## **Exhibit 10.3**

## **PLIANT CORPORATION**

## **2006 RESTRICTED STOCK INCENTIVEPLAN**

**1.**                 PURPOSE OF PLAN

The purpose of the Pliant Corporation 2006 RestrictedStock Incentive Plan (this “Plan”) is to promote the success of PliantCorporation (the “Corporation”) and to increase stockholder value byproviding an additional means, through the grant of the right to acquire sharesof the Corporation’s Series M Redeemable Preferred Stock, no par value pershare (the “Restricted Stock” or the “Series M Preferred”), toattract, motivate, retain and reward selected employees of the Corporation.

**2.**                 ELIGIBILITY

The Administrator (as such term is defined in Section3.1) may grant the right to acquire Restricted Stock under this Plan (a “RestrictedStock Award”) only to those persons that the Administrator determines to beEligible Persons. An “Eligible Person” is any person who is an officer(whether or not a director), employee, consultant, advisor, agent orrepresentative of the Corporation or any of its Subsidiaries employed in such capacityon the date such Restricted Stock is granted and is designated an “EligiblePerson” by the Administrator. An Eligible Person who has been granted aRestricted Stock Award (a “participant”) may, if otherwise eligible, begranted the right to purchase additional shares of Restricted Stock if theAdministrator shall so determine.

**3.**                 PLANADMINISTRATION

**3.1**                               ***The Administrator***. ThisPlan shall be administered by, and all Restricted Stock Awards awarded underthis Plan shall be authorized by, the Administrator. The “Administrator”means the Board of Directors of the Corporation (the “Board”) or one ormore committees appointed by the Board to administer all or certain aspects ofthis Plan. Any such committee shall be comprised solely of two or more directorswho are not Eligible Persons or such number of directors who are not EligiblePersons as may be required under applicable law and the Corporation’s Bylaws.

**3.2**                               ***Powers of the Administrator***.Subject to the express provisions of this Plan and any limitations contained ina Restricted Stock Agreement (a “Restricted Stock Agreement”) enteredinto by the participant, the Administrator is authorized and empowered to doall things necessary or desirable in connection with the authorization ofshares of Restricted Stock and the administration of this Plan (in the case ofa committee, within the authority delegated to that committee, including,without limitation, the authority to:

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(a)                                  determineeligibility and, from among those persons determined to be eligible, theparticular Eligible Persons who will receive a Restricted Stock Award underthis Plan;

(b)                                 grantRestricted Stock Awards to Eligible Persons, determine the price at whichshares of Restricted Stock will be offered or awarded and the number of sharesof Restricted Stock to be awarded to any of such Eligible Persons, determinethe other specific terms and conditions of such Restricted Stock consistentwith the express limits of this Plan, establish the installments or terms (ifany) in which such shares of Restricted Stock shall vest (which may include,without limitation, performance and/or time-based criteria), or determine thatno vesting is required, establish any applicable performance targets, andestablish the events of termination or reversion of such Restricted Stock;

(c)                                  approvethe forms of Restricted Stock Agreements, which need not be identical amongparticipants;

(d)                                 construeand interpret this Plan and any agreements defining the rights and obligationsof the Corporation and participants under this Plan, further define the termsused in this Plan, and prescribe, amend and rescind rules and regulationsrelating to the administration of this Plan or the Restricted Stock grantedunder this Plan;

(e)                                  cancel,modify, or waive the Corporation’s rights with respect to, or modify,discontinue, suspend, or terminate any or all outstanding shares of RestrictedStock;

(f)                                    accelerateor extend the vesting of any or all outstanding shares of Restricted Stock insuch circumstances as the Administrator may deem appropriate (including,without limitation, in connection with a termination of employment or servicesor other events of a personal nature);

(g)                                 adjustthe number of shares of Restricted Stock subject to any Restricted Stock Award,adjust the price of any or all outstanding shares of Restricted Stock orotherwise change previously imposed terms and conditions, in such circumstancesas the Administrator may deem appropriate, in each case subject to Sections 4and 8.6.2;

(h)                                 determinethe date of grant of a Restricted Stock Award;

(i)                                     determinewhether, and the extent to which, adjustments are required pursuant to Section7 hereof and authorize the termination, conversion, substitution or successionof shares of Restricted Stock upon the occurrence of an event of the typedescribed in Section 7;

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(j)                                     acquireor settle (subject to Sections 7 and 8.6.2) rights under Restricted Stock incash, stock of equivalent value, or other consideration; and

(k)                                  determinethe fair market value of the shares of Restricted Stock awarded under this Planfrom time to time and/or the manner in which such value will be determined andmake all other elections or determinations under this Plan and under anyRestricted Stock Agreement.

