Document:

Exhibit
10.4

 

PP HOLDING CORPORATION II

 

2004 STOCK OPTION PLAN

 

Section 1.                                            PURPOSE.

 

The Plan is intended as an incentive to improve the performance,
encourage the continued employment and increase the proprietary interest of
certain employees of the Company and its Subsidiaries selected for
participation in the Plan.  The Plan is
designed to grant such employees the opportunity to share in the Company’s
long-term success through Stock ownership and to afford them the opportunity
for additional compensation related to the value of Stock of the Company.  Options granted under this Plan are not
intended to qualify as “incentive stock options” under Section 422 of the
Code.

 

Section 2.                                            DEFINITIONS.

 

(a)                                  “Affiliate”
means, with respect to any entity, any other entity that, directly or
indirectly through one or more intermediaries, controls, is controlled by or is
under common control with such entity.

 

(b)                                 “Annual
EBITDA” means, for any fiscal year, an amount equal to means, for any
fiscal year, an amount equal to the Consolidated EBITDA (as such term is
defined in that certain Credit Agreement, dated as of May 13, 2004, but
determined after adding back all management, sponsor, arranger and other fees,
if any, paid by the Company to the Fund or its Affiliates) for such fiscal
year.

 

(c)                                  “Annual
EBITDA Target” means:

 

(i)                                     for
fiscal year 2004, $147.4 million;

 

(ii)                                  for
fiscal year 2005, $162.1 million;

 

(iii)                               for
fiscal year 2006, $177.5 million;

 

(iv)                              for
fiscal year 2007, $194.4 million; and

 

(v)                                 for
fiscal year 2008, $210.1 million.

 

(d)                                 “Board”
means the Board of Directors of the Company.

 

(e)                                  “Cause”
means, in the absence of any employment agreement between a Participant and the
Company or any of its Affiliates otherwise defining Cause, (i) fraud or
embezzlement on the part of Participant in the course of his or her employment
or services, (ii) personal dishonesty or acts of gross negligence or gross
misconduct, which, in each case, is demonstrably and materially injurious to
the Company or any of its Affiliates (iii) a Participant’s intentional
engagement in conduct that is materially injurious to the Company or any of its
Affiliates, (iv) a Participant’s conviction by a court of competent
jurisdiction of, or pleading “guilty” or “no contest” to, (x) a felony or (y)
any other criminal charge (other than minor traffic

 

 

violations) which could reasonably be expected to have a material
adverse impact on the reputation or business of the Company or any of its
Affiliates; (v) public or consistent drunkenness by a Participant or his or her
illegal use of narcotics which is, or could reasonably be expected to become,
materially injurious to the reputation or business of the Company or any of its
Affiliates or which impairs, or could reasonably be expected to impair, the
performance of a Participant’s duties to the Company or any of its Affiliates;
or (vi) willful failure by a Participant to follow the lawful directions of a
superior officer or the Board, unless such failure did not occur in bad faith
and is cured promptly after written notice of such failure is given to the
Participant by such superior officer or the Board.  In the event there is an employment agreement between a
Participant and the Company or any of its Affiliates defining Cause, “Cause”
shall have the meaning provided in such agreement.

 

(f)                                    “Change
in Control” means (i) a change in ownership or control of the Company
effected through a transaction or series of transactions (other than an
offering of Stock to the general public through a registration statement filed
with the Securities and Exchange Commission) whereby any “person” or related
“group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of
the Exchange Act) (other than the Company, any of its Subsidiaries, an employee
benefit plan maintained by the Company or any of its Subsidiaries, a Principal
Stockholder or an Affiliate of the Company or a Principal Stockholder) directly
or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of securities of the Company possessing more than fifty
percent (50%) of the total combined voting power of the Company’s securities
outstanding immediately after such acquisition; or (ii) the sale or conveyance
of all or substantially all of the assets of the Company.

 

(g)                                 “Closing”
shall have the meaning ascribed to such term in the Stock Purchase Agreement.

 

(h)                                 “Code”
means the Internal Revenue Code of 1986, as amended.

 

(i)                                     “Committee”
means the Compensation Committee of the Board.

 

(j)                                     “Company”
means PP Holding Corporation II, a Delaware corporation.

 

(k)                                  “Cumulative
EBITDA” means, for any fiscal year, the sum of the Annual EBITDA for each
fiscal year prior to and including such fiscal year, commencing with fiscal
year 2004.

 

(l)                                     “Cumulative
EBITDA Target” means:

 

(i)                                     for
fiscal year 2004, $147.4 million;

 

(ii)                                  for
fiscal year 2005, $309.5 million;

 

(iii)                               for
fiscal year 2006, $487.0 million;

 

(iv)                              for
fiscal year 2007, $681.4 million; and

 

(v)                                 for
fiscal year 2008, $891.5 million.

 

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(m)                               “Disability”
means, in the absence of any employment agreement between a Participant
and the Company or an Affiliate otherwise defining Disability, the permanent
and total disability of a person within the meaning of Section 22(e)(3) of
the Code.  In the event there is an
employment agreement between a Participant and the Company or an Affiliate
defining Disability, “Disability” shall have the meaning provided in such agreement.

 

(n)                                 “Employee”
means any person employed by the Company or any subsidiary of the Company.

 

(o)                                 “Exchange Act”
means the Securities Exchange Act of 1934, as amended.

 

(p)                                 “Expiration
Date” means the date that an Option expires, after which the Option may no
longer be exercised.

 

(q)                                 “Fair
Market Value” means (i) prior to an IPO, the fair market value per share of
Stock, as determined by the Board in good faith, (ii) at the time of an IPO,
the per share price to the public in such IPO, and (iii) after an IPO, on any
date (A) if the Stock is listed on a national securities exchange, the mean
between the highest and lowest sale prices reported as having occurred on the
primary exchange with which the Stock is listed and traded on the date prior to
such date, or, if there is no such sale on that date, then on the last
preceding date on which such a sale was reported, or (B) if the Stock is not
listed on any national securities exchange but is quoted in the National Market
System of the National Association of Securities Dealers Automated Quotation System
(“NASDAQ-NMS”) on a last sale basis, the average between the high bid
price and low ask price reported on the date prior to such date, or, if there
is no such sale on that date then on the last preceding date on which such a
sale was reported.  If, after an IPO,
the Stock is not quoted on NASDAQ-NMS or listed on an exchange, or
representative quotes are not otherwise available, the Fair Market Value shall
mean the amount determined by the Board in good faith to be the fair market
value per share of Stock, on a fully diluted basis.

 

(r)                                    “Fund”
means Warburg Pincus Private Equity VIII, L.P. or Warburg Pincus International
Partners, L.P.

 

(s)                                  “Good
Reason” means, in the absence of any employment agreement between a
Participant and the Company or any of its Affiliates otherwise defining Good
Reason, (i) the reduction of a Participant’s base salary or bonus opportunity,
other than an across the board reduction in base salary or bonus opportunity
applicable to all middle and senior management of the Company, (ii) the
material breach by the Company of the provisions of this Plan or of any
employment or similar agreement with the Participant, (iii) a relocation of
Participant’s principal place of employment to a location which is more than 50
miles from the Participant’s principal place of employment as of the Closing,
but only if such new principal place of employment is further from his
permanent residence than the prior place of employment, or (iv) the material
diminution of a Participant’s title, duties or responsibilities, without the
Participant’s consent.  For purposes of
this Plan, no termination of a Participant’s employment shall be considered for
Good Reason unless the Participant has provided the Company thirty (30) days’
written notice setting forth in reasonable specificity the event that
constitutes Good Reason, within sixty (60) days of the occurrence of such
event, and during such

 

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thirty (30) day notice period, the Company shall have failed to cure
the event or events in question.  In the
event there is an employment agreement between a Participant and the Company or
an Affiliate defining Good Reason, “Good Reason” shall have the meaning
provided in such agreement.

 

(t)                                    “IPO”
means an initial public offering of the Stock registered under the Securities
Act pursuant to an effective registration statement.

 

(u)                                 “IPO
Date” means the effective date of the registration statement for the IPO.

 

(v)                                 “Option”
means any stock option granted pursuant to the Plan

 

(w)                               “Option
Agreement” means a written agreement between the Company and a Participant
evidencing the terms and conditions of an individual Option grant.

 

(x)                                   “Participant”
means a person or entity to whom an Option is granted pursuant to the
Plan or, if applicable, such other person or entity who holds an outstanding
Option.

 

(y)                                 “Permitted Transfer” means any
transfer by a Participant of all or any portion of his or her shares of Stock
or Options (i) to the Company, (ii) to or for the benefit of any spouse, child
or grandchild of a Participant, or (iii) to a trust or partnership for the
benefit of any of the foregoing, including transfers by will or the laws of
descent and distribution; provided, however, that, in the case of
clauses (ii) and (iii) above, it shall be a condition of each such transfer
that (x) the transferee agrees to be bound by the terms of the Plan and the
applicable Option Agreement as though no such transfer had taken place, and
that (y) the Participant has complied with all applicable law in connection
with such transfer.

 

(z)                                   “Plan”
means the PP Holding Corporation II 2004 Stock Option Plan, as the same may be
amended from time to time.

 

(aa)                            “Polypore”
means Polypore, Inc., a Delaware corporation and Affiliate the Company.

 

(bb)                          “Principal
Stockholder” means either Fund or any of their respective Affiliates.

 

(cc)                            “Qualifying
Termination” means a termination of a Participant’s employment with the
Company or its Affiliates (i) by the Company without Cause, (ii) by the
Participant with Good Reason or as a result of the Participant’s Retirement,
(iii) by reason of the Participant’s death or Disability.

 

(dd)                          “Repurchase
Options” means Options the underlying shares of Stock of which are
allocated out of the Repurchase Pool,
and except to the extent specifically provided otherwise herein, a Repurchase
Option shall be treated in all respects as an Option in accordance with the
Plan.

 

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(ee)                            “Repurchase
Pool” means a pool of shares of Stock allocated under the Plan pursuant to
Section 4(d) hereof.

 

(ff)                                “Repurchase
Price” means:

 

(i)                                     For
Options:

 

(A)                              In
the case of a Participant’s termination of employment which is not by reason of
a Qualifying Termination, $0; and

 

(B)                                In
the case of a Participant’s termination of employment by reason of a Qualifying
Termination, the fair value of the Option on the date of repurchase by the
Company.

