**Exhibit 10.3**

 

**EMPLOYMENT AGREEMENT** (this “Agreement”)dated as of December 21, 2006 (the “Agreement Date”), and amended andrestated June 11, 2008, effective as of January 1, 2008, between **PLIANT CORPORATION**, a Delaware corporation (the “Company”),and **HAROLD BEVIS** (the “Executive”).

 

Each of the Company and itsSubsidiaries is engaged in the business (the “Business”) of producingand distributing polymer-based, value-added films and flexible packagingproducts for food, personal care, medical, agricultural, industrial and otherapplications.

 

The Executive is currentlyemployed by the Company as its President and Chief Executive Officer and hasoriginally entered into an employment agreement with the Company dated as of January 1,2004.

 

Section 409A of theInternal Revenue Code of 1986, as amended (the “Code”) imposes additional taxeson deferred compensation that fails to meet certain requirements.

 

The Company and theExecutive each desire to amend the Executive’s current employment agreement tocomply with the requirements of Code Section 409A and to make certainadditional modifications to the terms and conditions of Executive’s employmentby amending and restating the Executive’s employment agreement to contain theterms and be subject to the conditions hereinafter set forth.

 

**NOW, THEREFORE,** inconsideration of the mutual covenants contained herein and other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties hereto hereby agree as set forth below.

 

# **Section 1.****             ****Employment**.

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The Company hereby employsthe Executive, and the Executive accepts employment with the Company, upon theterms and conditions set forth in this Agreement for the period beginning withthe Company’s pay period immediately preceding the Agreement Date and ending onthe Termination Date determined pursuant to Section 4(a) (the “EmploymentPeriod”).

 

# **Section 2.****             ****Base Salary and Benefits**.

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## (a)           Duringthe Employment Period, the Executive’s base salary shall be $675,000 per annum(the “Base Salary”), which salary shall be payable in such installmentsas is customary for senior executives of the Company, but not less frequentlythan monthly.  In addition, during theEmployment Period, (i) the Executive shall participate in all bonus andincentive plans or arrangements which may be provided by the Company from timeto time to its senior executives, with award opportunities commensurate withExecutive’s position, duties and responsibilities, including the ManagementIncentive Plan for calendar years commencing after December 31, 2005, thePliant 2006 Restricted Stock Incentive Plan and the Pliant Deferred CashIncentive Plan; (ii) the Executive shall be entitled to participate in allsavings and retirement plans which may be provided by the Company from time totime to its senior executives; (iii) the Executive and the Executive’sspouse and children shall be eligible to 

 

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## participatein, and receive all benefits under, welfare and insurance benefit plans whichmay be provided from time to time by the Company (including, withoutlimitation, medical, prescription, dental, disability, individual life, grouplife, dependent life, accidental death and travel accident plans) to seniorexecutives of the Company and their spouses and children generally, inaccordance with the terms of such plans; (iv) the Executive shall beentitled to fringe benefits which may be provided by the Company from time totime in accordance with the most favorable fringe benefit plans made availableto senior executives of the Company, generally; and (v) the Executiveshall be entitled to an office of a size and with furnishings and otherappointments, and to secretarial and other assistance, which may be provided bythe Company from time to time, in each case, in accordance with the mostfavorable policies applicable to senior executives of the Companygenerally.  The Executive acknowledgesthat the current office, furnishings, appointments and secretarial and otherassistance provided to him by the Company satisfies the requirements set forthin Section 2(a)(v).  The Executiveshall be entitled to take four weeks of paid vacation annually, or any greateramount of paid vacation to which he is entitled under the Company’s vacationpolicy as in effect during the Employment Period.  The Board shall conduct a review of, and mayincrease (but not decrease), the Executive’s Base Salary on an annual or morefrequent basis.

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## (b)           Inaddition to the Base Salary and other benefits specified in Section 2(a),the Company shall pay to the Executive a cash incentive bonus (“BonusCompensation”) for each calendar year ending during the EmploymentPeriod.  The amount of BonusCompensation, if any, payable to the Executive shall be determined andcalculated in accordance with the terms of the Management Incentive Plan.  Accrued Bonus Compensation for any calendaryear shall be due and payable on March 15 of the calendar year followingthe calendar year for which the Bonus Compensation was earned but, subject to Section 17(a),in no event later than ten Business Days following the Company’s receipt fromits public accountants of the audited consolidated financial statements of theCompany for the calendar year for which such Bonus Compensation wasearned.  Notwithstanding any provision inthe Management Incentive Plan to the contrary, if the Executive’s employmentwith the Company is terminated for any reason, the Company will pay theExecutive on the date required by this Section 2(b) his BonusCompensation with respect to the calendar year preceding the calendar year inwhich Executive’s employment terminated at the to the extent not previouslypaid.  However, the Company will not paythe Executive any Bonus Compensation with respect to the calendar year in whichthe Executive’s employment is terminated (other than pursuant to Section 5(a)(iii) and5(b)(iv)) or for any calendar year ending thereafter.

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## (c)           TheCompany shall reimburse the Executive for all reasonable expenses incurred byhim in the course of performing his duties under this Agreement which areconsistent with the Company’s policies in effect from time to time with respectto travel, entertainment and other business expenses, subject to the Company’srequirements with respect to reporting and documentation of such expenses.

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## (d)           TheCompany shall deduct from any payments to be made by it to the Executive underthis Agreement any amounts required to be withheld in respect of any Taxes.

