Exhibit 10.17

 

EMPLOYMENT AGREEMENT

 

dated as of

 

November 1, 2008, between

 

AEP INDUSTRIES INC.,

 

a Delaware corporation (the “Company”), and

 

LINDA GUERRERA

 

(the “Executive”).

 

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EMPLOYMENT AGREEMENT

 

This Employment Agreement, dated November    , 2008 by and between AEP
INDUSTRIES, INC., a Delaware corporation having its offices at 125 Phillips
Avenue, South Hackensack, New Jersey 07606 (the “Company”), and LINDA GUERRERA
(the “Executive”), presently residing at 20 Powderhorn Drive, Wayne, New Jersey
07470, is entered into and shall be effective as of November 1, 2008 (the
“Effective Date”).

 

RECITALS

 

The Executive is an employee of the Company; and

 

The Company desires to continue to employ Executive upon the terms and
conditions set forth in this Agreement, and Executive desires to accept such
continuation of employment.

 

Accordingly, in consideration of the mutual promises contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and intending to be legally bound hereby, the parties hereto agree
as follows:

 

Section 1.               Employment; Term.

 

(a)           Employment. Subject to Section 3, commencing as of the Effective
Date, the Company hereby agrees to continue to employ Executive, and Executive
hereby agrees to continue to be employed by the Company, in accordance with the
terms and provisions of this Agreement.

 

(b)           Term. The initial term of this Agreement shall be a period of one
(1) year (the “Initial Term”). Thereafter this Agreement shall be extended for
successive periods of one (1) year each from the Effective Date (each an
“Extended Term” and together with the Initial Term the “Term”) unless either
party gives written notice to the other at least one hundred (180) days before
the expiration of the Initial Term or the then current Extended Term that it
does not wish to extend this Agreement beyond the last day of the current Term.

 

Section 2.               Terms of Employment.

 

(a)           Position. During the term of Executive’s employment, Executive
shall serve in the position set forth on the signature page hereto and shall
report to the person or persons set forth on the Executive Data Sheet annexed
hereto as Exhibit A. Executive shall have supervision and control over, and
responsibility for, such management and operational functions of the Company
currently assigned to such position, and shall have such other powers and duties
(including holding officer positions with the Company and one or more
subsidiaries of the Company) as may from time to time be prescribed by the
person or persons to whom Executive will report, so long as such powers and
duties are reasonable and customary for such position of an enterprise
comparable to the Company. The primary person(s) that Executive reports to shall
be such person(s) as set forth under the label “Reports to” on the Executive
Data Sheet annexed hereto as Exhibit A.

 

(b)           Duties. During the term of Executive’s employment, and excluding
any periods of vacation and sick leave to which Executive is entitled, Executive
agrees to devote substantially all of his business time to the business and
affairs of the Company and, to the extent necessary to discharge the
responsibilities assigned to Executive hereunder, to use Executive’s reasonable
best

 

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efforts to perform faithfully, effectively and efficiently such
responsibilities. During the term of Executive’s employment, it shall not be a
violation of this Agreement for Executive to (1) serve on corporate, civic or
charitable boards or committees, (2) deliver lectures or fulfill speaking
engagements, and (3) manage personal investments, so long as such activities do
not interfere with the performance of Executive’s responsibilities as an
employee of the Company in accordance with this Agreement.

 

(c)           Compensation.

 

(i)             Base Salary. During the term of Executive’s employment,
Executive shall receive an annual base salary (the “Annual Base Salary”), which
shall be paid in accordance with the customary payroll practices of the Company,
at least equal to the base salary set forth on the Executive Data Sheet annexed
hereto as Exhibit A. Commencing on November 1, 2008 (the “First Date”), and on
each subsequent anniversary date of the First Date as long as Executive remains
an employee of the Company (the First Date and each subsequent anniversary of
the First Date being herein referred to as an “Adjustment Date”), the Annual
Base Salary of Executive in effect on the day preceding the Adjustment Date
shall be increased by (A) the percentage equal to the percentage increase, if
any, in the Consumer Price Index for all Urban Consumers for the New
York-Northeastern New Jersey Metropolitan Area (or any successor Consumer Price
Index) based on data published by the Bureau of Labor Statistics of the United
States Department of Labor for the 12-month period ended on the
September 30th immediately preceding the Adjustment Date over such Consumer
Price Index for September 30, in the year preceding the Adjustment Date, and
(B) such additional amount as the Board of Directors of the Company (the
“Board”) in its discretion may determine to be appropriate. The result of such
increase or increases to the then current Annual Base Salary shall constitute
Executive’s Annual Base Salary commencing on the Adjustment Date then at hand
and continuing until the next Adjustment Date. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to Executive
under this Agreement. After an Adjustment Date the term Annual Base Salary as
used in this Agreement shall refer to Annual Base Salary as so increased.

