Document:

Ex10.1_2014ManagementIncentiveCompensationPlan

XERIUM TECHNOLOGIES, INC.
2014 MANAGEMENT INCENTIVE COMPENSATION PROGRAM
This Xerium Technologies, Inc. 2014 Management Incentive Compensation (“MIC”) Program contains rules supplemental to those set forth in the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “EIP”).  The MIC provides for the grant of the incentive award opportunities (each, an “Award”) under and subject to the terms of the EIP, which is incorporated herein by reference.  In the event of any inconsistency between the MIC and applicable provisions of the EIP, the EIP shall control.  Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the EIP.
1.Administration; Eligibility.  The MIC shall be administered by the Committee as described in the EIP.  The Committee may in its discretion consult with outside advisors or internal Company resources for purposes of making any determinations in connection with its administration of the MIC.  Eligibility to participate in the MIC shall be limited to individuals who are selected by the Committee to participate in the MIC from among those individuals who are eligible to participate in the EIP.  Each selected individual who signs and returns an agreement (“Award Agreement”) in substantially the form of Exhibit A shall be a participant (“Participant”) in the MIC Program.  Participation in any Award shall not entitle a Participant to share in any future Awards or in any other future awards of the Company or its subsidiaries.
2.Features of Awards.  Each Award shall entitle the holder, subject to satisfaction of the performance conditions under the Award, to a benefit determined in accordance with the provisions of the Award Agreement applicable to such Participant that shall be payable in cash in accordance with the Award Agreement.  The performance year is the fiscal/calendar year 2014.
3.Award Determinations.  The Award for each Participant shall be initially determined as set forth on Schedule 1 of the Award Agreement on the basis of the target Award and Xerium’s 2014 Bank-Adjusted EBITDA (as defined in Schedule 1 of the Award Agreement) (the “Formula Award”) and the amounts actually payable to all Participants in the aggregate shall not exceed 100% of the sum of the Formula Awards for all Participants in the aggregate, provided, however, (i)  one hundred twenty percent (120%) of the sum of the Formula Awards payable to all Participants shall constitute a pool for the payment of MIC Awards and (ii) the amount payable to any Participant shall not be less than eighty percent (80%) of and shall not exceed one hundred twenty percent (120%) of his or her Formula Award so long as the total amounts payable to all Participants in the aggregate do not exceed the 100% of the sum of the Formula Awards for all Participants cap set forth above. 
4.Termination of Employment.  Unless otherwise determined by the Committee in its sole discretion, no Award shall be payable to or in respect of Participant unless the Participant is employed by the Company or a subsidiary on December 31 of the performance year; provided that in the event of a termination of Participant’s employment by the Company or a subsidiary without Cause or a Good Reason (as “Cause” and “Good Reason” are defined in the Award Agreement), a pro-rata portion of the Award determined as of the date of termination shall be paid upon payout to all other Participants pursuant to Section 5 below.  
5.Payout.  The amount determined under Schedule 1 with respect to an Award shall be paid to a Participant in cash, as soon as practicable after completion of the Company’s audit for calendar year ending December 31, 2014, but in all events before the 15th day of the third month following December 31 following the performance year.  

6.Tax Withholding.  The minimum tax withholding amount with respect to any payments being made in cash shall be withheld from such payments.
7.Intent to be Exempt from Section 162(m).  Awards for the 2013 performance year are intended to qualify for the performance-based compensation exception under Section 162(m) of the Code.
8.Nature of Awards.  Awards hereunder are intended as cash awards pursuant to the EIP.  The MIC Program is unfunded and any cash payments by the Company hereunder shall be made from the general assets of the Company.
9.Other Incentives.  Nothing in this MIC Program restricts the ability of the Company to pay incentive compensation or other supplemental compensation in any amount to any individual for any reason, including but not limited to hiring incentives, retention incentives, separation payments, safety and service awards or incentive compensation or awards on any other basis.
10.No Duplication.  There shall be no duplication of annual incentives under multiple plans.  If the Committee in its sole discretion determines that a Participant also participates in another annual cash incentive arrangement of the Company or any Affiliate based on the achievement of financial or personal goals, the Committee may in its sole discretion reduce the amount of any Award under this Plan by the amount or value of the of the duplicative benefit. 
11.Prior MIC Programs.  The MIC Program as set forth in this document supercedes for 2014 fiscal year all prior management incentive compensation plans.  
12.Amendment.  The Committee may amend the MIC at any time and from time to time, and may terminate the MIC, in each case subject only to such limitations, if any, as the EIP may impose.
13.409A.  This MIC and the Awards granted thereunder shall be construed and administered consistent with the intent that they at all times be in compliance with or exempt from the requirements of Section 409A of the Code and the regulations promulgated thereunder.

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EXHIBIT A
XERIUM TECHNOLOGIES, INC.
MANAGEMENT INCENTIVE COMPENSATION AWARD AGREEMENT
Pursuant to the terms of the Xerium Technologies, Inc. 2014 Management Incentive Compensation Program (the “MIC”) and the Xerium Technologies, Inc. 2010 Equity Incentive Plan (the “Plan”), Xerium Technologies, Inc. (the “Company”) hereby grants to the Employee the Management Incentive Compensation Award (“MIC Award”) described below.
1.The Incentive Compensation Award.  The MIC Award is subject to the terms and conditions of this Management Incentive Compensation Award Agreement (“Agreement”) and the Plan.  The Incentive Compensation Award is a cash award payable as set forth in this Agreement.  The target amount of the award for the Employee, as a percentage of Employee’s year-end annual base compensation from the Company, is set forth on Schedule 1 of this Agreement.  The amount payable will be adjusted upward or downward, or may be forfeited, based on performance as set forth on Schedule 1 of this Agreement.  “Vested” portion of the Award is the portion of the Award to which the Employee has a nonforfeitable rights.  An Award shall be paid hereunder only to the extent that such Award is Vested, as provided in this Agreement.  The Employee’s rights to payment under the Award are subject to the restrictions described in this Agreement and the Plan in addition to such other restrictions, if any, as may be imposed by law.
1.    Payment of Award.  The amount determined under Schedule 1 shall be paid to the Employee in cash not later than March 15, 2015, subject to applicable tax withholding.  
2.    Treatment of Awards Upon a Change of Control; Termination of Employment.  
(a)    In the event a Change of Control (defined below) occurs prior to the close of the performance year with respect to the Award, for the performance period from January 1, 2014 to the date of closing of the Change of Control (the “COC Performance Year”) the applicable performance metrics specified in Schedule 1 of the Award Agreement shall be determined as follows:  (i) the performance year shall be deemed to end on the effective date of such transaction; and (ii) the performance metrics shall be deemed achieved to the extent the applicable performance metrics specified in Schedule 1 of the Award Agreement for the shortened performance year described in clause (i) above are on target to be achieved based upon the financial information available to the Company.  In the event such performance metrics have been achieved pursuant to the foregoing sentence for the COC Performance Year and the MIC (or an equivalent plan approved by the Board that is no less lucrative or generous than the MIC) is not continued for the period from the end of the COC Performance Year to the end of calendar year 2014, the full amount of the Award determined under Schedule 1 shall be paid to the Employee in cash promptly following the Change of Control, subject to applicable tax withholding.  In the event such performance metrics have been achieved pursuant to the first sentence above for the COC Performance Year and the MIC (or an equivalent plan approved by the Board that is no less lucrative or generous than the MIC) is continued for the period from the end of the COC Performance Year to the end of the calendar year (subject to an adjustment for any payments made at the Change of Control effective date hereunder), the amount of the Award determined under Schedule 1 shall be prorated by multiplying the Award by a fraction, the numerator of which is the number of days in the COC Performance Year and the denominator of which is 365, and such Award shall be paid to the Employee in cash promptly following the Change of Control, subject to applicable tax withholding.  For avoidance of doubt and for example purposes only, assuming a COC Performance Year ending on July 31 where the Bank Adjusted EBITDA is on target to achieve 125% of target for the full year 