**3.3**                               ***Binding Determinations***.Any action taken by, or inaction of, the Corporation or the Administratorrelating or pursuant to this Plan and within its authority hereunder or underapplicable law shall be within the absolute discretion of that entity or bodyand shall be conclusive and binding upon all persons. Neither the Board nor anyBoard committee, nor any member thereof or person acting at the directionthereof, shall be liable for any act, omission, interpretation, construction ordetermination made in good faith in connection with this Plan (or any shares ofRestricted Stock granted under this Plan), and all such persons shall beentitled to indemnification and reimbursement by the Corporation in respect ofany claim, loss, damage or expense (including, without limitation, attorneys’fees) arising or resulting therefrom to the fullest extent permitted by law,under the Corporation’s Amended and Restated Certificate of Incorporation asamended from time to time (the “Charter”) and/or, to the extentavailable, under any directors and officers liability insurance coverage thatmay be in effect from time to time.

**3.4**                               ***Reliance on Experts***. Inmaking any determination or in taking or not taking any action under this Plan,the Administrator may obtain and may rely upon the advice of experts, includingemployees and professional advisors to the Corporation. No director, officer oragent of the Corporation shall be liable for any such action or determinationtaken or made or omitted in good faith.

**3.5**                               ***Delegation***. TheAdministrator may delegate ministerial, non-discretionary functions inconnection with the administration of the Plan to individuals who are officersor employees of the Corporation or to third parties.

**4.**                 SHARES OFRESTRICTED STOCK SUBJECT TO THE PLAN; SHARE LIMITS

**4.1**                               ***Shares Available***. Subjectto the provisions of Section 7.1, the aggregate number of shares of RestrictedStock that may be awarded to Eligible Persons under this Plan (the “ShareLimit”) shall not exceed 8,000 shares of Series M Preferred.

**4.2**                               ***Reissue of Awards and Shares***.Shares of Restricted Stock that are subject to awards which are cancelled orterminated, are forfeited, fail to vest, or for any other reason are notdelivered under this Plan shall again be available for subsequent awards underthis Plan to Eligible Persons.

**4.3**                               ***Reservation of Shares; FractionalShares; Minimum Issue***. The Corporation shall at all times reservea number of shares of Series M Preferred sufficient to cover the Corporation’sobligations and contingent obligations, if any, to issue and sell shares of RestrictedStock. The Corporation has initially reserved 8,000 

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shares of Series MPreferred for issuance under this Plan. Fractional shares may be issued ordelivered under this Plan.

**5.**                 AWARDS

**5.1**                               ***Restricted Stock Agreements***.Each Restricted Stock Award shall be evidenced by a written Restricted StockAgreement as approved by the Administrator and executed on behalf of theCorporation and by the recipient of the Restricted Stock Award. TheAdministrator may authorize any officer of the Corporation to execute any orall Restricted Stock Agreements on behalf of the Corporation. The RestrictedStock Agreement shall set forth the material terms and conditions of suchRestricted Stock Award as established by the Administrator consistent with theexpress limitations of this Plan.

**5.2**                               ***Consideration for Restricted StockAwards***. The purchase price for any shares of Restricted Stock tobe delivered pursuant to a Restricted Stock Award, as applicable, may be paidby means of any lawful consideration as determined by the Administrator,including, without limitation, one or a combination of the following methods:

(a)                                  servicesrendered by the recipient of such Restricted Stock Award;

(b)                                 cash,check payable to the order of the Corporation, or electronic funds transfer; or

(c)                                  paymentin such manner as may be authorized by the Administrator;

In no event shallany shares of Restricted Stock newly issued by the Corporation be issued forless than the minimum lawful consideration for such shares or for considerationother than consideration permitted by applicable state law. The Corporationwill not be obligated to deliver any shares of Restricted Stock unless anduntil it receives full payment of the purchase price therefor, and any otherconditions to purchase have been satisfied.