 

(ii)            Bonuses. In addition to his Base Salary, Executive shall be paid
an annual bonus (the “Bonus”) during the term of his employment pursuant to the
Company’s Management Incentive Plan or any successor thereto (the “MIP”). The
Bonus shall be based upon performance criteria and objectives determined by the
Compensation Committee of the Board in its reasonable discretion and approved by
the Board. All Bonuses shall become payable on a date reasonably determined by
the Company after the Company finally determines with respect to Executive that
the Company has achieved the applicable performance criteria and objectives
under the MIP, and the amount of the Bonus shall be paid to Executive promptly
thereafter.

 

(iii)           Benefits. The Company shall provide Executive during the term of
his employment hereunder with coverage under all employee pension and
compensation programs, plans and practices (commensurate with his positions in
the Company and to the extent permitted under any employee benefit plan) in
accordance with the terms thereof, which the Company makes available to its
senior executives. During the term of Executive’s employment, Executive shall be
entitled to receive, in addition to the benefits described above, such
perquisites and fringe benefits appertaining to his position in accordance with
any practice existing at the Company prior to the Effective Date or as
subsequently changed by the Board, which perquisites and fringe benefits will be
consistent with past practice. The Executive shall also be entitled to an
additional perquisite allowance each year in an amount from time to time
determined by the Company’s Compensation Committee in order to cover expenses
not covered by the Company’s

 

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business expense reimbursement policy.

 

(iv)            Expenses. During the term of Executive’s employment, Executive
shall be entitled to receive reimbursement for all reasonable employment
expenses incurred by Executive in accordance with the policies, practices and
procedures of the Company, including, without limitation, expenses for travel
and similar items related to such duties and responsibilities. The Company will
reimburse Executive for all such expenses upon presentation by Executive from
time to time of appropriately itemized and approved (consistent with the
Company’s policy) accounts of such expenditures.

 

(v)             Vacation: During the term of Executive’s employment, Executive
shall be entitled to such number of days of paid vacation as set forth under the
label “Vacation Days” on the Executive Data Sheet annexed hereto as Exhibit A,
to be taken in accordance with the existing policies of the Company and past
practice. Any paid vacation shall be taken at such times as are consistent with
Executive’s responsibilities hereunder. Unless otherwise approved by the
Company, any vacation days not taken in any calendar year shall be forfeited
without payment thereof as permitted by applicable law. No such vacation days
shall be forfeited to the extent that such vacation days are not taken at the
request of the Company.

 

(vi)            Stock Options etc. In addition to any benefits Executive may
receive hereunder, the Company may, from time to time, grant Executive stock
options exercisable for shares of common stock of the Company or restricted
stock, stock appreciation rights or performance awards under the Company’s then
current Stock Option Plan (the “Executive Options”), and such Executive Options
shall be of such kind, in such number and have such terms and provisions as may
be determined appropriate by the Board or Stock Option Committee thereof.

 

(vii)           Witholding. The Company shall be entitled to withhold from
payment any amount of withholding required by law as the Company may reasonably
determine.

 

(d)           Director’s and Officer’s Liability Insurance. The Company shall
use all commercially reasonably efforts to obtain and maintain a director’s and
officer’s liability insurance policy during the term of Executive’s employment
covering Executive on commercially reasonable terms, and the amount of coverage
shall be reasonable in relation to Executive’s position and responsibilities
hereunder; provided, however, that such coverage may be reduced or eliminated to
the extent that the Company reduces or eliminates coverage for its directors and
executives generally.

 

Section 3.               Termination of Employment.

 

(a)           Death or Disability. Executive’s employment shall terminate
automatically upon Executive’s death. If Executive becomes Disabled during the
Employment Period (pursuant to the definition of Disability set forth below),
the Company may give to Executive written notice in accordance with
Section 10(g) of its intention to terminate Executive’s employment on the date
specified in such notice. In such event, Executive’s employment with the Company
shall terminate effective on such specified date, which date shall be at least
on thirty (30) days after receipt of such notice by Executive (the “Disability
Effective Date”), prior to the Disability Effective Date, Executive shall not
have returned to full-time performance of Executive’s duties. For purposes of
this Agreement, “Disability” means, with respect to Executive, Executive’s
inability to perform the duties and obligations required by Executive’s job by
reason of any medically determined physical or mental impairment, as determined
in accordance with the

 

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provisions of the long term disability coverage under the AEP Industries Inc.
Long Term Disability Plan (the “AEP Disability Plan”), if Executive has elected
coverage thereunder, provided, however, that if Executive has not elected long
term disability coverage under the AEP Disability Plan, then “Disability” shall
mean, with respect to Executive, any medically determined physical or mental
impairment by the Compensation Committee of the Company or its insurers and
acceptable to Executive or Executive’s legal representative that prevents
Executive from performing the duties and obligations required by Executive’s job
for more than ninety (90) days during a period of one hundred and eight (180)
consecutive days.