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and the Employee’s target award is 50% of a $250,000 base compensation, in the event that at the closing of such Change of Control the Company does not provide for the continuation of the MIC or equivalent plan that is no less lucrative or generous than the MIC for the remainder of the year, Employee shall be entitled to receive the full amount of his Award totaling $156,250.
(b)    In the event of a termination of the Employee’s employment for reasons other than (i) death or Disability, (ii) termination without Cause or (iii) termination by the Employee with Good Reason on or prior to December 31, 2014, no Award shall be payable to Employee.
(c)    In the event of a termination of the Employee’s employment as a result of (i) death or Disability, (ii) termination without Cause or (iii) termination by the Employee with Good Reason on or prior to December 31, 2014, the Formula Award for such Employee determined under Schedule 1 of the Award Agreement shall be prorated by multiplying such Formula Award amount by a fraction, the numerator of which is the number of days in the performance year in which Employee was employed by the Company and the denominator of which is 365.  The resulting Award shall be paid to Employee in accordance with Section 2 above.
(d)    For purposes of this Agreement, the following definitions will apply:
(i)    “Cause” has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof).  If the Employee has no written employment agreement with the Company, “Cause” shall mean (i) the Employee’s conviction of or plea of nolo contendere to a felony or other crime involving moral turpitude; (ii) the Employee’s fraud, theft or embezzlement committed with respect to the Company or any of its subsidiaries; or (iii) the Employee’s willful and continued failure to perform his material duties to the Company and its Subsidiaries, where the Company has provided written notice to the Employee of the failure and the Employee shall not have remedied such failure within then (10) business days following the effectiveness of such notice.
(ii)    “Change of Control” shall mean any of the following which takes place after the Effective Date: (i) any Person or “group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Act”), other than the Company or any of its subsidiaries  or any trustee or  other  fiduciary holding securities  under an employee benefit plan of the Company or one of its subsidiaries, becomes a beneficial owner, directly or indirectly, in one or a series of transactions, of securities representing fifty percent (50%) or more of the total number of votes that may be cast for the election of directors of the Company; (ii) any merger or consolidation involving the Company or any sale or other disposition of all or substantially all of the assets of the Company, or any combination of the foregoing, occurs and the beneficial owners of the Company’s voting securities outstanding immediately prior to such consolidation, merger, sale or other disposition do not, immediately following the consummation of such consolidation, merger, sale or other disposition, hold beneficial ownership, directly or indirectly, of securities representing fifty percent (50%) or more of the total number of votes that may be cast for election of directors of the surviving or resulting corporation in the case of any merger or consolidation or of the acquiring Person or Persons in the case of any sale or other disposition; or (iii) within twelve (12) months after a tender offer or exchange offer for voting securities of the Company (other than by the Company or any of its subsidiaries), individuals who are Continuing Directors shall cease to constitute a majority of the Board.  For the purpose of this definition, the term “beneficial owner” (and correlative terms, including “beneficial ownership”) shall have the meaning set forth in Rule 13d-3 under the Act. provided in each such 

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case such event is also a “change in control event” within the meaning of Treas. Reg. § 1.409A-3(i)(5)(1) (or similar applicable regulation under Section 409A of the Code).
(iii)    “Disability” has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof).  If the Employee has no written employment agreement with the Company, “Disability” shall mean Employee (i) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, or (ii) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company.
(iv)    “Good Reason” has the meaning ascribed to it in the written employment agreement between the Company and the Employee (as in effect on the date hereof), where the Employee provides notice of the Good Reason event within 90 days of its occurrence and provides the Company at least 30 days to cure such matter.  If the Employee has no written employment agreement with the Company, “Good Reason” shall mean a requirement that the Employee relocate more than fifty (50) miles from his then-current principal residence, it being understood that the Employee may be required to travel frequently and that prolonged periods spent away from Employee’s principal residence shall not constitute Good Reason.
(v)    “Person” means any individual, partnership, limited liability company, corporation, association, trust, joint venture, unincorporated organization, or other entity or group.
3.    Clawback.  If an Employee receives an Award payout under the MIC based on financial statements that are subsequently required to be restated in a way that would decrease the amount of the Award to which the Employee was entitled, the Employee will refund to the Company the difference between what the Employee received and what the Employee should have received; provided that (i) the value of any difference to be refunded will be determined net of withholding and (ii) no refund will be required for Awards paid more than three years prior to the date on which the Company is required to prepare the applicable restatement. The value of any difference to be refunded will be determined in a manner consistent with regulations the Securities and Exchange Commission may adopt pursuant to Section 945 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
4.    Confidentiality.  
(a)    Employee acknowledges that the Company and its subsidiaries continually develop Confidential Information (defined below), that the Employee may develop Confidential Information for the Company or its subsidiaries during Employee’s employment with the Company, and that Employee may learn of Confidential Information during the course of such employment. Employee will comply with the policies and procedures of the Company and its subsidiaries for protecting Confidential Information and shall never use or disclose to any Person (except as required by applicable law or for the proper performance of his duties and responsibilities to the Company and its subsidiaries), any Confidential Information obtained by Employee incident to his employment or other association with the Company or any of its subsidiaries.  Employee agrees to only use the Company’s Confidential Information as necessary to perform his or her job during employment with the Company.  Employee understands that this restriction shall continue to apply after his employment terminates, regardless of the reason for such termination.  All documents, records, 

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tapes and other media of every kind and description relating to the business, present or otherwise, of the Company or its subsidiaries and any copies, in whole or in part, thereof (the “Documents”), whether or not prepared by Employee, shall be the sole and exclusive property of the Company and its subsidiaries.  Employee shall safeguard all Documents and shall surrender to the Company at the time his employment terminates, or at such earlier time or times as the Board or its designee may specify, all Documents then in the Employee’s possession or control.
(b)    For purposes of this Agreement, “Confidential Information” means any and all information of the Company and its subsidiaries that is not generally known by others with whom they compete or do business, or with whom they plan to compete or do business and any and all information which, if disclosed by the Company or its subsidiaries, would assist in competition against them.  Confidential Information includes without limitation such information relating to (i) the development, research, testing, manufacturing, marketing and financial activities of the Company and its subsidiaries, (ii) the Company and its subsidiaries Products (defined below), (iii) the costs, sources of supply, financial performance and strategic plans of the Company and its subsidiaries, (iv) the identity and special needs of the customers of the Company and its subsidiaries and (v) the people and organizations with whom the Company and its subsidiaries have business relationships and those relationships.  Confidential Information also includes any information that the Company or any of its subsidiaries have received, or may receive hereafter, from others which was received by the Company or any of its subsidiaries with any understanding, express or implied, that the information would not be disclosed.  For purposes of this Agreement, “Products” mean all products planned, researched, developed, tested, manufactured, sold, licensed, leased or otherwise distributed or put into use by the Company or any of its subsidiaries, together with all services provided or planned by the Company or any of its subsidiaries, during Employee’s employment with the Company or any of its subsidiaries.
5.    Restricted Activities.  Employee, as a condition to participation in the MIC and in consideration of Participant's continued employment by the Company and/or its subsidiaries,  agrees that some restrictions on his activities during and after his employment are necessary to protect the goodwill, Confidential Information and other legitimate interests of the Company and its subsidiaries and agrees as follows:
(a)    For a period of time beginning on the date Employee executes a copy of this Agreement and continuing for a period ending on the date which is one (1) year after Employee’s employment terminates (the “Non-Competition Period”) Employee shall not, whether as owner, partner, investor, consultant, agent, employee, co-venturer or otherwise, engage in, assist or have any active interest in a business that competes with the Company or any of its subsidiaries or otherwise compete with the Company or any of its subsidiaries: (i) anywhere throughout the world; (ii) in North America; (iii) in South America; (iv) in Europe; (v) in Asia; (vi) in Australia; (vii) in the United States; (viii) in those states of the United States in which the Company or any of its subsidiaries sells products or conducts business activities.  Specifically, but without limiting the foregoing, Employee agrees that during the Non-Competition Period, Employee shall not: (A) undertake any planning for any business competitive with the Company or any of its subsidiaries; or (B) engage in any manner in any activity that is competitive with the business of the Company or any of its subsidiaries.  For the purposes of this Section 6, Employee’s undertaking shall encompass all items, products and services that may be used in substitution for Products.
(b)    Employee agrees that, during his employment with the Company, he will not undertake any outside activity, whether or not competitive with the business of the Company or its subsidiaries that could reasonably give rise to a conflict of interest or otherwise interfere with his duties and obligations to the Company or any of its subsidiaries.

