**Exhibit 10.4**

 

**EMPLOYMENTAGREEMENT**(this “Agreement”) dated as of June 10,2005 (the “Agreement Date”), and amended and restated June 11,2008, effective as of January 1, 2008, between **PLIANTCORPORATION**, a Delaware corporation (the “Company”), and **R.****DAVID COREY**(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 currently employed by the Company asits Executive Vice President and Chief Operating Officer and has originallyentered into this employment agreement with the Company as of June 10,2005.

 

Section 409A of the Internal Revenue Code of1986, as amended (the “Code”) imposes additional taxes on deferred compensationthat fails to meet certain requirements.

 

The Company and the Executive each desire to amend theExecutive’s current employment agreement to comply with the requirements ofCode Section 409A and to make certain additional modifications to theterms and conditions of Executive’s employment by amending and restating theExecutive’s employment agreement to contain the terms and be subject to the conditionshereinafter 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**.

 

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 onthe Agreement Date and ending on the Termination Date determined pursuant to Section 4(a) (the“Employment Period”).

 

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

 

(a)           During theEmployment Period, the Executive’s base salary shall be $414,356.00 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 2006Restricted Stock Incentive Plan and the Deferred Cash Incentive Plan, butexcluding all other equity based incentive or compensation plans; (ii) theExecutive shall be entitled to participate in all savings and retirement planswhich may be provided by the Company from time to time to its seniorexecutives; (iii) the Executive and the Executive’s spouse and childrenshall be eligible to participate in, and receive all benefits under, welfareand insurance benefit plans which may be provided from time to time by theCompany 

 

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(including,without limitation, medical, prescription, dental, disability, individual life,group life, dependent life, accidental death and travel accident plans) tosenior executives 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.

 

(b)           In addition tothe Base Salary and other benefits specified in Section 2(a), Executiveshall participate in all applicable Management Incentive Plans of the Company.

 

(c)           The Companyshall reimburse the Executive for all reasonable expenses incurred by him inthe course of performing his duties under this Agreement which are consistentwith the Company’s policies in effect from time to time with respect to travel,entertainment and other business expenses, subject to the Company’srequirements with respect to reporting and documentation of such expenses.

 

(d)           The Companyshall deduct from any payments to be made by it to the Executive under thisAgreement any amounts required to be withheld in respect of any Taxes.

 

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

 

(a)           The Companyemploys the Executive as the Executive Vice President and Chief OperatingOfficer.  His responsibilities and dutieswill be commensurate with the title of his position, and will include thoseduties and responsibilities normally performed by the Executive Vice Presidentand Chief Operating Officer of a private corporation in the Business, includingthe management and direction of the affairs of the Company on a day to daybasis and such other duties as the Board shall assign to the Executive fromtime to time.

 

(b)           The Executiveacknowledges and agrees to discharge his duties and otherwise act in a mannerconsistent with the best interests of the Company and its Subsidiaries.  During the Employment Period, the Executiveshall devote his best efforts, on a full-time basis, to the performance of hisduties and responsibilities under this Agreement (except for vacations to whichhe is entitled pursuant to Section 2(a), illness or incapacity or otherpersonal or personal investment activities that do not interfere with his fulland timely performance of his duties and responsibilities under thisAgreement).  During the EmploymentPeriod, the Executive may, subject to Section 8, (i) serve oncorporate, civic or charitable boards or committees, (ii) deliverlectures, fulfill speaking engagements or teach at educational institutions,and (iii) manage 

 

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personalinvestments, so long as such activities, either individually or in theaggregate, do not materially conflict with the performance of the Executive’sduties under this Agreement.