 

(ii)                                  For
Stock underlying an Option:

 

(A)                              In
the case of a Participant’s termination of employment which is not by reason of
a Qualifying Termination, the lower of (x) price paid by the Participant for
the Stock upon the exercise of the Option, and (y) the Fair Market Value of the
Stock on the date of repurchase by the Company; and

 

(B)                                In
the case of a Participant’s termination of employment by reason of a Qualifying
Termination, the Fair Market Value of the Stock on the date of repurchase by
the Company.

 

(gg)                          “Retirement”
means a Participant’s voluntary resignation of employment with the Company or
its Affiliates following such Participant’s attainment of age 62; provided,
however, that no voluntary resignation by a Participant shall be
considered a Retirement hereunder if such resignation occurs following such
Participant’s receipt of notice from the Company or an Affiliate of its
intention to terminate the Participant for Cause but prior to the expiration of
any required notice or cure period.

 

(hh)                          “Securities
Act” means the Securities Act of 1933, as amended.

 

(ii)                                  “Stock”
means the common stock of the Company, par value $0.01 per share.

 

(jj)                                  “Stock
Purchase Agreement” means the Stock Purchase Agreement by and among the
Company, PP Acquisition Corporation and certain sellers named therein, dated as
of January 30, 2004.

 

(kk)                            “Subsidiary”
means any subsidiary corporation within the meaning of Section 424(f) of
the Code.

 

(ll)                                  “Transfer”  shall mean a voluntary or involuntary sale,
exchange, transfer, assignment, pledge, hypothecation, encumbrance or other
disposition.

 

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(mm)                      “Top-Up
Price” means an amount equal to (x + y) / z), where (x) equals the
aggregate consideration received by the Company or its shareholders as a result
of the Change in Control (after payment of all fees and expenses incidental
thereto), (y) equals the aggregate Repurchase Price paid to all Participants
within the one hundred eighty (180) day period immediately prior to the date of
such Change in Control, and (z) equals the sum of (i) all of the shares of
Stock, calculated on a fully diluted basis, outstanding immediately before the
Change in Control plus (ii) the aggregate number of Options and shares of Stock
repurchased pursuant to Section 6(c) hereof within the one hundred eighty
(180) day period immediately prior to the date of such Change in Control.

 

(nn)                          “Vested
Equity” shall mean any Options which are vested on the date of a
Participant’s termination of employment, together with any Stock acquired by
such Participant upon the exercise of any Options.

 

Section 3.                                            ADMINISTRATION.

 

(a)                                  General.  The Plan shall be administered by the
Committee.

 

(b)                                 Powers
of the Committee.  Subject to the
provisions of the Plan, the Committee shall have sole authority, in its
absolute discretion:

 

(i)                                     To
determine from time to time which of the Employees shall be granted Options,
when and how each Option shall be granted, what type or combination of types of
Option shall be granted, the provisions of each Option granted (which need not
be identical), including the time or times when a person shall be permitted to
receive Stock pursuant to an Option, the number of shares of Stock with respect
to which an Option shall be granted to each such person, and, subject to the
provisions of the Plan, the Option exercise price;

 

(ii)                                  To
construe and interpret the Plan and Options granted under it, and to establish,
amend and revoke rules and regulations for its administration;

 

(iii)                               To
amend the Plan or an Option as provided in Section 14; and

 

(iv)                              To
exercise such powers and to perform such acts as the Committee deems necessary
or expedient to promote the best interests of the Company which are not in
conflict with the provisions of the Plan.

 

(c)                                  Committee
Determinations.  All determinations,
interpretations and constructions made by the Committee in good faith shall not
be subject to review by any person or entity and shall be final, binding and
conclusive on all persons and entities.

 

(d)                                 Delegation
of Authority.  The Committee may
delegate to one or more of its members, or to one or more agents, such
administrative duties under this Section 3 as it may deem advisable.

 

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Section 4.                                            STOCK SUBJECT TO THE PLAN.

 

(i)                                     Share
Reserve.  Subject to Section 7
hereof relating to adjustments, the total number of shares of Stock which may
be issued pursuant to the exercise of Options shall not exceed, in the
aggregate, 8,968 shares of Stock. 
Options for at least 50% of the shares of Stock reserved for issuance
under the Plan shall be granted at or promptly following the Closing, and
Options for all shares available for issuance under the Plan shall be granted
prior to any Change in Control or prior to or in conjunction with an IPO.

 

(b)                                 Source.  The Stock to be optioned under the Plan
shall be shares of authorized but unissued Stock or previously issued shares of
Stock reacquired by the Company on the open market, by private purchase or
otherwise.

 

(c)                                  Reversion
of Shares.  If any Option shall for
any reason expire, be forfeited or otherwise terminate, in whole or in part,
the shares of Stock not acquired under such Option shall revert to and again
become available for issuance under the Plan.

 

(d)                                 Repurchase
Pool.  Following the Closing, if,
pursuant Section 6(c), the Company repurchases (i) any shares of Stock
acquired upon exercise of any Option, or (ii) any vested Option, such shares of
Stock repurchased, or the shares of Stock underlying the Option repurchased, as
applicable, shall be allocated to the Repurchase Pool, and again become
available for issuance under the Plan as a Repurchase Option.

 

Section 5.                                            ELIGIBILITY.

 

Participation shall be limited to Employees who have received written
notification from the Committee, or from a person designated by the Committee,
that they have been selected to participate in the Plan.

 

Section 6.                                            OPTIONS.

 

(a)                                  General.  Options granted hereunder shall be in such
form and shall contain such terms and conditions as the Committee shall deem
appropriate.  The provisions of separate
Options shall be set forth in an Option Agreement, which agreements need not be
identical.

 

(b)                                 Option
Terms.  Each Option shall include
(through incorporation of provisions hereof by reference in the Option
Agreement or otherwise) the substance of each of the following provisions:

 

(i)                                     Expiration Date.  Except as may otherwise be provided in an Option Agreement, the
Expiration Date of an Option shall be the tenth (10th) anniversary
of the date of grant of such Option; provided, however, that no
Option granted hereunder shall have an Expiration Date beyond the tenth (10th)
anniversary of the date it was granted.

 

(ii)                                  Exercise Price.  The exercise price per share of Stock for each Option, which per
share exercise price shall be subject to adjustment as provided in
Section 7 hereof, shall be $1,000 per share, representing the Fair Market
Value of a share of Stock

 

7

 

immediately following the Closing; provided, however, in
the case of Participants who become Participants who become employed with the
Company following the Closing, the Fair Market Value of a share of Stock as of
the date of grant of an Option; provided, further, that if the
Option is a Repurchase Option, the exercise price of such Repurchase Option
shall in no event (unless determined otherwise by the Compensation Committee)
be less than the Repurchase Price per share paid by the Company in connection
with its repurchase of the shares of Stock or the vested Option in accordance
with the terms of the Section 6(c).

 

(iii)                               Vesting.

 

(A)                              General. 
Options shall vest and become exercisable in such manner and on such
date or dates set forth in subsections (B) below (regardless of the date of grant of any such Option or Repurchase
Option); provided, however, that notwithstanding such
vesting dates, the Committee may in its sole discretion accelerate the vesting
of any Option, which acceleration shall not affect the terms and conditions of
any such Option other than with respect to vesting.  Unless otherwise specifically determined by the Committee, the
vesting of an Option shall occur only while the Participant is employed or
rendering services to the Company or its Affiliates and all vesting shall cease
upon a Participant’s termination of employment or services for any reason.  If an Option is exercisable in installments,
such installments or portions thereof which become exercisable shall remain
exercisable until the Option expires.

 

(B)                                Performance Vesting.

 

(I)                                    Vesting Based on
Annual Performance.  For each fiscal
year of the Company beginning with fiscal year 2004 and ending with fiscal year
2008, ten percent (10%) of the Options granted to a Participant shall be
eligible to become vested and exercisable, provided that the Polypore has
achieved an Annual EBITDA equal to, or in excess of, the Annual EBITDA Target
for such fiscal year.  Such Options
shall become vested and exercisable as of the date that the Committee verifies
that such Annual EBITDA Target has been achieved.  For each such fiscal year, the Committee shall verify whether the
Annual EBITDA Target has been achieved, and shall notify Polypore’s Chief
Executive Officer of its determination with respect thereto, within ten (10)
business days after the Committee receives Polypore’s audited financial
statements for that fiscal year.  If
Annual EBITDA for a fiscal year is less than the Annual EBITDA Target for such
fiscal year (an “EBITDA Shortfall”), but Annual EBITDA for the
immediately following fiscal year exceeds the Annual EBITDA Target for such
fiscal year by at least the amount of the prior fiscal year’s EBITDA Shortfall,
in addition to any Options that vest and become exercisable in such immediately
following fiscal year in accordance with the preceding sentence, the Options
that were eligible for vesting in the immediately prior fiscal year shall also vest
and become exercisable as of the date that the Committee verifies (in the
manner specified above) that such Annual EBITDA has been achieved.

 

8

 

(II)                                Vesting Based on Cumulative Target.  Provided that the Cumulative EBITDA for
fiscal year 2008 is equal to, or in excess of, the Cumulative EBITDA Target for
fiscal year 2008, fifty percent (50%) of the Options (the “Cumulative Target
Options”) shall become vested and exercisable as of the date that the
Committee verifies that the Cumulative EBITDA Target for fiscal year 2008 has
been achieved.  If the Cumulative EBITDA
for fiscal year 2008 is in excess of ninety (90%) of the Cumulative EBITDA
Target for fiscal year 2008 but less than one hundred percent (100%) of the
Cumulative EBITDA Target for fiscal year 2008, a fraction of the Cumulative
Target Options shall become vested and exercisable, based on a linear
interpolation of the percentage of the Cumulative EBITDA Target for 2008
achieved between 90% and 100%, as of the date that the Committee verifies that
such percentage of the Cumulative EBITDA Target for fiscal year 2008 has been
achieved.  If the Cumulative EBITDA for
fiscal year 2008 is less than ninety (90%) of the Cumulative EBITDA Target for
such fiscal year, no Options shall vest under this
Section 6(b)(iii)(B)(II).  The Committee shall verify whether the
Cumulative EBITDA Target for fiscal year 2008 has been achieved, and shall
notify Polypore’s Chief Executive Officer of its determination with respect
thereto, within ten (10) business days after the Committee receives Polypore’s
audited financial statements for fiscal year 2008.