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(c)    Employee further agrees that while he is employed by the Company and during the Non-Competition Period, Employee will not, (i) hire or attempt to hire any employee of the Company or any of its subsidiaries, (ii) hire or attempt to hire any independent contractor providing services to the Company or any of its subsidiaries, (iii) assist in hiring or any attempt to hire anyone identified in clauses (i) or (ii) of this sentence by any other Person, (iv) encourage any employee or independent contractor of the Company or any of its subsidiaries to terminate his or her relationship with the Company or any of its subsidiaries, or (v) solicit or encourage any customer or vendor of the Company or any of its subsidiaries to terminate or diminish its relationship with any of them, or, in the case of a customer, to conduct with any Person any competing business or activity.  For purposes of Employee’s obligations hereunder during that portion of the Non-Competition Period that follows termination of Employee’s employment, employee, independent contractor, customer or vendor of the Company or any of its subsidiaries shall mean any Person who was such at any time during the six (6) months immediately preceding the date of the termination of Employee’s employment.
(d)    In the event that the one (1) year period stated above is held unenforceable by a court of competent jurisdiction due to its length, then the period shall be six (6) months or such other time as determined enforceable by such court.
6.    Non-Inducement.  Employee will not directly or indirectly assist or encourage any person or entity in carrying out or conducting any activity that would be prohibited by this Agreement if such activity were carried out or conducted by me.
7.    Assignment of Rights to Intellectual Property.  Employee shall promptly and fully disclose all Intellectual Property (defined below) to the Company.  Employee hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) Employee’s full right, title and interest in and to all Intellectual Property.  Employee agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do such other acts (including without limitation the execution and delivery of instruments of further assurance or confirmation) requested by the Company to assign the Intellectual Property to the Company and to permit the Company to enforce any patents, copyrights or other proprietary rights to the Intellectual Property.  Employee will not charge the Company for time spent in complying with these obligations.  All copyrightable works that Employee creates shall be considered “work made for hire” and shall, upon creation, be owned exclusively by the Company.  For purposes of this Section 8, “Intellectual Property” means inventions, discoveries, developments, methods, processes, compositions, works, concepts and ideas (whether or not patentable or copyrightable or constituting trade secrets) conceived, made, created, developed or reduced to practice by Employee (whether alone or with others and whether or not during normal business hours or on or off the premises of the Company or any of its subsidiaries) during Employee’s employment with the Company or any of its subsidiaries (including prior to the Effective Date if applicable) that relate to either the Products or any prospective activity of the Company or any of its subsidiaries or that make use of Confidential Information or any of the equipment or facilities of the Company or any of its subsidiaries.
8.    Consideration and Acknowledgments.  Employee acknowledges and agrees that the covenants described in Sections 4 through 8 of this Agreement are essential terms, and the underlying Management Incentive Compensation Award would not be provided by the Company in the absence of these covenants.  Employee further acknowledges that these covenants are supported by adequate consideration as set forth in this Agreement, that full compliance with these covenants will not prevent Employee from earning a livelihood following the termination of his or her employment, and that these covenants do not place undue restraint on Employee and are not in conflict with any public interest.  Employee further acknowledges and agrees that Employee fully understands these covenants, has had full and complete 

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opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants before signing this Agreement, that these covenants are reasonable and enforceable in every respect, and has voluntarily agreed to comply with these covenants for their stated term.  Employee agrees that in the event he or she is offered employment with a competing business at any time in the future, Employee shall immediately notify the competing business of the existence of the covenants set forth above.
9.    Enforceability; General Provisions.
(a)    Employee agrees that the restrictions contained in this Agreement are reasonable and necessary to protect the Company’s legitimate business interests and that full compliance with the terms of this Agreement will not prevent Employee from earning a livelihood following the termination of employment, and that these covenants do not place undue restraint on Employee.
(b)    Because the Company’s current base of operations is in North Carolina, Employee consents to the jurisdiction of the state and federal courts of North Carolina with respect to any claim arising out of this Agreement.
(c)    Employee acknowledges that in the event of a breach or a threatened breach of this Agreement, the Company will face irreparable injury which may be difficult to calculate in dollar terms and that the Company shall be entitled, in addition to all remedies otherwise available in law or in equity, to temporary restraining orders and preliminary and final injunctions enjoining such breach or threatened breach in any court of competent jurisdiction without the necessity of posting a surety bond, as well as to obtain an equitable accounting of all profits or benefits arising out of any violation of this Agreement.
(d)    Employee agrees that if a court determines that any of the provisions in this Agreement is unenforceable or unreasonable in duration, territory, or scope, then that court shall modify those provisions so they are reasonable and enforceable, and enforce those provisions as modified.
(e)    If any phrase or provision of this Agreement is declared invalid or unenforceable by a court of competent jurisdiction, that phrase, clause or provision shall be deemed severed from this Agreement, and will not affect the enforceability of any other provisions of this Agreement, which shall otherwise remain in full force and effect.
(f)    Waiver of any of the provisions of this Agreement by the Company in any particular instance shall not be deemed to be a waiver of any provision in any other instance and/or of the Company’s other rights at law or under this Agreement.
(g)    Employee agrees that the Company may assign its rights under this Agreement to its successors and that any such successor may stand in the Company’s shoes for purposes of enforcing this Agreement.
(h)    Employee agrees to reimburse Company for all attorneys’ fees, costs, and expenses that it reasonably incurs in connection with enforcing its rights and remedies under this Agreement, but only to the extent the Company is ultimately the prevailing party in the applicable legal proceedings.
(i)    If Employee violates this Agreement, then the restrictions set out in Sections 4 - 8 shall be extended by the same period of time as the period of time during which the violation(s) occurred.
(j)    Employee fully understands Employee’s obligations in this Agreement, has had full and complete opportunity to discuss and resolve any ambiguities or uncertainties regarding these covenants 

