Document:

SMART GLOBAL HOLDINGS,
INC.

 

 

 

AMENDMENT NO. 4 TO

INVESTORS SHAREHOLDERS AGREEMENT

 

 

Dated as of January
29, 2018

 

 

 

 

 

 

 

     

     

    

SMART GLOBAL HOLDINGS,
INC.

 

AMENDMENT NO. 4 TO INVESTORS
SHAREHOLDERS AGREEMENT

 

This AMENDMENT NO. 4 TO INVESTORS SHAREHOLDERS
AGREEMENT (this “Amendment”), dated as of January 29, 2018, amends the Amended and Restated Investors
Shareholders Agreement, dated as of November 5, 2016 (the “Original A&R Investors Shareholders
Agreement”) and as amended by Amendment No. 2 to Investors Shareholders Agreement dated as of May 30, 2017 and
Amendment No. 3 to Investors Shareholders Agreement dated as of October 17, 2017 (as amended, the “A&R Investors
Shareholders Agreement” and, together with this Amendment, this “Agreement”), by and among SMART
Global Holdings, Inc. (f/k/a Saleen Holdings, Inc.), a Cayman Islands exempted company (together with its successors and
assigns, the “Company”), Silver Lake Partners III Cayman (AIV III), L.P., a Cayman Islands exempted
limited partnership (the “SLP Investor”), Silver Lake Technology Investors III Cayman, L.P., a Cayman
Islands exempted limited partnership (the “SLP Co-Investor”), Silver Lake Sumeru Fund Cayman, L.P., a
Cayman Islands exempted limited partnership (the “SLS Investor”), Silver Lake Technology Investors Sumeru
Cayman, L.P., a Cayman Islands exempted limited partnership (the “SLS Co-Investor”), the
Management Investors (as defined in the A&R Investors Shareholders Agreement) and the Warrant Investors (as defined in
the A&R Investors Shareholders Agreement).

 

WHEREAS, the Company, the
SLP Investor, the SLP Co-Investor, the SLS Investor, the SLS Co-Investor and the initial Management Investors named therein entered
into that certain Management Investors Shareholders Agreement, dated as of August 26, 2011 (the “Initial Agreement”),
in order to set forth certain rights and other terms in connection with ownership of ordinary shares of the Company;

 

WHEREAS, the Company, the
SLP Investor, the SLP Co-Investor, the SLS Investor and the SLS Co-Investor entered into the Original A&R Investors Shareholders
Agreement to amend and restate the Initial Agreement in connection with the Amended Credit Agreement (as defined in the Original
A&R Investors Shareholders Agreement) in order to set forth certain rights and obligations of the Warrant Investors with respect
to the ownership of equity securities of the Company by the Warrant Investors, and the Management Investors and the Warrant Investors
became parties thereto; and

 

WHEREAS, the Company, the
SLP Investor, the SLP Co-Investor, the SLS Investor and the SLS Co-Investor desire to amend certain sections A&R Investors
Shareholders Agreement.

 

NOW,
THEREFORE, in consideration of the agreements and obligations set forth in this Agreement and for other good and valuable consideration,
the receipt of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

 

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ARTICLE I

 

DEFINITIONS

 

Section 1.1.Definitions. Capitalized
terms that are defined in the preamble or the recitals hereto shall have such meanings throughout this Amendment. Capitalized
terms used but not defined in this Amendment shall have the meanings assigned thereto in the A&R Investors Shareholders
Agreement. The meanings assigned to all defined terms used in this Amendment shall be equally applicable to both the singular
and plural forms of such defined terms.

 

Section 1.2.Amendment
to Section 1.1 of the A&R Investors Shareholders Agreement. The definition for the term “Shares” in Section
1.1 of the A&R Investors Shareholders Agreement is hereby amended and restated in its entirety as follows:

 

“Shares” means the ordinary shares, par
value $0.03 per share, of the Company.

 

ARTICLE II

 

AMENDMENTS

 

Section 2.1.Amendments to Section 3.4 of
the A&R Investors Shareholders Agreement. Section 3.4 of the A&R Investors Shareholders Agreement is hereby
amended and restated in its entirety as follows:

 

Section 3.4. Post-Initial Public Offering Transfers.

 

(a)  Certain
Definitions. As used in this Section 3.4:

 

(i)  “Applicable
Transfer Cap” means, with respect to the Key Management Investor or his Permitted Transferee at the date of a
proposed transfer, a number of Transferrable Shares equal to (A) the Key Management Investor’s First Period Cap plus (B)
if the transfer occurs after the commencement of the Second Period, the Key Management Investor’s Second Period Cap minus (C)
the aggregate number of Transferrable Shares that the Key Management Investor and his Permitted Transferees have transferred
on or after November 20, 2017 other than (1) to a Permitted Transferee pursuant to Section 3.2, (2) to satisfy tax
withholding requirements in connection with the exercise, vesting or settlement, as applicable, of Options (or similar stock
appreciation rights), Restricted Stock Units or restricted stock awards or (3) with the prior written consent of the Silver
Lake Investors.

 

(ii)  “First
Period” means the period beginning on November 20, 2017 and ending at the close of trading on May 30, 2018.

 

(iii)  “First
Period Cap” means, with respect to the Key Management Investor or his Permitted Transferee at the date of the proposed

 

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transfer, a number of Transferrable Shares equal
to (A) 638,518 multiplied by (B)(1) the aggregate number of Transferable Shares that are Transferred by the Silver Lake
Investors on or after November 20, 2017 and prior to the end of the First Period divided by (2) 14,501,358.