 

(C)                                Vesting of
Cumulative Target Options on an IPO or Qualifying Termination of Employment.  Notwithstanding the vesting schedule provided
in sub-clause (B) above, in the event of (x) an IPO, or (y) a Qualifying
Termination, provided that the Cumulative EBITDA for the fiscal year ending
immediately prior to the fiscal year in which such IPO or Qualifying
Termination occurs is equal to, or exceeds, the Cumulative EBITDA Target for
such fiscal year, a percentage of Cumulative Target Options held by each
Participant, in the case of an IPO, or the Participant who undergoes a
Qualifying Termination, in the case of a Qualifying Termination, shall vest
based upon the number of whole fiscal years completed from the Closing through
the date of such IPO or Qualifying Termination over five (5).  For purposes of clarification, in the event
that an IPO or Qualifying Termination occurs in fiscal year 2004, no vesting of
Cumulative Target Options shall occur by virtue of this sub-clause (C).

 

(D)                               Change in Control.  In the event of a Change in Control: (i) if
the annualized net rate of return to the Company’s stockholders (excluding
Participants) immediately following the Closing from the Closing until the date
of consummation of such Change in Control (the “NRR”), equals, or is in
excess of, thirty percent (30%), then all Options shall vest and become
exercisable on the Change in Control; and (ii) if the NRR is greater than
twenty percent (20%) but less than thirty percent (30%), a percentage of the
Options which are then unvested, between zero (0) and one-hundred percent
(100%), shall vest and become exercisable on the Change in Control by means of
a linear interpolation of the percentage NRR achieved between 20% and 30%.  For purposes hereof, NRR shall be calculated
solely by reference to payments received or to be

 

9

 

received by stockholders
of the Company in respect of any equity security held by them, taking into
account all management, sponsor, arranger and other fees, if any, paid by the
Company to the Fund or its Affiliates. 
Any Options which have not vested prior to, or upon, a Change in
Control, shall terminate upon consummation of a Change in Control.

 

(E)                                 Expiration of Unvested Options.  Unless earlier terminated pursuant to
sub-clause (D) above, Options which have not vested in accordance with the
provisions of sub-clauses (B), (C) or (D) above on or prior to the date that
the Committee verifies whether the Cumulative EBITDA Target for fiscal year
2008 has been achieved shall terminate as of such date.

 

(F)                                 New Employees.  Notwithstanding the vesting provisions described above, with respect
to any Options granted to any Participant who becomes an Employee following the
Closing, the Committee shall have the discretion to alter the performance
criteria to which the Options so granted will vest.  If the Committee elects to alter the performance criteria
applicable to any Options granted to any such Participant as contemplated by
this Section 6(b)(iii)(F), the Option Agreement evidencing the Options so
granted shall specifically set forth such altered performance vesting criteria.

 

(iv)                              Payment for
Stock.  Payment for shares of Stock acquired
pursuant to Options granted hereunder shall be made in full, upon exercise of
the Options (i) in immediately available funds in United States dollars, by
certified or bank cashier’s check, (ii) by surrender to the Company of shares
of Stock which either (A) have been held by the Participant for at least
six-months, or (B) were acquired from a person other than the Company, (iii) by
a combination of (i) and (ii), (iv) prior to an IPO, by delivery of a notice of
“net exercise” to the Company, pursuant to which the Participant shall receive
the number of shares of Stock underlying the Options so exercised reduced by
the number of shares of Stock equal to the aggregate exercise price of the
Options divided by the Fair Market Value on the date of exercise, or (v)
following an IPO, by any other means approved by the Committee.  Anything herein to the contrary
notwithstanding, the Company shall not directly or indirectly extend or
maintain credit, or arrange for the extension of credit, in the form of a
personal loan to or for any director or executive officer of the Company
through the Plan in violation of Section 402 of the Sarbanes-Oxley Act of
2002 (“Section 402 of SOX”), and to the extent that any form of
payment would, in the opinion of the Company’s counsel, result in a violation
of Section 402 of SOX, such form of payment shall not be available.

 

(v)                                 Transferability of Options.  An Option shall not be transferable except
by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Participant only by the Participant; provided,
however, that subject to the consent of the Committee (such consent not
to be unreasonably withheld), an Option may be transferred for legitimate
estate planning pursuant to a Permitted Transfer.  The Committee may impose reasonable and customary conditions on
any such transfers.

 

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(vi)                              Termination of Employment or Service.

 

(A)                              Other than Death or Disability.  If prior to the Expiration Date, the
Participant’s employment with the Company and its Affiliates terminates for any
reason other than by reason of the Participant’s death or Disability, then (1)
all vesting with respect to the Options shall cease, (2) any unvested Options
shall expire as of the date of such termination, and (3) any vested Options
shall remain exercisable until the earlier of the Expiration Date or the date
that is ninety (90) days after the date of such termination of employment or
service.

 

(B)                                Death or Disability.  If prior to the Expiration Date, the
Participant’s employment with the Company and its Affiliates terminates by
reason of death or Disability, (1) all vesting with respect to the Options
shall cease, (2) any unvested Options shall expire as of the date of such
termination, and (3) any vested Options shall expire on the earlier of the
Expiration Date or the date that is twelve (12) months after the date of such
termination due to death or Disability of the Participant.  In the event of a Participant’s death, the
Options shall remain exercisable by the person or persons to whom the
Participant’s rights under the Options pass by will or the applicable laws of
descent and distribution until its expiration, but only to the extent the
Options were vested by the Participant at the time of such termination due to
death or Disability.

 

(c)                                  Repurchase
Rights.  Following a Participant’s
termination of employment with the Company and its Affiliates, and prior to the
IPO Date, each Option, and the Stock underlying such Option, shall be subject
to the following repurchase rights:

 

(i)                                     Company Call Right.  In the event that a Participant’s employment
is terminated for any reason, for a period of ninety (90) days following such
termination, the Company shall have the right to repurchase such Participant’s
Vested Equity at the Repurchase Price. 
The Company’s repurchase right under this Section 6(c)(i) shall be
exercisable upon written notice to the Participant indicating the number of
Options and/or shares of Stock to be repurchased and the date on which the
repurchase is to be effected, such date to be not more than thirty (30) days
after the date of such notice.

 

(ii)                                  Participant Put Right.  In the event that a Participant’s employment
is terminated by the Company other than for Cause or by the Participant with
Good Reason, for a period of ninety (90) days following such termination, the
Participant shall have the right to require the Company to repurchase such
Participant’s Vested Equity at the Repurchase Price.  The Participant’s repurchase right under this
Section 6(c)(ii) shall be exercisable upon written notice to the Company
indicating the number of Options and/or shares of Stock to be repurchased and
the date on which the repurchase is to be effected, such date to be not more
than thirty (30) days after the date of such notice.

 

(iii)                               Limitation
to Repurchase. 
Notwithstanding anything contained herein to the contrary, to the extent
(a) the Company is prohibited from purchasing such Vested Equity by applicable
law, (b) any debt instruments or agreements of the Company or its Affiliates do
not allow the Company to purchase such Vested Equity, or in the reasonable
opinion of the Committee, such purchase could result in a default or an event
of default under

 

11

 

any such instrument or agreement, or create a condition which could,
with notice or lapse of time or both, result in such default or event of
default, or (c) the purchase of such Vested Equity would, in the reasonable
opinion of the Committee, be imprudent in view of the financial condition
(present or projected) of the Company and its Affiliates, the Company shall not
be permitted or obligated to make any repurchase of Options or Stock hereunder
until such time that clauses (a), (b) and (c) above, as applicable, cease to
apply.

 

(iv)                              IPO or
Change in Control.  If,
within 180 days following the date of repurchase of a Participant’s Options or
shares of Stock under this Section 6(c), there is either an IPO or a
Change in Control then, with respect to:

 

(A)                              an
IPO, the Participant shall be entitled to receive an additional payment from
the Company equal to (x – y), where (x) equals the product obtained by
multiplying (A) the IPO price (less the per share underwriting discount and
commission), as set forth on the cover of the final prospectus for such IPO by
(B) the number of Options or shares of Stock, as applicable, repurchased from
such Participant (after giving effect to any adjustment in the number of
Options or shares of Stock pursuant to Section 7 hereof that would have
otherwise applied had the Options or Stock remained outstanding), and (y)
equals the aggregate Repurchase Price; provided, however, that
such Participant shall not be entitled to receive the additional payment
contemplated by this Section 6(c)(iv)(A) if such difference shall be a
negative number; or

 

(B)                                a
Change in Control, the Participant shall be entitled to receive a payment from
the Company equal to ((x * y) – z), where (x) equals the number of Options or
shares of Stock, as applicable, repurchased from such Participant, (y) equals
the Top-Up Price, and (z) equals the aggregate Repurchase Price received by
such Participant; provided, however, that such Participant shall
not be entitled to receive the additional payment contemplated by this
Section 6(c)(iv)(B) if such difference shall be a negative number.

 

(d)                                 Restrictions
on Transfers.  Prior to the IPO
Date, the Stock underlying such Option, shall be subject to the following
restrictions on Transfer:

 

(i)                                     Prohibition on Transfer.  Except as otherwise approved by the
Committee, shares of Stock acquired by a Participant upon the exercise of the
Options may not be sold, transferred or otherwise disposed of (other than
pursuant to a Permitted Transfer) prior to the fifth (5th)
anniversary of the Closing.

 

(ii)                                  Company Right of First Refusal.  (A) 
If, following the fifth (5th) anniversary of the Closing, a
Participant wishes to sell to a third party pursuant to a bona fide offer the
shares of Stock acquired by a Participant upon the exercise of the Options,
prior to such transfer, such Participant shall give each of the Company and the
Fund advanced written notice of such proposed sale, setting forth the terms of
such bona fide offer in reasonable detail. 
The Company shall have twenty (20) days following its receipt of such
notice from such Participant to elect to repurchase any or all of the shares of
Stock proposed to be transferred from such Participant, and, if the Company
does not elect to repurchase all of such shares of Stock during

 

12

 

such twenty (20) day period, the Fund shall have twenty (20) days
following the expiration of the Company’s twenty (20) day period to purchase
any remaining shares of Stock proposed to be transferred from such Participant
(the entity so electing to purchase shares hereunder being, the “Purchaser”).  The purchase price for such shares of Stock
shall be equal to the bona fide offer price of the third party transferee and
otherwise on the same terms and conditions of such offer; provided, however,
if the purchase price specified in such Participant’s notice be payable in
property other than cash, the purchase price shall equal the cash value of such
property.  If such Participant and the
Purchaser cannot agree on such cash value of such property within thirty (30)
days after the Purchaser’s receipt of such Participant’s notice, the valuation
shall be made by the Company’s independent accounting firm.  The cost of such valuation shall be shared
equally by the Participant and the Purchaser.

