Exhibit 10.1
EMPLOYMENT AGREEMENT
          EMPLOYMENT AGREEMENT (the “Agreement”) dated as of July 6, 2005 by and
between Polypore International, Inc., headquartered in Charlotte, North Carolina
(the “Company”) and Robert B. Toth (the “Executive”), and as acknowledged by PP
Holding, LLC (the “LLC”).
          The Company desires to employ Executive and to enter into an agreement
embodying the terms of such employment; and
          Executive desires to accept such employment and enter into such an
agreement; therefore
          In consideration of the premises and mutual covenants herein and for
other good and valuable consideration, the parties agree as follows:
          1.      Term of Employment. Subject to Section 8 of this Agreement,
Executive shall be employed by the Company for a period commencing on July 6,
2005 (the “Commencement Date”) and ending on July 6, 2008 (the “Employment
Term”), on the terms and subject to the conditions set forth in this Agreement;
provided, however, that commencing upon July 6, 2008 and on each anniversary
thereafter (each an “Extension Date”), the Employment Term shall be
automatically extended for an additional one-year period, unless the Company or
Executive provides the other party hereto at least 120 days prior written notice
before the next Extension Date that the Employment Term shall not be so
extended. For the avoidance of doubt, the term “Employment Term” shall include
any extension that becomes applicable pursuant to the preceding sentence.
          2.      Position.
               a.      For so long as Executive is employed by the Company
pursuant to this Agreement, Executive shall serve as the Company’s Chief
Executive Officer and President. In such positions, Executive shall have such
duties and authority as shall be determined from time to time by the Board of
Directors of the Company (the “Board”) and Executive shall report solely to the
Board. Executive also agrees to serve, without additional compensation, as a
member of the Board, and the Company shall take all actions necessary to cause
Executive to be appointed as a member of the Board. The Company shall provide
Executive with Directors and Officers (“D&O”) and Errors and Omissions (“E&O”)
insurance in limits provided to other directors and officers of the Company. The
Company also agrees to indemnify and defend Executive to the fullest extent
permitted by law and the Company’s corporate bylaws (the “By-Laws”), with
respect to any and all claims, which arise from or relate to Executive’s duties
as an officer, member of the Board, if applicable, or employee of the Company.
               b.      For so long as Executive is employed by the Company
pursuant to this Agreement, Executive will devote Executive’s full business time
and best efforts to the performance of Executive’s duties hereunder and will not
engage in any other business, profession or occupation for compensation or
otherwise which would conflict or interfere with the rendition of such services
either directly or indirectly, without the prior written consent of the Board.
Notwithstanding the foregoing, nothing herein shall preclude Executive from
serving as

 