 

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

 

(a)           TerminationDate.  The Executive’s employmentunder this Agreement shall terminate upon the earliest to occur (the date ofsuch occurrence being the “Termination Date”) of (i) July 31,2010 (an “Expiration”), (ii) the effective date of the Executive’sresignation (a “Resignation”), (iii) the effective date of theExecutive’s Resignation for Good Reason, (iv) the Executive’s death, (v) theExecutive’s Disability, (vi) the Executive’s Retirement, (vii) theeffective date of a termination of the Executive’s employment for Cause by theCompany (including by the Board) (a “Termination for Cause”), and (viii) theeffective date of a termination of the Executive’s employment by the Company(including by the Board) for reasons that do not constitute Cause (a “TerminationWithout Cause”).  The effective dateof the Executive’s Resignation or the Executive’s Retirement shall be asdetermined under Section 4(b); the effective date of a Resignation forGood Reason shall be as determined under Section 4(c); the effective dateof the Executive’s Disability shall be the date specified in a Notice ofTermination delivered to the Executive by the Company; and the effective dateof a Termination for Cause or a Termination Without Cause shall be the datespecified in the Notice of Termination delivered to the Executive by theCompany.

 

(b)           Resignation orRetirement.  TheExecutive shall give the Company and the Board at least ninety (90) days’ priorwritten notice of a Resignation or Retirement, with the effective date of suchResignation or Retirement specified therein. The Board may, in its discretion, accelerate the effective date of aResignation, but not of a Retirement.

 

(c)           Resignation forGood Reason.  Except fora Resignation for Good Reason effected pursuant to Section 19(e), theExecutive will give the Company and the Board at least thirty (30) days’ priorwritten notice of a Resignation for Good Reason.  Such notice may be provided only after theCompany shall fail to cure or remedy the events described in the definition of “Resignationfor Good Reason” (other than in clause (e) thereof) during the CurePeriod.

 

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

 

(a)           In the event ofa Termination Without Cause or a Resignation for Good Reason, the Executive orhis beneficiaries or estate shall receive the following:

 

(i)            a lump sum payment of theunpaid portion of the Base Salary, computed on a prorata basisto the Termination Date, payable on the Company’s next payroll date;

 

(ii)           subject to Section 17(b),the monthly portion of the Base Salary, payable in such installments as iscustomary for senior executives of the Company, but not less frequently thanmonthly, over the period beginning on the Termination Date and ending on thesecond anniversary of the Termination Date; provided, however,that in the event of a breach by the Executive of Sections 6, 7, 8 or 9 on orafter the Termination Date, the provisions of Section 11 shall apply;

 

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(iii)          subject to Section 17(b),a lump sum amount equal to any incentive plan award earned under any applicableManagement Incentive Plan that was paid or is payable to the Executive for theyear preceding the calendar year in which the Termination Date occurs (the “IncentivePlan Award”), multiplied by a fraction, the numerator of which is thenumber of days of the then-current calendar year that elapse before theTermination Date, and the denominator of which is 365; provided, however,that in the event of a breach by the Executive of Sections 6, 7, 8 or 9 on orafter the Termination Date, the provisions of Section 11 shall apply;

 

(iv)          subject to Section 17(b),a lump sum payment in an amount equal to two times the Incentive Plan Award,payable on the Termination Date.

 

(v)           a lump sum reimbursement forany expenses for which the Executive shall not have been previously reimbursed,as provided in Section 2(c), payable on the next payroll date followingthe date on which such reimbursement expense is submitted to the Company; provided,  however, that such reimbursementexpense is submitted to the Company within one year from the Termination Date;and

 

