Document:

Employment Agreement with Douglas Milner.

 EXHIBIT 10.6 
  
 EMPLOYMENT AGREEMENT 
  
 AGREEMENT made and entered into in Westborough, Massachusetts, by and between Xerium Technologies, Inc. (the “Company”), a Delaware corporation
with its principal place of business at Westborough, Massachusetts, and J. Douglas Milner of Raleigh, North Carolina (the “Executive”), effective as of the 19th day of May, 2005 (the “Effective Date”). 
  
 WHEREAS, the Executive has been employed by the Company; and 
  
 WHEREAS, subject to the terms and conditions hereinafter set forth, the Company wishes to continue to employ the Executive, in the position of President,
Stowe Woodward Worldwide – Stowe Woodward LLC, and the Executive wishes to accept such continued employment; 
  
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, terms, provisions and conditions set forth in this Agreement, the
parties hereby agree: 
  
 1. Employment. Subject to the
terms and conditions set forth in this Agreement, the Company hereby offers and the Executive hereby accepts continuation of employment. 
  
 2. Term. The employment of the Executive by the Company hereunder shall be for the period commencing on the Effective Date and expiring on the date
of the termination of such employment in accordance with Section 5 hereof. For all purposes of this Agreement, references to (i) the “Termination Date” shall mean the date Executive’s employment hereunder shall terminate pursuant to
said Section 5, and (ii) references to the “term” of the Executive’s employment hereunder shall mean the period commencing on the Effective Date and ending on the Termination Date. Following the Termination Date, unless specifically
otherwise agreed between Executive and any applicable party, the Executive shall cease to hold any position (whether as an officer, director, manager, employee, trustee, fiduciary or otherwise) with the Company or any of its Subsidiaries or
Affiliates. 
  
 3. Capacity and Performance.

  
 (a) During the term of Executive’s
employment hereunder, the Executive shall serve the Company as its President, Stowe Woodward Worldwide – Stowe Woodward LLC. In addition, and without further compensation, the Executive shall serve as a director and/or officer of one or more of
the Company’s Subsidiaries if so elected or appointed from time to time. 
  
 (b) During the term of Executive’s employment hereunder, the Executive shall be employed by the Company on a full-time basis and shall perform such duties and responsibilities on behalf of the Company and its
Subsidiaries as may be designated from time to time by the Chief Executive Officer. 
  
 (c) During the term of Executive’s employment hereunder, the Executive shall devote his full business time to the advancement of the
business and interests of the Company and its Subsidiaries and to the discharge of his duties and responsibilities hereunder. The Executive shall not engage in any other business activity or serve in any 

 industry, trade, professional, governmental or academic position during the term of this Agreement,
except as may be expressly approved in advance by the Chief Executive Officer in writing. 
  
 4. Compensation and Benefits. During the term of Executive’s employment hereunder as compensation for all services performed by the Executive:

  
 (a) Base Salary. The Company shall pay
the Executive a base salary at the rate of three hundred fifty thousand dollars ($350,000) per year, payable in accordance with the payroll practices of the Company for its executives and subject to increase from time to time by the Board, in its
sole discretion. Such base salary, as from time to time increased, is hereafter referred to as the “Base Salary”. 
  
 (b) Senior Executive Annual Cash Bonus Plan. The Executive shall be entitled to participate in any and all annual cash bonus plans
(the “Annual Bonus Plans”) from time to time in effect for senior executives of the Company generally (it being understood that effective immediately prior to the Company’s initial public offering, the Company established a single
such plan called the “Senior Executive Annual Incentive Plan”). The terms of each Annual Bonus Plan and Executive’s participation therein shall be determined by the compensation committee of the Board of Directors of the Company (the
“Board”) (or, if there is no such committee, by the Board); provided, however, that the Executive shall be entitled to participate in such plans at a minimum participation rate of 75% of his Base Salary in effect on the final
day of the applicable fiscal year, with any awards thereunder payable only to the extent earned pursuant to the terms of the applicable Annual Bonus Plan and subject to adjustment in accordance with the terms of the applicable Annual Bonus Plan.
Notwithstanding the foregoing, no award under the Annual Bonus Plans may be granted if the compensation committee determines that in order for such award to qualify as performance-based for purposes of Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”), the Plan must be submitted to and approved, or resubmitted to and approved, by the stockholders of the Company in accordance with the requirements of Section 162(m) of the Code, unless such grant is made
contingent upon such approval. The compensation committee of the Board (or, if there is no such committee, the Board) may alter, modify, add to or delete any Annual Bonus Plan at any time as it, in its sole judgment, determines to be appropriate.

  
 (c) Other Incentive Plans. The
Executive shall be entitled to participate in any and all cash, equity, bonus and other incentive plans which are not Annual Bonus Plans (the “Long Term Plans”) from time to time in effect for senior executives of the Company generally (it
being understood that effective immediately prior to the Company’s initial public offering, the Company established a single such plan called the “2005 Equity Incentive Plan”). The terms of each Long Term Plan and Executive’s
participation therein shall be determined by the compensation committee of the Board (or, if there is no such committee, by the Board). The compensation committee of the Board (or, if there is no such committee, the Board) may alter, modify, add to
or delete any Long Term Plan at any time as it, in its sole judgment, determines to be appropriate. 
  

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 (d) Vacations. The Executive shall be entitled to an annual vacation of three (3)
weeks (subject to increase in accordance with the Company’s vacation policies from time to time in effect), with reasonable notice to the Chief Executive Officer and subject to the reasonable business needs of the Company. Vacation shall
otherwise be governed by the policies of the Company, as in effect from time to time. 
  
 (e) Other Benefits. Subject to any contribution therefor generally required of executives of the Company, the Executive shall be
entitled to participate in any and all employee benefit plans from time to time in effect for executives of the Company generally, except to the extent such plans are in a category of benefit specifically otherwise provided to the Executive under
this Agreement (e.g., severance pay). Such participation shall be subject to the terms of the applicable plan documents and generally applicable Company policies. The Board may alter, modify, add to or delete employee benefit plans at any
time as it, in its sole judgment, determines to be appropriate. 
  
 (f) Business Expenses. The Company shall pay or reimburse the Executive for all reasonable and necessary business expenses incurred or paid by the Executive in the performance of his duties and responsibilities
hereunder, subject to any maximum annual limit or other restrictions on such expenses set by the Board and to such reasonable substantiation and documentation as may be specified by the Company from time to time. 
  
