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                                                                       EXHIBIT I

                      READ CAREFULLY AND CONSULT WITH YOUR
                             ATTORNEY BEFORE SIGNING

                                    RELEASE


          1.  In full consideration of the execution of this Release by Timothy
E. Needham ("TEN"), American Pad & Paper Company (the "Company") will provide
TEN with the consideration and other rights set forth in the letter agreement
(the "Letter Agreement") dated October 13, 1998 to which this Release is
attached as Exhibit I.

          2.  TEN, intending to be legally bound and for and in consideration of
the benefits described in the Letter Agreement, does for himself his heirs,
executors, administrators, successors and assigns hereby remise, release and
forever discharge the Company, its successors, predecessors, subsidiaries,
affiliates, directors, officers, agents and employees, and all persons,
corporations or other entities who might be claimed to be jointly and severally
liable with them, from any and all actions and causes of action, claims and
demands, suits, damages including back pay, front pay, employee benefits,
bonuses, liquidated damages, attorneys' fees, expenses, debts, dues, accounts,
bonds, covenants, contracts, agreements and compensation whatsoever and from any
claims for retaliation, and from any and all other claims of any nature
whatsoever against the Company, whether known or unknown or whether asserted or
unasserted, including but not limited to claims under the Americans with
Disabilities Act of 1990 (42 U.S.C. Section 12101 ET SEQ.), Title VII of the
Civil Rights Act of 1964 (42 U.S.C. Section 2000e ET SEQ.), the Consolidated
Omnibus Budget Reconciliation Act of 1985 (29 U.S.C. Section 1161 ET SEQ.), and
the Age Discrimination in Employment Act (29 U.S.C. Section 626 ET SEQ.), claims
for breach of contract, discrimination, wrongful discharge, tortious
interference with contract, intentional and negligent infliction of emotional
distress, and any other statutory or common law theories, including any claim
for attorneys' fees and costs, from the beginning of time to the date of the
Letter Agreement, which he or anyone claiming by, through or under him in any
way might have or could claim against the Company; provided that, TEN
specifically does not release and specifically reserves all of his rights with
respect to the following:

          (a)  the Letter Agreement;

          (b)  the Employment Agreement;

          (c)  those certain stock option agreements between TEN and the
               Company; 

          (d)  any rights of TEN pursuant to the Company's health and welfare
               plans; and 

          (e)  any rights of TEN as to indemnification with regard to any
               existing or future litigation involving TEN to the extent such
               rights are provided to TEN in the Company's certificate of
               incorporation and/or bylaws or in the Letter Agreement.

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          3.  TEN confirms that he has had at least twenty-one (21) day to
consider whether or not to sign this Release, it first having been presented to
TEN on October 7, 1998.  TEN certifies that he has read the terms of the Letter
Agreement and the Release, that he understands the terms and effects, and that
he has signed the Letter Agreement and the Release voluntarily and knowingly in
exchange for the consideration described in the Letter Agreement, which
consideration TEN acknowledges is in addition to anything to which TEN already
is entitled and which he acknowledges as adequate and satisfactory to him.

          4.  TEN acknowledges that he understands he may revoke his agreement
to this release if he does so within 7 days of executing it and that this
release is not effective until that 7 day period has expired.

          5.  This Release shall be governed by and construed in accordance with
the laws of the State of Texas.

          6.  Except as provided herein, each of the provisions of this Release
is intended to be severable.  If any term or provision is held to be invalid,
void or unenforceable by a court of competent jurisdiction for any reason
whatsoever, such ruling shall not effect the remainder of this Release.

          7.  TEN, intending to be legally bound, has voluntarily executed this
Release with full understanding of the contents hereof and after having had
ample time to review and study the Letter Agreement and this Release.

          Signed and executed this ____ day of October, 1998.

WITNESS:



______________________                 ____________________________(SEAL)
                                       TIMOTHY E. NEEDHAM