This EMPLOYMENT
AGREEMENT is made and entered into as of this 15
th day of August , 2005, by and between
Polypore International, Inc., a Delaware corporation (the “
Company ”), and Frank Nasisi (the “
Executive ”).
WHEREAS, Executive
is currently employed as the Chief Executive Officer of the
Company; and
WHEREAS,
Executive’s employment with the Company is currently governed
by the terms set forth in term sheet executed by Executive and an
behalf of the Company in January 2004 (the “ Term
Sheet ”); and
WHEREAS, the
Company and Executive have mutually agreed to have Executive resign
from his position as Chief Executive Officer of the Company, and to
appoint Executive as the Vice Chairman of the Company;
and
WHEREAS, the
Company and Executive desire to enter into an agreement embodying
the terms of such continued employment with the Company (this
“ Agreement ”).
NOW, THEREFORE, in
consideration of the premises and mutual covenants contained herein
and for other good and valuable consideration, the receipt of which
is mutually acknowledged, the Company and Executive agree as
follows:
(a) “
Accrued Obligations ” shall mean (i) all accrued
but unpaid Base Salary through the date of termination of
Executive’s employment; (ii) any unpaid Annual Bonus in
respect to any completed fiscal year which has ended prior to the
date of termination of Executive’s employment; (iii) any
unpaid or unreimbursed expenses incurred in accordance with
Section 6 below; and (iv) any benefits provided under the
Company’s employee benefit plans upon a termination of
employment, in accordance with the terms therein, including rights
with respect to stock options in the Company granted pursuant to
the Plan. To the extent payable pursuant to Section 8 below,
the Accrued Obligations shall be paid within five (5) business
days of any applicable termination, except amounts payable with
respect to unpaid Annual Bonus, which shall be paid at such time
Annual Bonus amounts are paid to other senior
executives.
(b) “
Base Salary ” shall mean the salary provided for in
Section 4(a) below or any increased salary granted to Executive
pursuant to Section 4(a).
(c) “
Board ” shall mean the Board of Directors of the
Company.
(d) “
Cause ” shall mean a good faith determination by the
Board of: (i) misappropriation by Executive of the assets or
business opportunities of the Company or its affiliates;
(ii) embezzlement or other financial fraud committed by
Executive or at his direction, or with his knowledge;
(iii) Executive’s indictment for, conviction of,
admission to, or entry of
pleas of no
contest to any felony or any crime involving moral turpitude; or
(iv) Executive’s willful and material breach of Sections
3(b) or 9 of this Agreement.
(e) “
COBRA ” shall mean the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended.
(f) “
Competitive Activities ” shall mean any business
activities in which the Company is engaged or has committed plans
to engage either (i) during the Term of Employment, or
(ii) for purposes of Executive’s obligations under
Section 9(b) after the Term of Employment, at the time of
termination of Executive’s employment.
(g) “
Confidential Information ” shall have the meaning set
forth in Section 9(a) below.
(h) “
Plan ” shall mean the Polypore International, Inc.
2004 Stock Option Plan, as amended from time to time.
(i) “
Restricted Period ” shall mean the period commencing
as of the date hereof and ending on the eighteen (18) month
anniversary of the date of Executive’s termination of
employment for any reason (including expiration of the Term of
Employment).
(j) “
Severance Term ” shall mean the period specified in
Section 8(c)(ii) below.
(k) “
Term of Employment ” shall mean the period specified
in Section 2 below.
Section 2.
Acceptance and Term of Employment .
The Company agrees
to employ Executive and Executive agrees to serve the Company on
the terms and conditions set forth herein. Unless sooner terminated
as provided in Section 8 hereof, the Term of Employment shall
commence immediately following the date hereof and shall continue
during the period ending on December 31, 2006. The Term of
Employment may be extended by mutual agreement of the parties
hereto.
Section 3.
Position and Duties and Responsibilities .
