders as of May 15, 1996 (the "Recapitalization
Agreement"). A portion of the PGI Common Stock to be issued pursuant
to the Recapitalization Agreement will be subject to this Agreement as
set forth in paragraph 1(b) hereof.
(C) Paragraph 1 of the Agreement is hereby amended by deleting such
paragraph and replacing it with the following:
1. Option to Require Exchange of Stock.
(a) At any time, the persons who hold, as of May 15, 1996, a
majority of the PGI Stock (as defined below) (the "PGI Majority
Holders") will have one election, exercisable by written notice
delivered to the Polypore Stockholders not less than 30 days prior to
the closing date selected by the PGI Majority Holders, to cause the
exchange (an "Exchange") by the Polypore Stockholders of the Polypore
Stock for the PGI Stock. Each class of the Polypore Stock shall be
allocated among the PGI Stockholders stock pro rata based upon their
ownership of PGI Stock prior to the exchange. The PGI Stock shall be
allocated among the Polypore Stockholders pro rata based upon the
relative values (determined under paragraph 2 below) of the Polypore
Stock given up in the exchange by each Polypore Stockholder.
(b) For purposes hereof, (i) the "PGI Stock" shall mean, for any
PGI Stockholder, a number of shares of PGI Common Stock equal to 21.5%
of the number of shares of PGI Common Stock into which the shares of
PGI capital stock set forth opposite each PGI Stockholder's name on
Schedule A attached hereto are converted pursuant to the
Recapitalization Agreement (as such number is equitably adjusted for
stock splits, stock dividends, combinations of shares,
recapitalizations and similar transactions), or such lesser number of
shares as may be owned by such PGI Stockholder at the time of an
Exchange, it being understood that this Agreement shall apply to a
certain number of shares of PGI Common Stock rather than any
particular shares of PGI Common Stock; and (ii) the "Polypore Stock"
shall mean, for any Polypore Stockholder, the number of shares of each
class of Polypore capital stock set forth opposite each Polypore
Stockholder's name on Schedule A attached hereto (as such numbers are
equitably adjusted for stock splits, stock dividends, combinations of
shares, recapitalizations and similar transactions); provided that
immediately prior to any Exchange, all shares of convertible preferred
stock of Polypore shall be converted to common stock.
-2-
<PAGE>
(c) If any PGI Stockholder owns less than the number of shares of
PGI Stock into which the shares of PGI capital stock set forth
opposite such PGI Stockholder's name on Schedule A attached hereto are
converted pursuant to the Recapitalization Agreement, the amount of
Polypore Stock to be exchanged by the Polypore Stockholders shall be
proportionately reduced, and such Polypore Stock received by the PGI
Stockholders shall be allocated pursuant to (a) above taking into
account such lesser number of shares.
(d) The costs and expenses of any Exchange will be paid 78.5% by
the PGI Stockholders and 21.5% by the Polypore Stockholders.
(D) All references to the defined term "Roll-In" anywhere in the
Agreement shall be amended by deleting such reference and replacing it with
the defined term "Exchange."
(E) Paragraph 2 of the Agreement is hereby amended by deleting the
parenthetical at the end of the last sentence thereof.
(F) Paragraph 3 of the Agreement is hereby amended by deleting the
last three sentences thereof.
(G) Paragraph 4(b) of the Agreement is hereby amended by deleting
such paragraph and replacing it with the following:
(b) Stockholders' Agreements; Regulation Y.
(i) All stockholder agreements relating to the PGI Stock
and/or the Polypore Stock in existence immediately prior to any
Exchange shall remain in full force and effect immediately after such
Exchange, and the PGI Stock or Polypore Stock (as the case may be)
shall continue to be subject to the terms thereof; provided that PGI,
Polypore, the PGI Stockholders and the Polypore Stockholders hereby
waive any restrictions on transfer that may be contained in any such
agreement (whether now in existence or subsequently entered into) with
respect to any Exchange.
