EXHIBIT 10.4

 

AGREEMENT

 

This Agreement is made and entered into in Westborough, Massachusetts, by and
among Xerium Technologies, Inc. (the “Company”), a Delaware corporation with its
principal place of business at Westborough, Massachusetts, Xerium Germany
Holding GmbH and Josef Mayer of Blaustein, Germany (the “Mr. Mayer”), effective
as of the 19th day of May, 2005. Reference is made to the Managing Director
Service Contract between Mr. Mayer and Xerium Germany Holding GmbH as evidenced
by the employment contract between Mr. Mayer and Wangner Beteiligungs GmbH,
which became valid May 1, 2001, and the agreement transferring Mr. Mayer’s
employment to Xerium Germany Holding GmbH effective as of January 2, 2005
(collectively, the “Managing Director Service Contract”).

 

WHEREAS, this Agreement is not intended to amend the Managing Director Service
Contract except as expressly set forth herein;

 

WHEREAS, this Agreement intends to treat Mr. Mayer as an executive of the
Company only with respect to monies paid to Mr. Mayer as transactional bonus in
connection with Company’s initial public offering, all loans to him that were,
are, or will be forgiven in connection with the Company’s public offering and
any tax gross-up payments with respect thereto, and certain amounts related to
the management incentive compensation plans of the Company;

 

WHEREAS, this Agreement does not create or purport to create an employment or
service relationship between Mr. Mayer and the Company;

 

The parties agree as follows:

 

  1. If Mr. Mayer shall terminate his employment/managing director service
relationship with Xerium Germany Holding GmbH prior to the completion of
eighteen (18) months following the date of this Agreement, then he shall
immediately forfeit and return to the Company: (i) the gross amount of all
monies paid to him as a transactional bonus in connection with the Company’s
initial public offering; (ii) the gross amount of all loans to him that were
forgiven in anticipation of the Company’s initial public offering in April 2004
and the tax gross-up payment with respect thereto; and (iii) the amount paid on
or about April 14, 2005 in consideration of the fact that Mr. Mayer will no
longer participate in the Company’s previously existing cash management
incentive compensation plans and in connection with the adoption of the Senior
Executive Annual Incentive Plan. Failure by Mr. Mayer to make due repayment of
such amount within ten (10) days of the Company’s demand for same shall
authorize the Company to commence a civil proceeding for the same, in which
event Mr. Mayer shall be liable for all reasonable costs and attorney’s fees
incurred by the Company in connection herewith.

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  2. The provisions of the Managing Director Service Contract shall remain
unaffected, except as follows:

 

  (i) Section III (2) is amended to read as follows:

 

The employee shall receive an annual management bonus according to the Xerium
Technologies, Inc. (“XTI”) annual cash bonus plan from time to time in effect
for senior executives of XTI generally, it being understood that effective
immediately prior to the Company’s initial public offering, the Company
established a single such plan called the Senior Executive Annual Incentive
Plan. The amount and the criteria for entitlement to the annual management bonus
shall be determined by the shareholder of the Company, or by the compensation
committee of the Board of Directors of XTI as such shareholder’s designee on an
annual basis. A paid bonus does not represent an automatic entitlement for one
or the following years.

 

  (ii) The references to MIC in Section IV and Section VII shall be deemed to be
references to annual cash bonus plans of XTI.

 

  3. This Agreement may be amended or modified only by a written instrument
signed by Mr. Mayer and by an expressly authorized representative of each of the
Company and Xerium Germany Holding GmbH.

 

  4. This Agreement may be executed in two or more counterparts, each of which
shall be an original and all of which together shall constitute one and the same
instrument.

 

  5. This is a Massachusetts contract and shall be construed and enforced under
and be governed in all respects by the laws of the Commonwealth of
Massachusetts, without regard to the conflict of laws principles thereof.