 

(iv)  “Key
Management Investor” means those Management Investors set forth on Exhibit C attached hereto on the date of this
Agreement.

 

(v)  “Listing
Exchange” means the NASDAQ Global Market or other nationally recognized stock exchange or listing system, in each case
on which the Shares of the Company are at any time listed or quoted.

 

(vi)  “Non-Discretionary
Sale Program” means a non- discretionary, automatic selling program for the sale of securities established with a nationally
recognized registered broker/dealer that complies with customary market practices for non-discretionary, automatic selling programs
instituted by senior executives of public companies pursuant to Rule 10b5-1 (or any successor provision) under the Exchange Act,
as such provision is amended from time to time, which executes trades in the subject securities without direction or control by
the Key Management Investor (except with respect to additions and reductions in the number of Transferrable Shares to be sold in
a given Non-Discretionary Sale Program to the extent required by Section 3.4(c)(i) or Section 3.4(c)(ii)).

 

(vii)  “Post-IPO
Transfer Restriction Periods” means, collectively, the First Period and the Second Period.

 

(viii)  “Second
Period” means the period beginning and including May 31, 2018 and ending at the close of trading on May 30, 2020.

 

(ix)  “Second
Period Cap” means, with respect to the Key Management Investor or his Permitted Transferee at the date of the proposed
transfer, a number of Transferrable Shares equal to (A) 127,703 plus (B) the result of (X) 638,518 multiplied by (Y)
(1) the aggregate number of Transferable Shares that are Transferred by the Silver Lake Investors during the Second Period divided
by (2) 14,501,358.

 

(x)  “Trading
Day” means a day on which the Listing Exchange is open for at least one-half (1/2) of its normal trading hours.

 

(xi)  “Transferred”
with respect to Transferable Shares of any Silver Lake Investor means any Transferrable Shares, directly or indirectly, sold, exchanged,
assigned, pledged, hypothecated, distributed, gifted or otherwise transferred, disposed of or encumbered, in each case, whether
in such Silver Lake Investor’s own right or by its representative and whether voluntary or involuntary or by operation of
law, including, for the avoidance of doubt, Transferrable Shares sold in a registered public offering, sold in a non-registered
or private trade, or distributed to any person or entity, other than, in each case, to an affiliate of a Silver Lake Investor.

 

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(b)  Termination
of Section 3.4. Notwithstanding anything in this Section 3.4 to the contrary:

 

(i)  if (x)
the Company and all of its Subsidiaries terminate the employment or service of the Key Management Investor without Cause (as
defined in Section 5.1(e)) or (y) the Key Management Investor resigns from the Company and its Subsidiaries with Good Reason
(as defined in Section 5.1(h)), in either case during any of the Post-IPO Transfer Restriction Periods, this Section 3.4
shall cease to apply to the Key Management Investor from and after the date of any such termination; provided, that
for the avoidance of doubt, if (A) the Company and all of its Subsidiaries terminate the employment or service of the Key
Management Investor for Cause or (B) the Key Management Investor resigns from the Company and its Subsidiaries, in each case
during any of the Post-IPO Transfer Restriction Periods, this Section 3.4 shall continue to apply to such Key Management
Investor in accordance with its terms;

 

(ii)  if
all of the Silver Lake Investors, taken as a whole, cease to own any Securities, this Section 3.4 shall cease to apply to the Key
Management Investor from and after the date that the Silver Lake Investors as a whole, own no Securities; and

 

(iii)  for
the avoidance of doubt, this Section 3.4 shall terminate in its entirety upon the expiration of the Second Period.

 

(c)  Transfers
During the Post-IPO Transfer Restriction Periods. Without limiting Section 3.1 or Section 3.5 and subject in all cases to Section
3.4(b), during the Post-IPO Transfer Restriction Periods, the Key Management Investor and his Permitted Transferees shall not transfer
any Securities to any Person, except transfers of Transferable Shares (A) to Permitted Transferees pursuant to Section 3.2, (B)
transfers to satisfy tax withholding requirements in connection with the exercise, vesting or settlement, as applicable, of Options
(or similar stock appreciation rights), Restricted Stock Units or restricted stock awards, (C) upon receipt of the prior written
consent of the Silver Lake Investors or (D) any other transfers as long as such proposed transfer is made in accordance with the
Key Management Investor’s Applicable Transfer Cap as of such transfer. Notwithstanding anything in this Agreement to the
contrary, Shares underlying Restricted Stock Units that vest after November 5, 2018 shall not be subject to any restrictions contained
in this Agreement.

 

(i)  To the
extent the Key Management Investor or his Permitted Transferee desires to transfer any Transferable Shares to any Person
(other than (u)  a Permitted Transferee pursuant to Section 3.2, (v) in a registered underwritten offering in which
one or more of the Silver Lake Investors participates, (w) in connection with a Tag-Along Sale, (x) to satisfy tax
withholding requirements in connection with the exercise, vesting or settlement, as applicable, of Options (or similar stock
appreciation rights), Restricted Stock Units or restricted stock awards, or (y) transfers upon receipt of the prior written
consent of the Silver

 

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Lake Investors) or implement a Non-Discretionary
Sale Program (or increase the number of Transferrable Shares permitted to be sold thereunder), the Key Management Investor or his
Permitted Transferee, as applicable, shall provide written notice (a “Post-IPO Transfer Notice”) of such action
to the Company and the Silver Lake Investors at least one (1) Business Days prior thereto, setting forth, as applicable, (i) the
number of Transferable Shares proposed to be transferred or covered by such Non-Discretionary Sale Program and (ii) the identity
of the proposed transferee, if known, and the manner of disposition contemplated for such proposed transfer or the identity of
the broker-dealer that will be establishing such Non-Discretionary Sale Program. Within one (1) Business Days following receipt
of such Post-IPO Transfer Notice, the Company shall provide written notice to the Key Management Investor or his Permitted Transferee,
as applicable, and the Silver Lake Investors setting forth the Applicable Transfer Cap for the Key Management Investor or his Permitted
Transferee as of the date of delivery of such Post-IPO Transfer Notice, provided that the Key Management Investor or his Permitted
Transferee, as applicable, shall provide the Company with all information reasonably requested by the Company in order to calculate
such Applicable Transfer Cap.