 (g) Payments/Actions by Company. Wherever it is
provided in this Agreement that payment of any form of compensation or any other action shall by made by the Company, such payment or action may be made by any Subsidiary or Affiliate of the Company. 
  
 5. Termination of Employment. The Executive’s employment
hereunder shall terminate under the following circumstances: 
  
 (a) Death. In the event of the Executive’s death during the term of Executive’s employment hereunder, the Executive’s employment shall immediately and automatically terminate.  

 
 (b) Disability. The Company may terminate the
Executive’s employment hereunder, upon notice to the Executive, in the event that the Executive becomes disabled during his employment hereunder. For this purpose, disability means that the Executive (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 12 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 12 months, receiving income replacement benefits for a period of not less than 3 months under an
accident and health plan covering employees of the Company. If any question shall arise as to whether during any period the Executive is disabled within the meaning of this Section 5(b), the Executive, at the request of the Company, shall submit to
a medical examination by a physician selected by the Company to determine whether 
  

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 the Executive is so disabled and such determination shall for the purposes of this Agreement be
conclusive of the issue. If such question shall arise and the Executive shall fail to submit to such medical examination, the Company’s determination of the issue shall be binding on the Executive. 
  
 (c) By the Company for Cause. The Company may
terminate the Executive’s employment hereunder for Cause at any time upon notice to the Executive setting forth the nature of such Cause. The following shall constitute Cause for termination: (i) the Executive’s conviction of or plea of
nolo contendere to a felony or other crime involving moral turpitude; (ii) the Executive’s fraud, theft or embezzlement committed with respect to the Company or its Subsidiaries; (iii) material breach by the Executive of any of the
provisions of Sections 9, 10 or 11 hereof that causes demonstrable harm to the Company or any of its Subsidiaries; or (iv) the Executive’s willful and continued failure to perform his material duties to the Company and its Subsidiaries;
provided, however, that the Company may terminate Executive’s employment hereunder for “Cause” within the meaning of this clause (iv) only after the Company has provided written notice to the Executive of the failure and
the Executive shall have not have remedied such failure within 10 business days following the effectiveness of such notice.  
  
 (d) By the Company Other than for Cause. The Company may terminate the Executive’s employment hereunder other than for Cause
at any time upon notice to the Executive. 
  
 (e)
By the Executive Other Than For Good Reason. The Executive may terminate his employment hereunder other than for Good Reason (as defined in Section 5(f) below) at any time upon the provision of 60 days written notice to the Company. In the
event of termination of the Executive pursuant to this Section 5(e), the Board may elect to waive the period of notice or any portion thereof. 
  
 (f) By the Executive for Good Reason. The Executive may terminate his employment hereunder for Good Reason, upon written notice to
the Company setting forth in reasonable detail the nature of such Good Reason. The following shall constitute Good Reason for termination of his employment by the Executive: a requirement that the Executive relocate more than fifty (50) miles from
his current principal residence. 
  
 6. Compensation Upon
Termination. 
  
 (a) Death. In the
event of a termination of the Executive’s employment hereunder by reason of death as contemplated by Section 5(a), the Company shall pay in a lump sum within 30 days of such termination to the Executive’s designated beneficiary or, if no
beneficiary has been designated by the Executive, to his estate, the Base Salary earned but not paid through the Termination Date.  
  
 (b) Disability. In the event of any termination of Executive’s employment hereunder by reason of disability as contemplated by
Section 5(b), the Company shall pay to him his Base Salary earned but not paid through the Termination Date and, in addition, shall, subject to any employee contribution applicable to the Executive on the 
  

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 Termination Date, continue to contribute to the premium cost of the Executive’s participation in the
Company’s group medical and dental plans for eighteen (18) months (or such longer period as may be provided under the employee benefit plans of the Company), but only if the Executive does not have access at reasonable cost to substantially
equivalent benefits through another employer, and provided that the Executive is entitled to continue such participation under applicable law and plan terms. In the event that there is any limitation on the Company’s ability to provide, or any
disqualification of the Executive’s eligibility to receive (other than a disqualification under this Agreement resulting from Executive’s access at a reasonable cost to substantially equivalent benefits through another employer), such
group medical and/or dental plan benefits, the Company shall pay to the Executive a sum that is equivalent to what the Company would have continued to contribute to the premium cost of the Executive’s participation in the applicable medical
and/or dental plans for such 18-month period (or such longer period as may be provided under the employee benefit plans of the Company) if there had been no such limitation or disqualification. 
  
 (c) By the Company for Cause. In the event of any
termination of Executive’s employment hereunder by the Company for Cause as contemplated by Section 5(c), the Company shall have no further obligations to the Executive under this Agreement other than payment of Base Salary through the
Termination Date and except as specifically provided in Section 6(f). 
  
 (d) By the Company Other than for Cause or by the Executive for Good Reason. 
  
 (i) Not Close in Time to a Change of Control. In the event of any termination of Executive’s employment hereunder by the
Company pursuant to Section 5(d) or by the Executive pursuant to Section 5(f), which termination does not occur within three (3) months prior to or two (2) years following a Change of Control, the Company (i) shall continue to pay the Executive the
Base Salary at the rate in effect on the Termination Date for one (1) year, and (ii) subject to any employee contribution applicable to the Executive on the Termination Date, shall continue to contribute to the premium cost of the Executive’s
participation in the Company’s group medical and dental plans for one (1) year (or such longer period as may be provided under the employee benefit plans of the Company), but only if the Executive does not have access at reasonable cost to
substantially equivalent benefits through another employer, and provided that the Executive is entitled to continue such participation under applicable law and plan terms. In the event that there is any limitation on the Company’s ability to
provide, or any disqualification of the Executive’s eligibility to receive (other than a disqualification under this Agreement resulting from Executive’s access at a reasonable cost to substantially equivalent benefits through another
employer), such group medical and/or dental plan benefits, the Company shall pay to the Executive a sum that is equivalent to what the Company would have continued to contribute to the premium cost of the Executive’s participation in the
applicable medical and/or dental plans for such one-year period (or such longer period as may be provided under the employee benefit plans of the Company) if there had been no such limitation or disqualification. 
  