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## (e)           TheCompany shall reimburse the Executive for (i) country club membership duesand expenses incurred in 2006 or incurred in the portion of any subsequent 

 

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## calendaryear within the Employment Period in an amount not to exceed $14,000 per annum,(ii) tax and financial planning services and fees incurred in 2006 orincurred in the portion of any subsequent calendar year within the EmploymentPeriod in an amount not to exceed $10,500 per annum and (iii) the cost andexpense of annual physicals at the Mayo clinic (or such other facility of theExecutive’s choosing) incurred in 2006 or incurred in the portion of anysubsequent calendar year within the Employment Period in an amount not toexceed $7,000 per annum, with all such reimbursements for any calendar yearsubject to the Company’s requirements with respect to reporting anddocumentation of such expenses.  Inaddition, beginning in 2006 and continuing for the remainder of the EmploymentPeriod, the Company shall provide the Executive with an allowance of $27,600per annum for automobile costs and expenses. In return for such allowance, the Executive agrees and acknowledges thathe shall be responsible for all insurance, operating expenses and taxes relatedto such automobile and the allowance paid pursuant to this Section 2(e).  Notwithstanding the foregoing, allreimbursements made to the Executive by the Company for allowances, fees andexpenses incurred by the Executive during any calendar year pursuant to this Section 2(e) shallbe paid no later than March 15 of the calendar year following the calendaryear in which such fees or expenses were incurred, provided that the Executivehas by then complied with applicable Company requirements with respect toreporting and documentation of such expenses and that such reimbursementexpense request is submitted to the Company within one year after the date suchfees or expenses were incurred.

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# **Section 3.****             ****Position and Duties**.

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## (a)           TheCompany employs the Executive as the President and Chief ExecutiveOfficer.  His responsibilities and dutieswill be commensurate with the title of his position, and will include thoseduties and responsibilities normally performed by the Chief Executive Officerof a private corporation in the Business, including the management anddirection of the affairs of the Company on a day to day basis and such otherduties as the Board shall assign to the Executive from time to time.  The Executive shall also have thenon-exclusive authority to call and agenda items for meetings of the Board, solong as the Executive is a member of the Board and the Chief Executive Officerof the Company.  All operations and staffpersonnel shall report directly to the Executive or through one or moreofficers designated by the Executive who shall report directly to theExecutive.  The Executive will reportdirectly and exclusively to the Board. The Executive will perform his duties from the Schaumburg, Illinoislocation of the Company.

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## (b)           TheExecutive acknowledges and agrees to discharge his duties and otherwise act ina manner consistent with the best interests of the Company and itsSubsidiaries.  During the EmploymentPeriod, the Executive shall devote his best efforts, on a full-time basis, tothe performance of his duties and responsibilities under this Agreement (exceptfor vacations to which he is entitled pursuant to Section 2(a), illness orincapacity or other personal or personal investment activities that do notinterfere with his full and timely performance of his duties andresponsibilities under this Agreement). During the Employment Period, the Executive may, subject to Section 8,(i) serve on corporate, civic or charitable boards or committees, (ii) deliverlectures, fulfill speaking engagements or teach at educational institutions,and (iii) manage personal investments, so long as such activities, eitherindividually or in the aggregate, do not materially conflict with theperformance of the Executive’s duties under this Agreement.

 

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# **Section 4.****             ****Termination**.

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## (a)           TerminationDate.  The Executive’s employment under thisAgreement shall terminate upon the earliest to occur (the date of suchoccurrence being the “Termination Date”) of (i) July 31, 2010 (an “Expiration”),(ii) the effective date of the Executive’s resignation (a “Resignation”),(iii) the effective date of the Executive’s Resignation for Good Reason, (iv) theExecutive’s death, (v) the Executive’s Disability, (vi) the Executive’sRetirement, (vii) the effective date of a termination of the Executive’semployment for Cause by the Company (including by the Board) (a “Terminationfor Cause”), and (viii) the effective date of a termination of theExecutive’s employment by the Company (including by the Board) for reasons thatdo not constitute Cause (a “Termination Without Cause”).  The effective date of the Executive’sResignation or the Executive’s Retirement shall be as determined under Section 4(b);the effective date of a Resignation for Good Reason shall be as determinedunder Section 4(c); the effective date of the Executive’s Disability shallbe the date specified in a Notice of Termination delivered to the Executive bythe Company; and the effective date of a Termination for Cause or a TerminationWithout Cause shall be the date specified in the Notice of Terminationdelivered to the Executive by the Company.

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## (b)           Resignationor Retirement.  The Executive shall give the Company and theBoard at least ninety (90) days’ prior written notice of a Resignation orRetirement, with the effective date of such Resignation or Retirement specifiedtherein.  The Board may, in itsdiscretion, accelerate the effective date of a Resignation, but not of aRetirement.

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## (c)           Resignationfor Good Reason.  Except for a Resignation for Good Reasoneffected pursuant to Section 19(e), the Executive will give the Companyand the Board at least thirty (30) days’ prior written notice of a Resignationfor Good Reason.  Such notice may beprovided only after the Company shall fail to cure or remedy the eventsdescribed in the definition of “Resignation for Good Reason” (other than inclause (e) thereof) during the Cure Period.

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# **Section 5.****             ****Effect of Termination;  Severance**.

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## (a)           Inthe event of a Termination Without Cause or a Resignation for Good Reason, theExecutive or his beneficiaries or estate shall receive the following:

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### (i)            a lump sum payment of the unpaid portion of the Base Salary,computed on a prorata basis to the Termination Date, payable onthe Company’s next payroll date;

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### (ii)           subject to Section 17(b), the monthly portion of theBase Salary, payable in such installments as is customary for senior executivesof the Company, but not less frequently than monthly, over the period beginningon the Termination Date and ending on the second anniversary of the TerminationDate; provided, however, that in the event of a breach by theExecutive of Sections 6, 7, 8 or 9 on or after the Termination Date, theprovisions of Section 11 shall apply;

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### (iii)          subject to Section 17(b), a lump sum amount equal tothe Bonus Compensation that was paid or is payable to the Executive for theyear preceding the 

 

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### calendaryear in which the Termination Date occurs, multiplied by a fraction, thenumerator of which is the number of days of the then-current calendar year thatelapse before the Termination Date, and the denominator of which is 365,payable in accordance with Section 2(b) or, if later, on theTermination Date; provided, however, that in the event of abreach by the Executive of Sections 6, 7, 8 or 9 on or after the TerminationDate, the provisions of Section 11 shall apply;

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### (iv)          a lump sum reimbursement for any expenses for which theExecutive shall not have been previously reimbursed, as provided in Sections 2(c) and 2(e),payable on the next payroll date following the date on which such reimbursementexpense request is submitted to the Company; provided, however,that such reimbursement expense is submitted to the Company within one yearfrom the Termination Date; and