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a member of the board of directors or advisory boards (or their equivalents in
the case of a non-corporate entity) of (i) not-for-profit and/or charitable
organizations, and (ii) with the prior written consent of the Board, which
consent shall not be unreasonably withheld, non-competing businesses.
          3.      Base Salary. For so long as Executive is employed by the
Company pursuant to this Agreement, the Company shall pay Executive a base
salary (the “Base Salary”) at the annual rate of $450,000, payable in regular
installments in accordance with the Company’s usual payment practices; provided,
however, that on January 1, 2006, the Company shall increase Executive’s Base
Salary by five percent (5%). Notwithstanding the foregoing, (a) at least once
every twelve (12) months and (b) upon the occurrence of a material corporate
event of the Company (including, without limitation, a merger, recapitalization,
acquisition, consolidation of the Company or other similar event), the Board
shall review Executive’s rate of Base Salary. Executive’s Base Salary shall not
be reduced by the Company at any time during the Employment Term.
          4.      Annual Bonus. With respect to each full fiscal year of the
Company (each a “Fiscal Year”) during the Employment Term (for so long as
Executive is employed during such Term), Executive shall be eligible to earn an
annual bonus award (an “Annual Bonus”). Such Annual Bonus shall be based upon
the achievement of certain performance targets to be established by the Board
after consultation with Executive and the eligibility amount shall not be less
than Executive’s Base Salary (the “Target Annual Bonus”); provided, however,
that Executive’s Annual Bonus in respect to the current fiscal year shall be
guaranteed to be $225,000 (50% of Executive’s Base Salary) (the “Guaranteed
Bonus”). Annual Bonuses shall, to the extent earned, be paid to Executive no
later than March 31 each year.
          5.      Equity Arrangements.
               a.      On the Commencement Date, subject to the terms of the
Company’s 2004 Stock Option Plan (the “Plan”), the Company shall grant Executive
Options (as defined in the Plan) representing 2.25% of the Company’s Common
Stock, determined on a fully diluted basis, with an exercise price per share
equal to the Fair Market Value (as defined in the Plan). The Options shall be
vested as to 25% on the date of grant, and subject to Executive’s continued
employment with the Company, the remainder of the Options shall be eligible to
vest upon the achievement of the annual and/or cumulative performance targets
for 2006, 2007 and 2008, in accordance with the terms of the Plan. The Options
shall otherwise be subject to the terms of an option agreement, the form of
which is attached hereto as Exhibit A. The parties hereto shall execute such
option agreement contemporaneously with the execution of this Agreement.
               b.      During the one (1) year period following the Commencement
Date, Executive shall be given the opportunity to make one or more cash
investments in the LLC, pursuant to which he may purchase Class A Common Units
of the LLC, subject to the terms of a subscription agreement in substantially
the same form executed by other members of the Company’s management team who
have invested in the LLC. As a condition of such purchase, Executive shall be
required to execute and become a party to the LLC’s LLC Agreement, as amended
and restated from time to time. The purchase price of Common Units of the LLC

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purchased hereunder shall be at $875 per Common Unit. The parties hereto
acknowledge that (i) the LLC shall not engage in any new valuation of the Common
Units prior to the sixtieth (60th) day following the Commencement Date, (ii) the
Company and the LLC represent that the purchase price set forth above accurately
represents the fair market value of a Common Unit, as determined in good faith
and upon reasonable belief by the LLC, and (iii) to the extent Executive makes a
purchase hereunder at a time where the purchase price is less than the fair
market value of such Common Units on the date of such purchase, such purchase
may result in taxable income to Executive.
          6.      Employee Benefits. For so long as Executive is employed by the
Company pursuant to this Agreement, Executive shall be entitled to participate
in the Company’s employee benefit plans, such as but not limited to life
insurance, medical, dental, disability, pension and retirement plans, as in
effect from time to time (collectively “Employee Benefits”). Commencing upon
Executive’s first day of employment, Executive shall be entitled to participate
in the medical and all other Employee Benefits on an equivalent basis to those
benefits that are generally made available to other senior executives of the
Company.
          7.      Business Expenses, Vacation, Automobile Allowance, Educational
Expenses, Temporary Housing and Relocation Expenses and Attorneys Fees.
               a.      Business Expenses. For so long as Executive is employed
by the Company pursuant to this Agreement, reasonable business expenses incurred
by Executive in the performance of Executive’s duties hereunder shall be
reimbursed by the Company in accordance with Company policies as in effect from
time to time.
               b.      Vacation. Executive shall be entitled to four (4) weeks
of vacation for each Fiscal Year (including two (2) weeks for the first partial
fiscal year) during the Employment Term (for so long as Executive is employed by
the Company pursuant to this Agreement), to be taken at such times and at such
periods as to not interfere with the duties required to be rendered by Executive
under this Agreement. Executive shall be compensated, on a pro-rata basis, for
any unused vacation remaining upon the termination of Executive’s employment
with the Company pursuant to Section 8 of this Agreement.
               c.      Automobile Allowance. Executive shall be entitled to a
monthly car allowance equal to $1,000 to cover all expenses relating to the
provision and maintenance of a vehicle of Executive’s choice.
               d.      Educational Expenses. To the extent Executive is not
reimbursed for tuition already paid or contracted to be paid by Executive for
private educational expenses for any child of Executive for education in the St.
Louis, Missouri area for the 2005-2006 academic year, Executive shall be
reimbursed by the Company for any such expenses.
               e.      Temporary Housing and Relocation Expenses. The Company
shall reimburse Executive or pay directly for any temporary housing expenses
incurred by Executive until Executive is able to relocate into a permanent
residence in the Charlotte, North Carolina Metropolitan area. In addition, all
relocation expenses, also including trips for obtaining appropriate housing in
Charlotte, North Carolina, shall be paid by the Company. Without