(ii) Any holder of stock who is subject to Regulation Y
promulgated by the Board of Governors of the Federal Reserve, or any
successor regulation thereto, will not be required to accept any
securities in an Exchange which it would not be required to accept
under Section 8.2(h) of the Stockholders Agreement, dated as of
November 18, 1994, among Polypore, the Polypore Stockholders and
certain other parties, and the parties will comply with Section 3H of
the Purchase Agreement, dated as of November 18, 1994, among Polypore,
GTC, ZBH and Chase, with respect to any Exchange.
-3-
<PAGE>
(H) Paragraph 5 of the Agreement is hereby amended by deleting all
references therein to "PGI Stock".
(I) Paragraph 6 of the Agreement is hereby amended by deleting the
first sentence thereof and replacing it with the following:
Except as otherwise provided herein, no modification, amendment or
waiver of any provision of this Agreement shall be effective against
any party unless such modification, amendment or waiver is approved in
writing by the holders of a majority of the PGI Stock and the holders
of a majority of the Polypore Stock; provided that to the extent any
amendment would materially and adversely affect any party hereto, such
amendment will not be effective without such party's consent.
(J) Paragraph 14 of the Agreement is hereby amended by deleting such
paragraph and replacing it with the following:
This Agreement will terminate on the earlier of (i) the tenth
anniversary of the date hereof and (ii) the occurrence of a Change in
Control. The rights of the PGI Majority Holders hereunder will
terminate on the earlier of (i) the date the Exchange contemplated
hereby is consummated and (ii) the first date on which GTC does not
own any PGI Common Stock. For purposes of this Agreement, "Change in
Control" means the acquisition by an independent third party of a
majority of the voting securities of Polypore or the sale by Polypore
to an independent third party of all or substantially all of its
assets.
2. Conditions to Effectiveness. This Amendment will be effective
only upon (i) the consummation of the initial public offering of PGI's common
stock, and (ii) the execution by Connecticut General Life Insurance Company and
CIGNA Mezzanine Partners III, L.P. of the consent attached hereto as Exhibit I.
3. Miscellaneous. This Amendment may be executed in two or more
counterparts each of which shall be an original and all of which taken together
shall constitute one and the same Amendment. This Amendment shall be governed
by the internal law, and not the law of conflicts, of New York.
* * * * *
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
No. 1 to Roll-In Agreement on the day and year first above written.
THE INTERTECH GROUP, INC.
By: /s/ Jerry Zucker
-------------------------------------
Its: Chairman, President & CEO
-------------------------------------
POLYMER GROUP, INC.
By: /s/ Jerry Zucker
-------------------------------------
Its: Chairman, President & CEO
-------------------------------------
POLYPORE, INC.
By: /s/ Jerry Zucker
-------------------------------------
Its: Chairman, President & CEO
-------------------------------------
CHASE MANHATTAN INVESTMENT HOLDINGS, INC.
By: /s/ Donna L. Carter
-------------------------------------
Its: Senior Vice President & Treasurer
/s/ Jerry Zucker
------------------------------------------
JERRY ZUCKER
/s/ James G. Boyd
------------------------------------------
JAMES BOYD
<PAGE>
CONTINUATION OF SIGNATURE PAGES TO
AMENDMENT NO. 1 TO ROLL-IN AGREEMENT
GOLDER, THOMA, CRESSEY FUND III LIMITED
PARTNERSHIP
By: Golder, Thoma, Cressey, Rauner, L.P.
Its: General Partner
By: /s/ Bruce V. Rauner
-------------------------------------
Its: General Partner
-------------------------------------
ZB HOLDINGS, INC.