  

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 (ii) Close in Time to a Change of Control. In the event of any termination of
Executive’s employment hereunder by the Company pursuant to Section 5(d) or by the Executive pursuant to Section 5(f), which termination occurs within three (3) months prior to or two (2) years following a Change of Control, the Company (i)
shall continue to pay the Executive the Base Salary at the rate in effect on the Termination Date for eighteen (18) months, and (ii) subject to any employee contribution applicable to the Executive on the Termination Date, shall continue to
contribute to the premium cost of the Executive’s participation in the Company’s group medical and dental plans for eighteen (18) months (or such longer period as may be provided under the employee benefit plans of the Company), but only
if the Executive does not have access at reasonable cost to substantially equivalent benefits through another employer, and provided that the Executive is entitled to continue such participation under applicable law and plan terms. In the event that
there is any limitation on the Company’s ability to provide, or any disqualification of the Executive’s eligibility to receive (other than a disqualification under this Agreement resulting from Executive’s access at a reasonable cost
to substantially equivalent benefits through another employer), such group medical and/or dental plan benefits, the Company shall pay to the Executive a sum that is equivalent to what the Company would have continued to contribute to the premium
cost of the Executive’s participation in the applicable medical and/or dental plans for such 18-month period (or such longer period as may be provided under the employee benefit plans of the Company) if there had been no such limitation or
disqualification. 
  
 (iii) Conditions.
Any obligation of the Company to the Executive under Sections 6(b) and 6(d) hereof is conditioned upon (i) the Executive signing a release of claims in the form appended hereto as Attachment A (the “Employee Release”) within
twenty-one (21) days (or such greater period as the Company may specify) following the date notice of termination of employment is given hereunder and upon the Executive’s not revoking the Employee Release in a timely manner thereafter and (ii)
the Executive’s continued full performance of his continuing obligations hereunder, including those under Sections 9, 10 and 11 hereof. Base Salary to which the Executive is entitled under Sections 6(b) and 6(d) hereof shall be payable in
accordance with the normal payroll practices of the Company and will begin at the Company’s next regular payroll period which is at least five (5) business days following the effective date of the Employee Release, but shall be retroactive to
next business day following the Termination Date. 
  
 (iv) No reduction. The continued payments/contributions by the Company that are described in Sections 6(d)(i) and 6(d)(ii) hereof shall not be reduced by any income or other compensation received by Executive subsequent to the
termination of his employment. 
  

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 (e) By the Executive Other Than for Good Reason. If the Executive shall terminate
his employment pursuant to Section 5(e), the Company shall continue to pay Executive his Base Salary through the Termination Date (it being understood that if, in accordance with Section 5(e), the Board elects to waive the period of notice, or any
portion thereof, the payment of Base Salary under this Section 6(e) shall continue through the notice period or any portion thereof so waived). 
  
 (f) Delay in Payment Commencement on Account of Internal Revenue Code Section 409A. To the extent any payment hereunder shall be
required to be delayed until six months following separation from service to comply with the “specified employee” rules of Section 409A of the Code, it shall be so delayed (but not more than is required to comply with such rules). In this
regard, any payments that otherwise would have been made during such 6 month period shall be paid to the Executive in a lump sum on the first date on which they may be paid, together with interest credited at the short-term applicable federal rate,
compounded daily. 
  
 (g) Post-Termination
Obligations Generally. Except for (i) any right expressly set forth in this Section 6, (ii) any vested benefits under any employee benefit plan referred to in Section 4(e) which specifically is designed to provide benefits following termination
of employment (such as any such plan providing benefits upon disability or retirement) (but subject to all of the terms, if any, of each such other benefit plan as to how such vested benefits will be treated following termination of employment) and
(iii) any rights expressly set forth in any other written agreement to which Executive and any of the Company or any of its Subsidiaries or Affiliates shall become parties from time to time after the date hereof, none of the Company or any of its
Subsidiaries or Affiliates shall have any further obligations to the Executive, in connection with his employment or the termination thereof, following expiration of the term of the Executive’s employment hereunder. Satisfaction by the Company
and other applicable Persons of such rights and benefits shall constitute full settlement of any claim that the Executive may have on account of any termination of employment hereunder against the Company, any of its Subsidiaries or Affiliates and
all of their respective past and present officers, directors, stockholders, members, managers, partners, controlling Persons, employees, agents, representatives, successors and assigns and all other others connected with any of them, both
individually and in their official capacities. 
  
 7.
Limitation. 
  
 (a) In the event that it
is determined that any payment or benefit provided by the Company or any of its Subsidiaries to or for the benefit of the Executive, either under this Agreement or otherwise, and regardless of under what plan or arrangement it was made, would,
absent the application of this Section 7, be subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Code, or any successor provision (“Section 4999”), the Company will reduce such payments and/or benefits to
the extent, but only to the extent, necessary so that no portion of the remaining payments and/or benefits will be subject to the Excise Tax. The Company shall have discretion in determining which, if any, of several payments and/or benefits (if
more than one) are to be reduced. 
  

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 (b) Determinations as to the amount of any cutback required under this Section 7 will be
made by the Company’s tax accountant unless the Executive has reasonable objections to the use of that firm, in which case the determinations will be made by a comparable firm chosen jointly by the Company and the Executive (the firm making the
determinations to be referred to as the “Firm”). The determinations of the Firm will be binding upon the Company and the Executive except as the determinations are established in resolution (including by settlement) of a controversy with
the Internal Revenue Service to have been incorrect. All fees and expenses of the Firm will be paid by the Company. 
  
 8. Return by Executive of Certain Payments. If the Executive shall terminate his employment pursuant to Section 5(e) or shall terminate his
employment otherwise than in accordance with the terms of this Agreement, in either case prior to the completion of eighteen (18) months following the date of this Agreement, then he shall immediately forfeit and return to the Company: (i) the gross
amount of all loans to him that were forgiven in anticipation of the Company’s initial public offering in April 2004 and the tax gross-up payment with respect thereto; and (ii) the amount paid on or about April 14, 2005, in consideration of the
fact that the Executive will no longer participate in the Company’s previously existing cash management incentive compensation plans and in connection with the adoption of the Senior Executive Annual Incentive Plan. Failure by the Executive to
make due repayment of such amount within ten (10) days of the Company’s demand for same shall authorize the Company to commence a civil proceeding for the same, in which event the Executive shall be liable for all reasonable costs and
attorney’s fees incurred by the Company in connection herewith. 
  