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### (v)           subject to Section 17, continued participation in theCompany’s comprehensive medical and dental plan for the period beginning on theTermination Date and ending on the second anniversary of the Termination Date,with the COBRA continuation coverage qualifying event connected with theExecutive’s termination occurring when he loses coverage at the end of thattwo-year period.  If it is unable toobtain the consent of its medical and/or dental plan insurer to providecoverage under this clause (v), the Company may instead pay the full premiumcost of other medical and dental insurance that provides comparable coveragefor the required two year period, and require the Executive to pay an amountequal to the then-current COBRA continuation premium for the period commencingon the second anniversary of the Termination Date during which the Executivewould be entitled to COBRA continuation coverage (with the Executive and hisdependents being treated for all notice, election, coverage entitlement andother administrative purposes the same as other COBRA qualified beneficiariesunder the Company’s medical and dental plan). Payment or reimbursement of the amount of any premium, medical or dentalexpenses under this clause (v) shall be made on or before the last day ofthe Executive’s taxable year following the taxable year in which the premium,medical or dental expense was incurred. The parties agree that the Executive’s entitlement to medical and dentalcoverage during the two years after the Termination Date will end on the datehe becomes eligible for comprehensive medical and dental coverage under a planof his successor employer, if he becomes so eligible before the secondanniversary of the Termination Date.

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## (b)           Inthe event of the Executive’s death, Disability, Retirement or an Expiration,the Executive or his beneficiaries or estate shall have the right to receivethe following:

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### (i)            a lump sum payment of the unpaid portion of the Base Salary,computed on a prorata basis to the Termination Date, payable onthe Company’s next payroll date;

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### (ii)           a lump sum reimbursement for any expenses for which theExecutive shall not have been previously reimbursed, as provided in Sections 2(c) and 2(e),payable on the next payroll date following the date on which such 

 

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### reimbursementexpense request is submitted to the Company; provided, however, that suchreimbursement expense is submitted to the Company within one year from theTermination Date; and

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### (iii)          subject to Section 17(b), in the event of a terminationdue to Disability, such Executive’s Base Salary will continue to be paid insuch installments as is customary for senior executives of the Company, but notless frequently than monthly, until such time as the Executive first receivesbenefits under the Company’s then-effective long-term disability plan; and

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### (iv)          subject to Section 17(b) and solely in the case ofthe Executive’s death or Disability, an amount equal to the Bonus Compensationthat was paid or is payable to the Executive for the year preceding thecalendar year in which the Termination Date occurs, multiplied by a fraction,the numerator of which is the number of days of the then current calendar yearthat elapse before the Termination Date, and the denominator of which is 365,payable in accordance with Section 2(b) or, if later, on theTermination Date; provided, however, that in the event of abreach by the Executive of Sections 6, 7, 8 or 9 on or after the TerminationDate, the provisions of Section 11 shall apply.

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## (c)           Inthe event of a Termination for Cause or a Resignation, the Executive or hisbeneficiaries or estate shall have the right to receive the following:

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### (i)            a lump sum payment of the unpaid portion of the Base Salary,computed on a prorata basis to the Termination Date, payable onthe Company’s next payroll date; and

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### (ii)           a lump sum reimbursement for any expenses for which theExecutive shall not have been previously reimbursed, as provided in Section 2(c) and 2(e),payable on the next payroll date following the date on which such reimbursementexpense request is submitted to the Company; provided, however, that suchreimbursement expense is submitted to the Company within one year from theTermination Date.

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## (d)           Notwithstandingany other term of this Agreement to the contrary, but subject to Section 11hereof, upon termination of the Executive’s employment for any reason, theExecutive will in all events receive, when they would otherwise be then due andowing, any amounts that, as of his Termination Date, have accrued and becomevested under the Pliant 2006 Restricted Stock Incentive Plan, the PliantDeferred Cash Incentive Plan, the Company’s qualified and nonqualifiedretirement plans, all statutory rights to receive or purchase welfare benefits,reimbursement for unreimbursed expenses in accordance with the policies of theCompany in effect as of the Termination Date, accrued vacation pay, and anyother employee benefits owing to him as of the Termination Date, all asdetermined in accordance with the applicable terms of the plans themselves andthe laws applicable to them.  Inaddition, the Company shall continue (i) to indemnify the Executive foracts and omissions which occurred prior to the Termination Date, subject to andin accordance with the terms of the Company’s organizational documents referredto in Section 15(b) as they are in effect on the Termination 

 

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## Dateand (ii) to retain coverage for the Executive under the Company’sdirectors and officers liability insurance policies as provided in Section 15(a).

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## (e)           Ifthe Executive is employed as the President and Chief Executive Officer of theCompany following an Expiration (such period, the “Post-Employment AgreementPeriod”) and no other event of termination of employment under thisAgreement has occurred prior to such Expiration, the Executive shall beemployed by the Company as an “at-will” employee during the Post-EmploymentAgreement Period.  Accordingly, theExecutive’s employment may be terminated at any time during the Post-EmploymentAgreement Period, for any reason. Subject to Section 17(b), if the Executive’s employment with theCompany is terminated by the Company at any time during the Post-EmploymentAgreement Period for reasons that constitute a Termination without Cause, theExecutive or his beneficiaries or estate shall receive the monthly portion ofthe Base Salary, payable monthly, during the period beginning on the date hisemployment with the Company is terminated and ending on the first anniversary thereof;provided, however, that in the event of a breach by the Executive of Sections6, 7, 8 or 9, the provisions of Section 11 shall apply.

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## (f)            TheExecutive, so long as he is employed by the Company as President and ChiefExecutive Officer, regardless of whether or not this Agreement shall terminateor an Expiration shall occur, shall be elected to the Board and shall be amember of the Board pursuant and subject to the Stockholders Agreement.  Upon termination of his employment with theCompany for any reason, the Executive shall be deemed to have automaticallyresigned as an officer, manager, member and director of the Company and itsSubsidiaries and the Executive shall execute and deliver to the Companydocumentation evidencing such resignations (but the failure to execute anddeliver such documentation shall not affect such deemed resignations).  The resignations effected by this Section 5(f) shallnot constitute a “Resignation for Good Reason” or a “Resignation” hereunder.