 

(b)           Cause. Executive’s employment may be terminated at any time by the
Company for Cause or without Cause. For purposes of this Agreement, “Cause”
shall mean an Executive’s (i) commission of a crime of moral turpitude or a
felony that involves financial misconduct or moral turpitude or has resulted, or
reasonably could be expected to result, in any adverse publicity regarding
Executive or the Company or economic injury to the Company, (ii) dishonesty or
willful commission or omission of any action that has resulted, or reasonably
could be expected to result, in any adverse publicity regarding Executive or the
Company or has caused, or reasonably could be expected to cause, demonstrable
and serious economic injury to the Company, or (iii) material breach of this
Agreement or any other agreement entered into between Executive and the Company
or any of its subsidiaries or Affiliates (other than as a result of the
Disability of Executive or other factors outside of Executive’s control) after
notice and a reasonable opportunity to cure (if such breach can be cured). For
purposes of this Agreement, “without Cause” shall mean a termination by the
Company of Executive’s employment during the Employment Period for any reason
other than a termination based upon Cause, death or Disability. For purposes
hereof, no act or omission shall be considered willful unless committed in bad
faith or without a reasonable belief that the act or omission was in the best
interests of the Company or any of its Affiliates. For purposes of this
Agreement, “Affiliate” of the Company means a Person (as defined below) that
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Company. As used in this
definition, the term “control,” including the correlative terms “controlling,”
“controlled by” and “under common control with” mean the possession, directly or
indirectly, of the power to direct or cause the direction of management or
policies (whether through ownership of securities or any partnership or other
ownership interest, by contract or otherwise) of a Person. For purposes of this
Agreement, “Person” shall be construed broadly and shall include, without
limitation, an individual, a partnership, a limited liability company, a
corporation, an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.

 

(c)           Good Reason. Executive’s employment may be terminated at any time
by Executive for Good Reason or without Good Reason. For purposes of this
Agreement, “Good Reason” means voluntary resignation after any of the following
actions are taken by the Company or any of its subsidiaries without Executive’s
consent: (a) any material breach by the Company of any provision of this
Agreement; (b) a significant diminution in the responsibilities or authority of
Executive which are materially inconsistent with Executive’s position other than
(1) an insubstantial and inadvertent diminution that is remedied by the Company
promptly after receipt of written notice thereof sent by Executive, (2) in
connection with the termination of Executive’s employment for Cause, (3) as a
result of Executive’s Disability, or (4) by Executive other than for Good
Reason; (c) a significant diminution in the Annual Base Salary and Bonus to be
paid to Executive (but not including any diminution related to a broader
compensation reduction that is not limited to any particular employee or
executive); provided, however, that none of the events described in the
foregoing clauses (a), (b) or (c) shall constitute Good Reason unless Executive
shall have notified the Company in writing describing the events which

 

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constitute Good Reason and then only if the Company shall have failed to cure
such events within (x) in the case of clause (a), fifteen (15) days, or (y) in
the case of clauses (b) or (c), thirty (30) days, after the Company’s receipt of
such written notice.

 

(d)             Notice of Termination. Any termination by the Company for Cause
or without Cause, or by Executive for Good Reason or without Good Reason, shall
be communicated by Notice of Termination to the other party hereto given in
accordance with Section 11(g). For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) to the extent applicable, sets
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Executive’s employment under the provision so
indicated, and (iii) if the Date of Termination (as defined below) is other than
the date of receipt of such notice, specifies the termination date (which date
shall not be more than five (5) days after the giving of such notice). The
failure by Executive or the Company to set forth in the Notice of Termination
any fact or circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or preclude
Executive or the Company from asserting such fact or circumstance in enforcing
Executive’s or the Company’s rights hereunder.

 

(e)             Date of Termination. “Date of Termination” means (i) if
Executive’s employment is terminated by the Company for Cause or without Cause,
or by Executive for Good Reason or without Good Reason, the date of receipt of
the Notice of Termination or any later date specified therein pursuant to
Section 3(d), as the case may be, and (ii) if Executive’s employment is
terminated by reason of death or Disability, the date of death of Executive or
the Disability Effective Date, as the case may be.

 

Section 4.               Obligations of the Company upon Termination.