(vi)          subject to Section 17,continued participation in the Company’s comprehensive medical and dental planfor the period beginning on the Termination Date and ending on the secondanniversary of the Termination Date, with the COBRA continuation coveragequalifying event connected with the Executive’s termination occurring when heloses coverage occurring at the end of that two-year period.  If it is unable to obtain the consent of itsmedical and/or dental plan insurer to provide coverage under this clause (v),the Company may instead pay the full premium cost of other medical and dentalinsurance that provides comparable coverage for the required two year period,and require the Executive to pay an amount equal to the then-current COBRAcontinuation premium for the period commencing on the second anniversary of theTermination Date during which the Executive would be entitled to COBRAcontinuation coverage (with the Executive and his dependents being treated for allnotice, election, coverage entitlement and other administrative purposes thesame as other COBRA qualified beneficiaries under the Company’s medical anddental plan).  Payment or reimbursementof the amount of any premium, medical or dental expenses under this clause (v) shallbe made on or before the last day of the Executive’s taxable year following thetaxable year in which the premium, medical or dental expense was incurred.  The parties agree that the Executive’sentitlement to medical and dental coverage during the two years after theTermination Date will end on the date he becomes eligible for comprehensivemedical and dental coverage under a plan of his successor employer, if hebecomes so eligible before the second anniversary of the Termination Date.

 

(b)           In the event ofthe Executive’s death, Disability, Retirement or an Expiration, the Executiveor his beneficiaries or estate shall have the right to receive the following:

 

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(i)            a lump sum payment of theunpaid portion of the Base Salary, computed on a prorata basisto the Termination Date, payable on the Company’s next payroll date;

 

(ii)           a lump sum reimbursement forany expenses for which the Executive shall not have been previously reimbursed,as provided in Section 2(c), payable on the next payroll date followingthe date on which such reimbursement expense request is submitted to theCompany; provided,  however,that such reimbursement expense is submitted to the Company within one year fromthe Termination Date; and

 

(iii)          subject to Section 17(b),in the event of a termination due to Disability, such Executive’s Base Salarywill continue to be in such installments as is customary for senior executivesof the Company, but not less frequently than monthly, until such time as theExecutive first receives benefits under the Company’s then-effective long-termdisability plan; and

 

(iv)          subject to Section 17(b) andsolely in the case of the Executive’s death or Disability, an amount equal toany Incentive Plan Award earned under any applicable Management Incentive Planthat 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; provided,however, that in the event of a breach by the Executive of Sections 6,7, 8 or 9 on or after the Termination Date, the provisions of Section 11shall apply.

 

(c)           In the event ofa Termination for Cause or a Resignation, the Executive or his beneficiaries orestate shall have the right to receive the following:

 

(i)            a lump sum payment of theunpaid portion of the Base Salary, computed on a prorata basisto the Termination Date, payable on the Company’s next payroll date; and

 

(ii)           a lump sum reimbursement forany expenses for which the Executive shall not have been previously reimbursed,as provided in Section 2(c), payable on the next payroll date followingthe date on which such reimbursement expense request is submitted to theCompany; provided,  however,that such reimbursement expense is submitted to the Company within one yearfrom the Termination Date.

 

(d)           Notwithstanding any other term of this Agreement tothe contrary, but subject to Section 11 hereof, upon termination of theExecutive’s employment for any reason, the Executive will in all eventsreceive, when they would otherwise be then due and owing, any amounts that, asof his Termination Date, have accrued and become vested under the Pliant 2006Restricted Stock Incentive Plan, the Pliant Deferred Cash Incentive Plan, theCompany’s qualified and nonqualified retirement plans, all statutory rights toreceive or purchase welfare benefits, reimbursement for unreimbursed expensesin accordance with the policies of the 

 

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Company in effect as ofthe Termination Date, accrued vacation pay, and any other employee benefitsowing to him as of the Termination Date, all as determined in accordance withthe applicable terms of the plans themselves and the laws applicable tothem.  In addition, the Company shallcontinue (i) to indemnify the Executive for acts and omissions whichoccurred prior to the Termination Date, subject to and in accordance with theterms of the Company’s organizational documents referred to in Section 15(b) asthey are in effect on the Termination Date and (ii) to retain coverage forthe Executive under the Company’s directors and officers liability insurancepolicies as provided in Section 15(a).