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# **Section 6.****             ****Nondisclosure and Nonuse of ConfidentialInformation**.

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The Executive will notdisclose or use at any time, either during the Employment Period or thereafter,any Confidential Information of which the Executive is or becomes aware,whether or not such information is developed by him, except, during theEmployment Period, to the extent that such disclosure or use is directlyrelated to and reasonably consistent with the Executive’s performance of dutiesassigned to the Executive by the Company, and except in connection withenforcing the Executive’s rights under this Agreement or if compelled by acourt or governmental agency.

 

# **Section 7.****             ****Inventions and Patents**.

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The Executive agrees thatall Work Product belongs to the Company. The Executive will perform all actions reasonably requested by the Board(whether during or after the Employment Period) to establish and confirm suchownership (including, without limitation, the execution and delivery ofassignments, consents, powers of attorney and other instruments) and to providereasonable assistance to the Company in connection with the prosecution of anyapplications for patents, trademarks, trade names, service marks or reissuesthereof or in the prosecution or defense of interferences relating to any WorkProduct.  Notwithstanding the 

 

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foregoing,the Executive has been notified by the Company, and understands, that theforegoing provisions of this Section 7 do not apply to an invention forwhich no equipment, supplies, facilities or trade secret information of theCompany or its affiliates was used and which was developed entirely on theExecutive’s own time, unless:  (a) theinvention relates (i) to the business of the Company, or (ii) to theCompany’s actual or demonstrably anticipated research and development, or (b) theinvention results from any work performed by the Executive for the Company orany of its affiliates.

 

# **Section 8.****             ****Non-Compete, Non-Solicitation,Non-Disparagement**.

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The Executive acknowledgesand agrees that during the course of such Executive’s association with theCompany or any of its Subsidiaries, the Executive has had the opportunity todevelop relationships with existing employees, customers and other businessassociates of the Company and its Subsidiaries which relationships constitutegoodwill of the Company and its Subsidiaries, and the Company and itsSubsidiaries would be irreparably damaged if the Executive were to take actionsthat would damage or misappropriate such goodwill.  Accordingly, from and after the AgreementDate, the Executive covenants and agrees to comply with the terms andprovisions set forth in this Section 8.

 

## (a)           TheExecutive acknowledges that the Company and its Subsidiaries currently conductthe Business throughout the world (the “Territory”).  Accordingly, during the period (the “Non-CompetePeriod”) commencing on the Agreement Date and ending on the firstanniversary of either (i) the Termination Date, or (ii) the date ofthe Executive’s termination of employment during any Post-Employment AgreementPeriod, as applicable, the Executive shall not, without the consent of theCompany, directly or indirectly, enter into, engage in, assist, give or lendfunds to or otherwise finance, be employed by or consult with, or have a financialor other interest (other than (i) an ownership interest of less than 1% ofthe outstanding common equity securities in any publicly traded company and (ii) aninvestment by the Executive in the restaurant business operated by theExecutive’s brother) in, any business which competes with the Business, whetherfor or by himself or as an independent contractor, agent, stockholder, partneror joint venturer for any other Person. To the extent that the covenant provided for in this Section 8(a) orSection 8(b) may later be deemed by a court to be too broad to beenforced with respect to its duration or with respect to any particularactivity or geographic area, the court making such determination shall have thepower to reduce the duration or scope of this Section 8(a) and Section 8(b),and to add or delete specific words or phrases. This Section 8(a) and Section 8(b) as modified shallthen be enforced.

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## (b)           TheExecutive covenants and agrees that during the Non-Compete Period, theExecutive will not, directly or indirectly, either for himself or for any otherPerson (i) solicit any employee of the Company or any of its Subsidiariesto terminate his or her employment with the Company or any of its Subsidiaries,(ii) solicit any customer of the Company or any of its Subsidiaries topurchase products or services of or on behalf of the Executive or such otherPerson that are competitive with the products or services provided by theCompany or any of its Subsidiaries or (iii) take any action (not otherwisedescribed in Section 8(b)(i) and (ii)) intended to cause injury tothe relationships between the Company or any of its Subsidiaries or any oftheir employees and any lessor, lessee, vendor, supplier, customer,distributor, employee, consultant or other business associate of the Company orany of its Subsidiaries as such 

 

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## relationshiprelates to the Company’s or any of its Subsidiaries’ conduct of the Business.Notwithstanding the foregoing, the restrictions set forth in Section 8(b)(i) shallexpire on the first anniversary of a Liquidation Event.

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## (c)           TheExecutive understands that the foregoing restrictions may limit his ability toearn a livelihood in a business similar to the Business, but he neverthelessbelieves that he has received and will receive sufficient consideration andother benefits under this Agreement and the Pliant 2006 Restricted StockIncentive Plan and Pliant Deferred Cash Incentive Plan to clearly justify suchrestrictions which, in any event, he does not believe would prevent him fromotherwise earning a living.

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# **Section 9.****             ****Delivery of Materials Upon Termination ofEmployment**.

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The Executive shall deliverto the Company at either (i) the termination of the Employment Period or, (ii) thetermination of the Executive’s employment during any Post-Employment AgreementPeriod, or (iii) at any other time the Company may request, as applicable,all property belonging to the Company or its Subsidiaries, including memoranda,notes, plans, records, reports, computer tapes and software and other documentsand data (and copies thereof) relating to the Confidential Information or WorkProduct which he may then possess or have under his control regardless of thelocation or form of such material and, if requested by the Company, willprovide the Company with written confirmation that all such materials have beendelivered to the Company.

 

# **Section 10.****           ****Insurance**.

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The Company may, for its ownbenefit, maintain “keyman” life and disability insurance policies covering theExecutive.  The Executive will cooperatewith the Company and provide such information or other assistance as theCompany may reasonably request in connection with the Company’s obtaining andmaintaining such policies.