By: /s/ Jerry Zucker
-------------------------------------
Its: Chairman, President & CEO
-------------------------------------
<PAGE>
SCHEDULE A
----------
PGI Stockholders
----------------
<TABLE>
<CAPTION>
Name PGI Stock/1/
- ---- ------------
Class Class Class Class
A-1 A-2 A-3 B
Common Common Common Common
------ ------ ------ ------
<S> <C> <C> <C> <C>
GTC 111,825 115,000 185,902
InterTech 118,476
Zucker 21,802
Boyd 7,267
CMIHI 17,248 14,136
</TABLE>
Polypore Stockholders
---------------------
<TABLE>
<CAPTION>
Name Polypore Stock/2/
- ---- -----------------
Class A Class B-1 Class B-2
Preferred Preferred/3/ Preferred/3/ Common Stock
--------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
GTC 2,565 18,314
ZBH 5,861 41,872
Zucker 27,876
Boyd 9,289
CMIHI 2,565 18,314
</TABLE>
- ---------------------
/1/ Amounts represent PGI capital stock outstanding as of the time of the
Polypore acquisition/formation, as adjusted for the recapitalization which
occurred on March 15, 1995 in connection with the Chicopee acquisition. All
such shares will be converted into PGI Common Stock pursuant to the
Recapitalization Agreement.
/2/ Amounts are equal to 78.5% of each class of capital stock held by the
indicated stockholder.
/3/ All convertible preferred stock will be converted into common stock prior
to the Exchange.
<PAGE>
Exhibit I
---------
Consent to Amendment
The undersigned hereby consent to Amendment No. 1 to Roll-In Agreement
in the form attached hereto as Annex 1.
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA Investments, Inc. (as Agent)
By:
--------------------------------------
Its:
--------------------------------------
CIGNA MEZZANINE PARTNERS III, L.P.
By: CIGNA Investments, Inc. (as Agent)
By:
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Its:
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Exhibit 10.14
INDEMNIFICATION AGREEMENT
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THIS AGREEMENT is made as of April 1, 1996 among Polymer Group, Inc.,
a Delaware corporation (together with each of its subsidiaries, the "Company"),
The InterTech Group, Inc., a South Carolina corporation ("InterTech"), Golder,
Thoma, Cressey Fund III Limited Partnership, an Illinois limited partnership
("GTC Fund III"), Golder, Thoma, Cressey, Rauner, Inc., a Delaware corporation
("GTCR"), ConX, Inc., a South Carolina corporation ("ConX"), ConX II, Inc., a
Delaware corporation ("ConX II"), Jerry Zucker ("Zucker") and James G. Boyd
("Boyd"). InterTech, GTC Fund III, GTCR, ConX, ConX II, Zucker, Boyd and, as
applicable, each of their respective directors, officers, partners and agents,
are referred to herein as the "Indemnified Parties." Except as otherwise
indicated herein, capitalized terms used herein are defined in Section 6 hereof.
Pursuant to a Letter Agreement (the "Danaklon Letter Agreement"),
dated as of September 28, 1995, by and among ConX, ConX II, Danaklon a/s and
Danaklon Americas, Inc., ConX II has guaranteed the performance by ConX and The
FiberTech Group, Inc. ("FiberTech") of certain obligations under a Supply and
Cooperation Agreement (the "Supply and Cooperation Agreement") between Danaklon
Americas, Inc. and FiberTech. ConX and FiberTech are wholly owned subsidiaries
of the Company and the guarantee of their obligations allowed the Company to
obtain certain benefits under the Supply and Cooperation Agreement.
Pursuant to (i) a Loan and Security Agreement (the "First Union Credit
Agreement"), dated as of June 9, 1995, by and among First Union National Bank of
South Carolina ("First Union") as lender, ConX II as borrower and Zucker and
Boyd as guarantors, (ii) an Unconditional Guaranty, dated as of June 9 1995, by
and between First Union and Zucker, relating to the First Union Credit Agreement
and (iii) an Unconditional Guaranty, dated as of June 9 1995, by and between
First Union and Boyd, relating to the First Union Credit Agreement, Zucker and
Boyd have guaranteed the performance by ConX II of certain of its obligations
under the First Union Credit Agreement (collectively, the "First Union
Guarantees"). The loans to ConX II under the First Union Credit Agreement have
enabled ConX II to perform its obligations under its Services/Production
Agreement and its Fiber Supply agreement with FiberTech.