 

(a)             With Good Reason; Other Than for Cause, Death or Disability. If,
during the period commencing with the Effective Date and ending with the
termination of Executive’s employment (the “Employment Period”), (1) the Company
shall terminate Executive’s employment other than for Cause, or (2) Executive
shall terminate his employment for Good Reason or within thirty (30) days
subsequent to a Discontinuation Event, and (3) the termination of Executive’s
employment in any case is not due to his death or Disability, then the Company
will provide Executive with the following severance payments and/or benefits:

 

(i)              The Company shall pay, subject to Section 8, to Executive as a
severance payment an amount equal to two (2) times the sum of (x) the Annual
Base Salary in effect immediately prior to the event giving rise to such
termination and (y) the Bonus earned, if any, for the fiscal year immediately
preceding the fiscal year in which the event giving rise to such termination
occurs. The severance payment shall be payable over a period of two (2) years
commencing on the Termination Date (subject to applicable federal and state
withholding taxes, social security contributions, any garnishments, or any
deductions required by law and any other deductions) in accordance with the
ordinary payroll practices of the Company, but no less frequently than
semi-monthly following such termination of employment. In addition, the Company
shall pay to Executive (A) any earned but unpaid Bonus of Executive with respect
to the fiscal year preceding this termination, (B) any earned but unpaid Bonus
of Executive with respect to the fiscal year in which his termination occurs,
multiplied by a fraction, (x) the numerator of which is the number of days
during such fiscal year that Executive was employed by the Company, and (y) the
denominator of which is three hundred and sixty-five (365), and (C) amounts with
respect to accrued and unused vacation through the Date of Termination to the
extent not theretofore paid (“Accrued Obligations”); [Q: change re: termination
by the Company

 

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without Cause, e.g. downsize]

 

(ii)             Solely for purposes of this Section 4(a), the following defined
terms shall have the following meanings:

 

“Discontinuation Event” shall have occurred if the conditions set forth in any
one of the following paragraphs shall have been satisfied:

 

(A)    Any person, corporation or other entity or group, including any “group”
as defined in Section 13(d)(3) of the Exchange Act of 1934, as amended, other
than (1) those persons in control of the Company on the Effective Date, (2) any
person acting on behalf of the Company in a distribution of stock to the public,
or (3) a trustee or other fiduciary holding securities of the Company under an
employee benefit plan of the Company, becomes the beneficial owner of shares of
the Company having fifty (50%) percent or more of the total number of votes that
may be cast for the election of directors of the Company; or

 

(B)    As the result of, or in connection with, any tender or exchange offer,
merger or other business combination, sale of assets or contested election, or
any combination of the foregoing (a “Transaction”), the persons who were
directors of the Company before the Transaction shall cease to constitute a
majority of the Board of Directors of the Company or any successor to the
Company or its assets; or

 

(C)    If at any time, (1) the Company shall consolidate with, or merge with,
any other Person and the Company shall not be the continuing or surviving
corporation, (2) any Person shall consolidate with, or merge with, the Company,
and the Company shall be the continuing or surviving corporation and in
connection therewith, all or part of the outstanding Stock shall be changed into
or exchanged for stock or other securities of any other Person or cash or any
other property, (3) the Company shall be a party to a statutory share exchange
with any other Person after which the Company is a Subsidiary of any other
Person, or (4) the Company shall sell or otherwise transfer 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any Person or Persons;

 

“Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act of 1934, as amended, and used in Sections 13(d) and 14(d) thereof,
including a “group” as defined in Section 13(d); and

 

“Subsdiary” shall mean, a subsidiary of the Company within the meaning
Section 424(f) of Internal Revenue Code, as amended. .

 

(iii)            After the Date of Termination, Executive (and Executive’s
eligible family members) will be entitled to continue their participation in the
Company’s medical and dental insurance plans at normal associate contribution
rates during the period ending on the earlier of (A) the last day of the
Severance Period and (B) the first date as of which the Company ceases to be
obligated to make such plans available to Executive under COBRA (the “COBRA
Termination Date”). In the event that the date specified in clause (A) is the
earlier date, Executive (and Executive’s eligible family members) shall be
entitled to continue their participation in the Company’s medical and dental
insurance plans during the period from such date until the COBRA Termination
Date by paying the full monthly premiums under these plans.

 

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Except in the case of a termination by reason of Executive’s death or
Disability, the Company’s obligations to make payments under this
Section 4(a) will be conditioned on Executive executing and delivering a
customary general release reasonably satisfactory to the parties.

 

(b)             Death; Disability; Cause; Other than for Good Reason. If
Executive’s employment shall be terminated by reason of Executive’s death or
Disability, by the Company for Cause or by Executive without Good Reason,
Executive shall only be entitled to receive (i) any earned but unpaid Annual
Base Salary through the date of the termination event, (ii) any earned but
unpaid Bonus of Executive with respect to the fiscal year preceding his
termination, (iii) if other than Cause, any earned but unpaid Bonus of Executive
with respect to the fiscal year in which his termination occurs, multiplied by a
fraction, (x) the numerator of which is the number of days during such current
fiscal year that Executive was employed by the Company, and (y) the denominator
of which is three hundred and sixty-five (365), (iv) payment of Accrued
Obligations to Executive or his legal representatives in the case of the death
or, if applicable, the Disability of Executive, and (v) the continuance of
benefits under the Company’s employee benefit plans to the Date of Termination
and in the case of death or Disability, the continuance of death or Disability
benefits thereafter in accordance with the terms of such plans and the Company’s
perquisite policies as in effect as of such date. [Company Policy must be
written.]