 

(ii)  Notwithstanding
the foregoing, if the Key Management Investor or his Permitted Transferees wishes to transfer a number of Transferrable Shares
during the Second Period in excess of such Key Manager Investor’s or his Permitted Transferees’ Applicable Transfer
Cap if the figure in clause (A) of the definition of Second Period Cap were “0”, then any such excess Transferrable
Shares must be transferred pursuant to a Non-Discretionary Sale Program established in accordance with Section 3.4(c)(iii)

 

(iii)  The
Key Management Investor or his Permitted Transferee may establish a Non-Discretionary Sale Program for the sale of Transferable
Shares owned by the Key Management Investor and his Permitted Transferees at any time during an open trading window (which, for
this purpose, shall include the period prior to the Initial Public Offering) for any or all of his Transferrable Shares as long
as such Non-Discretionary Sale Program does not permit the sale of any such shares other than as permitted by this Agreement. Each
Non- Discretionary Sale Program shall not permit the transfer of a number of Transferrable Shares in excess of the Applicable Transfer
Cap for the Key Management Investor and his Permitted Transferees from time to time, but such cap shall never be less than the
number of Transferable Shares permitted under the Applicable Transfer Cap at the time of creation of the Non-Discretionary Sales
Program. Notwithstanding the foregoing, the Key Management Investor or his Permitted Transferee may amend any Non-Discretionary
Sales Program to provide for sales of excess Transferable Shares as required by Section 3.4(c)(ii), but in all cases subject to
the Applicable Transfer Cap for the Key Management Investor and his Permitted Transferee. For the avoidance of doubt, in no event
shall the Key Management Investor or his Permitted Transferee be permitted to sell (whether or not pursuant to a Non-Discretionary
Sales Program and whether

 

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or not in one or more transactions) an amount in
excess of the Applicable Transfer Cap of the Key Management Investor.

 

Section 2.2.Amendments
to Section 3.6 of the A&R Investors Shareholders Agreement. Section 3.6 of the A&R Investors Shareholders Agreement
is hereby amended and restated in its entirety as follows:

 

Section 3.6. Tag-Along Rights.

 

(a)  If
any of the Silver Lake Investors propose to transfer, in one (1) or a series of related transactions, Transferrable Shares (a “Tag-Along
Sale”) to another Person, such Silver Lake Investor (the “Selling Silver Lake Investor”) shall give
written notice (a “Transfer Notice”) of such proposed transfer to the Key Management Investor with respect to
such Tag- Along Sale as far in advance, as is reasonably practicable as determined by such Silver Lake Investor, prior to the consummation
of such proposed transfer, setting forth (i) such Silver Lake Investor’s estimate of the number of Transferable Shares proposed
to be Transferred, (ii) such Silver Lake Investor’s estimate of the consideration to be received for such Transferable Shares
by such Selling Silver Lake Investor, (iii) the identity of the purchaser (if known), (iv) any other material terms and conditions
of the proposed transfer, (v) the fraction, expressed as a percentage, determined by dividing the estimated number of Transferable
Shares to be purchased from all Silver Lake Investors selling in the Tag-Along Sale by 14,501,358 and (vi) an invitation to the
Key Management Investor or his Permitted Transferee to irrevocably agree to include in the Tag-Along Sale a number of Transferable
Shares held by the Key Management Investor or his Permitted Transferee equal to the product of 638,518 multiplied by the fraction,
expressed as a percentage (the “Tag-Along Sale Percentage”), determined by diving the number of Transferable
Shares that are actually purchased from all Silver Lake Investors selling in the Tag- Along Sale by 14,501,358 (such amount with
respect to the Key Management Investor or his Permitted Transferee, the Key Management Investor’s or his Permitted Transferee’s
“Tag-Along Shares”). In the event that more than one (1) Silver Lake Investor proposes to execute or participate
in a Tag-Along Sale (including, for the avoidance of doubt, the exercise by any Silver Lake Investor of its own “tag-along”
or participation rights), then all such transferring Silver Lake Investors shall be treated as the Selling Silver Lake Investor,
and the Transferable Shares held and to be transferred by such Silver Lake Investors shall be aggregated under this Section 3.6,
including for purposes of calculating the applicable Tag-Along Sale Percentage.

 

(b)  Upon
delivery of a Transfer Notice, the Key Management Investor or his Permitted Transferee may either (i) irrevocably elect to include
the Key Management Investor’s or his Permitted Transferee’s Tag-Along Shares in such Tag-Along Sale at the same price
per Transferable Share and pursuant to the same terms and conditions as agreed to by the Selling Silver Lake Investor prior to
the deadline specific by the applicable Silver Lake Investor in the Transfer Notice, or (ii) allow the Applicable Transfer Cap
to be increased by the number of Shares that would otherwise be in the Tag-Along Shares amount. In the event that (x) the Key Management
Investor or his Permitted Transferee does not deliver the irrevocable election contemplated by clause (i) of the immediately preceding
sentence prior to the applicable deadline or (y) the form of the Silver Lake Investor transfer is a “distribution-in-kind”
to its partners, then

 

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in either such case, the Key Management Investor
and his Permitted Transferees shall not participate in the Tag-Along Sale and clause (ii) of the immediately preceding sentence
shall apply with respect to such sale by the Selling Silver Lake Investor.