 

(B)                                If
the Purchaser does not exercise the right of first refusal as provided in
Section 6(d)(ii)(A) above, the Participant shall have sixty (60) days to
consummate the sale of such shares of Stock but only pursuant to the terms of
the bona fide offer.  If such sale is
not consummated within sixty (60) days or is a material term of such bona fide
offer is changed, the Participant shall again be required to present such offer
to the Company and the Fund (as revised, if applicable) and allow the Company
and the Fund to exercise its right of first refusal as provided in
Section 6(d)(ii)(A) above.

 

(iii)                               Drag-Along
Rights.

 

(A)                              If
the Principal Stockholder is proposing to sell to one or more third parties in
excess of fifty percent (50%) of the number of shares of Stock beneficially
owned (within the meaning of Rule 13d-3 under the Exchange Act) by it, the
Principal Stockholder shall have the right to require each Participant to sell,
in accordance with the immediately following sentence hereof, all or a portion
of the shares of Stock acquired by a Participant upon exercise of any Option
granted under the Plan (including, for these purposes, any warrants, Options or
other convertible securities to acquire shares of Stock) in such sale.

 

(B)                                The
maximum number of shares of Stock a Participant may be required to sell in
accordance with Section 6(d)(iii)(A) above shall be equal to the aggregate
number of shares of Stock received upon exercise of any option granted
hereunder multiplied by a fraction, the numerator of which shall be the number
of shares of Stock that the Principal Stockholder is proposing to sell in such
sale, and the denominator of which is the aggregate number of shares of Stock
beneficially owned (within the meaning of Rule 13d-3 under the Exchange Act) by
the Principal Stockholder as of the date of the proposed sale.

 

(C)                                A
Participant required to sell any shares of Stock pursuant to Section 6(d)(iii)(A)
above shall be entitled to receive in exchange therefor the purchase price per
share received by the Principal Stockholder with respect to its shares in such
transaction, and shall otherwise participate in such transaction on other terms
and conditions not less favorable than those applicable to the Principal
Stockholder and, subject to subsection (D) below, shall receive the same
type of

 

13

 

consideration received by
the Principal Stockholder in such transaction. 
In the event that any such transaction involves the merger of the
Company with or into a third party or, in the event that in lieu of the sale of
shares of Stock, the transaction involves the sale by Company of all or
substantially all of the Company’s assets to any third party, or if such
transaction otherwise requires the vote of the Company’s stockholders, each
Participant shall be required to vote all shares of Stock then owned by such
Participant in favor of such transaction and to otherwise to take all steps
necessary to enable him or her to comply with the provisions of this
Section 6(d)(iii) to facilitate any such transaction.

 

(D)                               To
exercise the rights granted under Section 6(d)(iii)(A) above, the
Principal Stockholder shall give each Participant a written notice containing
(i) the name and address of the proposed transferee(s), and (ii) the proposed
purchase price with respect to the shares of Stock, terms of payment and other
material terms and conditions of the offer of the proposed transferee(s).  Each Stockholder shall thereafter be
obligated to sell its shares of Stock to the proposed transferee(s) or vote its
shares of Stock in favor of the proposed transaction, as the case may be, in
accordance with this Section 6(d)(iii).

 

(E)                                 Notwithstanding
anything contained in this Section 6(d)(iii) to the contrary, in the event
that all or a portion of the purchase price for the shares of Stock being
purchased consists of securities and the sale of such securities to a
Participant entitled to participate therein would, by virtue of the fact that
such Participant is not an “accredited investor” (within the meaning of Rule
501(a) under the Securities Act), require either a registration under the
Securities Act or the preparation of a disclosure document pursuant to
Regulation D under the Securities Act (or any successor regulation) or a
similar provision of any state securities law, then, at the option of the
Principal Stockholder, any one or more of such Participants may receive, in lieu
of such securities, the fair market value of such securities in cash, as
determined in good faith by the Committee.

 

(iv)                              Tag-Along
Rights.

 

(A)                              Subject
to Section 6(d)(iv)(C) below, for so long as the Fund, together with its
Affiliates, directly owns at least twenty percent (20%) of the outstanding
shares of Stock held by the Fund and such Affiliates immediately after the
Closing (as adjusted to reflect any stock dividend, split, reverse split,
combination, recapitalization, reclassification of shares, capital
contributions or like event), and the Fund or any of its Affiliates desire to
sell any of the shares of Stock in a single transaction or a series of
transactions (the “Selling Stockholder”), the Selling Stockholder agrees
that it shall be prohibited from selling any Stock directly owned by it to one
or more third parties, unless the Fund notifies all Participants holding Stock
received upon the exercise of Options (the “Tag-Along Investors”), in
writing, of such proposed sale and its terms and conditions.  Within ten (10) days of the date of such
notice, each Tag-Along Investor shall notify the Selling Stockholder if it
elects to participate in such sale.  Any
Tag-Along Investor that fails to notify the Selling Stockholder within such

 

14

 

ten (10) day period shall
be deemed to have waived its rights under this Section 6(d)(iv)(A) with
respect to the proposed sale.  Each
Tag-Along Investor that so notifies the Selling Stockholder shall have the right
to sell, at the same price and on the same terms and conditions as the Selling
Stockholder, an amount of Stock equal to the Stock the third party actually
proposes to purchase multiplied by a fraction, the numerator of which shall be
the number of shares of Stock owned by such Tag-Along Investor and the
denominator of which shall be the sum of aggregate number of shares of Stock
owned (i) by the Selling Stockholder, (ii) each Tag-Along Investor exercising
its rights under this Section 6(d)(iv)(A) and (iii) any other stockholders
of the Company exercising tag-along rights existing pursuant to other
contractual agreements with the Company.

 

(B)                                Cash
in Lieu of Securities.  In the event
that all or a portion of the purchase price consists of securities and the sale
of such securities to the Tag-Along Investors would require either a
registration under the Securities Act or the preparation of a disclosure
document pursuant to Regulation D under the Securities Act or a similar
provision of any state securities law, then, at the option of the Selling
Stockholder, any one or more of the Tag-Along Investors may receive, in lieu of
such securities, the Fair Market Value of such securities in cash.

 

(C)                                Transfers
to Affiliates of the Funds; Termination of Tag-Along Rights.  The provisions of Section 6(d)(iv)(A)
above shall not apply to Transfers, whether by sale or otherwise, by the Fund
to any of its Affiliates provided such Affiliate(s) agree in writing to be
bound by the terms of this Section 6(d)(iv).  The rights provided to the Tag-Along Investors pursuant to this
Section 6(d)(iv) shall terminate automatically upon an IPO.

 

Section 7.                                            ADJUSTMENT FOR RECAPITALIZATION, MERGER, ETC.

 

(a)                                  Capitalization
Adjustments.  The aggregate number
of shares of Stock which may be granted or purchased pursuant to Options
granted hereunder, the number of shares of Stock covered by each outstanding
Option, and the price per share thereof in each such Option shall be equitably and proportionally adjusted
or substituted, as determined by the Committee in good faith and in its sole
discretion, as to the number, price or kind of a share of Stock or other
consideration subject to such Options or as otherwise determined by the
Committee in good faith to be fair and equitable (i) in the event of changes in
the outstanding Stock or in the capital structure of the Company by reason of
stock dividends, stock splits, reverse stock splits, recapitalizations,
reorganizations, mergers, consolidations, combinations, exchanges, or other
relevant changes in capitalization occurring after the date of grant of any
such Option, (ii) in the event of any change in applicable laws or any change
in circumstances which results in or would result in any substantial dilution
or enlargement of the rights granted to, or available for, Participants in the
Plan, or (iii) for any other reason which the Committee determines, in its sole
discretion and acting in good faith, to otherwise warrant equitable
adjustment.  Absent manifest error, any
adjustment shall be conclusively determined by the Committee; provided, in each
case, the fair value of the Option immediately following any such adjustment
shall be equal to the fair value of the Option immediately prior to such
adjustment.

 

15

 

(b)                                 Corporate
Events.  Notwithstanding the
foregoing, in the event of (i) a merger or consolidation involving the Company
in which the Company is not the surviving corporation, (ii) a merger or
consolidation involving the Company in which the Company is the surviving
corporation but the holders of shares of Stock receive securities of another
corporation and/or other property, including cash, (iii) the sale of all or
substantially all of the assets of the Company, (iv) the reorganization or
liquidation of the Company, or (v) a Change in Control (each, a “Corporate
Event”), in lieu of providing the adjustment set forth in
subsection (a) above, the Committee may, in its sole discretion and acting
in good faith, provide that all outstanding Options shall terminate as of the
consummation of such Corporate Event, and provide that holders of vested
Options will receive a payment in respect of cancellation of their Options
based on the amount (if any) by which the per share consideration being paid
for the Stock in connection with such Corporate Event exceeds the applicable
exercise price, such payment to be made in cash, or, in the sole discretion of
the Committee acting in good faith, in such other consideration necessary for a
holder of an Option to receive property, cash or securities as such holder
would have been entitled to receive upon the occurrence of the transaction if
the holder had been, immediately prior to such transaction, the holder of the
number of shares of Stock covered by the Option at such time; provided, that if
such consideration received in the transaction is not solely equity securities
of the successor entity, the Committee may, with the consent of the successor
entity and acting in good faith, provide for the consideration to be received
upon exercise of the Option to be solely equity securities of the successor
entity equal to the Fair Market Value of the per share consideration received
by holders of Stock in the Corporate Event. 
If a Corporate Event occurs which does not constitute a Change in
Control, the Committee shall, acting in good faith, take such actions with
respect to unvested Options as it considers reasonable and equitable under the
circumstances, and to the extent practicable will require the successor entity
or parent thereof to assume such options and adjust the vesting
schedule thereon in a manner that is designed to ensure treatment thereof
that is consistent with Section 6(b)(iii)(B).

 

(c)                                  Fractional
Shares.  Any such adjustment may
provide for the elimination of any fractional share which might otherwise
become subject to an Option.