Pursuant to a Letter Agreement (the "GTC Letter Agreement"), dated as
of June 9, 1995, by and among GTC Fund III, Zucker and Boyd, relating to First
Union Credit Agreement, GTC Fund III have indemnified Zucker and Boyd for a
portion of any amounts for which they may become liable in connection with their
guarantees under the First Union Credit Agreement.
Pursuant to a Purchase Agreement (the "J&J Purchase Agreement"), dated
as of January 27, 1995, by and among Johnson & Johnson Advanced Materials
Company, Johnson & Johnson, InterTech and Chicopee, Inc. ("Chicopee"), and a
Supply Agreement (the "J&J Supply Agreement"), dated as of March 15, 1995, by
and among Johnson & Johnson and Chicopee, InterTech has guaranteed performance
by Chicopee of certain of its obligations under the J&J Purchase Agreement and
the J&J Supply Agreement. Chicopee is a wholly owned subsidiary of the Company
which was formed to acquire the nonwoven fabrics business of Johnson & Johnson
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pursuant to the J&J Purchase Agreement. Johnson & Johnson purchases a
substantial amount of product from Chicopee pursuant to the J&J Supply
Agreement.
Pursuant to a Guaranty as an Inducement to Make Loan, dated as of
September 1, 1993, by and among Zucker and Enterprise Zone Development
Corporation of Vineland and Millville (the "Development Corporation") and a
Guaranty as an Inducement to Make Loan, dated as of September 1, 1993, by and
among InterTech and the Development Corporation, Zucker and InterTech have
guaranteed the performance by ConX of certain of its obligations under a loan
agreement between ConX and the Development Corporation (collectively, the
"Development Corporation Guarantees"). ConX, a wholly owned subsidiary of the
Company, used the proceeds of such loan agreement to make substantial
improvements to its Vineland facility.
Pursuant to certain other agreements, the Indemnified Parties have
from time to time, individually or collectively, guaranteed the performance of
certain obligations of affiliates of the Company (collectively, "Other
Guaranteed Obligations"). The Indemnified Parties' obligations under the
Danaklon Letter Agreement, the First Union Guarantees, the GTC Letter Agreement,
the J&J Purchase Agreement, the J&J Supply Agreement, the Development
Corporation Guarantees and the Other Guaranteed Obligations are collectively
referred to herein as the "Indemnified Obligations."
The Indemnified Parties have entered into the Indemnified Obligations
at the request of the Company and at substantial personal risk to themselves.
Each of the Indemnified Obligations represents a significant benefit to the
Company or to one of its affiliates. The Company desires to defend, hold
harmless and indemnify the Indemnifies Parties from and against any losses they
may incur from time to time in respect of the Indemnified Obligations.
The parties hereto agree as follows:
Section 1. Indemnification.
1A. Indemnification Obligation. If any Indemnified Party suffers any
Adverse Consequences in respect of any of the Indemnified Obligations, the
Company shall defend, hold harmless and indemnify such Indemnified Party from
and against the entirety of such Adverse Consequences the Indemnified Party may
suffer through and after the date of the claim for indemnification in respect of
such Indemnified Obligations. "Adverse Consequences" means all actions, suits,
proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties,
fines, costs, amounts paid in settlement, liabilities, obligations, taxes,
liens, losses, expenses, and fees, including court costs and attorneys' fees and
expenses.
1B. Notice; Payment. If any Indemnified Party suffers any Adverse
Consequences which may give rise to a claim for indemnification hereunder, then
such Indemnified Party shall promptly notify the Company thereof in writing,
providing written evidence of the incurrence of such Adverse Consequences;
provided, however, that no delay on the part of the Indemnified Party in
notifying any Company shall relieve the Company from any obligation hereunder.