 9. Restricted Activities. The Executive 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: 
  
 (a) While the Executive is
employed by the Company and for one (1) year after his employment terminates (in the aggregate, the “Non-Competition Period”), the Executive shall not, directly or indirectly, whether as owner, partner, investor, consultant, agent,
employee, co-venturer or otherwise, (i) compete with the Company anywhere throughout the world where, as of the Termination Date, the Company sells Products or conducts its business activities, has sold Products or has conducted such business
activities, or intends to sell Products or conduct such business activities, or (ii) undertake any planning for any business competitive with the Company or any of its Subsidiaries. Specifically, but without limiting the foregoing, the Executive
agrees not to engage in any manner in any activity that is directly or indirectly competitive or potentially competitive with the business of the Company or any of its Subsidiaries as conducted or under consideration at any time during the
Executive’s employment with the Company or any of its Subsidiaries (including prior to the date hereof). For the purposes of this Section 9, the Executive’s undertaking shall encompass all items, products and services that may be used in
substitution for Products. 
  
 (b) The Executive
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) The Executive further agrees that while he is employed by the Company and during the
Non-Competition Period, the Executive will not, directly or indirectly, (i) hire or attempt to hire any employee of the Company or any of its Subsidiaries or anyone who was such an employee within the six (6) months preceding such hire or attempt to
hire, (ii) hire or attempt to hire any independent contractor providing services to the Company or any of its Subsidiaries or anyone who was such an independent contractor within six (6) months preceding such hire or attempt to hire, (iii) assist in
hiring or any attempt to hire of 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 business or activity which such customer conducts or could conduct with the Company or any of its Subsidiaries. 
  
 10. Confidential Information. 
  
 (a) The Executive acknowledges that the Company and its Subsidiaries continually develop Confidential Information, that the Executive has
in the past and may in the future develop Confidential Information for the Company or its Subsidiaries and that the Executive has in the past and may in the future learn of Confidential Information during the course of employment. The Executive 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 the Executive incident to his employment or other association with the Company or any of its Subsidiaries. The Executive understands that this
restriction shall continue to apply after his employment terminates, regardless of the reason for such termination. 
  
 (b) All documents, records, 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 the Executive, shall be the sole and exclusive property of the Company and its Subsidiaries. The Executive 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 Executive’s possession or control.

  
 11. Assignment of Rights to Intellectual Property. The
Executive shall promptly and fully disclose all Intellectual Property to the Company. The Executive hereby assigns and agrees to assign to the Company (or as otherwise directed by the Company) the Executive’s full right, title and interest in
and to all Intellectual Property. The Executive agrees to execute any and all applications for domestic and foreign patents, copyrights or other proprietary rights and to do 
  

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 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. The Executive will not charge the
Company for time spent in complying with these obligations. All copyrightable works that the Executive creates shall be considered “work made for hire”. 
  
 12. Notification Requirement. Until the conclusion of the Non-Competition Period, the Executive shall give notice to
the Company of each new business activity that he plans to undertake at least thirty (30) days prior to beginning any such activity. Such notice shall state the name and address of the Person for whom such activity is undertaken and the nature of
the Executive’s business relationship(s) and position(s) with such Person. The Executive shall provide the Company with such other pertinent information concerning such business activity as the Company may reasonably request in order to
determine the Executive’s continued compliance with his obligations under Sections 9, 10 and 11 hereof. 
  
 13. Enforcement of Covenants. The Executive acknowledges that he has carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 9, 10 and 11 hereof. The Executive agrees that said restraints are necessary for the reasonable and proper protection of the Company and its Subsidiaries and that each and every one of
the restraints is reasonable in respect to subject matter, length of time and geographic area. The Executive further acknowledges that, were he to breach any of the covenants contained in Sections 9, 10 and 11 hereof, the damage to the Company would
be irreparable. The Executive therefore agrees that the Company, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunctive relief against any breach or threatened breach by the Executive of any of
said covenants, without having to post bond. The parties further agree that, in the event that any provision of Sections 9, 10 and 11 hereof shall be determined by any court of competent jurisdiction to be unenforceable by reason of its being
extended over too great a time, too large a geographic area or too great a range of activities, such provision shall be deemed to be modified to permit its enforcement to the maximum extent permitted by law. 
  
 14. Conflicting Agreements. The Executive hereby represents and
warrants that the execution of this Agreement and the performance of his obligations hereunder will not breach or be in conflict with any other agreement to which the Executive is a party or is bound and that the Executive is not now subject to any
covenants against competition or similar covenants or any court order or other legal obligation that would affect the performance of his obligations hereunder. The Executive will not disclose to or use on behalf of the Company any proprietary
information of a third party without such party’s consent. 
  
 15. IPO Matters. In connection with the initial public offering of the Company, the Executive will exchange his equity interests in Xerium, S.A. for securities of the Company. The Executive understands that, whereas the equity
interests in Xerium, S.A. were subject to substantial restrictions on disposition (including, in the case of options, a prohibition against selling any of the shares underlying such options for three years following the date of grant of the
applicable options, and, in the case of shares issued under the share purchase program, a prohibition against selling such shares for three years following their purchase), the securities of 
  

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 the Company to be held by the Executive following the initial public offering will not be subject to any restrictions on
disposition, other than restrictions arising under applicable law and restrictions contained in a “lock-up” agreement to be entered into by the Executive with the underwriters of the initial public offering (and the Executive agrees to
enter into such a lock-up agreement substantially in the form entered into by other executives of the Company, provided that the term of such lock-up agreement shall not restrict disposition of the securities of the Company held by the Executive for
more than 180 days following the consummation of the initial public offering, subject to customary extensions not to exceed 45 days). The Executive further understands that he will be entitled to receive proceeds from the initial public offering,
either as a direct seller in the offering or otherwise in exchange for a portion of the securities of the Company held by the Executive, as reflected in the prospectus relating to the initial public offering. Except as specifically provided in the
immediately preceding sentence, the Executive shall not participate as a seller in the initial public offering or otherwise receive any portion of the proceeds of such offering in respect of the securities of the Company held by the Executive.

  
 16. Definitions. Words or phrases which are initially
capitalized or are within quotation marks shall have the meanings provided in this Section 16 and as provided elsewhere herein. For purposes of this Agreement, the following definitions apply: 
  
 (a) “Affiliate” means, with respect to the Company
or any other specified Person, any other Person directly or indirectly controlling, controlled by or under common control with the Company or such other specified Person, where control may be by management authority, equity interest or other means.

  
 (b) “Change of Control” shall mean
any of the following which takes place after the consummation of the initial public offering of common stock of the Company (including as part of an income deposit security or other investment unit) registered under the Securities Act of 1933, as
amended: (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. 
  

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 (c) “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
Products, (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. 
  