 

(e)           If the Executive is employed as theExecutive Vice President and Chief Operating Officer of the Company followingan Expiration (such period, the “Post-Employment Agreement Period”) andno other event of termination of employment under this Agreement has occurredprior to such Expiration, the Executive shall be employed by the Company as an “at-will”employee during the Post-Employment Agreement Period.  Accordingly, the Executive’s employment maybe terminated at any time during the Post-Employment Agreement Period, for anyreason.  Subject to Section 17(b),if the Executive’s employment with the Company is terminated by the Company atany time during the Post-Employment Agreement Period for reasons thatconstitute a Terminationwithout Cause, the Executive or his beneficiaries or estate shall receive the monthly portionof the Base Salary, payable monthly, during the period beginning on the datehis employment with the Company is terminated and ending on the firstanniversary thereof; provided, however, that in the event of abreach by the Executive of Sections 6, 7, 8 or 9, the provisions of Section 11shall apply.

 

(f)            Upontermination of his employment with the Company for any reason, the Executiveshall be deemed to have automatically resigned as an officer, manager, member,and director of the Company and its Subsidiaries and the Executive shallexecute and deliver to the Company documentation evidencing such resignations(but the failure to execute and deliver such documentation shall not affectsuch deemed resignations).  Theresignations effected by this Section 5(f) shall not constitute a “Resignationfor Good Reason” or a “Resignation” hereunder.

 

**Section 6.****             ****Nondisclosure and Nonuse of Confidential Information**.

 

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**.

 

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 any 

 

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applicationsfor patents, trademarks, trade names, service marks or reissues thereof or inthe prosecution or defense of interferences relating to any Work Product.  Notwithstanding the foregoing, the Executivehas been notified by the Company, and understands, that the foregoingprovisions of this Section 7 do not apply to an invention for which noequipment, supplies, facilities or trade secret information of Company or itsaffiliates was used and which was developed entirely on the Executive’s owntime, unless: (a) the invention relates (i) to the business of theCompany, or (ii) to the Company’s actual or demonstrably anticipatedresearch and development, or (b) the invention results from any workperformed by the Executive for the Company or any of its affiliates.

 

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

 

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 Agreement Date, the Executive covenants and agrees tocomply with the terms and provisions set forth in this Section 8.

 

(a)           The Executive acknowledgesthat the Company and its Subsidiaries currently conduct the Business throughoutthe world (the “Territory”). Accordingly, during the period (the “Non-Compete Period”)commencing on the Agreement Date and ending on the first anniversary of theTermination Date, the Executive shall not, without the consent of the Company,directly or indirectly, enter into, engage in, assist, give or lend funds to orotherwise finance, be employed by or consult with, or have a financial or otherinterest (other than an ownership interest of less than 1% of the outstandingcommon equity securities in any publicly traded company) in, any business whichcompetes with the Business, whether for or by himself or as an independentcontractor, agent, stockholder, partner or joint venturer for any otherPerson.  To the extent that the covenantprovided for in this Section 8(a) may later be deemed by a court tobe too broad to be enforced with respect to its duration or with respect to anyparticular activity or geographic area, the court making such determinationshall have the power to reduce the duration or scope of this Section 8(a),and to add or delete specific words or phrases. This Section 8(a) as modified shall then be enforced.

 

(b)           The Executivecovenants and agrees that during the Non-Compete Period, the Executive willnot, directly or indirectly, either for himself or for any other Person (i) solicitany employee of the Company or any of its Subsidiaries to terminate his or heremployment with the Company or any of its Subsidiaries, (ii) solicit anycustomer of the Company or any of its Subsidiaries to purchase products orservices of or on behalf of the Executive or such other Person that arecompetitive with the products or services provided by the Company or any of itsSubsidiaries or (iii) take any action (not otherwise described in Section 8(b)(i) and(ii)) intended to cause injury to the relationships between the Company or anyof its Subsidiaries or any of their employees and any lessor, lessee, vendor,supplier, customer, distributor, employee, consultant or other businessassociate of the Company or any of its Subsidiaries as such relationshiprelates to the Company’s or any of its Subsidiaries’ conduct of theBusiness.  