 

Section 8.                                            USE OF PROCEEDS.

 

The proceeds received from the sale of Stock pursuant to the Plan shall
be used for general corporate purposes.

 

Section 9.                                            RIGHTS AND PRIVILEGES AS A STOCKHOLDER.

 

Except as otherwise specifically provided in the Plan, no person shall
be entitled to the rights and privileges of stock ownership in respect of
shares of Stock which are subject to Options hereunder until the related
Options have been exercised.

 

Section 10.                                      MARKET STANDOFF AGREEMENT.

 

In connection with any registration of the Stock and upon the request
of the Committee or the underwriters managing any public offering of the Stock,
Participants shall not sell or otherwise dispose of any Stock without prior
written consent of the Committee or such

 

16

 

underwriters, as the case may be, for a period of time (not to exceed
twelve (12) months) from the effective date of such registration as the Committee
or the underwriters may specify for employee-shareholders generally; provided,
however, that such restrictions shall apply only to the extent the Fund
has agreed to a similar restriction in respect of Stock it holds, and if the
Fund shall be subsequently released from any such restriction, the Participants
shall also be released from any such restriction.  If requested by the underwriters, the Participant shall execute a
separate agreement to the foregoing effect. 
The Company may impose stop-transfer instructions with respect to the
Stock (or securities) subject to the foregoing restriction until the end of
such period.  The provisions of this
Section 10 shall be binding upon any transferee who acquires the shares of
Stock from the Participant

 

Section 11.                                      EMPLOYMENT.

 

No individual shall have any claim or right to be granted an Option
under the Plan or, having been selected for the grant of an Option, to be
selected for a grant of any other Option. 
Neither the Plan nor any action taken hereunder shall be construed as
giving any individual any right to be retained in the employment of the Company
or an Affiliate.

 

Section 12.                                      COMPLIANCE WITH LAWS.

 

The obligation of the Company to make payment of Options in Stock or
otherwise shall be subject to all applicable laws, rules, and regulations, and
to such approvals by governmental agencies as may be required.  Notwithstanding any terms or conditions of
any Option to the contrary, the Company shall be under no obligation to offer
to sell or to sell and shall be prohibited from offering to sell or selling any
shares of Stock pursuant to an Option unless such shares have been properly
registered for sale pursuant to the Securities Act with the Securities and
Exchange Commission or unless the Company has received an opinion of counsel,
satisfactory to the Company, that such shares may be offered or sold without
such registration pursuant to an available exemption therefrom and the terms
and conditions of such exemption have been fully complied with.  The Company shall be under no obligation to
register for sale or resale under the Securities Act any of the shares of Stock
to be offered or sold under the Plan or any shares of Stock issued upon
exercise of Options unless the Stock is registered under Section 12(b) or
12(g) of the Exchange Act and such registration is necessary in order to permit
issuance of the Stock upon exercise in accordance with the Plan.  If the shares of Stock offered for sale or
sold under the Plan are offered or sold pursuant to an exemption from
registration under the Securities Act, the Company may restrict the transfer of
such shares and may legend the Stock certificates representing such shares in
such manner as it deems advisable to ensure the availability of any such
exemption.

 

Section 13.                                      WITHHOLDING OBLIGATIONS.

 

As a condition to the exercise of any Option, the Committee may require
that a Participant satisfy, through deduction or withholding from any payment
of any kind otherwise due to the Participant, or through such other arrangements
as are satisfactory to the Committee, the minimum amount of all Federal, state
and local income and other taxes of any kind required or permitted to be
withheld in connection with such vesting or exercise.  The Committee, in its sole discretion, may permit shares of Stock
to be used to satisfy tax withholding requirements

 

17

 

and such shares shall be valued at their Fair Market Value as of the
date of exercise of the Option; provided, however, that following
the IPO Date, the aggregate Fair Market Value of the number of shares of Stock
that may be used to satisfy tax withholding requirements may not exceed the
minimum statutory required withholding amount with respect to the exercise of
such Option.  For purposes of this
Section 13, the term “Company” shall be deemed to mean any Subsidiary or
Affiliate that may have a tax withholding obligation due to its relationship
with a Participant.

 

Section 14.                                      AMENDMENT OF THE PLAN OR OPTIONS.

 

(a)                                  Amendment of Plan.  The Board at any time, and from time to time, may amend the Plan; provided,
however, that without further stockholder approval the Board shall not
make any amendment to the Plan which would increase the maximum number of
shares of Stock which may be issued pursuant to Options under the Plan, except
as contemplated by Section 7 hereof, or which would otherwise violate the
shareholder approval requirements of the national securities exchange on which
the Stock is listed or Nasdaq, as applicable.

 

(b)                                 No Impairment of Rights. 
Rights under any Option granted before amendment of the Plan shall not
be impaired by any amendment of the Plan unless the Participant consents in
writing.

 

(c)                                  Amendment of Stock Options. 
The Committee, at any time, and from time to time, may amend the terms
of any one or more Options; provided, however, that the rights
under any Option shall not be impaired by any such amendment unless the
Participant consents in writing.

 

Section 15.                                      TERMINATION OR SUSPENSION OF THE PLAN.

 

The Board may suspend or terminate the Plan at any time.  Unless sooner terminated, the Plan shall
terminate on the day before the tenth (10th) anniversary of the date
the Plan was originally adopted by the Board. 
No Options may be granted under the Plan while the Plan is suspended or
after it is terminated.  Rights under
any Option granted before suspension or termination of the Plan shall not be
impaired by such suspension or termination of the Plan unless the Participant
consents in writing.

 

Section 16.                                      EFFECTIVE DATE OF THE PLAN.

 

The Plan shall be effective immediately following the Closing.

 

Section 17.                                      MISCELLANEOUS.

 

(a)                                  No Liability of Board or Committee Members.  No member of the Board or the Committee
shall be personally liable by reason of any contract or other instrument
executed by such member or on his behalf in his capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless each member of the Board or the Committee and
each other Employee, officer or director of the Company to whom any duty or
power relating to the administration or interpretation of the Plan may be
allocated or delegated, against any cost or expense (including

 

18

 

counsel fees) or liability (including any sum paid in settlement of a
claim) arising out of any act or omission to act in connection with the Plan
unless arising out of such person’s own fraud or willful bad faith; provided,
however, that approval of the Board shall be required for the payment of
any amount in settlement of a claim against any such person.  The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to which such persons
may be entitled under the Company’s Certificate of Incorporation or By-Laws, as
a matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.

 

(b)                                 Payments
Following Accidents or Illness.  If
the Committee shall find that any person to whom any amount is payable under
the Plan is unable to care for his affairs because of illness or accident, or
is a minor, or has died, then any payment due to such person or his estate
(unless a prior claim therefor has been made by a duly appointed legal
representative) may, if the Committee so directs the Company, be paid to his
spouse, child, relative, an institution maintaining or having custody of such
person, or any other person deemed by the Committee to be a proper recipient on
behalf of such person otherwise entitled to payment.  Any such payment shall be a complete discharge of the liability
of the Committee and the Company therefor.

 

(c)                                  Governing
Law.  The Plan shall be governed by
and construed in accordance with the internal laws of the State of Delaware
without reference to the principles of conflicts of laws thereof.

 

(d)                                 Funding.  No provision of the Plan shall require the Company, for the
purpose of satisfying any obligations under the Plan, to purchase assets or
place any assets in a trust or other entity to which contributions are made or
otherwise to segregate any assets, nor shall the Company maintain separate bank
accounts, books, records or other evidence of the existence of a segregated or
separately maintained or administered fund for such purposes.  Participants shall have no rights under the
Plan other than as unsecured general creditors of the Company, except that
insofar as they may have become entitled to payment of additional compensation
by performance of services, they shall have the same rights as other employees
under general law.

 

(e)                                  Reliance on Reports.  Each member of the Committee and each member
of the Board shall be fully justified in relying, acting or failing to act, and
shall not be liable for having so relied, acted or failed to act in good faith,
upon any report made by the independent public accountant of the Company and
its Affiliates and upon any other information furnished in connection with the
Plan by any person or persons other than himself.

 

(f)                                    Titles and Headings.  The titles and headings of the sections in
the Plan are for convenience of reference only, and in the event of any
conflict, the text of the Plan, rather than such titles or headings shall
control.

 

*    
*     *

 

19Exhibit 10.5

 

DIRECTOR AND OFFICER
INDEMNIFICATION AGREEMENT

 

This Director and Officer
Indemnification Agreement, dated as of May 13, 2004 (this “Agreement”), is made by and between PolyPore,
Inc., a Delaware corporation, and
                                     
(“Indemnitee”).

 

RECITALS:

 

A.                                   Section 141 of the Delaware General
Corporation Law provides that the business and affairs of a corporation shall
be managed by or under the direction of its board of directors.

 

B.                                     By virtue of the managerial prerogatives
vested in the directors and officers of a Delaware corporation, directors and
officers act as fiduciaries of the corporation and its stockholders.

 

C.                                     Thus, it is critically important to the
Company and its stockholders that the Company be able to attract and retain the
most capable persons reasonably available to serve as directors and officers of
the Company.

 

D.                                    In recognition of the need for
corporations to be able to induce capable and responsible persons to accept
positions in corporate management, Delaware law authorizes (and in some
instances requires) corporations to indemnify their directors and officers, and
further authorizes corporations to purchase and maintain insurance for the
benefit of their directors and officers.

 

E.                                      The Delaware courts have recognized that
indemnification by a corporation serves the dual policies of (1) allowing
corporate officials to resist unjustified lawsuits, secure in the knowledge
that, if vindicated, the corporation will bear the expense of litigation, and (2) encouraging
capable women and men to serve as corporate directors and officers, secure in
the knowledge that the corporation will absorb the costs of defending their
honesty and integrity.

 

F.                                      The number of lawsuits challenging the
judgment and actions of directors of Delaware corporations, the costs of
defending those lawsuits and the threat to directors’ personal assets have all
materially increased over the past several years, chilling the willingness of
capable women and men to undertake the responsibilities imposed on corporate
directors and officers.

 

G.                                     Recent federal legislation and rules
adopted by the Securities and Exchange Commission and the national securities
exchanges have exposed such directors and officers to new and substantially
broadened civil liabilities.