 (d) “Continuing Director” means, with respect to any event referred to in the definition of
“Change of Control”, each individual who was a director of the Company immediately prior to the event in question and each individual whose election as a director by the Board or whose nomination for election by the stockholders of the
Company was approved by a vote of two-thirds of the directors then still in office who were directors immediately prior to such event or whose election or nomination was previously so approved. 
  
 (e) “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 the Executive (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 the Executive’s employment with the Company or any of its Subsidiaries (including prior to the
Effective Date) 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.
Notwithstanding the preceding, “Intellectual Property” shall not include any invention that the Executive has developed entirely on his own time without using the Company’s equipment, supplies, facility or trade secret information
except for those inventions that (i) relate to the Company’s business or actual or demonstrably anticipated research or development, or (ii) result from any work performed by the Executive for the Company. 
  
 (f) “Person” means an individual, a corporation, a
limited liability company, an association, a partnership, an estate, a trust and any other entity or organization. 
  

 -12- 

 (g) “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 the Executive’s employment
with the Company or any of its Subsidiaries (including prior to the Effective Date). 
  
 (h) “Subsidiary” shall mean any Person of which the Company (or other specified Person) shall, directly or indirectly, own
beneficially or control the voting of at least a majority of the outstanding capital stock (or other shares of beneficial interest) entitled to vote generally or at least a majority of the partnership, membership, joint venture or similar interests,
or in which the Company (or other specified Person) or a Subsidiary thereof shall be a general partner or joint venturer without limited liability. 
  
 17. Survival. The provisions of this Agreement shall survive following the Termination Date if so provided herein or desirable to accomplish the
purposes of other surviving provisions, including without limitation the provisions of Section 6, 7, 8, 9, 10 and 11. 
  
 18. Withholding. All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the
Company under applicable law. 
  
 19. Assignment. Neither
the Company nor the Executive may make any assignment of this Agreement or any interest herein, by operation of law or otherwise, without the prior written consent of the other; provided, however, that the Company may assign its rights and
obligations under this Agreement without the consent of the Executive in the event that the Company shall hereafter effect a reorganization, consolidation or merger or to whom the Company transfers all or substantially all of its properties or
assets. This Agreement shall inure to the benefit of and be binding upon the Company and the Executive, their respective successors, executors, administrators, heirs and permitted assigns. 
  
 20. Severability. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 
  
 21. Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving
party. The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be
deemed a waiver of any subsequent breach. 
  
 22. Notices.
Any and all notices, requests, demands and other communications provided for by this Agreement shall be in writing and shall be effective when delivered in person, when delivered by courier at the Executive’s last known address on the books of
the Company, or five business days following deposit in the United States mail, postage prepaid, 
  

 -13- 

 registered or certified, and addressed to the Executive at his last known address on the books of the Company or, in the
case of the Company, at its principal place of business, attention of the Chairman of the Board, or to such other address as either party may specify by notice to the other actually received. 
  
 23. Entire Agreement. This Agreement and the other plans and documents
specifically referred to herein constitute the entire agreement between the parties regarding the subject matter of this Agreement and such other plans and documents and supersede all prior communications, agreements and understandings, written or
oral, with respect to such subject matter. 
  
 24.
Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a expressly authorized representative of the Company. 
  
 25. Headings. The headings and captions in this Agreement are for convenience only and in no way define or describe
the scope or content of any provision of this Agreement. 
  
 26.
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 
  
 27. Governing Law. This is a Massachusetts contract and shall be construed and enforced under and be governed in all
respects by the laws of the Commonwealth of Massachusetts, without regard to the conflict of laws principles thereof. 
  
 [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.] 
  

 -14- 

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

					
	THE EXECUTIVE:	 	THE COMPANY
			
	 /s/ J. DOUGLAS MILNER

	 	By:	 	 /s/ MICHAEL P. O’DONNELL

	J. Douglas Milner	 	Name:	 	Michael P. O’Donnell
	 	 	Title:	 	 Executive Vice President and Chief
 Financial
Officer

  
  

 Attachment A 
  
 RELEASE OF CLAIMS 
  
 FOR AND IN CONSIDERATION OF the special payments and benefits to be provided
in connection with the termination of my employment in accordance with the terms of the Employment Agreement between me and Xerium Technologies, Inc., a Delaware corporation (the “Company”) dated as of May 19, 2005 (the “Employment
Agreement”), I, on my own behalf and on behalf of my personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees and all others connected with me, hereby release and forever discharge,
the Company, its Subsidiaries and Affiliates and all of their respective past and present officers, directors, stockholders, members, partners, managers, controlling persons, employees, agents, representatives, successors and assigns and all others
connected with any of them (all collectively, the “Released”), both individually and in their official capacities, from any and all rights, liabilities, claims, demands and causes of action of any type (all collectively “Claims”)
which I have had in the past, now have, or might now have, through the date of my signing of this Release of Claims, in any way resulting from, arising out of or connected with my employment or its termination or pursuant to any federal, state,
foreign or local employment law, regulation or other requirement (including without limitation Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, and the fair employment
practices laws of the state or states in which I have been employed pursuant to the Employment Agreement, each as amended from time to time); provided, however, that the foregoing release shall not apply to any right or benefit that Section 6 of the
Employment Agreement explicitly provides shall survive the termination of my employment. Capitalized terms used in this Release of Claims which are defined in the Employment Agreement are used herein with the meanings so defined. 
  
 In signing this Release of Claims, I acknowledge that I have had at least
twenty-one (21) days from the date of notice of termination of my employment to consider the terms of this Release of Claims and that such time has been sufficient; that I am encouraged by the Company to seek the advice of an attorney prior to
signing this Release of Claims; and that I am signing this Release of Claims voluntarily and with a full understanding of its terms. 
  
 I understand that I may revoke this Release of Claims at any time within seven (7) days of the date of my signing by written notice to the Company and
that this Release of Claims will take effect only upon the expiration of such seven-day revocation period and only if I have not timely revoked it. 
  
 Intending to be legally bound, I have signed this Release of Claims under seal as of the date written below. 
  

			
	 Signature:
	 	  

	 	 	 J. Douglas Milner

		
	 Date:2005 Equity Incentive Plan.

 EXHIBIT 10.7 
  
 XERIUM TECHNOLOGIES, INC. 
  