 

(c)             Company Obligations After Termination. After the termination of
Executive’s employment under Section 4(b) and payment of all amounts due and
provision of all benefits due to Executive pursuant to Section 4(b), the
obligations of the Company under this Agreement to make any further payments or
provide any benefits specified elsewhere in this Agreement (other than benefits
required to be provided by applicable law or under the terms of any employee
benefit of the Company in which the Executive was a participant), shall
thereupon cease and terminate.

 

(d)             Nature of Payments. Notwithstanding anything contained in this
Section 4, all payments under this Section 4 shall be deemed severance payments
for the purpose of Section 8 and may be terminated as therein provided.

 

(e)             Executive’s Obligations after Termination. Executive agrees that
at any time after the Date of Termination he will cooperate with the Company in
any litigation brought by or against the Company at no additional compensation.
Executive shall, however, be entitled to be reimbursed by the Company for his
reasonable costs and expenses in connection with such cooperation.

 

Section 5.               Nondisclosure and Nonuse of Confidential Information.

 

(a)             Executive shall not disclose or use at any time, either during
the Employment Period or thereafter, any Confidential Information (as
hereinafter defined) of which Executive is or becomes aware, whether or not such
information is developed by him, except (i) to the extent that such disclosure
or use is directly related to, and required by, Executive’s performance in good
faith of duties assigned to Executive by the Company or (ii) when required to do
so by a court of competent jurisdiction, by any governmental agency having
supervisory authority over the business of the Company, or by any administrative
body or legislative body (including a committee thereof) with jurisdiction to
order Executive to divulge, disclose or make accessible such information,
provided that Executive shall notify the Company promptly upon learning that
such event may occur, and, if the Company shall so request, Executive shall use
his reasonable best efforts (without any additional consideration to be paid to
Executive) to assist the Company in

 

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seeking a protective order to prevent and/or limit disclosure of such
Confidential Information. Executive will take all appropriate steps to safeguard
Confidential Information in his possession and to protect it against disclosure,
misuse, espionage, loss and theft. Executive shall deliver to the Company at the
termination of the Employment Period, and at any time, either before or after
the Termination Date, as the Company may request, all memoranda, notes, plans,
records, reports, computer tapes and software and other documents and data (and
copies thereof) relating to the Confidential Information or the Work Product (as
hereinafter defined) of the business of the Company or any of its Affiliates
which Executive may then possess or have under his control.

 

(b)             As used in this Agreement, the term “Confidential Information”
means information that is not generally known to the public in the context in
which used and that is used, developed or obtained by Executive in the course of
performing his duties for the Company, including, but not limited to,
information, observations and data obtained by Executive while employed by the
Company or any predecessors thereof (including those obtained prior to the date
of this Agreement) concerning (i) the business or affairs of the Company and its
Affiliates (or such predecessors), including without limitation, financial data,
marketing plans, strategic business plans, product development plans (or other
product data), (ii) products or services, (iii) fees, costs and pricing
structures, (iv) designs, (v) analyses, (vi) drawings, photographs and reports,
(vii) computer software, including operating systems, applications and program
listings, (viii) flow charts, manuals and documentation, (ix) data bases,
(x) accounting and business methods, (xi) inventions, devices, new developments,
methods and processes, whether patentable or unpatentable and whether or not
reduced to practice, (xii) customers and clients and customer or client lists,
(xiii) other copyrightable works, (xiv) all production methods, processes,
technology, know how and trade secrets, and (xv) all similar and related
information in whatever form. Confidential Information will not include any
information in the context in which used that has been published in a form
generally available to the public prior to the date Executive proposes to
disclose or use such information. Confidential Information will not be deemed to
have been published merely because individual portions of the information have
been separately published, but only if all material features comprising such
information have been published in combination.

 

(c)             As used in this Agreement, the term “Work Product” means all
inventions, innovations, improvements, technical information, systems, software
developments, methods, designs, analyses, drawings, reports, service marks,
trademarks, trade names, logos and all similar or related information (whether
patentable or unpatentable) which relates to the Company’s or any of its
Affiliates’ actual or anticipated business, research and development or existing
or future products or services and which are conceived, developed or made by
Executive (whether or not during usual business hours and whether or not alone
or in conjunction with any other person) while employed (and for the Restricted
Period (as defined below) if and to the extent such Work Product results from
any work performed for the Company, any use of the Company’s premises or
property or any use of the Company’s Confidential Information) by the Company
(including those conceived, developed or made prior to the date of this
Agreement) together with all patent applications, letters patent, trademark,
trade name and service mark applications or registrations, copyrights and
reissues thereof that may be granted for or upon any of the foregoing.