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before signing this Agreement, and has voluntarily agreed to comply with these covenants for their stated terms.
(k)    Employee agrees that in the event Employee receives an offer of employment at any time in the future with any entity that may be considered a Competing Business Line, Employee shall immediately notify such Competing Business of the existence and terms of this Agreement.  Employee also understands and agrees that the Company may notify anyone later employing Employee of the existence and provisions of this Agreement.
(l)    Employee agrees that Employee’s obligations under Sections 4 through this Section 10 will survive the payment or forfeiture of the Award hereunder and continue for the duration of Employee’s employment with the Company, and thereafter to the extent stated in their terms.  
10.    Miscellaneous.
(a)    No Assignment.  No right or benefit or payment under the Plan shall be subject to assignment or other transfer nor shall it be liable or subject in any manner to attachment, garnishment or execution.
(b)    Employment Rights.  This Agreement shall not create any right of the Employee to continued employment with the Company or its Affiliates or limit the right of Company or its Affiliates to terminate the Employee’s employment at any time and shall not create any right of the Employee to employment with the Company or any of its Affiliates.  Except to the extent required by applicable law that cannot be waived, the loss of the Award shall not constitute an element of damages in the event of termination of the Employee’s employment even if the termination is determined to be in violation of an obligation of the Company or its Affiliates to the Employee by contract or otherwise.
(c)    Unfunded Status.  The obligations of the Company hereunder shall be contractual only.  The Employee shall rely solely on the unsecured promise of the Company and nothing herein shall be construed to give the Employee or any other person or persons any right, title, interest or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company or any Affiliate.
(d)    Severability.  Any term or provision of this Agreement that is invalid or unenforceable in any situation in any jurisdiction will not affect the validity or enforceability of the remaining terms and provisions hereof or the validity or enforceability of the offending term or provision in any other situation or in any other jurisdiction.  In the event that any provision hereof would, under applicable law, be invalid or unenforceable in any respect, such provision will be construed by modifying or limiting it so as to be valid and enforceable to the maximum extent compatible with, and possible under, applicable law.
(e)    Employee Acknowledgments.  Employee acknowledges that (i) Employee has had access to Company’s trade secrets and Confidential Information at the highest levels, including without limitation manufacturing and marketing strategy, customer strategy and lists, technical know-how, product and process research and development, and business plans, (ii) Employee has had access to Confidential Information regarding and has been privy to discussions and strategy sessions at the highest levels of the Company regarding all aspects, business lines and product segments of the Company, and (iii) that these trade secrets and Confidential Information would inevitably be disclosed were Employee to work for a competitor.

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(f)    Governing Law.  This Agreement and all actions arising in whole or in part under or in connection herewith, will be governed by and construed in accordance with the domestic substantive laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule that would cause the application of the laws of any other jurisdiction.
(g)    Conflicts. To the extent there are any conflicts between provisions this Agreement and any applicable employment agreement entered into between Employee and the Company or its subsidiaries, the provisions of such employment agreement shall govern and nothing in this Agreement shall in any way amend, supersede or otherwise change any provisions or rights contained in such employment agreement.
(h)    409A.  The Award shall be construed and administered consistent with the intent that it be at all times in compliance with, or exempt from, the requirements of Section 409A of the Internal Revenue Code and the regulations thereunder.
(i)    Section 162(m).  The Award shall be construed and administered consistent with the intent that it qualify to the maximum extent possible as qualifying performance-based compensation within the meaning of Section 162(m) of the Internal Revenue Code and the regulations thereunder.
(j)    Amendment.  This Agreement may be amended only by mutual written agreement of the parties.
IN WITNESS WHEREOF, Xerium Technologies, Inc. and Employee have executed this Management Incentive Compensation Agreement as of the date first written above.

Xerium Technologies, Inc.

By:         
Name:    Michael Bly 
Title:    EVP of Global Human Resources
Acknowledged and agreed:
Employee
Signature:    
Printed Name:    _________        
Date:    

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Schedule 1
(a)    Target Award:  ___% of base compensation
(b)    Metric.  One measure of performance will be used in determining the formula adjustment under the Award:  Xerium 2014 Bank Adjusted EBITDA.  The “Bank Adjusted EBITDA” means “Adjusted EBITDA,” as such term is defined in the Credit and Guaranty Agreement (the “Credit Agreement”), dated as of May 26, 2011, entered into by and among the Company, certain subsidiaries of the Company, Citibank N.A., as administrative agent, and other agents and banks party thereto, as in effect for Xerium Technologies, Inc. for the year ended December 31, 2014.  
(c)    Currency Adjustments.  The final Bank Adjusted EBITDA will be adjusted at the end of the year to reflect currency fluctuations relative to the US$ in all markets.  Any adjustments made will be based on the following budgeted rates:  
	
		
	Foreign Exchange Rates

	ARS
	$0.12669

	AUD
	$0.86590

	BRL
	$0.43036

	CAD
	$0.96621

	CHF
	$0.99322

	CNY
	$0.16529

	EUR
	$1.28000

	GBP
	$1.58500

	JPY
	$0.00939

	MXN
	$0.08139

	NOK
	$0.16356

	SEK
	$0.15536

	VND
	$0.00005

(d)    Target and Formula.  The minimum, target and maximum thresholds of Bank Adjusted EBITDA for 2014 shall be set by the Committee and delivered to the Employee in a separate writing; provided, however, that the amounts may be adjusted by the Committee after the initial determination of the amounts to reflect any material change of circumstance, including without limitation, the acquisition or disposition of any business by the Company or any of its subsidiaries.
	
				
	Bank Adjusted EBITDA
	Minimum
	Target
	Maximum

	Percentage of Target Award Payable
	0%
	100%
	150%

The formula amount payable with respect to an Award shall be determined as follows (where “X” below refers to the portion of the target award for a Participant under an Award):
		
	•
	Bank Adjusted EBITDA Metric below minimum:    Award = no payment

		
	•
	Bank Adjusted EBITDA Metric equal to minimum:    Award = 0

		
	•
	Bank Adjusted EBITDA Metric at target:      Award = X

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	•
	Bank Adjusted EBITDA Metric at maximum or above:      Award = 1.5X

The amount payable between the levels of Bank Adjusted EBITDA identified above shall be determined on the basis of straight line interpolation between points.
(e)    The Committee may in its sole discretion adjust Award amount determined under subsection (e) upwards or downwards by 20% based on the following individual goals associated with the Company’s restructuring projects: 

The Committee has delegated such authority (except with respect to his own Award) to the President and Chief Executive Officer of the Company.  

The amount payable with respect to an Award shall in all cases be capped at one hundred eighty percent (180%) of a Participant’s target Award (1.8X).  

S - 2Ex10.2_EmploymentAgreementswithWern-LirnPaulWang

EMPLOYMENT CONTRACT 

THIS EMPLOYMENT CONTRACT (this “Contract”) is made in Shanghai, People’s Republic of China (“PRC”), on March 17, 2014, by and between:
Huyck Wangner (Shanghai) Trading Co., Ltd., with its registered address at Room 1508, 12th Floor, No. 596, Middle Longhua Road, Shanghai, P.R.China (the “Company”), and
Paul Wern-Lirn Wang (Passport Number: 710714535), with residential address at No. 150, 68 Nong, Zhifa Rd., Qingpu District, Shanghai,  201703, P.R.China.  (“You”).
In this Contract, the Company and you are referred to collectively as the “Parties” and each individually as a “Party.” 
1.    EMPLOYMENT TERM
		
	1.1
	The term of this Contract is five years, commencing from 10 March, 2014 (the “Commencement Date”) to 9 March, 2019 (the “Expiration Date”). Three (3) months before the expiration of this contract, either party could issue to the other party a written request to extend this employment contract.  If the company decides not to extend this employment contract, then the termination clause in section 14.1 will apply.

		
	1.2
	Your probationary period shall be for a period of six (6) months commencing from the Commencement Date (the “Probationary Period”).  The Probationary Period is included in your employment term.