 2005 EQUITY INCENTIVE PLAN 
  

	1.	Purpose; Term. 

  
 This Xerium Technologies, Inc. 2005 Equity Incentive Plan (the “Plan”) provides for the grant of incentive awards consisting of or based on the
Common Stock of the Company. The purpose of the Plan is to attract and retain key employees, directors and consultants of the Company and its Affiliates, to provide an incentive for them to achieve performance goals, and to enable them to
participate in the growth of the Company by granting Awards with respect to the Company’s Common Stock. No Awards may be granted under the Plan after May 19, 2015, but Awards granted prior to that date may continue in accordance with their
terms. Certain capitalized terms used herein are defined in Section 3 below. 
  

	2.	Administration. 

  
 The Plan shall be administered by the Committee. Except to the extent action by the Committee is required under Section 162(m) of the Code in the case of
Awards intended to qualify for exemption thereunder, the Board may in any instance perform any of the functions of the Committee hereunder. The Committee shall select the Participants to receive Awards and shall determine the terms and conditions of
the Awards. The Committee shall have authority to adopt, alter and repeal such administrative rules, guidelines and practices governing the operation of the Plan as it shall from time to time consider advisable, and to interpret the provisions of
the Plan. The Committee’s decisions shall be final and binding. The Committee may delegate (i) to one or more of its members such of its duties, powers and responsibilities as it may determine; (ii) to one or more officers of the Company the
power to grant rights or options to the extent permitted by Section 157(c) of the Delaware General Corporation Law; (iii) to one or more officers of the Company the authority to allocate other Awards among such persons (other than officers of the
Company) eligible to receive Awards under the Plan as such delegated officer or officers determine consistent with such delegation; provided, that with respect to any delegation described in this clause (iii) the Committee (or a properly
delegated member or members of such Committee) shall have authorized the issuance of a specified number of shares of Stock under such Awards and shall have specified the consideration, if any, to be paid therefor; and (iv) to such employees or other
persons as it determines such ministerial tasks as it deems appropriate. In the event of any delegation described in the preceding sentence, references herein to the Committee shall include the person or persons so delegated to the extent of such
delegation. 
  

	3.	Certain Definitions. 

  
 “Affiliate” means any business entity in which the Company owns directly or indirectly 50% or more of the total voting power or has a
significant financial interest as determined by the Committee. 

 “Award” means any Option, SAR, Restricted Stock, Unrestricted Stock or Stock Unit Award granted
under the Plan. 
  
 “Board” means the Board of Directors
of the Company. 
  
 “Code” means the Internal Revenue
Code of 1986, as amended from time to time, or any successor law. 
  
 “Committee” means one or more committees each comprised of not less than two members of the Board appointed by the Board to administer the Plan or a specified portion thereof. Unless otherwise determined by the Board, if a
Committee is authorized to grant Awards to a Reporting Person or a Covered Employee, each member shall be a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act or an “outside director” within the
meaning of Section 162(m) of the Code, respectively. 
  
 “Common Stock” or “Stock” means the Common Stock, $0.01 par value, of the Company. 
  
 “Company” means Xerium Technologies, Inc., a Delaware corporation. 
  
 “Covered Employee” means a “covered employee” within the meaning of Section 162(m) of the Code.

  
 “Designated Beneficiary” means the beneficiary
designated by a Participant, in a manner determined by the Committee, to receive amounts due or exercise rights of the Participant in the event of the Participant’s death. In the absence of an effective designation by a Participant,
“Designated Beneficiary” means the Participant’s estate. 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, or any successor law. 
  
 “Fair Market Value” means, with respect to Common Stock or any other property, the fair market value of such property as determined by the
Committee in good faith or in the manner established by the Committee from time to time. 
  
 “Participant” means a person selected by the Committee to receive an Award under the Plan. 
  
 “Reporting Person” means a person subject to Section 16 of the Exchange Act. 
  

 -2- 

	4.	Eligibility. 

  
 All key employees, all directors and all consultants of the Company or of any Affiliate whom the Committee considers to be capable of contributing to the
successful performance of the Company are eligible to be Participants in the Plan. Incentive Stock Options may be granted only to employees of the Company or of any parent or subsidiary corporation of the Company, as those terms are used in Section
424 of the Code. 
  

	5.	Stock Available for Awards. 

  
 (a) Amount. Subject to adjustment under subsection (b), no more than 2,500,000 shares of Common Stock in the aggregate may be delivered
under or in satisfaction of Awards. The number of shares of Common Stock delivered under or in satisfaction of Awards shall, for purposes of the immediately preceding sentence, be determined net of shares of Common Stock withheld by the Company in
satisfaction of tax withholding requirements with respect to the Award. For the avoidance of doubt, the termination, cancellation or expiration of an Award or any portion thereof without the delivery of shares of Common Stock, or the satisfaction of
an Award or any portion thereof by the delivery of cash or other property other than shares of Common Stock, shall not be treated as the delivery of shares of Common Stock for purposes of this subsection (a). Common Stock issued under awards granted
by another company (“other company awards”) and assumed by the Company in connection with a merger, consolidation, stock purchase or similar transaction, or issued by the Company under awards substituted for other company awards in
connection with a merger, consolidation, stock purchase or similar transaction, shall not reduce the shares available for Awards under the Plan; provided, that the maximum number of shares that may be issued pursuant to ISOs (as defined
below) shall be determined in a manner consistent with Section 422 of the Code and the rules thereunder. Shares issued under the Plan may consist of authorized but unissued shares or treasury shares. 
  
 (b) Adjustment. In the event that the Committee determines that
any stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, exchange of shares or other transaction affects the Common Stock such that an adjustment is required or
appropriate to preserve the benefits intended to be provided by the Plan, then the Committee (subject in the case of ISOs, or in the case of Awards intended to qualify for exemption under Section 162(m) of the Code, to any limitation required under
the Code) shall make such adjustment as it determines to be equitable to any or all of (i) the number and kind of shares in respect of which Awards may be made under the Plan, (ii) the number and kind of shares subject to outstanding Awards and
(iii) the exercise price with respect to any of the foregoing; provided, that the number of shares subject to any Award shall always be a whole number. 
  

(c) Limit on Individual Grants. The maximum number of shares of Common Stock subject to Options and Stock Appreciation Rights that may be
granted to any Participant in the aggregate in any calendar year shall not exceed, in each case, 500,000, and the maximum number of shares of Common Stock that may be granted as Stock Awards pursuant to Section 8 to any Participant in the aggregate
in any calendar year shall not exceed 500,000, subject in each case to adjustment under subsection (b). 
  