 

Section 6.               Non-Solicitation: Non-Compete.

 

(a)             During the period commencing on the Effective Date and ending on
the latter of (x) second anniversary of the Termination Date or (y) the first
anniversary of the date on which Executive ceases to receive any payments from
the Company or any of its Affiliates related to salary, bonus or severance (the
“Restricted Period”), Executive shall not directly or indirectly through another
Person (i) induce or attempt to induce anyone who was engaged or employed by

 

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the Company or any Affiliate of the Company to leave the employ or engagement of
the Company or such Affiliate, or in any way interfere with the relationship
between the Company or any such Affiliate, on the one hand, and any such person
thereof, on the other hand, (ii) hire any person who was engaged or employed by
the Company or any Affiliate of the Company at any time until twenty-four (24)
months after such individual’s employment relationship or engagement with the
Company or such Affiliate has been terminated, or (iii) induce or attempt to
induce any customer, supplier, licensee or other business relation of the
Company or any Affiliate of the Company to cease doing business with the Company
or such Affiliate, or in any way interfere with the relationship between any
such customer, supplier, licensee or business relation, on the one hand, and the
Company or any Affiliate, on the other hand. Executive further agrees that,
during the period of his employment and thereafter during the restricted period,
Executive will not disparage the Company or any of its Affiliates or any of
employee of the Company or its Affiliates in any manner whatsoever

 

(b)             Executive acknowledges that in the course of his employment with
the Company and/or its Affiliates and their predecessors, he has become
familiar, or will become familiar, with the Company’s and its Affiliates’ and
their predecessors’ trade secrets and with other Confidential Information
concerning the Company, its subsidiaries or Affiliates and their respective
predecessors and that his services have been and will be of special, unique and
extraordinary value to the Company, its subsidiaries and its Affiliates.
Therefore, Executive agrees that, during the Restricted Period, Executive shall
not directly or indirectly, engage in the production, sale or distribution of
any product produced, sold or distributed by the Company, its subsidiaries or
its or Affiliates on the Effective Date or during the Restricted Period in the
same geographic areas in which the Company, its subsidiaries or any of its
Affiliates is doing business. For purposes of this Agreement, the phrase
“directly or indirectly engage in” shall include any direct or indirect
ownership or profit participation interest in such enterprise, whether as an
owner, stockholder, partner, principal, manager, agent, consultant, officer,
investor, lender, joint venturer of or otherwise in any capacity whatsoever, and
shall include any direct or indirect participation in such enterprise as an
employee, consultant, licensor of technology or otherwise. Nothing herein shall
prohibit Executive from being a passive owner of not more than two (2%) percent
of the outstanding stock or ownership interest of any class of a corporation or
other entity which is publicly traded, so long as Executive has no active
participation in the business or management of such corporation or other entity.

 

(c)             Executive understands that the foregoing restrictions may limit
his ability to earn a livelihood in a business similar to the business of the
Company and any of its subsidiaries and Affiliates, but he nevertheless believes
that he has received and will receive sufficient consideration and other
benefits as an employee of the Company and as otherwise provided hereunder or as
described in the recitals hereto to clearly justify such restrictions which, in
any event (that given his education, skills and ability), Executive does not
believe would prevent him from otherwise earning a living. Executive has
carefully considered the nature and extent of the restrictions placed upon him
by this Agreement, and hereby acknowledges and agrees that the same are
reasonable in time and territory and do not confer a benefit upon the Company
disproportionate to the detriment of Executive.

 

Section 7.               Enforcement.

 

Because Executive’s services are unique and because Executive has access to
Confidential Information and Work Product, and because Executive acknowledges
that any breach of the covenants contained in Section 6 would irreparably injure
the Company, the parties hereto agree that money damages would be an inadequate
remedy for any breach of this

 

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Agreement. Therefore, in the event of a breach or threatened breach of this
Agreement, the Company or its successors or assigns may, in addition to other
rights and remedies existing in their favor at law or in equity, apply to any
court of competent jurisdiction for specific performance and/or injunctive or
other relief in order to enforce, or prevent any violations of, the provisions
hereof (without posting a bond or other security) or require Executive to
account for and pay over to the Company all compensation, profits, moneys,
accruals, increments or other benefits derived from or received as a result of
any transactions constituting a breach of the covenants contained herein in this
Agreement, if and when final judgment of a court of competent jurisdiction is so
entered against Executive.

 

Section 8.               Severance Payments.