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limitation, Executive shall be promptly reimbursed for any brokerage commissions
paid on the sale of his current residence. All of the foregoing shall be
grossed-up for taxes incurred in respect of such reimbursement.
               f.      Attorney Fees. The Company shall reimburse Executive for
any attorneys’ fees incurred by Executive with respect to the negotiation and
preparation of this Agreement.
          8.      Termination.
               a.      By the Company For Cause or Resignation By Executive.
               (i)      The Employment Term and Executive’s employment hereunder
may be terminated by the Company for Cause (as defined below) and shall
terminate automatically upon Executive’s resignation, which Executive shall be
permitted to do at any time upon at least thirty (30) days’ written notice.
               (ii)      For purposes of this Agreement, “Cause” shall mean:
(A) gross negligence or willful misconduct by Executive in connection with
Executive’s employment duties or responsibilities hereunder; (B) a material and
continued failure by Executive to perform in any material respect his duties or
responsibilities after notice and reasonable opportunity to cure;
(C) misappropriation by Executive of the assets or business opportunities of the
Company or its affiliates; (D) embezzlement or other financial fraud committed
against the Company or its affiliates by Executive or at his direction, or with
his prior personal knowledge; (E) Executive’s conviction of, admission to, or
entry of pleas of no contest to any (I) felony, or (II) any crime involving
moral turpitude that materially interferes with the performance of Executive’s
duties; (F) Executive’s abuse of alcohol and/or any use of illegal drugs that
materially interferes with the performance of Executive’s duties; or
(G) Executive’s breach of any material provision of this Agreement. In the event
the Company determines that Cause exists, it shall notify Executive, and
termination of Executive’s employment for Cause shall be effected by at least a
majority vote of the Board (excluding Executive for such purpose) at a meeting
occurring at least ten (10) business days after the Company provides Executive
with written notice that the Company intends to terminate Executive’s employment
for Cause, at which meeting Executive shall have the opportunity to be heard
with respect to the conduct giving rise to the termination for Cause.
               (iii)      If Executive’s employment is terminated by the Company
for Cause, or if Executive resigns, Executive shall be entitled to receive:
  (A) the Base Salary through the date of termination, to be paid in a lump sum
within ten (10) business days after any termination;
  (B) reimbursement for any unreimbursed business expenses properly incurred by
Executive in accordance with Company policy prior to the date of Executive’s
termination, to be paid in a lump sum within ten (10) business days after any
termination; and
  (C) such Employee Benefits, if any, as to which Executive may be entitled (or
may have accrued) as of the date of termination under the employee benefit