**5.3**                               ***TransferRestrictions***.

**5.3.1**   ***Limitations on Exercise and Transfer***.Unless otherwise expressly provided in (or pursuant to) this Section 5.3.1, byapplicable law, (a) all Restricted Stock Awards are non-transferable and shallnot be subject in any manner to sale, transfer, participation, alienation,assignment, pledge, encumbrance or charge other than pursuant to, and inaccordance with Part C of Article Four of the Charter; and (b) amounts payableor shares issuable pursuant to any Restricted Stock Awards shall be deliveredonly to (or for the account of) the participant.

**5.3.2**   ***Exceptions to Limits on Transfer***.The transfer restrictions in Section 5.3.1 shall not apply to:

(a)                                  transfersto the Corporation; or

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(b)                                 thedesignation of a beneficiary to receive benefits in the event of theparticipant’s death or, if the participant has died, transfers to theparticipant’s beneficiary, or, in the absence of a validly designatedbeneficiary, transfers by will or the laws of descent and distribution, or

(c)                                  transfersto trusts or other entities controlled by the participant, and whose beneficiariesor beneficial owners are, the participant and/or members of the participantsimmediate family so long as (i) the Administrator receives evidencesatisfactory to it that such transfer is being made for tax and/or estateplanning purposes on a gratuitous or donative basis, without consideration(other than nominal consideration or in exchange for an interest in thequalified transferee) and (ii) the participant maintains control over thevoting and dispositive power of the Restricted Stock;

provided however, that in the case of clauses (b) and(c) above, the beneficiary, successor, trust, trustee or other entity shallagree in writing to be bound by this Plan and the participant’s RestrictedStock Agreement.

**6.**                 EFFECT OFTERMINATION OF SERVICE ON AWARDS

The Administrator shall establish the effect of atermination of employment or service on the rights and benefits under eachRestricted Stock Award under this Plan and in so doing may make distinctionsbased upon the cause of termination or otherwise.

**7.**                 ADJUSTMENTS

Upon or in contemplation of any reclassification,recapitalization, stock split (including a stock split in the form of a stockdividend) or reverse stock split; any merger, combination, consolidation, orother reorganization; any exchange of Restricted Stock, or any similar, unusualor extraordinary corporate transaction, in each case, in respect of theRestricted Stock; then the Administrator shall, in such manner, to such extent(if any) and at such time as it deems appropriate and equitable in thecircumstances, proportionately adjust any or all of (1) the number and type ofshares of Restricted Stock that thereafter may be made the subject ofRestricted Stock Awards, (2) the amount of shares of Restricted Stock thensubject to any or all outstanding Restricted Stock Awards, (3) the grant of anyor all outstanding Restricted Stock Awards or (4) the Share Limit. Notwithstandingthe foregoing, any adjustment made pursuant to this Section 7 shall be subjectto de novo review at the request of the participant to the extent provided in aRestricted Stock Agreement.

In any of such events, the Administrator may take suchaction prior to such event to the extent that the Administrator deems theaction necessary to permit the participant to realize the benefits intended tobe conveyed with respect to the underlying shares of Restricted Stock. In thecase of any stock split or reverse stock split, if no action is taken 

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by the Administrator, the proportionate adjustmentscontemplated by clause (a) above shall nevertheless be made.

**8.**                 OTHER PROVISIONS

**8.1**                               ***Compliance with Laws***.This Plan, the granting and vesting of Restricted Stock Awards under this Plan,the offer, issuance and delivery of shares of Restricted Stock, the acceptanceof promissory notes and/or the payment of money under this Plan or underRestricted Stock Awards are subject to compliance with all applicable federaland state laws, rules and regulations (including but not limited to state andfederal securities law, federal margin requirements) and to such approvals byany listing, regulatory or governmental authority as may, in the opinion ofcounsel for the Corporation, be necessary or advisable in connection therewith.Eligible Persons acquiring any Restricted Stock under this Plan will, ifrequested by the Corporation, provide such assurances and representations tothe Corporation as the Administrator may deem necessary or desirable to assurecompliance with all applicable legal and accounting requirements.