 

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Notwithstandingthe foregoing, the restrictions set forth in Section 8(b)(i) shallexpire on the first anniversary of a Liquidation Event.

 

(c)           The Executiveunderstands that the foregoing restrictions may limit his ability to earn alivelihood in a business similar to the Business, but he nevertheless believesthat he has received and will receive sufficient consideration and otherbenefits under this Agreement to clearly justify such restrictions which, inany event, he does not believe would prevent him from otherwise earning aliving.

 

**Section 9.****             ****Delivery of Materials Upon Termination of Employment**.

 

The Executive shall deliverto the Company at the termination of the Employment Period or at any time theCompany may request, all property belonging to the Company or its Subsidiaries,including memoranda, notes, plans, records, reports, computer tapes andsoftware and other documents and data (and copies thereof) relating to theConfidential Information or Work Product which he may then possess or haveunder his control regardless of the location or form of such material and, ifrequested by the Company, will provide the Company with written confirmationthat all such materials have been delivered to the Company.

 

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

 

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**.

 

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 thisAgreement.  Therefore, in the event of abreach or threatened breach of Sections 5(f), 6, 7, 8 or 9 of this Agreement,the Company or its successors or assigns may, in addition to other rights andremedies existing in their favor, apply to any court of competent jurisdictionfor specific performance and/or injunctive or other relief in order to enforce,or prevent 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),5(a)(iv), 5(b)(iv), the Pliant2006 Restricted Stock Incentive Plan and the Pliant DeferredCash Incentive Plan against any damages and costs or expenses incurred by theCompany or its Subsidiaries by such violation, in each case without limiting oraffecting the Executive’s obligations under such Sections 5(f), 6, 7, 8 and 9or the Company’s other rights and remedies available at law or equity.

 

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

 

(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.****           ****ExpenseReimbursement and Default Interest.**

 

(a)           The Companywill reimburse the Executive for reasonable legal fees and expenses incurred bythe Executive in connection with the negotiation and execution of thisAgreement.

 

(b)           If the Company fails to payany amount due to the Executive under this Agreement within thirty (30) daysafter such amount became due and owing hereunder, interest shall accrue on suchamount from the date it became due and owing until the date of payment at anannual rate (based on a 365 day year) equal to the prime lending rate publiclyannounced from time to time by Credit Suisse First Boston in effect at itsprincipal office in New York City during the period of such nonpayment plus twopercent.

 

**Section 14.****           ****NoMitigation**

 

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 specificallyotherwise provided in this Agreement, all amounts payable pursuant to thisAgreement shall be paid without reduction to the extent of any amounts ofsalary, compensation or other amounts which may be paid or payable to theExecutive as the result of the Executive’s employment by another employer orself employment.

 

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

 

(a)           During theEmployment Period, the Company shall maintain directors and officers liabilityinsurance covering the Executive through the second anniversary of theTermination Date.  Such insurance shallprovide coverage in amounts and on terms and conditions customary for a privatecorporation in the Business. The Executive confirms that the current directorsand officers liability insurance policy satisfies the foregoing requirements.

 

(b)           During theEmployment Period, the Company shall not amend or repeal any article, sectionor provision of the Company’s Certificate of Incorporation or Bylaws related 

 

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toliability and/or indemnification of officers and directors of the Company in amanner materially adverse to the Executive without the prior written consent ofthe Executive.