 

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]

 

-2-

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IN WITNESS WHEREOF, this Agreement has been executed as a sealed instrument by
the Company, by its duly authorized representative, and by the Mr. Mayer, as of
the date first above written.

 

/s/ Josef Mayer

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Josef Mayer XERIUM TECHNOLOGIES, INC. By:  

/s/ MICHAEL P. O’DONNELL

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Name:   Michael P. O’Donnell Title:  
Executive Vice President & Chief Financial Officer XERIUM GERMANY HOLDING GMBH
By:  

/s/ THOMAS GUTIERREZ

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Name:   Thomas Gutierrez Title:   Director

 

Agreement concerning

transfer of employment contract

 

by and between

 

1. Firm Wangner Beteiligungsgesellschaft mbH, Föhrstr. 39, 72760 Reutlingen;

2. Firm Xerium Germany Holding GmbH, Föhrstr. 39, 72760 Reutlingen

 

and

 

Josef Mayer, Hölderlinstr. 20, 89134 Bläustein

- hereinafter called employee -

 

1. Transfer of employment contract

 

1.1. the employment contract is hereby transfered to XERIUM Germany Holding GmbH
on 01.02.2005 with the effect that it ceases to be valid between employee and
Wangner Beteiligungsgesellschaft mbH on 01.02.2005 and will be continued by
Xerium Germany Holding GmbH from this date onwards. Xerium Germany Holding GmbH
hereby accepts all rights and obligations from the employment contract. Employee
keeps all rights and Xerium Germany Holding GmbH accepts to be bound by and
undertakes to satisfy all rights that employee has acquired under his former
employment contract with Wangner Beteiligungsgesellschaft mbH.

 

The employment of employee with the predecessor of Xerium Group is
01.05.2001—such date shall be considered as date of commencement of employment
with Xerium Germany Holding GmbH.

 

1.2. The employment of employee with Xerium Germany Holding GmbH is governed by
all terms, conditions and contractual arrangements that had been agreed upon
with Wangner Beteiligungsgesellschaft mbH including all amendments and
supplements.

 

2. Miscellaneous

 

The agreement contains all of the arrangements made between the parties in
respect of the transfer. Other arrangements have not been made niether orally
nor in writing.

 

2.2. All modifications and supplements hereof shall be considered null and void
if not made in writing.

 

2.3. This agreement shall be subject to the laws of the Federal Republic of
Germany.

 

2.4. Any litigation shall be subject to the jurisdiction at the corporate seat
of the corporation against which the claim is presented.

 

2.5. The employee confirms to have received one original of this agreement.

 

2.6. In case of any discrepancies between the German and the English text the
German text shall prevail.

 

3/02/05

Datum/Date                                     
                                                                

     

3/02/05

Datum/Date                                     
                                                                

/s/ Thomas Gutierrez

     

/s/ Thomas Gutierrez

Thomas Gutierrez

     

Thomas Gutierrez

(Wangner Beteiligungsgesellschaft mbH)

     

(Xerium Germany Holding GmbH)

 

25.2.05

Datum/Date                                     
                                            

/s/ Josef Mayer

Josef Mayer

(- employee -)

 

Employment Contract

 

between

 

Wangner Beteiligungs GmbH

Föhrstraße 39, D-72760 Reutlingen

 

(in the following called “the Company”) and

 

Herrn Mag. Josef Mayer

Hauptstraße 4, A-7442 Langeck

 

(in the following called “employee”)

 

as follows:

 

I.

Position and Scope of Duties

 

1. The employee shall be employed for the overall technical and commercial
leadership and responsibility as “Geschäftsführer” (= Managing Director) of the
Company and of any successors of the Company with the right of joint signature
as per German legislature. The Company is a subsidiary company of Xerium S.A.
Wangner Service GmbH is currently the major shareholder of the Company.

 

2. Initially, the employee shall represent the Company jointly. The Company
reserves the right to appoint more than one Managing Director, which case does
not affect the scope of the overall technical and commercial leadership and
responsibility of the employee.