 

# **Section 11.****           ****Enforcement**.

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Because the Executive’sservices are unique and because the Executive has access to ConfidentialInformation and Work Product, the parties hereto agree that money damages wouldbe an inadequate remedy for any breach of Sections 5(f), 6, 7, 8 or 9 of this Agreement.  Therefore, in the event of a breach orthreatened breach of Sections 5(f), 6, 7, 8 or 9 of this Agreement, the Companyor its successors or assigns may, in addition to other rights and remediesexisting in their favor, apply to any court of competent jurisdiction forspecific performance and/or injunctive or other relief in order to enforce, orprevent any violations of, such Sections. 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, ifthe Executive violates any provision of the foregoing Sections 5(f), 6, 7, 8 or9, the Company shall have the right to set off any payments then or thereafterdue from the Company to the Executive pursuant to Section 5(a)(ii), Section 5(a)(iii),Section 5(b)(iv), Section 5(e), the Pliant 2006 Restricted StockIncentive Plan and the Pliant Deferred Cash Incentive Plan against any damagesand costs or expenses incurred by the Company or its Subsidiaries by suchviolation, in each case without 

 

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limitingor affecting the Executive’s obligations under such Sections 5(f), 6, 7, 8 and9 or the Company’s other rights and remedies available at law or equity.

 

# **Section 12.****           ****Representations**.

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(a)           Each party hereby representsand warrants to the other party that the execution, delivery and performance ofthis Agreement by such party does not and will not conflict with, breach,violate or cause a default under any agreement, contract or instrument to whichsuch party is a party or any judgment, order or decree to which such party issubject.

 

(b)           The Executive represents andwarrants to the Company that the Executive is not a party to or bound by anyemployment agreement, consulting agreement, non-compete agreement,confidentiality agreement or similar agreement with any Person other than theCompany.

 

(c)           The Company represents thatthe execution, delivery and performance of this Agreement by the Company hasbeen duly and validly authorized by the Board.

 

# **Section 13.****           ****Expense Reimbursement and Default Interest**.

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## (a)           TheCompany will reimburse the Executive for reasonable legal fees and expensesincurred by the Executive in connection with the negotiation and execution ofthis Agreement.

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## (b)           Ifthe Company fails to pay any amount due to the Executive under this Agreementwithin thirty (30) days after such amount became due and owing hereunder,interest shall accrue on such amount from the date it became due and owinguntil the date of payment at an annual rate (based on a 365 day year) equal tothe prime lending rate publicly announced from time to time by Credit SuisseFirst Boston in effect at its principal office in New York City during theperiod of such nonpayment plus two percent.

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# **Section 14.****           ****No Mitigation**.

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The Executive shall not haveany duty to mitigate the amounts payable by the Company under this Agreementupon any termination of employment by seeking new employment followingtermination.  Except as specifically otherwiseprovided in this Agreement, all amounts payable pursuant to this Agreementshall be paid without reduction to the extent of any amounts of salary,compensation or other amounts which may be paid or payable to the Executive asthe result of the Executive’s employment by another employer or selfemployment.

 

# **Section 15.****           ****Indemnification**.

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## (a)           Duringthe Employment Period, the Company shall maintain directors and officers’liability insurance covering the Executive through the second anniversary ofthe Termination Date.  Such insuranceshall provide coverage in amounts and on terms and conditions customary for aprivate corporation in the Business.  TheExecutive confirms that the current directors and officers liability insurancepolicy satisfies the foregoing requirements.

 

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## (b)           Duringthe Employment Period, the Company shall not amend or repeal any article,section or provision of the Company’s Certificate of Incorporation or Bylawsrelated to liability and/or indemnification of officers and directors of theCompany in a manner materially adverse to the Executive without the priorwritten consent of the Executive.

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# **Section 16.****           ****Parachute Gross-Up**.

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If the Executive incurs anexcise tax imposed on “excess parachute payments” under Code Section 4999,as defined in Code Section 280G, on account of any amount paid or payableto, or for the benefit of, the Executive by the Company or its stockholders oraffiliates in respect of obligations of the Company, in each case, in respectof this Agreement or any of the Company’s incentive and benefit plans, then theCompany shall pay the Executive, simultaneously with the payment of the excessparachute payment(s) and in no event later than the end of the Executive’staxable year after the taxable year in which such taxes are remitted, and subjectto Section 17, an amount equal to the sum of (x) the excise taxespayable on such excess parachute payments, plus (y) an additional amountsuch that after payment of all Taxes on such additional amount there remains abalance sufficient to pay Taxes actually due and payable on the payment made inclause (x).

 

# **Section 17.****           ****Section 409A Amendments**.

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## (a)           Benefitsunder this Agreement are intended either not to be part of a deferredcompensation plan within the meaning of Section 409A of the Code and regulationsand rulings thereunder (“Section 409A”), or to meet the requirements of Section 409Afor deferred compensation plans, and this Agreement shall be construedconsistently with that intent.

##  

## (b)           Withoutlimiting the generality of Section 17(a) and notwithstanding anyother provision in this Agreement to the contrary, if immediately prior to theTermination Date or, as applicable, the termination of the Executive’semployment during any Post-Employment Agreement Period, the Executive is a “specifiedemployee” (within the meaning of Section 409A(a)(2)(B)(i) of the Codeand the regulations or rulings thereunder), any payments otherwise payable tothe Executive pursuant to clauses (ii) or (iii) of Section 5(a),clauses (iii) or (iv) of Section 5(b) or Section 5(e) duringthe first six (6) months following the Termination Date or, as applicable,the termination of the Executive’s employment during any Post-EmploymentAgreement Period (without regard to this Section 17(b)) shall be delayedand paid to the Executive in a lump sum on the date that is six (6) monthsafter the Termination Date or, as applicable, the date of termination of theExecutive’s employment during any Post-Employment Agreement Period, and anyremaining payments due under Section 5 shall be paid in accordance withthe terms of Section 5; provided, however, that this Section 17(b) shallnot apply if the Executive’s employment is terminated due to his death or dueto his disability (within the meaning of Code Section 409A(a)(2)(C)), andfurther provided that if the Executive dies prior to the date that is six (6) monthsafter the Termination Date or, as applicable, the date of termination of theExecutive’s employment during any Post-Employment Agreement Period, hisbeneficiaries or estate shall receive an immediate lump sum payment of allamounts otherwise payable to the Executive through the date of the Executive’sdeath pursuant to Section 5 (without regard to this Section 17(b))that were delayed pursuant to this Section 17(b), 

 

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## andany remaining payments due under Section 5 will be paid in accordance withthe terms of Section 5.