 

**Section 16.****           ****ParachuteGross-Up**

 

If the Executive incurs an excise tax imposed on “excessparachute payments” under Code Section 4999, as defined in Code Section 280G,on account of any amount paid or payable to, or for the benefit of, theExecutive by the Company or its stockholders or affiliates in respect ofobligations of the Company, in each case, in respect of this Agreement or anyof the Company’s incentive and benefit plans, then the Company shall pay theExecutive, simultaneously with the payment of the excess parachute payment(s) andin no event later than the end of the Executive’s taxable year after thetaxable year in which such taxes are remitted and subject to Section 17,an amount equal to the sum of (x) the excise taxes payable on such excessparachute payments, plus (y) an additional amount suchthat 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 409AAmendments**

 

(a)           Benefits under this Agreement are intended either notto be part of a deferred compensation plan within the meaning of Section 409Aof the Code and regulations and rulings thereunder (“Section 409A”)or to meet the requirements of Section 409A for deferred compensationplans; and this Agreement shall be construed consistently with that intent.

 

(b)           Without limiting the generality of Section 17(a) andnotwithstanding any other provision in this Agreement to the contrary, ifimmediately prior to the Termination Date or, as applicable, the termination ofthe Executive’s employment during any Post-Employment Agreement Period, theExecutive is a “specified employee” (within the meaning of Section 409A(a)(2)(B)(i) ofthe Code and the regulations or rulings thereunder), any payments otherwisepayable to the Executive pursuant to clauses (ii), (iii) or (iv) 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), and any remainingpayments due under Section 5 will be paid in accordance with the terms of Section 5.

 

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**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)           the materialand 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)           the continued use of alcohol or drugs bythe Executive to an extent that such use interferes with the performance of theExecutive’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(without intent of the Executive to gain, directly or indirectly, a profit towhich the Executive was not legally entitled) and reasonably believed by theExecutive not 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 shallnot otherwise change or shift the burden of proof in connection with anydispute resolution proceeding.

 

“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.

 

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

 

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“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” means any medically determinable physical ormental impairment that has lasted, or is reasonably expected to last, for aperiod of at least six (6) months, can reasonably be expected to bepermanent or of indefinite duration, and renders the Executive unable toperform his duties hereunder, as certified by a physician jointly selected bythe Company and the Executive or the Executive’s legal representative.

 

“JPMP” means J.P.Morgan Partners (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.

 

“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 

 

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reasonabledetail the facts and circumstances claimed to provide a basis for terminationof the Executive’s employment under such termination provision, as applicable,and (c) if the Termination Date is other than the date of receipt of suchNotice of Termination, the Termination Date.

 

“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, a jointventure, 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)           the assignmentto the Executive of any material duty materially inconsistent with theExecutive’s position (including status, offices, titles and reportingrequirements), authority, duties or responsibilities as contemplated by Section 3(a);

 

(b)           the materialbreach by the Company of any material provision of this Agreement (it beingagreed that the failure to elect or re-elect the Executive to the Board inaccordance with Section 5(f) during the Employment Period and thefailure to appoint or re-appoint the Executive as the Executive Vice Presidentand Chief Operating 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)           any reductionin the Base Salary payable hereunder;

 

(d)           the Company requires the Executive to, or assignsduties to the Executive which would reasonably require him to, relocate hisprincipal business office more than forty (40) miles from where it is locatedon the Agreement Date;

 

(e)           a termination of employment by the Executive for anyreason or no reason at any time prior to the six month anniversary of the dateof 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.

 

“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.

 

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“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,that for purposes of determining the date(s) of any payment(s) under Section 5or (if applicable) Section 17(b), the Termination Date shall be the date of separation from service (asdefined 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 desire and intent of the partieshereto that the provisions of this Agreement be enforced to the fullest extentpermissible under the laws and public policies applied in each jurisdiction inwhich enforcement is sought. Accordingly, if any particular provision of this Agreement shall beadjudicated by a court of competent jurisdiction to be invalid, prohibited orunenforceable for any reason, such provision, as to such jurisdiction, shall beineffective, without invalidating the remaining provisions of this Agreement oraffecting the validity or enforceability of this Agreement or affecting thevalidity or enforceability of such provision in any other jurisdiction.  Notwithstanding the foregoing, if suchprovision could be more narrowly drawn so as not to be invalid, prohibited orunenforceable in such jurisdiction, it shall, as to such jurisdiction, be sonarrowly drawn, without invalidating the remaining provisions of this Agreementor affecting the validity or enforceability of such provision in any otherjurisdiction.