 

3. The employee shall conduct the business of the Company with the care of a
diligent businessman in accordance with the legal provisions, the provisions of
the Company’s Articles of Incorporation and in accordance with the general or
specific directions and instructions of the shareholder.

 

4. The employee shall devote all of his working time to the business of the
Company. Any other paid or unpaid secondary occupation, especially the
acceptance of positions on Boards or similar mandates requires the prior
approval of the Company. The approval may be withheld without the requirement of
giving any reason.

 

Scientific and literary activities shall be permitted under the condition that
they do not impair the employee’s work and give no reason to disclose
confidential information to the detriment of the Company.

 

II.

Duration of the Contract

 

1. This employment contract shall become valid on May 1st, 2001 and shall remain
in force for an indefinite period of time. The employment shall terminate
automatically without any further notice when the employee reaches the mandatory
full retirement age (currently upon attaining the age of 65 years). This
contract may be terminated with effect of June 30th or December 31st by giving
12 (twelve) months prior notice.

 

2. For its effectiveness, any termination shall be in writing.

 

3. Upon receipt of the notice of termination by the employee, the Company is in
its discretion entitled to release the employee from his duties permanently or
temporarily provided his salary is continued to be paid.

 

4. The right to terminate this employment contract without notice for good cause
is not restricted by the foregoing provisions. Good cause would for instance be
continued failure to conduct the business of the Company in a diligent and
orderly manner, severe violations of the legal duties or the instructions of the
shareholder or the liquidation of the Company.

 

III.

Compensation, Benefits

 

The employee shall receive an annual gross salary of DEM 350,000.— (three
hundred fifty thousand), payable in 12 (twelve) equal monthly instalments at the
end of each month.

 

The Company’s shareholder will review annually whether, and to what extent, an
increase of this salary and/or the management bonus level (amount (refer to
III./2. below) would be appropriate.

 

The Company shall bear the cost of statutory social security contributions to be
borne by an employer, i.e., currently pension fund, nursing care insurance,
unemployment insurance, and health insurance contributions.

 

In so far as the employee is exempt from the obligation to maintain any such
insurance and/or the employee chooses to enter into another insurance instead of
the statutory insurance, then the Company shall reimburse the cost thereof up to
the maximum employer contribution under the statutory insurance scheme. This
shall not apply to unemployment insurance.

 

The payment of the above annual gross salary shall reimburse the employee for
all activities, including those outside of standard working hours.

 

2. The employee shall receive an annual management bonus (currently MIC III A)
according to the respective bonus plan for executives of Xerium S.A., to which
the Company operatively belongs at this time. The amount and the criteria for
entitlement to the annual management bonus are newly determined by the
shareholder of the Company on an annual basis. A paid bonus does not represent
an automatic entitlement for one or the following years. For the first year, the
annual management bonus will be attributed pro rata, dependent on the date of
commencement of this contract.

 

3. The Company shall make available to the employee a Company owned appropriate
upper middle-class automobile (according to the applicable Car Policy) for his
business and personal use, whereby the Company shall pay all operating costs for
the automobile. The employee shall be responsible for any income taxes for such
personal use.

 

4. Expenses for travelling, telephone/telefax, entertainment spent by the
employee in the interest of the Company will be reimbursed to the employee by
the Company against presentation of receipts, which shall be in accordance with
the principles of a prudent businessman.

 

The Company shall bear the cost of an accident insurance covering the employee
during the duration of this employment contract with an insured sum of DEM
500,000.— in case of death and DEM 1,000,000— in case of disability.

 

In addition, there is a Group insurance covering the liabilities of the employee
in connection with his activities as Managing Director, and the Company shall
provide for an insurance covering civil and criminal risks in connection with
the employee’s use of the Company owned automobile.

 

IV.

Compensation in case of Illness, Accident Death

 

1. In case of illness, accident or other disabilities of the employee, the
Company shall pay the difference between any health insurance benefits of the
employee and his compensation as per III./1. for up to 6 (six) months.