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plans of the Company, to be paid in accordance with the terms thereof (the
amounts and benefits described in clauses (A) through (C) hereof, being
hereinafter referred to as the “Accrued Rights”).
          Following any termination of Executive’s employment by the Company for
Cause or resignation by Executive, except as set forth in Section 5 and this
Section 8(a)(iii), Executive shall have no further rights to any compensation or
any other benefits under this Agreement.
               b. Disability or Death.
               (i) The Employment Term and Executive’s employment hereunder
shall terminate upon Executive’s death and may be terminated by the Company if
Executive becomes physically or mentally incapacitated and is therefore unable
for a period of six (6) consecutive months or for an aggregate of nine
(9) months in any twenty-four (24) consecutive month period to perform
Executive’s duties (such incapacity is hereinafter referred to as “Disability”).
Any question as to the existence of the Disability of Executive as to which
Executive and the Company cannot agree shall be determined in writing by a
qualified independent physician mutually acceptable to Executive and the
Company. If Executive and the Company cannot agree as to a qualified independent
physician, each shall appoint such a physician and those two physicians shall
select a third who shall make such determination in writing. The determination
of Disability made in writing to the Company and Executive shall be final and
conclusive for all purposes of the Agreement.
               (ii) Upon termination of Executive’s employment hereunder for
either Disability or death, Executive or Executive’s estate (as the case may be)
shall be entitled to receive:
(A) the Accrued Rights;
(B) so long as and to the extent the Company achieves the performance targets
established by the Board in respect of the Fiscal Year in which the date of
termination occurs, an amount equal to the Annual Bonus, if any, to which
Executive would have been entitled to receive pursuant to Section 4 hereof in
respect of such Fiscal Year, pro rated from the first day of such Fiscal Year
through the date of termination and payable when such Annual Bonus would have
otherwise been payable had Executive’s employment not terminated; and
(C) continuation of medical benefits for Executive (as applicable) and his
covered dependents, at the same cost paid by Executive (and his dependents, as
applicable) immediately prior to the date of such termination, until the earlier
of (x) the twelve (12) month anniversary of the date of such termination, or
(y) the date Executive and/or his dependents elect to cease continuation of such
benefits.
          Following Executive’s termination of employment due to death or
Disability, except as set forth in Section 5 and this Section 8(b)(ii),
Executive shall have no further rights to any compensation or any other benefits
under this Agreement.
               c. By the Company Without Cause or by Executive for Good Reason.

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               (i) The Employment Term and Executive’s employment hereunder may
be terminated by the Company without Cause (which shall include the Company’s
election not to extend the Employment Term pursuant to Section 1, as set forth
in Section 8(d) below) or Good Reason by Executive. For purposes of this
Agreement, a termination without Cause by the Company shall be deemed to mean
any termination of Executive’s employment by the Company which (x) does not
constitute a termination for Cause as defined in Section 8(a)(ii), or (y) is not
by reason of Executive’s death or Disability. For purposes of this Agreement,
Good Reason includes, but is not limited to, the following: (i) any material
breach of this Agreement by the Company; (ii) any request by the Company for
Executive to relocate or perform services at a location other than the
Charlotte, North Carolina Metropolitan area; (iii) a substantial and material
diminution or reduction, not consented to by Executive in writing, in the nature
or scope of Executive’s responsibilities, authorities, powers, functions or
duties; (iv) any removal, during the Employment Term, from Executive of his
title of President or Chief Executive Officer; or (v) the failure of the Company
to obtain the agreement from any successor to the Company to expressly assume
and agree in writing to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place.
               (ii) If Executive’s employment is terminated by the Company
without Cause, or by Executive for Good Reason, Executive shall be entitled to
receive:
(A) The Accrued Rights;
(B) A lump-sum payment equivalent to the greater of (x) the aggregate Base
Salary payable to Executive for the remainder of the then current Employment
Term (assuming no such termination had occurred and no further extension of the
Employment Term), or (y) Executive’s then current Base Salary, in either case,
to be paid within fifteen (15) business days following termination of
employment;
(C) Continuation of Executive’s employee benefits for the later of (x) a period
of twelve (12) months following the date of employment termination or (y) the
expiration of the then current Employment Term (assuming no such termination had
occurred and no further extension of the Employment Term); and
(D) A lump-sum payment equivalent to the Bonus Severance Amount, such amount to
be paid within fifteen (15) business days following termination of employment;
provided, however, in the event that Executive’s employment is terminated by the
Company or any successor to the Company in anticipation of or within twelve
months following any material corporate event of the Company, including without
limitation, a merger, recapitalization, acquisition, consolidation of the
Company or other similar event, Executive shall be entitled to the lump-sum
amounts and benefits described above in Section 8(c)(ii)(B), (C) and (D) for a
period equivalent to two years instead of one year as otherwise set forth
therein.
For purposes of this Section 8(c)(ii):