 

(c)  The
Key Management Investor or his Permitted Transferees shall take or cause to be taken all reasonable actions as the Selling Silver
Lake Investor deems to be necessary or desirable in or to consummate expeditiously such Tag-Along Sale pursuant to this Section
3.6, including (i) executing, acknowledging and delivering consents, assignments, waivers and other documents or instruments, (ii)
filing applications, reports, returns, filings or other documents or instruments with governmental authorities and (iii) otherwise
cooperating with the Selling Silver Lake Investors and the Proposed Transferee.

 

(d)  Notwithstanding
the delivery of any Transfer Notice, all determinations as to whether to complete any Tag-Along Sale and as to the timing, manner,
price and other terms and conditions of any such Tag-Along Sale shall be at the sole discretion of the Selling Silver Lake Investor,
and the Selling Silver Lake Investor and its Affiliates shall have no liability to the Key Management Investor or his Permitted
Transferees arising from, relating to or in connection with the pursuit, consummation, postponement, abandonment or terms and conditions
of any Tag-Along Sale except to the extent such Selling Silver Lake Investor failed to comply with the provisions of this Section
3.6.

 

(e)
This Section 3.6 shall terminate upon the expiration of the Second Period.

 

Section 2.3.Amendment
to Exhibit C of the A&R Investors Shareholders Agreement. Exhibit C to the A&R Investors Shareholders Agreement
is hereby deleted in its entirety and replaced with Exhibit C attached hereto.

 

ARTICLE
III

 

MISCELLANEOUS

 

Section 3.1.The A&R Investors
Shareholders Agreement. Except as provided herein, all terms and conditions of the A&R Investors Shareholders
Agreement remain in full force and effect.

 

Section 3.2.Governing
Law. This Agreement and all claims or causes of action (whether in tort, contract or otherwise) that may be based upon, arise
out of or relate to this Agreement or the negotiation, execution or performance of this Agreement (including any claim or cause
of action based upon, arising out of or related to any representation or warranty made in or in connection with this Agreement)
shall be governed by and construed in accordance with the laws of the State of Delaware, regardless of the laws that might otherwise
govern under applicable principles of conflicts of laws, except that Cayman Islands law shall apply in respect of any fiduciary
duty or any mandatory provision of Cayman Islands corporate law.

 

Section 3.3.Severability.
If any portion of this Agreement shall be declared void or unenforceable by any court or administrative body of competent jurisdiction,
such

 

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portion shall be deemed severable from the remainder
of this Agreement, which shall continue in all respects valid and enforceable.

 

Section
3.4. Counterparts. This Agreement may be executed in any number of counterparts (which delivery may be by electronic transmission),
each of which shall be deemed an original, but all of which together shall constitute a single instrument.

 

 

[The remainder of this page intentionally left
blank.]

 

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IN WITNESS
WHEREOF, each of the undersigned has executed this Amendment No. 4 to Investors Shareholders Agreement or caused this Amendment
No. 4 to Investors Shareholders Agreement to be signed by its officer thereunto duly authorized as a deed as of the date first
written above.

 

COMPANY:

 

	SMART GLOBAL HOLDINGS, INC.	 	In the presence of:
	 	 	 	 
	 	 	 	 
	 	 	 	 
	By: 	/s/ Jack Pacheco	 	/s/ Debbie Borden
	 	Name: Jack Pacheco 	 	Signature of Witness
	 	Title: Executive Vice President, Chief 	 	Name of Witness: Debbie Borden
	 	Operating Officer and Chief Financial	 	 
	 	Officer	 	 

 

 

[Signature Pages Follow]

 

     

     

    

SLP INVESTOR:

 

SILVER LAKE PARTNERS III CAYMAN

(AIV III), L.P.

 

	By:	Silver Lake Technology Associates III 
	 	Cayman, L.P., its General Partner
	 	 
	By: 	Silver Lake (Offshore) AIV GP III, Ltd., 
	 	its General Partner

	 	 	 	In the presence of:
	 	 	 	 
	 	 	 	 

	By: 	/s/ Kenneth Hao	 	/s/ Sue Hudson
	 	Name: Kenneth Hao	 	Signature of Witness
	 	Title: Director 	 	Name of Witness: Sue Hudson
	 	 	 	 

SLP CO-INVESTOR:

 

Silver Lake Technology
Investors

III Cayman, L.P.

 

	By:	Silver Lake Technology Associates
    III 
	 	Cayman, L.P., its General Partner
	 	 
	By: 	Silver Lake (Offshore) AIV GP III, Ltd., 
	  	its General Partner

	 	 	 	In the presence of:
	 	 	 	 
	 	 	 	 

	By: 	 /s/ Kenneth Hao	 	/s/ Sue Hudson
	 	Name: Kenneth Hao	 	Signature of Witness
	 	Title: Director 	 	Name of Witness: Sue Hudson

 

 

[Signature Page Follows]

 

     

     

    

SLS INVESTOR:

 

SILVER LAKE SUMERU FUND CAYMAN, L.P.