##  

# **Section 18.****           ****Definitions**.

#  

“Board” shall meanthe board of directors of the Company, excluding the Executive if he is amember thereof at such time.

 

“Business Day” shallmean any day that is not (a) a Saturday, Sunday or legal holiday or (b) aday in which banks are not required by law to be open in New York, New York.

 

“Cause” shall mean:

 

## (a)           (i) theExecutive commits a crime involving his fraud, theft or dishonesty or (ii) engagesin willful or wrongful activities that are materially detrimental to theCompany or its Subsidiaries;

##  

## (b)           thematerial and willful breach by the Executive of his responsibilities under thisAgreement or willful failure to comply with reasonable directives or policiesof the Company or the Board, but only if the Company has given Executivewritten notice specifying the breach or failure to comply, demanding that theExecutive remedy the breach or failure to comply and the Executive (i) failedto remedy the alleged breach or failed to comply within thirty days afterreceipt of the written notice and (ii) failed to take all reasonable stepsto that end during the thirty days after he received the notice; or

##  

## (c)           thecontinued use of alcohol or drugs by the Executive to an extent that such useinterferes with the performance of the Executive’s duties and responsibilities.

##  

Notwithstanding theforegoing, the term “Cause” shall not include any one or more of thefollowing: (i) bad management decision-making by the Executive or (ii) anyact or omission reasonably believed by the Executive in good faith to have beenin and not opposed to the best interests of the Company and its Subsidiaries (withoutintent of the Executive to gain, directly or indirectly, a profit to which theExecutive was not legally entitled) and reasonably believed by the Executivenot to have been improper or unlawful.

 

The Executive shall have anopportunity to appear before the Board, with or without legal representation,in connection with any event or circumstance which is the subject matter of aTermination for Cause in order to offer or present his perspective on any ofthe matters which are the subject of a Termination for Cause.  In the event of a dispute between theExecutive and the Company regarding whether “Cause” exists, any determinationby the Board shall be subject to de novo review by any forum deciding thedisputed issue; provided, however, that such de novo review shall not otherwisechange or shift the burden of proof in connection with any dispute resolutionproceeding.

 

“COBRA” means theConsolidated Omnibus Budget Reconciliation Act of 1985.

 

“Code” means theInternal Revenue Code of 1986 and the regulations thereunder, as amended and ineffect from time to time.

 

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“Common Stock” meansthe common stock of the Company, $0.01 par value per share.

 

“Confidential Information”means information that is not known to the public, that is used, developed orobtained by the Company or any of its Subsidiaries in connection with theBusiness, and that the Executive learns in the course of performing servicesfor the Company or any of its Subsidiaries, including, but not limited to, (a) information,observations, procedures and data obtained by the Executive while employed bythe Company (including those obtained prior to the Agreement Date) concerningthe business or affairs of the Company or any of its Subsidiaries, (b) productsor services of the Company or any of its Subsidiaries, (c) costs andpricing structures of the Company or any of its Subsidiaries, (d) analysesof the Company or any of its Subsidiaries, (e) drawings, photographs andreports of the Company or any of its Subsidiaries, (f) computer software,including operating systems, applications and program listings of the Companyor any of its Subsidiaries, (g) flow charts, manuals and documentation ofthe Company or any of its Subsidiaries, (h) data bases of the Company orany of its Subsidiaries, (i) accounting and business methods of theCompany or any of its Subsidiaries, (j) inventions, devices, newdevelopments, methods and processes, whether patentable or unpatentable andwhether or not reduced to practice of the Company or any of its Subsidiaries, (k) customersand customer lists of the Company or any of its Subsidiaries, (l) othercopyrightable works of the Company or any of its Subsidiaries, (m) allproduction methods, processes, technology and trade secrets of the Company orany of its Subsidiaries, and (n) all similar and related information ofthe Company or any of its Subsidiaries in whatever form.  Confidential Information will not include anyinformation that is now or later becomes part of the public domain, withoutbreach of this Agreement by the Executive.

 

“Disability” meansany medically determinable physical or mental impairment that has lasted, or isreasonably expected to last, for a period of at least six (6) months, canreasonably be expected to be permanent or of indefinite duration, and rendersthe Executive unable to perform his duties hereunder, as certified by aphysician jointly selected by the Company and the Executive or the Executive’slegal representative.

 

“JPMP” means J.P. MorganPartners (BHCA), L.P., a Delaware limited partnership.

 

“Liquidation Event”means the consummation of (a) the transfer (in one or a series of relatedtransactions) of all or substantially all of the Company’s consolidated assetsto a Person or a group of Persons acting in concert (other than to a Subsidiaryof the Company, JPMP or any of their respective affiliates); (b) the saleor transfer (in one or a series of related transactions) of a majority of theoutstanding Common Stock to one Person or a group of Persons acting in concert(other than to JPMP or any of its affiliates); or (c) the merger orconsolidation of the Company with or into another Person (other than to JPMP orany of its affiliates), in the case of clauses (b) and (c) above,under circumstances in which the holders of a majority of the voting power ofthe outstanding Common Stock immediately prior to such transaction own lessthan a majority in voting power of the outstanding Common Stock or other votingsecurities of the surviving or resulting corporation or acquirer, as the casemay be, immediately following such transaction.