 

In addition to the foregoing, and not in any way in limitation thereof, or in
limitation of any right or remedy otherwise available to the Company, if
Executive violates any provision of the foregoing Section 5 or 6, any severance
payments then or thereafter due from the Company to Executive under Section 4 or
otherwise shall be terminated forthwith, and the Company’s obligation to pay,
and Executive’s right to receive, such severance payments shall terminate and be
of no further force or effect, if and when determined by a court of competent
jurisdiction, in each case without limiting or affecting Executive’s obligations
under such Sections 5 and 6 or the Company’s other rights and remedies available
at law or equity.

 

Section 9.               Executive’s Representations, Warranties and Covenants.

 

(a)           Executive hereby represents and warrants to the Company that:

 

(1)           Executive has all requisite power and authority to execute and
deliver this Agreement and to consummate the transactions contemplated hereby,
and this Agreement has been duly executed by Executive;

 

(2)           the execution, delivery and performance of this Agreement by
Executive does not and will not, with or without notice or the passage of time,
conflict with, breach, violate or cause a default under any agreement, contract
or instrument to which Executive is a party or any judgment, order or decree to
which Executive is subject;

 

(3)           Executive is not a party to or bound by any employment agreement,
consulting agreement, non-compete agreement, non-solicitation agreement,
confidentiality agreement or similar agreement with any other Person;

 

(4)           upon the execution and delivery of this Agreement by the Company
and Executive, this Agreement will be a legal, valid and binding obligation of
Executive, enforceable in accordance with its terms;

 

(5)           Executive is a continuing employee of the Company or one of its
Affiliates; and

 

(6)           Executive understands that the Company will rely upon the accuracy
and truth of the representations and warranties of Executive set forth herein,
and Executive consents to such reliance.

 

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Section 10.             General Provisions.

 

(a)           Severability. It is the desire and intent of the parties hereto
that the provisions of this Agreement be enforced to the fullest extent
permissible under the laws and public policies applied in each jurisdiction in
which enforcement is sought. Accordingly, if any particular provision of this
Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable under any present or future law, and if the
rights and obligations of any party under this Agreement will not be materially
and adversely affected thereby, such provision, as to such jurisdiction, shall
be ineffective, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction; furthermore, in lieu of such invalid or unenforceable provision
there will be added automatically as a part of this Agreement, a legal, valid
and enforceable provision as similar in terms to such invalid or unenforceable
provision as may be possible. Notwithstanding the foregoing, if such provision
could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so
narrowly drawn, without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

 

(b)           Entire Agreement. Each party acknowledges and agrees that, except
as expressly set forth herein, no representations, warranties, promises or
statements of any kind or character have been made to them by each other, or
their agents, representatives or attorneys, to induce the execution of this
Agreement. This Agreement, together with the Executive Data Sheet annexed hereto
as Exhibit A and such other employee benefits that Executive has on the
Effective Date, constitute the entire agreement between the parties with respect
to the subject matter hereof and supersedes all prior agreements, commitments,
arrangements, negotiations or undertakings, whether oral or written, between the
parties with respect to its subject matter. No changes, amendments, waivers or
modifications to this Agreement shall be valid, unless made by a written
instrument that expressly refers to the relevant provision of this Agreement and
that is executed by all parties in the case of any changes or modifications and
by the party against whom enforcement is sought in the case of any discharge or
waiver and then only to the specific purpose, extent and instance so provided.
This Agreement shall be deemed to have been jointly drafted and, in construing
and interpreting this Agreement, no provision shall be construed or interpreted
for or against any party because such party prepared or requested such
provision.

 

(c)           Successors and Assigns.

 

(i)            This Agreement is personal to Executive and without the prior
written consent of the Company shall not be assignable by Executive otherwise
than by will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by Executive’s legal representatives or
estate upon Executive’s death or, if applicable, Disability.

 

(ii)           This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns. The Company will require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place. As used in this Agreement, “Company”
shall mean the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.

 

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(d)           Governing Law. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY, WITHOUT GIVING EFFECT TO
ANY CHOICE OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF
DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEW JERSEY TO BE APPLIED. IN FURTHERANCE OF
THE FOREGOING, THE INTERNAL LAW OF THE STATE OF NEW JERSEY WILL CONTROL THE
INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH
JURISDICTION’S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF
SOME OTHER JURISDICTION WOULD ORDINARILY APPLY.

 

(e)           Remedies. Each of the parties to this Agreement and any such
person or entity granted rights hereunder whether or not such person or entity
is a signatory hereto shall be entitled to enforce its rights under this
Agreement specifically to recover damages and costs for any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages may not be an
adequate remedy for any breach of the provisions of this Agreement and that the
Company may in its sole discretion apply to any court of law or equity of
competent jurisdiction for specific performance and/or other injunctive relief
(without posting any bond or deposit) in order to enforce or prevent any
violations of the provisions of this Agreement. Each party shall be responsible
for paying its own attorneys’ fees, costs and other expenses pertaining to any
such action for and enforcement, regardless of whether an award or finding or
any judgment or verdict thereon is entered against Executive. [Q-add: except
that Executive shall be entitled to be reimbursed for his reasonable legal fees
if he is successful in enforcing the provisions requiring payment by the
Company.]