 

2. In case of illness, accident or other disabilities of the employee, the
employee is eligible for MIC according to III/2. up to a duration of 6 (six)
months. The MIC will be reduced by  1/12 for any further month of absence due to
illness, accident or other disabilities.

 

3. In the event of the employee’s death during the duration of his employment
contract, all surviving dependants shall have a title to continued remuneration
as per III./l. above for the month in which the death occurred and the 3 (three)
subsequent months.

 

V.

Vacation

 

1. The employee is entitled to an annual vacation of 30 (thirty) working days
which may be consumed in parts. Saturdays are not working days.

 

2. The point and time of vacation shall be mutually agreed upon between the
employee and the Company, considering the requirements of the Company and the
recreation possibilities of the employee. This agreement shall further consider
that the vacation is to be consumed until the end of the year in which the
entitlement has arisen.

 

VI.

Secrecy

 

1. The employee shall not, during the duration of his employment and thereafter,
disclose to any third party any business or operational secrets of the Company
or an “affiliated company” which have been entrusted or otherwise become known
to him, and he shall not for himself or for other persons exploit such business
or operational secrets directly or indirectly.

 

The term “business and operational secrets” includes all business, operational,
organisational and technical knowledge, transactions and information which
is/are known only to a limited number of persons and which pursuant to the
intentions of the Company or an “affiliated company” shall not become known to
the public.

 

2. Business records of any description, including private notes concerning
Company affairs and activities, including those of an “affiliated company”,
shall be used for business purposes only.

 

3. Business and operational records which are in the possession of the employee
within the scope of his employment shall be carefully kept and shall be returned
to the Company any time upon request, at the latest upon termination of the
employment. The same applies to any other items owned or controlled by the
Company which are in the direct or indirect possession of the employee. The
assertion of any right or retention by the employee in respect of the said
records shall be excluded.

 

VII.

Competitive Clause

 

1. During the duration of this employment contract, the employee shall not in
any form (paid or unpaid) work for, any company which is directly or indirectly
in competition or has business relations with the Company. The maximum extent to
which the employee may become linked to or take an interest in a company which
is directly or indirectly in competition or has business relations with the
Company is one where the employee does not have any influence and does thus not
risk any conflict of interest.

 

2. The same applies for the duration of 12 (twelve) months following the
termination of the employment contract. This competition clause refers to the
area of paper machine clothing. During the duration of the competition clause
following the termination of the employment contract, the employee is entitled
to a compensation in the amount of 50% of his fixed monthly salary (excluding
the management bonus MIC) paid during the last year of his employment with the
Company. This compensation becomes due at the end of each month. Any income the
employee gets from any other occupation during this period will be deducted from
the compensation.

 

3. The Company is entitled to waive in writing and before the employment
contract ends, the provisions of the competitive clause which applies to the
time following the employment. In such case, the Company’s obligation to pay the
employee the above compensation shall cease 3 (three) months upon receipt of the
waiver by the employee.

 

VIII.

General

 

1. Amendments or additions to this employment contract must be in writing in
order to be valid. The same shall apply to an amendment or repeal of this
provision.

 

2. Should any provision of this employment contract be or become invalid, the
validity of the other provisions shall remain unaffected thereby. The invalid
provision shall be replaced by a valid provision that comes as close as possible
to the spirit and purpose of the invalid provision.

 

3. Any assignment or other disposition of rights or obligations under this
employment contract requires prior written consent of the other party.

 

4. The place of performance and, in so far as legally permissible, of
jurisdiction is the registered headquarters of the Company. This employment
contract shall be governed by German law.

 

5. This employment contract is executed in duplicate, one executed copy of the
contract to be furnished to the Company and one to the employee. For the
convenience of the Company’s shareholder, an English language version of this
contract is herewith included by reference. In case of deviations, the German
language version shall prevail.