 

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“Notice of Termination”means a written notice delivered by the Company to the Executive which setsforth (a) the specific termination provisions in this Agreement reliedupon by the Company to effect a termination of the Executive’s employmenthereunder, (b) in reasonable detail the facts and circumstances claimed toprovide a basis for termination of the Executive’s employment under suchtermination provision, as applicable, and (c) if the Termination Date isother than the date of receipt of such Notice of Termination, the TerminationDate.

 

“Person” shall beconstrued as broadly as possible and shall include an individual person, apartnership (including a limited liability partnership), a corporation, anassociation, a joint stock company, a limited liability company, a trust, ajoint venture, an unincorporated organization and a governmental authority.

 

“Resignation for GoodReason” occurs if the Executive terminates his employment with the Companyand the Subsidiaries in accordance with Section 4(c) because, withoutExecutive’s express written consent, any of the events described below occursduring the Employment Period and, with respect to the events described inclauses (a) through (d) below, the Company fails to cure or remedythe same within thirty days (the “Cure Period”) after receiving writtennotice thereof from the Executive, which the Executive shall deliver withinninety (90) days following the occurrence of any of such events; it beingagreed that the failure by the Executive to provide such notice during such 90day period shall preclude the Executive from invoking any such events as thebasis for a Resignation for Good Reason:

 

## (a)           theassignment to the Executive of any material duty materially inconsistent withthe Executive’s position (including status, offices, titles and reportingrequirements), authority, duties or responsibilities as contemplated by Section 3(a);

##  

## (b)           thematerial breach by the Company of any material provision of this Agreement (itbeing agreed that the failure to elect or re-elect the Executive to the Boardin accordance with Section 5(f) during the Employment Period and thefailure to appoint or reappoint the Executive as the President and ChiefExecutive Officer of the Company in accordance with Section 3(a) duringthe Employment Period shall constitute a material breach by the Company of amaterial provision of this Agreement);

##  

## (c)           anyreduction in the Base Salary or the applicable percentages of Base Salary setforth in the Management Incentive Plan which are used to determine the BonusCompensation, if any, payable hereunder;

##  

## (d)           theCompany requires the Executive to, or assigns duties to the Executive whichwould reasonably require him to, relocate his principal business office morethan forty (40) miles from where it is located on the Agreement Date;

##  

## (e)           atermination of employment by the Executive for any reason or no reason at anytime prior to the six month anniversary of the date of a Liquidation Event.

##  

“Retirement” meansthe Executive’s election to terminate his employment with the Company and itsSubsidiaries following the date of his sixty-fifth birthday.

 

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“Stockholders’ Agreement”means the Stockholders’ Agreement dated as of July 18, 2006, among theCompany and the stockholders of the Company from time to time, as the same hasbeen amended and as may be amended, modified or supplemented from time to time.

 

“Subsidiary” of aPerson means any other Person fifty percent (50%) or more of whose outstandingvoting securities or other equity interests are directly or indirectly owned bythe first Person.

 

“Taxes” means anyFederal, state or local income, excise or other taxes.

 

“Termination Date”shall have the meaning prescribed by Section 4(a); provided, however, thatfor purposes of determining the date(s) of any payment(s) under Section 5or (if applicable) Section 17(b), the Termination Date shall be the dateof separation from service (as defined for purposes of Section 409A).

 

“Work Product” shallmean all inventions, innovations, improvements, technical information, systems,software developments, methods, designs, analyses, drawings, reports, servicemarks, trademarks, tradenames, logos and all similar or related information(whether patentable or unpatentable) which relates to the Company’s or any ofits Subsidiaries’ business, research and development or existing or futureproducts or services and which are conceived, developed or made by theExecutive (whether or not during usual business hours and whether or not aloneor in conjunction with any other Person) while employed by the Company(including those conceived, developed or made prior to the Agreement Date)together with all patent applications, letters patent, trademark, tradename andservice mark applications or registrations, copyrights and reissues thereofthat may be granted for or upon any of the foregoing.

 

# **Section 19.****           ****General Provisions**.

#  

## (a)           Severability.  It is the desireand intent of the parties hereto that the provisions of this Agreement beenforced to the fullest extent permissible under the laws and public policiesapplied in each jurisdiction in which enforcement is sought.  Accordingly, if any particular provision ofthis Agreement shall be adjudicated by a court of competent jurisdiction to beinvalid, prohibited or unenforceable for any reason, such provision, as to suchjurisdiction, shall be ineffective, without invalidating the remainingprovisions of this Agreement or affecting the validity or enforceability ofthis Agreement or affecting the validity or enforceability of such provision inany other jurisdiction.  Notwithstandingthe foregoing, if such provision could be more narrowly drawn so as not to beinvalid, prohibited or unenforceable in such jurisdiction, it shall, as to suchjurisdiction, be so narrowly drawn, without invalidating the remainingprovisions of this Agreement or affecting the validity or enforceability ofsuch provision in any other jurisdiction.

##  

## (b)           Notices.  All notices,requests, demands, claims and other communications hereunder shall be inwriting and sufficient if (i) delivered personally, (ii) delivered bycertified United States Post Office mail, return receipt requested, (iii) telecopiedor (iv) sent to the recipient by a nationally-recognized overnight courierservice (charges prepaid) and addressed to the intended recipient as set forthbelow:

 

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### (i)            if to the Executive, to him at his last known residenceaddress on file with the Company, with a copy to:

###  

SonnenscheinNath & Rosenthal LLP

4520 Main Street

Suite 1100

Kansas City, Missouri 64111

Attention: Steven L. Rist

Telephone: (816) 460-2645

Telecopier: (816) 460-2652

 

### (ii)           if to the Company, to:

###  

PliantCorporation

1475Woodfield Road

Suite 700

Schaumburg,Illinois 60173

Attention:Chief Financial Officer

Telecopier:(847) 969-3338

Telephone:(847) 969-3330

 

witha copy to:

 

CCMPCapital Advisors, LLC

245Park Avenue, 16th Floor

NewYork, New York 10167-2403

Telephone:(212) 600-9650

Telecopier:(917) 464-9024

Attention:Timothy Walsh

 

and

 

O’Melveny & Myers LLP

7Times Square

NewYork, New York 10036

Telephone:(212) 408-2400

Telecopier:(212) 408-2420

Attention:Ilan S. Nissan, Esq.