 

H.                                    Under Delaware law, a director’s or
officer’s right to be reimbursed for the costs of defense of criminal actions,
whether such claims are asserted under state or federal law, does not depend
upon the merits of the claims asserted against the director or officer and is
separate and distinct from any right to indemnification the director may be
able to establish.

 

 

I.                                         Indemnitee is, or will be, a director
and/or officer of the Company and his willingness to serve in such capacity is
predicated, in substantial part, upon the Company’s willingness to indemnify
him in accordance with the principles reflected above, to the fullest extent
permitted by the laws of the State of Delaware, and upon the other undertakings
set forth in this Agreement.

 

J.                                        Therefore, in recognition of the need to
provide Indemnitee with substantial protection against personal liability, in
order to procure Indemnitee’s continued service as a director and/or officer of
the Company and to enhance Indemnitee’s ability to serve the Company in an
effective manner, and in order to provide such protection pursuant to express
contract rights (intended to be enforceable irrespective of, among other
things, any amendment to the Company’s certificate of incorporation or bylaws
(collectively, the “Constituent Documents”),
any change in the composition of the Company’s Board of Directors (the “Board”) or any
change-in-control or business combination transaction relating to the Company),
the Company wishes to provide in this Agreement for the indemnification of and
the advancement of Expenses to Indemnitee on the terms, and subject to the
conditions, set forth in this Agreement.

 

K.                                    In light of the considerations referred
to in the preceding recitals, it is the Company’s intention and desire that the
provisions of this Agreement be construed liberally, subject to their express
terms, to maximize the protections to be provided to Indemnitee hereunder.

 

AGREEMENT:

 

NOW, THEREFORE, the
parties hereby agree as follows:

 

1.              Certain Definitions.  In addition
to terms defined elsewhere herein, the following terms have the following
meanings when used in this Agreement with initial capital letters:

 

(a)          “Change in Control” shall have occurred at such time, if any, as  Incumbent Directors cease for any reason to constitute a
majority of Directors.  For purposes of
this Section 1(a), “Incumbent Directors” means the individuals who, as of
the date hereof, are Directors of the Company and any individual becoming a
Director subsequent to the date hereof whose election, nomination for election
by the Company’s stockholders, or appointment, was approved by a vote of at
least a majority of the then Incumbent Directors (either by a specific vote or
by approval of the proxy statement of the Company in which such person is named
as a nominee for director, without objection to such nomination); provided,
however,
that an individual shall not be an Incumbent Director if such individual’s
election or appointment to the Board occurs as a result of an actual or
threatened election contest (as described in Rule 14a-12(c) of the
Securities Exchange Act of 1934, as amended) with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board.

 

2

 

(b)         “Claim” means (i) any threatened, asserted, pending
or completed claim, demand, action, suit or proceeding, whether civil,
criminal, administrative, arbitrative, investigative or other, and whether made
pursuant to federal, state or other law; and (ii) any inquiry or
investigation, whether made, instituted or conducted by the Company or any
other Person, including, without limitation, any federal, state or other governmental
entity, that Indemnitee reasonably determines might lead to the institution of
any such claim, demand, action, suit or proceeding.  For the avoidance of doubt, the Company intends indemnity to be
provided hereunder in respect of acts or failure to act prior to, on or after
the date hereof.

 

(c)          “Controlled Affiliate” means any corporation, limited
liability company, partnership, joint venture, trust or other entity or
enterprise, whether or not for profit, that is directly or indirectly
controlled by the Company.  For purposes
of this definition, “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management or policies of an
entity or enterprise, whether through the ownership of voting securities,
through other voting rights, by contract or otherwise; provided that direct or
indirect beneficial ownership of capital stock or other interests in an entity
or enterprise entitling the holder to cast 15% or more of the total number of
votes generally entitled to be cast in the election of directors (or persons
performing comparable functions) of such entity or enterprise shall be deemed
to constitute control for purposes of this definition.

 

(d)         “Disinterested Director” means a director of the Company
who is not and was not a party to the Claim in respect of which indemnification
is sought by Indemnitee.

 

(e)          “Expenses” means attorneys’ and experts’ fees and
expenses and all other costs and expenses paid or payable in connection with
investigating, defending, being a witness in or participating in (including on
appeal), or preparing to investigate, defend, be a witness in or participate in
(including on appeal), any Claim.

 

(f)            “Indemnifiable Claim” means any Claim based upon, arising
out of or resulting from (i) any actual, alleged or suspected act or
failure to act by Indemnitee in his or her capacity as a director, officer,
employee or agent of the Company or as a director, officer, employee, member,
manager, trustee or agent of any other corporation, limited liability company,
partnership, joint venture, trust or other entity or enterprise, whether or not
for profit, as to which Indemnitee is or was serving at the request of the
Company, (ii) any actual, alleged or suspected act or failure to act by Indemnitee
in respect of any business, transaction, communication, filing, disclosure or
other activity of the Company or any other entity or enterprise referred to in
clause (i) of this sentence, or (iii) Indemnitee’s status as a
current or former director, officer, employee or agent of the Company or as a
current or former director, officer, employee, member, manager, trustee or
agent of the Company or any other entity or enterprise referred to in
clause (i) of this sentence or any actual, alleged or suspected act or
failure to act by Indemnitee in connection with any obligation or restriction
imposed upon Indemnitee by reason of such status.  In addition to any service at the actual request of the Company,
for purposes of this Agreement, Indemnitee shall be deemed to be serving or to
have served at the request

 

3

 

of the Company as a
director, officer, employee, member, manager, trustee or agent of another
entity or enterprise if Indemnitee is or was serving as a director, officer,
employee, member, manager, agent, trustee or other fiduciary of such entity or
enterprise and (i) such entity or enterprise is or at the time of such
service was a Controlled Affiliate, (ii) such entity or enterprise is or
at the time of such service was an employee benefit plan (or related trust)
sponsored or maintained by the Company or a Controlled Affiliate, or
(iii) the Company or a Controlled Affiliate (by action of the Board, any
committee thereof or the Company’s Chief Executive Officer (“CEO”) (other than as
the CEO him or herself)) caused or authorized Indemnitee to be nominated,
elected, appointed, designated, employed, engaged or selected to serve in such
capacity.

 

(g)         “Indemnifiable Losses”  means any and all Losses relating to,
arising out of or resulting from any Indemnifiable Claim; provided, however, that
Indemnifiable Losses shall not include Losses incurred by Indemnitee in respect
of any Indemnifiable Claim (or any matter or issue therein) as to which
Indemnitee shall have been adjudged liable to the Company, unless and only to
the extent that the Delaware Court of Chancery or the court in which such
Indemnifiable Claim was brought shall have determined upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, Indemnitee is fairly and reasonably entitled to indemnification for
such Expenses as the court shall deem proper.

 

(h)         “Independent Counsel” means a nationally recognized law
firm, or a member of a nationally recognized law firm, that is experienced in
matters of Delaware corporate law and neither presently is, nor in the past
five years has been, retained to represent: 
(i) the Company (or any Subsidiary) or Indemnitee in any matter
material to either such party (other than with respect to matters concerning
the Indemnitee under this Agreement, or of other indemnitees under similar
indemnification agreements) or (ii) any other named (or, as to a
threatened matter, reasonably likely to be named) party to the Indemnifiable
Claim giving rise to a claim for indemnification hereunder.  Notwithstanding the foregoing, the term
“Independent Counsel” shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Company or Indemnitee in an action to
determine Indemnitee’s rights under this Agreement.

 

(i)             “Losses” means any and all Expenses, damages, losses,
liabilities, judgments, fines, penalties (whether civil, criminal or other) and
amounts paid or payable in settlement, including, without limitation, all
interest, assessments and other charges paid or payable in connection with or
in respect of any of the foregoing.

 

(j)             “Person”
means any individual, entity or group, within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended.

 

(k)          “Standard
of Conduct” means the standard for conduct by Indemnitee that is
a condition precedent to indemnification of Indemnitee hereunder against
Indemnifiable Losses relating to, arising out of or resulting from an
Indemnifiable Claim.  The Standard of
Conduct is (i) good faith and a reasonable belief by Indemnitee that his action
was in or not opposed to the best interests of the Company and, with respect to
any

 

4

 

criminal action or
proceeding, that Indemnitee had no reasonable cause to believe that his conduct
was unlawful, or (ii) any other applicable standard of conduct that may
hereafter be substituted under Section 145(a) or (b) of the Delaware
General Corporation Law or any successor to such provision(s).

 

2.              Indemnification Obligation.  Subject only
to Section 7 and to the proviso in this Section, the Company shall
indemnify, defend and hold harmless Indemnitee, to the fullest extent permitted
or required by the laws of the State of Delaware in effect on the date hereof
or as such laws may from time to time hereafter be amended to increase the
scope of such permitted indemnification, against any and all Indemnifiable
Claims and Indemnifiable Losses; provided, however, that, except as
provided in Sections 5, Indemnitee shall not be entitled to indemnification
pursuant to this Agreement in connection with any Claim initiated by Indemnitee
against the Company or any director or officer of the Company unless the
Company has joined in or consented to the initiation of such Claim.  The Company acknowledges that the foregoing
obligation may be broader than that now provided by applicable law and the
Company’s Constituent Documents and intends that it be interpreted consistently
with this Section and the recitals to this Agreement.

 

3.              Advancement of Expenses.  Indemnitee
shall have the right to advancement by the Company prior to the final
disposition of any Indemnifiable Claim of any and all actual and reasonable
Expenses relating to, arising out of or resulting from any Indemnifiable Claim
paid or incurred by Indemnitee.  Without
limiting the generality or effect of any other provision hereof, Indemnitee’s
right to such advancement is not subject to the satisfaction of any Standard of
Conduct.  Without limiting the
generality or effect of the foregoing, within five business days after any
request by Indemnitee that is accompanied by supporting documentation for
specific reasonable Expenses to be reimbursed or advanced, the Company shall,
in accordance with such request (but without duplication), (a) pay such
Expenses on behalf of Indemnitee, (b) advance to Indemnitee funds in an
amount sufficient to pay such Expenses, or (c) reimburse Indemnitee for such
Expenses; provided
that Indemnitee shall repay, without interest any amounts actually advanced to
Indemnitee that, at the final disposition of the Indemnifiable Claim to which
the advance related, were in excess of amounts paid or payable by Indemnitee in
respect of Expenses relating to, arising out of or resulting from such
Indemnifiable Claim.  In connection with
any such payment, advancement or reimbursement, at the request of the Company,
Indemnitee shall execute and deliver to the Company an undertaking, which need
not be secured and shall be accepted without reference to Indemnitee’s ability
to repay the Expenses, by or on behalf of the Indemnitee, to repay any amounts
paid, advanced or reimbursed by the Company in respect of Expenses relating to,
arising out of or resulting from any Indemnifiable Claim in respect of which it
shall have been determined, following the final disposition of such
Indemnifiable Claim and in accordance with Section 7, that Indemnitee is
not entitled to indemnification hereunder.