**8.2**                               ***Employment Status***. Noperson shall have any claim or rights to be granted a Restricted Stock Award(or additional Restricted Stock Awards, as the case may be) under this Plan,subject to any express contractual rights (set forth in a document other thanthis Plan) to the contrary.

**8.3**                               ***No Employment/Service Contract***.Nothing contained in this Plan (or in any other documents under this Plan or inany Restricted Stock Award) shall confer upon any person any right to continuein the employ or other service of the Corporation, constitute any contract oragreement of employment or other service or affect an employee’s status as anemployee at will, or shall interfere in any way with the right of theCorporation to change a person’s compensation or other benefits, or toterminate his or her employment or other service, with or without cause. Nothingin this Section 8.3, however, is intended to adversely affect any expressindependent right of such person under a separate employment or servicecontract other than a Restricted Stock Agreement.

**8.4**                               ***Plan Not Funded***. RestrictedStock Awards granted under this Plan shall be payable in shares of RestrictedStock, and no special or separate reserve, fund or deposit shall be made toassure payment of such Restricted Stock Awards. No participant, beneficiary orother person shall have any right, title or interest in any fund or in anyspecific asset of the Corporation by reason of any Restricted Stock Awardhereunder. Neither the provisions of this Plan (or of any related documents),nor the creation or adoption of this Plan, nor any action taken pursuant to theprovisions of this Plan shall create, or be construed to create, a trust of anykind or a fiduciary relationship between the Corporation and any participant,beneficiary or other person.

**8.5**                               ***Tax Withholding***. Uponany vesting or payment of any Restricted Stock Award the Corporation shall havethe right at its option to:

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(a)                                  requirethe participant (or the participant’s personal representative or beneficiary,as the case may be) to pay or provide for payment of at least the minimumamount of any taxes which the Corporation may be required to withhold withrespect to such vesting or payment; or

(b)                                 deductfrom any amount otherwise payable in cash to the participant (or theparticipant’s personal representative or beneficiary, as the case may be) theminimum amount of any taxes which the Corporation may be required to withholdwith respect to such vesting or payment.

**8.6**                               ***EffectiveDate, Termination and Suspension, Amendments***.

**8.6.1**                     ***Effective Date***. This Plan is effectiveas July 18, 2006 (the “Effective Date”).

**8.6.2**                     ***Amendments to Plan and Awards***. This Planmay be amended, modified, suspended or terminated with the written approval ofthe Corporation; provided,however, any amendment whichmaterially adversely affects an outstanding Restricted Stock Award shallrequire the consent of the holder of such Restricted Stock Award. Changes,settlements and other actions contemplated by Section 7 shall not be deemed toconstitute amendments, modifications or suspensions for purposes of thisSection 8.6.2.

**8.7**                               ***GoverningLaw; Construction; Severability***.

**8.7.1**                     ***Choice of Law***. This Plan, the RestrictedStock Awards, the Restricted Stock Agreements, all documents evidencingRestricted Stock Awards and all other related documents shall be governed by,and construed in accordance with the laws of the State of New York.

**8.7.2**                     ***Severability***. If a court of competentjurisdiction holds any provision invalid and unenforceable, the remainingprovisions of this Plan shall continue in effect.

**8.8**                               ***Captions***. Captionsand headings are given to the sections and subsections of this Plan solely as aconvenience to facilitate reference. Such headings shall not be deemed in anyway material or relevant to the construction or interpretation of this Plan orany provision thereof.

**8.9**                               ***RequiredSale in Connection with a Sale of the Company***.

**8.9.1**                     ***Drag-AlongRights***. Subject to the provisions of this Section 8.9, ifthe Board and the “Requisite Investor Stockholders” (as defined in the Stockholders’Agreement of the Corporation dated July 18, 2006, as amended (the “Stockholders’Agreement”)) approve a “Sale of the Company” (as defined pursuant to theStockholders’ Agreement)(such approved Sale of the Company, an “ApprovedSale”), each participant shall consent to, vote in favor of and raise noobjections against the Approved Sale, and if the Approved Sale is structured as