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     “Bonus Multiple” shall be an amount equal to the greater of (x) one (1), or
(y) a fraction, the numerator of which shall equal the number of whole calendar
months remaining in the then current Employment Term (assuming no termination
had occurred and no further extension of the Employment Term), including for
such purpose, the calendar month during which Executive’s termination occurs,
and the denominator of which shall equal twelve (12).
     “Bonus Severance Amount” shall mean an amount equal to the Bonus Multiple
multiplied by the Deemed Bonus.
     “Deemed Bonus” shall mean an amount equal to the greater of (1) Executive’s
Annual Bonus for the fiscal year immediately preceding the fiscal year in which
such termination occurred, or (2) 50% of Executive’s Target Annual Bonus
relating to the year in which such termination occurs; provided however that if
such termination occurs on or before December 31, 2005, the Deemed Bonus shall
equal the Guaranteed Bonus.
               d. Expiration of Employment Term.
               (i) Election Not to Extend the Employment Term. In the event
either party elects not to extend the Employment Term (on the same terms and
conditions set forth in this Agreement) pursuant to Section 1, unless
Executive’s employment is earlier terminated pursuant to paragraphs (a), (b) or
(c) of this Section 8, Executive’s termination of employment hereunder (whether
or not Executive continues as an employee of the Company thereafter) shall be
deemed to occur on the close of business on the day immediately preceding the
next scheduled Extension Date and Executive shall be entitled to receive (x) the
Accrued Rights plus (y) the Annual Bonus in respect of the last Fiscal Year of
the Employment Term, so long as and to the extent the Company achieves the
performance targets established by the Board in respect of such Fiscal Year. In
addition, in the event the Company elects not to extend the Employment Term (on
the same terms and conditions set forth in this Agreement) pursuant to
Section 1, Executive shall also be entitled to the payments and benefits
described in Section 8(c)(ii), above (and as set forth therein).
          Following such termination of Executive’s employment hereunder as a
result of either party’s election not to extend the Employment Term, except as
set forth in Section 5 and in this Section 8(d)(i), Executive shall have no
further rights to any compensation or any other benefits under this Agreement.
               (ii) Continued Employment Beyond the Expiration of the Employment
Term. Unless the parties otherwise agree in writing or the Employment Term (on
the same terms and conditions set forth in this Agreement) is extended pursuant
to Section 1, continuation of Executive’s employment with the Company beyond the
expiration of the Employment Term shall be deemed an employment at-will and
shall not be deemed to extend any of the provisions of this Agreement and
Executive’s employment may thereafter be terminated at will by either Executive
or the Company; provided that the provisions of Sections 9, 10 and 11 of this
Agreement shall survive any termination of this Agreement or Executive’s
termination of employment hereunder.