 

	By:	Silver Lake Technology Associates Sumeru 
	 	Cayman, L.P., its General Partner
	 	 
	By: 	SLTA Sumeru (GP) Cayman, L.P., its 
	 	General Partner
	 	 
	By:	Silver Lake Sumeru (Offshore) AIV GP, 
	 	Ltd., its General Partner

	 	 	 	In the presence of:
	 	 	 	 
	 	 	 	 

	By:	/s/ Ajay Shah	 	/s/ Cynthia Reyes-Orosco
	 	Name: Ajay Shah	 	Signature of Witness
	 	Title: Director 	 	Name of Witness: Cynthia Reyes-Orosco
	 	 	 	 
	 	 	 	 

SLS CO-INVESTOR:

 

Silver Lake Technology
Investors 

Sumeru Cayman, L.P.

 

	By:	Silver Lake Technology Associates Sumeru 
	 	Cayman, L.P., its General Partner
	 	 
	By: 	SLTA Sumeru (GP) Cayman, L.P., its 
	 	General Partner
	 	 
	By:	Silver Lake Sumeru (Offshore) AIV GP, 
	 	Ltd., its General Partner 

	 	 	 	In
the presence of:
	 	 	 	 
	 	 	 	 
	By: 	 /s/ Ajay Shah	 	/s/ Cynthia Reyes-Orosco
	 	Name: Ajay Shah	 	Signature of Witness
	 	Title: Director 	 	Name of Witness: Cynthia Reyes-Orosco

         

 

 

[Signature Page for Amendment
No. 4 to Investors Shareholders Agreement]

 

     

     

    

EXHIBIT C

 

KEY MANAGEMENT INVESTORS

 

Iain MacKenzie

 

[Amendment No. 4 to Investors Shareholders Agreement]Exhibit

Exhibit 10.1

XERIUM TECHNOLOGIES, INC.
2018-2020 LONG TERM INCENTIVE PLAN
This Xerium Technologies, Inc. 2018-2020 Long Term Incentive Plan (the "LTIP") provides for the grant of incentive award opportunities (each, an "Award") payable, if earned, in cash.  Because any Award under the LTIP will be paid in cash, and not equity, the Awards granted under the LTIP are not made pursuant to the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the "EIP"); provided, however, that, unless inconsistent with the express terms of the LTIP and the Award Agreement governing each Award (attached hereto as Exhibit A), the LTIP shall be construed, and the Awards shall be administered, consistent with the provisions of the Plan, the terms of which are herein incorporated by reference. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the EIP.
1.Administration: Eligibility. The LTIP shall be administered by the Committee as described in the EIP. The Committee may in its discretion consult with outside advisors or internal Company resources for purposes of making any determinations in connection with its administration of the Program. Eligibility to participate in the LTIP shall be limited to those officers who are selected by the Committee to participate in the LTIP from among those individuals who are eligible to participate in the EIP. Each selected individual who signs and returns an Award Agreement in substantially the form of Exhibit A shall be a participant ("Participant") in this LTIP. Participation in any Award shall not entitle a Participant to share in any future Awards or in any other future awards of the Company or its subsidiaries.
2.Form of Award; Determination of Number of Units. Awards will consist of Phantom Stock Units.  Each Phantom Stock Unit represents the right to receive a cash amount equal to the Average Value (defined in the Award Agreement) of one share of common stock of the Company to the extent vested and on the applicable date(s) set forth herein, subject to the terms and conditions of the LTIP and the Award Agreement. The number of Phantom Stock Units covered by an Award (the "Units") shall be as determined by the Committee and set forth in Schedule 1 to the Award Agreement.
3.Determination of Time-Based Versus Performance-Based Units. Participants will receive fifty percent (50%) of their Units in the form of time-based Units as described in Section 4 below ("Time-Based Units") and fifty percent (50%) of their Units credited to them as performance-based Units ("Performance-Based Units") as described in Section 5 below, to be earned and vested subject to satisfaction of certain performance conditions. The performance period is the three-year period comprising a three year period beginning on the date of each Participant's grant and ending on the third (3rd) anniversary of such grant date.
4.General Terms of Time-Based Units. Any Units that are to be conveyed in the form of Time-Based RSUs will be granted as of the date set forth in Schedule 1 to the Award Agreement. The Award Agreement provides that Time-Based Units shall vest on the third (3rd) anniversary of such grant date and settle in cash as soon as administratively possible after the third (3rd) anniversary of such grant date, but in all events before the 15th day of the third month following December 31 following the third (3rd) anniversary of such grant date.
5.General Terms of Performance-Based Units. The determination of the number of Phantom Stock Units to vest and be payable in cash at the end of the three-year performance period with respect to the Performance-Based Units shall be made in accordance with the provisions of the Award Agreement. The Award Agreement provides that the Performance-Based Units will vest based on achievement of certain performance goals described in Schedule 2. Vested Performance-Based Units will settled in cash as soon as administratively possible after the third (3rd) anniversary of such grant date, but in all events before the 15th  day of the third month following December 31 following the third (3rd) anniversary of such grant date.
6.Forfeiture Upon Termination of Employment. Except as provided in the Award Agreement with respect to a Change of Control, death or Disability, a termination of employment by the Company without Cause or by the Participant with Good Reason or a Retirement by the Participant (as "Disability", "Cause", 'Good Reason" and "Retirement" are defined in the Award Agreement), notwithstanding vesting under Section 

4 or Section 5, no Time-Based Units or Performance-Based Units shall vest and be payable to or in respect of a Participant unless the Participant is employed by the Company or a subsidiary on the third (3rd) anniversary of such grant date.
7.Tax Withholding. The minimum tax withholding amount with respect to any payments being made in respect of vested Units will be made at the time of payment.
8.[Intentionally Left Blank].
9.Nature of Awards. Awards hereunder, and the underlying cash amounts payable, are unfunded.
10.Clawback. If a Participant receives an Award payout under the LTIP based on financial statements that are subsequently required to be restated in a way that would decrease the amount of cash to which the Participant was entitled, the Participant will refund to the Company the difference between what the Participant received and what the Participant should have received; provided that (i) the value of any difference to be refunded will be determined net of withholding and (ii) no refund will be required for cash paid more than three years prior to the date on which the Company is required to prepare the applicable restatement. The value of any difference to be refunded will be determined in a manner consistent with regulations the Securities and Exchange Commission may adopt pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
11.Amendment. The Committee may amend the LTIP at any time and from time to time, and may terminate the LTIP, in each case subject only to such limitations, if any, as the EIP may impose.
12.409A. This LTIP and the Units granted thereunder shall be construed and administered consistent with the intent that they at all times be in compliance with or exempt from the requirements of Section 409A of the Code and the regulations promulgated thereunder.