 

(f)            Amendment and Waiver. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and
Executive. The failure of any party to insist upon strict performance of any
provision hereof, irrespective of the length of time for which such failure
continues, shall not be a waiver of such party’s right to demand strict
compliance in the future, and no consent or waiver, express or implied, to any
breach or default in the performance of any obligation hereunder shall
constitute a consent or waiver to any other breach or default in the performance
of the same or any other obligation hereunder.

 

(g)           Notices. All notices, requests, demands, claims, consents and
other communications required or permitted to be given in this Agreement must be
in writing and must be either personally delivered, transmitted via telecopier,
mailed by certified or registered mail (postage prepaid and return receipt
requested) or sent by reputable overnight courier service (charges prepaid) to
the recipient at the address below indicated or at such other address or to the
attention of such other person as the recipient party has specified by prior
written notice to the sending party. Notices will be deemed to have been given
hereunder and received when delivered personally, when received if transmitted
via telecopier, five (5) days after deposit in the U.S. mail and one (1) day
after deposit with a reputable overnight courier service.

 

If to the Company, to:

 

AEP Industries Inc.

125 Phillips Avenue

South Hackensack, NJ 07606-1546

Facsimile: (201) 807-6801

Attention: Paul M. Feeney

Executive Vice President, Finance

 

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with a copy (which shall not constitute notice) to:

 

Warshaw Burstein Cohen Schlesinger & Kuh, LLP

555 Fifth Avenue

New York, New York 10017

Facsimile: (212) 972-9150

Attention: Paul E. Gelbard, Esq.

 

If to Executive, to Executive’s address set forth on the signature page hereto.

 

(h)           Survival of Representations, Warranties and Agreements. All
representations, warranties and agreements contained herein shall survive the
consummation of the transactions contemplated hereby indefinitely.

 

(i)            Descriptive Headings; Counterparts. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a part of
this Agreement. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one
and the same agreement.

 

(j)            Construction. Where specific language is used to clarify by
example a general statement contained herein, such specific language shall not
be deemed to modify, limit or restrict in any manner the construction of the
general statement to which it relates. The language used in this Agreement shall
be deemed to be the language chosen by the parties to express their mutual
intent, and no rule of strict construction shall be applied against any party.

 

(k)           Nouns and Pronouns. Whenever the context may require, any pronouns
used herein shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns and pronouns shall include the plural and
vice-versa.

 

(l)            Further Assurances. Executive agrees to do such further acts and
things, and to execute and deliver such additional conveyances, assignments,
agreements and instruments, as the Company may at any time reasonably request in
connection with the administration and enforcement of this Agreement or in order
better to assure and confirm unto the Company its rights and remedies hereunder.

 

(m)          Acknowledgements. Executive has carefully read and considered all
of the terms and conditions of the Agreement, including the restraints and
obligations imposed upon Executive under Sections 5 and 6 of this Agreement.
Executive agrees that said restraints and obligations are necessary for the
reasonable and proper protection of the Company and its Affiliates, and that
each and every one of the restraints and obligations is reasonable in respect to
subject matter, length of time and otherwise.

 

Executive has had an opportunity to consult with independent counsel with
respect to the execution of this Agreement and Executive has made such
investigation of the facts pertaining to this Agreement and of all the matters
pertaining hereto as Executive deem necessary or appropriate.

 

(n)           Acceptance of Offer; Reservation of Rights to Withdraw Offer. By
executing the enclosed counterpart of this Agreement where indicated and
returning it to the Company, Executive hereby accepts the Company’s offer of
continued employment and agrees to all terms and conditions of this Agreement.
Until such execution, the Company hereby reserves all rights to withdraw its
offer of employment to Executive pursuant to this Agreement.

 

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(o)           Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF, OR RELATING TO, THIS AGREEMENT.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

 

AEP INDUSTRIES INC.

 

 

 

 

 

 

 

By:

/s/ Paul M. Feeney

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

LINDA GUERRERA, Executive

 

 

 

 

 

Signature:

/s/ Linda Guerrera

 

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EXHIBIT A

 

Executive Data Sheet for Signature Page

 

Name

 

Linda Guerrera

 

 

 

Address

 

[Address]

 

 

 

Annual Base Salary (Fiscal 2009)

 

$200,018

 

 

 

Position

 

Vice President, Finance and Controller

 

 

 

Reports to

 

Executive Vice President, Finance/CFO

 

 

 

Vacation Days

 

20 days

 

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