 

(b)           Notices.  All notices, requests, demands, claims andother communications hereunder shall be in writing and sufficient if (i) deliveredpersonally, (ii) delivered by certified United States Post Office mail,return receipt requested, (iii) telecopied or (iv) sent to therecipient by a nationally-recognized overnight courier service (chargesprepaid) and addressed to the intended recipient as set forth below:

 

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(i)            if to theExecutive, to him at his last known residence address on file with the Company,with a copy to

 

62 Azalea DriveApartment 114Schaumburg, Illinois  60173

 

(ii)           if to theCompany, to:

 

Pliant Corporation

1475 Woodfield Road

Suite 700

Schaumburg, Illinois 60173

Attention: Chief FinancialOfficer

Telecopier:   (847) 969-3338

Telephone: (847) 969-3330

 

with a copy to:

 

CCMP Capital Advisors, LLC

245 Park Avenue, 16thFloor

New York, New York10167-2402

Telephone: (212) 600-9650

Telecopier: (917) 464-9024

Attention: Timothy Walsh

 

or such other address as the recipient party to whom notice is to begiven may have furnished to the other party in writing in accordanceherewith.  Any such communication shalldeemed to have been delivered and received (i) in the case of personaldelivery, on the date of such delivery, (ii) in the case of delivery bymail, on the date received, (iii) if telecopied, on the date telecopied asevidenced by confirmed receipt, and (iv) in the case of delivery bynationally-recognized, overnight courier, on the date received.

 

(c)           EntireAgreement.  ThisAgreement and the documents expressly referred to herein embody the completeagreement and understanding among the parties and, with respect to the subjectmatter of this Agreement, supersede and preempt any prior understandings,agreements or representations by or among the parties, written or oral, whichmay have related to the subject matter hereof in any way.

 

(d)           Counterpartsand Facsimile Execution. This Agreement may be executed in two ormore counterparts, all of which shall be considered one and the same agreementand shall become effective when one or more counterparts have been signed byeach of the parties and delivered (by facsimile or otherwise) to the otherparty, it being understood that all parties need not sign the samecounterpart.  Any counterpart or othersignature to this Agreement that is delivered by facsimile shall be deemed forall purposes as constituting good and valid execution and delivery  by such party of this Agreement.

 

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(e)           Successors and 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)            Payments to 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)           Survival of theExecutive’s Rights.  All of theCompany’s and Executive’s rights hereunder shall survive any termination of therelationship of the Executive with the Company, other than those whichexpressly terminate, or are contemplated to terminate hereunder, upon atermination of employment.

 

(h)           Amendment andWaiver.  The provisions of thisAgreement may be amended and waived only with the prior written consent of theCompany and the Executive, and no course of conduct or failure or delay inenforcing the provisions of this Agreement shall affect the validity, bindingeffect or enforceability of this Agreement or any provision hereof.

 

(i)            Governing Law.  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)            Selection ofJurisdiction.  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.

 

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(k)           Waiver of JuryTrial.  EACH OF THE PARTIES HERETOHEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDINGOR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

 

(l)            MutualContribution.  The partiesto this Agreement and their counsel have mutually contributed to itsdrafting.  Consequently, no provision ofthis Agreement shall be construed against any party on the ground that oneparty drafted the provision 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 ofthis 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.

 

**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/ Harold C. Bevis |
|       |                     | Name:  Harold C. Bevis |
|       |                     | Title:    President and Chief  Executive Officer |
|       |                     |   |
|       |                     |   |
|       | **EXECUTIVE**            |
| ** ** |                     |   |
| ** ** |  /s/ R. David Corey |
|       | R. David Corey           |

 

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