 

4.              Indemnification for Additional Expenses. 
Without limiting the generality or effect of the foregoing, the Company
shall indemnify and hold harmless Indemnitee against and, if requested by Indemnitee,
shall reimburse Indemnitee for, or advance to

 

5

 

Indemnitee, within five
business days of such request accompanied by supporting documentation for
specific Expenses to be reimbursed or advanced, any and all actual and
reasonable Expenses paid or incurred by Indemnitee in connection with any Claim
made, instituted or conducted by Indemnitee for (a) indemnification or
reimbursement or advance payment of Expenses by the Company under any provision
of this Agreement, or under any other agreement or provision of the Constituent
Documents now or hereafter in effect relating to Indemnifiable Claims, and/or
(b) recovery under any directors’ and officers’ liability insurance
policies maintained by the Company; provided, however, if it is ultimately
determined that the Indemnitee is not entitled to such indemnification,
reimbursement, advance or insurance recovery, as the case may be, then the
Indemnitee shall be obligated to repay any such Expenses to the Company; provided
further, that, regardless in each case of whether Indemnitee
ultimately is determined to be entitled to such indemnification, reimbursement,
advance or insurance recovery, as the case may be, Indemnitee shall return,
without interest, any such advance of Expenses (or portion thereof) which
remains unspent at the final disposition of the Claim to which the advance
related.

 

5.              Partial Indemnity.  If Indemnitee
is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of any Indemnifiable Loss but not for all of the
total amount thereof, the Company shall nevertheless indemnify Indemnitee for
the portion thereof to which Indemnitee is entitled.

 

6.              Procedure for Notification.  To obtain
indemnification under this Agreement in respect of an Indemnifiable Claim or
Indemnifiable Loss, Indemnitee shall submit to the Company a written request
therefor, including a brief description (based upon information then available
to Indemnitee) of such Indemnifiable Claim or Indemnifiable Loss.  If, at the time of the receipt of such
request, the Company has directors’ and officers’ liability insurance in effect
under which coverage for such Indemnifiable Claim or Indemnifiable Loss is
potentially available, the Company shall give prompt written notice of such
Indemnifiable Claim or Indemnifiable Loss to the applicable insurers in
accordance with the procedures set forth in the applicable policies.  The Company shall provide to Indemnitee a
copy of such notice delivered to the applicable insurers, substantially
concurrently with the delivery thereof by the Company.  The failure by Indemnitee to timely notify
the Company of any Indemnifiable Claim or Indemnifiable Loss shall not relieve
the Company from any liability hereunder unless, and only to the extent that,
the Company did not otherwise learn of such Indemnifiable Claim or
Indemnifiable Loss and to the extent that such failure results in forfeiture by
the Company of substantial defenses, rights or insurance coverage.

 

7.              Determination of Right to Indemnification.

 

(a)          To the extent that Indemnitee shall have been
successful on the merits or otherwise in defense of any Indemnifiable Claim or
any portion thereof or in defense of any issue or matter therein, including, without
limitation, dismissal without prejudice, Indemnitee shall be indemnified
against all Indemnifiable Losses relating to, arising out of or resulting from
such Indemnifiable Claim in accordance with Section 2 and no

 

6

 

Standard of Conduct
Determination (as defined in Section 7(b)) shall be required.

 

(b)         To the extent that the provisions of Section 7(a)
are inapplicable to an Indemnifiable Claim that shall have been finally
disposed of, any determination of whether Indemnitee has satisfied the
applicable Standard of Conduct (a “Standard of Conduct Determination”) shall be made as
follows:  (i) if a Change in
Control shall not have occurred, or if a Change in Control shall have occurred
but Indemnitee shall have requested that the Standard of Conduct Determination
be made pursuant to this clause (i), (A) by a majority vote of the
Disinterested Directors, even if less than a quorum of the Board, (B) if
such Disinterested Directors so direct, by a majority vote of a committee of
Disinterested Directors designated by a majority vote of all Disinterested
Directors, or (C) if there are no such Disinterested Directors, or if a
majority of the Disinterested Directors so direct, by Independent Counsel in a
written opinion addressed to the Board, a copy of which shall be delivered to
Indemnitee; and (ii) if a Change in Control shall have occurred and
Indemnitee shall not have requested that the Standard of Conduct Determination
be made pursuant to clause (i), by Independent Counsel in a written
opinion addressed to the Board, a copy of which shall be delivered to
Indemnitee.

 

(c)          If (i) Indemnitee shall be entitled to
indemnification hereunder against any Indemnifiable Losses pursuant to
Section 7(a), (ii) no determination of whether Indemnitee has
satisfied any applicable standard of conduct under Delaware law is a legally
required condition precedent to indemnification of Indemnitee hereunder against
any Indemnifiable Losses, or (iii) Indemnitee has been determined or
deemed pursuant to Section 7(b) to have satisfied the applicable Standard
of Conduct, then the Company shall pay to Indemnitee, within five business days
after the later of (x) the Notification Date in respect of the
Indemnifiable Claim or portion thereof to which such Indemnifiable Losses are
related, out of which such Indemnifiable Losses arose or from which such
Indemnifiable Losses resulted, and (y) the earliest date on which the
applicable criterion specified in clause (i), (ii) or (iii) above shall have
been satisfied, an amount equal to the amount of such Indemnifiable
Losses.  Nothing herein is intended to
mean or imply that the Company is intending to use Section 145(f) of the
Delaware General Corporation Law to dispense with a requirement that Indemnitee
meet the applicable Standard of Conduct where it is otherwise required by such
statute.

 

(d)         If a Standard of Conduct Determination is required to
be, but has not been, made by Independent Counsel pursuant to
Section 7(b)(i), the Independent Counsel shall be selected by the Board or
a committee of the Board, and the Company shall give written notice to
Indemnitee advising him or her of the identity of the Independent Counsel so
selected.  If a Standard of Conduct
Determination is required to be, or to have been, made by Independent Counsel
pursuant to Section 7(b)(ii), the Independent Counsel shall be selected by
Indemnitee, and Indemnitee shall give written notice to the Company advising it
of the identity of the Independent Counsel so selected.  In either case, Indemnitee or the Company,
as applicable, may, within five business days after receiving written notice of
selection from the other, deliver to the other a written objection to such
selection; provided,
however,
that such objection may be asserted only on the ground that the Independent
Counsel so selected does not satisfy the criteria set forth in the definition
of “Independent Counsel” in Section 1(h), and the objection shall

 

7

 

set forth with
particularity the factual basis of such assertion.  Absent a proper and timely objection, the Person so selected
shall act as Independent Counsel.  If
such written objection is properly and timely made and substantiated,
(i) the Independent Counsel so selected may not serve as Independent
Counsel unless and until such objection is withdrawn or a court has determined
that such objection is without merit and (ii) the non-objecting party may,
at its option, select an alternative Independent Counsel and give written
notice to the other party advising such other party of the identity of the
alternative Independent Counsel so selected, in which case the provisions of
the two immediately preceding sentences and clause (i) of this sentence
shall apply to such subsequent selection and notice.  If applicable, the provisions of clause (ii) of the
immediately preceding sentence shall apply to successive alternative
selections.  If no Independent Counsel
that is permitted under the foregoing provisions of this Section 7(d) to
make the Standard of Conduct Determination shall have been selected within
30 calendar days after the Company gives its initial notice pursuant to
the first sentence of this Section 7(d) or Indemnitee gives its initial
notice pursuant to the second sentence of this Section 7(d), as the case
may be, either the Company or Indemnitee may petition the Court of Chancery of
the State of Delaware for resolution of any objection which shall have been
made by the Company or Indemnitee to the other’s selection of Independent
Counsel and/or for the appointment as Independent Counsel of a person or firm
selected by the Court or by such other person as the Court shall designate, and
the person or firm with respect to whom all objections are so resolved or the person
or firm so appointed will act as Independent Counsel.  In all events, the Company shall pay all of the actual and
reasonable fees and expenses of the Independent Counsel incurred in connection
with the Independent Counsel’s determination pursuant to Section 7(b).

 

8.              Cooperation.  Indemnitee shall cooperate with
reasonable requests of the Company in connection with any Indemnifiable Claim
and any individual or firm making such Standard of Conduct Determination,
including providing to such Person documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to defend the Indemnifiable
Claim or make any Standard of Conduct Determination without incurring any
unreimbursed cost in connection therewith. 
The Company shall indemnify and hold harmless Indemnitee against and, if
requested by Indemnitee, shall reimburse Indemnitee for, or advance to
Indemnitee, within five business days of such request accompanied by supporting
documentation for specific costs and expenses to be reimbursed or advanced, any
and all costs and expenses (including attorneys’ and experts’ fees and
expenses) actually and reasonably incurred by Indemnitee in so cooperating with
the Person defending the Indemnifiable Claim or making such Standard of Conduct
Determination.

 

9.              Presumption of Entitlement.  Notwithstanding any other provision hereof, in making any Standard
of Conduct Determination, the Person making such determination shall presume
that Indemnitee has satisfied the applicable Standard of Conduct.

 

10.       No Other Presumption.  For purposes
of this Agreement, the termination of any Claim by judgment, order, settlement
(whether with or without court approval) or conviction, or upon a plea of nolo
contendere or its equivalent, will not create a

 

8

 

presumption that
Indemnitee did not meet any applicable Standard of Conduct or that
indemnification hereunder is otherwise not permitted.