EXHIBIT A  
XERIUM TECHNOLOGIES, INC.  
LTIP AWARD AGREEMENT  
(2018-2020 LTIP)
Pursuant to the terms of the Xerium Technologies, Inc. Long Term Incentive Plan effective for fiscal years 2018 through 2020 (the "2018-2020 LTIP"), Xerium Technologies, Inc. (the "Company") hereby grants to (the "Employee") the Phantom Stock Units (“Units”) described below.
1.The Phantom Stock Unit Award. The Phantom Stock Unit Award is subject to the terms and conditions of this LTIP Award Agreement and the 2018-2020 LTIP. The Company hereby grants to the Employee the number of Units specified on Schedule 1, as of the date specified on Schedule 1, subject to the terms and conditions of this Agreement and the LTIP (the "Award"). An Award shall be paid hereunder, only to the extent that the Employee has a nonforfeitable right to such portion of the Award, as provided in this Agreement. The Employee's rights to the Units are subject to the restrictions described in this Agreement and the LTIP in addition to such other restrictions, if any, as may be imposed by law.
2.Definitions. The following definitions will apply for purposes of this Agreement. Capitalized terms not defined in the Agreement are used as defined in the Plan.
(a)"Agreement" means this LTIP Award Agreement granted by the Company and agreed to by the Employee.
(b)"Average Value" means, on the applicable date, or if the applicable date is not a date on which the NYSE is open the next preceding date on which the NYSE was open, the average of the last sale prices with respect to such Common Stock reported on the NYSE for the 30 previous trading days or, if on any such date either (i) such Common Stock has not been quoted by the NYSE for the previous 30 trading days, the average of the last sale prices for such shorter period, or (ii) such Common Stock is not quoted by the NYSE, the average of the closing bid and asked prices with respect to such Common Stock, as furnished by a professional market maker making a market in such Common Stock selected by the Committee in good faith; or, if no such market maker is available, the fair market value of such Common Stock as of such day as determined in good faith by the Committee.
(c)"Cause" has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof).
(d)"Change of Control" shall mean any of the following which takes place after the Grant Date: (A) any Person or "group," within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the "Act"), other than the Company or any of its subsidiaries or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or one of its subsidiaries, becomes a beneficial owner, directly or indirectly, in one or a series of transactions, of securities representing more than fifty percent (50%) of the total number of votes that may be cast for the election of directors of the Company; (B) any merger or consolidation involving the Company occurs and the beneficial owners of the Company's voting securities outstanding immediately prior to such consolidation, merger, sale or other disposition do not, immediately following the consummation of such consolidation, merger, sale or other disposition, hold beneficial ownership, directly or indirectly, of securities representing fifty percent (50%) or more of the total number of votes that may be cast for election of directors of the surviving or resulting corporation; (C) any sale or other disposition of all or a substantial portion of the assets of the Company occurs and the beneficial owners of the Company's voting securities outstanding immediately prior to such 

sale or other disposition do not, immediately following the consummation of such sale or other disposition, hold beneficial ownership, directly or indirectly, of securities representing fifty percent (50%) or more of the total number of votes that may be cast for election of directors of the acquiring Person or Persons in the case of any sale or other disposition; or (D) a change in the composition of the members of the Board such that the individuals who, as of the Grant Date, constitute the Board (such Board, the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that, for purposes of this Section 3(d)(ii)(D), any individual who becomes a member of the Board subsequent to the Grant Date, whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of those individuals who are members of the Board and who were also members of the Incumbent Board (or deemed to be such pursuant to this proviso) shall be considered as though such individual were a member of the Incumbent Board; provided, further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board shall not be so considered as a member of the Incumbent Board. For the purpose of this definition, the term "beneficial owner" (and correlative terms, including "beneficial ownership") shall have the meaning set forth in Rule 13d-3 under the Act. 
(e)"Change of Control Termination" means a termination of the Employee's employment with the Company or a member of the Company Group that occurs within three (3) months prior to a Change of Control as a result of (x) termination by a member of the Company Group without Cause or (y) a Good Reason Termination.
(f)"Common Stock" means the common stock of the Company, $0.01 par value.
(g)"Company Group" means the Company together with its Affiliates.
(h)"Disability" has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof).
(i)"Good Reason Termination" shall mean a termination of employment by the Employee with "Good Reason," as such term is defined in the written employment agreement between the Company and the Employee (as in effect on the date hereof), where the Employee provides notice of the Good Reason event within 90 days of its occurrence and provides the Company at least 30 days to cure such matter.
(j)"Grant Date" means the date specified on Schedule 1.
(k)"NYSE" means the New York Stock Exchange.
(l)"Person" means any individual, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization, or other entity or group, and "Affiliated Person" means, with respect to any Person, any other Person that directly or indirectly controls or is controlled by or is under common control with such Person.
(m)"Pro Rata Portion" shall mean the product of (x) a fraction, the numerator of which is, as of the time of measurement, the number of months (rounded down to the nearest whole number) occurring since the Grant Date and the denominator of which is 36 and (y) 100% of the Units not previously Vested; provided, however, that, in the event of a termination of employment due to Retirement, “Pro Rata Portion” shall mean the product of (x) the fraction as determined in the foregoing clause and (y) a percentage of the Units not previously Vested equal to the sum of (1) 100% multiplied 