2.    POSITION AND DUTIES
		
	2.1
	Your position in the Company is President of China - Xerium Technologies.  You agree to perform those job duties and functions of the position as set forth and described in the attached Exhibit A. You further agree that the Company in its discretion may reasonably change your job on a temporary or a permanent basis pursuant to business requirements and your work performance.

		
	2.2
	You will perform all duties and services hereunder in good faith and to the best of your ability. You agree to devote your working time, attention, and energies to the business of the Company and to be available at all reasonable times to perform such work as the Company may require.

		
	2.3
	Your working location is the Company in Shanghai. You agree to work at any other place that the Company may designate within the PRC. You may also be required to make business trips both inside and outside the PRC as required for the proper performance of your duties.

		
	3.
	LABOR PROTECTION AND WORKING CONDITIONS

		
	3.1
	According to the actual circumstances of the work done and the actual position held by you, the Company shall provide you with a safe environment in accordance with PRC laws and regulations.

		
	4.
	REPRESENTATIONS, WARRANTIES, AND UNDERTAKINGS 

		
	4.1
	You hereby represent, warrant, and undertake the following:

		
	(a)
	that throughout the term of this Contract, your provision of services to the Company under this Contract does not violate any contractual or statutory obligations;

		
	(b)
	that as of the Commencement Date and throughout the term of this Contract, you possess the governmental permits/registrations necessary to work at the Company at its present location;

		
	(c)
	that as of the Commencement Date, you possess the professional qualifications, licenses, and/or permits necessary to perform the job duties set out in this Contract and that you will maintain such qualifications, licenses, and/or permits throughout the term of this Contract;

		
	(d)
	that as of the Commencement Date, you are not bound by or subject to any court order, agreement, arrangement, or undertaking, whether by contract or otherwise, which in any way restricts or prohibits you from entering into this Contract or performing your duties hereunder; and

		
	(e)
	that all information that you provided to the Company during the recruitment period and thereafter, and throughout the term of this Contract, is true and correct.

5.    COMPENSATION AND SOCIAL INSURANCE
		
	5.1
	Your annual salary is US$165,000 before withholding of applicable tax and your individual portion of social insurance (or other) contributions (if applicable). The Company may revise your base salary in case of change of your position.

		
	5.2
	The Company will provide you with the following allowances:

		
	(i)
	Annual housing allowance (for serviced apartment including rental, fees and utilities) of US$110,000 per year during the term of this Contract.  

		
	(ii)
	Standard expatriate medical plan coverage administered by Ambassador as provided to US expatriates currently in China.

		
	(iii)
	Annual child education allowance for your two daughters upon presenting actual school invoices (which currently is US$62,000 annually), until they graduate from high school.

		
	(iv)
	A car and a driver, which will be arranged in accordance with company policy.

		
	5.3
	You annual salary and annual housing allowance will be paid to your bank account designated by you in twelve equal installments per year in RMB (converted at the middle rate published by People's Bank of China on the 20th day of every month). The payroll date for each month is the 5th day of the next month.  

		
	5.4
	You are eligible to participate in the annual incentive plan of Xerium Technologies, Inc. ("Xerium") at a target participation level of 50% of base salary.  During your first year, your incentive award will be pro-rated for 2014 based on your actual hire date. Please note that awards under the annual incentive plan and their terms are subject to the approval and discretion of the Compensation Committee of the Board of Directors of Xerium.

		
	5.5
	You are eligible to participate in the Long Term Incentive Program of Xerium at 50% of your base pay per year. During your first year, your incentive award will be pro-rated for 2014 based on your actual hire date.  Please note that awards under the Long Term Incentive Program and their terms are subject to the approval and discretion of the Compensation Committee of the Board of Directors of Xerium.

		
	5.6
	In addition to other performance factors, in order to be eligible to receive the above awards, you must be performing services for the Company on the date of the awards payment.  If you have not worked for the full award period, you may be eligible for a pro-rated award according to the duration of your employment in the award period.  The Company reserves the right to vary, alter or discontinue any incentive plan and/or the terms of participation in any incentive plan from time to time with notice to you.  The fact that an award is paid in one year is no guarantee that awards will be paid in subsequent years. 

		
	5.7
	If required by applicable national and local rules, the Company will enroll you in various social insurance and benefit schemes in accordance therewith.  The Parties will make their respective contributions for social insurance and welfare in accordance with the applicable national and local rules. The Company is entitled to withhold the contribution payable by you from your monthly base salary and pay it to the relevant governmental authorities in accordance with PRC law.

		
	5.8
	In addition to statutory social insurance benefits, you will be eligible to participate in any benefit plans that the Company establishes from time to time for its employees in China, at such times as you qualify for them or, as the case may be, as you are selected for participation in them.  The Company reserves the right to amend or discontinue such benefit plans in its sole discretion with notice to you.

		
	5.9
	You will pay individual income tax in accordance with PRC law, the amount of which the Company shall withhold from your monthly income.    

		
	6.
	WORKING HOURS, STATUTORY HOLIDAYS AND ANNUAL LEAVE

		
	6.1
	Subject to the governmental approval as required by law, you are subject to a non-fixed working hour system and your working hours are not restricted by the normal office hours as may be prescribed in the employee handbook of the Company.

		
	6.2
	You understand that you will be entitled to the statutory holidays specified by the PRC government.

		
	6.3
	Your annual leave entitlement is twenty (20) working days each full calendar year and will be pro-rated during partial years of employment.  

		
	6.4
	All annual leave taken by you will first satisfy any statutory entitlement to annual leave before satisfying any additional annual leave entitlement.

		
	6.5
	Annual leave for each year may not be carried forward without the approval of the Company and shall be taken at times approved by Company.

7.    SERVICE WORKS, INVENTIONS AND CREATIONS
		
	7.1
	The copyright, patent application right, patent or ownership of any ideas, works, inventions, designs, devices, machines, masks, models, work in process, deliverables, products, procedures, improvements, developments, drawings, notes, documents, information and materials, creations, computer programs, know-how, trade secrets and proprietary information (“Work Product”), which are made, conceived or developed by you alone or in conjunction with others during the term of this Contract and one (1) year after the Expiration Date, shall belong to the Company so long as such Work Product is related to your duties or tasks assigned by the Company or are made, conceived or developed by utilizing the Company’s material and technical conditions such as funds, equipment, technology, confidential or proprietary information.  In addition, the provisions of this Article shall be binding upon your successors and assigns.  

8.    CONFIDENTIALITY
		
	8.1
	Without prior written consent from the Company, you shall not at any time during the employment term or thereafter use for your own account or divulge to any person, firm, or company (and shall at all times use your best efforts to prevent the publication or disclosure of) any Confidential Information.  For the purposes of this Article, “Confidential Information” shall mean any and all confidential or proprietary information concerning the business and affairs of the Company and its affiliates, including, without limitation, personal data regarding employees, secondees or any other individual’s personal data, data files, manuals, photographs, graphs, drawings, price lists, program information, financial data, market studies and strategies, business plans, and any other information, however documented.  Confidential Information also includes, without limitation, any business secrets within the meaning of Article 10 of the PRC Anti-Unfair Competition Law. Your confidentiality obligations will survive the termination of your employment with the Company.  Upon the Company’s demand, you agree immediately to surrender to the Company all originals and copies of documents, samples and all other items of whatever nature relating to any matter aforesaid and all items of whatever description belonging to the Company.  You understand that Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through 

no wrongful act of you or of others who were under confidentiality obligations as to the item or items involved.
		
	8.2
	You agree that you will not, during your employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity and that you will not bring onto the Company’s premises any unpublished document or proprietary information belonging to any such employer, person or entity without written consent from such employer, person or entity.