 

11.       Non-Exclusivity.  The rights of
Indemnitee hereunder will be in addition to any other rights Indemnitee may
have under the Constituent Documents, or the substantive laws of the Company’s
jurisdiction of incorporation, any other contract or otherwise (collectively, “Other Indemnity Provisions”);
provided,
however,
that (a) to the extent that Indemnitee otherwise would have any greater
right to indemnification under any Other Indemnity Provision, Indemnitee will
without further action be deemed to have such greater right hereunder, and
(b) to the extent that any change is made to any Other Indemnity Provision
which permits any greater right to indemnification than that provided under
this Agreement as of the date hereof, Indemnitee will be deemed to have such
greater right hereunder.  The Company
may not, without the consent of Indemnitee, adopt any amendment to any of the
Constituent Documents the effect of which would be to deny, diminish or
encumber Indemnitee’s right to indemnification under this Agreement.

 

12.       Liability Insurance and Funding. 
For the duration of Indemnitee’s service as a director and/or officer of
the Company and for a reasonable period of time thereafter, which such period
shall be determined by the Company in its sole discretion, the Company shall
use commercially reasonable efforts (taking into account the scope and amount
of coverage available relative to the cost thereof) to cause to be maintained
in effect policies of directors’ and officers’ liability insurance providing
coverage for directors and/or officers of the Company that is substantially
comparable in scope and amount to that provided by the Company’s current
policies of directors’ and officers’ liability insurance.  Upon reasonable request, the Company shall
provide Indemnitee or his or her counsel with a copy of all directors’ and
officers’ liability insurance applications, binders, policies, declarations,
endorsements and other related materials. 
In all policies of directors’ and officers’ liability insurance obtained
by the Company, Indemnitee shall be named as an insured in such a manner as to
provide Indemnitee the same rights and benefits, subject to the same
limitations, as are accorded to the Company’s directors and officers most
favorably insured by such policy.  Notwithstanding the foregoing, (i) the Company may, but shall not
be required to, create a trust fund, grant a security interest or use other
means, including, without limitation, a letter of credit, to ensure the payment
of such amounts as may be necessary to satisfy its obligations to indemnify and
advance expenses pursuant to this Agreement and (ii) in renewing or seeking to
renew any insurance hereunder, the Company will not be required to expend more
than 2.0 times the premium amount of the immediately preceding policy period
(equitably adjusted if necessary to reflect differences in policy periods).

 

13.       Subrogation.  In the event
of payment under this Agreement, the Company shall be subrogated to the extent
of such payment to all of the related rights of recovery of Indemnitee against
other Persons (other than Indemnitee’s successors), including any entity or
enterprise referred to in clause (i) of the definition of “Indemnifiable Claim”
in Section 1(f).  Indemnitee shall
execute all papers reasonably required to evidence such rights (all of
Indemnitee’s reasonable Expenses, including attorneys’ fees and charges,
related thereto to be reimbursed by or, at the option of Indemnitee, advanced
by the

 

9

 

Company).

 

14.       No Duplication of Payments.  The Company
shall not be liable under this Agreement to make any payment to Indemnitee in
respect of any Indemnifiable Losses to the extent Indemnitee has otherwise
already actually received payment (net of Expenses incurred in connection
therewith) under any insurance policy, the Constituent Documents and Other
Indemnity Provisions or otherwise (including from any entity or enterprise
referred to in clause (i) of the definition of “Indemnifiable Claim” in
Section 1(f)) in respect of such Indemnifiable Losses otherwise
indemnifiable hereunder.

 

15.       Defense of Claims.  Subject to
the provisions of applicable policies of directors’ and officers’ liability
insurance, if any, the Company shall be entitled to participate in the defense
of any Indemnifiable Claim or to assume or lead the defense thereof with
counsel reasonably satisfactory to the Indemnitee; provided that if Indemnitee
determines, after consultation with counsel selected by Indemnitee, that
(a) the use of counsel chosen by the Company to represent Indemnitee would
present such counsel with an actual or potential conflict, (b) the named
parties in any such Indemnifiable Claim (including any impleaded parties)
include both the Company and Indemnitee and Indemnitee shall conclude that
there may be one or more legal defenses available to him or her that are
different from or in addition to those available to the Company, (c) any
such representation by such counsel would be precluded under the applicable standards
of professional conduct then prevailing, or (d) Indemnitee has interests in the
claim or underlying subject matter that are different from or in addition to
those of other Persons against whom the Claim has been made or might reasonably
be expected to be made, then Indemnitee shall be entitled to retain separate
counsel (but not more than one law firm plus, if applicable, local counsel in
respect of any particular Indemnifiable Claim for all indemnitees in
Indemnitee’s circumstances) at the Company’s expense.  The Company shall not be liable to Indemnitee under this
Agreement for any amounts paid in settlement of any threatened or pending
Indemnifiable Claim effected without the Company’s prior written consent.  The Company shall not, without the prior
written consent of the Indemnitee, effect any settlement of any threatened or
pending Indemnifiable Claim which the Indemnitee is or could have been a
party unless such settlement solely involves the payment of money and includes
a complete and unconditional release of the Indemnitee from all liability on
any claims that are the subject matter of such Indemnifiable Claim.  Neither the Company nor Indemnitee shall
unreasonably withhold its consent to any proposed settlement; provided
that Indemnitee may withhold consent to any settlement that does not provide a
complete and unconditional release of Indemnitee.

 

16.       Successors and Binding Agreement.

 

(a)          This Agreement shall be binding upon and inure to the
benefit of the Company and any successor to the Company, including, without
limitation, any Person acquiring directly or indirectly all or substantially
all of the business or assets of the Company whether by purchase, merger,
consolidation, reorganization or otherwise (and such successor will thereafter
be deemed the “Company”
for purposes of this Agreement), but shall not otherwise be assignable or
delegatable by the Company.

 

10

 

(b)         This Agreement shall inure to the benefit of and be
enforceable by the Indemnitee’s personal or legal representatives, executors,
administrators, heirs, distributees, legatees and other successors.

 

(c)          This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the other, assign or delegate
this Agreement or any rights or obligations hereunder except as expressly
provided in Sections 16(a) and 16(b). 
Without limiting the generality or effect of the foregoing, Indemnitee’s
right to receive payments hereunder shall not be assignable, whether by pledge,
creation of a security interest or otherwise, other than by a transfer by the
Indemnitee’s will or by the laws of descent and distribution, and, in the event
of any attempted assignment or transfer contrary to this Section 16(c),
the Company shall have no liability to pay any amount so attempted to be
assigned or transferred.

 

17.       Notices.  For all
purposes of this Agreement, all communications, including without limitation
notices, consents, requests or approvals, required or permitted to be given hereunder
must be in writing and shall be deemed to have been duly given when hand
delivered or dispatched by electronic facsimile transmission (with receipt
thereof orally confirmed), or one business day after having been sent for
next-day delivery by a nationally recognized overnight courier service,
addressed to the Company (to the attention of the Secretary of the Company) and
to Indemnitee at the applicable address shown on the signature page hereto, or
to such other address as any party may have furnished to the other in writing
and in accordance herewith, except that notices of changes of address will be
effective only upon receipt.

 

18.       Governing Law.  The validity,
interpretation, construction and performance of this Agreement shall be
governed by and construed in accordance with the substantive laws of the State
of Delaware, without giving effect to the principles of conflict of laws of
such State.  The Company and Indemnitee
each hereby irrevocably consent to the jurisdiction of the Chancery Court of
the State of Delaware for all purposes in connection with any action or
proceeding which arises out of or relates to this Agreement, waive all
procedural objections to suit in that jurisdiction, including, without
limitation, objections as to venue or inconvenience, agree that service in any
such action may be made by notice given in accordance with Section 17 and
also agree that any action instituted under this Agreement shall be brought
only in the Chancery Court of the State of Delaware.

 

19.       Validity.  If any
provision of this Agreement or the application of any provision hereof to any
Person or circumstance is held invalid, unenforceable or otherwise illegal, the
remainder of this Agreement and the application of such provision to any other
Person or circumstance shall not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal shall be reformed to the extent,
and only to the extent, necessary to make it enforceable, valid or legal.  In the event that any court or other
adjudicative body shall decline to reform any provision of this Agreement held
to be invalid, unenforceable or otherwise illegal as contemplated by the
immediately preceding sentence, the parties thereto shall take all such action
as may be necessary or appropriate to replace the provision so held to be
invalid, unenforceable or otherwise illegal with one or more alternative
provisions that effectuate the purpose and intent of

 

11

 

the original provisions of
this Agreement as fully as possible without being invalid, unenforceable or
otherwise illegal.

 

20.       Miscellaneous.  No provision
of this Agreement may be waived, modified or discharged unless such waiver,
modification or discharge is agreed to in writing signed by Indemnitee and the
Company.  No waiver by either party
hereto at any time of any breach by the other party hereto or compliance with
any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.  No agreements or representations, oral or
otherwise, expressed or implied with respect to the subject matter hereof have
been made by either party that are not set forth expressly in this Agreement.

 

21.       Certain Interpretive Matters.  Unless the context of this Agreement otherwise
requires, (1) “it” or “its” or words of any gender include each other gender,
(2) words using the singular or plural number also include the plural or
singular number, respectively, (3) the terms “hereof,” “herein,” “hereby” and
derivative or similar words refer to this entire Agreement, (4) the terms
“Article,” “Section,” “Annex” or “Exhibit” refer to the specified Article,
Section, Annex or Exhibit of or to this Agreement, (5) the terms “include,”
“includes” and “including” will be deemed to be followed by the words “without
limitation” (whether or not so expressed), and (6) the word “or” is disjunctive
but not exclusive.  Whenever this Agreement
refers to a number of days, such number will refer to calendar days unless
business days are specified and whenever action must be taken (including the
giving of notice or the delivery of documents) under this Agreement during a
certain period of time or by a particular date that ends or occurs on a
non-business day, then such period or date will be extended until the
immediately following business day.  As
used herein, “business day” means any day other than Saturday, Sunday or a
United States federal holiday.

 

22.       Entire Agreement.  This
Agreement constitutes the entire agreement, and supersede all prior agreements
and understandings, both written and oral, between the parties hereto with
respect to the subject matter of this Agreement.  Any prior agreements or understandings between the parties hereto
with respect to indemnification are hereby terminated and of no further force
or effect.

 

23.       Counterparts.  This
Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original but all of which together shall constitute one and the
same agreement.

 

 

[
SIGNATURE PAGE FOLLOWS ]

 

12

 

IN WITNESS WHEREOF,
Indemnitee has executed and the Company has caused its duly authorized
representative to execute this Agreement as of the date first above written.

 

	
   

  	
  POLYPORE, INC.

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  INDEMNITEE

  
	
   

  	
  Address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00067-of-00352.parquet"}]]