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               e.      Notice of Termination. Any purported termination of
employment by the Company or by Executive (other than due to Executive’s death)
shall be communicated by written Notice of Termination to the other party hereto
in accordance with Section 12(h) hereof. For purposes of this Agreement, a
“Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of employment under the provision so indicated.
               f.      Board Resignation. Upon termination of Executive’s
employment for any reason, Executive agrees to resign, as of the date of such
termination and to the extent applicable, from the Board and the Board of
Directors of any of the Company’s affiliates, if applicable.
          9.      Restrictive Covenants. Executive acknowledges and recognizes
the highly competitive nature of the business of the Company and accordingly
agrees as follows:
               a.      Non-Competition.
                    (1) During the Employment Term (but only for so long as
Executive remains employed by the Company pursuant to this Agreement) and, for a
period of one year following the date Executive ceases to be employed by the
Company (the “Restricted Period”), Executive will not (i) engage in any business
that is in Competition (as hereinafter defined) with the Company or its
subsidiaries, (ii) enter the employ of, or render any services to, any person
engaged in Competition with the Company; or (iii) acquire a financial interest
in, or otherwise become actively involved with, any person engaged in any
business that is in Competition with the Company, as an individual, partner,
shareholder, officer, director, principal, agent, trustee, employee or
consultant. For purposes of this Section 9, “Competition” shall mean the
business of producing or selling microporous membrane products produced or sold,
or expressly contemplated to be produced or sold, by the Company or its
subsidiaries as of the date hereof and during the Employment Term.
                    (2) Notwithstanding anything to the contrary in this
Agreement, Executive may, directly or indirectly own, solely as an investment,
securities of any person engaged in Competition with the Company or its
affiliates which are publicly traded on a national or regional stock exchange or
on the over-the-counter market if Executive (i) is not a controlling person of,
or a member of a group which controls, such person and (ii) does not, directly
or indirectly, own 5% or more of any class of securities of such person.
               b.      Non-Solicitation; Non-Interference. During the Restricted
Period, Executive shall not, directly or indirectly, for his own account or for
the account of any other individual or entity, (i) encourage, solicit or induce,
or in any manner attempt to solicit or induce, any individual or entity employed
by, as agent of, or a service provider to, the Company to terminate such
person’s employment, agency or service, as the case may be, with the Company;
(ii) engage in Competition with the Company by soliciting business of the type
performed by the Company from any individual or entity for whom the Company
provided services or products within the one-year period immediately preceding
the date of Executive’s termination of employment; (iii) engage in Competition
with the Company by soliciting business of the type

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performed by the Company from any prospective customer or client of the Company
who, within the one-year period immediately preceding the date of Executive’s
termination of employment, the Company had directly solicited; or (iv) assist
any person or entity to engage in any activity prohibited by this subsection
(b).
               c.      It is expressly understood and agreed that although
Executive and the Company consider the restrictions contained in this Section 9
to be reasonable, if a final judicial determination is made by a court of
competent jurisdiction that the time or territory or any other restriction
contained in this Agreement is an unenforceable restriction against Executive,
the provisions of this Agreement shall not be rendered void but shall be deemed
amended to apply as to such maximum time and territory and to such maximum
extent as such court may judicially determine or indicate to be enforceable.
Alternatively, if any court of competent jurisdiction finds that any restriction
contained in this Agreement is unenforceable, and such restriction cannot be
amended so as to make it enforceable, such finding shall not affect the
enforceability of any of the other restrictions contained herein.
          10.      Confidentiality. Executive will not at any time (whether
during or after Executive’s employment with the Company) disclose or use for
Executive’s own benefit or purposes or the benefit or purposes of any other
person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise other than the Company, any trade
secrets, information, data, or other confidential information relating to
customers, development programs, costs, marketing, trading, investment, sales
activities, promotion, credit and financial data, manufacturing processes,
financing methods, plans, or the business and affairs of the Company; provided
that the foregoing shall not apply to information which is not unique to the
Company or which is generally known to the industry or the public other than as
a result of Executive’s breach of this covenant. Except as required by law,
Executive will not disclose to anyone, other than his immediate family and legal
or financial advisors or financial institutions, the existence or contents of
this Agreement. Executive agrees that upon termination of Executive’s employment
with the Company for any reason, he will return to the Company immediately all
memoranda, books, papers, plans, information, letters and other data, and all
copies thereof or therefrom, in any way relating to the business of the Company,
except that he may retain personal notes, notebooks and diaries that do not
contain confidential information of the type described in the preceding
sentence. Executive further agrees that he will not retain or use for
Executive’s account at any time any trade names, trademark or other proprietary
business designation used or owned in connection with the business of the
Company.
          11.      Specific Performance. Executive acknowledges and agrees that
the Company’s remedies at law for a breach or threatened breach of any of the
provisions of Section 9 or Section 10 would be inadequate and, in recognition of
this fact, Executive agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the Company shall be entitled to
obtain equitable relief in the form of specific performance, temporary
restraining order, temporary or permanent injunction or any other equitable
remedy which may then be available.
          12.      Miscellaneous.