(a) During
the Term of Employment, Executive shall be employed and serve as
the Vice Chairman of the Company and shall have such duties
typically associated with such title and such other duties and
responsibilities as may be mutually agreed upon by the Board, and
the Executive. During the Term of Employment, Executive shall also
continue to serve as a member of the Board.
(b) Executive
shall devote an amount of business time to the performance of his
duties under this Agreement as is mutually agreed upon by the Board
and Executive, which shall in no event constitute less than
one-third (1/3) of Executive’s full business time. The
parties hereto acknowledge that Executive may conduct other
business activities during the Term of Employment, subject to the
restrictions contained in Section 9 hereof.
Section 4.
Compensation . During the Term of Employment, Executive
shall be entitled to the following compensation:
(a) Base
Salary . Pursuant to the Term Sheet, Executive shall continue
to be paid his base salary of $435,000 until December 31,
2005. Commencing January 1, 2006, to reflect Executive’s
revised responsibilities and time commitment as set forth in this
Agreement, Executive’s annualized Base Salary shall be
changed to $300,000 without further action by the parties
hereto.
(b)
Annual Bonus . Executive shall be eligible for an annual
cash incentive bonus award (the “ Annual Bonus
”) based upon achievement of the Annual EBITDA Targets, as
set forth in the Plan. For the Company’s 2005 fiscal year,
Executive’s Annual Bonus shall be governed by the terms of
the Term Sheet. For the Company’s 2006 fiscal year,
Executive’s target Annual Bonus shall equal to two-thirds
(2/3) of Base Salary during such period, with his actual Annual
Bonus continuing to be based upon achievement of the Annual EBITDA
Targets, as set forth in the Plan. Executive shall receive the
Annual Bonus in respect of any year at the same time as bonuses are
paid to other executive officers of the Company, but in no event
later than ninety (90) days after the end of the year for
which the bonus is payable.
(c) Stock
Options . Executive shall continue to vest in any stock options
previously granted to Executive in accordance with the terms and
conditions contained in the Plan.
Section 5.
Employee Benefits .
During the Term of
Employment, Executive shall be entitled to continue to participate
in health, insurance, retirement and other benefits provided to
other senior executives of the Company. Executive shall also be
entitled to the same number of holidays, vacation, sick days and
other benefits as are generally allowed to senior executives of the
Company in accordance with the Company policy in effect from time
to time.
Section 6.
Reimbursement of Business Expenses .
Executive is
authorized to incur reasonable expenses in carrying out his duties
and responsibilities under this Agreement and the Company shall
promptly reimburse him for all business expenses incurred in
connection with carrying out the business of the Company, subject
to documentation in accordance with the Company’s policy, as
in effect from time to time.
Section 7.
Indemnification
The Company shall
indemnify Executive to the fullest extent permitted (including
payment of expenses in advance of final disposition of the
proceeding) by the laws of the State of Delaware as in effect at
the time of the subject act or omission, and Executive shall be
entitled to the protection of any insurance policies the Company
may elect to maintain generally for the benefit of its directors
and officers, against all costs, charges and expenses whatsoever
incurred or sustained by him in connection with any action, suit or
proceeding to which he may be made a party by reason of his being
or having been a director, officer or employee of the Company or
any of its subsidiaries. If any action, suit or proceeding is
brought or threatened against the
Executive in
respect of which indemnity may be sought against the Company
pursuant to the foregoing, the Executive shall notify the Company
promptly in writing of the institution of such action, suit or
proceeding and the Company shall assume the defense hereof and the
employment of counsel and payment of all fees and
expenses.
Section 8.
Termination of Employment .
(a)
General . The Term of Employment shall terminate upon
expiration of the Term of Employment (as provided in
Section 2) or earlier upon the occurrence of either (i) a
termination by the Company for Cause, (ii) a termination by
Executive for any reason, or (iii) the death of Executive.
Upon any termination of Executive’s employment for any
reason, except as may otherwise be requested by the Company,
Executive shall resign from any and all dir
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