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a sale of the issued andoutstanding capital stock of the Corporation (whether by merger,recapitalization, consolidation or sale or otherwise), then each participantshall waive any dissenters rights, appraisal rights or similar rights inconnection with such Approved Sale and shall, so long as such participant shallcomply with Section 1 of Part C of Article Four of the Charter, be entitled toreceive the consideration for his or her Restricted Stock in connection withsuch Approved Sale upon a Mandatory Redemption as provided in, and subject to,Section 1 of Part C of Article Four of the Charter. Each participant shall takeall necessary and desirable actions in connection with the consummation of theApproved Sale which are substantially equivalent to the actions being taken bythe parties to the Stockholders’ Agreement, including, but not limited to, theexecution of such agreements and instruments and other actions necessary toprovide the representations, warranties, indemnities, covenants, conditions,escrow agreements and other provisions and agreements relating to such ApprovedSale as shall be determined by the Board of Directors; provided, however, thatthe participant’s obligations with respect to any representations, warranties,indemnities, covenants, conditions, escrow provisions and agreements of (i) theCorporation and its subsidiaries shall be limited to such participant’sIndemnity Cap; provided, further that in no event shall the maximum liabilityof a participant on account of such participant’s Restricted Stock exceed thesum of (x) the net proceeds received by such participant in connection withsuch Approved Sale on account of such Restricted Stock and (y) any amounts paidto such participant pursuant to the Company’s Deferred Cash Incentive Plan and(ii) of such Participant shall not be so limited or restricted. In the eventthat any participant fails for any reason to take any of the foregoing actionsafter reasonable notice thereof, he, she or it hereby grants an irrevocablepower of attorney and proxy to any officer or member of the Board (as definedin the Stockholders’ Agreement) or an assignee of such person to take allnecessary actions and execute and deliver all documents deemed by such personto effectuate the terms of this Section 8.9. As used in this Section8.9.1, “Indemnity Cap” shall mean, with respect to any participant, thesum of the product of (x) the Indemnity Percentage and (y) the sum of (1) theaggregate Series M Mandatory Redemption Price received by such Participant inconnection with such Approved Sale plus (2) the aggregate amount, if any, paidto such participant pursuant to the Company’s Deferred Cash Incentive Plan. “IndemnityPercentage” shall mean the percentage which the aggregate maximumindemnification obligation of all holders of capital stock of all CoveredClasses (as defined in the Charter) represents of the Net Asset Proceeds (asdefined in the Charter) or Net Stock Proceeds (as defined in the Charter), asthe case may be; provided, however, that in the event that holders of capitalstock of the Covered Classes have different maximum indemnification obligationsfor different matters (for example, if some representations or warranties areexcluded from a cap on indemnity), then the Indemnity Percentage shall becalculated separately with respect to each type of indemnification obligations.

**8.9.2**                     ***Procedure***.The Corporation shall deliver written notice to each participant setting forthin reasonable detail the terms (including price, time and 

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form of payment) of anyApproved Sale (the “Drag Notice”). Within twenty (20) days followingreceipt of the Drag Notice, each such participant shall deliver to theCorporation written notice setting forth such participants’ agreement toconsent to and raise no objections against, or impediments to, the ApprovedSale (including, waiving all dissenter’s and similar rights).

**8.10**                        ***Compliancewith Code Section 409A***. The Restricted Stock Awards grantedhereunder are intended to comply with the requirements set forth in Section409A of the Internal Revenue Code of 1986, as amended, and any regulations andrulings thereunder (“Section 409A”), so as to avoid the imposition of excisetaxes and other penalties (“409A Penalties”) under Section 409A with respect tothe Restricted Stock. The Administrator shall not amend any Restricted StockAward in a manner that would subject the participant to Section 409A Penalties.In the event that the grant of any Restricted Stock Award under this Plan orthe amendment of any Restricted Stock Award under this Plan would subject theparticipant to 409A Penalties, the Administrator and the participant shallcooperate diligently to amend the terms of the Restricted Stock Award to avoid,insofar as possible, such 409A Penalties while minimizing any material andadverse impact of any such amendment upon the economic, tax or accountingimplications of such Restricted Stock Award to the Company.

**8.11**                        ***Non-Exclusivity of Plan***. Nothing in thisPlan shall limit or be deemed to limit the authority of the Board or theAdministrator to authorize any other compensation under any other plan orauthority.

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