by 50% (representing the Time-Based Units), plus (2) the percentage of the Cumulative Adjusted EBITDA Target (as set forth on Schedule 2) projected to be achieved as of the most recent quarter end multiplied by 25%, plus (3) the percentage of the RONA Target (as set forth on Schedule 2) projected to be achieved as of the most recent quarter end multiplied by 25%.    
(n)"Retirement" means the retirement from employment with the Company by the Employee after the employee reaches the age of 65.
(o)"Vested" means that portion of the Award to which the Employee has a nonforfeitable right.
3.    Vesting. Subject to Sections 5 and 6 below:
(a)Time-Based Units shall become Vested on the third (3rd) anniversary of the Grant Date.
(b)Performance-Based Units shall become Vested in accordance with the criteria set out in Schedule 2.
(c)Notwithstanding subsections (a) and (b), except as provided in Sections 5 and 6, all Units shall be forfeited if Employee's employment terminates for any reason whatsoever before the third (3rd) anniversary of the Grant Date.
4.Payment of Award. Subject to Sections 5 and 6 below, as soon as practicable after the third (3rd) anniversary of the Grant Date, and in all events before the 15th day of the third month following December 31 following the third (3rd) anniversary of the Grant Date, the Company shall pay to the Employee a cash amount equal to the Average Value of that number of Units that have become Vested.  
5.Change of Control. In the event of a Change of Control, then all Time-Based Units and Performance-Based Units shall become fully and immediately Vested as though 100% of the target performance goals were achieved, as described in Schedule 2.  If Employee incurred a Change of Control Termination, all Time-Based RSUs and Performance Units otherwise forfeited upon such termination shall become fully and immediately Vested.  In the case of either a Change of Control or a Change of Control Termination, the Company shall pay to the Employee a cash amount equal to the Average Value of that number of Units that have become Vested pursuant to one of the two preceding sentences and shall, to the extent practicable, be paid immediately preceding the effective time of the Change of Control transaction.
6.Termination of Employment.
(a)Resignation or Termination by the Company. If the Employee ceases to be employed by the Company Group as a result of resignation, dismissal or any other reason, then the portion of the Award that has not previously Vested shall be forfeited automatically; provided that in the event of a termination of Employee's employment by a member of the Company Group without Cause, as a result of death or Disability, a Good Reason Termination or a Retirement, a portion of the Units (both Time-Based Units and Performance-Based Units) equal to the Pro Rata Portion of the Units as of the time of termination shall Vest immediately prior to such termination and the Company shall pay to the Employee a cash amount equal to the Average Value of that number of Units that have become Vested thereby as soon as practicable thereafter, and in all events before the 15th day of the third month following the end of the calendar year in which such Units became Vested.
(b)Meaning of termination of employment. Termination of employment occurs on the date of notice to Employee, except that if (i) the Company or a member of the Company Group is 

required to give Employee a written notice of termination of employment, and (ii) the termination of employment is not effective for a period of more than thirty (30) days due to applicable law or contractual arrangements between a member of the Company Group and the Employee, then, solely for the purposes of this Award, including without limitation Section 6(a) hereof and the determination of the Pro Rata Portion, the Employee's employment shall be deemed terminated and the Employee shall be deemed ceased to be employed by the Company Group on the date that is thirty (30) days from the date of such notice instead of the actual date of termination.
7.Dividends. No dividend equivalents shall be paid on Units (either Time-Based Units or Performance-Based Units).
8.Clawback. If the Employee receives an Award payout under the LTIP based on financial statements that are subsequently required to be restated in a way that, in the reasonable determination of the Committee, would have decreased the number of Units that should have Vested and the corresponding cash to which the Employee was entitled, the Employee will refund to the Company the difference between what the Employee received and what the Employee should have received; provided that (i) the value of any difference to be refunded will be determined net of withholding and (ii) no refund will be required for cash payments delivered more than three years prior to the date on which the Company is required to prepare the applicable restatement. The value of any difference to be refunded will be determined in the reasonable discretion of the Committee in a manner consistent with regulations the Securities and Exchange Commission may adopt pursuant to Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
9.    Miscellaneous.
(a)Adjustments Based on Certain Changes in the Common Stock. In the event of any stock split, reverse stock split, stock dividend, recapitalization or similar change affecting the Common Stock, the Award shall be equitably adjusted.
(b)No Voting Rights. The Award shall not be interpreted to bestow upon the Employee any equity interest or ownership in the Company or any Affiliate.
(c)No Assignment. No right or benefit or payment under the Plan shall be subject to assignment or other transfer nor shall it be liable or subject in any manner to attachment, garnishment or execution.
(d)Withholding. The Employee is responsible for payment of any taxes required by law to be withheld by the Company with respect to an Award. To facilitate that payment, the Company will, to the extent permitted by law, retain from the aggregate cash payable to the Employee under the Award that amount of cash necessary for payment of the minimum tax withholding amount.
(e)Employment Rights, This Agreement shall not create any right of the Employee to continued employment with the Company or its Affiliates or limit the right of Company or its Affiliates to terminate the Employee's employment at any time and shall not create any right of the Employee to employment with the Company or any of its Affiliates. Except to the extent required by applicable law that cannot be waived, the loss of the Award shall not constitute an element of damages in the event of termination of the Employee's employment even if the termination is determined to be in violation of an obligation of the Company or its Affiliates to the Employee by contract or otherwise.
(f)Unfunded Status. The obligations of the Company hereunder shall be contractual only. The Employee shall rely solely on the unsecured promise of the Company and nothing herein shall be construed to give the Employee or any other person or persons any right, title, interest or 

claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company or any Affiliate.
(g)Severability. Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction. In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.
(h)Governing Law. This Agreement and all actions arising in whole or in part under or in connection herewith, will be governed by and construed in accordance with the domestic substantive laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.