The Company shall promptly, but in any event within ten days after receipt of
such
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notice, pay such Indemnified Party such amounts as are due with respect to such
Indemnified Obligation. If such Indemnified Party suffers additional Adverse
Consequences with respect to such Indemnified Obligation, the Company shall pay
such Indemnified Party such additional amounts in accordance with the terms of
this Section 1B.
1C. Right of Setoff. Any Indemnified Party shall have the option of
recouping all or any part of any Adverse Consequences it may suffer (in lieu of
seeking any indemnification to which it is entitled under this Agreement) by
notifying the Company that such Indemnified Party is reducing the amount
outstanding under any amounts otherwise payable by such Indemnified Party,
irrespective of whether the terms of such amounts payable to such Indemnified
Party expressly allow a right of setoff against such amounts.
1D. Other Indemnification Provisions. The foregoing indemnification
provisions are in addition to, and not in derogation of, any statutory,
equitable, or common law remedy any Indemnified Party may have against the
Company.
Section 2. Miscellaneous.
2A. Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company may take
any action herein prohibited, or omit to perform any act herein required to be
performed by it, only if the Company has obtained the written consent of the
Indemnified Party to which such amendment relates. No other course of dealing
between the Company and any Indemnified Party or any delay in exercising any
rights hereunder shall operate as a waiver of any rights of any such holder.
2B. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on behalf
of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
2C. 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 prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
2D. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together shall constitute
one and the same Agreement.
2E. Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement and the exhibits and schedules
hereto shall be governed by the internal law, and not the law of conflicts, of
New York.
2F. Notices. All notices, demands or other communications to be
given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be
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deemed to have been given when delivered personally to the recipient, sent to
the recipient by reputable overnight courier service (charges prepaid) or mailed
to the recipient by certified or registered mail, return receipt requested and
postage prepaid. Such notices, demands and other communications shall be sent
to each Stockholder at the address indicated next to such party's name on the
signature pages hereto or to such other address or to the attention of such
other person as the recipient party has specified by prior written notice to the
sending party.
* * * * * * * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement on the date first written above.
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Address: POLYMER GROUP, INC.
4838 Jenkins Avenue
North Charleston, SC 29406 By: /s/ Jerry Zucker
Attention: President ---------------------------------------
Its: Chairman, President & CEO
Address: THE INTERTECH GROUP, INC.
4838 Jenkins Avenue
North Charleston, SC 29406 By: /s/ Jerry Zucker
Attention: President ----------------------------------------
Its: Chairman, President & CEO
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Address: CONX, INC.
4838 Jenkins Avenue
North Charleston, SC 29406 By: /s/ James G. Boyd
Attention: President ----------------------------------------
Its: Executive Vice President and Treasurer
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Address: CONX II, INC.
4838 Jenkins Avenue
North Charleston, SC 29406 By: /s/ James G. Boyd
Attention: President ----------------------------------------
Its: Executive Vice President and Treasurer
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GOLDER, THOMA, CRESSEY FUND III
LIMITED PARTNERSHIP
Address:
6100 Sears Tower By: Golder, Thoma, Cressey & Rauner, L.P.
Chicago, IL 60606-6402 ----------------------------------------
Attention: Bruce V. Rauner Its: General Partner
David A. Donnini ----------------------------------------
By: /s/ Bruce V. Rauner
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Its: General Partner
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GOLDER, THOMA, CRESSEY, RAUNER, INC.
Address:
6100 Sears Tower By: /s/ Bruce V. Rauner
Chicago, IL 60606-6402 ----------------------------------------
Attention: Bruce V. Rauner Its: Principal
David A. Donnini ----------------------------------------
Address:
c/o The InterTech Group, Inc. /s/ Jerry Zucker
4838 Jenkins Avenue ---------------------------------------------
North Charleston, SC 29406 Jerry Zucker
Address:
c/o The InterTech Group, Inc. /s/ James G. Boyd
4838 Jenkins Avenue ---------------------------------------------
North Charleston, SC 29406 James G. Boyd
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