 -3- 

	6.	Stock Options. 

  
 (a) Grant of Options. Subject to the provisions of the Plan, the Committee may grant both (i) options (“Options”) to purchase
shares of Common Stock that are intended to comply with the requirements of Section 422 of the Code and the rules thereunder (“ISOs”) and (ii) Options that are not intended to comply with such requirements (“NSOs”). The Committee
shall determine the number of shares subject to each Option and the exercise price therefor, which shall not be less than 100% of the Fair Market Value of the Common Stock on the date of grant. 
  
 (b) Terms and Conditions. Each Option shall be exercisable at
such times and subject to such terms and conditions as the Committee may specify in the applicable grant or thereafter. The Committee may impose such conditions with respect to the exercise of Options, including conditions relating to applicable
federal or state securities laws, as it considers necessary or advisable. 
  
 (c) Payment. No shares shall be delivered pursuant to any exercise of an Option until payment in full of the exercise price therefor is received by the Company. Such payment may be made in whole or in
part in cash or, to the extent legally permissible and permitted by the Committee at or after the grant of the Option, by delivery of a note or other commitment satisfactory to the Committee; shares of Common Stock that have been owned by the
optionee for at least six months (or such other period as the Committee may determine), valued at their Fair Market Value on the date of delivery; such other lawful consideration, including a payment commitment of a financial or brokerage
institution, as the Committee may determine; or any combination of the foregoing permitted forms of payment. 
  

	7.	Stock Appreciation Rights. 

  
 (a) Grant of SARs. Subject to the provisions of the Plan, on or after the date of an initial public offering of the Common Stock pursuant to
an effective registration statement under the Exchange Act, the Committee may grant rights to receive any excess in value of shares of Common Stock over the exercise price (“Stock Appreciation Rights” or “SARs”). The Committee
shall determine at the time of grant or thereafter whether SARs are settled in cash, Common Stock or other securities of the Company, Awards or other property, and may define the manner of determining the excess in value of the shares of Common
Stock. 
  
 (b) Exercise Price. The Committee shall
fix the exercise price of each SAR, which shall not be less than 100% of the Fair Market Value of the Common Stock at the date of grant. 
  

 -4- 

	8.	Stock Awards. 

  
 (a) Restricted or Unrestricted Stock Awards. The Committee may grant shares of Common Stock subject to forfeiture (“Restricted
Stock”) and determine the duration of the period (the “Restricted Period”) during which, and the conditions under which, the shares may be forfeited to the Company and the other terms and conditions of such Awards. Shares of
Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered, except as permitted by the Committee, during the Restricted Period. Shares of Restricted Stock shall be evidenced in such manner as the Committee may
determine. Any certificates issued in respect of shares of Restricted Stock shall be registered in the name of the Participant and unless otherwise determined by the Committee, deposited by the Participant, together with a stock power endorsed in
blank, with the Company. At the expiration of the Restricted Period, the Company shall deliver such certificates to the Participant or if the Participant has died, to the Participant’s Designated Beneficiary. The Committee also may make Awards
of shares of Common Stock that are not subject to restrictions or forfeiture, on such terms and conditions as the Committee may determine from time to time (“Unrestricted Stock”). Shares of Restricted Stock or Unrestricted Stock may be
issued for such consideration, if any, as the Committee may determine consistent with applicable law. 
  
 (b) Stock Unit Awards. The Committee may grant Awards (“Stock Unit Awards”) consisting of units representing shares of Common
Stock. Each Stock Unit Award shall represent the unfunded and unsecured commitment of the Company to deliver to the Participant at a specified future date or dates one or more shares of Common Stock (including, if so provided with respect to the
Award, shares of Restricted Stock), subject to the satisfaction of any vesting or other terms and conditions established with respect to the Award as the Committee may determine. No Participant or Designated Beneficiary holding a Stock Unit Award
shall be treated as a stockholder with respect to the shares of Common Stock subject to the Award unless and until such shares are actually delivered under the Award. Stock Unit Awards may not be sold, assigned, transferred, pledged or otherwise
encumbered except as permitted by the Committee. 
  
 (c)
Performance Goals. The Committee may establish performance goals on which the granting of Restricted Stock, Unrestricted Stock, or Stock Unit Awards, or the vesting of Restricted Stock or Stock Unit Awards, will be subject. Such
performance goals may be based on such corporate or other business criteria as the Committee may determine. The Committee shall determine whether any performance goals so established have been achieved, and if so to what extent, and its
determination shall be binding on all persons. 
  

	9.	General Provisions Applicable to Awards. 

  
 (a) Documentation. Each Award shall be evidenced by a writing delivered to the Participant or agreement executed by the Participant
specifying the terms and conditions thereof and containing such other terms and conditions not inconsistent with the provisions of the Plan as the Committee considers necessary or advisable to achieve the purposes of the Plan or to comply with
applicable tax and regulatory laws and accounting principles. 
  

 -5- 

 (b) Application of Code Section 409A. Notwithstanding anything in this Plan to the
contrary, any grant of an Award shall satisfy the requirements of Code §409A, to the extent applicable. 
  
 (c) Committee Discretion. Awards may be made alone or in combination with other Awards, including Awards of other types. The terms of
Awards of the same type need not be identical, and the Committee need not treat Participants uniformly (subject to the requirements of applicable law). Except as otherwise provided by the Plan or a particular Award, any determination with respect to
an Award may be made by the Committee at the time of grant or at any time thereafter. 
  
 (d) Dividends and Cash Awards. In the discretion of the Committee, any Award under the Plan may provide the Participant with (i) dividends or dividend equivalents payable (in cash or in the form
of Awards under the Plan) currently or deferred with or without interest and (ii) cash payments in lieu of or in addition to an Award. 
  
 (e) Termination of Service. Unless the Committee expressly provides otherwise, the following rules shall apply in connection with the
cessation of a Participant’s employment or other service relationship with the Company and its Affiliates. Immediately upon the cessation of the Participant’s employment or other service relationship with the Company and its Affiliates an
Award requiring exercise will cease to be exercisable and all Awards to the extent not already fully vested will be forfeited, except that: 
  
 (i) All Stock Options and SARs held by a Participant immediately prior to his or her death, to the extent then exercisable, will remain
exercisable by such Participant’s executor or administrator or the person or persons to whom the Stock Option or SAR is transferred by will or the applicable laws of descent and distribution, in each case for the lesser of (i) the one year
period ending with the first anniversary of the Participant’s death or (ii) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this subsection (e), and shall thereupon terminate;
and 
  
 (ii) all Stock Options and SARs held by
the Participant immediately prior to the cessation of the Participant’s employment or other service relationship for reasons other than death and except as provided in (iii) below, to the extent then exercisable, will remain exercisable for the
lesser of (1) a period of three months or (2) the period ending on the latest date on which such Stock Option or SAR could have been exercised without regard to this subsection (e), and shall thereupon terminate. 
  