		
	8.3
	You recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  You agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out your work for the Company consistent with the Company’s agreement with such third party.

		
	8.4
	You understand and acknowledge that you are required to immediately disclose to the Company, clearly, fully, in writing and in detail, any and all material information that you learn about prospective customers, business partners, and competitors of the Company.

9.    NON-SOLICITATION
		
	9.1
	For two (2) years after the termination of your employment, you will not directly or indirectly (whether as owner, partner, employee/secondee or otherwise) induce an employee, secondee, contractor or consultant of the Company to terminate an employment/employment relationship (of whatever form) with the Company, or solicit, hire, attempt to hire or employ any employee, secondee, contractor or consultant of the Company.

10.    NON-BRIBERY
		
	10.1
	You will not give or promise any payment or gift of money or anything of value to officials (including officers or the employees of a government or regulatory agency, political parties and candidates, and the employees of state-owned entities) with the intent to induce such officials to use their authority to help you or the Company or any affiliated company for personal gain or for that of the Company or an affiliated company.  You further agree that you will not demand or accept any payment or other benefit in money or in kind offered to you or your family members from any person as an inducement or reward for any act or forbearance or in connection with any matter or business transacted by or on behalf of the Company.

11.    NON-COMPETITION
		
	11.1
	You agree that during the term of your employment and for two (2) years after the date of termination of your employment at the Company (“Post Employment Non-Compete Period”), you will not directly or indirectly (whether as owner, partner, employee/secondee 

or otherwise) interfere with business relationships between the Company and any customer or targeted customer, nor will you, directly or indirectly, for your interests or the interests of any party other than the Company, engage in any “Competing Business” in the PRC or hold a position in any entity that engages in any Competing Business.  “Competing Business” means any business competing with the Company and its affiliated companies for market share, customers, or talent.
		
	11.2
	You hereby agree that the Company has the option in its sole discretion, whether to require you to fulfill the non-compete obligations during the Post Employment Non-Compete Period set forth in this Article 11.  If and only if the Company chooses to require you to fulfill the non-compete obligations during the Post Employment Non-Compete Period set forth in Article 11, the Company shall pay you for every twelve (12) months during the Post Employment Non-Compete Period an amount equal to 30% (thirty percent) of your annual wages, or the minimum amount required by the applicable laws in effect at the Expiration Date, whichever is higher (“Non-Compete Compensation”).  Your “annual wages” in this Article 11 means the total of the base salary and any bonus paid to you during the twelve (12) months immediately preceding the Expiration Date.  

		
	11.3
	The Company will pay the Non-Compete Compensation to you in installments on a monthly basis.  If at the time of the Expiration Date, the applicable laws or regulations require a different payment date or schedule, the Company will comply with such laws or regulations and adjust the payment schedule accordingly.

		
	11.4
	If you fail to comply with Section 11.1 above, in addition to repayment of all the Non-Compete Compensation you have received, you will pay the Company liquidated damages in the amount of three times your annual salary or as otherwise permitted by law.  If the liquidated damages cannot cover the loss that the Company suffers as a result of your breach of Section 11.1, the Company may claim further damages from you.

12.    WORK RULES 
		
	12.1
	The Company reserves the right to monitor email, internet and computer usage or perform background checks and/or drug tests. You are not allowed to move the Company’s data to personal storage devices (for example, iPods, digital cameras, external flash drives, portable hard drives, or any other non-Company equipment) at any time, and doing so may result in discipline, including summary termination of employment.

13.    PERSONAL INFORMATION 
		
	13.1
	You consent to the processing by the Company of personal data of which you are the subject.  You agree that the data may be collected and held by the Company, or be disclosed or transferred to other employees/secondees of the Company (including if necessary to other affiliates of the Company outside the PRC) or to any other person as may be reasonably necessary or as otherwise permitted by PRC law.

14.    TERMINATION OF EMPLOYMENT

		
	14.1
	The Company may terminate your employment with immediate effect under any circumstances allowable by law and the terms of this Contract or any subsequent amendments thereto. In the event that your employment is terminated by the Company according to the PRC laws, in which case any statutory severance compensation is required for such termination, the Company agrees to giving you thirty (30) days’ prior written notice and pay to you twelve (12) months of your monthly base salary as severance compensation (including any statutory severance compensation, if it is required under PRC laws for such termination).   

		
	14.2
	Both Parties may terminate your employment by giving thirty (30) days’ prior written notice to the other Party, unless PRC law or this Contract provides otherwise.

		
	14.3
	The Company may suspend your duties when you are subject to an investigation of any disciplinary or legal matter, in which case the Company will pay the appropriate compensation or living allowance in accordance with applicable laws and regulations. If the investigation reveals that you have committed any disciplinary or legal offence, the Company will be entitled to terminate your employment.

		
	14.4
	The Company reserves the right to require you to not attend work and/or to not undertake all or any of your duties at any time, including during any period of notice.

		
	14.5
	On or before the termination of your employment with the Company, you shall return to the Company all property and belongings of the Company, including such items as mobile phones, laptop computers, documents, files, credit cards or keys (as applicable).  You acknowledge and agree that the failure to do so shall entitle the Company to withhold payment of your final paycheck temporarily and/or any other payable item or to deduct an amount equivalent to the cost of such property from such payables.

		
	14.6
	You will not represent yourself or cause or allow yourself to be represented as being in any way connected with the Company after the termination of your employment.

		
	14.7
	In the event that your employment with the Company terminates, you hereby consent to the notification to your new employer of your continuing rights and obligations under this Contract.  Further, you agree that you will provide your prospective employers with notice of your obligations to the Company.

15.    LIABILITY FOR BREACH OF CONTRACT 
		
	15.1
	In addition to the liquidated damages provided under this Contract or other agreements between the Parties or as provided by applicable PRC law or regulations, a Party shall compensate for the other Party’s direct loss as a result of its breach of this Contract.

		
	16.
	GOVERNING LAW AND HANDLING OF LABOR DISPUTES 

		
	16.1
	This Contract shall be interpreted and enforced in accordance with PRC law.

		
	16.2
	The Company and you agree that we will first endeavor to reach an amicable settlement of any labor dispute arising out of this Contract through mutual negotiations.  If the dispute is not resolved within thirty (30) days after the commencement of negotiations, either Party may submit the labor dispute for arbitration to the labor dispute arbitration commission with jurisdiction over the matter. Any such proceeding shall be closed to the public.

17.    MISCELLANEOUS PROVISIONS 
		
	17.1
	This Contract is executed in English languages in two (2) originals.  Each Party will hold one (1) executed original.  

		
	17.2
	This Contract may be amended only by a written agreement signed by both Parties.

		
	17.3
	In the event that any term hereof conflicts with the rules and regulations of the Company, this Contract will prevail. Any matters that have not been addressed in this Contract will be handled in accordance with the rules and regulations of the Company.

		
	17.4
	If any provision of this Contract is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Contract. 

		
	17.5
	Failure or delay on the part of any Party to exercise any right or privilege under this Contract shall not operate as a waiver of such right or privilege, nor shall any partial exercise of any right or privilege preclude any further exercise thereof.  Any waiver by a Party at any time of a breach of any term or provision of this Contract shall not be construed as a waiver by such Party of any subsequent breach, its rights in such provision, or any of its other rights hereunder.

		
	17.6
	Articles 8, 9 and 11 shall survive the termination of this Contract.

		
	17.7
	The headings contained in this Contract are for reference only and shall not be deemed to be a part of this Contract or to affect the meaning or interpretation hereof.

		
	17.8
	Any exhibit referred to in this Contract shall be incorporated herein and made a part hereof.

		
	17.9
	This Contract supersedes any prior oral or written agreements between the Parties relating to your employment with the Company.