 

and

 

SidleyAustin LLP

OneSouth Dearborn Street

Chicago,Illinois  60603

Telephone:(312) 853-7000

Telecopier:(312) 853-7036

Attention:  Brian J. Gold;

 

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or such other address as therecipient party to whom notice is to be given may have furnished to the otherparty in writing in accordance herewith. Any such communication shall deemed to have been delivered and received (i) inthe case of personal delivery, on the date of such delivery, (ii) in thecase of delivery by mail, on the date received, (iii) if telecopied, onthe date telecopied as evidenced by confirmed receipt, and (iv) in thecase of delivery by nationally recognized, overnight courier, on the datereceived.

 

## (c)           EntireAgreement.  This Agreement and the documents expresslyreferred to herein embody the complete agreement and understanding among theparties and, with respect to the subject matter of this Agreement, supersedeand preempt any prior understandings, agreements or representations by or amongthe parties, written or oral, which may have related to the subject matterhereof in any way.

##  

## (d)           Counterpartsand Facsimile Execution.  This Agreement may be executed in two or morecounterparts, all of which shall be considered one and the same agreement andshall become effective when one or more counterparts have been signed by eachof the parties and delivered (by facsimile or otherwise) to the other party, itbeing understood that all parties need not sign the same counterpart.  Any counterpart or other signature to thisAgreement that is delivered by facsimile shall be deemed for all purposes asconstituting good and valid execution and delivery by such party of thisAgreement.

##  

## (e)           Successorsand Assigns.  Except as otherwise provided herein, thisAgreement shall bind and inure to the benefit of and be enforceable by theExecutive and the Company and their respective successors, assigns, heirs,representatives and estate, as the case may be; provided, however,that the obligations of the Executive under this Agreement shall not beassigned without the prior written consent of the Company.  The Company will request any successor to allor substantially all assets of the Company upon a Liquidation Event of the typespecified in clause (a) thereof to assume expressly and agree to performthis Agreement in the same manner and to the same extent that the Company wouldbe required to perform it if no such succession had taken place.  If such successor shall not so assume theperformance thereof or if the Executive does not consent to such assignment,then the Executive’s sole recourse under this Agreement with respect to suchevent shall be to effect a Resignation for Good Reason, effective immediatelyprior to the consummation of such Liquidation Event; provided, however,that such Resignation for Good Reason shall not be effective if suchLiquidation Event shall not be consummated. Any successor to the assets of the Company which so assumes or agrees toperform this Agreement with the consent of the Executive shall be liable underthis Agreement as if such successor were the Company.

##  

## (f)            Paymentsto Beneficiary.  If the Executive dies before receivingamounts to which the Executive is entitled under this Agreement, such amountsshall be paid in accordance with the terms of this Agreement to the beneficiarydesignated in writing by the Executive, or if none is so designated, to theExecutive’s estate.

##  

## (g)           Survivalof the Executive’s Rights.  All of the Company’s and Executive’s rightshereunder shall survive any termination of the relationship of the Executivewith the 

 

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## Company,other than those which expressly terminate, or are contemplated to terminatehereunder, upon a termination of employment.

##  

## (h)           Amendmentand Waiver.  The provisions of this Agreement may beamended and waived only with the prior written consent of the Company and theExecutive, and no course of conduct or failure or delay in enforcing theprovisions of this Agreement shall affect the validity, binding effect orenforceability of this Agreement or any provision hereof.

##  

## (i)            GoverningLaw.  This Agreement shall be governed by andconstrued in accordance with the domestic laws of the State of Illinois withoutgiving effect to any choice or conflict of law provision or rule thatwould cause the application of the laws of any jurisdiction other than theState of Illinois.

##  

## (j)            Selectionof Jurisdiction.  WITH RESPECT TO ANY LAWSUIT OR PROCEEDINGARISING OUT OF OR BROUGHT WITH RESPECT TO THIS AGREEMENT, EACH OF THE PARTIESHERETO IRREVOCABLY (a) SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITEDSTATES FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS; (b) WAIVES ANYOBJECTION IT MAY HAVE AT ANY TIME TO THE LAYING OF VENUE OF ANY PROCEEDINGBROUGHT IN ANY SUCH COURT; (c) WAIVES ANY CLAIM THAT SUCH PROCEEDING HASBEEN BROUGHT IN AN INCONVENIENT FORUM; AND (d) FURTHER WAIVES THE RIGHT TOOBJECT, WITH RESPECT TO SUCH PROCEEDINGS, THAT SUCH COURT DOES NOT HAVEJURISDICTION OVER SUCH PARTY.

##  

## (k)           Waiverof Jury Trial.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLYWAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIMARISING OUT OF OR RELATING TO THIS AGREEMENT.

##  

## (l)            MutualContribution.  The parties to this Agreement and theircounsel have mutually contributed to its drafting.  Consequently, no provision of this Agreementshall be construed against any party on the ground that one party drafted theprovision or caused it to be drafted.

##  

## (m)          DescriptiveHeadings; Nouns and Pronouns.  Descriptive headings are for convenience onlyand shall not control or affect the meaning or construction of any provision ofthus Agreement.  Whenever the context mayrequire, any pronouns used herein shall include the corresponding masculine,feminine or neuter forms, and the singular form of nouns and pronouns shallinclude the plural and vice-versa.

 

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**IN WITNESS WHEREOF**, the partieshereto have executed this Employment Agreement on and to be effective as of thedates first written above.

 

 
|   | **PLIANT  CORPORATION** |
|--------|-------------------------|
|   |                    |
|   |                    |
|   | By:                     |  /s/ R. David Corey |
|   | Name:                   | R.  David Corey |
|   | Title:                  | Executive  Vice President and |
|   |                    | Chief  Operating Officer |
|   |                    |   |
|   |                    |   |
|   | **EXECUTIVE**           |
|   |                    | ** ** |
|   |  /s/ Harold Bevis  |
|   | Harold  Bevis           |
|        |                         |  |  |

 

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