 (iii) Unless the Committee expressly provides otherwise, a
Participant’s “employment or other service relationship with the Company and its Affiliates” will be deemed to have ceased, in the case of an employee Participant, upon termination of the Participant’s employment with the Company
and its Affiliates (whether or not the Participant continues in the service of the Company or its Affiliates in some capacity other than that of an employee of the Company or its Affiliates), and in the case of any 
  

 -6- 

 other Participant, when the service relationship in respect of which the Award was granted terminates
(whether or not the Participant continues in the service of the Company or its Affiliates in some other capacity). 
  
 (f) Change in Control. In the event of (i) a change of control of the Company (as defined by the Committee) or other consolidation,
merger, acquisition of shares or similar transaction or series of related transactions (whether or not constituting a change of control) in which the Company is not the surviving corporation or which results in the acquisition of all or
substantially all of the Company’s then outstanding common stock by a single person or entity or by a group of persons and/or entities acting in concert, or (ii) a sale or transfer of all or substantially all the Company’s assets, or (iii)
a dissolution or liquidation of the Company (any of (i), (ii) or (iii) being herein referred to as a “Covered Transaction”), the Committee in its discretion may, with respect to any Award, at the time the Award is made or at any time
thereafter, take one or more of the following actions: (A) provide for the acceleration of any time period relating to the exercise or payment of the Award, (B) provide for payment to the Participant of cash or other property with a Fair Market
Value equal to the amount that would have been received (net of any exercise price) upon the exercise or payment of the Award had the Award been exercised or paid immediately prior to the covered transaction, (C) adjust the terms of the Award in a
manner determined by the Committee to reflect the covered transaction, (D) cause the Award to be assumed, or new rights substituted therefor, by another entity, or (E) make such other provision as the Committee may consider equitable to Participants
and in the best interests of the Company; provided, that in the absence of any such action by the Committee or an expressly applicable provision in the Award document, immediately prior to the covered transaction (1) each Option and SAR shall
cease to be exercisable and shall terminate, (2) each Restricted Stock Award and Stock Unit Award shall terminate to the extent such Award is unvested, and (3) each Stock Unit Award, to the extent vested, shall be converted into the right to
receive, with respect to each unit (representing a share of Common Stock) subject to such Award, the same per-share consideration (or other cash or property, of equivalent Fair Market Value at the time of payment, as determined by the Committee or
its successor in connection with the payment or delivery of such cash or property) as would have been retained or received by a holder of one share of Common Stock in the covered transaction. The Committee may require that any amounts delivered,
exchanged or otherwise paid in respect of Restricted Stock or Stock Unit Awards in connection with a covered transaction be placed in escrow or otherwise made subject to such restrictions as the Committee deems appropriate to carry out the intent of
the Plan. 
  
 (g) Transferability. No Award may be
transferred other than by will or the laws of descent and distribution and may be exercised, during the life of the Participant, only by the Participant, except that, as to Awards other than ISOs, the Committee may permit certain transfers to the
Participant’s family members or to certain entities controlled by the Participant or his or her family members. 
  
 (h) Withholding Taxes. The Participant shall pay to the Company, or make provision satisfactory to the Committee for payment of, any
taxes or social insurance contributions required by law to be withheld in respect of Awards under the Plan no later than the date of the event creating the tax liability. The Company and its Affiliates may, to the extent permitted by 
  

 -7- 

 law, deduct any such tax (or social insurance) obligations from any payment of any kind due to the Participant hereunder
or otherwise. In the Committee’s discretion, the minimum tax (or social insurance) obligations required by law to be withheld in respect of Awards may be paid in whole or in part in shares of Common Stock, including shares retained from the
Award creating the obligation, valued at their Fair Market Value on the date of retention or delivery. 
  
 (i) Amendment of Award. The Committee may amend, modify, or terminate any outstanding Award, including substituting therefor another
Award of the same or a different type, changing the date of exercise or realization and converting an Incentive Stock Option to a Nonstatutory Stock Option. Any such action shall require the Participant’s consent unless the Committee determines
that the action, taking into account any related action, would not materially and adversely affect the Participant.  
  
 (j) Foreign Nationals. The Committee may take any action consistent with the terms of the Plan, either before or after an Award has
been granted, which the Committee deems necessary or advisable to comply with government laws or regulatory requirements of any foreign jurisdiction, including but not limited to modifying or amending the terms and conditions governing any Awards,
establishing sub-plans under the Plan, or adopting such procedures as the Committee may determine to be appropriate in response to differences in laws, rules, regulations or customs of such foreign jurisdictions with respect to tax, securities,
currency, employment, accounting or other matters. 
  

	10.	Miscellaneous. 

  
 (a) No Right To Employment. No person shall have any claim or right to be granted an Award. Neither the adoption, maintenance, nor
operation of the Plan nor any Award hereunder shall constitute a contract of employment or confer upon any employee, director or consultant of the Company or of any Affiliate any right with respect to the continuance of his/her employment by or
other service with the Company or any such Affiliate nor shall it or they be construed as affecting the rights of the Company (or Affiliate) to terminate the service of any person at any time or otherwise change the terms of such service, including,
without limitation, the right to promote, demote or otherwise re-assign any employee or other service provider from one position to another within the Company or any Affiliate. 
  
 (b) No Rights As Stockholder. Subject to the provisions of the applicable Award, no Participant or
Designated Beneficiary shall have any rights as a stockholder with respect to any shares of Common Stock to be issued under the Plan until he or she becomes the holder thereof. A Participant to whom Restricted Stock or Unrestricted Stock is awarded
shall be considered a stockholder of the Company at the time of the Award except as otherwise provided in the applicable Award. 
  
 (c) Effective Date. The Plan shall be effective on the date it is approved by the stockholders. 
  

 -8- 

 (d) Amendment of Plan. The Board may amend, suspend, or terminate the Plan or any
portion thereof at any time, subject to such stockholder approval as the Board determines to be necessary or advisable. Further, under all circumstances, the Committee may make non-substantive administrative changes to the Plan as to conform with or
take advantage of governmental requirements, statutes or regulations. 
  
 (e) Governing Law. The provisions of the Plan shall be governed by and interpreted in accordance with the laws of the State of Delaware. 
  

 -9-

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