		
	17.10
	You represent and warrant that you have read and understood all provisions of this Contract and have had an opportunity to confer with anyone of your choosing regarding the contents of this Contract.

IN WITNESS WHEREOF, the Parties hereto have executed this Contract as of the date first above written.
Huyck Wangner (Shanghai) Trading Co., Ltd.
(Seal)
/s/ Michael Bly______________
Name: Michael Bly 
Title: EVP of Global Human Resources
Date: 3/23/14
Employee:
/s/ Wern-Lirn Wang________
Name: Paul Wern-Lirn Wang
Passport Number: 710714535
Date:

EMPLOYMENT CONTRACT 

THIS EMPLOYMENT CONTRACT (this “Contract”) is made in Hong Kong, on March 17, 2014, by and between:
Xerium Asia Holding Limited. & c/o Tricor Services Limited, with its registered address at Level 54 Hopewell Centre, 183 Queen’s Road East, Hong Kong (the “Company”), and
Paul Wern-Lirn Wang (Passport Number: 710714535), with residential address at No. 150, 68 Nong, Zhifa Rd., Qingpu District, Shanghai,  201703, P.R.China.  (“You”).
In this Contract, the Company and you are referred to collectively as the “Parties” and each individually as a “Party.” 
1.EMPLOYMENT TERM
		
	1.1
	The term of this Contract is five years, commencing from 10 March, 2014 (the “Commencement Date”) to 9 March, 2019 (the “Expiration Date”). Three (3) months before the expiration of this contract, either party could issue to the other party a written request to extend this employment contract.  If the company decides not to extend this employment contract, then the termination clause in section 14.1 will apply.

		
	1.2
	Your probationary period shall be for a period of six (6) months commencing from the Commencement Date (the “Probationary Period”).  The Probationary Period is included in your employment term.

2.POSITION AND DUTIES
		
	2.1
	Your position in the Company is President of Asia - Xerium Technologies.  You agree to perform those job duties and functions of the position as set forth and described in the attached Exhibit A. You further agree that the Company in its discretion may reasonably change your job on a temporary or a permanent basis pursuant to business requirements and your work performance.

		
	2.2
	You will perform all duties and services hereunder in good faith and to the best of your ability. You agree to devote your working time, attention, and energies to the business of the Company and to be available at all reasonable times to perform such work as the Company may require.

		
	2.3
	You may be required to make business trips in the Asia Pacific Region as required for the proper performance of your duties.

		
	3.
	LABOR PROTECTION AND WORKING CONDITIONS

		
	3.1
	According to the actual circumstances of the work done and the actual position held by you, the Company shall provide you with a safe environment in accordance with applicable laws and regulations.

		
	4.
	REPRESENTATIONS, WARRANTIES, AND UNDERTAKINGS 

		
	4.1
	You hereby represent, warrant, and undertake the following:

		
	(a)
	that throughout the term of this Contract, your provision of services to the Company under this Contract does not violate any contractual or statutory obligations;

		
	(b)
	that as of the Commencement Date and throughout the term of this Contract, you possess the governmental permits/registrations necessary to work and perform the job duties set out in this Contract;

		
	(c)
	that as of the Commencement Date, you possess the professional qualifications, licenses, and/or permits necessary to perform the job duties set out in this Contract and that you will maintain such qualifications, licenses, and/or permits throughout the term of this Contract;

		
	(d)
	that as of the Commencement Date, you are not bound by or subject to any court order, agreement, arrangement, or undertaking, whether by contract or otherwise, which in any way restricts or prohibits you from entering into this Contract or performing your duties hereunder; and

		
	(e)
	that all information that you provided to the Company during the recruitment period and thereafter, and throughout the term of this Contract, is true and correct.

5.COMPENSATION AND SOCIAL INSURANCE
		
	5.1
	Your annual salary is US$135,000, inclusive of all taxes. The Company may revise your base salary in case of change of your position.

		
	5.2
	You annual salary will be paid to your bank account designated by you in twelve equal installments per year in US dollar currency.  

		
	5.3
	You are eligible to participate in the annual incentive plan of Xerium Technologies, Inc. ("Xerium") at a target participation level of 50% of base salary.  During your first year, your incentive award will be pro-rated for 2014 based on your actual hire date. Please note that awards under the annual incentive plan and their terms are subject to the approval and discretion of the Compensation Committee of the Board of Directors of Xerium.

		
	5.4
	You are eligible to participate in the Long Term Incentive Program of Xerium at 50% of your base pay per year.  During your first year, your incentive award will be pro-rated for 2014 based on your actual hire date.  Please note that awards under the Long Term Incentive Program and their terms are subject to the approval and discretion of the Compensation Committee of the Board of Directors of Xerium.

		
	5.5
	In addition to other performance factors, in order to be eligible to receive the above awards, you must be performing services for the Company on the date of the awards payment.  If you have not worked for the full award period, you may be eligible for a pro-rated award according to the duration of your employment in the award period.  The Company reserves the right to vary, alter or discontinue any incentive plan and/or the terms of participation in any incentive plan from time to time with notice to you.  The fact that an award is paid in one year is no guarantee that awards will be paid in subsequent years. 

		
	5.6
	In addition, you will be eligible to participate in any benefit plans that the Company establishes from time to time for its employees, at such times as you qualify for them or, as the case may be, as you are selected for participation in them.  The Company reserves the right to amend or discontinue such benefit plans in its sole discretion with notice to you.

		
	5.7
	You will be solely responsible for payment of individual salaries tax.    

6.SERVICE WORKS, INVENTIONS AND CREATIONS
		
	6.1
	The copyright, patent application right, patent or ownership of any ideas, works, inventions, designs, devices, machines, masks, models, work in process, deliverables, products, procedures, improvements, developments, drawings, notes, documents, information and materials, creations, computer programs, know-how, trade secrets and proprietary information (“Work Product”), which are made, conceived or developed by you alone or in conjunction with others during the term of this Contract and one (1) year after the Expiration Date, shall belong to the Company so long as such Work Product is related to your duties or tasks assigned by the Company or are made, conceived or developed by utilizing the Company’s material and technical conditions such as funds, equipment, technology, confidential or proprietary information.  In addition, the provisions of this Article shall be binding upon your successors and assigns.  

7.CONFIDENTIALITY
		
	7.1
	Without prior written consent from the Company, you shall not at any time during the employment term or thereafter use for your own account or divulge to any person, firm, or company (and shall at all times use your best efforts to prevent the publication or disclosure of) any Confidential Information.  For the purposes of this Article, “Confidential Information” shall mean any and all confidential or proprietary information concerning the business and affairs of the Company and its affiliates, including, without limitation, personal data regarding employees, secondees or any other individual’s personal data, data files, manuals, photographs, graphs, drawings, price lists, program information, financial data, market studies and strategies, business plans, and any other information, however documented.  Confidential Information also includes, without limitation, any business and/or trade secrets under Hong Kong law. Your confidentiality obligations will survive the termination of your employment with the Company.  Upon the Company’s demand, you agree immediately to surrender to the Company all originals and copies of documents, 

samples and all other items of whatever nature relating to any matter aforesaid and all items of whatever description belonging to the Company.  You understand that Confidential Information does not include any of the foregoing items which has become publicly known and made generally available through no wrongful act of you or of others who were under confidentiality obligations as to the item or items involved.
		
	7.2
	You agree that you will not, during your employment with the Company, improperly use or disclose any proprietary information or trade secrets of any former employer or other person or entity and that you will not bring onto the Company’s premises any unpublished document or proprietary information belonging to any such employer, person or entity without written consent from such employer, person or entity.