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               a.      Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to conflicts of laws principles thereof. The Company and
Executive each hereby consents to the jurisdiction of the federal and state
courts in the state in which Executive maintains his principal place of
residence, as of the earlier of the date on which (i) either party brings a
claim under this Agreement against the other party and (ii) Executive’s
termination of employment occurs. The Company and Executive also each hereby
irrevocably waives any objection it may now or hereafter have to laying of the
venue of any suit, action or proceeding in connection with this Agreement in any
such court, and agrees that service upon it shall be sufficient if made by
registered mail.
               b.      Entire Agreement/Amendments. This Agreement contains the
entire understanding of the parties with respect to the employment of Executive
by the Company. There are no restrictions, agreements, promises, warranties,
covenants or undertakings between the parties with respect to the subject matter
herein other than those expressly set forth herein. This Agreement may not be
altered, modified, or amended except by written instrument signed by the parties
hereto.
               c.      No Waiver. The failure of a party to insist upon strict
adherence to any term of this Agreement on any occasion shall not be considered
a waiver of such party’s rights or deprive such party of the right thereafter to
insist upon strict adherence to that term or any other term of this Agreement.
               d.      Severability. In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions of this Agreement shall not be affected thereby.
               e.      Assignment. This Agreement shall not be assignable by
Executive. This Agreement shall be assigned by the Company to a person or entity
which is a successor in interest to substantially all of the business operations
of the Company. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such successor person or
entity.
               f.      Mitigation. Executive shall not be required to mitigate
the amount of any payment provided for pursuant to this Agreement by seeking
other employment, taking into account the provisions of Section 9 of this
Agreement.
               g.      Successors; Binding Agreement. This Agreement shall inure
to the benefit of and be binding upon personal or legal representatives,
executors, administrators, successors, heirs, distributes, devises and legatees.
               h.      Notice. For the purpose of this Agreement, notices and
all other communications provided for in the Agreement shall be in writing and
shall be deemed to have been duly given when delivered by hand or overnight
courier or three days after it has been mailed by United States registered mail,
return receipt requested, postage prepaid, addressed to the respective addresses
set forth below Agreement, or to such other address as either party may

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have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
     If to the Company:
     If to Executive:
     To the most recent address of Executive set forth in the personnel records
of the Company.
               i.      Executive Representation. Executive hereby represents to
the Company that the execution and delivery of this Agreement by Executive and
the Company and the performance by Executive of Executive’s duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
employment agreement or other agreement or policy to which Executive is a party
or otherwise bound.
               j.      Prior Agreements This Agreement supercedes all prior
agreements and understandings (including verbal agreements), if any, between
Executive and the Company regarding the terms and conditions of Executive’s
employment with the Company.
               k.      Withholding Taxes. The Company may withhold from any
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.
               l.      Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
               m.      Prevailing Party. The prevailing party shall be entitled
to recover all reasonable attorneys’ fees and costs in any litigation for breach
of this Agreement.

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               IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.

         
 
  POLYPORE INTERNATIONAL, INC.:    
 
  /s/ Michael Graff    
 
       
 
  By:  Michael Graff    
 
  Title:  Chairman of the Board    
 
       
 
  EXECUTIVE:    
 
  /s/ Robert B. Toth    
 
       
 
  Robert B. Toth    
 
       
 
  Solely for purposes of its obligations
under Section 5(b) hereof:    
 
       
 
  PP HOLDING, LLC:    
 
  /s/ Michael Graff    
 
       
 
  By:  Michael Graff    
 
  Title:  Chairman of the Board    

Page 12 of 12