(i)Conflicts. To the extent there are any conflicts between provisions this Agreement and any applicable employment agreement entered into between Employee and the Company or its subsidiaries, the provisions of such employment agreement shall govern and nothing in this Agreement shall in any way amend, supersede or otherwise change any provisions or rights contained in such employment agreement.
(j)409A. The Award shall be construed and administered consistent with the intent that it be at all times in compliance with, or exempt from, the requirements of Section 409A of the Internal Revenue Code and the regulations thereunder.
(k)Amendment. This Agreement may be amended only by mutual written agreement of the parties.

IN WITNESS WHEREOF, Xerium Technologies, Inc. has executed this LTIP Award Agreement as of the date first written above.
	
		
	Xerium Technologies, Inc.

	 
	 

	By:
	 

	Name:
	Michael F. Bly

	Title:
	Executive Vice President of Global Human Resources

	
		
	Acknowledged and agreed: Employee

	 
	 

	By:
	 

	Name:
	 

Schedule 1
Grant Date:             January 30, 2018
Number of Phantom Stock Units:     [__________] 
Allocation of Phantom Stock Units Granted:

	
		
	Number of Time-Based Units
	Number of Performance-Based Units

	_____________________
	______________________

Schedule 2

Performance-Based Unit Vesting
•Vesting of Performance-Based Units shall occur in two (2) ways: 
		
	Ø
	One-half of the Employee's Performance-Based Units shall vest based on the Company's three-year cumulative Adjusted EBITDA goal ("Adjusted EBTIDA Units”) 

		
	Ø
	One-half of the Employee's Performance-Based Units shall vest based upon the Company’s three-year average Return on Net Assets ("RONA") (such Units, the "RONA Units")

•Performance Metrics
		
	•
	Cumulative Adjusted EBITDA:

		
	•
	Cumulative Adjusted EBITDA Definition: "Cumulative Adjusted EBITDA" means the cumulative "Adjusted EBITDA," as such term is defined in the Xerium Technologies, Inc. Form 10-K for the year ended December 31, 2016, for fiscal years 2018, 2019 and 2020.

		
	•
	Cumulative Adjusted EBITDA Target: The Cumulative Adjusted EBITDA target for the 2018-2020 performance period shall be such amount as is set by the Compensation Committee ("Target"), as may be adjusted from time to time.

		
	•
	Cumulative Adjusted EBITDA Payout: The Adjusted EBITDA Units that may vest will range from 50% to 200% of the Employee's total Adjusted EBITDA Units. Upon attainment of the Committee approved Threshold, the Adjusted EBITDA Units will begin vesting on a straight-line basis from 50% to 100% at 100% of Target.  Performance from Target to the Committee approved Cap, will begin vesting on a straight-line basis from 100% at Target to 200% at the Committee approved Cap, interpolation in between.

The following table sets forth the performance requirements and respective payout amounts.
Table of Adjusted EBITDA Performance Payout
	
			
	Adjusted EBITDA Achievement
	Payout %
	

	Threshold
	50.0
	%

	Target
	100.0
	%

	Cap
	200.0
	%

		
	•
	Return on Net Assets (RONA):

		
	•
	RONA and Average RONA Definition: “RONA,” for any fiscal year end, means the Company’s “Adjusted EBITDA” (as defined above) as of the end of such fiscal year divided by the average net assets (Net asset figure is calculated as average of last 5 quarter ends), excluding cash, goodwill, intangible assets, notes payable, current and long term debt, current and long term capital leases, net current and long term pension obligations and all income tax related balance sheet accounts.  “Average RONA” means the average of the RONA as of the end of fiscal years 2018, 2019 and 2020.    

		
	•
	Average RONA Target: The Average RONA target for the 2018-2020 performance period shall be such amount as is set by the Compensation Committee ("Target"), as may be adjusted from time to time.

		
	•
	Cumulative RONA Payout: The RONA Units that may vest will range from 50% to 200% of the Employee's total RONA Units. Upon attainment of the Committee approved Threshold, the RONA Units will begin vesting on a straight-line basis from 50% to 100% at 100% of Target.  Performance from Target to the Committee approved Cap, will begin 

vesting on a straight-line basis from 100% at Target to 200% at the Committee approved Cap, interpolation in between.
The following table sets forth the performance requirements and respective payout amounts.
Table of RONA Payout
	
			
	Average RONA Achievement
	Payout %
	

	Threshold
	50.0
	%

	Target
	100.0
	%

	Cap
	200.0
	%

Currency Adjustments. In calculating Cumulative Adjusted EBITDA and Average RONA, the Adjusted EBITDA and RONA for each fiscal year within the performance period will be adjusted at the end of such fiscal year to reflect US GAAP currency exchange rate fluctuations relative to the US$ in all markets as compared to the budgeted currency exchange rates in the initial plan year or for any fiscal years in which the respective target may be adjusted.

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