		
	7.3
	You recognize that the Company has received and in the future will receive from third parties their confidential or proprietary information subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes.  You agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out your work for the Company consistent with the Company’s agreement with such third party.

		
	7.4
	You understand and acknowledge that you are required to immediately disclose to the Company, clearly, fully, in writing and in detail, any and all material information that you learn about prospective customers, business partners and competitors of the Company.

8.NON-SOLICITATION
		
	8.1
	For two (2) years after the termination of your employment, you will not directly or indirectly (whether as owner, partner, employee/secondee or otherwise) induce an employee, secondee, contractor or consultant of the Company with whom you have or had business dealings within the period of two (2) years prior to the date of termination of your employment at the Company to terminate an employment/employment relationship (of whatever form) with the Company, or solicit, hire, attempt to hire or employ any such employee, secondee, contractor or consultant of the Company.  

9.NON-BRIBERY
		
	9.1
	You will not give or promise any payment or gift of money or anything of value to officials (including officers or the employees of a government or regulatory agency, political parties and candidates, and the employees of state-owned entities) with the intent to induce such officials to use their authority to help you or the Company or any affiliated company for personal gain or for that of the Company or an affiliated company.  You further agree that you will not demand or accept any payment or other benefit in money or in kind offered to you or your family members from any person as an inducement or reward for any act or forbearance or in connection with any matter or business transacted by or on behalf of the Company.  The foregoing shall be without prejudice to your general obligation to comply with all applicable anti-bribery laws.

10.NON-COMPETITION
		
	10.1
	You agree that during the term of your employment and for two (2) years after the date of termination of your employment at the Company (“Post Employment Non-Compete Period”), you will not directly or indirectly (whether as owner, partner, employee/secondee or otherwise) interfere with business relationships between the Company and any customer or targeted customer, nor will you, directly or indirectly, for your interests or the interests of any party other than the Company, engage in any “Competing Business” in the Asia Pacific region.  “Competing Business” means any business competing with the Company and its affiliated companies for market share, customers, or talent.  

		
	10.2
	If you fail to comply with Section 10.1 above, you will pay the Company liquidated damages in the amount of three times your annual salary or as otherwise permitted by law.  If the liquidated damages cannot cover the loss that the Company suffers as a result of your breach of Section 10.1, the Company may claim further damages from you.  

11.WORK RULES 
		
	11.1
	The Company reserves the right to monitor email, internet and computer usage or perform background checks and/or drug tests. You are not allowed to move the Company’s data to personal storage devices (for example, iPods, digital cameras, external flash drives, portable hard drives, or any other non-Company equipment) at any time, and doing so may result in discipline, including summary termination of employment.

12.PERSONAL INFORMATION 
		
	12.1
	You consent to the processing by the Company of personal data of which you are the subject for the purpose of human resources management, including without limitation recruitment, appointment, benefits, termination, performance appraisal and discipline.  You agree that the data may be collected and held by the Company, or be disclosed or transferred to other employees/secondees of the Company (including if necessary to other affiliates of the Company outside Hong Kong) or to any other person as may be reasonably necessary or as otherwise permitted by Hong Kong law.  

13.TERMINATION OF EMPLOYMENT
		
	13.1
	The Company may terminate your employment with thirty (30) days’ notice or payment in lieu under any circumstances allowable by law and the terms of this Contract or any subsequent amendments thereto.

		
	13.2
	Both Parties may terminate your employment by giving thirty (30) days’ prior written notice to the other Party.

		
	13.3
	In the event that your employment is terminated by the Company, save where such termination is for cause, the Company agrees to pay to you twelve (12) months of your monthly base salary as compensation (which shall be inclusive of any statutory severance 

and/or redundancy payment, long service payment and all termination payments to which you are or may be entitled under all applicable laws in connection with such termination).   
		
	13.4
	The Company may suspend your duties when you are subject to an investigation of any disciplinary or legal matter, in which case the Company will pay the appropriate compensation or living allowance in accordance with applicable laws and regulations. If the investigation reveals that you have committed any disciplinary or legal offence, the Company will be entitled to terminate your employment.

		
	13.5
	The Company reserves the right to require you to not attend work and/or to not undertake all or any of your duties at any time, including during any period of notice.

		
	13.6
	On or before the termination of your employment with the Company, you shall return to the Company all property and belongings of the Company, including such items as mobile phones, laptop computers, documents, files, credit cards or keys (as applicable).  You acknowledge and agree that the failure to do so shall entitle the Company to withhold payment of your final paycheck temporarily and/or any other payable item or to deduct an amount equivalent to the cost of such property from such payables.  

		
	13.7
	You will not represent yourself or cause or allow yourself to be represented as being in any way connected with the Company after the termination of your employment.

		
	13.8
	In the event that your employment with the Company terminates, you hereby consent to the notification to your new employer of your continuing rights and obligations under this Contract.  Further, you agree that you will provide your prospective employers with notice of your obligations to the Company.

14.LIABILITY FOR BREACH OF CONTRACT 
		
	14.1
	In addition to the liquidated damages provided under this Contract or other agreements between the Parties or as provided by applicable laws or regulations, a Party shall compensate for the other Party’s direct loss as a result of its breach of this Contract.

		
	15.
	GOVERNING LAW AND HANDLING OF LABOR DISPUTES 

		
	15.1
	This Contract shall be governed by Hong Kong law.

		
	15.2
	The Company and you agree that we will first endeavor to reach an amicable settlement of any labor dispute arising out of this Contract through mutual negotiations.  If the dispute is not resolved within thirty (30) days after the commencement of negotiations, either Party may submit the labor dispute for determination by the courts of Hong Kong.

16.MISCELLANEOUS PROVISIONS 
		
	16.1
	This Contract is executed in English language in two (2) originals.  Each Party will hold one (1) executed original.  

		
	16.2
	This Contract may be amended only by a written agreement signed by both Parties.

		
	16.3
	In the event that any term hereof conflicts with the rules and regulations of the Company, this Contract will prevail. Any matters that have not been addressed in this Contract will be handled in accordance with the rules and regulations of the Company.

		
	16.4
	If any provision of this Contract is determined to be invalid or unenforceable, in whole or in part, this determination will not affect any other provision of this Contract. 

		
	16.5
	Failure or delay on the part of any Party to exercise any right or privilege under this Contract shall not operate as a waiver of such right or privilege, nor shall any partial exercise of any right or privilege preclude any further exercise thereof.  Any waiver by a Party at any time of a breach of any term or provision of this Contract shall not be construed as a waiver by such Party of any subsequent breach, its rights in such provision, or any of its other rights hereunder.

		
	16.6
	Articles 7,8 and 10 shall survive the termination of this Contract.

		
	16.7
	The headings contained in this Contract are for reference only and shall not be deemed to be a part of this Contract or to affect the meaning or interpretation hereof.

		
	16.8
	Any exhibit referred to in this Contract shall be incorporated herein and made a part hereof.

		
	16.9
	This Contract supersedes any prior oral or written agreements between the Parties relating to your employment with the Company.

		
	16.10
	You represent and warrant that you have read and understood all provisions of this Contract and have had an opportunity to confer with anyone of your choosing regarding the contents of this Contract.

IN WITNESS WHEREOF, the Parties hereto have executed this Contract as of the date first above written.
[Xerium]
(Seal)
/s/ Michael Bly____________
Name: Michael Bly
Title: EVP of Global Human Resources
Date: 3/18/14
Employee:
/s/ Wern-Lirn Wang_______
Name: Paul Wern-Lirn Wang
Passport Number: 710714535
Date:

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