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 a
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